Nexben today released ICHRA Market Investigation, a white paper sharing in-depth analysis about the viability and future of individual coverage health reimbursement arrangements (ICHRAs). This analysis was commissioned by Nexben, an end-to-end cloud-based platform connecting all aspects of the benefits industry, and published by Ezer21, an innovation consulting and advisory firm.
The analysis revealed how brokers, technologists and regulatory leaders view ICHRAs, which provide employers with an additional option for employee health coverage and significantly expand employee choice. Key findings include:
- 82% of participants believe ICHRAs provide better benefit options for employees vs. traditional group major medical plans, bringing a particular advantage to employers with historically higher risk/higher cost medical expense trends;
- 73% believe ICHRAs can reduce cost uncertainty for employers, eliminating the volatility of medical spend by shifting employees to the individual market;
- 45% feel a comprehensive, full-service technology platform is required to drive growth of ICHRAs, while promoting flexibility and ease of use;
- Participants anticipate a 19% year-over-year compound annual growth rate for the ICHRA market over the next five years.
ICHRAs are still in their infancy after taking effect January 1, 2020, to allow employers to fund individual employees’ health insurance premiums and qualified medical expenses. While challenges exist given the short tenure of ICHRAs in the health insurance landscape – including the need for more education for employers and brokers, as well as small or poor-quality individual markets in some rural areas – participants in this analysis believe the benefits outweigh the challenges, indicating they expect significant growth for ICHRAs for the foreseeable future.
“This analysis reveals important insights from the collective and unique perspectives of key industry players when it comes to the promise and perils of ICHRAs. With proper education about the benefits of these arrangements—coupled with robust technology to bring them to life—we have every reason to believe more employers and employees will find ICHRAs to be an increasingly attractive option,” said Nexben Founder and CEO John Kelly. “Nexben is proud to address the need for a full-service technology platform to administer ICHRAs, which was one of the key success factors indicated by study participants.”
Read the full white paper for more insights and analysis.
