SALT LAKE CITY — PeopleKeep, the leader in personalized benefits for small and midsize organizations, released its third annual report on the individual coverage health reimbursement arrangement (ICHRA).
The report, which features data on how PeopleKeep customers and their employees utilized the ICHRA as a health benefit, showed that employers offering an ICHRA provided an average monthly allowance that was nearly double the average cost of a gold-level individual insurance premium.
According to PeopleKeep’s data, the average monthly allowance employers offered their employees between midyear 2022 and midyear 2023 was $908.80 – 92% higher than the average lowest-cost gold health insurance premium of $472 for a 40-year-old, as reported by the Kaiser Family Foundation.
‘Employers are demonstrating their willingness to not only vest healthcare-buying decisions in their employees but also budget enough money for their employees to choose high-quality coverage,’ said Victoria Glickman Hodgkins, CEO of PeopleKeep. ‘Giving employees the flexibility to select their healthcare plans within a specified budget is proving advantageous for small to midsize organizations, which are increasingly selecting ICHRA benefits to better respect individual needs while gaining greater budgetary control.’
The report also examined how applicable large employers (ALEs) – organizations with 50 or more full-time equivalent employees – used the ICHRA to comply with the Affordable Care Act’s employer shared responsibility provisions as well as trends in benefit design and employee use.
Additional key findings from the report include:
- Applicable large employers took advantage of the ability to structure their plans around employee classes – on average, ALEs used five employee classes in their benefit design.
- Approximately 56% of employers offered a premium-plus ICHRA, enabling their employees to use their allowances for more than 200 qualifying out-of-pocket medical expenses in addition to individual health insurance premiums.
- Employers who chose to cover premiums plus out-of-pocket expenses offered an average monthly allowance that was 49% greater than employers who chose to cover premiums only.
- On average, employers reimbursed employees $573.14 for their individual insurance premiums.
- The most common expenses for which employees submitted reimbursement requests – outside of insurance premiums – were doctor’s office visits and prescriptions.
The ICHRA, which the federal government first made available in 2020, is a defined contribution employer-sponsored health benefit. An increasing number of organizations are turning to it as an alternative to traditional group health insurance.