By Bill Rusteberg
There are those in our industry who say ICHRAs are not the solution to rising health care costs. They are not wrong. But they miss an important point.
ICHRAs provide plan sponsors a solution to rising health care costs through the miracle of Defined Contribution.
Here are four reasons why market demand is driving ICHRA sales:
ICHRA satisfies an employer’s need to (1) Remain within budgetary constraints, (2) Stave off ACA government punishment, (3) Remove risk, (4) Get out of the health insurance business.
Nothing more and nothing less.
Controlling hospital, doctor and Rx costs is not possible for employers who sponsor ICHRA but they don’t care about that for all the reasons stated above.
Number 3 is a big one. Lawsuits against plan sponsors for breach of fiduciary duties are gaining traction all across the country and will make the Tobacco Settlement bonanza look like small potatoes.
“It’s not a question of if, it’s a question of when. The inevitable class action suit will dwarf the tobacco settlements.” – Mark Cuban
Why on earth would an employer want to take that risk especially when they don’t have the internal resources to constantly monitor a health plan subject to outside business practices of vendors they can’t control.
Embracing ICHRA removes that risk entirely unless you take the stance “You can sue a ham sandwich anywhere, anytime, for any reason.”
