The ICHRA market is growing. Recent reports state ICHRA adoption grew almost 30% from 2023 to 2024, with Applicable Large Employers (ALEs) experiencing the fastest adoption growth at 84%.
Despite ICHRA growth, some brokers and distribution partners still hesitate to present ICHRAs as a solution to their employer clients. However, as more employers face unsustainable group plan rate increases, ICHRA should be an option that brokers feel confident presenting to their clients.
The good news is that much of what holds brokers back from offering ICHRA to their clients is based on misconceptions. If you’re feeling spooked by ICHRAs, we have 7 ICHRA truths to put your fears to rest.
- Employees don’t have to front the full premium cost.
One of the most common ICHRA objections we hear is that employees can’t afford to pay their full premium cost upfront and wait for reimbursement from their employer. While the traditional reimbursement model required this, Nexben’s patent-pending payment solution eliminates that reimbursement process.
With Nexben, employees access their employer’s contribution through a unique bank account that ensures a secure and compliant payment transfer. If they choose a policy that costs more than the employer’s contribution, the remainder may be payroll deducted pre-tax.
- The individual health insurance market benefits employers and employees.
Research continues to show that employees want more choices with health insurance. Simultaneously, 87% of employers want to help workers get insured without offering a group health plan.
The individual market offers the best of both worlds. Employers can offer a defined contribution that helps them control costs, and with it, employees can choose the policy that works best for them and their families. Some employees will choose a more expensive PPO policy to prioritize a broader network and others will prioritize affordability, finding an HMO or POS policy that fits their needs and budget.
Here are a couple of other things to know about the individual market:
- In 2024, states have, on average, six insurers participating in the individual health insurance marketplaces.
- ICHRAs are bringing younger workers, including Gen Z and millennials, into the ACA marketplaces, which stabilizes risk and keeps premiums and costs lower.
- The administrative burden is low (with the right ICHRA platform).
Some brokers and distribution partners are concerned that ICHRAs are more of an administrative burden for employers than group plans. However, there are several reasons this is not the case.
First, with an ICHRA, the human resources department is no longer the middle person between the employee and the insurance carrier. Instead, employees work directly with benefits experts — whether that’s you or one of Nexben’s enrollment partners— to choose their coverage. Lifting this responsibility from HR is an administrative relief for most companies.
Nexben’s payment technology also streamlines the “many-to-many payment process” required with an ICHRA. In other words, we take on the tedious task of distributing all defined contributions across all employee benefit plans, regardless of how many different insurance carriers employees choose from.
The employer’s responsibility? The click of one button to pay a single invoice that combines all of their employees’ premiums.
Nexben simplifies ICHRA even further by providing necessary reports to support payroll deductions and ACA reporting requirements.
Have a client who could benefit from ICHRA? Get an estimate in minutes.
- ICHRA helps employers control their healthcare costs.
Employer groups of all sizes are facing group plan premium hikes that are forcing them to reconsider how — and if — they can continue to support their employees’ healthcare needs. These increases are becoming unsustainable.
ICHRA is an effective solution for controlling healthcare costs because employers can set the maximum amount they will be liable for monthly using a defined contribution model.
As the broker, you can help your clients develop an effective ICHRA strategy that lowers or stabilizes their healthcare costs, satisfies affordability requirements (if applicable), and still provides their employees with a solid benefit package. Many tools are available to help you navigate these complex financial discussions, including Nexben’s estimator tool.
- Onboarding is inexpensive and simple.
While costs will vary depending on your chosen ICHRA platform, Nexben does not charge an administrative setup or renewal fee. Instead, employers pay Nexben an administrative fee per enrollee per month for the employees actively using the platform. Any size group can leverage Nexben’s payment solution without minimum enrollment requirements.
ICHRA onboarding is also simple with Nexben:
- Employers get a Nexben account and add employee data via a simple spreadsheet upload.
- Nexben generates an invoice for the employer.
- The employer pays that invoice in one click, and open enrollment starts for employees.
- Employees shop for coverage and, if they need help, can contact the benefits expert (either you or a Nexben enrollment partner).
Resources like our employee and employer guides are also available in our Resource Hubs to help ease the experience even more.
- You still get paid — and can choose how involved you are with enrollment.
As a financial technology company, Nexben does not assume agent of record on any ICHRA plans. This means you can retain your status as the agent of record and earn a commission on any ICHRA plans purchased by employees.
However, if you’d rather not be responsible for employee enrollment, you can choose to send your client to one of Nexben’s enrollment partners. If you do this, the enrollment partner will assume the agent of record, help the employees shop for coverage, and compensate you based on their referral fee structure.
- Nexben is here to help fill ICHRA knowledge gaps.
As one of the first companies to enter the ICHRA space, we have deep industry expertise. When you offer Nexben to your clients, you get access to that expertise through our content resources and customer support.
Our partner portal includes learning modules and resources that can help you deepen your knowledge about ICHRAs and how Nexben works. We also have resources available for employers and their employees.
If you need more personalized, hands-on guidance, our partner success team can help. Our goal is to equip you with the knowledge and support you need so you can approach client discussions with confidence.
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While there’s little that should spook you about ICHRAs, there is one thing about ICHRA that should cause some fright.
We continue to hear from employers that the group health insurance market is just not working for them. Rate increases are too high. They need an alternative. If you, their broker, are not the one to present ICHRA to them as a way to control costs, they will find this option elsewhere.
Don’t be afraid of ICHRA. The sooner you embrace it, the sooner you’ll gain confidence in building as much — or more — business from it as you’re getting elsewhere.
About Nexben
Nexben is a financial technology company with a patent-pending payment solution that streamlines ICHRA administration and offers compliant reporting. We serve you — the broker and distribution partner — so you can deliver the best options to your employer clients and their employees. Get in touch if you’d like to learn more about how offering Nexben can enhance your client offering.