Group health insurance has long been part of an unwritten agreement, a social contract, between employers and employees: You help our business thrive, and we help take care of you with employer-sponsored health insurance.
But for decades, health benefits for part-time employees and seasonal employees have been a rare offer. In fact, in 2023, only 26% of large firms and 13% of firms with fewer than 200 employees offered health benefits to part-time workers.
This isn’t because employers don’t want to offer these benefits. It’s because traditional group plans have made it difficult and costly.
That’s changing with defined contribution health plans offered through Individual Coverage Health Reimbursement Arrangements (ICHRAs). ICHRAs let employers vary contributions based on up to 11 employee classification groups, including part-time, seasonal, and temporary employees.
The impact? Employers finally have a cost-controlled and valuable way to offer health benefits to part-time employees. And you get an entirely new way to keep clients happy and gain new business.
Why health benefits for part-time employees matter
The U.S. labor shortage isn’t expected to improve soon. An aging population, evolving staffing models, and less participation in the traditional workforce are just some of the factors driving it.
Industries heavily reliant on part-time workers, like hospitality, retail, and transportation, are especially affected by these shortages because they can’t offer the same flexibility and pay as other industries. These industries — particularly leisure and hospitality — also have some of the highest turnover rates.
In a tight labor market, employers can’t afford to overlook new ways to attract and retain talent. Offering defined contribution health plans with ICHRAs is a powerful way to recruit and build long-lasting relationships with part-time and seasonal employees. These employees aren’t just hard to hire and keep; they’re essential for strong businesses.
How defined contribution health plans work for employers
Employers start by offering an ICHRA plan (with your help). Then, using the 11 employee classes mentioned before, they decide who’s eligible and set a monthly contribution amount for each class.
Employers can even use defined contributions to fund additional benefits like dental, vision, life insurance, and other non-insurance products.
Once contribution amounts are set, eligible employees can use employer funds to buy the individual coverage that best fits their needs.
What employers gain
- Employers strengthen their employee offerings.
Few companies offer health benefits for part-time employees and seasonal workers (especially on a pre-tax basis). Doing so can set an employer apart. It’s a benefit these employees need and value, and it could be the reason they accept the job — and why they keep coming back.
- Health benefits give seasonal employees a reason to return.
Seasonal employees can keep their coverage purchased via the ICHRA plan year-round, even when not working for the employer. This could mean they’re more likely to return for the next season to regain the employer’s contribution. And employers can save the hassle and expense of hiring new staff.
- Employers reap these benefits while controlling costs.
Employers define their monthly contribution, so they know the maximum impact to their budget. They control who’s eligible and how much to offer, all in a cost-effective way that benefits employees.
What employees gain
Of course, part-time employees are who benefit the most from defined contribution health plans.
- They get help paying for health coverage (with pre-tax funds).
Very few part-time and seasonal employees get their employer’s help paying for health insurance. This incentive can make a significant and positive financial impact, especially since the monthly contributions from their employer are pre-tax. Employees also don’t need to pay the full premium upfront like they do with traditional HRAs. If they choose a policy that costs more than the employer’s contribution, the remainder will be payroll deducted.
- They choose coverage that works for them.
They can choose the coverage that fits their needs from all available individual policies in their area. In 2025, an average of 9 insurers are participating in the individual marketplaces in each state, giving employees considerable choice.
- They can keep their plan if they leave.
The policy belongs to the employee, even if they change jobs or stop working for the employer. Seasonal employees who sign up for coverage via the ICHRA plan can choose to keep their coverage, even after their season ends. This can be especially appealing if they’ve met some of their deductibles or found the right coverage for their doctors or medications.
What brokers gain
Keeping your employer clients happy means helping them navigate rising costs and changing workforce needs. With ICHRAs, you get a flexible new way to deliver value, especially for clients with a large part-time workforce.
Fortunately, ICHRA isn’t an all-or-nothing solution: if your employer’s group plan works well, they can keep it for full-time employees. Then, they can add an ICHRA plan, and offer it to any of the 11 approved employee classes.
It’s a win-win-win: You help your client offer meaningful benefits. They attract and keep hard-to-retain part-time employees. You gain a new revenue stream.
Nexben simplifies health benefits for all
Nexben’s payment technology simplifies premium payments to insurance carriers. Here’s how it works:
- Employers set a monthly contribution for each eligible employee class.
- Employees use their allocated funds to buy coverage from available carriers.
- The employer receives a simple statement for employee premiums and pays a single invoice.
- Nexben handles the rest — facilitating payments to each carrier, reconciling individual accounts and providing notifications when updates are needed.
Want to explore how Nexben can benefit your employer groups and your business? Identify clients facing staffing challenges or difficulty retaining part-time and seasonal employee populations. Talk to them about ICHRAs and show them how defined contribution plans can help attract and retain their part-time and seasonal talent.
Need help building the case? Reach out anytime.