The 2022 ICHRA Market Trend Report

Since 2020, a growing number of employers are departing from the traditional insurance and self-insured group health market. We have seen the adoption of a modern approach to offering health benefits with ICHRA's, the Individual Coverage HRA. Employers want to run their business and make health insurance benefits less cumbersome. The cost, the time spent on health insurance, and administrative hassles are becoming headaches for CEOs and CFOs for companies of all sizes. ICHRA's "Defined Contribution" approach is much more appealing.

What will we see in 2022?

• 2022 appears to be another challenging year for employers as the stop-loss markets tighten, self-insurance rates will continue to rise due to "pent up claims demand." Double-digit increases are becoming the new normal for self-insurance no matter how hard we work to keep costs transparent. Employers will bear more cost and spend more time administering benefits than any time in our history.
• We will see the heavyweight insurance carriers dip deep into their reserves to retain the customers.

Offer Choice with The ICHRA Shop

• The broker market will adapt to the Consolidated Appropriations Act of 2021 (CAA). Brokers and consultants providing services to ERISA-covered group health plans must disclose any compensation they receive for providing services to the plan.
• These two items will shine a light on the relationships between the employer and their advisors regarding the compensation and cost associated with purchasing, procuring, and administering health benefits.
• As we embark on the "second inning" of ICHRA, 2022 provides a perfect springboard to more employers and their broker/consultants to consider ICHRA as an alternative to controlling the rising cost of health insurance and reducing their expense and time administering health benefits. Top carriers created ICHRA products, while other carriers need to step up their onboarding capabilities not to be left behind. ICHRA membership will flow to those with the most effortless enrollment and billing experiences.
• The "drivers of change" will be the employees in 2022. Employees will continue to rejoice as they can select the carrier, networks, and plans that meet their needs. This generation of employees wants control of their pocketbooks and will shop for healthcare in the same way they shop for other goods and services.

A NEW WAY TO "FUND" HEALTH BENEFITS

ICHRA will be an option for renewal for every employer in 2022

Politically, ICHRA is gaining bipartisan support both at our governments' federal and state levels by shining a light on the ACA market and the health exchanges. The 2022 pricing for ICHRA shows enormous savings with a pricing advantage of 20%-50%. Employers will learn more about the "Advanced Premium Tax Credits" in 2022 as they compare their contributions and ask, "how much does the government pay for my employees if I did not offer them coverage?"

ICHRA drives more people to the individual ACA market by allowing employees choice of carriers and plans, while CFO's love the savings from a cost and administrative standpoint. Employers are tired of feeling like they are an "insurance company, the hassles of being self-insured, and knowing too much about their employee's health needs.

ICHRA is the 401K of Health Benefits - The shift to Defined Contribution health benefits

Do you like your deductible this year?

Do you need to access alternative providers?

Is the carrier buying your business?

Behavioral economics shows that we consume different amounts of health care depending on our stage of life. ICHRA provides the mechanism for employers to offer a 401K style defined contribution form of health insurance. Because the medical portion of ICHRA is Individual Coverage, employees choose from a variety of carriers and plan designs from HSA's to $0 Deductible Plans. Carriers are focused on promoting condition-specific plan designs and increasing coverage in local networks as a way to personalize employees' healthcare experience.

As a 401k plan, the employer offers a wide array of plan choices to meet the investment strategy for the employee's path to health insurance. The employer will provide a stipend, allotment of money, or a match as a benefit to the employee. The employer hires an Administrator who helps manage the engagement process, offers support, call centers, and technology to help employees find the "right mix" for their financial future. The Advisors manage the relationship, the process and assist employees in better understanding their options by offering education and support.

Traditionally, in the group insurance market model (sometimes referred to as a defined benefit approach), employers select a one-size-fits-most group plan, and employees are limited to the options their employer chooses. Because ICHRAs are centered on a reimbursement model (sometimes referred to as a defined contribution approach), ICHRA gives employers greater control over costs and provides the freedom of choice to employees.

"Affordability Testing" will become one of the most critical topics to employers with over 50 employees.

Not until we dug into ICHRA did we understand the importance and the impact legislative changes have on contribution strategy. We challenge employers to ask their broker/consultant about "Affordability Testing." Are you aware of the minimum requirements for employers providing health insurance?

Employers will say Goodbye Open Enrollment Meetings

Do you pay for EDI feeds?

Do you pay for ACA reporting?

Do you have COBRA liability?

ICHRA changed open enrollment. Employees freely shop the insurance marketplace, compare different plan options, and select the plan that meets their needs. They can compare networks for each provider and choose depending on location or personal history with a doctor or clinic. They complete the enrollment online using the eSignature protocol. Employees pay premiums with automatically deducted pre-tax dollars. Employees can take their individual health plans with them when they leave the company, further reducing COBRA liability.

Evaluating the ICHRA Vendors

The ICHRA Shop does the homework on ICHRA platforms. We know the vendors and what makes a better fit for a client. Just as behavioral economics allows employees to select the best plan for themselves, employers today spend too-much time procuring health benefits. ICHRA will change the process, and selecting the right administrative vendor is vital.

What are the cut-off dates for enrollments each month?

What does the employee onboarding experience do to help educate the members?

Do you have a call center?

What are your data security and fraud protection?

What are the performance guarantees?

What is the length of our contract?

We have already asked you all these questions for you.

HEALTH INSURANCE CARRIERS CREATE BETTER PLAN DESIGNS

Insurance carriers will continue to develop "Condition-Specific" plan designs for ICHRA

Some insurers offer condition-specific plans that can help keep costs down. For example, Cigna offers plans for asthma, mental health and diabetes as part of its ACA plans. Patients pay little or nothing for special equipment and supplies, preventive care, common medications, and the medical services they need to manage their conditions. The trend will lead to more personalized health benefits for all consumers.

$0 Deductible plans with embedded Dental + Vision will become the standard "Benchmark plans."

As predicted in 2021, we have seen the trend continue with the No-Deductible plans. However, there is a new flair. Embedded Dental + Vision plans are available in Bright HealthCare, Oscar Health, United Healthcare, Ambetter, Kaiser, and more. The $0 deductible plans work well for ICHRA. They can be used as a benchmark plan so employers can move mid-year and not worry about "deductible accumulation," making plans easy to understand. We predict that we will see "split deductibles" for 2023. This trend follows Medicare plan designs, and we expect to see these continue.

ICHRA PLATFORMS HAVE BECOME MORE ROBUST

The top vendors in ICHRA will continue to deploy tools and resources Each year, The ICHRA Shop has taken time to understand the differentiation between the leading brands: One Bridge Benefits, Savvy, Nexben, ICHRA Systems, Take Command, benefitbay, W3LL, and a few other brands are among our "top-rated" vendor partners. This year we will see new names and familiar names in the retirement business. We are already witnessing Transamerica join the mix. Vendors will shift the focus from brokers to other trusted business partner relationships such as banks, CPAs, and financial advisors that serve retirement needs for the employers.

Large Group Enrollment & Decision Support: In 2021, The ICHRA Shop launched the first decision support tool powered with AI for the ICHRA industry. We found that there was a need to help large employers to help employees find an easier way to navigate the choices of ICHRA and then get them enrolled in "off-exchange" plans.

Lessons learned from enrolling thousands of employees of varying educational levels, trades, and other factors say ICHRA can work for the masses. Still, it would help if you had a way to funnel the education. The ICHRA Shop Decision Support tool asks the employee basic questions about their upcoming medical consumption and healthcare needs. Just answer a few simple questions such as "what does your medicine cabinet look like?" The member can begin to customize health insurance to their own needs. Employees with chronic conditions can now find "condition-specific" plans or find the best program based on their budget. Once an employee selects their carrier and plan, they can easily enroll securely to the carriers. Large employers now have tools that will help employees "self-serve" their benefits but still have live- support of 24-hour customer service. The only wish for 2022 is to get our carrier partners better in sync with the needs of the brokers and ICHRA distributors by filing rates early and using more EDI

ICHRA Benefits Billing Payment Options: The ICHRA Shop has evaluated various ICHRA vendors for two years. The capabilities around payments to the carriers and simple billing learned that the employer's experience in the billing + payments of the ICHRA bills from the individual carriers becomes one of the most critical factors. The majority of vendors are looking to increase their tools in the premium payments to the carriers and the integration between the carriers. The carriers need to understand the volume of business coming from ICHRA and create a more straightforward process to onboard and transact the billing. After two years of increasing enrollment, some major brands need to keep up with the new players. Ask our enrollers, and they will tell you the experience between onboarding a Bright or Oscar plan versus the legacy systems of the Blues or Kaiser is night and day. The new carriers understand the consumers and agents much more today.

The MOMENTUM OF ICHRA 2022

The majority of states will be " ICHRA Friendly" in 2022.

According to a recent announcement by Vericred, there are now 24 states where the 2022 individual Bronze plan premiums are equal to or less expensive than small group plan premiums. The number of ICHRA-friendly states has grown by 26% since 2021. The mix of the states moving to "Federal Reinsurance" has offered ICHRA an opportunity to not only blossom but dominate from a pricing perspective. In Western Colorado, Georgia, and Ohio, 50% less than traditional coverage and less expensive than self-insurance or captives. It offers greater flexibility with less administrative work for the employer.

How States can create a better health care system.

A recent publication from Dr. Brian Blase and the Paragon Institute speaks to 8 Ways States can Take Control of their Health Care: (1) States can create their solutions and provide remedies. Legislatures need to reach across the aisle, seek non-partisan solutions, and demonstrate and simulate new ways to reduce local costs and inadequacies. Programs like the Valley Health Alliance in Aspen Colorado (www.ourvha.org) and the Peak Health Alliance in Western Colorado (www.peakhealthalliance.org) are examples that health care needs to be solved locally. We will see Locals collaborating with their providers, hospitals, chambers of commerce, and business leaders, both large and small.

ICHRA allows States to offer maximum choice and increases competition. At the same time, many states are making progressive moves in health care. They are creating a single transparent fee schedule that allows health care providers to use technology and treat the patients without the control of the insurance companies. Just a few slight adjustments of language in the law, like changing "cannot" to "can," could unleash new savings and restore confidence in our broken health care systems. States will recognize how ICHRA can help drive people to the health exchanges and use the ACA products. In 2022, brokers will become much more familiar with the advantages of their state's health exchanges, and the exchanges will learn that ICHRA will be a new source of membership.

As the States control their local health care, patients must have a voice and less red tape. Take away the barriers to purchasing prescription drugs and open up the competition to new ways to access care. Amazon Care and Walmart Care are not going away. They are growing, and states will see the value in promoting outside-the-box thinking and point solutions such as Dispatch Health, TouchCare, and others to make the member experience better

Broker Fee Transparency Laws & The Lifting the Lid on Broker Compensation

The advantage of ICHRA is that all the fees are either embedded in the individual insurance plan or a transparent "advisor/broker" fee. It is simple to disclose. The brokers who have been taking advantage of the "transition bonus" and added compensation, sporting events, and contingency bonus programs for growth and hidden checks from the big carriers will now be open records.

Common Questions will be: How often did your broker visit and discuss your plans? How many employee questions have been answered? Is there a call service call log? How many emails or chats did you respond to on our behalf? How did you model our affordability? Moreover, the biggest question of 2022 is, "Why did you not tell us about ICHRA for the past two renewals?" and as we advance, "what services are being provided by our broker?" as employers now can better understand the value of the broker and the added services they provide.

ICHRA makes the transition to the new broker transparency simple. The average Advisor/Broker fee ranges from $0-$60 PEPM. The monthly administration cost ranges from $5 -$80 PEPM, with the average being around $20 PEPM.

The future is bright for ICHRA. Just ask one of the employers that have been through one or two renewals. The retention rate is over 98% for most early adopters. An average of 2% overall rate increases from carriers with a stable trend make ICHRA an appealing option for employers of all sizes in 2022. Nothing is perfect, and like any health insurance change, it is a bit "bumpy," but a good administrator and broker/advisor make it a "smoother" process for sure.

For the carriers that have embraced ICHRA, created new products for the individual market, and made it easy to enroll, thank you! We ask that you continue to work with this new industry to make it easier to onboard large amounts of ICHRA members that can come your way if the experience is quiet and straightforward.

"If not now, then when? If not you, then who?"

Do not be shy about asking the key questions to compare ICHRA versus your current health benefits solution. The flexibility and cost savings might be what you were looking for all this time.

Brad O'Neill is the Co-founder and Managing Principal of The ICHRA Shop, the leading distribution hub for ICHRA in the United States. He is a Partner/Advisor of Voyager Space Insurance Marketplace, the chairperson for Colorado Connect, a Public Benefits Corporation for Connect for Health Colorado, a Founding Member of the HRA Council, and a featured panelist on ICHRA's for the Centers of Medicaid Services. (CMS)

Contact him at [email protected] or 1-833-464-2472