Nov 19, 2022Liked by Loren Feldman

So so so tempted to do something, ANYTHING else besides accept yet another 5-10% price increase with no increase in value. What a novel idea.

That said, I have some issues with ICHRA. Some of which I don't see addressed.

First, I get Gene’s motivation to find a better way for healthcare. It’s a totally broken system and is a massive burden on small businesses. Indeed, for years we went without (or with crappy coverage) because we simply couldn’t afford it.

But, as we grew, and wanted to attract and retain the “next level” employee, it became clear that weak benefits were hurting us. Ultimately, we not only increased our spend, but we also added more benefits like short term disability, life insurance, maternity leave, and more. Adding a 401K was part of our strategic benefits approach, too. It’s a PAIN IN THE BUTT. However, the results do speak for themselves – high levels of qualified applicants for every role, record-level retention, etc etc.

What Gene understates in his advocacy for ICHRA plans is the employer branding aspect of the benefit. Yes, when a business is very small and hiring young/healthy employees, this kind of plan might make sense. But as you grow and need more senior and experienced employees, telling folks “Go get your own plan,” is a weak brand position.

The point I’m making is that for companies like Gene’s where there’s no office, and employees are treated more like contractors than a team, ICHRA could be just fine. AND, for small companies just getting going, I can see a real win with this. But for companies like mine – culture-centric and looking to hire top-talent – this is (for now) a non-starter.

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Nov 21, 2022Liked by Loren Feldman

Hi Shawn! Great note. My name is Amy and I work with Take Command, an HRA administrator. We actually see small and large companies signing up for ICHRA. Many of our smaller clients are net new to benefits, as you mention. It's a budget friendly on ramp to benefits. But our largest growing sector of clients is actually large employers. For companies with multi state footprints or remote workers, ICHRA is a huge win. What we see is our clients offering generous ICHRAs to their employees, meaning many times, their HRA is actually resulting in less out of pocket costs than their previous group plan. Most of our clients save 15% right off the bat, and some of our clients save $1M or more, giving ample wiggle room to extend generous ICHRAs to their team. In half of the states, individual health plans are cheaper than their small group counterparts, meaning dollars spent on benefits in those states stretch further for the same level of coverage. Happy to chat more about this if you're interested! amy@takecommandhealth.com / www.takecommandhealth.com

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Hi Amy,

Thanks for taking the time to outline this. I think it's great that there's an alternative.

You bring up something that is outside of the cost vs culture tradeoff. Namely, remote employees. Can a company offer a traditional plan AND ICHRA for employees in other states?


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Nov 22, 2022Liked by Loren Feldman

Great question. You could offer a traditional plan to one class of employees (say, the ones at headquarters) and an ICHRA to those out of state. You could also offer different amounts to different states based on what insurance costs in those markets to make sure everyone is taken care of fairly. You just can't offer the same class of employees a group plan and an ICHRA at the same time.

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Nov 28, 2022Liked by Loren Feldman

Many years ago I was at a event where an employment attorney was speaking.

In his talk he essentially told the audience, made up of mostly entrepreneurs, that paying the healthcare insurance premiums for employees was an open invitation to a discrimination lawsuit. He went on to say, that If that if you have two people of different ages doing the same job, the premium cost difference between the older worker and the younger worker amounted to different compensation to each worker. The older worker would be getting more compensation because their insurance premiums would cost more than the younger worker.

So about 20 years ago, we adopted a plan where the company would offer multiple levels of health insurance - low-deductible, high-deducible (HSA compliant), HMO, etc. - and provide our employees with a monthly health insurance stipend where they can choose and pay for their own plan. Since that time, the Obamacare exchanges have essentially eliminated the need for the company to offer any healthcare plans since they can purchase their insurance directly from the exchange with the monthly stipend we provide them.

The stipend is the same for every employee (top to bottom) and is recalculated each January using a simple formula that anyone can replicate on their own.

This plan also eliminates the situation whereas if an employee already has insurance from another source (from a spouse or perhaps military benefits) and is now able to use the healthcare stipend as additional compensation.

Most importantly, the monthly healthcare stipend takes my business out of the healthcare business and simply allows me to focus on providing higher compensation to attract and retain employees.

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