Many employers' greatest strength is the diversity of their teams. But, with a diverse employee base comes a wide range of healthcare needs. Employees of all ages, locations, genders, and more benefit from choices, particularly regarding healthcare, so a “one-size-fits-all” health plan doesn’t always make sense.
For many workers, group health benefits exclude them. They might not be covered by the providers they want or have access to the medical services they need.
That’s where ICHRAs (Individual Coverage Health Reimbursement Arrangements) come in. An ICHRA is a flexible, cost-effective healthcare option that lets employees choose the right coverage for them. That means every employee—regardless of age, health status, family size, or location—gets the coverage and care they need.
So, how does ICHRA work?
ICHRA is a federal program that allows employers to offer employees a tax-free stipend to cover health expenses on plans purchased through the individual marketplace. Instead of negotiating a group health insurance package every year, employers can set aside money for each employee’s health expenses and give their workers the power to choose the right coverage. This has the potential to reduce costs for employers while offering flexibility to employees.
ICHRAs alone can be precisely what some employers need, while for others, group health insurance might be working for some employees but not all. ICHRA provides options there, too. The federal government’s rules allow employers to offer different health plans to different “classes” of workers, meaning some can stick with group coverage while others switch to an ICHRA.
The key thing to note here is the same benefits must be offered to the same class of workers — a class is a group defined by factors such as making a salaried or hourly wage, living in a particular geographic location, or working on a seasonal contract. For example, full-time, in-office employees might be better off with a group plan, while part-time remote workers might benefit more from an ICHRA. The whole class of workers must get the same coverage, but different classes can be offered various options.
And we know workers want options: According to SureCo’s 2024 State of Employee Health Benefits survey, 87 percent of employers said their employees wanted more plan options, while 59 percent said they’d leave their current job for one with better benefits. In a market where a staggering 81 percent of companies saw renewal rate increases in 2023, it’s harder than ever to provide group coverage that’s the right fit for all.
How does ICHRA support diversity in the workplace?
A diverse workforce includes and supports people from all walks of life—employees of different races, genders, ages, geographic locations, abilities, and more. With an ICHRA, no matter the background or characteristics of your employees, each can choose their best health plan.
Imagine you’re the father of a daughter with a rare health condition, like SureCo’s brand new Chief Impact Officer, former NBA star Robert Horry. Your company’s group health benefits might not offer in-network access to the providers your daughter needs, leaving you to pay thousands out-of-pocket for your child’s essential care.
Or think of the remote worker who moves to a smaller city or rural location—they may have extremely limited access to the in-network providers available through their employer’s group health insurance program.
It goes on: Think of a disabled employee who's been seeing the same essential provider for years, then suddenly loses access when their employer’s group health plan stops covering that provider.
Think of a transgender employee who's undergoing transition care and needs consistent access to the same providers.
Or think of an employee whose first language isn't English, who's found a provider they can speak to in their native tongue, who suddenly can't access that doctor because they're not in-network on the employee’s ground health plan.
With ICHRA, all those workers can select a plan from the marketplace that meets their needs and still have costs covered by their employer—a win-win.
Do you think an ICHRA might be what your company needs to recruit and retain diverse talent? Schedule a 15-minute call with a SureCo benefits advisor today to find out.
