It's no secret that businesses are laying off employees, and it is a difficult topic to dance around. Last year about 100,000 people lost their jobs, with numbers rising throughout the new year.
Companies with layoffs in 2023:
- Google (Alphabet) layoffs: 6% of workforce laid off (January, 2023)
- Microsoft layoffs: 4-5% of workforce laid off (January, 2023)
- Amazon layoffs: 1-2% of workforce laid off (January, 2023)
- DirecTV layoffs: 5-6% of workforce laid off (January, 2023)
- Salesforce layoffs: 10% of workforce laid off (January, 2023)
- Vimeo layoffs: 11% of workforce laid off (January, 2023)
- Stitch Fix layoffs: 20% of workforce laid off (January, 2023)
As a leader, one of the most challenging decisions you may face is laying off employees. Not only is it difficult to let go of dedicated team members, but it also significantly impacts the company's morale and productivity.
However, there are ways to prevent layoffs while improving the quality of care for your clients or employees. One solution is implementing an Individual Coverage Health Reimbursement Arrangement (ICHRA).
What is an ICHRA?
An ICHRA is an alternative to group insurance that allows employers to reimburse their employees for individual health insurance premiums. This can be a cost-effective solution for both the employer and the employee, enabling employees to choose their own health insurance plan that best fits their needs and budget.
For employers, implementing an ICHRA can lead to significant cost savings. Rather than offering a traditional group health insurance plan, which can be expensive and inflexible. ICHRA can help businesses lower overall health insurance costs for the company and is a great way to prevent layoffs or invest in other business areas.
5 ways you can reduce costs and save on yearly premiums to avoid layoffs
1. Cost and Choice: Employees choose an insurance plan that aligns with their healthcare needs and budget with the ability to select from any carrier available to them. This can lead to lower overall health insurance costs for the company.
2. Risk Mitigation: Because employees now own their plans, employers are not taking on the risk associated with providing a one-size-fits-all group insurance plan. This solves the big challenge that surrounds "risky employees and/or industries”. Eliminating the risk means that employers are not responsible for any significant increases in the cost of insurance.
3. Flexibility: Employers can set a budget for employees to use towards their individual health insurance plans, which can lead to more cost-effective coverage.
4. Cost Predictability: Plans are offered directly through the free market, reducing annual premiums and creating cost predictability.
5. Tax advantages: An ICHRA is tax-advantage for employers and employees. Employers reimburse employees for their plans on a pre-tax basis, reducing premium costs which is massive cost savings for both parties.
It's important to note that ICHRA can be a complex process, and it's essential to work with a qualified and trusted benefits administrator to ensure compliance with regulations. See how SureCo’s Enrollment Platform can help streamline the benefits process through ICHRA.
Also, check out SureCo’s latest cost savings calculator to see how you can significantly reduce yearly premiums.