15: Percentage of employers planning to offer or considering offering ICHRAs to at least some portion of their employees in 2022 or later

Individual coverage health reimbursement arrangements (ICHRAs), a new employer-sponsored healthcare benefit program for active employees that became available this year, are drawing the attention of U.S. employers, according to a survey of nearly 400 employers from consulting firm Willis Towers Watson. About one in six employers are planning to offer or considering offering ICHRAs to at least some portion of their employees in 2022 or later. The survey results showed similar levels of interest regardless of employer size, with 20% of large employers planning to offer or considering offering ICHRAs to at least some portion of their active employees.

What it means to HR leaders

An IRS rule issued in 2019 opened the door for employers in 2020 to begin offering ICHRAs, which allow employees to choose where their medical benefit dollars are spent by purchasing individual insurance coverage and then receiving reimbursement through an employer-sponsored health reimbursement arrangement. Although relatively few employers adopted ICHRAs this year—especially as the pandemic prioritized other benefit strategies—there appears to be a growing interest in ICHRAs, meaning that HR and benefits leaders may consider the program as they rethink benefits strategy in the coming years.

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“ICHRAs may align well with employers rethinking their overall approach to benefits, especially in certain industries that have struggled with the challenge of providing competitive benefits that meet the diverse needs of their workforces under ever-increasing budget pressures,” says John Barkett, senior director of policy affairs, benefits delivery and administration at Willis Towers Watson. “And as more employers adopt the ICHRA approach, employees could find relief from the burden of having to change plans whenever they change jobs.”