Many employers start by looking at traditional group health plans… and quickly realize the numbers just don’t work. Costs are too high, participation is hard to meet, or the plan simply doesn’t fit the business.
Before walking away from offering benefits altogether, it helps to understand how the system actually works.
Traditional group health insurance is carrier-priced — meaning the insurance company ultimately controls the cost. ICHRA (Individual Coverage Health Reimbursement Arrangement) flips that model to employer-priced, giving businesses more control over their healthcare budget.
In this video, we cover:
- The difference between group health and ICHRA
- Why traditional plans often break down on cost or participation
- How employer contributions work under each model
- How federal tax credits can impact employee coverage
- Why some employees may be better off outside a traditional group plan
- What to consider before making a decision
For many businesses, it comes down to one key idea: each employee effectively has access to the greater of the employer contribution or available federal assistance.
Understanding that dynamic can completely change how you think about employee benefits.