Want to Lower Employee Healthcare Costs? More Businesses Are Turning to This Alternative.
Traditional group health insurance has become unmanageable for many businesses. Here鈥檚 a way to decrease those expenses.
For many small- and medium-size business owners, providing healthcare benefits to employees is an important way to attract and retain top talent. But it can also be one of a business鈥檚 largest expenses. These employers pay an average of $9,211 in premiums annually for single coverage plans and as much as $26,054 for family plans1. For some SMBs, that amounts to a small fortune.
Decades of rising costs for hospital care, physician and clinical services, and prescription drugs鈥攁mong other system-wide challenges鈥攈ave steadily driven up traditional employer-sponsored premiums. Today, those pressures have reached a breaking point. That鈥檚 why an increasing number of employers are to traditional group health insurance.
One such option is an Individual Coverage Health Reimbursement Arrangement (ICHRA). Instead of choosing one group plan for everyone, employers can use to reimburse employees for individual health insurance policies they choose themselves.
A new healthcare model for the modern workplace
In response to rising costs, many employers are reevaluating how to structure their coverage. Some 94% of employers surveyed for the say they are actively exploring alternate healthcare strategies, including ICHRA. The report was conducted by SureCo, an ICHRA benefits administrator, and sponsored by Oscar Health, a leading healthcare technology company.
suggests ICHRA is gaining traction with employers, brokers, and employees alike:
Switching to ICHRA yields an average premium savings of 15.5% for businesses
91% of employers who adopted ICHRA said it was the right move for their company.
56% of insurance brokers are now actively recommending or implementing ICHRA.
83% of employees say they would prefer to choose from all available plans in their area (instead of the few their company offers) if their employer contributed toward coverage.
88% of employees feel confident selecting their own health plan, up from 74% in 2024.
Almost 90% of employees on an ICHRA surveyed say their coverage is better than their previous group plan, and 91% report being satisfied with their ICHRA overall.
to learn how can help your business manage healthcare costs while giving employees more choice in their coverage.
1, KFF