After the introduction of the Individual Coverage Health Reimbursement Arrangement (ICHRA) in 2020, Dalton-based HRASimple, a health benefits administrator, has been “making an impact” in the community and across Georgia when it comes to local small businesses, said CEO Mark Mixer.
An ICHRA, created under regulations made at the federal government level in 2019, is a company-funded health benefit that reimburses employees for healthcare expenses.
Through HRASimple, Mixer said the company quickly became one of the first to administer ICHRAs to businesses by providing affordable health benefits, something they have continued to do through active partnerships.
Through HRASimple, Mixer said the company quickly became one of the first to administer ICHRAs to businesses by providing affordable health benefits, something they have continued to do through active partnerships.
Mixer also serves as the chairman of the HRA (Health Reimbursement Arrangement) Council, a not-for-profit advocacy organization made up of major health benefit carriers and administrators throughout the nation.
He said following the introduction of the ICHRA, small businesses were given options that were previously unavailable to them.
“Instead of offering a defined benefit of health insurance, where the employer would go and pick a plan and then make it available to their employees, employers now had the option to give money to their employees and then that employee would take that money and go buy an individual plan on their own,” Mixer said. “So, that was a new tool that employers had the advantage of taking as an option.”
After “building the infrastructure” for administering ICHRAs to local businesses, Mixer said they soon realized the tool was “something that we could market throughout the country, so we made it a product line and we’ve done just that over the last four years.”
He said with the introduction of the ICHRA, employers now have options to consider when offering health insurance benefits to employees.
“So, what HRASimple does is it’s the administrator that helps the employees shop for a plan, enroll in a plan and then manage their monthly contributions that their employer makes on their behalf and reimburse them for qualified medical expenses,” Mixer said.
Over the years, small employers would opt out of being able to afford to offer coverage due to rising prices, Mixer said, with 2014’s Affordable Care Act “really accelerating those costs and making it unbearable for many small employers.”
“So, they began to abandon the ability to pay for and fund health insurance for their employees,” he said. “Then, what you had was employers having an option for the first time to consider either going self-funded, which many small employers aren’t able to do, or the ICHRA, where for a set amount of money that the employer determines, they can make that option available to their employees. So, it’s just another tool on the tool belt for employers that want to offer health coverage for their employees.”
Mixer said ICHRAs, while not insurance, is an innovation that helps provide an umbrella of protection to employees, giving them the freedom to choose plans aligning with their individual needs.
For a startup company that has never offered benefits, Mixer said HRASimple and their ICHRA administration gives them the avenue to enter into offering benefits without great financial exposure.
“They’re not under the same restrictions that many insurance companies require,” he said. “Oftentimes, they have to pay at least half of the premium and then at least 70% or 80% of the employees in the company must enroll. All those barriers are gone and now an employer can offer a flat amount of money for each employee and then the employee can decide whether that’s of any value to them.”
Mixer said both the importance and impact of supplying ICHRAs to local businesses has been great.
“In Georgia alone, the fully insured health plan market is, in essence, gone,” he said. “I believe less than 200,000 people out of 10 million that live in Georgia get coverage through a fully insured small group plan. A lot of them have abandoned fully insured product and gone to level funded, which is a self-funded plan with fixed costs every month, or they’ve gone the ICHRA route.”
Mixer said during the last four years, HRASimple has doubled the size of employer count through business in ICHRAs each year, “and many of those are small employers taking advantage of this opportunity.”
But, as with any new implementation or program, there are upsides and downsides, Mixer said.
“I don’t want to announce that this is the silver bullet that solves everybody’s problems,” he said. “Every week, we encounter employers who take a look at this as an option but choose that it’s not the best choice for them. And that’s the beauty of it. It’s an option they never had before, and now they have it. Where it fits, it’s a great fit.”
Mixer said he spends much of his time explaining to local employers how the process works.
“And if those employers say, ‘Alright, this is interesting,’ then we take the next steps,” he said. “But that happens probably one out of every three times and the rest of it is, ‘Ok now at least I’ve heard this was an option, I looked at it, and maybe not this year but maybe next year.’ Then, we come back again a year from now and have the same conversation all over again.”
As ICHRAs are still a fairly new innovation, Mixer said small employers will be the primary early adopters.
“We predict this will be the case for probably for the next 10 years,” he said. “But the occasional large employer will decide to pull the trigger or offer it to a subsection of their employees. When 401(k)s were first introduced, it took decades for them to displace the traditional model, which was a defined benefit program. And that’s exactly what will happen here. It will grow slowly, little baby steps at first. And then I predict in about probably eight to nine years from now, we’ll move into hyper-speed and then more and more employers will jump on the bandwagon.”
For more information on HRASimple and their health benefit tools, visit www.hrasimple.com.