The Trump administration's efforts to expand the use of health reimbursement arrangements is drawing interest from employers, according to a new survey.
Willis Towers Watson conducted its 2020 Health Care Delivery Survey in August and September and found that 15% of employers are planning to offer an individual coverage HRA to some of its employees starting in 2022.
Retail employers, as well as those in education and the public sector, are particularly interested in these arrangements, the survey found. Twenty-nine percent of public sector firms said they intend to launch an ICHRA in 2022, as did 22% of wholesale and retail companies.
In an ICHRA, the employee chooses to purchase coverage on the individual market and receives a reimbursement from their employer to do so.
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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," said John Barkett, senior director of policy affairs, benefits delivery and administration at Willis Towers Watson, in a statement.
"And as more employers adopt the ICHRA approach, employees could find relief from the burden of having to change plans whenever they change jobs,” said Barkett.
The departments of Health and Human Services, Labor and Treasury finalized the joint rule in the summer of 2019 as part of the White House's broader efforts to expand insurance options, which also included the expansion of short-term health plans.
The Trump administration estimated that the rule could balloon the size of the individual markets by 15% and could draw interest from 800,000 employers.
Barkett said in a statement that the COVID-19 pandemic slowed down the adoption of these plans for 2021 as employers focused on other, more pressing concerns. However, Willis Towers Watson expects the interest to continue as a solution to address growing health costs, especially as the individual markets continue to stabilize.
“Not surprisingly, relatively few employers adopted ICHRAs this year, as the pandemic diverted much of their attention to other critical benefit matters,” said Barkett. “However, we expect to see interest grow as companies learn more about ICHRAs and the market for individual health plans continues to grow more robust each year."