With shrinking candidate pools being the top concern for the home improvement industry, employers are having to be flexible with their definition of “employee”. While part-time, varied hours, apprenticeship, etc. positions are becoming more common these days, the demand for benefits has not changed. Fortunately, the ICHRA program provides an employer health insurance option that offers many employee classifications the benefits they seek.
ICHRA Overview
This program launched in 2019 allows employers to contribute pre-tax dollars for employee health care. Like previous health reimbursement accounts or HRAs, employees can use those funds to purchase their own insurance plans. ICHRA’s game-changer was lifting many of the restrictions on participation and implementation of the HRAs.
Benefits of the ICHRA Health Insurance Option
1) Flexibility
ICHRA allows employers to set the budget for contributions and employees to choose an insurance plan that best suits their situation. This flexibility is a win-win for both sides.
2) Fewer Restrictions
Previous HRA program requirements made it difficult for many small businesses to qualify, including employee participation rates, number of W-2 employees and premium contribution levels. ICHRA removed those barriers, placing more control in the hands of employers and employees.
3) No Set Contribution or Participation Levels
Budget concerns were a large barrier to participation for many small businesses pre-ICHRA. Now, employers can set the amount of money they want to contribute, balancing costs with employee needs. Also, not everyone on the team must participate, making no real downside to implementing the program.
4) Wider Employee Definitions
Here is where ICHRA has become an even more powerful tool for employers looking to adapt to the current workforce characteristics. The program allows contractors, 1099, W-2 and seasonal and temporary employees to participate. They must be of similar employment class, such as hourly or salary, but employers can vary contribution levels per employee.
The Wharton & Power Insurance Team has helped many Greater Indianapolis home improvement businesses develop ICHRA programs that suit their varied types of employees. We would be happy to talk with you about your situation and create a plan to fits your workforce and your bottom line. Reach out to us for a conversation. Send us an email or give us a call at 317-663-4138.
