Transamerica has announced the expansion of its workplace-focused benefit solutions with the introduction of individual coverage health reimbursement accounts (ICHRAs).
ICHRAs allow employers to contribute toward premiums and other expenses paid by employees for individual primary medical insurance.
Transamerica says an ICHRA provides a tax-advantaged platform for employers to provide contributions without the administrative burden of providing medical insurance through their organization. For employees, advantages include choosing the medical coverage that best fits their situation and having more control over their health benefits budget. Also, if the plan allows, employees can make additional pre-tax contributions.
Eligible reimbursable expenses may be customized by the employer to include:
- health insurance policy premiums;
- dental services;
- vision expenses;
- prescription drugs;
- over-the-counter medications; and
- doctor visits or medical procedures.
Transamerica adds that customers can pay for expenses through a Transamerica-issued debit card or by submitting receipts for reimbursement through Transamerica’s website. The website also provides the customer’s current balance and any pending claims.
Under final regulations issued in 2019 by the U.S. departments of Health and Human Services, Labor and the Treasury, starting in January 2020, employers were able to use ICHRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market, subject to certain conditions. Interest in the benefit has since been growing.
Willis Towers Watson has found ICHRAs are starting to attract more interest from U.S. employers, particularly wholesale and retail employers and those in education and the public sector.
According to the “Willis Towers Watson 2020 Health Care Delivery Survey,” about one in six employers (15%) is planning to offer or considering offering ICHRAs to at least some portion of its employees in 2022 or later. The survey results showed similar levels of interest regardless of employer size, with 20% of large employers planning to offer or considering offering ICHRAs to at least some portion of their active employees.
Recently, PeopleKeep reported that its 2021 report on ICHRAs found the top reason employers want to offer an ICHRA is because it allows their employees to choose their own health insurance plans. Nearly 70% of employers surveyed said they find that an ICHRA is more flexible than other group health insurance options.
In addition, 90% of employers surveyed already plan to renew their ICHRA benefit in 2022.
To learn more about Transamerica’s ICHRA solution, employers may contact their financial adviser or Transamerica directly at 888-401-5826.
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