Traditional group plans have long been the go-to for the majority of employers in the United States, but these plans come with some distinct drawbacks. Group plans can be complicated for employers to support, and force employees into a “one size fits most” solution, that might not offer proper coverage to all enrollees. Moreover, group plan premiums are consistently on the rise, sometimes by double digit percentages each year. One employer I spoke with told me, “(e)very year at renewal time, I hold my breath until I see the premium increases. Sometimes after, too.” A lack of available options has forced these companies to grit their teeth and accept the status quo.
As of January 2020, employers of all sizes are able to offer an alternative called an Individual Coverage Health Reimbursement Arrangement, or ICHRA for short. Simply put, with an ICHRA an employer gives each of their employees a monthly stipend to be used towards their health insurance premiums. The employee then shops for the individual plan that best fits their needs and budget. The result is a better outcome for everyone involved.
But the implementation is not.
ICHRA implementation and reimbursement can be difficult for the employer. The time and cost savings by switching to an ICHRA can easily be negated if the employer doesn’t have the guidance of a trusted Broker to lead them through the process, and the software to match. The issue? Most Brokers do not have the capabilities to support an ICHRA offering for their clients. The result is that employers are forced to make the decision to either stick with their traditional group plans, or to proceed without the invaluable service of a trusted Broker.
So, how can Wholesalers and MGAs help their Broker partners?
The role of the Wholesale and MGA community is to enable their Broker partners access to the best products and solutions that allow them to serve the needs of their clients. According to the Department of Health and Human Services, between 5 to 10 million people will be covered through an ICHRA by 2025. That’s a significant market segment that Brokers could potentially be losing out on. Understanding this, it only benefits the Wholesaler to provide a solution that services an ICHRA from end to end. Unfortunately, most software on the market falls short of aiding the Wholesaler and MGA community. Companies have emerged that aim to cut out the Broker entirely, or to offer them a small finder’s fee. Others have emerged that only address one piece of the puzzle, be it billings and reimbursements, or employee plan selection. The end result is either implementation of multiple solutions to solve one problem, or a complete loss of an entire market segment.
Enter Candor USA
Candor USA is a software-as-a-service company, empowering Wholesalers and MGAs with the tools and products to enable their Broker partners to provide high quality, affordable healthcare coverage. Designed as a one-of-a-kind software solution to the ICHRA dilemma, it provides a seamless transition to this offering for all of your Broker partners. This platform walks employers and employees alike through each step of the ICHRA process, from defining contributions, to plan selection, to billing and reimbursement. Like all Candor offerings, the solution is completely customized and white labeled. Wholesalers, MGAs, and Brokers remain the face to their customers. The first ICHRA platform built just for Brokers, powered by Candor.
About the author: Nick Shirman is the Director of Sales at Candor USA and leads the effort to support MGA and Wholesaler relationships.