New to Health Reimbursement Arrangements (HRA)? Check out our recent blog to better understand HRA basics and learn what’s changing in 2020.
In our ongoing VeriStat blog series on Health Reimbursement Arrangements (HRA), we’re examining how a new type of HRA — the Individual Coverage HRA (ICHRA) — could alter health insurance options for businesses and their employees in 2020. According to White House estimates, ICHRA regulations are expected to transition millions of employees from traditional, employer-managed group health insurance plans to individual market plans.
Our first VeriStat analyzed how monthly premiums in the individual market compare with small group premiums, and identified states where employees could potentially benefit by switching to the individual market from their current small group coverage. This crucial information enables employers to make cost-effective benefits decisions that best suit their and their employees’ needs.
However, the individual market differs from the small and large group markets in more than just premiums. There are differences in plan design and networks that employers may wish to consider when evaluating whether an ICHRA is right for them and their employees. The majority of employer-sponsored coverage offered is PPO (preferred provider organization) or POS (point of service) plans, but these are less common in the individual market. PPO and POS plans offer some degree of out-of-network coverage, whereas HMO (health maintenance organization) and EPO (exclusive provider organization) plans generally do not.
Vericred’s data science team analyzed, at the county level, where an employee switching to the individual market would have available to them at least one PPO or POS plan.
An interactive version of this map is available here.
The results show that individual market PPO or POS plans are available in only 40 percent of counties and are more commonly offered in certain states:
- 22 states have PPO/POS plans available in every county
- 20 states have PPO/POS plans available in some counties
- 9 states have no PPO/POS plans in any county
Employers considering switching to an ICHRA should evaluate what plan types are offered in the individual market in their geographic area and the importance of out-of-network benefits to their employees.