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 the health insurance options for businesses and 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.
Thus far, we’ve analyzed how monthly premiums in the individual market compare with small group premiums and identified counties where employees — if shifted to the individual market — would have access to the plan types they may be accustomed to in the group market. This information can enable employers to make well-informed benefits decisions that best fit their and their employees’ needs.
Recognizable Group Carriers
Another factor that employers may want to consider is whether their employees will be able to purchase individual coverage from recognizable brands. The four largest U.S. insurance brands by market share — Aetna, Blue Cross Blue Shield Association member carriers, Cigna and UnitedHealthcare — likely have national name recognition with employees. The data science team at Vericred investigated where these brands actively sell plans on the individual market and found that at least one of the above four offers plans in 74 percent of U.S. counties, with Blue Cross Blue Shield carriers accounting for most of this participation.
An interactive version of this map is available here.
CVS Aetna, among the most recognizable health insurance brands, offers plans in the employer market, but no longer actively participates in the individual market.
Blue Cross Blue Shield Association member carriers are the most active of four national carriers in the individual market offering individual plans across nearly every state. These Blue Cross Blue Shield carriers also offer small and large group plans.
Cigna offers individual plans in seven states, generally in a small number of counties in and around high-population metropolitan areas. In 2020, Cigna is expanding its individual market presence into metro areas in three additional states: Florida, Utah and Kansas.
UnitedHealthcare, like Aetna, no longer actively participates in the individual market, but the insurer has discussed the possibility of adding more individual plans targeted at the ICHRA audience.
“We’re supportive of the expansion of the HRA and the ways in which they’re used broadly,” UnitedHealthcare’s CEO, David Wichmann, said during the company’s Q3 2019 earnings call. “I suspect that there may be some migration towards more individual offerings. I wouldn’t suggest that that would be prevalent, but to the extent that there are, I think, our company is well-positioned to be able to offer affordable coverages for people in the commercial individual space.”
New Brands are Emerging
While employees may take comfort in coverages from the well-established brands noted above, new recognizable brands are emerging in the individual market. Ambetter (Centene), Bright and Oscar are aggressively marketing themselves as a new generation of health insurance carrier. Younger employees in particular may be less loyal to the four national brands, embracing these new carriers.
Employers should consider how important name recognition is for their employees, as many of the carriers with the largest employer market share have minimal participation in the individual market.
ICHRAs present another employer-sponsored health insurance option, but in order for businesses to make the best decision for their employees, InsurTech and HR platforms must provide decision support tools that assist them through this complicated determination. As the only data platform partnered with hundreds of health insurance carriers serving both the group and individual markets, Vericred is uniquely positioned to help tech companies, and their customers, capitalize on changes to HRA regulations. Contact email@example.com to learn how Vericred can support digital ICHRA solutions.