ICHRAs and employee autonomy: Empowering your workforce

Understanding employee autonomy 

Recognizing employee autonomy is crucial for enhancing workplace satisfaction and boosting productivity. 

For many employees, workplace benefits aren’t the cherry on top. They’re the whole sundae. 

In a 2021 Pew Research Center survey, 43% of employees who resigned in the previous year cited poor benefits as an issue. 

Individual Coverage Health Reimbursement Arrangements (ICHRAs, for short) can empower employees to make personalized decisions about healthcare benefits. While this might seem like a small benefit, the ability to choose healthcare can help foster a greater sense of employee autonomy. 

Regarding healthcare, autonomy means employees aren't stuck with the limited plans chosen by their employers. Instead, they can explore various options available on the individual marketplace. This freedom allows employees to select plans that align with their specific health requirements, family needs, and budget constraints. It's all about choice and control rather than settling for a one-size-fits-all solution. 

Just how can ICHRA benefit employee autonomy? Keep reading to find out. 

Freedom to choose

ICHRAs allow employees to pick their health insurance plans from the marketplace rather than being tied down by a single Group Insurance plan offered by the employer. This freedom to choose gives employees a much wider range of coverage, catering to their lifestyle, preferred doctors, and even bottom line. 

What may feel like a small choice is a personalized, empowered decision allowing employees to select a plan that aligns with their unique healthcare needs and budget.  

In the case of Group Insurance, an employee might not have a choice or be able to choose between only a few plans. ICHRA opens employees up to the marketplace at large, broadening their healthcare horizons. 

Portability

Many working-age Americans (19-64) get health insurance through an employer-sponsored plan. Most employer-sponsored plans are classified as traditional group insurance, but ICHRAs are gaining popularity.

While ICHRAs help employees get the health insurance they need, the plan’s portability gives employees greater autonomy. An employer provides reimbursement for premiums on individual plans, but at the end of the day, the employee owns their coverage, not the employer. 

If employees switch jobs or become self-employed, they can take their coverage with them. This portability gives a greater sense of control over their healthcare coverage, even if an employee’s situation changes. 

This sense of employee ownership from an ICHRA is better defined as self-determination. The more autonomy a workplace can grant employees in everything from day-to-day tasks to benefits, the greater the sense of “satisfaction, fulfillment, and engagement at work,” according to the Harvard Business Review.

Simply put, entrusting employees with healthcare that stays with them, job or not, can boost retention. 

Tailored benefits

With ICHRA, employees can tailor their benefits to meet their unique needs. 

For example, a younger employee in generally good health could pick a high deductible plan at a lower expense because they don’t expect to use their coverage much.  

Or, if an employee wants to prioritize their mental health, they can select a plan with low or no copays for therapy appointments. This could be an empowering choice for Gen Z employees, who are significantly more likely to seek therapy.

Under group insurance, there’s little choice for employees regarding coverage. They have less ownership over their plans. However, being able to pick a personalized plan tailored to their healthcare goals can help foster more employee autonomy. 

Choice of reimbursements

Feeling more control over your finances can boost feelings of empowerment and autonomy.

Employers offering ICHRAs start by setting reimbursements for their employees for qualifying healthcare expenses. But beyond that, it’s up to employees how they spend that money. 

For example, an employee could reimburse dental or vision coverage more, or they could save some of the reimbursement for future premiums. To minimize paperwork, an employee might choose to reimburse only high-dollar qualifying expenses and pay for small expenses out of pocket. Regardless, the decision about what gets reimbursed and what doesn’t is up to the employee (as long as the expense is eligible). 

The flexibility to prioritize different types of coverage helps employees feel more in control of their overall benefits package. 

Not a “one-size-fits-all” approach

Unlike traditional group health plans, which apply the same plan to all employees regardless of their health or life circumstances, ICHRAs allow for greater diversity in the types of plans employees can choose. 

An employee with a young family may prioritize pediatric care and maternity coverage, while a single employee may focus on lower-cost, catastrophic health plans. This lack of a one-size-fits-all approach ensures employees feel more autonomy in managing their healthcare needs.

ICHRAs allow employees to be seen as individuals with personalized needs and priorities. By empowering them to make a choice that fits them best, they’re gaining a sense of autonomy and control over their healthcare.  

The takeaway

ICHRAs help foster a sense of autonomy for employees by giving them control over the health insurance plans they select, how they manage healthcare expenses, and the flexibility to adapt their benefits as their needs change. This autonomy leads to greater ownership and satisfaction with their healthcare choices, making them feel more responsible for their well-being. Want to learn more? Check out how Thatch can help simplify the entire ICHRA process for your company today.