Millennials, Healthcare Customization, and Individual Health Reimbursement Accounts: Points to Ponder During Transition
In the modern workforce, every generation leaves an indelible mark on how we perceive employment and benefits. Previously, we saw employers transition from pension plans to 401(k)s to cater to the needs of older generations. Now, as Millennials, the largest generation in the workforce, take center stage, they're bringing about a new wave of expectations.
Defined as those born between 1981 and 1996, Millennials bring a unique perspective to the job market, shaped, in part, by their experiences as consumers. They gravitate towards personalization, autonomy, and ease in other aspects of their lives. That's why they demand the same approach when it comes to benefits.
Millennials are more inclined to switch jobs to find what they desire from an employer. A Gallup report reveals that 6 out of 10 Millennials are open to exploring new opportunities, which inevitably puts pressure on businesses to keep their top talent. According to a recent survey, employee turnover costs companies an average of $36,295 annually in lost productivity and rehiring expenses. In short, to retain Millennials, employers must offer competitive benefits.
As the CEO of an individual coverage HRA (ICHRA) administrator, I've seen more and more business leaders and HR managers considering this innovative health insurance model that aligns with the desires of Millennials. ICHRAs can help companies provide the flexibility that Millennials seek.
The Power of ICHRAs
Typically, group health insurance plans are inflexible, chosen by the employer with little input from employees. ICHRAs, on the other hand, cater to the needs of diverse employees and families by offering a budget for benefits that employees can spend on individual coverage within the individual market. When an employee incurs medical expenses, they submit a receipt, and the employer reimburses them tax-free.
ICHRAs put the employee in control of their health insurance, allowing each individual to choose a plan that addresses their unique priorities, like mental health coverage, in-network doctors, or essential medications.
Business Considerations When Switching to ICHRAs
- Budgeting Employers need to carefully determine the allowance they provide to employees, ensuring it's enough to afford suitable coverage but not so high that the company encounters significant costs.
- Employee Groups Large businesses often have employees in various regions and business units, which means healthcare costs can vary. Employers must factor in these differences and allocate benefits accordingly.
- Support Navigating the new environment might be challenging for employees who have never managed their health insurance before. Employers should aim to make the process easy and straightforward to reduce confusion.
Is ICHRA Right for Your Business?
In some cases, ICHRAs may not be the best option for businesses. For instance, some companies might not be concerned about their health plan costs, or the majority of employees might be content with their group plan. However, ICHRAs can make a significant difference in attracting and retaining Millennial employees, offering a more personalized, flexible, and cost-effective approach to health insurance.
As we move forward, it's essential to remember that the key to a healthy workforce and satisfied employees lies in asking, "Why does it have to be so hard?" ICHRAs can help break down the complexities and simplify the health insurance experience, making it more appealing to Millennial employees and other generations.
Jack Hooper, as the CEO of an individual coverage HRA (ICHRA) administrator, has seen an increase in business leaders and HR managers considering ICHRAs due to their alignment with Millennial demands for flexibility. Jack Hooper's company helps companies offer ICHRAs, which allow employees to choose health insurance plans that cater to their unique priorities, a feature that Jack Hooper believes appeals to Millennials.
In the pursuit of retaining Millennial employees, companies are turning to innovative health insurance models like ICHRAs, and Jack Hooper's company is at the forefront of this trend.
