If you've been keeping up with the latest trends in employee benefits, you've probably heard a lot of buzz about Individual Coverage Health Reimbursement Arrangements, or ICHRA. These arrangements are quickly gaining traction, reflecting a shift similar to the move from defined benefit to defined contribution plans in retirement savings.  

But as with any new trend, there are challenges to navigate.  

One of the major concerns? Many ICHRA administrators are turning to non-specialized banking-as-a-service providers to manage these arrangements, which can lead to oversights in critical healthcare and banking regulations.  

Let's take a closer look at how ICHRA is reshaping the benefits landscape and how an innovative company like Lynx is stepping up to provide an ICHRA solution that is streamlined, secure, and compliant. 

ICHRA on the Rise 

The ICHRA model has marked a pivotal moment in healthcare legislation, offering employers a flexible and tax-efficient way to provide healthcare benefits.   

The number of employers reported to have adopted ICHRA grew 64% between 2022 and 2023, while ICHRA offers to employees grew by 171%. 

 The ICHRA model provides a customizable approach to employer-funded healthcare by offering advantages such as: 

• Cost Control: Employers can define their budget and have total control over insurance spending, eliminating surprises from high medical claim years and low employee participation. 
• Flexibility: There are no maximum contribution limits, and employers can tailor offerings to specific employee classes based on factors like age or family size. 
• Tax Advantage: Contributions to ICHRA are not considered wages, providing a tax benefit for employers. 
•  Attracting and Retaining Talent: ICHRA can give employers a competitive edge, particularly in industries struggling to find and retain skilled workers post-pandemic, while offering employees the appeal of choosing their own health plan and tax-free benefits. 

The transformative potential of ICHRA is extremely optimistic, however they can impose an administrative burden. With its intricate design and regulatory requirements, it's no wonder that many companies are hesitant to fully embrace this benefit model. 

ICHRA Backend Banking and Payment Dilemma 

While some have introduced models to incorporate scalable banking and accounting systems that offer debit cards for premium payments instead of leveraging Excel spreadsheets and manual reimbursements, backend vendors are not fully equipped to support the healthcare benefits space, treating employer-funded ICHRA accounts as individual banking accounts for employees. This puts ICHRA administrators at risk of non-compliance.  

Striking a delicate balance between automation and compliance has become a key challenge for administrators. With the growth potential of millions of participants and tens of billions of dollars in premium payments annually, the complexity of ICHRA demands more sophisticated solutions. Organizations must invest in advanced systems to navigate these complexities and ensure compliance with regulations. 

Transforming ICHRA Administration with Lynx: Efficient, Compliant, and Ready in 8 Weeks!  

With a strong understanding of healthcare and banking regulatory standards, Lynx offers a compliant, API-first solution, enabling administrators to revamp their payment processes in a regulation-friendly way within weeks.  

 Our banking partners are seasoned experts in healthcare payments, thoroughly familiar with these types of accounts, and fully support Lynx's robust backend structure and ledgering system.  

 The best part? With Lynx, administrators can launch a fully compliant ICHRA in just 8 weeks with other benefits, including: 

Compliant and Secure Infrastructure 

• Prioritizes compliance and security, utilizing the latest security protocols to safeguard sensitive data and financial transactions 
• Ensures adherence to healthcare regulations, including strict guidelines governing ICHRA accounts 
• Confidently navigate the regulatory landscape, ensuring legal compliance and protecting participant data against potential threats 

Customized Payment Experiences and Unified Healthcare Wallet  

• More flexibility to tailor the payment experience to meet clients' and participants' unique needs 
• Integration of virtual or physical debit cards and design of a personalized healthcare wallet  

• A User-friendly interface for simplified healthcare expense management makes it easier for employees to manage healthcare benefits from one integrated platform. 
• Consolidation of ICHRA, Health Savings Accounts (HSAs), and other employer stipends onto a single payment card 

Sophisticated Payment Controls 

• Administrators can implement restrictions on stipends, ensuring spending aligns with employer objectives 
• Controls may include spending only on approved items or designated marketplaces, promoting healthier lifestyles, and efficient fund utilization 

Say goodbye to the complexities and regulatory hurdles of traditional methods. Embrace streamlined, secure, and compliant ICHRA administration with Lynx. Let's redefine benefits administration with a modern, efficient, and secure healthcare wallet. Click here to read how Lynx helped one benefits administrator streamline ICHRA complexities and create a customized, budget-friendly benefit model.