ICHRA vs. Traditional Group Insurance: A Broker's Comparison

A deep dive into the structural differences between ICHRAs and traditional group health plans.

Selection and Choice

Traditional Group: The employer selects one or two group plans for everyone. Employees are locked into those specific carrier networks.
ICHRA: The employer sets a defined dollar allowance. Employees choose any individual plan they want from any available carrier in their zip code.

Premium Pricing

Traditional Group: Premiums are based on the group's collective risk profile and claims history.
ICHRA: Premiums are based solely on each employee's individual age, location, and plan choice (community rating).

Quoting Process

Traditional Group: A one-stage, often lengthy group quoting process involving census data and carrier underwriting.
ICHRA: A two-stage process: first, the broker helps the employer set the contribution strategy, and second, employees shop for their individual plans in real-time.

Class Structure

Traditional Group: Generally, all employees in a class must share the same plan options with rigid participation requirements.
ICHRA: Employers can set completely different allowance amounts for up to 11 different distinct employee classes (e.g., full-time vs. part-time, salaried vs. hourly, geographic regions) with no minimum participation requirements.