ICHRA INSIGHTS
The Business Of Benefits : ALLIANCE RECYCLING AND ICHRA
WITH STEVE STREGE
C ompanies face risks every day . Those risks may be due to the nature of the work , the local environment , regulations , or any of a slew of others . For Alliance Recycling Group , the biggest risk was employee retention and an everincreasing hemorrhage of money going toward benefits . Alliance , like many other companies , saw their costs creeping higher and higher each year and seemingly had no recourse .
There are some huge issues that benefits cost increases bring . For one thing , owners of the company are going to see more and more of their potential profits going right out the door . For employees , their pay may stay the same but their actual take-home from that will go down since they have to keep spending larger and larger amounts on their benefits plans . This could lead to lower-quality plans and , ultimately , a lower quality of life . Finally , and perhaps most important , less than stellar benefit plans and costs could result in difficulty with employee retention .
The benefits administrators that Alliance had been working with either weren ’ t able to find any way to save money or simply did not want to do the legwork . That put Alliance in the unfortunate position of having to either deal with those increases costs or begin shopping around to find a better solution .
This is the position Alliance was in when they began to work with Nesbit Agencies on their benefits plans . Nesbit didn ’ t have a cookie cutter solution for the problem . Instead , they did a deep dive into some unique solutions that may have worked for Alliance . Eventually , they landed on an individual coverage health reimbursement arrangement ( ICHRA ).
An ICHRA is a benefits cost payment model which allows employers of all sizes to reimburse employees tax-free for qualified medical expenses , including individual medical plans . It also allows employees to pay their remaining qualified medical expenses through pre-tax payroll deductions .
This arrangement has shown Alliance positives across the board . Management saves money and increases profits . Employees are able to save money on their own premiums ( to the tune of hundreds of dollars in some cases ). That savings ultimately increases employee happiness and , thus , employee retention . The savings have been so high , in fact , that they seem more like bonuses or a raise than a savings .
After hearing about all of the work Nesbit has done for Alliance , what hard savings number do you think was arrived at ? Just how big were the savings ? Nesbit saved Alliance over $ 400,000 in the first year with comparable benefits . What Nesbit has done for Alliance could be done for your company as well . For more information and to see if you could be saving on your benefits , contact me , Steve Strege at SStrege @ nesbitagencies . com . +
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