Jack Hooper is the CEO of Take Command, an ICHRA administrator that helps employers reimburse for health insurance.

Every generation brings about changes to the way we work—in particular with their expectations for the workplace experience and benefits. With previous generations, we saw companies pivot from pension plans to 401(k)s.

And with Millennials entrenched as the largest generation in the workforce, we are now seeing the impact of this generation. Millennials (commonly defined as those born between 1981 and 1996) often have different expectations for their company benefits, driven in part by their experiences as consumers. Having come of age in an era of Amazon, Uber and DoorDash, many expect personalization, autonomy and ease of use in other aspects of their lives—including employee benefits.

Many Millennials are willing to change jobs in order to find what they want from an employer: A Gallup report found that 6 in 10 Millennials were open to new job opportunities—putting pressure on organizations to retain employees. According to a recent survey, employee turnover costs companies “an average of $36,295 annually in lost productivity and rehiring costs.” Employers need to provide competitive benefits in order to retain Millennial employees.

As CEO of an individual coverage HRA administrator, I’ve noticed many business leaders and hiring managers are considering this new model for health insurance that delivers the personalization Millennials are often looking for.

The Individual Coverage HRA

With typical group health insurance, the plans are often one-size-fits-all, chosen by the employer with little employee input and flexibility to meet the personal health needs of employees and their families.

In contrast, the individual coverage HRA (ICHRA) addresses this inflexibility. The concept is simple: Instead of choosing a group plan for their workforce, the employer establishes a budget for benefits, and employees choose their own plan on the individual market. When the employee incurs medical expenses, they submit a receipt and the employer reimburses them on their paycheck—tax-free.

Most importantly, ICHRA puts employees—Millennial and otherwise—in the driver’s seat when it comes to their health coverage. Each individual employee can choose the plan that’s best for them. Different people have different priorities: from mental health coverage to specific in-network doctors to important medications.

Considerations For Businesses

For business leaders considering a switch to ICHRA, there are a few factors to bear in mind:

1. Budget

The allowance you provide to employees will dictate which plans they’ll be able to purchase on the individual market. Employers should take the time to research their local market and determine what amount they should be offering to ensure their employees can find the coverage they need without paying too much out of pocket.

2. Employee Groups

Many large businesses have employees spread out across different regions and business units. Healthcare in one state may be more expensive than another. Part-time and seasonal employees, who are typically difficult to cover on a group plan, can be offered benefits through ICHRA. Employers should plan for these groups and allocate benefits accordingly.

3. Support

Until now, many employers have made health insurance decisions for their employees. With ICHRA, many employees will now be making these decisions for the first time—or even gaining health insurance for the first time. Employers should aim to make it easy for their employees to navigate the individual market and find the plan that meets their needs.

Determining The Right Fit

Of course, ICHRA isn’t for everyone. Some companies don’t stress over the cost of their health plan and may find that the transition will cause unnecessary stress for employees and HR staff. In other cases, the majority of employees may already be satisfied with their group plan and will be hesitant to make a change.

Providing healthcare to employees is complicated, and businesses must carefully plan for change management before making a significant change to their benefits.

As a Millennial myself, leading a largely Millennial workforce at my own company has taught me that nothing motivates our team more than asking the question, “Why does it have to be so hard?” Health insurance doesn’t need to be so complicated. With ICHRA, it’s possible to have a healthy workforce, a healthy business and a team of Millennials who are satisfied and engaged at work.

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