For employers preparing for a January renewal, October is an important decision point. When the renewal proposal arrives higher than budgeted, leadership faces difficult questions: Can the business absorb the increase? Should employees contribute more? Are there other ways to maintain meaningful coverage?
Before accepting a significant increase or reducing benefits, consider whether a different approach could better support your organization.
BeneSkill helps employers review their options, understand the financial and employee implications, and develop a strategy that fits their workforce. Three approaches worth evaluating are medical expense reimbursement plans, reference-based pricing, and individual coverage health reimbursement arrangements.
1. Medical Expense Reimbursement Plans: Rethinking How Benefits Are Funded
A medical expense reimbursement plan, or MERP, is an employer-funded arrangement that reimburses eligible medical expenses according to the plan’s terms. These may include deductibles, copays, and coinsurance.
One potential strategy pairs a higher-deductible group health plan with employer-funded reimbursement benefits. The employer evaluates whether the premium reduction can help fund reimbursements while preserving meaningful protection for employees.
The financial comparison should include more than premiums. Expected reimbursements, maximum reimbursement obligations, administrative fees, and employees’ remaining out-of-pocket costs all matter. A lower premium alone does not establish that the arrangement will save money.
BeneSkill can help model these scenarios and coordinate a review of plan administration and compliance requirements, including how the arrangement affects health savings account eligibility.
2. Reference-Based Pricing: Examining How the Plan Pays for Care
Reference-based pricing, or RBP, changes how a health plan determines payment for covered services. Instead of relying exclusively on negotiated network discounts, the plan uses an established reimbursement benchmark.
For employers evaluating self-funded alternatives, this approach warrants a careful review of both financial exposure and access to care.
The employee experience is especially important. Providers may dispute the plan’s payment or seek additional amounts where balance billing is permitted. Federal surprise-billing protections apply to certain services, but employers should not assume every potential billing dispute is eliminated.
BeneSkill can help employers examine provider acceptance, claims administration, member advocacy, dispute support, stop-loss protection, and total projected costs. A successful evaluation considers how the arrangement would function when an employee actually needs care.
3. ICHRA: Establishing an Employer Contribution Toward Individual Coverage
An individual coverage health reimbursement arrangement, or ICHRA, allows employers to reimburse eligible individual health insurance premiums and, depending on its design, other qualified medical expenses.
Rather than selecting one group insurance policy for participating employees, the employer establishes a reimbursement allowance. Employees select eligible individual coverage that fits their needs.
This structure can make employer contributions more predictable. However, its value depends on the individual insurance options available where employees live, including premiums, provider networks, prescription coverage, and family coverage costs.
Employers must also evaluate employee-class rules, required notices, and applicable ACA affordability requirements. An ICHRA offer can affect employees’ eligibility for Marketplace premium tax credits.
BeneSkill can help compare available coverage and contribution scenarios so employers understand both their budget and the potential effect on employees.
How a BeneSkill Health Scorecard Helps Guide the Review
Choosing an alternative should begin with understanding your workforce and the questions that need further investigation.
BeneSkill can prepare a health scorecard, working with appropriate carrier and analytical resources, to help organize available population-level information into a practical planning summary. Depending on the available data, that review may include workforce demographics, geographic distribution, aggregate health indicators, and potential medical and pharmacy cost pressures.
These insights help focus the discussion. Geographic information can highlight where individual-market options and provider networks need closer review. Pharmacy indicators can prompt a more detailed examination of prescription benefits. Broader population patterns can identify questions about care management and employee support.
The scorecard helps establish what to investigate next. It does not independently determine which funding arrangement is best, establish underwriting terms, or guarantee savings. BeneSkill combines those insights with actual proposals, financial modeling, coverage comparisons, and implementation considerations to help employers make informed decisions.
Build a Renewal Strategy Around Your Organization
MERP, RBP, and ICHRA each address different aspects of healthcare spending. The right direction depends on your budget, workforce needs, tolerance for financial variability, and readiness for change.
Starting early creates time to evaluate proposals, confirm administrative requirements, and communicate clearly with employees.
BeneSkill can help you review your renewal, prepare a health scorecard, and identify alternatives worth evaluating—whether that means refining your current program or exploring a different approach.
Discuss Your Renewal
Review your options with a BeneSkill advisor.
This article is for informational purposes only and does not constitute legal, tax, or medical advice. Plan suitability and compliance requirements depend on the arrangement and employer’s circumstances.