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How to Control Healthcare Costs Throughout Your Portfolio With New Insurance Model
- Private equity firms often overlook employee benefits when implementing value creation plans to increase profitability during ownership of companies.
- The individual coverage HRA (ICHRA) model offers control over insurance costs for businesses while providing quality healthcare benefits to employees.
- ICHRA can help PE-backed companies struggling with unpredictable group health plan renewals and high insurance costs.
- It allows for personalization in healthcare coverage, giving employees the freedom to choose plans that suit their individual needs.
- Implementation of ICHRA can lead to cost savings for both employers and employees compared to traditional group healthcare plans.
- ICHRA offers stability to employers, flexibility to employees, and eliminates the financial burden of high-cost claimants.
- Companies with multi-state operations find ICHRA particularly appealing due to the scalability and customization it offers for diverse employee groups.
- ICHRA allows employers to set a consistent budget for health insurance costs, providing predictability and avoiding unexpected cost increases during renewals.
- The adoption of ICHRA, as exemplified by a case study of a PE-backed manufacturing company, has shown benefits in reducing costs for employers and empowering employees with choice and control over their healthcare.
- Overall, ICHRA serves as a valuable tool for private equity firms seeking to optimize costs and enhance value creation within their portfolio companies.
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