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Uncategorized

ACA Subsidy Expiration Could Ripple Through Group Health Plans

by Inoventive Solutions
December 23, 2025

The expiration of enhanced premium subsidies that have helped millions of Americans afford individual health insurance through the Affordable Care Act exchanges at the end of 2025 will be felt by employers offering group health plans.

As exchange coverage becomes less affordable for many households, more workers may look to employer-sponsored plans for stability, while employers that fund Individual Coverage Health Reimbursement Arrangements (ICHRA) to help employees buy coverage may need to revisit affordability and contribution strategies because the same employer funds may cover a smaller share of premiums than before when purchasing health insurance on Healthcare.gov and other state-run exchanges.

The temporary subsidy enhancements enacted during the COVID-19 pandemic removed the 400% federal poverty level income cap and increased the value of premium tax credits across income brackets. As a result, subsidized exchange enrollment nearly doubled between 2020 and 2024. If the enhanced subsidies expire, higher-income households will lose eligibility altogether while those who remain eligible will receive smaller credits and pay more for their share of the premium.

Increasing enrollment pressure

For employers offering traditional group health coverage, one likely consequence is increased enrollment pressure. As individual premiums rise, employees who previously declined employer coverage may opt in during open enrollment.

That could affect plan participation, contribution levels and claims experience particularly if workers with higher health care needs are more motivated to seek employer coverage.

Labor dynamics could also shift. Workers without access to affordable employer-sponsored coverage may be more inclined to change jobs to secure benefits, potentially influencing recruitment and retention in competitive labor markets. At the same time, fewer employees qualifying for exchange subsidies could slightly reduce applicable large employers’ exposure to costly ACA “pay or play” penalties, which are triggered when full-time employees receive premium tax credits.

ICHRA effects

The impact may be more immediate for employers offering ICHRAs, which reimburse employees for individual market coverage rather than providing a group plan.

If subsidies shrink and marketplace premiums rise, some ICHRA allowances that were previously affordable may no longer meet regulatory affordability thresholds. Employers may need to increase contribution levels or adjust benchmark assumptions to remain compliant.

Industry experts have also warned that abrupt shifts in individual market enrollment could create volatility. A contraction in exchange enrollment — particularly if healthier individuals drop coverage — could put upward pressure on premiums, further complicating affordability for both employees and employers relying on individual-market plans.

At the same time, the uncertainty may accelerate interest in alternative benefit strategies. Employers facing steep group plan renewals may explore ICHRAs to shift risk to the broader individual market, though that strategy becomes more complex if exchange affordability deteriorates.

What employers should consider now

Now that the enhanced subsidies have expired, employers may want to:

  • Review group health plan affordability and employee contribution structures.
  • Reassess ICHRA allowance levels and benchmark plans if applicable.
  • Evaluate workforce demographics and possible enrollment shifts for 2026.
  • Prepare employee communications that explain coverage options and tradeoffs.
"Cancer
Uncategorized

Cancer Care Costs Surge for Group Health Plans

by Inoventive Solutions
October 21, 2025

As cancer rates rise among working adults, treatment has become one of the fastest-rising expenses in employer-sponsored health plans, according to a new survey.

The survey by the International Foundation of Employee Benefit Plans (IFEBP) found that 86% of employers have seen their cancer care spending increase over the past year, with a median rise of 11%, making it one of the most significant contributors to overall health care cost growth.

As more employees get diagnosed with cancer, which in turn increases the cost of care for employers, they are increasingly turning to strategies that direct plan members to high-quality, cost-efficient providers and care facilities.

What’s driving the trend

Employers report that cancer-related costs are increasing due to a mix of:

Expensive specialty drugs — Many of the newest cancer drugs can cost $20,000 to $40,000 per month, while gene and cell therapies can top $1 million per course. Even with negotiated network discounts, the compounding cost of these treatments is straining plan budgets.

New treatment technologies — New high-cost therapies like immunotherapies and gene-based treatments are regularly coming on line.

A higher number of working-age adults being diagnosed with cancer — New cancer diagnoses are expected to exceed 2 million cases in 2025, with rising rates among women under 50 and cancers such as colorectal, breast and cervical appearing more often in younger age groups.

More people are surviving cancer — Employees and their dependents are entering treatment phases earlier and remaining in survivorship programs longer, adding sustained costs for employers.

How employers are responding

Employers are increasingly turning to steerage techniques that direct plan members to high-quality, cost-efficient providers and care pathways. According to IFEBP, the most common approaches include:

  • Nurse navigators (63%) to help employees coordinate complex care.
  • Second-opinion programs (58%) to validate treatment plans.
  • Centers of excellence (42%), which offer bundled, value-based pricing.
  • Treatment center networks (24%) and virtual care clinic vendors (18%).
  • Value-based contracts (17%) and point-of-care testing (15%).

Among employers using these strategies, the primary goals are:

  • Improving outcomes (66%),
  • Offering personalized support (59%) and
  • Negotiating lower prices (33%).

Nearly a third is experimenting with alternative payment models such as shared-savings or bundled-rate arrangements that tie reimbursement to results rather than the volume of care.

Prevention and early detection

Experts say early detection offers the greatest potential to control both costs and outcomes. However, only about half of employees receive annual preventive care, and a significant portion of catastrophic cancer claims is linked to individuals who skipped routine screenings.

Employers can help by:

  • Promoting annual preventive exams and age-appropriate cancer screenings.
  • Covering or incentivizing genetic and biomarker testing for at-risk employees.
  • Incorporating AI-assisted diagnostics and at-home testing options for early detection.
  • Providing educational campaigns on modifiable risk factors such as smoking, obesity and inactivity.

To manage this, benefit professionals are urged to take a comprehensive, life-cycle approach from prevention and early screening to treatment navigation and survivorship care. As Julie Stich, IFEBP vice president of content, noted, employers must “offer the most effective cancer care treatments while also exploring cost-control techniques.”

"kit"/
Uncategorized

What You Need to Know About COVID Test Kit Rules for Group Health Plans

by Inoventive Solutions
January 27, 2022

Starting Jan. 15, the nation’s health insurers have been required to cover the cost of up to eight at-home rapid COVID-19 tests per month for their health plan enrollees.

Insurers are taking different approaches to the mandate and, as an employer, you should communicate with your covered staff about this new benefit, how it works and other advice.

According to frequently asked questions posted by the Department of Labor, coverage for over-the-counter test kits must be covered by insurers without cost-sharing and without a doctor’s order or prescription. It laid out a series of rules insurers and health plans must follow. They:

  • May require enrollees to submit reimbursement claims for OTC COVID-19 tests (the agency, however, “strongly encourages” plans to reimburse pharmacies directly instead).
  • Must reimburse plan enrollees for tests they purchase outside of their preferred network up to $12 per test if they also offer coverage for OTC tests through a pharmacy network. Health plans are authorized to provide a more generous reimbursement from tests purchased through a non-preferred provider.
  • Can limit the number of OTC tests covered without cost-sharing, as long as they cover eight per month per enrollee with no cost-sharing. That means a family of three on a family plan can be reimbursed for up to 24 tests per month.
  • Cannot limit the number of covered tests if they are ordered by a doctor after a clinical assessment.
  • Can require enrollees to attest that OTC tests they are reimbursed for are for personal use and not for work, that they are not being reimbursed for the tests by other sources and that they won’t resell the tests.
  • Can require that enrollees provide receipts as proof of purchase.

Action items

Contact us or your group health insurer for guidance on how it will handle payment for OTC tests. It is important to:

  • Check that it has pharmacy and retailer networks in place where covered individuals can obtain the OTC tests.
  • Check if it has a direct-to-consumer shipping program for kits.
  • Check if it has systems in place to handle claims and for reimbursing either participants or participating pharmacies that have point-of-sale test kits available.
  • Ask the insurer whether it has any purchase or reimbursement limits if tests are purchased at a non-network pharmacy or retailer.

Once you have those details in hand, hold a meeting with your staff covering the following:

  • An explanation of the new benefit and how their insurer will reimburse or pay for the kits.
  • Go over the claims and reimbursement process if they pay out of pocket at a non-participating pharmacy.
  • Provide a list of network pharmacies and retailers that will offer point-of-sale test kits that the insurer pays for direct. Also provide information on any direct-to-consumer purchase options.
  • Tell them about any reimbursement limits if they purchase from non-preferred pharmacies, or other limits (like the eight tests per month limit).
  • Advise your staff to keep receipts for any at-home test kits they have purchased since Jan. 15. They should also save the boxes the test kits come in as some plans may require them as proof of purchase.
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Uncategorized

How to Distribute Group Health Plan Rebates to Your Staff

by Inoventive Solutions
November 11, 2020

Group health plan insurers are paying out $689 million in rebates to plan sponsors this year, as required by the Affordable Care Act’s “medical loss ratio” provision.

The provision requires insurance companies that cover individuals and small businesses to spend at least 80% of their premium income on health care claims and quality improvement, leaving the remaining 20% for administration, marketing and profit.

The MLR threshold is higher for large group insured plans, which must spend at least 85% of premium dollars on health care and quality improvement.

Employers who sponsor health small and large group health plans around the country in the last few months have received notices of rebates from their insurers. For those who have received one for the first time, there’s always a question of what they should do with the surprise funds. 

MLR rebates are based on a three-year average, meaning that 2020 rebates are calculated using insurers’ financial data in 2017, 2018 and 2019.

You received a rebate…now what?

Health insurers may pay MLR rebates either in the form of a premium credit (for employers that are still using the insurer) or as a lump-sum payment. More than 90% of group plan rebates come as a lump-sum payment.

Once an employer receives this money, it is their responsibility to distribute the rebate to plan beneficiaries appropriately within 90 days, or risk triggering ERISA trust issues. 

How the employer distributes the check will depend on how much their employees contribute to the plan, if at all. Here are the basic rules for employers handling their MLR rebate checks:

  • If you paid 100% of the premiums, the rebate is not a plan asset and you can retain the entire rebate amount and use it as you wish.
  • If the premiums were paid partly by you and partly by the participants, the percentage of the rebate equal to the percentage of the cost paid by participants must be distributed to the employees.

If you have to distribute funds to the plan participants, the Department of Labor provides a few options (if the plan document or policy does not already prescribe how they should be distributed):

  • The funds can be used to reduce your portion of the annual premium for the subsequent policy year for all staff who were covered by all of your group health plans.
  • The funds can be used to reduce your portion of the annual premium for the subsequent policy year for only those workers covered by the group health policy on which the rebate was based.
  • You can provide a cash refund to subscribers who were covered by the group health policy on which the rebate is based.

How it works (example)

  • Total premiums paid to an insurance company for a plan with 100 covered employees during 2019 = $2,000,000.
  • Total participant contributions during 2019 = $500,000 (25% of total plan premiums for the year).
  • The employer receives a $30,000 rebate from the carrier in 2020.
  • A total of $7,500 is considered plan assets and must be distributed to the employees (25% of the $30,000).

Tax treatment of cash refunds

If your employees paid for their share of the health premium with pre-tax earnings, the refund would also have to be taxed. But if they paid for their premiums post-tax, they would not be required to pay taxes on the refund (unless they deducted the premiums on their income tax returns). 

You must distribute rebates to your staff within 90 days of receiving them.

Uncategorized

How to Distribute Group Health Plan Rebates to your Staff

by Inoventive Solutions
October 7, 2020

Group health plan insurers are paying out $689 million in rebates to plan sponsors this year, as required by the Affordable Care Act’s “medical loss ratio” provision.

The provision requires insurance companies that cover individuals and small businesses to spend at least 80% of their premium income on health care claims and quality improvement, leaving the remaining 20% for administration, marketing and profit.

The MLR threshold is higher for large group insured plans, which must spend at least 85% of premium dollars on health care and quality improvement.

Employers who sponsor health small and large group health plans around the country in the last few months have received notices of rebates from their insurers. For those who have received one for the first time, there’s always a question of what they should do with the surprise funds. 

MLR rebates are based on a three-year average, meaning that 2020 rebates are calculated using insurers’ financial data in 2017, 2018 and 2019.

You received a rebate…now what?

Health insurers may pay MLR rebates either in the form of a premium credit (for employers that are still using the insurer) or as a lump-sum payment. More than 90% of group plan rebates come as a lump-sum payment.

Once an employer receives this money, it is their responsibility to distribute the rebate to plan beneficiaries appropriately within 90 days, or risk triggering ERISA trust issues. 

How the employer distributes the check will depend on how much their employees contribute to the plan, if at all. Here are the basic rules for employers handling their MLR rebate checks:

  • If you paid 100% of the premiums, the rebate is not a plan asset and you can retain the entire rebate amount and use it as you wish.
  • If the premiums were paid partly by you and partly by the participants, the percentage of the rebate equal to the percentage of the cost paid by participants must be distributed to the employees.

If you have to distribute funds to the plan participants, the Department of Labor provides a few options (if the plan document or policy does not already prescribe how they should be distributed):

  • The funds can be used to reduce your portion of the annual premium for the subsequent policy year for all staff who were covered by all of your group health plans.
  • The funds can be used to reduce your portion of the annual premium for the subsequent policy year for only those workers covered by the group health policy on which the rebate was based.
  • You can provide a cash refund to subscribers who were covered by the group health policy on which the rebate is based.

How it works (example)

  • Total premiums paid to an insurance company for a plan with 100 covered employees during 2019 = $2,000,000.
  • Total participant contributions during 2019 = $500,000 (25% of total plan premiums for the year).
  • The employer receives a $30,000 rebate from the carrier in 2020.
  • A total of $7,500 is considered plan assets and must be distributed to the employees (25% of the $30,000).

Tax treatment of cash refunds

If your employees paid for their share of the health premium with pre-tax earnings, the refund would also have to be taxed. But if they paid for their premiums post-tax, they would not be required to pay taxes on the refund (unless they deducted the premiums on their income tax returns). 

You must distribute rebates to your staff within 90 days of receiving them.

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