Rising Medical Costs in Cincinnati May Leave Employers Wondering Which Route to Take, This Benefit Might be the Map They’re Looking For

By Daker Monroe

Year after year, for many employers it’s the same story. The cost of employee benefits keeps rising, causing many companies to look for ways to plug the leak. This often means reducing benefits and shifting more of the cost to employees, but it doesn’t have to.

An Individual Coverage Health Reimbursement Arrangement or ICHRA (pronounced ick-ruh) is the newest generation of employer-sponsored health coverage. It provides richer benefits for employees and saves money for employers.

That’s good news given that the cost of medical care continues to rise in Cincinnati and throughout Ohio. In 2025, costs are expected to rise 8% year over year for group health and 7.5% for individual insurance across the U.S., according to a report by the PwC Health Research Institute.

What’s more, ICHRAs were developed under President Donald Trump’s first term and embraced by the Biden administration. So, the chances of it being impacted by any changes in the current White House are low, making it easy for employers to plan benefit renewals.

Here’s how ICHRAs work

Employees choose the health plan that best suits their needs. Meanwhile, the employer has set aside a certain amount of money to reimburse employees for costs such as premiums, copays and deductibles.

What’s in it for employers

There is no minimum or maximum an employer must contribute and they can reimburse employees on a tax-advantaged basis.

ICHRAs can be provided for full-time, part-time, seasonal, salaried and hourly employees.

Employers can enter 2026 knowing exactly what they will spend on employee medical care and wellness, so the guessing game is replaced with certainty.

By providing a flexible plan option, organizations can attract and retain top talent that wasn’t getting the right coverage under a group health plan. With six generations in the current workforce, employers who offer flexible benefits stand out from the competition.

Employers will work with a benefits administrator, eliminating the need for insurance companies to work directly with employees, which can be a confusing and drawn-out process.

What’s in it for employees

It’s certainly a boon for employers, but employees also have something to gain.

Employees have the freedom to choose the health plan that best suits them, their families and their wallets. They’re not tied to a one-size-fits-all plan provided by their employer because, with an ICHRA, their decision can be very specific to their personal needs.

For example, if an employee is healthy and rarely uses health insurance, they may purchase a lower cost plan with a higher deductible, potentially saving money by not having to pay for coverage they rarely use.

On the other hand, an employee who often accesses medical care may benefit from purchasing a more expensive plan that will have lower out-of-pocket costs.

Aside from the freedom of choice that an ICHRA allows, employees may continue to benefit from the tax advantages that they have today, just like they do through a traditional group health insurance plan.

Finally, if an employee takes a job with another organization, they don’t have to lose the health plan they have already chosen. Their plan is portable. They can keep it through their transition period and even take it with them to another employer that offers benefits through an ICHRA.

With so many options to provide health and wellness benefits, it could be confusing for an organization to sift through it all.

This article also appeared on the Cincinnati Business Courier.

For more information, contact us below or visit our Property & Casualty Risk Hub here.