In today’s evolving workforce, businesses are looking for innovative solutions that balance affordability with personalized employee benefits. Enter the Individual Coverage Health Reimbursement Arrangement (ICHRA)—a revolutionary model that allows employers to reimburse employees for health insurance rather than providing a one-size-fits-all group plan. Despite its advantages, ICHRA adoption has struggled to gain traction within the Professional Employer Organization (PEO) sector due to entrenched structural and administrative barriers. However, Stitch PEO is redefining this space by eliminating these hurdles and creating a seamless, scalable solution for businesses looking to modernize their benefits approach.
ICHRA puts employers and employees in the driver’s seat when it comes to health benefits. Instead of being stuck with one health plan, employees get to pick the coverage that works best for them, while employers can set a budget that makes sense for their business. This approach means:
More Flexibility – Customize benefits for different types of employees.
Predictable Costs – Employers set their contributions upfront, so there are no surprises.
Happier Employees – When people have a say in their benefits, they feel more valued and satisfied.
A report from Redesign Health highlights how ICHRA adoption is increasing, particularly in industries where employers struggle to provide competitive group health plans. In their article, "ICHRA Reality Check: Exploring the Good, the Bad, and the Road to Scale", they note that 72% of employers who have adopted ICHRA plan to continue using it, demonstrating the potential for long-term success.
Even with all its perks, ICHRA adoption in PEOs has been slow due to deeply ingrained industry practices. Traditional PEOs rely on bundled group health plans, making the transition to ICHRA administratively challenging. Managing reimbursements across multiple employers requires a level of automation and integration that many legacy PEO systems do not support. As highlighted by Redesign Health, broker compensation models are often structured to favor the renewal of high-margin group plans, further hindering widespread ICHRA adoption.
Stitch PEO is pioneering a scalable ICHRA solution by integrating technology-driven administration and employer-focused efficiencies. Unlike traditional PEOs, Stitch PEO’s model is built to make ICHRA practical for organizations of varying scales. Key features include:
Streamlined Administration – An intuitive platform that automates compliance, reimbursement processing, and employee enrollment, reducing the complexity associated with ICHRA.
Employer-Centric Scalability – Designed to support businesses across industries and sizes, Stitch PEO eliminates the barriers that have traditionally prevented PEOs from adopting ICHRA.
Seamless Integration – Companies can transition to ICHRA without disrupting existing HR workflows or operations. Cost and
Compliance Advantages — Stitch PEO offers lower costs and greater flexibility than traditional group health plans, ensuring companies remain compliant with ACA and IRS regulations.
Businesses today need benefits solutions that evolve with workforce expectations. ICHRA offers an approach that helps employers manage healthcare expenses with predictable, pre-determined contributions. With the rise of remote and hybrid workforces, companies require benefits that accommodate employees across different states, and ICHRA provides the flexibility needed to meet these demands.
When employees get to choose a health plan that truly fits their needs, they feel more in control of their well-being. This sense of ownership leads to higher job satisfaction and a stronger connection to the company, creating a workplace where employees feel genuinely engaged, appreciated, and motivated to do their best work.
Stitch PEO is redefining the future of employer-sponsored healthcare by making ICHRA accessible, scalable, and effective for businesses. As more companies recognize the advantages of this modern benefits approach, now is the time to move away from traditional group plans and embrace a cost-effective, flexible, and sustainable solution.
Ready to explore ICHRA for your business? Contact Stitch PEO today to modernize your benefits strategy.