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The evolution of the U.S. health care system has been nothing short of profound. New advancements in science, technology, and patient care are enabling an era of personalized, precision medicine. Employers now face an important crossroads: how best to approach employee benefits in this evolving landscape?

As is often the case, innovative solutions have emerged through the trenches of all of this change. One example, the Individual Coverage Health Reimbursement Arrangement (ICHRA), has quickly grown in popularity given its wide spectrum of benefits – both for the employer and the employee.

Companies of all sizes are grappling with the challenge of escalating costs of providing health benefits to their employees, and there's every indication that these costs will continue trending upwards for years to come. As of last year, employers were shouldering an average of $12,562 per employee, and oftentimes those lofty premiums don't meet the specific needs of each employee, making the burden of the bill too much to bear for most.

The ICHRA model was born in 2020, and quickly gained popularity as a more practical choice that stood to help employers manage rising costs. Using pre-tax dollars to cover the cost of premiums, employers are able to navigate the complexities of this nuanced system in order to create high-quality health care benefits for their employees.

Given the complexities of the health care industry, it's impossible for one size to fit all when it comes to coverage, and as the ICHRA model replicates, it's essential to ask the right questions to ensure you're making the right choice for your business. Here are the top three things to consider when vetting an ICHRA:

First and foremost, what are your goals?

Employee benefits play a huge role in recruitment, retention, as well as the bottom line of your business. Every one of these factors will impact and should therefore influence how you set up your contribution strategy.

When it comes to cost, not only are you evaluating your responsibility in providing health care for your employees, but recruitment and retention tend to be large expenses for an organization, and selecting the right health care benefits can help attract and retain good talent.

Outline and specify the goals you have for your business, and ensure the ICHRA model will support those. ICHRA, when done well, allows you to leverage flexibility in many areas, but it's important to do the proper due diligence prior to committing to a plan.