As a 24/7 operation, manufacturing is always in motion. Shifts change around the clock, production lines speed up and slow down, and workers move between jobs and facilities. However, many group health plans are designed for traditional nine-to-five workplaces with predictable schedules and stable employee counts. This often means manufacturers pay insurance costs for former employees or lack options for coverage for valuable workers who don’t fit neatly into full-time roles.
Static plans might not match how your organization and team work, but another type of health benefits strategy can: Individual Coverage Health Reimbursement Arrangements (ICHRAs).
ICHRAs are built for diverse, shift-driven manufacturing workforces. They give you a way to flexibly and affordably cover full-time, part-time and temporary staff, all while providing coverage that keeps pace with changing production demands and turnover.
Before making your next benefits decision, consider how ICHRAs align with your around-the-clock staffing requirements and dynamic workforce challenges.
How ICHRAs work for manufacturing
As an alternative type of employer-sponsored coverage, ICHRAs bring affordable, personalized coverage to manufacturing teams, making health benefits more tailored and accessible to employers and employees alike. Whereas traditional group health insurance plans offer limited choices and are difficult to customize, ICHRAs put you and your employees in control.
You decide how much money you want to give employees toward health benefits, and they decide which health plan to purchase. Your defined contribution is tax-free for employees and goes toward the individual health insurance plan of their choice, whether it’s the same insurance they’ve always used or a new plan with better specialty care.
Regardless of your company size — a local machine shop or a multi-state production enterprise — you can offer your workers an ICHRA.
Onboarding an ICHRA is simple:
- You choose the contribution level for each employee class (seasonal, hourly, salaried, etc.).
- Your employees evaluate their options and enroll in a plan that fits their needs.
- Your employees are reimbursed for eligible insurance costs up to the amount you agreed to provide.
Why manufacturers are choosing ICHRAs
ICHRAs are designed for the realities of manufacturing, where costs, headcount and workflow can shift with production cycles. With fixed benefit contributions set each year, your HR and finance leaders can predict spending and budget accordingly, even as overtime, labor contracts and raw material prices fluctuate annually.
You can establish different health benefit allowances for each group on the plant floor — salaried supervisors, hourly temp hires, etc. — to ensure that team members get coverage options that align with their employment terms. Coverage levels can be adjusted annually to keep pace with the true size and shape of your workforce as demand spikes or slows.
While traditional group plans require HR to choose a one-size-fits-all policy and manage annual renegotiations, ICHRAs give manufacturers the freedom to focus on strategic workforce management. This makes administration easier, giving leaders time for solving real business challenges instead of worrying about complex benefits management. You can focus on setting allowances and verifying reimbursements.
What manufacturing employees gain with ICHRAs
In a fast-moving work environment, ICHRAs give manufacturing employees choice and stability, regardless of their role or which plant they’re assigned to. Workers can keep their health plan even if they change positions or locations within the company. For them, that means no disruption in care if they choose. For you, that means less administrative work caused by shifts, rotations or promotions.
ICHRAs let each employee shop for the plan that works best for their situation, rather than locking them into traditional group coverage where everyone gets the same plan, regardless of their needs. Whether employees want coverage that supports the physical demands of their job, provides access to specialty care for long-standing health issues, or offers comprehensive options for their large family, they have the power to choose what’s best.
ICHRAs give employees a financial advantage because employer contributions used for qualified medical expenses are not treated as taxable income. Compared with receiving the same amount as cash compensation, employees keep more of each dollar.
A smart benefits solution for modern manufacturing
By delivering cost predictability for manufacturers and offering truly tailored choices to employees, ICHRAs help solve longstanding challenges in benefits administration. They make it easier for employers to offer coverage that fits their employees’ needs. And with more flexibility in health benefits, you’re better positioned to attract and retain a diverse, high-performing workforce.
For you and your employees, ICHRAs may mean less frustration, more choice and a simpler path to health coverage that aligns with how modern manufacturing operates.
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