While the public insurance exchanges under the health law have garnered substantial attention for their woeful rollout, private insurance exchanges are continuing to gain traction in the employee benefits marketplace. These exchanges are a way for employers to offer workers a variety of choices and to simplify administration and potentially lower costs. The Private Exchange Evaluation Collaborative was formed by several business health groups and it recently surveyed 723 employers in regard to private exchanges. (PEEC Survey)
According to the survey, 45% of employers have implemented or plan to consider a private exchange by 2018, while 15% are encouraging or will encourage their employees to obtain coverage on a public exchange in that timeframe. If employers could contribute toward the cost of employee’s coverage on a public exchange, 58% would consider doing that. Twenty-five percent of employers think using a private exchange will save them money. About 70% think they need an advisor in regard to exchanges that is independent of the any exchange they might use, which could cause problems for the large benefit consulting firms. The lack of a track record and concerns about staying power were viewed as major barriers to immediate implementation of a private exchange.
Major features desired by employers include tools that aid in plan selection, data and reports, lower cost, ease of use, employee communication support and a variety of plan options. The survey also found about a 12% decrease in the number of employers who said they are likely to be offering health benefits to employees in 2016 and found that 13% of employers have adopted or are very likely to adopt a defined contribution approach in the next two years.