Private health insurance exchanges burst on the employer-sponsored health benefit scene a couple of years ago but interest seems to have plateaued. There were a number of significant transactions, many with vendors being acquired by the large benefit consulting firms. Several large business groups on health have formed the Private Exchange Evaluation Collaborative and it issued results of a survey on current employer views of private exchanges. (NEBGH Survey) The respondents are 446 employers. Only 6% of the respondents have currently implemented a private exchange for active employees, but another 41% are considering doing so by 2018. There is somewhat greater use or interest for other groups, like retirees, COBRA recipients and part-time employees. Reflecting a wait-and-see attitude, 57% of companies said they would be more likely to use an exchange if a peer did so. Almost every firm said cost of plan options on a private exchange is a key consideration, as are administrative fees charged by he operator of the exchange. Important features of an exchange include tools that aid in plan selection, mobile device compatibility, health education tools and data and reports. Employers are showing more willingness to consider provider approaches other than broad networks, including ACO and medical home models. Among the group that has implemented an exchange, the top reasons for adoption were reduction of total health care costs, giving employees more choice and reducing the HR administrative burden. Most implementers believed they saved money. Half of the companies said it was very important to have a self-funded option among the private exchange choices. 10% use a defined contribution approach and 31% are considering doing so by 2018. Interestingly, with most of the large benefit consultants offering an exchange service, employers said it was important to have an independent advisor help them with their exchange selection, design and strategy. While this group of respondents was very committed to continuing to offer health benefits to active employees, most already have or plan to drop coverage for retirees. It is unclear why private exchange momentum has stalled; it could simply be too many other issues impinging on employers, most related to the reform law. But exchanges, especially when coupled with a defined contribution approach, seem to be a very attractive method of giving employees choice and controlling costs.
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The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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