Tn Private Health Insurance Exchanges
Is a private health insurance exchange right for your company?
Private health insurance exchanges are becoming a popular and viable option for companies with as few as 250 employees. While it won't be the right option for all, a private health exchange could provide an easier way to offer employee benefits as there are many online tools and electronic data feeds directly to the insurance carriers. It also could save money, provide more flexibility and offer your entire benefit package in one easy-to-manage program.
Private exchanges are similar to the new health insurance marketplaces in that insurance will be built around an online chassis to view, compare, enroll and manage the entire process through the internet. There are two private HIX models that will be available depending on the administrator: single-carrier and multi-carrier plans.
Single Carrier Private Exchanges
In most cases, the single carrier model will be offered by a specific insurance company like Aetna or Cigna, where employees can choose from a variety of health insurance policies, dental, vision, life, disability and probably some supplemental policies. You may have 4-6 different health plans to choose from low to high benefits and perhaps different provider networks.
Multi Option Private Exchange
A multi-option plan would look similar but have options from multiple insurance companies, giving more flexibility in networks, prescription coverage and plan design. These will be offered by consulting companies like Aon Hewitt, Mercer, and private companies like Liazon or Bloom. While still a new strategy in most markets, there a few to choose from nationally. An example of a small group private exchange that has been extremely successful for years is CaliforniaChoice, where 10,000 companies cover more than 160,000 employees. Hopefully, this model will be replicated across the country making a private exchange an option you can consider for your company.
Is a private exchange right for you?
It's too soon to know if a private exchange will reduce your company's healthcare costs. One of the main frustrations of offering an employee benefits package is the annual renewal process and trying to offset cost increases by reducing benefits to manage the company and employee costs. By using a defined contribution, where the company chooses a set contribution for each employee, the employee can choose from many options and determine what is best for their situation and budget. This eliminates the uncertainty of budgeting for healthcare costs on a year-to-year basis for employers.
The future of Private Exchanges
Many industry professionals believe the private exchange model will grow and improve much like 401Ks did in the 1990s, where they are now commonplace in large and small companies and employees are comfortable with the concept. One thing is sure:
Do you want to learn more about a private health exchange for your company? Give us a call to learn more today 615-724-1699.
HIX: Myths Surrounding Private Exchanges
Liazon's Chief Strategy Officer Alan Cohen gives his views on what it means to move employees to private insurance marketplaces.
HIX: Real Answers to Private Exchanges
There has been a great deal of discussion about private exchanges and why they make sense for an employer. Craig Hasday of Frenkel Benefits addresses important questions about private exchanges including: Will they deliver real cost savings or just shift costs to employees? And how important is technology to implementing private exchanges?
Liazon Private Exchange Employer Video
Liazon Employee Video