Choice Stories

March 29, 2017

Looking Ahead: Private Exchanges in a Changing Health Care World

Looking Ahead: Private Exchanges in a Changing Health Care World

With the proposed GOP replacement plan for the Affordable Care Act (ACA) on hold – after Speaker Paul Ryan pulled the bill from consideration on March 24 – health reform’s future remains a question. In the weeks (or, perhaps, months) ahead, the GOP and White House will have to work out a new strategy for ACA repeal. But while the ACA’s future is uncertain, private health insurance exchanges continue to thrive. And there are several reasons why private exchanges will continue to attract employer interest.

Cost Control

An obvious concern for employers is cost. Many may be asking “how much should I be paying for my employees’ benefits?” A private health insurance exchange puts employers in charge, thanks to Defined Contribution. You choose the amount you want to contribute toward your employees’ health insurance – a Fixed Percentage or a Fixed Dollar Amount – and each employee then applies your contribution to the plan he or she prefers. If the preferred plan costs more than your employer contribution, the employee simply pays the difference through the convenience of payroll deduction.

Greater Choices

No longer does a single carrier solution work for most businesses. One size does not fit all. Every employee is unique and offering just one carrier to all employees doesn’t give them the ability to choose the coverage that best fits their individual or family health care needs. With a multi-carrier private exchange, employees have access to multiple health plans, so they can select the coverage that makes the most sense for them.

Online Technology and Decision Support Tools

Many private exchanges offer online enrollment to streamline sign-ups and decision support tools to help employees determine which health care providers and prescription drug benefits are available with each health plan. They often also offer tools to help employees and dependents identify potential out-of-pocket health care costs – and the ability to match the right health plan to their specific health care needs. Online enrollment helps employees enroll more quickly and gives employers the ability to track who’s enrolled and who still needs to submit enrollment information.

Streamlined Administration, Easy Renewal

Private exchanges offer the added advantage of more-efficient administration, including processing of new hires’ applications, terminations, and other coverage changes as well as billing and other account updates. Groups also appreciate the dedicated support they get from a single customer service team plus the ability to get answers by calling just one number – or visiting one website – when a need for assistance arises. Renewals are easy because businesses can adjust their Defined Contribution each year without leaving the program. That means increased flexibility to manage health care costs, while still giving each employee the ability to find a plan that fits his or her individual needs and budget. Private health insurance exchange enrollment is on the rise. In fact, California’s oldest, continuously operating multi-carrier private exchange, CaliforniaChoice, has seen its membership grow by more than 300 percent since 2010. Consulting group Accenture reports private exchange enrollment was up 35 percent nationwide in 2016, as compared to 2015.   If you want to find out if a private exchange might be the right move for your business, your employee benefits broker can help. If you don’t already have a broker, we’ll help you find a CaliforniaChoice broker to speak with about your group’s health insurance needs.

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