Choice Stories

June 8, 2016

Private Health Exchange Enrollment on the Rise

Private Health Exchange Enrollment on the Rise

  Private health insurance exchange growth hit eight million in the first half of 2016, increasing by more than one-third (35 percent) from 2015, according to an analysis by global professional services company Accenture. The private exchange movement had approximately six million participants in 2015, up more than 100 percent from 2013. California’s first private health insurance exchange, CaliforniaChoice has been serving businesses for more than 20 years. It focuses on groups of one to 100 employees and reports a significant increase in its membership during the past five years since the Affordable Care Act (ACA) was signed into law. Today, CaliforniaChoice serves more than 17,000 employers and 306,000 employees and dependents.

What’s driving the move?

Defined Contribution, which allows employers more control over their costs, is one reason why more businesses are moving to a private exchange. You decide what amount you want to contribute to your employees’ health coverage. You can choose a fixed dollar amount for each employee or a percentage of your employees’ cost of insurance. It’s your choice. A private exchange also gives employees more choices, including the ability to choose the HMO, PPO, or HSA health insurance plan they prefer. They apply their employer’s generous contribution to the coverage they want and if it costs more than the employer’s contribution, they simply pay the difference through convenient payroll deduction.

Health care reform is also motivating employers to revisit and re-examine their approach to benefits. The ACA requires businesses to include benefits that may not have been part of their employee benefits program previously and it mandates new reporting. Another consideration is reduced administrative burden. Private exchanges offer employers the ability to expand their employees’ options, control their costs (using defined contribution), and streamline their benefits administration – with online enrollment for multiple health plans, a single bill for all coverage, and one website and toll-free number for employee support. Contact a CaliforniaChoice broker to find out how CaliforniaChoice can deliver cost control to you, while offering your employees more health care choices than ever before.

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