Choice Stories

April 28, 2016

Private Health Exchanges: Explained Simply

Private Health Exchanges: Explained Simply

  The Affordable Care Act has given new life to the term "Private Health Insurance Exchange", so much so that some people may think that private exchanges are a new phenomenon. The truth is that Private health insurance exchanges have been around for years (The CaliforniaChoice private exchange began in 1996.) So, you may be asking, “What exactly is a private exchange?” Here’s a quick overview:

QuestionPrivate Health Exchange 
Who runs the exchange?Private exchanges are operated by benefit brokerages, employee benefits consulting firms, and other companies (including privately backed firms like CHOICEAdministrators, which operates the CaliforniaChoice exchange). 
Who uses the exchange?Businesses who want to offer their employees a greater selection of coverage options. Medicare-eligible retirees may also be offered coverage through a private exchange. 
Are subsidies available?Companies offering coverage to employees (and their eligible dependents) typically offer a fixed contribution amount toward the cost of health insurance chosen by the employee.
Does the exchange offer different health plans?Some private exchanges limit group choices to a single carrier, but give employees the option to choose from multiple plans offered by that carrier. Other private exchanges, like CaliforniaChoice, give employees the ability to choose from a selection of carriers and plans (though all family members need to be insured through the same carrier and health plan). 

Contact a CaliforniaChoice broker  if you want to know more about private health insurance exchanges.

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