Sifting through the opposing rulings on the legality of the subsidies on the federal health insurance exchange.
By Cyril Tuohy
Benefits advisors and consultants that play a critical role in helping companies navigate the private health and benefits exchanges appear to be early winners in the rapidly changing landscape of health care reform.
Aon PLC, Marsh & McLennan and Towers Watson, the three largest benefits advisors with big stakes in exchanges, are poised to “capitalize on this market’s significant growth potential,” according to a report from Moody’s Investors Service.
Between the number of active employees and their dependents, along with retirees covered through employer-sponsored benefits programs, coverage purchased through exchanges protects more than a million lives, according to publicly available data posted by the exchanges.
The number of covered lives could grow to the tens of millions of active employees by the end of the decade, Moody’s said in its new report, “Benefit Consultants Are Early Winners in Building Private Health Exchanges.”
“The most successful exchanges will be those that minimize growth, or generate savings, in overall health care costs, rather than simply shifting costs from employers to employees,” said Bruce Ballentine, senior credit officer with Moody’s.
Successful exchanges build strong insurance carrier networks, Moody’s said. With the help of advanced analytics, the best exchanges help guide employees to the most suitable coverage available at different price points.
The best exchanges will also help promote employee wellness, streamline administration and ensure compliance with the Affordable Care Act, Ballentine also said.
Moody’s estimates there are between 1.5 million and 2 million active employees and retirees insured through coverage bought on private exchanges. The exchange initiatives are seen as “credit positive” for Aon, Marsh and Towers Watson, Moody’s also said.
The number of lives that could be covered through insurance sold on private exchanges include the 122 million active employees in employer-sponsored group medical plans as well as the 12 million Medicare-eligible retirees who have some sort of employer-sponsored coverage, according to Aon.
A separate report by Accenture pegs the total number of employees covered by employer-sponsored health plans at 170 million people.
More than 18 companies have joined the AonHewitt exchange. Major employers include Sears, Darden Restaurants and Walgreen’s.
Mercer, a division of Marsh & McLennan, counts 52 companies on the Mercer Marketplace. Employers include Petco, Kinder Morgan, DineEquity, Addison Group, Sanborn Map Co., Surgical Specialties Corp. and Vistronix.
Last year, Towers Watson bought Liazon, a pioneer in the private health care exchange market. Liazon has 2,400 companies on its exchange.
Arby’s, Bob Evans Farms, Church & Dwight, Ovation Brands, Domino’s Pizza Inc. and Xerox are on RightOpt, the exchange run by Buck Consultants, a Xerox subsidiary.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
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