Large Employers Have Mixed Views On Private Exchanges



Interest in private health insurance exchanges is growing slowly among large employers, and many of those employers still have reservations about whether the exchanges will offer more value than the plans they already offer.

Those were among the results of a survey of nearly 400 large employers conducted by the National Business Group on Health. The survey found that by next year 3 percent of large employers will provide active employees with health insurance through a private exchange.

However, the survey also found that 35 percent of respondents said they are considering using a private exchange for 2016 and beyond.

Brian Marcotte, president and chief executive officer of the National Business Group on Health, said employers are “clamoring for information and help in understanding” private exchanges, to gauge whether the exchange is a fit for the employer.

“The proliferation of private exchanges is presenting employers with an option but employers need to ask questions and study carefully,” Marcotte said.

While proponents of private exchanges tout the ability of exchanges to control costs, employers appear to have more of a mixed view.

The National Business Group survey found that 77 percent of employers are confident in an exchange’s ability to provide more choices, and 51 percent of respondents said exchanges will do a better job complying with regulations.

Only 17 percent of respondents said exchanges were better at engaging employees in making better health care decisions, and only 10 percent of respondents believe exchanges will control costs better than their own plans, the survey found.

Private exchanges allow employees to shop for health benefits through a mix-and-match model, buying coverage from different insurance plans sold on these exchanges.

More choices will mean lower costs as employees shop only for what they need — a phenomenon known as the “buydown” effect.

There are dozens of private health exchanges around the country, but they are not all equal. Some offer more coverage choices and options. Other exchanges offer deeper analytics to help employees buy coverage.

Major employers like Sears Holding Corp., Darden Restaurants and Walgreen have signed on with the AonHewitt Corporate Health Exchange.

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Petco, Kinder Morgan, DineEquity, Addison Group, Sanborn Map, Surgical Specialties and Vistronix have joined Mercer Marketplace, the exchange sponsored by the global benefits consultant Mercer.

Arby’s Restaurant Group, Bob Evans Farms, Church & Dwight, Ovation Brands, Domino’s Pizza and Xerox are on RightOpt, the exchange run by Buck Consultants.

In an interview earlier this year, Laurel Pickering, president and CEO of the Northeast Business Group on Health, a 190-member business coalition, said organizations running private exchanges can be grouped into four categories.

There are the benefits consultants and brokers, the large health insurance plans, the technology-driven intermediaries with a heavy use of analytics, and the simple “pure-play” benefits models, Pickering said.

is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

© Entire contents copyright 2014 by Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from


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