|By Alex Nixon, The Pittsburgh Tribune-Review|
|McClatchy-Tribune Information Services|
They'll be on a private exchange run by
"Our broker thought it would work well for us," Pratt said. "We have line staff who make minimum wage to salaried managers that make more than that. It would be fitting to have a platform that offered more than one plan, and they could pick a plan that fit their budget."
It's a change in the way employers traditionally have provided health insurance, and represents an evolution of the long-term trend of companies shifting more benefit costs onto employees.
Highmark's exchange is one of dozens popping up across the country, run by insurers and benefit consulting companies, giving employers a new way to control health costs and reduce administration.
And companies, which have taken similar steps with retirement benefits by shifting from pensions to 401(k) plans, increasingly are attracted to the concept of a private health exchange and defined contributions.
A national survey by consulting firm
Experts say this fast-growing trend represents a watershed moment in employer-employee relationships.
"Ultimately, we're seeing the beginning of the end of the employer-sponsored market," said
Wright and others point to the success of the federal government's HealthCare.gov and similar state-run exchanges, which attracted millions of people to shop for insurance this year, coupled with the strong interest in private versions as slowly shifting the responsibility for health coverage away from employers and onto individuals and the government.
Trend likely to grow
Employers steadily have gotten out of health benefits during the past 15 years as costs have risen dramatically, according to the
"It's been slowly eroding in terms of the amount of financing that employer-based coverage represents," Melani said.
It's a trend that's not likely to slow because increases in health costs, which have moderated in the past several years, are predicted to begin rising faster during the next decade.
Higher costs will push even more companies out of the practice of offering health benefits and into defined contribution arrangements, Melani said.
"We'll eventually get to a system where it's individuals paying for health care ... and employers just paying wages," he said. "Employers don't want to be in this business."
Or as Wright put it, employers are increasingly saying to their workers: "I don't buy your homeowners insurance, so why should I buy your health insurance?"
Burden on workers
While the move to private exchanges and a defined contribution offers positives for companies, it can place greater burdens on workers. Critics have argued that defined contributions are just another way, like high-deductible plans, for employers to foist more costs onto their workers, which can lead people to skip treatments or medications.
Cutting benefits can make it harder to recruit high-quality employees, experts say.
There are other obstacles as well. One is a penalty under the Affordable Care Act that fines large companies
Another is the substantial tax benefit to workers from employer-sponsored health insurance that would go away if companies stopped buying health insurance.
"You've got to make the tax treatment for nonemployer-based coverage basically the same," said
A way to control costs
He previously offered only one health plan and covered 100 percent of the premium, she said. Now employees have the choice of five plans but must pay 60 to 70 percent of the cost, depending on the plan they choose.
With the options in a private exchange, Pratt said, "he's able to control the cost on his end, and the employees are able to control their cost. It gives us a way to meet in the middle."
(c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.)
Visit The Pittsburgh Tribune-Review (Greensburg, Pa.) at www.triblive.com
Distributed by MCT Information Services