Health insurer AmeriHealth New Jersey is entering the “defined contribution” health plan market, where employers give their workers a set amount of money — a defined contribution — that employees then use to shop for their own health coverage on AmeriHealth's new private exchange, MyAHNJ.
The employer selects a package of AmeriHealth plans, and the workers go online to MyAHNJ to choose the one that fits their needs. The employee's share of the premium will vary, depending on how rich a menu of benefits the employee selects.
AmeriHealth is offering MyAHNJ to employers of all sizes. In July, Horizon Blue Cross Blue Shield of New Jersey launched a private exchange for employers with more than 50 workers.
Ryan Petrizzi, director of sales operations and small markets for AmeriHealth NJ, said the MyAHNJ online portal was created with Liazon, which operates private benefits exchanges for business throughout the United States.
Petrizzi said employees will go online "and answer questions that relate to their specific (health care) needs. MyAHNJ will then show them options that might make sense. The key here is that as a member (employee), you actually have more control over choosing your health plan, rather than what the employer is just giving to you."
The benefit for the employer is "you are giving your employees options, with a set amount of money for each of them, and you are letting them pick and choose what makes the most sense for them. And if they want to buy up to a richer plan, they have the ability to do so. But you're actually giving them the choice."
Asked what impact this might have on the employee's health care costs, Petrizzi said it depends on the situation. Under traditional employer-sponsored health coverage, the employer may offer a base plan and give the employees the option to "buy up" for a plan with richer benefits. But with MyAHNJ, "I will go in with a certain dollar amount and pick one of a multitude of plans," he said. "I could end up making out better in some cases, because I don't want to pay for some of the extra things that maybe my employer had been paying for before. Or I may decide to put a little extra out of my pocket and pick a richer benefit plan based on my needs."
AmeriHealth NJ has 225,000 members in New Jersey. The company is participating in the new online marketplace that the federal government will launch Oct. 1 so health insurers can sell government-subsidized health plans to small businesses and individuals under the Affordable Care Act. Petrizzi said MyAHNJ is another alternative for employers seeking to cover their workers outside the new government-run exchange.
He said the defined contribution plans are gaining in popularity, and "we wanted to offer our existing customers, as well as new customers, the option to take part in the defined contribution" concept.
He said "I think that our defined contribution portal will be very attractive to employers who want to give their employee a multitude of choice and access to health plan that meet their needs."
With MyAHNJ, employees will be provided with a link to an online portal created specifically for their company. MyAHNJ then walks the employee through a questionnaire in order to recommend the right health plan for them and their families. Employees can compare health plans side-by-side, view plan costs by pay period and evaluate different choices using an analysis of projected costs.
Reporter Beth Fitzgerald is @BethFitzgerald8 on Twitter.
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