A national survey found 45 percent of employers are considering offering their workers health coverage through a "private exchange," where employees select a health plan from a menu of choices from an insurance company or health plan administrator.
Whether this actually saves anyone any money remains to be seen.
Several private exchanges have been launched nationwide over the past two years, and they typically enable employers to give workers a set amount of money, or a defined benefit, to spend on health coverage; workers who want a more extensive plan can use their own money to "buy up" to a richer plan.
Two New Jersey health insurers, Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth New Jersey, began offering private exchanges to employers earlier this year.
Private exchanges are entirely separate from the public exchanges launched Oct. 1 under the Affordable Care Act through healthcare.gov, where individuals who qualify are entitled to receive federal subsidies to help them pay for health insurance.
Three insurers are selling policies in New Jersey on healthcare.gov: Horizon, AmeriHealth, and Health Republic Insurance of New Jersey, a new cooperative insurer launched with funding from the ACA.
According to the survey of 723 employers, 45 percent plan to consider, or will be using, a private exchange for their full-time active employees before 2018.
The study was conducted by the Private Exchange Evaluation Collaborative to help employers better understand what their peers are thinking about private health insurance exchanges.
And here's what they think: Only 25 percent of employees surveyed feel doing this will actually save any money.
PEEC was recently launched by four leading non-profit business coalitions – Employers Health Coalition, Inc. (Ohio), Midwest Business Group on Health, Northeast Business Group on Health, and the Pacific Business Group on Health – and PwC US, the assurance, tax and advisory services firm. PwC US does not sell an exchange product to employers,
"Private exchanges have the opportunity to gain traction over the next five years as an alternative to traditional employer sponsored benefit options," said Christopher Goff, chief executive of the Employers Health Coalition. He said the collaborative was created "to serve as an independent, unbiased party to assess the marketplace and evaluate private exchange capabilities to meet employer needs and objectives and the findings in this survey will help us accomplish these goals."
But will doing this actually save anyone any money? Laurel Pickering, president of the Northeast Business Group on Health, said that's the unanswered question.
"The survey results indicate a strong interest in private exchanges, but also uncertainty about the benefits," she said. "PEEC will assist employers with their review of private exchanges, help them navigate the complexities, and determine the value proposition."
Key survey findings:
- If employers are permitted to contribute toward employees' coverage on the public exchange/marketplace in 2017/2018, 58 percent would consider encouraging their employees to obtain coverage through the exchange
- Employers are seeking comprehensive capabilities and services from private exchanges
- Close to 70 percent of employers believe it is very important that their advisor is independent of any exchange they are considering
- Only 25 percent think moving to a private exchange will save them money
- The greatest barriers to private exchange adoption relate to their immaturity, the uncertainty about their long term stability and employer's loss of flexibility, especially as it relates to tailoring benefit plan designs
- Interest in private exchanges extends across all industry segments and employer size, while the importance of exchange features varies between employers
- Employers are split on whether they will move to a defined contribution approach