The health insurer Cigna on Sept. 1 will launch nationwide and in New Jersey its version of the “private exchange” where employers let workers shop for their health coverage from a menu of different plans and prices. The employer may give workers a set sum of money to spend, and employees can either select the most affordable option or “buy up” with their own money to get a richer suite of benefits.
Cigna rolled out its private exchange, Cigna Guided Solutions, in four U.S. markets in 2014 and will go national next Monday.
The last two years have seen a surge of new private exchanges, from benefits consultants Aon and Mercer and from health insurers, including Horizon Blue Cross Blue Shield of New Jersey, Aetna and AmeriHealth New Jersey. A 2013 survey found that 45 percent of employers will either consider or actually offer a private exchange to their full-time workers by 2018.
Cigna said it does not disclose the size of its New Jersey membership but said the majority of its New Jersey members are in employer-sponsored health plans, as opposed to individual plans.
Jake Biscoglio, vice president, private exchange business for Cigna, said the private exchange uses technology to guide employees when choosing a health plan, which eases the administrative burden on employers. He said other advantages include providing a wide range of benefits choices to the ultimate consumer — the employee — as well as more affordable health insurance solutions for both the employer and the employees.
And, given these advantages, “We expect that there will be steady growth in the private exchange,” Biscoglio said. He said the Cigna exchange has so far sparked “interest from our existing clients as well as very strong interest from clients that do not have relationships with Cigna.”
He said Cigna will “have the ability to create new client relationships through Cigna Guided Solutions as well as through the traditional (health plan) offerings that we have in the market today.” Cigna began rolling out its new private exchange earlier this year in Atlanta, Dallas, metro Washington, D.C., and the San Francisco Bay area.
Employers can offer a private exchange as a “defined contribution” plan, where the employer gives workers an allowance for health benefits and the employees can opt to spend more to get more benefits. The employer does not have to go the defined contribution route, but so far about a third of the employers have opted to do so, Biscoglio said.
Some employees chose high-deductible plans that lower the amount of their paycheck deduction for health care; others opted to spend more and buy more benefits.
“Employees want to get the right coverage for themselves and their families, and offer broad choice and give them tools that help them really understand what those choices are and allow them to purchase the plan that is best for them,” Biscoglio said.
The technology that enables employees to go online and choose their health benefits is a key component of the private exchange
“It is important for employers to offer more choices to employees, but they don’t want to create more work,” Biscoglio said. “The human resources professionals have a lot on their plate already, and offering more choice can create more work.” Streamlining the administration of health plans “is something that we have been very focused on.”
He said employees “want a simplified, easy-to-use shopping experience. And they want assistance if they need it, if they have to ask questions.” He said Cigna provides 24/7 customer service, 365 days a year.
The suite of products available through Cigna’s private exchange includes a variety of medical, pharmacy, dental, vision, life/accident and disability plans.
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