Employers Increasingly Look at Private Exchanges
Aug. 22—Many businesses are taking a closer look at covering their employees through health insurance marketplaces—privately run ones—according to a recent employer survey.
Employers are about twice as likely to consider private health insurance marketplaces (formerly known as exchanges) as a viable alternative to their existing employee coverage as they are to consider coming public marketplaces authorized by the Affordable Care Act, according to a Towers Watson survey of 420 midsize and large companies. The survey found nearly 30 percent of employers have confidence in public health insurance marketplaces as a viable alternative to employer-sponsored coverage in 2015. In contrast, private marketplaces were seen as viable alternatives by 58 percent of the employers.
“In short, employers are intrigued by the potential of private exchanges to control cost increases, reduce administrative burdens and provide greater value,” stated a Towers Watson release.
Despite the interest in private marketplaces, 98 percent of them planned to retain their active medical plans for 2014 and 2015. The employers looked to private marketplaces as a potential “delivery channel,” according to the consulting firm. The delivery role would keep the employer as the plan sponsor, while outsourcing certain aspects of plan management to a marketplace plan.
A key feature that nearly three-quarters (74 percent) of companies said they would look for in private marketplaces is evidence that private options deliver greater value than their existing self-managed model.
“While employers are grappling with how to comply with health care reform right now, they are evaluating new health care designs and delivery approaches for their employee and retiree populations that will ultimately transform the look of employer-provided health plans over the next three to five years,” Randall Abbott, a senior health care consultant at Towers Watson, said in the release.
Publication Date: Thursday, August 22, 2013