Switching to a private health care exchange may make sense for your organization but there are a wide range of factors to take into account.
This issue of Ideas looks at the key considerations you should make to help you decide, including:
For the full picture, download the publication.
A private health care exchange is a marketplace of preselected coverage options through which employers can offer their active employees health and certain other benefits, such as dental, vision and life and disability insurance.
Some also offer voluntary benefits, including critical illness, hospital indemnity, personal travel and accident insurance, legal assistance, identity theft protection and even pet insurance.
Employers choose an exchange vendor that can give their employees a choice of health plan carriers and plan designs based on their individual needs and preferences.
Exchange vendors often contract with carriers that offer a predetermined suite of health plan designs. Depending on the exchange vendor, these plans can be fully or self-insured.
Projected costs are based on the claims experience of the employer’s population.
Plan designs and administrative platforms differ among the exchange vendors.
Some provide multiple carriers by geographic location while others fix the carrier by location. In other words, offerings within a private exchange vary by vendor.
Switching to a private exchange is a complicated undertaking, with both pros and cons to consider.
With significant diversity in the models available in the market, not every private exchange will make sense for every organization.
When reviewing the different aspects of various exchange models, organizations need to drill down into what drives savings, the choice and support available, and ultimately whether these factors will be a good fit for the organization.
For some, a traditional model may still be a better match.
After careful consideration, some Sibson clients have found an exchange model to be a viable solution. Others have discovered it would not be a good fit.
While organizational leadership has the final decision about whether to move to a private exchange, a thorough analysis can provide a deeper level of knowledge to help make the best decision, given the organization’s culture and its benefits and HR strategies.
Sibson has developed a strategic approach to reviewing the financial and cultural impact of moving to a private exchange model.
For more information about our review services, contact your Sibson consultant or one of the following professionals:
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Sibson Consulting is a member of The Segal Group.
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