Tag Archives: Private Exchange

Companies Turning to Private Exchanges for Lower Costs

Companies that turned to a new private exchange concept of giving their workers money to buy health benefits via online marketplaces continue to see lower health care costs than trends for most other employers, saving “more than $750 per worker” for 2015, according to benefits consultancy Aon Hewitt (AON).

Across companies on its private exchange, Aon Hewitt said “rates for coverage increased an average of 5.3 percent” in 2015. That was lower than industry averages projected for large self-insured employers of between 6 and 8 percent for 2015.

The lower trend in 2015 on the exchange is significant because the rate increase in the exchanges also included various costs associated with the Affordable Care Act, benefits analysts say. It’s the third year of Aon Hewitt’s exchange.

“After three years in operation, we continue to see evidence that our fully insured, multi-carrier model is fostering competition at the consumer level and encouraging individuals to become smarter about their health care choices,” Ken Sperling, Aon Hewitt’s national health exchange strategy leader, said in a statement accompanying its report.

Aon Hewitt said all 18 of the companies that participated in its exchange in 2014 are returning for 2015 with more than 600,000 employees and dependents enrolling in coverage via the exchange.

Across the country, an estimated 3 million Americans are getting insurance from their employers via exchanges, which is triple the number of active employees that were buying from private exchanges a year ago, according to Accenture, which projects 40 million Americans will be buying on private exchanges in 2018.

It works like this: Employees get a credit or subsidy, and are sent to buy a plan on a private market place akin to Amazon.com or Orbitz in their respective industries.

Sperling said Aon Hewitt’s exchange is “designed to create a more effective and efficient health care ecosystem by aligning employers, employees, providers and insurance companies.”

More and more benefits firms like Aon Hewitt rival, Mercer, and insurance companies like Aetna (AET), Cigna (CI), Humana (HUM) UnitedHealth Group (UNH) are developing their own private exchanges.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Students’ Options for Health Insurance

With the Affordable Care Act, twenty-somethings now have the opportunity to remain on their parents’ plan until they reach the age of 26. While this is good news for the struggling grad-students, this also means that some of you (or most of you) will choose to remain uninformed about health insurance options until it’s absolutely necessary. If you want to be prepared, the list below outlines the options available for individuals between the ages of 18 and 29.

1) Student Health Insurance Plans

Most colleges and universities offer student health insurance plans that you can keep throughout your time as a student. These plans typically end when your time as a student does, so if you’ve recently graduated, make sure you find out until when this coverage will last.

2) Employer-Sponsored Health Insurance Plans

If you’ve recently graduated and started a new job, congratulations! If you are a full-time employee, your employer may offer group health insurance coverage that you can enroll in at your time of hire. If you have questions about the company’s plan offerings and your eligibility, follow up with a Company HR Representative. Under the Affordable Care Act, waiting periods for these plans cannot last longer than 90 days. If you need a plan for the 90-day waiting period, however, see if you can stay on your parents’ plan for a few months or check out option 4 (Short-Term Plans).

3) Marketplace Plans

The new health insurance marketplace offers a one-stop shop for various types of major medical insurance. If you lose other coverage (e.g. you turn 26 and your parents’ plan finally kicks you off, your full-time job becomes a part-time job, etc.), you become eligible for a 60-day special enrollment period for plans offered on the Health Insurance Marketplace in your state of residence. To compare the premium (monthly cost), deductible and coinsurance (cost for health services) and benefits (health services that are covered by the plan), you can work with an agent (like the ones who work at ACA Marketplace Enrollment Solutions). They can even tell you about the special high-deductible Catastrophic Plan available for people under 30. These plans usually have lower monthly premiums, but cover you comprehensively only in the event of a medical crisis.

4) Short-Term Plans

Although Short-Term Plans are not considered minimum-essential health coverage, these plans can provide medical coverage for health events that might come up between coverage periods (e.g. your parents’ plan ends on July 1st and your employer plan doesn’t begin until October 1st). As the name suggests, these plans cover you for a short period of time and are typically not renewable after they expire.

To learn more about health insurance, visit us at our exchange.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

More Insurance Plans Sold Through Private Exchange

Employers are moving more quickly than forecasted to offer health insurance to their workers through private exchanges, according to new data from Accenture, a consulting firm.

Three million people signed up for workplace health coverage for this year through private exchanges, Accenture said. That’s roughly three times the number of people the firm had estimated last fall would enroll for coverage through the private exchanges — online systems that are separate from the state and federal health insurance marketplaces.

The growth was driven largely by smaller and midsize companies — those with no more than 1,000 employees, said Rich Birhanzel, who leads Accenture’s health administration services. Beginning last fall, significant numbers of employers offered coverage through private exchanges for the first time, and the firm had predicted that about one million would enroll. “What we’re seeing is that adoption is happening faster than we anticipated,” he said.

Accenture estimates that total enrollment in private exchanges by active employees will reach about 40 million by 2018, surpassing the number of people enrolling through state and federally funded exchanges. (Currently, the federal government says eight million people have signed up for health insurance through the public exchanges set up by the Affordable Care Act).

Private exchanges are similar to the public marketplaces, but are offered by employers to their employees. Consulting companies, including Aon Hewitt, Mercer, Towers Watson and Buck Consultants, operate private exchanges, and some insurers also offer their own versions. Walgreen and Sears, for instance, participate in Aon Hewitt’s offering, known as the Corporate Health Exchange.

Some employers are shifting employees to the exchanges to control costs and reduce administrative burdens, and to give workers more plans to choose from. (The idea is that offering plans from multiple insurers will help lower costs through competition.) While details of the exchanges vary, companies typically allocate a specific amount for employees to spend on health insurance, and then workers choose from a menu of options.

To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary

 

Private Exchanges are Popular

Due to unpopularity of HealthCare.gov and other woes, private exchanges have become increasingly popular. Recent success for private exchanges can be attributed to many reasons, but not qualifying for federal help pushed them to seek other remedies. To read more, click here.

Jeffrey R. Ungvary

President

Jeffrey R. Ungvary