Connecting you to Insurance and Risk Management Resources About HUBSign-upSearch

Interest in Private Exchanges Increasing Among Employers

If you are like many employers across the U.S., you may be closely watching the development of private healthcare exchanges and wondering if this model could be right for your company.   Private exchanges promise to offer employers more predictability in health care costs while offering employees more choice with regard to buying up or down when it comes to coverage options. 

Exchanges are likely to play a significant role in the future healthcare landscape.   Some employers may use private exchanges to move their employees to a defined contribution model as a means to manage rising healthcare costs, much as 401(k) plans became a replacement for traditional pension plans.   Others may use an exchange as a vehicle to empower employees to choose plans that suit their needs.  Potential savings can result when employees choose less expensive coverage in the form of higher deductibles or more limited networks of doctors and hospitals.

This fall, HUB International Northeast launched a private exchange program in partnership with Liazon Corporation.  Built on a defined contribution chassis, HUB's private insurance exchange provides an alternative to state exchanges which are slated to begin offering coverage in 2014. According to Joe Torella, President, HUB International Northeast and Employee Benefits Practice Leader, HUB's strategy is to help clients save money by structuring their health benefits on a predictable, budget-based platform.   

In addition to medical insurance options, the HUB online marketplace provides access to a wide range of benefits, including dental, vision, life, and disability coverage as well as voluntary benefits. "We want to ensure that employees and their families can choose the options that work best for them," Joe said. HUB plans to expand the availability of its private exchange model throughout 2013 with offerings that are tailored specifically to local market needs.

While a number of private exchanges are expected to launch in 2013, it is clear that the model will evolve over the next 12 to 24 months.  So, what should an employer be looking for when evaluating the exchange model? 

HUB International recommends you look for the following: 

  • Coverage plans that are tailored to your employee population and provide a choice of different options, price points and insurers. 
  • Ease of use in navigating, comparing and selecting benefits in order to maintain employee satisfaction and minimize complaints. 
  • Decision support tools that help employees find providers, estimate costs of procedures, and calculate out-of-pocket costs.
  • Care management and wellness programs that engage different employee segments and help them manage their costs and promote good health.  

Private exchanges will become a major consideration for employers in 2013 and beyond.  The key is to figure out if it's right for your business and which exchanges will evolve over time to create real value.  Your HUB benefits consultant can keep you updated on this rapidly evolving model and help you craft a long-term benefits strategy to meet your business objectives.