Employers continue to struggle with the rising cost of healthcare. Several factors contribute to upward pressure on healthcare costs: healthcare reform mandates/fees and unhealthy lifestyles leading to costly chronic illnesses are just a couple of examples. Help is on the way in the form of the private exchange model.
Employers have historically "owned" the decision-making process for the benefits elected by their employees, limiting choices and erring on the side of their own definition of "generosity." The private exchange model helps the employee own the decision-making process, providing an online portal with an expanded array of options, an allowance of dollars from the employer to "shop," and interactive technology to help employees choose the optimal levels of benefits. The result is happier employees with customized benefits that cost the employer far less than in the past.
"Through a system of support questions, we can guide the consumer to make smarter decisions on what's best for them. Questions like: Are you anticipating a change in the family or an upcoming surgery? will be prompted as the employee navigates through the exchange (online portal) to help them choose the right benefits," said Lerone Sidberry, President, Central Region Employee Benefits, HUB International. "The private exchange strategy gives employees the flexibility to spend their benefits money as they see fit. And with a highly personalized support experience, employees will make smarter choices at lower price points."
How It Works
The HUB private exchange is a platform to execute best in class cost control strategies. We think of it as a "power strip" that will allow employers to "plug in" the best benefit options, support services and HRIS/payroll systems. With our advanced technology integrating all of these components, employees will enjoy a customized experience when they enroll and throughout the year.
The HUB private exchange features unique flexibility to accommodate client-specific offerings as well as preset offerings designed for various group sizes and industries. The benefit options will include standard benefits such as medical, dental, vision, life and disability, plus voluntary benefits like critical illness, accident coverage and pet insurance designed to compliment the employee's unique situation and standard benefit selections. Support services will include wellness programs, concierge support, perks and decision support to guide optimal behaviors such as benefit selections and when/where members seek care.
Employers can integrate a variety of educational tools into their private exchange platform, including videos and voice over animation to communicate the parameters of each benefits option. And employers can also streamline their various reporting requirements, carrier applications, bill payment reconciliations and related data entry into numerous systems.
The Benefits
The HUB private exchange strategy brings many benefits including:
- Benchmarking - Reporting tools to help educate employer groups on trends.
- Decision Support - A support tool called "Ask Emma" will respond to different questions that will lead employees on an intuitive path along the benefits shopping process.
- Mobile capability - Employees can enroll from either a tablet or smart phone and return to their benefits page electronically as eligibility questions arise throughout the year.
- Paperless - Removing the paper from the process, a private exchange provides electronic communication between the employee and employer on their benefits choices and can even register employees for their benefits package automatically.
- Flexibility/Scalability - The flexibility and scalability of the power strip model allows employers to offer different plans at multiple price points and engage employees to spend their benefits allowance as desired.
- Reporting - The Affordable Care Act (ACA) will require employers to report to the government on specific data pertaining to the costs and benefits of the solutions offered to their employees. The HUB exchange solution will support this effort as well.
Blazing a New Trail
The private exchange model can be the core of an effective cost management strategy, and today's employers are cautiously optimistic when considering them. A recent survey reports low enrollment in private exchanges to date, only 1 million, or 2%, in 2014, but projects rapid growth over the next few years - surpassing public exchange enrollment to 40 million, or 25%, of Americans, in 2018 [1]. Because not all employers are ready to move entirely to a private exchange strategy, the HUB exchange platform is flexible and scalable.
"Businesses are 'in between' defined benefits administration and defined contribution approaches," said Matthew Osborn, VP, National Employee Benefits Technology, HUB International. "HUB's platform is designed to do both and allows the employer to evolve at their own pace."
Proper training and support by HUB employee benefits consultants can make the shift to a private exchange benefits model a true success. Contact your HUB benefits consultant to determine if a private exchange strategy - and at what level of integration - is right for your firm.
[1] Accenture (2013) "Are you ready? Private health insurance exchanges are looming."