Evaluating Private Exchanges

With the 2016 plan year upon us, many HR teams and benefits consultants are co
nsidering streamlining the benefits enrollment processes by utilizing an online enrollment platform.  One type of platform that aggregates consumers across multiple employer groups with the goal of driving down prices and providing a marketplace experience rich with choices is known as a private exchange.  If implemented correctly, a private exchange can help to make the enrollment process simple and hassle free, but selecting an exchange that meets the needs of the employer is critical.
privatexchange1Many exchanges boast an immense selection of plan options and products, while others have adopted a more customized approach.  Bloom Health, one of the many up-and-coming exchange platforms, has gained notoriety for helping consumers make elections based on their unique personal situations.  Using a short survey and an advanced evaluation system, “Bloom Health inspires consumers, giving them confidence to take ownership of their benefit selections, while improving the business results of partners including insurers, brokers and employers.” Other exchanges have also adopted a variation of a survey or decision-making tool, but Bloom Health remains a “best in class” example of a simple and efficient model.

Another private exchange, Teemwurk, enhances the user experience by providing employees with an enrollment environment similar to a social media platform. Users develop their own profile and have access to intra-company communication tools. The site is also mobile adaptive to encourage viewing on a mobile device.

Other exchange platforms have taken a contrary approach to the marketplace concept.  Instead of offering a wide variety of providers and product options, they have elected to contract with a single carrier for each benefit (health, dental, legal, etc.) in a given region.  This approach has the advantage of dealing with fewer providers, but has inspired debate regarding the detriments of limiting employee choice, including locking out a groups’ preferred providers and discouraging competitive pricing.

As leaders in the benefits industry, we owe it to employees, clients, and partners to be educated on the pros and cons of private exchanges.  While they can be a great platform for employee education, and potentially control benefit costs for the employer, some exchanges limit provider choices or may present other administrative difficulties.  It is important to carefully consider the specific goals and potential effects of moving open enrollment to a private exchange platform before doing so.

Benefits Administration

Private Exchange Coalition

Private Health Insurance Exchange

 

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