A corporate health care exchange run by Aon Hewitt is “open and ready for business,” according to Ken Sperling, global health & benefits practice leader for the human resource consulting firm. Aon Hewitt Announced last week that it is launching the exchange for employer groups of 1,000 or more full-time employees beginning as early as January 2012. While the infrastructure — based on Aon Hewitt’s existing retiree benefit exchange model with 2.4 million participants — is built, the timing depends on securing a viable number of both employer and insurance company participants.
“It’s a little bit of a ‘Catch 22’ in that the insurance companies won’t come to play unless there are employers ready to do this and the employers aren’t going to be willing to play unless the insurance companies come,” says Sperling. “So we are talking to both employers and insurance companies simultaneously and both have agreed that when there is a committed volume of employees there will be insurance companies who are eager to take on that volume, insure that risk and make this work.”
Sperling likens the move to the switch from a defined benefit model to a defined contribution model that took place in the retirement arena. “That’s what we’re likely to see in the health care area — where a few companies decide they’re going to be first movers and that kind of starts the wave,” he predicts.
States are currently in the process of establishing exchanges for individuals and employer groups under 50 lives that are mandated to take effect in 2014 by the Patient Protection and Affordable Care Act. The Aon Hewitt exchange structure intentionally mirrors the PPACA model. The firm will offer five standardized designs: bronze, bronze plus, silver, gold and platinum. Three of the plans will be HSA-eligible, high-deductible plans, according to Sperling. Individual employers will decide the amount of premium subsidy for their employees.
“This is designed for an employer that wants to continue to provide coverage but wants to do it in an exchange environment which offers less administrative burden for the employer and a more competitive environment and more choice to the employee,” says Sperling.
Aon Hewitt intends to work with large national insurers at the outset, but is open to teaming with a regional player that an employer would like to see as an option for its employees, Sperling adds. The firm has been testing the exchange concept for more than a year with an employer advisory board.
While Sperling acknowledges that other consulting firms may follow in Aon Hewitt’s footsteps, he believes the company’s consulting and health care market expertise, along with its HR outsourcing platform, give it the capabilities to successfully execute an exchange. “We think that the concept is something that a lot of other firms are going to be talking about,” he says. “We’re unique in that we have the delivery capabilities to actually execute it.”
It’s about employers acknowledging and adapting to the changing health care marketplace, says Sperling. “Whether that’s doing what they’re doing now or … requiring more rules around health improvement and coaching and care management or whether it’s move to a corporate exchange, we want to be positioned to serve our clients in whatever strategy they believe is best for them,” he says. “So if we make our competitors nervous by being able to provide that suite of capabilities, that’s OK with us.”
