Although employees are reporting positive experiences with private exchanges, most employers remain tepid about adopting one, saying significant barriers still deter them from implementing a private exchange-based health care benefits model.
More than two-thirds of employees using a private exchange say theyre satisfied or more satisfied with the benefits they selected from the exchange compared with their previous plans, yet less than half (45%) of employers say they have implemented or plan to consider using a private exchange for full-time employees before 2018, the Healthcare Trends Institute says in a new whitepaper.
More than 80% of employers surveyed recently by the Private Exchange Evaluation Collaborative (PEEC) identified significant barriers to adopting a private exchange-based health care benefits model, including uncertainty about employee readiness, the immaturity of the marketplace and limited information about private exchanges.
Employers continue to take a wait-and-see approach, the report says, adding that education is the key to increased use of private health care exchanges, but employers face a steep learning curve. Benefit brokers and agents looking to position themselves as an employers trusted adviser should be prepared to minimize that curve.
What they want to know
Specifically, employers are interested in how private exchanges will help them maintain a competitive, yet cost-effective, benefits package. Theyre also seeking information on the tax implications and how to communicate plan changes and increased responsibilities to their employees.
Also, employers are concerned about the business of administering private health care benefit exchanges. Since the concept is relatively new, employers are concerned about administrator inexperience, HTI says, adding that private exchanges need to prove their ability to provide products and services that meet the needs of various employer groups.
PEEC also found employers are looking for comprehensive capabilities and services from private exchanges, with products designed and priced to establish long-term stability, a challenge that directly relates to defining the value proposition, HTI says, adding that many employers are waiting until they are confident in their sustainable bottom-line value before adopting a private exchange approach.
Justine Peddle, global compensation benefits manager for the United Parcel Service told attendees of MetLifes national benefits symposium in March that UPS has talked with private exchanges but taken no action.
We want to see the demonstrated benefits and results that come out of private exchange models, she said.
See related: 8 private exchange considerations
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