All eyes are on private exchanges. Mercer is one of the latest companies to enter the game, and the consulting giant gave employers an opportunity to check out the service during a conference call Thursday. The company is staying mum about the number of employers expected to sign on, and the size of the whole operation, but details are available for interested potential clients.
Company executives revealed some of those specifics during the call, especially during the Q&A period for the audience.
Q: Can an employer decide to turn different pieces in the exchange on and off?
The answer is yes and no, according to Eric Grossman, Mercer’s business lead for the exchange. “Let’s look at medical,” he said. “We may have 10 or 12 carriers, but an employer may say they only want these three carriers — that we can do.” But when it comes to more nuanced variations, “we’re not anticipating allowing switches of types of insurance on and off,” he continued. So if an employer doesn’t want to offer one type of coverage, for example pet insurance, you’re out of luck.
Grossman said there are reasons for the aforementioned inflexibility. “One thing you get with an exchange is the standardization of administrative responsibilities, so you lose those abilities,” he said. The costs of operating an exchange will also not be billed directly to the employer, so all facets of the exchanges do need to be available to operate.
Q: Can an employee purchase from multiple carriers?
Grossman said that depends on the type of insurance, so in some cases yes, and some cases no. “Medical, we will provide an array of options,” he said. Life insurance is one example where he said the answer will be no.
Q: Will employers be able to offer wellness programs?
There are three choices for wellness programs on the Mercer exchange, Grossman said:
- No wellness: A minority of companies are not interested in wellness programs — Grossman said this is will be acceptable on the exchange.
- Current wellness: Other companies have long-entrenched wellness programs that work well and that they don’t want to give up if joining the exchange — Grossman said this is also fine.
- Exchange wellness: All medical carriers in the exchange will have standalone wellness programs that employers can buy if they’re interested in this option.
Q: What type of employer is the exchange most suitable for?
“Everyone,” Grossman said enthusiastically. He reiterated that the exchange will work for employers as small as 100 employees and has no “upper band” on the size of companies Mercer will accommodate. “There will be some sweet spots,” he continued about the types of companies Mercer is expecting might sign on in the next year or so. “A lot of [those with a] low interest margin and high concentration of part-time employees. [There’s been] a lot of interest from employers with employees in call centers or operational environments,” he said, while reminding the listeners that it’s all speculation at this point.
Q: Will Mercer monitor shared responsibility rules?
“Yes, we’ll help with compliance issues,” Grossman said.
Q: What are the bilingual options within the exchange?
There will be customer service reps who speak Spanish and there will also be a member portal in Spanish. A language line will also be available to translate any additional language needs.
Q: How will the private exchange comply with Patient Protection and Affordable Care Act?
“This is group coverage,” Grossman said. “Employers will still be sponsoring a health plan, so it’s compliant — it’s just a different way of going about it than we’re all used to.”
Q: How will costs compare with the public exchange?
Under the health reform law, everyone can buy coverage on the public exchange as individuals, but if employers are offering what’s known as affordable coverage, then that employee and their family will not be eligible for subsidies. “So 99.9% of the time your option will be more advantageous,” Grossman said to employers.
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