It’s logical that private benefit exchanges focused on their consumer-facing decision support tools in the beginning. But now, as employers turn to private exchanges to run more than open enrollment, those exchanges may be facing challenges in the ways they process information on the backend.
A private exchange needs to have an online shopping component, but for many employers it needs to support other things, said Scott Brown, Accenture’s private exchange offering lead, on a recent webinar sponsored by America’s Health Insurance Plans.
The “frontend is the sexy piece,” he said. “But we believe, and many clients believe, that ongoing benefits administration is equally if not more important, and where many of the challenges exist.”
Online shopping with decision support is simple. “The backend is where we have seen others who made the move [into a private exchange], run into challenges,” Brown adds in a follow-up interview.
According to Brown, those challenges include:
- Enrollment, eligibility and how companies manage that process: Depending on the size of the employer, there are complexities in the workforce that affect benefits. These include changes in the workforce, such as new hires, rehires, leave of absence, age-outs and life events, such as marriage, Brown explains. “All of these factors impact the ability of an exchange to manage eligibility and enrollment information for an employer,” he adds.
- Data management: As exchanges are introduced it is in many ways adding more complexity and volume to an employer, because of the potential for new carriers, payroll deduction, ancillary purchases and health spending accounts.
- Billing and financial management: “One promise of an exchange is … simplifying the employer experience or administrative burden,” Brown says. “Various approaches [have been] tried to simplify how an employer has to manage or pay their bill information, including things like consolidated billing.”
Brown says some private exchanges have tackled these issues better than others and what makes the difference is what the company originally focused on. While some exchanges put the most energy into their consumer-facing frontend components, others focused more on their backend systems that keep the data running.
“The broader point is even if the [backend] exists, there are many nuances and challenges in the exchange world as you introduce additional complexities with the number of carriers,” he says.
In the end, the accountability is on the exchange operator to make sure all features work. For example, Brown says, Mercer may use Benefitfocus to power its Mercer Marketplace, but Mercer’s role “is to ensure that the benefit administration capabilities are managed on behalf of the employer,” as it relates to the exchange.
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