As a veteran of the employee benefit brokerage business, the Affordable Care Act mandates are always a major consideration for my clients and their health insurance choices. In order to stay competitive, my company and I continue to investigate new benefit plan options. Recently, a private exchange platform became available in our marketplace and many brokers were very quick to embrace the product and offer it as a one-size-fits-all solution for all companies.
Throughout my years as a benefit broker and consultant, clients have relied on me and the brokerages where I have been employed to provide them with the proper resources, tools and education to understand all available benefit options and assist them to make informed decisions on the correct benefit choices for their company and employees.
Employee choice continues to be a prime consideration. Often, an employer will offer a number of health plan options for each of their employees; a base plan, and one or more buy-up plan options that allow employees choices to accommodate their health needs as well as their budgets. In each of these companies, a key element to employee benefit satisfaction is the benefits education that the employer and the broker provides to each employee.
The private exchanges advertise that they allow employees to make better plan choices to accommodate their personal health needs and budget constraints. This process is all accomplished through online technology. These private exchanges effectively remove the personal benefit education and human interactive consultative assistance from the open enrollment process. The benefit open enrollment becomes just another anonymous Internet transaction for the employee, much like ordering a book from Amazon or a pair of shoes from Zappos.
The private exchange programs drill down the benefit educational process to a half dozen questions that are designed to help employees make comprehensive benefit decisions that will impact them and their dependents for the next 12-month time period. There is neither human interaction nor opportunity for specific questions pertaining to each plan option being offered.
Assumptions
It seems that the private exchanges make three significant assumptions regarding employee acumen when selling their exchange services to the broker and the employer group:
1) Each employee has access to a computer
2) Each employee is computer literate
3) Employees actually understand how health insurance works
Recently, I came across a 100-plus employee company that utilized a private exchange for its health insurance plans. This company was primarily blue collar and had a large number of Hispanic employees that were benefits eligible. At the time the private exchange was implemented, it was only available to participants in English, further complicating the enrollment process for up to half of the eligible employees.
In addition, many of this employee population worked outdoors in a manual labor capacity and did not have access to computers nor the computer proficiency to enroll on a plan through the exchange. Finally, the employer was offering five health plan options to each employee through the exchange, resulting in significant confusion among the majority of the employees who were unable to understand the individual plans, and did not comprehend the differences between the plans in order to make an educated plan choice. This all ensued, despite the exchange plan qualifying questions that were supposed to enable the employees to make the correct plan choice for their individual needs.
It is significant to this discussion to address the many multi-national employee benefit corporations that have invested significant amounts of capital to either purchase or create their own private exchanges. Obviously, it is in these companies best interest to herald the well-publicized seeming advantages of their proprietary exchanges to all clients and prospective clients, regardless of appropriateness. Equally significant is that these entities generally dont work with the smaller-sized companies and seemingly dont understand the subtle intricacies of employee engagement and education on less than a vast collective level. What works well for an IBM does not necessarily work well for a 150-employee family owned business.
The word exchange has been bandied about in the health insurance marketplace extensively since the first definitive wave of ACA legislation in 2010. It would seem that these private exchanges are a way for the corporate sector to bank on the visibility of the use of the term exchange to further profits for their own organizations. This does not take into consideration the needs and challenges of those employees who are required to use the exchange to make important yearly decisions regarding their health options, as well as those of their covered dependents.
It is time for all brokers to take a very subjective look at the needs of their individual clients and assist them to make cohesive, educated decisions that can positively impact the employee benefit options available to their organization long-term rather than just following trends and taking the easiest path.
Miller is a senior benefit consultant at Human Resources Dimension. Reach her at (770) 857-0002 or
