Private exchanges for health coverage made headlines last fall as a number of companies signed up for the new format. But a couple of recent surveys suggest that many other employers are waiting to see how well the exchanges perform before committing themselves.

The public exchanges established by the Affordable Care Act offer individual coverage, generally to people who don't get health insurance at work. In contrast, private exchanges serve companies that provide health insurance as a benefit, letting employees of these organizations pick the group coverage they want from a range of plans offered by different insurers at different prices. The hope is that insurers' competition to win employees' business on the exchanges will help contain healthcare costs. The exchanges also relieve employers of some of the work of administering health benefits and provide them with more certainty about healthcare costs.

Still, a National Business Group on Health (NBGH) survey of 136 large U.S. employers released in August showed just 3% plan to use private exchanges for active employees next year, although 35% said they are considering using private exchanges in 2016 or later. Brian Marcotte, the NBGH's president, noted that companies gave private exchanges high scores "on items like providing more choice, managing a defined-contribution environment, or even handling or managing regulatory compliance.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.