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Analysis

Private insurance exchanges

"Outlook is good"

How might employers shape their health benefit strategies in the face of coverage changes, rising costs, and pressure to recruit and retain talent? One popular option is private insurance exchanges. Findings from the Deloitte Center for Health Solutions 2015 Survey of US Employers suggest that employers are positive about private exchanges and their potential for decreasing costs, simplifying the employer’s role in benefit administration, and providing employees with comparable, higher-quality coverage at a lower cost.

Insights from the Deloitte Center for Health Solutions 2015 Survey of US Employers

What future moves might employers make around their health benefit strategies in the face of coverage changes, rising costs, and pressure to recruit and retain talent? One popular option is private insurance exchanges (PIX), online marketplaces that allow employers to shift to a defined contribution for health care. Some employers have already implemented private exchanges and others are considering them.

Findings from the Deloitte Center for Health Solutions 2015 Survey of US Employers suggest that employers are positive about private exchanges and their potential for decreasing costs, simplifying the employer’s role in benefit administration, and providing employees with comparable, higher-quality coverage at a lower cost. Employers who have already implemented private exchanges (adopters) are even more positive than those who have not moved to private exchanges (non-adopters).

Of the adopters (11 percent of respondents), only eight percent say they are not satisfied with their current private exchange and only one in five says it has not reduced costs.

It appears that the trend of employers embracing the shift to private exchanges may be growing. Thirty percent of non-adopters say they are interested in moving to private exchanges, and the majority of those interested (62 percent) say they are likely to move in the next one-to-two years.

Since there is an expressed willingness to move, understanding employers’ preferences and concerns will likely be crucial for health plans and other stakeholders in the private exchange business.

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