Employers Remain Committed to Medical Benefits

Ninety-seven percent of employers say they are very likely to provide medical benefits to employees in 2016 compared to 77% in last year’s survey by the Private Exchange Evaluation Collaborative (PEEC). Sixty-seven percent are not considering moving part-time employees to public exchanges approach, and 84% not considering moving their full-time active employees to public exchanges.

Emma Hoo, director at the Pacific Business Group on Health said, “Employers…are seeking greater transparency in administrative and consulting or broker fees to [ensure] that employers and employees get better value. Many are not yet ready to relinquish control of key stewardship roles such as funding, carrier, plan design, provider network choice and even their benefits consultant.” The following are key findings of the survey:

• 98% say that the cost of private exchange plan options is important (up 5% from last year).

• The top two reasons that employers have implemented an exchange is to save money and provide more consumer choice.

• While only 6.4% of employers have implemented private exchanges for 2015, 20% are considering them as an option for 2016, and 41% are considering them as an option by 2018.

 Hurdles to private exchanges include employee readiness (84%), stability of carrier relationships (84%), loss of flexibility in plan design (78%), and loss of control or stewardship (72%).

• Employers say that the following are key elements of a private exchange: delivery and reporting capabilities, such as implementation assistance (93%), spending account program administration (89%), member advocacy (85%), enrollment and eligibility maintenance (85%), and employer-specific reporting (91%). In an era of increasing administrative burden, 85% of employers put a lot of importance on the exchange’s ability to reduce administrative burdens.

• Employers place a lot of value on the following attributes of private exchanges for active employees: experience and track record (96%), plan design choices (87%), carrier/network options (89%), and transparency of fees and rate setting (92%).

 Eighty-five percent say that plan selection tools are very important versus 70% in 2013. Thirty-five percent say that mobile device compatibility is very important compared to 26% in 2013.

Barbara Gniewek, principal, PwC said, “The emphasis on plan selection tools reflects the maturing of the employer’s understanding of the private exchange marketplace and the differences between the various exchange types /vendors. Because many exchanges assert that savings arise from employee decisions to buy-down on benefits, it’s critically important that consumers understand that they may be making trade-offs between a lower initial premium contribution and a higher deductible or out-of-pocket payments later,” said For more information, visit www.thepeec.com.

Last Updated 10/20/2021

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