How Large Employers Feel about Private Exchanges

healthcarewordsThe majority of large employers are fully committed to providing an array of company-sponsored benefits, but they are not sure whether private health insurance exchanges will be a part of their strategy, according to a Milliman and Pacific Resources survey of mostly Fortune 1000-ranked companies. The survey reveals the following about large employers:
• 80% say that having employer-sponsored benefits is an integral part of their strategy. Only 13% view it as a required expense of being in business.
• 75% are committed to providing an array of employer-sponsored benefits. They will continue to manage benefit costs by sponsoring exchanges, wellness programs, and other incentives.
• 21% expect to delay changes to their benefits until they understand the full impact of the Affordable Care Act (ACA).
• 91% say they have a good to excellent understanding of the opportunities, challenges, and decisions required to move to a private exchange.
• 51% are at least somewhat confident that private exchanges will be a viable alternative while 49% are not confident or are unsure.
• 37% don’t plan to evaluate private exchanges, and 13% have already conducted an evaluation and decided not to switch to an exchange.
• 35% have started evaluating private exchanges for active employees; 11% are interested in evaluating exchanges; and 3% are in an exchange.
• 34% have not determined how to evaluate private exchange vendors.
• 25% will use in-house resources to perform the evaluation, and 25% plan to use a consultant that does not sponsor an exchange. Only 13% would use an existing consultant who has sponsored a private exchange.
• Half of those who are willing to consider a private exchange don’t expect any move to happen until 2017 or 2018. The other half is unsure of the time frame for such a move.
• When asked to rank the most important factors in deciding whether to move to a private exchange, 85% say cost savings is most important. But 55% don’t know how much savings they would need in the first year to justify the move. The rest of the responses range from less than 2% in savings to more than 10% in savings.
• 60% would want to remain self-insured if they moved to a private exchange while only 13% would move to fully insured programs. The remaining 27% were undecided, but cited concerns about moving to fully insured products for various reasons, such as the ability to manage administrative and state requirements and the long-term cost effectiveness for fully insured products.

For more information, visit: http://www.pacresbenefits.com/private-health-insurance-exchanges.

Last Updated 09/16/2020

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