10 Private Benefits Exchange Assumptions That Are False
10 Private Benefits Exchange Assumptions That Are False
Private benefits companies have been launching healthcare insurance exchanges, like Lawley Marketplace which launched in 2003, that are poised to change the way you buy health coverage. While you are considering your options, especially with Affordable Care Act changes redefining small business, here are 10 private benefits exchange assumptions myths you may have heard and why they are inaccurate.
1. Private Healthcare Exchanges Are New and Risky
Private exchanges have been around for years and pre-date the Affordable Care Act.
2. No One Uses Them
In 2015, around 6 million people are enrolled in health plans through private benefits exchanges, including some big-name retailers, such as Walgreens.
3. They Are Related to the Obamacare Exchanges
Obamacare’s public exchanges are only for healthcare, while private exchanges are health insurance marketplaces that can include many other ancillary benefits. Employers use them to offer a menu of health plans to employees while controlling how much they pay toward premiums.
4. There’s No Transparency on Pricing
Private exchanges, such as Lawley Marketplace, shift employers from a defined benefit model (where employers provide a fixed set of benefits to employees) to a defined contribution model (where employers offer a fixed dollar amount to employees to purchase plans of their choice). Employers prefer defined contribution arrangements as they give predictable costs.
5. Workers Pay More for Health Coverage
Employees can purchase an array of health plans at different cost levels for their individual healthcare needs. The flexibility to purchase tailored coverage gives employees more bang for their buck.
6. They Don’t Offer Choice
Exchanges with many carriers let you shop from a vast inventory of major health plans as well as a side menu of supplemental insurance products. Consumers get a wider selection of retail products, such as vision and dental coverage, than are available on the public exchanges.
7. They Are Complex to Administer
Defined contribution health plans reduce the time required to administer health benefits. With the right platform, managing health benefits takes just a few minutes per month online –freeing up HR’s time for more strategic work.
8. Defined Contributions Deter New Hires
Some employers have expressed concern that offering defined contribution healthcare will make their benefit package less attractive to new hires, especially those who currently enjoy a defined benefit health plan. Private exchanges offer employees a greater choice of coverage options and access to a suite of education tools. Ultimately, they will help employees lead a healthier life, and wellness is a major weapon in the recruiting arsenal.
9. Employees Get a Bare-bones Experience
Private benefits exchanges are consumer-oriented. They typically offer a robust selection of online tools, such as physician finders, cost calculators and jargon-free FAQs to guide decision-making. Private exchange companies often serve as the benefits administrator for workers with questions about the inventory offered through the private exchange.
10. They’re Just a Fad
It’s estimated that 40 million people will use the private exchanges by 2018. Why? Because they offer the right tools to respond more specifically to employees’ needs and keep them healthier at lower cost — making private exchanges an attractive option for individuals and businesses.
Now that we have debunked these private benefits exchange assumptions, learn how our private benefits exchange, Lawley Marketplace, could be the right employee benefits solution for your organization, talk with our employee benefits team here.
