Since the passage of the Affordable Care Act, interest in private health exchanges has exploded, and so have their numbers. As of October 2014 there are at least 150 different private health care exchanges in the United States running on at least eight different software platforms. KTP does not offer one. Instead, we offer a completely independent and unbiased evaluation of the private exchange market, including running competitive RFPs based on selection criteria determined by the objectives of our client.
Private exchanges differ along many parameters including whether they:
- Target Medicare retirees, non-Medicare retirees or active employees
- Offer self-funded or fully-insured plans
- Offer individual policies or group policies
- Offer policies from only one carrier or many
- Are linked or not linked to individual funding accounts like HRAs
- Are transparent in their fees (i.e. Do they receive a larger commission when they sell one carrier’s plan vs. another’s?)
- Use temporary, seasonal workers or permanent employees in customer service roles
- Incent customer service representatives for directing individuals to plans with higher commissions or pay customer service representatives a flat salary for steering people to the right plan, not the highest commission plan.
- Promote annual churn (member plan switching) as a means to earn a new commission every year.
Evaluating all of the options in this brand new market is extremely difficult. Many large, traditional human resource consulting firms have launched their own private exchanges which are generating significant commissions and administrative fees. This revenue dirties the waters when consulting firms try to provide objective, independent advice.
Employers and plan sponsors understand the importance of independent advice. It is difficult, if not impossible, to provide unbiased advice regarding a range of solutions when one of those under consideration is your own. There are also legal and fiduciary concerns for employers to consider.
Any employer or plan sponsor considering a move to a private health care exchange should strongly consider retaining an independent, neutral third-party expert to evaluate the market and conduct a highly competitive RFP process. Any independent advisor’s fees should be transparent and not tied to which insurer wins the business. KTP is just such an advisor.
If you are in the private healthcare exchange market, have any questions regarding our services, or would like more information, please contact: Nicole Allen at firstname.lastname@example.org or Kate Beebe at email@example.com.
Here are some relevant KTP thought-pieces on private exchanges: