Ask Me Anything: Five Questions About Private Health Insurance Exchanges

What kind of resources are typically available to employees on private exchanges (i.e. call center, online tools)?
There are a number of resources available to employees including technology-driven decision support during open enrollment, as well as call centers, videos, avatars, and other marketing materials. Additionally, some private exchanges offer a call center with highly trained advisors to help employees learn about their employer’s specific health benefits as well as guide them through the choice of plans and the enrollment process.

In your experience, who typically leads the communication plan with employees and what part would the employer play in this regard?
This varies greatly depending on the exchange. It is important to pick an exchange that truly minimizes the employer involvement without minimizing your access to information. The exchanges and carriers should both be involved in the communication process.

Implementing a new benefits strategy, such as moving onto a private health insurance exchange, requires senior management to communicate clearly the benefits for both the employees and the organization. Employee communications should be designed to educate them about the transition to a private exchange.

What is the typical timeline for choosing a private exchange?
The timeline is generally four to six months, depending on how far along an employer is in developing its specific goals and objectives. Depending on the complexity of the employer’s needs, desire to customize, contract negotiation, and set-up time, a longer timeline may be necessary.  If the employer is conducting its own due diligence of exchanges, the selection process can be much longer than six months.

Can the employer remain self-funded in the private healthcare exchange?
Yes. Some private exchanges allow employers to choose the funding mechanism that best fits their needs and goals. The employer may choose between two different funding methods: fully insured or self-funded. For example, there are private exchange strategies that offer “fully-insured” group health plans. In a fully- insured model, the employer contracts with an insurance company, effectively shifting all of the health risks of its employees to the insurer.  Private exchanges may also be utilized to offer “self-insured” group health plans. This allows the employer to continue to manage the employees’ utilization of benefits. The employer, however, assumes responsibility for paying all medical and drug claims.

What is the effect of wellness & health management programs on a private exchange?
In theory, wellness and health management programs accessed through an exchange will generate similar positive impact as off an exchange. There are a few private exchange solutions that have effectively integrated wellness as part of their offering.

Have a question we didn’t cover in this edition of Ask Me Anything? E-mail your question to Jennifer Jones at JJones@KTPadvisors.com. I’ll answer five more of your questions about private exchanges soon.