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Employee Benefits
Is a Private Exchange the Solution to Ever Increasing Employee Benefits Costs?
Just for a moment, let’s forget about all the confusion and politicking surrounding the Affordable Care Act. In a survey of people on the street, Jimmy Kimmel makes light of the current climate by exposing a common misunderstanding through a simple question, “Which do you think is better – Obamacare or the Affordable Care Act?” As the video reveals, many Americans don’t know that Obamacare and the Affordable Care Act (ACA) are one in the same. This is merely the tip of the ACA iceberg.
The challenge
The ACA is extremely complex and requires the leadership and direction of educated experts to navigate the challenging road ahead. For agencies, there are two audiences who need our proficiency: the employer and the employees. In determining the best course of action for both parties, the employer and I sit in a room to look at the insurance renewal and options. Often times many of them seem unappealing. The conversation tends to circle around, “Should we cut the benefits to keep costs down, or retain the same benefits and pass the increase to employees?” Sound familiar?
A solution to the problem
Over the last few months I’ve spent numerous hours learning about private exchanges and all the advantages they offer. You’ve never heard of a private exchange? Don’t worry, these platforms are not new or untested. Other parts of the country have been using this technology for quite some time. It has been since the adoption of the ACA that the door has been kicked open for employers to explore this opportunity for themselves and employees at greater length.
What is a private exchange
Private exchange technology creates an online insurance store that helps employees decide what’s important to them and what are they willing, or unwilling, to give in order to get it. Maybe they would rather have a lower deductible plan with a smaller provider network and pay dental out of pocket. Perhaps they prefer the higher deductible with lower monthly premiums. No matter the scenario, a private exchange offers a side by side comparison of offerings and allows each employee to tailor the plan based on medical needs, budgetary concerns and coverage preferences.
How it works
Together the employer and broker review the carrier options and plans in your area and pick 5 or 6 that meet your organization’s budgetary criteria. Your human resources department will be responsible for introduction emails that will launch your people into a one on one enrollment meeting that will educate them through videos and other materials. Once the tutorial is complete, the employee elects benefits online. No more paper forms! As the employer, you are able to easily track employee’s completion, approve life changes, and submit elections.
What the statistics say
Current statistics show that more than 60% of employees buy less insurance coverage when utilizing a private exchange. Providing employees the opportunity to control their benefit plans makes it more affordable for both the agency and the employee while also providing unique plan options that cater to employee’s specific needs. With open enrollment right around the corner, what better time to offer a new buying platform specific to your employees’ individual wants, needs and desires and well within your organization’s budget.
With the unknowns that come with change, there are exciting new opportunities! It’s not a road without bumps and change can be challenging. You, Jimmy Kimmel and I already know that. Together, we can prepare and provide the tools needed to maximize your organization’s investment in employee benefits while simultaneously meeting each employee’s needs. This is a road that needs to be checked out at least once and I have a sweet new ride. Pick you up at 8?
Propel has partnered with Liazon Bright Choices to offer a unique private exchange opportunity. Expand the Private Exchange accordion in the provided link to find out more: Propel Private Exchange Info
