November/December 2013
Exchange
Private Exchanges and Open Enrollment: What to Expect this Year and Beyond
ANNOUNCING
Panel of Leading Experts Looks at Emergence of Private Exchanges www.theihcc.com
www.buckconsultants.com
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By leveraging our experience across the health care industry — from providers and payers to employers and government agencies — you can make your health care plans more accessible, affordable, and efficient. To learn more, visit www.buckconsultants.com
INSIDE
FEATURE 11 Private Exchanges and Open Enrollment: What to Expect this Year and Beyond How will the emergence of private exchanges impact the health benefits landscape? That’s the question we posed to eight industry leaders. Each gave his opinion on why private exchanges will succeed and what tools, technologies or components will be crucial for their success. With Eric Grossman, Mercer; Jeff Bakke, Evolution1; Scott Carver, PlanSource; Ken Sperling, Aon Hewitt; Ron Goldstein, Choice Administrators; Dennis McGuire, CodeBaby; Sanjay Singh, hCentive; and David Lindgren (left to right).
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Publisher’s Letter CEO/Publisher Doug Field covers the latest in the private exchange and defined contribution industry and what’s happening at the Institute around exchanges
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providers doing to prepare for these changes? By Ginger Bates, Director of Research, Eastbridge Consulting Group, Inc.
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Briefs & Innovations
Health Care Reform: Private Exchanges and Voluntary Health care reform, PPACA, ACA — the federally mandated changes that are coming have many different names and will be implemented whether the nation is ready or not. At the heart of this change is the formation of health care exchanges both public and private. For the benefits industry — and the voluntary market in particular — the question is not whether change will occur, but how? And will insurance carriers be ready? In what way will voluntary products fit into this new landscape? What are voluntary
By Joshua Hilgers, President & Founder, Health Partners America
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DEPARTMENTS exchanges. This number is grossly off from the projections. By Carlos Ferrara, Chief Operating Officer, Solstice Benefits
Exchange Profile: America’s Most Broker-Friendly Private Exchange The Affordable Care Act is going to make individual health insurance more attractive than group health insurance for millions of Americans. For the first time, many employers who have been using group major medical coverage to attract and retain employees may find that offering those same benefits may actually repel those same employees.
Keeping you up-to-date with the latest news, research and innovations in defined contribution and health insurance exchanges
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Private Exchange Panel Discussion
Employee Benefits in a Post-Exchange World I’m sure you have read the forecasts, market predictions and statistics about health care’s movement to state and federal exchanges. The preliminary enrollment data is starting to trickle in, and there are about 100,000 people enrolled in products purchased from public
10 Don’t Panic: Four Tips for Employers as January 1 Approaches October 1 has come and gone. Now what? Although there is much debate about whether the initial launch of the public exchanges was successful, one thing is certain: launching a massive health care transformation across the U.S. was never going to be easy. As an employer, you have a lot to think about when it comes to implementing an effective benefits strategy, especially as health reform continues to unfold. Here are four tips that will help as we work our way toward the next health reform milestone: January 1. By Joe Donlan, President, ConnectedHealth
15 Exchange Soution Provider Member Profiles
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PUBLISHER
Exchange www.theihcc.com VOLUME 1 NO. 5 | NOVEMBER/DECEMBER 2013
Amid Healthcare.gov Struggles, Private Exchanges Show Promising Future
Published by FieldMedia LLC 292 South Main Street, Suite 400 Alpharetta, GA 30009 Fax: 770.663.4409 CEO
Doug Field @ theihcc.com
The Obama administration’s initial struggles with Healthcare.gov have been widely reported. While many predicted the federal health insurance marketplace would get off to a slow start, not many could have anticipated that the technological errors would be so widespread and persistent. As a result, some Democrats are now joining their Republican colleagues in calling for the delay of the ACA’s individual mandate.
MANAGING DIRECTOR
Brent Macy
MANAGING EDITOR
Jonathan Field
SENIOR EDITOR
As the federal marketplace continues to experience glitches, many of the other health insurance exchanges — including several state-based exchanges — are having rather successful open enrollment periods. hCentive, a leading exchange software provider and contributor to this issue, is reporting that all of their state exchanges performed well out of the gate. Other private exchange platform providers, such as Aon Hewitt, Mercer, Liazon and CieloStar, are continuing to announce more and more clients and partnerships as employers, brokers, health plans and others discover the benefits offered by a private exchange. In this issue of HealthCare Exchange Solutions, we are excited to be featuring a number of articles focusing on private exchanges and this year’s open enrollment period. For the cover feature, we gathered a select group of business leaders and posed to them one question: how will the emergence of private exchanges impact the health benefits landscape? The responses, covering topics like defined contribution, decision-support tools, technology and broker accessibility, will provide a wealth of knowledge for any organization looking to implement a private exchange solution. Other articles from Solstice Benefits, Eastbridge Consulting, Health Partners America and ConnectedHealth look at additional topics that will be crucial to the private exchange market, including implementation, health care reform and voluntary insurance.
Heather Loveridge hloveridge@theihcc.com ACCOUNT MANAGER
Joni Lipson
MARKETING COMMUNICATIONS MANAGER
Lana Perry
ART DIRECTOR
Kellie Frissell
ASSOCIATE DIRECTOR OF EDUCATION SERVICES AND PROGRAMS
Dusty Rhodes CHAIRMAN OF IHC ADVISORY BOARD
Ronald E. Bachman, CEO, Healthcare Visions EDITORIAL ADVISORY BOARD
Kim Adler, Allstate; Diana Andersen, Zions Bancorporation; Bill Bennett; Doug Bulleit, DCS Health; Jon Comola, Wye River Group; John Hickman, Alston+Bird LLP; Tony Holmes, Sanders McConnell, TSYS Healthcare; Roy Ramthun, HSA Consulting Services LLC; John Young, Consumerdriven LLC WEBMASTERS
Kevin Carnegie
In addition, The Institute for HealthCare Consumerism is proud to announce the launch of PrivateHealthCareExchanges.com, the only online guide for employers, health plans, brokers and other organizations looking to navigate the industry’s various private exchange and defined contribution solutions. With the beta launch, we are aggregating private exchanges and looking for constructive feedback from the industry on what criteria they would like to see us showcase.
Tom Becher ASSOCIATE WEB ADMINISTRATOR
Tim Hemendinger
DIRECTOR OF CONFERENCE SPONSORSHIP/ CORPORATE MEMBERSHIP/REPRINTS
Rogers Beasley
Finally, our FORUM West conference is rapidly approaching and will feature many exchangerelated general sessions and workshops. We hope to see you there.
BUSINESS MANAGER
Karen Raudabaugh
Sincerely,
™ Volume 1 Issue 5 Copyright ©2013 by FieldMedia LLC. All rights reserved.
™ is a trademark of FieldMedia LLC. is published eight times yearly by FieldMedia LLC., 292 South Main Street, Suite 400, Alpharetta, GA 30009. Periodical postage ™
Doug Field CEO/Publisher dfield@fieldmedia.com
TO SUBSCRIBE: Make checks and money orders payable to ™ magazine 292 S. Main Street, Suite 400, Alpharetta, GA following rates: single copy $7.50; $75.00/yr in the U.S., $105/yr in Canada and $170/yr international. Please contact FieldMedia at 404.671.9551 or PRINTED IN THE U.S.A. ™ is designed to provide both accurate and authoritative information with regard to the understanding that the publisher
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November/December 2013 I HealthCare Exchange Solutions™ I www.TheIHCC.com
BRIEFS
NEWS BRIEFS New Employer Participation in Aon Hewitt’s Corporate Health Exchange Five Times Higher in 2014 Aon Hewitt has announced that 18 large employers, including Walgreens and 2013 participants Sears Holdings, Darden Restaurants and Aon plc, will offer health benefits this fall through the Aon Hewitt Corporate Health Exchange, the nation’s largest multi-carrier private health care exchange. The number of new employers joining Aon Hewitt’s exchange in 2014 is five times the number that participated in 2013. Enrollment is expected to triple to more than 330,000 U.S. employees. In total, Aon Hewitt anticipates more than 600,000 U.S. employees and their families will be covered under plans in the Aon Hewitt Corporate Health Exchange in 2014.
Array Health Launches Next Generation Private Exchange Marketplace Array Health has announced the next generation of its Array Spectrum™ Member Marketplace, the consumer-facing module of its private exchange solution. The new Marketplace features Array SmartFit™ decision support technology designed to simplify and humanize the process of buying benefits. With this solution consumers provide feedback to simple statements to indicate their preferences around financial risk, access to providers, prescription needs and more. The Array SmartFit technology uses proprietary algorithms to suggest plans that best map to each individual’s values. In addition to simplifying the decision-making process, health plan details are presented using everyday language, not insurance terms, further facilitating the shopping experience.
Frenkel Benefits Launches Frenkel Benefits Marketplace, a Private Exchange in Partnership with bswift Frenkel Benefits, an employee benefits broker and consulting firm, has unveiled the Frenkel Benefits Marketplace, a private exchange powered by bswift’s technology platform. Designed to take advantage of private health care opportunities in light of Affordable Care Act requirements, the exchange will manage costs for employers and offer competitive benefit options for employees. Within the next 12 months, Frenkel Benefits Marketplace is expected to support 20,000+ consumers and provide shopping tools, decision support and enrollment for employees. Frenkel Benefits chose to partner with bswift, a leader in cloud-based technology and services for employee benefits and health exchanges, because of its proven technology including a robust defined contribution platform for employers and employees, and bswift’s new “Ask Emma” interactive benefits advisor.
PlanSource Announces Its Selection As Technology Platform For Utah’s Public Exchange, Avenue H PlanSource has announced that after a thorough competitive evaluation process, it has been selected as the shopping and administration technology platform for Avenue H, the State of Utah’s public health insurance marketplace. PlanSource will provide the technology through which Avenue H offers its easy-to-use online health insurance marketplace and benefits shopping experience for small businesses throughout Utah, under the Small Business Health Options Program (SHOP) outlined in the Affordable Care Act. The PlanSource platform will cover plan quoting, employer shopping,
employee shopping, plan recommendation, enrollment, eligibility data management and data distribution to carriers for Avenue H.
Mercer Signs Up 52 Employers to its Private Exchange Platforms, Including Petco and Kinder Morgan Mercer has signed up 52 employers to offer a comprehensive range of benefits through Mercer’s private exchanges for the 2014 plan year. These employers include Petco and Kinder Morgan. Mercer anticipates that the exchanges will cover 200,000 employees, retirees, and family members next year. The 52 employers range in size from 100 to 30,000 employees and represent more than 15 industries. Thirty-three early adopters have chosen Mercer Marketplace, Mercer’s private exchange for active employees, to offer in 2014 a range of medical, dental, life, disability, and other voluntary benefit choices. In addition to Petco, some of the employers that will also offer Mercer Marketplace to their active employees include DineEquity (parent company of Applebee’s Neighborhood Grill & Bar® and IHOP® restaurants), Addison Group LLC, Cosentry, PAS Technologies Inc., Sanborn Map Company, Surgical Specialties Corporation, Kraus Flooring, and Vistronix.
CieloStar Selects My Health and Money Transparency Solution for its Private Exchange My Health and Money LLC, a unique, cost-saving solution for employees and consumers managing high-deductible health coverage, has been selected as an integral component of CieloStar’s new CieloChoice Fully Integrated Health and Benefits System. My Health and Money was created as a customizable, online portal to promote money-saving health care decisions that don’t compromise quality. CieloChoice is CieloStar’s proprietary web-based health and benefits solution that allows employers, affinity groups, brokers, third-party administrators, and associations to offer private exchanges and defined contribution benefit solutions to their employees, clients and member organizations.
Ascension Benefits & Insurance Solutions to Offer Private Exchange with Bloom Health Ascension Benefits & Insurance Solutions, partnering with Minneapolisbased Bloom Health, announces BenXchange by Ascension. BenXchange by Ascension is a private exchange model that gives clients the ability to offer employees an online benefits marketplace, providing a new solution for personalized benefits. Employees can choose from a variety of insurance carriers and ancillary products. To assist consumers with their purchasing decisions, Bloom Health’s userfriendly decision-support tools offer a unique way to communicate with and educate individuals to increase satisfaction for both employees and Ascension’s employer clients. BenXchange by Ascension allows employers to implement a defined contribution solution to provide personalized benefits in a group market setting.
USI Helps Clients Manage Employee Benefits Through Launch of Private Insurance Exchange USI Insurance Services has announced the launch of a private exchange to help clients manage their employee benefits. As a leading national benefits broker and consultant, USI has developed a broad and deep set of solutions to help employers control the costs of their benefits plans. This private exchange will be integrated with USI’s existing solutions. www.TheIHCC.com I HealthCare Exchange Solutions™ I November/December 2013
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PRIVATE EXCHANGES ‌ WHAT’S THE BUZZ?
Mercer Marketplace enables employers to: t 3FEVDF DPTUT t 4JNQMJGZ BENJOJTUSBUJPO t &NQPXFS FNQMPZFFT through choice.
Mercer Marketplace provides employees with: t $PTU FGGJDJFOU convenient buying. t $PNQSFIFOTJWF DPWFSBHF t 1FSTPOBMJ[FE QPSUGPMJPT
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Visit us at www.mercer.com/private-health-exchanges, or contact us at mercermarketplace@mercer.com.
Mercer is a global consulting leader in talent, health, retirement, and investments. We help clients around the world advance the health, wealth, and performance of their most vital asset — their people.
VOLUNTARY
BY GINGER BATES » DIRECTOR OF RESEARCH EASTBRIDGE CONSULTING GROUP, INC.
Health Care Reform: Private Exchanges and Voluntary
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ealth care reform, PPACA, ACA — the federally mandated pediatric dental plans, have already been made by many of the changes that are coming have many different names and carriers, whether more substantial modifications will need to be made will be implemented whether the nation is ready or not. At to the voluntary products offered remains a bit murky. Questions the heart of this change is the formation of health care exchanges both around what constitutes an “excepted benefit” and how that will affect public and private. For the benefits industry – and the voluntary market existing indemnity plans, as well as potential underwriting changes in particular — the question is to help manage risk tolerances not whether change will occur, and anti-selection concerns, but how? And will insurance are just a few of the unknowns About the Study: Health Care Reform: carriers be ready? In what way right now. Regardless of which will voluntary products fit into products are offered on private Private Exchanges & Voluntary is an this new landscape? What are exchanges, most of the carriers Eastbridge Frontline Report™. These voluntary providers doing to believe that the products will prepare for these changes? be generally more standardized reports provide timely data on hot or A recent Frontline Report™ and pre-packaged in terms of from Eastbridge Consulting the benefits offered than those new topics where the facts are often Group, Inc., Health Care offered outside of the exchange Reform: Private Exchanges & still emerging or are in transition. A total environment. Voluntary, attempts to answer those questions and others to Broker Roles of 18 voluntary carriers provided their get a better picture of voluntary Many carriers believe that carriers’ current strategy for the broker role will change in thoughts and feedback for this study. addressing health care reform the future, becoming more particular to the private exchange consultative in nature. This environment. will involve offering a broader repertoire of products and more communication with less focus on cost Exchange Participation and Type comparisons and more on regulatory, compliance and tax issues. Most Of the 18 carriers participating in the study, all but two plan to offer also believe that brokers across the market will be involved in private their voluntary products via a private exchange. The majority of these, exchanges. However, many agree that larger, more sophisticated however, said they are still in the exploratory phase of planning their brokers will be the earlier adopters of technology and change. strategies or plan to partner with medical carriers, brokers/consultants or technology vendors to craft their solution. Impact to Voluntary For those that already know their strategy or approach, the carriers Despite the evolving nature of most carriers’ exchange strategies, were evenly split among building a single-company private exchange all of the carriers interviewed believe that private exchanges will have either internally or via a vendor, adding their products to a multi- mostly a positive impact on the voluntary/worksite business, especially company private exchange set up by others, or using both the single- in the initial years that the exchanges are available. These include company and multi-company private exchange approach. Whatever increased knowledge and awareness of voluntary benefits overall by their private exchange plan, almost all carriers are busy creating employers and employees, as well as the addition of a new distribution alliances with various technology and administration companies to channel for voluntary that will generate revenue growth for the carriers. help them navigate the exchange set-up and implementation process. Other positives include the packaging of voluntary products with other products such as high-deductible health plans and HSAs along with a Product Offerings and Modifications continued shift towards consumer choice versus the employer as the Voluntary life, critical illness, accident and short-term disability primary decision-maker. products are the most frequently mentioned planned offerings for the private exchanges. Although some product modifications, such as changing the definition of a dependent to age 26 and offering
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PRIVATE EXCHANGE PROFILE
America’s Most Broker-Friendly Private Exchange BY JOSHUA HILGERS » PRESIDENT & FOUNDER » HEALTH PARTNERS AMERICA
Individual Insurance Takes on a Role in Employee Benefits The Affordable Care Act is going to make individual health insurance more attractive than group health insurance for millions of Americans. For the first time, many employers who have been using group major medical coverage to attract and retain employees may find that offering those same benefits may actually repel those same employees. There are several key reasons for this shift: Individual insurance is now guaranteed issue. This has not been the case in 45 of 50 states for the last 30 to 40 years. Many small businesses have been offering coverage because it was the only place for their employees to find coverage. t Mandated benefits and coverage levels are the same in the individual and small group markets. t Individual insurance is owned by the employee, and they can take it with them regardless of their job situation. t Individual coverage premiums are lower than group premiums for most consumers. t Federal subsidies will help pay the premiums for millions of Americans. t Cost-sharing subsidies will help make health care more affordable for millions of Americans by reducing deductible, co-pays and co-insurance.
Why the Private Exchange Broker Blueprint Understanding the new dynamics that are going to be at play is more important than ever. Unfortunately, many insurance producers do not have the time or resources to stay on top of the rapidly changing market. That’s why Health Partners America is here. We provide the training, tools, technology and fulfillment of individual health insurance (including facilitating federal subsidies) that a producer needs to not only keep their block of business but to grow it as well. The Private Exchange Broker Blueprint is made up of four key components that are all focused on helping the insurance producer meet their business needs while maximizing their profits. The flexibility in product selection, lead routing and fulfillment gives a producer broad capabilities, while the training, marketing tools, account management and business development teams help bring about focused execution.
The Four Key Components Training – Knowledge equals success. Our award-winning training team provides our broker community with the most up to date information on federal health reform, strategies for employers and other organizations and the latest marketing strategies. We provide on-demand training videos, weekly coaching webinars, open office
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hour webinars and business development teams to insure the brokers’ success. Tools – Having the right marketing materials to communicate your message is vital and can be expensive to develop. HPA has developed them for you. We have professional marketing pieces to communicate the concept to employers and other organizations and marketing pieces to brand with the employer to communicate to their employees. Marketing in the form of one-pagers, PowerPoint presentations, infographics and more. Technology – Health Partners America has built the most flexible and broker-friendly private exchange/marketplace platform available. The platform can be customized for the broker, their agency or even their client. The product lines and messaging can all be customized as well. That is not the end of the technology though. The leads generated in the online marketplace are tracked and managed by an industry-leading Client Relationship Management (CRM) system. Those leads can be routed to the broker to fulfill or to a fulfillment center licensed in all 50 states with a revenue share set up for the broker generating the lead. Leads sent to the fulfillment center are also tracked by the CRM and gives full transparency to the broker on exactly what is happening with the leads they generate. Team – We have experts to help you in two ways. First, our Account Management and Business Development teams will help you get off to a fast start and close employers on the concept of a private exchange. Second, our fulfillment team partner can provide a broker unprecedented leverage by enabling the broker to market multiple lines of insurance in all 50 states and even facilitate the eligibility and application of the federal subsidies. The fulfillment center agents are experts in cross-selling and actually average 2.5 policies per sale.
Who Needs the Private Exchange Broker Blueprint? There is a new reality facing America. The rise of individual insurance is being embraced by employers but, will brokers lead the way? It will certainly not replace all employer-sponsored group insurance — but it is a strategy that brokers need to be prepared for. Health Partners America provides a turn-key solution for brokers at an affordable price. To learn more visit www.healthpartnersamerica.com.
CONVERSATIONS
Employee Benefits in a Post-Exchange World BY CARLOS FERRARA » CHIEF OPERATING OFFICER » SOLSTICE BENEFITS
A candid conversation with Ellen deClaire, Director of Human Resources, Solstice Benefits I’m sure you have read the forecasts, market predictions and statistics about health care’s movement to state and federal exchanges. The preliminary enrollment data is starting to trickle in, and there are about 100,000 people enrolled in products purchased from public exchanges. This number is grossly off from the projections.
conditions clause or lifetime max.
So what do we do as business owners, brokers, insurance professionals and those who are making benefit decisions for their organization? How can we make balanced, informed, sound choices regarding health care in this new landscape, especially when there is little data to guide, validate and substantiate our vetting process?
E: That’s a tough one. I think the decision to renew early as a cost-savings tool is really dependent on the organization. One that offers products on a voluntary basis — or perhaps has a significant portion of its workforce eligible for subsidies on exchanges — will view this through a different lens than a group that pays for 100 percent of insurance costs for its employees.
This is when I turn an ear toward the consumer, in our case, our employees. I stop listening to the noise in the news and listen to those who are impacted the most. I sat down with our Director of HR, Ellen deClaire, to discuss the voice of the employee and the mindset of those making the ultimate, and often difficult, choice for group benefits. Carlos: Do you think benefit enrollment in smaller groups will be affected by the emergence of exchanges?
C: Rumor has it that an increased number of employers will try to renew in December, so they can prolong including those EHBs in 2014, as well as avoid increased premiums. What do you see trending in the human resources field?
C: What steps should groups take to educate their employees about their benefits options? E: Of course, offering cost-saving solutions and information is important. There will be an occasional employee who asks about dependent care and how to find a less expensive alternative. They can be advised to shop elsewhere, such as exchanges, to compare costs and benefits.
C: What about the Essential Health Benefits (EHB) provision; must employers now offer group benefits that include the EHB stipulations, such as pre-existing conditions?
Education is important as well. At Solstice, we have created an internal training course on the Affordable Care Act. There is so much information out there — and so much misinformation — that we wanted our employees to know the facts. When they are faced with making benefit decisions, they will know the nuances of reform, what certain terminology means and feel confident making benefit decisions. Our goal is to demystify this very complex topic and empower our workforce with knowledge. And of course, employer groups should be sending out their ACA-required notice to employees informing them of insurance options.
E: Yes. Once it’s time for a group’s open enrollment, the new plans that are offered cannot have a pre-existing
C: Based on what you hear and read in the news about wait times to shop on the exchange, the cost, the reported
Ellen: In some cases, absolutely. Some employees will opt out of their employer-sponsored benefits and go to the exchange because it will be more reasonably priced than their current benefits. In the small group market, they can age band the pricing of benefits, so it’s possible that older employees could pay more, which would make them want to consider shopping on exchanges.
system glitches — would you be apt to move your employees to public or private exchanges? E: I would be more inclined to move to a private exchange. We have more control of the products, of the communication to our employees and, ultimately, to their satisfaction with their benefits. C: What do you see as the future for health and ancillary benefits? What will you do in the long term as far as benefits are concerned? E: We are shifting our benefit’s spotlight from medical-only to a big-picture approach. The data is evident: health is no longer just about medical concerns. Oral health impacts overall health from heart disease, to diabetes and more. It’s no longer about just medical as so many aspects of one’s health are impacted by areas not traditionally covered under medial. Wellness, stress and nutrition tools help lower medical premiums and provide for a more engaged, happy workforce. We are broadening our scope of health. Our focus moving forward is on wellness and overall health. It’s about focusing on the whole body, about a healthier lifestyle overall. Times are changing with uncertainty ahead. Employer groups will want to continue to be involved in their employees’ benefits. After all, that’s one of the key ways to recruit the best talent and retain employees. Private exchanges provide cost-savings coupled with a positive online shopping experience, and I expect to see more and more groups moving in that direction. Full-suite offerings that include wellness, ancillary benefits and medical together will be the next generation of employer benefits. And, we look forward to that. Because when it comes to health, we really shouldn’t separate out each aspect of the benefits we offer—or leave any out altogether. They are all interconnected and critical for the well-being of our workforce.
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HEALTH CARE REFORM
Don’t Panic: Four Tips for Employers as January 1 Approaches
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BY JOE DONLAN » PRESIDENT » CONNECTEDHEALTH
ctober 1 has come and gone. Now what? Although there is much debate about whether the initial launch of the public exchanges was successful, one thing is certain: launching a massive health care transformation across the U.S. was never going to be easy. As an employer, you have a lot to think about when it comes to implementing an effective benefits strategy, especially as health reform continues to unfold. Here are four tips that will help as we work our way toward the next health reform milestone: January 1.
Consider how providing health care benefits will promote your company’s goals and vision — apart from the requirements of the Affordable Care Act (ACA). Most businesses have four goals: lower costs, engage employees, improve productivity and strengthen competitiveness. The right benefits strategy can do all of those things. Putting the priorities of the business first makes it easier to integrate the relevant portions of the health-care law into an overall benefits program that supports your company’s goals.
As employers feel the margin crunch, they increasingly seek answers to help moderate costs but also keep employees engaged, healthy and productive. One way to do this is through defined contribution, where the employer determines whether and how much they want to contribute toward employees’ benefits. This approach lets you avoid the open-ended health care costs that typically come with a defined benefit plan. Instead, you set a budget you can afford. Your employees can use that amount to help cover the cost of a plan that meets their particular needs. Ultimately, the defined contribution model helps control costs and can be adapted to almost any sized workforce and various employee populations — full-time employees, part-timers and 1099 contractors. Remember, in the long run, it’s about allowing employees to tailor their coverage and meet their needs across a range of health and ancillary benefits, taking into account who they are, their attitudes about benefits and how they intend to use their coverage.
Employees want to know if they should expect any drastic changes as a result of the ACA. Create clear and consistent communication materials and training for your employees that highlight any changes for your company. Everyone — from millennials to retirees — needs to
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hear the basics and learn how the ACA may impact them specifically. Each employee population has different needs and interests when it comes to health care, so try to cater to those characteristics the best you can. And think beyond open enrollment. A good strategy engages people throughout the year.
Having a plan that is responsive to your organization’s growing needs is always a good idea – albeit, easier said than done. In a nutshell, your plan should identify: ACA deadlines and requirements; a list of employees and hours they work; your benefits budget; planned communication around your implementation strategy; how employees might interact with the federal or state-based exchanges; and the tax implications for your employees. If you have a benefits advisor, meet with them regularly to ensure your progress aligns with your goals. And collect feedback from your employees (via surveys, etc.) to help determine if you are hitting those goals. The tens of millions of people who visited the public exchanges during the first week of October taught us this: consumers nationwide want to find affordable health coverage. As an employer, you are a trusted resource, and you play a critical role in helping your workforce understand their options: where to go, what to do and how to navigate the system. It’s a huge responsibility, but, if done well, it’s one that can reap huge benefits for your staff, your business and your bottom line.
PRIVATE EXCHANGES AND OPEN ENROLLMENT:
What to Expect this Year and Beyond
Strategic Change and the Private Exchange Advantage BY ERIC GROSSMAN » SENIOR PARTNER AND EXCHANGE BUSINESS LEADER » MERCER
As the implementation of health reform continues, the key aspects of the ACA have become well known to most employers. Thus, this year’s open enrollment season is a logical time for taking strategic aim at the future of
Mercer’s research and interviews with HR executives have a revealed exchanges offer to both employers and their employees. Private exchanges
responsibility for health care cost and utilization. Employee accountability and shared responsibility have emerged
through three fundamental and inter-related strategies: The widespread adoption of consumer-driven health plans. These plans will be available on private exchanges, and employees will have resources to help determine whether such a plan is their best choice. A focus on health and wellness with incentives and disincentives tied to healthy behaviors and outcomes. This focus should continue with a private exchange. Narrowing of provider networks to drive improvement in cost and quality. Private exchanges will support alternative network products. Overlay the above three trends with the ability for a private www.TheIHCC.com I HealthCare Exchange Solutions™ I November/December 2013
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PRIVATE EXCHANGES AND OPEN ENROLLMENT: What to Expect this Year and Beyond
management, and expand choice for employees, and the high interest becomes clear. Private exchanges offer many advantages, which is why so many employers are interested. Now is the time to determine whether this is the right approach for you and your employees.
The Influence of Private Exchanges on Health Benefits: The Two Things That Will Shift the Marketplace BY SCOTT CARVER » PRESIDENT » PLANSOURCE
At PlanSource, we have a unique perspective on the impact that
Defined Contribution Strategies Simplify Health Care Experience for Employers BY JEFF BAKKE » CHIEF STRATEGY OFFICER » EVOLUTION1
We’re in a time of unprecedented change for the health care industry — the biggest change since Medicare was introduced in 1965. The numbers tell the story:
technology is a complete health insurance exchange platform — one that spans both private and public exchanges (which are very different), one that includes both single- and multi-carrier installations, and one that also We speak daily with all of the parties involved in the exchange equation — carriers, employers, the employees who act as buyers and end users, and third-party brokers who are actively involved in the decisionthese discussions center on the private exchange model. We’ve found that there are two common threads that have enough groundswell of interest and appeal that they are inevitable.
accepting enrollees, more than 20 million people have visited continues to climb. According to a May 2013 report from the
technology solution is imperative for employers of all types and sizes. The growing workload for compliance with the Affordable Care Act — much of which can be automated through system reporting — is a compelling reason for that change. The second point is the opportunity for employers
by 2023. private health insurance exchange in the next three years, and private exchanges will ultimately surpass federal and state-run versions by 2018, according to a June 2013 report by Accenture. Although only one million individuals are expected to enroll in private exchanges this year, Accenture predicts nearly 40 million people will be buying their health plans from private exchanges by 2018, topping the 31 million individuals who are forecast to enroll in publicly-funded exchanges. Accenture also estimated 56 percent of the total exchange market 27 percent of consumers currently insured through employer-based
in providing health care coverage for employees. In order to both protect contribution private insurance exchange opportunities in 2014, we need solutions that go well beyond rudimentary enrollment platforms and legacy consumer-directed health account solutions. To be successful, it is imperative that health plans, third-party
to participate in insurance marketplaces, and provide solutions that deepen the relationship with customers and members. Key to success is choosing the right solution. 1Plan by Evolution1® —
solution. 1Plan supercharges both private and public insurance exchanges with a solution for employers and employees to manage premiums and out-of-pocket expenses in a comprehensive, easy-to-use experience. In short, 1Plan
the full value of their total compensation package. Beyond these two points we see little substantive difference in the health care reform and exchanges. Before ACA an employer would engage carriers, shop/compare rates and plans, and then offer those choices to their employees. Now they’re engaging in the same process, but simply
experience is both familiar and in line with expectations from other areas such as online retail — with comparison tools, advanced decision support, and even cost modeling and plan recommendation options available (for example, all of these are integrated directly in our platform). The private exchange model, and these two points in particular, use the power of technology to empower everyone involved in the process. Empowerment increases overall one of the main goals of health care reform, a primary mission of our company, and overall a good thing for
Private Exchanges Bring New Power to Health Benefits Delivery BY KENNETH L. SPERLING, CEBS » NATIONAL HEALTH EXCHANGE STRATEGY LEADER » EXCHANGE SOLUTIONS OF AON HEWITT
With the emergence of private health care exchanges, this open enrollment season stands poised to be a turning point in the evolution marketplaces like Amazon, Travelocity, and Orbitz connect buyers and
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sellers, a health care exchange is a competitive marketplace that connects insurance companies with individuals who are shopping for health insurance. In a private exchange, consumers are empowered to select health care coverage that best meets their health needs from a variety of plans, insurance carriers and price points. This fall, over 600,000 employees and their dependents will use Aon designed as a retail shopping experience. Consumer feedback from the Corporate Health Exchange 2012 open enrollment was overwhelmingly positive: 93 percent of employees appreciated having a choice of insurance companies, 79 percent of employees believed they had chosen the best plan for them and their families, and 75 percent reported a greater understanding of what their employer contributes for their health care coverage. An exchange isn’t right for every company, but our clients that have total rewards strategy. They are comfortable giving up control of elements like plan design and claims management in exchange for more options and an improved employee selection and enrollment experience, based on a standard set of plan designs. By focusing on improving the health management, disability incidence and duration, and employee productivity. This year’s open enrollment promises to be a time of great transformation, as private exchanges bring the delivery, ultimately helping to change the health care
Broker Guidance is Key Influence in Employer Health Care Decisions BY RON GOLDSTEIN » PRESIDENT AND CEO » CHOICE ADMINISTRATORS
businesses now have three options to choose from: the government
question:
guidance from brokers. The most successful exchanges will offer a variety of carriers and accessible and affordable for everyone. We know from the past 30 years of health plan evolution that provider networks are fundamental to consumer decision-making.
options, employers considering how important networks are will be key in the decision-making process. Secondly, programs offering additional products and services — whether they’re available to buy-up, offered on a voluntary basis or at no additional employer cost — will quickly differentiate themselves from dental, vision or chiropractic, and could extend to services such as online human resources support or employee discount programs. Offering
Education and Engagement: Crucial for Private Exchange Success BY DENNIS MCGUIRE » CHIEF EXECUTIVE OFFICER » CODEBABY
The intense public attention on health plan selection has highlighted the process as a complex and emotional undertaking with wide-ranging
detracts from employee commitment and loyalty. The success of private exchanges depends on employee education, engagement and ease of use. Not surprisingly, in a ConsumersUnion study participants had
to stand apart from others — while also empowering employers to offer more robust products and services to employees. And lastly, programs that work with independent brokers will provide a greater service to employers. In an era of change and confusion, brokers are best equipped to provide unbiased recommendations necessary to help employers make well-informed decisions. Government and market forces have prompted a shift in how
which carriers and exchanges compete will be vital to their success. Those programs offering multiple provider networks, products and services that add real make smart decisions. They are the options you’ll see succeed in 2014.
ability to assess the overall coverage they would receive. This confusion thinking employers to adopt a range of interactive and educational tools to guide and assist employees during open enrollment. Smartly, they are borrowing online retailer practices such as product comparison tools, behavioral analytics, chat, video, and intelligent virtual assistants to create a superior customer experience. Statistics show that these tools are already expected by employees due to the prevalence of consumer-based technology in daily life. As consumer engagement becomes the adopted contextual information, video tutorials, cost-at-time-of-care calculators, click-to-chat and click-to-call to name a few. A unique and highly effective way employers are facilitating enrollment while lowering costs is through the use of an intelligent virtual
assistant. Not to be confused with traditional virtual assistants that comprise simpler knowledge base solutions and don’t meet the needs of as described by Gartner, do. They are 3D avatars that have natural language response, emotional expressions, human movements, and the ability to guide users through the enrollment process, yet escalate to live help when necessary. These features speak volumes to employers who want to provide 24/7 access to their employees without relying on the HR team, allowing them to self-pace their enrollment and
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PRIVATE EXCHANGES AND OPEN ENROLLMENT: What to Expect this Year and Beyond
Technology Drives Future of Private Exchanges BY SANJAY SINGH » CHIEF EXECUTIVE OFFICER » HCENTIVE
At hCentive, we have built our business on exchange technology. When I co-founded the company in 2009, it was for the explicit goal to enable states, payers and consumers be successful in the post-ACA world. Since then, we have been hard at work building state exchange, private exchange and exchange connectivity solutions. As October 1 has passed, we are happy to report all of our state exchanges performed well the day of the launch and they are continuing to succeed with increasing number of enrollments. In fact, one of our exchanges has received recognition from multiple media sources as being one of the most successful exchanges out of the gate. While it takes more than technology to make an exchange successful, we are proud that we provided a solid foundation allowing the states to concentrate on the other components — marketing, outreach, etc. In addition, all of the health plans relying on our exchange connectivity solution went live on October and have been receiving enrollments with
2017, the number of employees is predicted to surge to between 10 and 20 million. Companies who are seeking new ways to reduce their exposure to rising health care costs are mainly driving these employee numbers. The needs in the private exchange market are vast and diverse. While the concept of private exchanges has been around for a number of years, market demand has completely changed the game requiring plans to implement new private exchange technology to meet the new
While a lot of attention is focused on the Federally Facilitated Marketplace and state-based exchanges, the adoption and use of private exchanges is growing. 2014 is predicted to be a watershed year for private exchanges, with studies predicting that over one million active employees will participate in a private exchange, up from about 100,000 in 2013. By
challenges while equipping our clients to address future requirements as needed. Being an active member of this convergence is exciting, we are belted in and ready for the ride.
private exchanges morphing into consumer engagement platforms, which and dis-intermediary sales and distribution channels. starting. We pride ourselves — and our products — on
We see private exchanges morphing into consumer engagement platforms, which will deliver automation, efficiency and effectiveness in both intermediary and dis-intermediary sales and distribution channels.
Simplify Small Business Health Insurance, Empower Employees BY DAVID LINDGREN » COMPLIANCE OFFICER » INSUREXSOLUTIONS PRIVATE EXCHANGE
Let’s face the reality. Many small businesses with less than 50 employees either have given strong consideration to terminating their
a small group continue to offer more expensive plans and take on the
High costs are the driving force. I don’t think I’m going too far out on a limb to assume most of you agree. Now we have a wave of new regulations and plan changes forthcoming with the ACA that will likely increase group health plan premiums even further for many small businesses. But the ACA appears to have given
Giving employees the ability to choose a health insurance plan they want and at a cost they can afford is ideal — especially if you believe in the overall consumer-driven model. You know the belief in letting employees be true health care consumers. While there are still some rules small businesses will need to follow to avoid ERISA plan status, the private exchange can assist with the proper set-up and execution of the program for the employer and employees.
employees a raise and call it a day. It’s that simple. Let employees shop freely for an individual plan. They choose the price, insurance company, network, deductible, co-pays, etc. All an employer has to do, if they are willing and able, is provide some after-tax dollars to help employees enroll in coverage. and if they do offer a group health plan, then most employees won’t be able to qualify for a subsidy. Plus individual plans are upwards of 15-20 percent less expensive than the same exact group health plans. That’s right, individual plans are cheaper than small group plans. So, why would 14
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employee choice, access to subsidies — and most of all happy employers and employees. This business model alleviates the employer burdens of dealing with group health plan renewals and reduces many of their administrative tasks. It also empowers employees to get the coverage they are now required to have.
EXCHANGE SOLUTION PROVIDER MEMBER PROFILES
HSA/HRA/FSA TECHNOLOGY: ADMINISTRATION & MANAGEMENT
TSYS HEALTHCARE TSYS Healthcare® provides end-toend strategic payment solutions for 706.649.5080 consumer directed healthcare. We www.tsys.com/healthcare partner with benefits administrators, healthcare@tsys.com financial institutions, health plans, and software providers to navigate all aspects of HSAs, HRAs, FSAs, transportation accounts, cash reimbursements, and lines of credit. TSYS Healthcare cards offer participants the security they expect along with the ability to conveniently access funds from multiple accounts and manage their benefits payments with simplified single-card access. Clients and partners benefit from simplified processes, reduced paperwork and cost savings that can contribute to improved return on investment. “We built the TSYS Healthcare platform to meet the market demand for reliable, configurable and intelligent solutions. Understanding the dynamic U.S. healthcare market, our customers rely on our option-driven system to prepare them for the future.” — Trey Jinks, Group Executive, TSYS Healthcare HSA/HRA/FSA TECHNOLOGY: ADMINISTRATION & MANAGEMENT
A PRIVATE EXCHANGE THAT SIMPLIFIES HEALTH INSURANCE
INSUREXSOLUTIONS
10275 W. Higgins Road, Suite 500 Rosemont, IL 60018 855-563-6993 info@insurexsolutions.com www.insurexsolutions.com
The InsureXSolutions® private exchange offers employers a simplified role in the new health insurance marketplace. Employers with part-time workers or retirees, as well as small businesses can utilize this exchange to empower their employees to choose the health and dental insurance that best fits their personal and family needs. Employers can reduce costs and administrative tasks, while employees receive interactive support tools and personal guidance from our licensed insurance professionals. Available in select markets, InsureXSolutions is exclusively offered and operated by Flexible Benefit Service Corporation (Flex). Contact your broker or consultant, call us directly at 855-563-6993, or visit www.insurexsolutions.com to learn more.
BENEFIT ADMINISTRATION/PRIVATE EXCHANGES
Since 1988, CieloStar (formerly OutsourceOne) CIELOSTAR has helped brokers, employers and employees 530 U.S. Trust Building navigate the ever-changing world of benefits. 730 Second Avenue South Now, with the dawn of “Defined Contribution Minneapolis, MN 55402 Health Care” we are again on the leading edge. With a team of industry thought leaders, CieloStar 612.436.2706 makes navigating healthand benefits choices john.reynolds@cielostar.com easy for employers and employees by offering comprehensive benefits administration solutions with a high-touch, high technology model—most recently launching a proprietary private health insurance exchange.
“Fueled by the far-reaching impact and complexities of health care reform taking effect in 2013 and 2014, employers and employees increasingly find themselves in a ‘farmer’s market’ of benefits choices. Cielostar is uniquely positioned with enabling technology that helps purchasers and consumers make the best possible decisions and create a best-in-class benefits administration process. Our unique comprehensive approach to benefits offers everything from back room technology for enrollment, data, billing and call centers to complete solutions for COBRA, CDHP and health insurance exchanges.” — John Reynolds, CEO, Cielostar HSA / HRA / FSA ADMINISTRATION AND FINANCE
Evolution1 and our Partners serve more EVOLUTION1, INC. than 9 million consumers, making us 952.908.9056 the nation’s largest electronic payment, www.evolution1.com on-premise and cloud computing sales@evolution1.com healthcare solution that administers reimbursement accounts, including HSAs, HRAs, FSAs, VEBAs, Wellness and Transit Plans. It is the only solution that offers a single end-to-end user experience, provides innovative auto-substantiation technologies, and automates workflow for Partners, employers, and consumers. It does all this on one technology platform comprised of 1Cloud™, 1Direct™, 1Pay™, 1View™, 1Plan™, and 1Mobile™. Evolution1 and our Partners are dedicated to delivering value, reducing costs and simplifying the business of healthcare.
“The combination of our innovative products will further our leadership position in a rapidly changing healthcare market. Together with our Partners we are committed to reducing costs and simplifying the business of healthcare.” — Jeff Young Chairman and CEO, Evolution1
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already moved their employee population into a private exchange, or are planning to in the highest adoption rates, according to recent research published by Alegeus Technologies.
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