An Introduction to Benefit Exchanges
As part of the Affordable Care Act, which aims to ensure that health care is accessible to all companies are being encouraged to find ways to continue to offer health care coverage to their employees. In some cases, companies may face penalties if they do not offer affordable coverage under new regulations. Alternatively, some companies may find that the cost to continue to offer health care is increasing, causing them to struggle to continue to offer these benefits. However, there are also a variety of new options or market places, in which employers can purchase health care coverage. Under the Patient Protection and Affordable Care Act (PPACA), states will be required to offer public exchange programs or public market places in which both companies and individuals can purchase health care coverage. Initially, only small companies are eligible to participate in these marketplaces, which enable them to enjoy similar purchasing power to those of larger companies. Public benefit exchanges, aim to reduce costs and enhance options, whilst making it easier for both companies and individuals to compare plans alongside each other.
A public benefit exchange can be administrated by each state in several ways. States may choose to set up and administrate their exchanges independently from the government or work in conjunction with the federal government, known as a hybrid model. States may also choose to participate in exchanges set up and operated by the government. The exchanges act as a transparent marketplace, ensuring that consumers are more able to compare plans side by side. The exchanges also ensure that plans offered by carriers meet new health care regulations, such as not imposing annual dollar limits on benefit plans, cover preexisting conditions, and other basic and essential criteria under the health care reform.
For smaller companies, the public benefit exchanges can help employers to make better decisions regarding the health care coverage they choose to offer their staff. However, further considerations should include how to administrate new benefits and incorporate these within their company. Some carriers offer administrative support, which can greatly reduce some of the overhead costs associated with benefits administration. However, companies will still be required to implement benefit software, through which staff can access the carrier’s external website. For example, benefit modules such as ICON, can be designed to work with the company’s defined carrier such as linking internal applications to the carrier’s website, and integrating multiple benefit packages. These applications also offer self-service, encouraging staff to access and update their own personal information, explore healthcare options, and can greatly reduce the amount of queries received by the HR staff. HR consulting firms are able to advise companies in how to best integrate their new benefit packages within the company. For companies who are not able to access public exchanges or who prefer not to, some consulting firms also help companies to choose from the range of private benefit exchanges which are also available.