Why choose Private exchanges?
Many companies recognize the importance of continuing to offer health care coverage to their staff. Unfortunately, there are a variety of reasons why smaller businesses are unable to offer group health care insurance. For example, the high costs to purchase coverage, including the costs to administrate benefits may be a barrier. Similarly, companies with a high staff turnover or who have multiple locations over several states may experience difficulty in finding appropriate coverage. Private exchanges may be a useful way for companies to enjoy a high level of purchasing power, providing cost effective coverage options through a private marketplace.
As part of the Affordable Care Act, new public benefit exchange programs are being implemented. These provide public markets to individuals and small businesses, allowing them to choose a variety of health care coverage options. Public exchanges will be set up and run by the state, the federal government, or a hybrid version, which is a combination of the two. However, not all companies will be eligible to utilize these public exchanges and are beginning to consider using private health care exchanges to purchase their group health care coverage. These private exchanges are sometime known as cafeteria plans due to the variety of options they provide. They enable companies to view a variety of options from a carrier, and choose from multiple plan designs based on defined criteria, such as how much the company will contribute to offset their employees’ health insurance costs. The exchanges will then offer several options based on these criteria, helping employers to determine which plans would best suit the needs of their employees. Once a company has selected a few options, these are then offered to their employees who choose the plan which bests suits their individual needs.
Companies must also ensure that they are able to administrate their benefits effectively, including allowing employees to have a greater control over their own plans. There are many HR software solutions available which help companies to integrate benefit administration with other administrative tasks. This can be achieved in ways which are more efficient and which streamline the administrative processes. In many cases, new software solutions incorporate current HR trends, such as the use of cloud computing. Application suites which use a SaaS platform, allow employees to easily access their benefit choices and information, allowing staff to make informed decisions using dashboards which compare plans side by side. They also allow for employees to participate in open enrollment, new hire enrollment and provide a self-service option in which employees can update their personal information. This allows a company to turn over the decision making process to their employees, something which many employees find attractive. Some private health care exchanges also offer additional benefit coverage such as life and disability insurance.
Ultimately, private exchanges provide employer and employees with more coverage options. It allows for a more efficient administration of these benefits in ways which are cost effective for company enabling them to continue to provide health care coverage to their staff.