States aren't required to have an American Health Benefit Exchange in place until January 1, 2014, pursuant to the Patient Protection and Affordable Care Act (ACA). But one private company is testing the waters before then.
Aon Hewitt has announced plans to offer a corporate health care exchange to employers nationwide, targeting 1,000 or more full-time employees, beginning as early as 2012. Aon Hewitt has been providing and administering retiree medical exchanges for several years. In anticipation of changes to the insurance market, the organization is extending its exchange model to offer employers a viable option for active employees.
"Health reform creates an opportunity for employers to re-examine the way in which they provide health benefits to employees," said Ken Sperling, global Health & Benefits Practice leader with Aon Hewitt. "Leveraging the efficiencies and market competition in an exchange environment has the potential to provide immediate and long-term savings to employers, while giving employees more choice and control over their benefit plans. The corporate health care exchange concept was an obvious choice for Aon Hewitt, given our experience and expertise in benefits administration. The Aon Hewitt exchange model already exists; it is an extension of our very successful retiree medical exchange, which administers retiree benefits to more than 2.4 million participants. We are the largest benefits administrator in the U.S., providing outsourcing administration services to more than 10 million employees and their dependents. We know what works."
Aon Hewitt currently is conducting health care conferences for their clients in many cities nationwide. At the Chicago and New York events, 243 participants were asked about their plans to provide health care coverage to their employees in 2015 and beyond. There was a nearly even split between employers who thought they would ultimately be delivering health benefits via a corporate exchange (43 percent) versus continuing to offer health care benefits directly with greater financial controls and policies (47 percent). Meanwhile, 9 percent said they would continue their attempts to manage the health care trend annually, based on current business and economic conditions, and just one percent said they do not believe they would be offering health care coverage at all in 2015.
"Client concerns about providing health care coverage center on the balance between removing risk and volatility, and offering coverage as a key attraction and retention tool," said John Zern, Americas Health & Benefits Practice leader with Aon Hewitt. "The Aon Hewitt corporate exchange model addresses both these issues. Volatility is mitigated through a defined employer contribution for employees to purchase coverage through the exchange, and this important benefit is delivered through a partner with a proven track record for success as the nation's leading health care consultant and employee benefits outsourcer."
Perhaps the states can watch (and learn?) from Aon Hewitt's early efforts.
For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
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