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Health Care Reform Corner

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What is a Private Exchange?

The private exchange, also referred to as a marketplace, is a new online healthcare platform that a growing number of companies and employers are adopting to comply with the Affordable Care Act. A private exchange is based on a defined contribution from the employer to the employee to cover healthcare costs. Using the set contribution, employees pick the health plan – which can include dental, wellness, life and even pet insurance – that is most advantageous to them. This platform is hastening the move away from one-size-fits all model for health insurance toward tailored healthcare plans.

Prior to the Affordable Care Act (ACA), many businesses provided one plan for all of their employees, who might have suffered if the plan didn't fit their particular needs. Today, in public exchanges, the government subsidizes bare bone plans for individuals. In private exchanges, employers are the providing sponsors for comprehensive healthcare plans.

Private exchanges provide employees with a high level of transparency into what their full compensation benefits are, seeing in real dollars not only what their employer pays them in salary, but also the actual cost of subsidizing healthcare benefits. The platform provides several benefits to employers, from establishing a defined contribution to consolidating various insurance channels.

Another advantage of private exchanges is the access to easy-to-use resources. For example, with Liazon's Bright Choices platform, employees first take a survey that analyzes their health, wealth and personality and then recommends the best benefits package for their situation.

We hope you will call your Northwestern Benefit representative, who can provide you with further resource information, videos, customized plan summaries as well as side-by-side comparisons of plan features, cost and coverage with your current offerings. Should your firm elect to adopt a private exchange, our team will help you manage the transition, ensuring a seamless integration for your HR professionals and your employees.

Private Exchange Video Series

Part 1 Part 2 Part 3
Part 4 Part 5 Part 6
Part 7
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