Major Players in Private Exchange
As the private exchange marketplace develops, more companies and software are entering the industry. Here are three major players as well as the pros and cons associated with each:
- Private exchange-centric companies: These companies’ software, such as Liazon’s Bright Choices, emerged on the market around six years ago specifically to provide a defined contribution, multi-choice strategy to help control employers’ healthcare costs while providing employees infinite benefit choices. These companies uniquely partner with carriers to provide a high level of customization. Users can choose one company’s dental plan and another company’s vision plan. While this method is slightly more expensive on the front-end, this choice offers the most customization, support and flexibility to alter if a plan doesn’t work out.
- Benefit enrollment firms: Traditional benefit enrollment firms offer benefits as an employee front-end facing “tack-on” system to already existing healthcare plans. Typically, the software adds a defined contribution approach coupled with decision support tools to the existing enrollment platform. The format is considered “empty technology” as these companies don’t often have their own insurance products in-store, but rather the broker and the client partner to determine which carriers and products should be offered.
- Carriers: The largest players in the healthcare industry, such as United, Cigna and Blue Cross Blue Shield, have recently increased their presence in private exchanges. Some carriers are currently offering an exchange technology platform and others will soon be entering the market. Though pricing is lower and the initial set-up is easier, the carrier locks employers into the decided upon technology and only offers that carrier’s product in a “one-carrier-fits-all” type model. If the employer changes their insurance carrier in future years, they may lose their exchange technology and have to implement a new system.
To choose the best plan, employers will need to decide if they value price, amount of time to implement and the importance of customization.