In the two years since the U.S. passed healthcare reform legislation, employers have re-examined how they provide health benefits to their employees. According to research from Aon Hewitt, a number of employers are considering alternate healthcare models, such as corporate exchanges, to deliver cost-effective employee benefits.
An Aon Hewitt survey of 562 employers across the U.S. found that 94% are committed to offering and financially supporting health benefits coverage for their workforce in some form. Of those surveyed, 72% are very or somewhat interested in exploring whether a corporate exchange model can be an effective long-term solution for managing the cost of an employee health plan. Further, 44% believe they will provide employees health benefits through a corporate exchange in the next three to five years, up from the current mark of 4% who employ such a model.
Under a corporate exchange model, employers can offer employees set plans provided by participating insurers, eliminating the time and expense of plan design and administration. Plans are available with five levels of benefits, including three high-deductible plans that could be linked to health savings accounts, a fourth design offering coverage much like a traditional preferred provider organization plan, and a fifth option that is similar to a traditional health maintenance organization plan.
“The emergence of corporate exchanges allows employers and employees to benefit from the competitive dynamic that exchanges create and the promise this competition can have in lowering costs,” said Ken Sperling, national health exchange strategy leader with Aon Hewitt.
The survey found that 75% of employers that could reduce healthcare costs by moving to a corporate exchange would use a portion of the savings to lower labour costs. Meanwhile, 64% indicated they would use the savings to invest in expanding health and wellness programs and 62% said they would re-direct these funds to other non-healthcare related initiatives.
“Every employer, whether they participate in exchanges or not, has a vested interest in the health and performance of their employees,” said John Zern, U.S. health benefits practice director with Aon Hewitt. “Investing in wellness and health improvement will continue to be a priority with employers regardless of their delivery model. That said, exchanges may enable employers to reduce the staff time focused on benefits plan design, increasing attention on efforts that improve health and lead to increased workforce performance.”