In one of the biggest steps for private health care exchanges so far, Aon Hewitt has announced that it will be offering health benefits for more than 330,000 American employees of some well-known companies, including Walgreens, Sears Holdings and Darden Restaurants – parent company of Red Lobster and the Olive Garden.
A total of 18 major employers have joined the Aon Hewitt Corporate Health Exchange, making it the country’s largest multi-carrier private health exchange. Health care providers including Anthem, MetLife and VSP Vision Care will be among the carriers represented in the exchange – with a wide variety of plans and different pricing options.
Aon Hewitt says it expects the enrollment to exceed 600,000 U.S. employees by 2014, approximately five times the number that participated in 2013.
In its 2013 Health Care survey, Aon Hewitt noted that more than a quarter of 800 large and mid-size national employers indicated that they plan to participate in a private health exchange within the next five years, with some 7 million employees represented.
The Aon Hewitt Corporate Health Exchange’s health insurance services remain private, unlike state or federal marketplaces, subject to the same rules as traditional employer-sponsored health care benefits.
Ken Sperling, Aon Hewitt’s national health exchange strategy leader, says the company’s exchange seeks to cut costs by encouraging competition at a consumer level, as well as providing more choices and better service for employee participants.
There’s still much anticipation to see how other major employers will adapt to the notion of health care exchanges. John Kelly, principal business advisor for Edifecs, an exchange technology provider, says that health care benefits still remain a major incentive for new workers, and employers need to figure out ways to offer better and less expensive options.
“[Employers] should be very interested in seeing how the [public] exchanges play out,” he says. “If they can pull it off, if they can have what anyone could call a successful first round in this open enrollment, there will be a lot of consideration I think among employer groups to get out of this business altogether.”
Richard Moore, director of professional services with Array Health, an exchange technology provider, says many large employers will need to start making their own decisions soon.
“They're going to start working with their brokers or carrier directly and say, ‘I'm now done, I'm done with traditional group model. I'm going to either bail to the public exchange, or I'm done with the group model, I want to do a private exchange. I want defined contribution,’” Moore says. “I think we're going to see a lot of activity come July of next year.”
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