The Patient Protection and Affordable Care Act and the desire of employers to limit their health insurance costs are likely to fuel interest in defined contribution health benefits and private health insurance exchanges, according to a report by the Employee Benefit Research Institute. EBRI says a combination of insurance market reforms, especially the health exchange structure in federal health care law, as well as rising health costs, have brought a renewed focus on limiting employers' health care cost exposure.
The vehicle that some employers are interested in using for providing coverage is a private health insurance exchange, said Paul Fronstin, director of EBRI's health research and education program and author of "Private Health Insurance Exchanges and Defined Contribution Health Plans: Is it Déjà vu All Over Again?" Through these exchanges, in tandem with a DC funding approach, employers can accelerate the drive toward a more mass consumer-driven insurance market and gain more control over their health care contribution costs. "Ultimately, whether and how the movement to private health insurance exchanges and DC health plans will occur is still subject to various influences and remains highly uncertain," Fronstin said.
EBRI notes that employers have long been interested in the concept of DC health benefits, but never moved in that direction because of a hesitance to drop group coverage and concern that employees would not be able to secure coverage in the individual market.
