Early adopters of private health care exchanges shared their experiences this week at EBN’s Private Healthcare Exchanges conference in Chicago, with many reporting employee communication as one of their primary challenges in moving to the exchange model.

Leslie Vander Gheynst, director of KWRI human resources with realtor Keller Williams, which has 100,000 real estate agents across the U.S., says communication and education was “extremely difficult because those agents are not focused on how the health care reform bill is going to affect them.” Keller Williams replaced its mini-medical plans last December and now offers its sales associates (classified as independent contractors, or 1099 workers, for IRS tax-filing purposes) access to a private exchange through ConnectedHealth.

Charlotte Anderson, vice president, benefits and workers’ compensation at Abhow, a provider of senior housing and health care, says no amount of communication could prepare her company’s workers for the fact that Abhow dropped Kaiser when it moved to Mercer’s private exchange, Mercer Marketplace.

“We had 52% of our team members in Kaiser and you all know, if you’re in California and you have Kaiser and [then] you no longer offer Kaiser, it’s total pandemonium, so no one hears what you are going to say,” she says. “I don’t care what you do – you can do every checklist and [tell employees] ‘know before you go,’ but until someone accesses care,” it’s very difficult for them to understand what their experience will be, she warns.

Also see: Private exchanges see robust interest, new clients

Benefits communication is an ongoing commitment, whether an employer offers an exchange or not. Karen Fillback, human resource specialist with commercial real estate group Miller-Valentine, which recently moved to Liazon’s exchange, says “we just constantly remind [employees] that the marketplace is a living, breathing tool for that throughout the entire year. [The challenge is] getting them to refocus and redirect on how they think about their benefits and how they get their questions answered.”

As for employer cost savings from moving to a private exchange, some employers said they’ve actually spent more, not less, since implementing the exchange.

“Every notice that has to go out to an employee is housed on the exchange,” says Karen Limestall, HR manager for Budnick Converting, a small employer with about 90 employees. She cites this as a big administrative cost savings to the company. “Once they enroll, we don’t have to worry about it. That is one thing that has been very helpful to us.” However, she says, “we are paying more [overall] because there’s a cost per employee that we are now paying.”

Keller Williams is also paying more -- not because it moved to the private exchange, but rather  because the company offered nothing to employees prior to moving to the exchange. “We’re definitely paying more because this wasn’t an option we were providing to our 1099 associates in the past,” says Vander Gheynst. “Our limited liability plans were tied to our vendor program, in fact, and so to integrate that technology it is costing us a bit more.”

Abhow, meanwhile, is paying about the same, says Anderson.

Also see: ‘Messy’ future ahead for health care market

For Miller-Valentine, costs have remained pretty flat since moving to the exchange. “Ours is more of a long-term goal so we can get to being self-funded,” says Fillback. “We can also incorporate the wellness programs and get more involved with that. I think within two or three years we’re going to see this [move] saving us money.”

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