The Private Benefit Exchange Index inched up a bit, with the most notable increase coming in the number of employers using an exchange.
Since September 2015, the number of employers using exchanges has increased 144%, the number of employees enrolling in benefits through the marketplaces has risen 92% and the number of lives covered by the plans sold on the platforms has jumped 100%.
But the sense among some industry experts is that the market is ripe for even more growth.
Participants in a panel at EBN’s recent Benefit Forum & Expo in Nashville agreed the market hasn’t lived up to its initial lofty projections, partly because it has taken time for employers and operators to find a happy medium. On the employer side, the panelists said, many initially lumped the private exchanges in with the much-maligned public marketplaces. Others were reluctant to give up significant benefits control to a third party.
As for the operators, many first-generation exchanges had limited features and functionality. Another self-inflicted problem was that operators overpromised healthcare cost savings.
“I think that [the exchanges] were over-marketed in the early days as a silver bullet — and particularly a silver bullet around cost control,” said panelist William Giaconia, VP of healthcare strategy at ADP.
But in the years since, the market has evolved. Operators have boosted their offerings with more flexibility, more options and better decision support — and have proven that their marketplaces can lead to healthcare savings.
The panelist consensus: The exchange market is poised well for expansion, with opportunities in the midmarket. The value proposition seems to make sense for SMBs, Giaconia said, since it gives employers a way to offer more options than they could on their own.
To create the PBE Index, Employee Benefit News and Employee Benefit Adviser collect data from eight leading exchange operators on the number of employers using each platform, the number of employees enrolled in benefits through each platform and the number of lives covered by the policies sold through each platform. Every month, the editors aggregate an update the operators’ numbers.
The eight leading exchange operators selected to participate in the index are: benefitsCONNECT, bswift, Connecture, Frenkel Benefits, Lockton, Marcum, Medica and Softheon. Data is self-reported and rounded.
For more, go to benefitnews.com/exchanges.
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