The Private Benefit Exchange Index is unchanged from last month. However, when looked at over the past 12 months, the PBE Index has seen significant gains.
Since September 2015, the number of employers using exchanges has increased 142%, the number of employees enrolling in benefits through the marketplaces has risen 100% and the number of lives covered by the plans sold on the platforms has jumped 114%.
And, in some respects, the private exchange sector is still emerging.
Indeed, despite the fact that the marketplaces have been open for years, many plan sponsors still don’t know much about these benefit portals. In fact, a survey released in July from exchange operator Liazon found almost half (45%) unfamiliar with the online benefits model.
Similar findings were recently released by the Pacific Business Group on Health. The organization, which represents 60 U.S. organizations that purchase healthcare services, surveyed members on why they haven’t moved to a private exchange. Among the reasons: Senior management isn’t well educated about the option. There is a tendency to conflate private with public exchanges and the federal marketplace, said Emma Hoo, the group’s director, in the Employee Benefit News article, “7 reasons employers are hesitant to adopt private exchanges.” And common misperceptions include loss of control over benefit design and contribution strategies, she added.
But it’s in employers’ best interested to become familiar with private exchanges. Market consultants, including Aite, have said employers should look to the benefit marketplaces. The portals solve two major challenges, Aite said in June, meeting requirements to comply with IRS mandates under the Affordable Care Act and moving to a defined contribution model for active and retired employees to mitigate the threat of the Cadillac tax.
Employee Benefit News and Employee Benefit Adviser will continue to track the month-over-month growth in the online benefit marketplaces.
To create the PBE Index, EBA and EBN 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 and update the operators’ numbers.
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