Self-insured employers wary about private exchanges

Self-insured employers remain cautious about the ability of private exchanges to reduce costs.

Large employers surveyed recently by the National Business Group on Health say they don’t have plans to eliminate health care coverage for active employees in 2015, although 35% say they are considering moving their active employees to a private exchange in 2016 or beyond. 

“The numbers reinforce what we’ve been hearing anecdotally from employers,” says Karen Marlo, vice president of benchmarking and analysis for the NBGH. “They’re being very cautious and making sure they review this option thoroughly.”

Also see: Employers on private exchanges troubled by employee communication challenges 

Only 11% of the 136 employers surveyed were confident a private exchange would control health care costs better than the employer could themselves. Because self-insured employers have greater flexibility in designing their health care plans, they may be unwilling to give up that level of control, according to the Large Employers’ 2015 Health Plan Design Changes survey. 

“Some employers have been able to keep their medical trend at 1% for the past several years because they’ve been aggressive,” says Marlo. “They’ve moved to CDHPs [consumer-driven health plans], they’ve provided a lot of tools to better engage their employees and help them be smarter and make better decisions and so I think, as a result, it would be hard if you’ve been very successful at controlling your health care costs to give up those tools in your toolbox to another entity [that doesn’t have a long track record].”

The three features that most employers were confident a private exchange would do better were providing more choice of plans, complying with regulations and supporting a defined contribution approach. They were less confident in the ability of private exchanges to engage employees in better health care decision-making, address employee questions and problems in a timely fashion and control health care costs.