5 ways to make a private exchange successful
September 23, 2014 4:26 PM
1. Compliance
There are many legal requirements under the Affordable Care Act that employers must follow, including tracking employee hours to see if they are full- or part-time. A private exchange needs a system to track hours when new employees are onboarded, Garlitz says. You need to pick a vendor that has tools on the backend to track who should be on the system, he explains. It is an ACA compliance tool function that the exchange ought to have.
[Image: Fotolia]
[Image: Fotolia]
2. Configure
The infrastructure of an exchange needs to be configurable and not based on custom software, Garlitz says. Custom software requires someone who understands and writes code to be able to make any changes to the exchanges backend, while configurable can be easily changed. Its about scalability, you cant build an exchange scalable to hundreds of thousands, if you need to write new code every time, Garlitz says.
[Image: Fotolia]
[Image: Fotolia]
3. Choice
This involves choice to the employer looking at different insurance packages or options available to them. Further, drilling down to the employee level and what options are presented to them, Garlitz says. For the [employee] this is the important factor, he says. Does the private exchange display information
in a way that is rational and [helps them] make a good decision?
[Image: Fotolia]
[Image: Fotolia]
4. Control
Employers need some tools to help them feel in control of their strategy. Even though they joined an exchange, they will not abandon various funding strategies, Garlitz says. They want control over how they set up defined-contribution.
[Image: Fotolia]
[Image: Fotolia]
5. Convenience
A private exchange needs to be easy to use for consumers, and similar to e-commerce sites, such as Amazon.com. Consumers, Garlitz says, dont have a lot of tolerance to go through dozens of screens. The system needs to be configured to be easy and convenient to use, he says. High-level information, but not bogged down in too many details.
[Image: Fotolia]
[Image: Fotolia]
How to choose
With all these Cs to watch, how do employers pick which is right for them? Large employers tend to rely on a consulting firm, many of which have their own private exchange. But in the process, Garlitz has heard of a few employers switching to consultancies that do not run their own exchange, such as PricewaterHouseCoopers, to ensure neutrality. Meanwhile, smaller employers, Garlitz says, will stick with their regular broker for help in making the correct choice.
[Image: Fotolia]
[Image: Fotolia]
