Over the past decade, there’s been a consistent rise in the popularity and importance of consumer-oriented, cost-conscious employee health plans.
A similar emphasis is now being placed on open-market solutions—namely, both public and private insurance exchanges. Employee benefit offerings are more important than ever, and plans are becoming increasingly competitive. By creating an employee-centric benefits marketplace, employers can offer a more desirable compensation package and maintain a solid retention rate.
Employers may turn to their brokers for guidance in developing a benefit strategy in a private exchange. But how can brokers better serve their clients in the marketplace environment?
Rise of consumerism and defined contribution
Rising health care costs are a key driver of the demand for reform. Private exchanges with defined contribution support are becoming popular in controlling these costs by capping the amount employers spend. The defined contribution model gives employees a set dollar amount, allowing them to shop from a variety of benefit offerings selected by their employer.
This method is a true reflection of how consumerism is being applied to employee benefit programs. Employees, as consumers, are more likely to spend their money more wisely when presented with more choices. By providing your clients with guidance in creating comprehensive benefit programs through private exchange, they will be able to offer their employees the best coverage at an affordable price and save more money in the long run.
Broker role redefined
Private exchanges are expected to thrive no matter what happens with health care reform.
There is questioning whether or not the role of the broker will disappear in the new consumer-driven marketplace. However, it’s becoming clear that brokers can still be a major part of the benefit management process. With more choice, employers and their employees will need more direction, allowing brokers to take on more of a consultative role. Healthcare plans are not a simple purchase and one plan doesn’t fit all.
Though many of the private exchanges have developed sophisticated decision support tools that encourage self-service, the role of the broker is not eliminated but redefined as a marketplace navigator. As a navigator, brokers will provide expert counsel to employers in purchasing plans. Employers will need that same expertise in developing a strategy to communicate benefit plans to their employees.
Not to mention, brokers can serve as consumer advocates throughout the benefits lifecycle, especially concerning issues that arise in billing or claims.
Broker-sponsored private exchange
By sponsoring a private exchange, brokers will be able to offer a whole new set of benefit options and services for employer clients with the scalability to support all size groups. With this flexibility, wellness and educational programs that were designed for large employers are now accessible to smaller groups. Private exchanges can be profitable for brokers while also offering the opportunity to expand their product offerings and services.
The emphasis on employee choice and decision-making does not eliminate the need for your client to enforce eligibility rules, manage life events and administer benefit programs after the plan selection process is complete.
By leveraging the latest in cutting-edge benefits technology, brokers can provide their clients access to a private exchange on a cloud-based platform designed to manage the benefit complexities associated with both insurance carriers and employers of all sizes. With a broker-sponsored private exchange, strategic alliances with insurance carriers are facilitated which is crucial when securing the best plans for your clients.
Building a private exchange
The best private exchanges are not built from the ground up, but rather are built with trusted, proven technology that can already handle the intricacies and transaction volumes associated with benefits management. This includes filtering plans by configurable prequalification data, verifying eligibility for public programs, premium tax credits, or subsidies, enforcing business rules at all levels and integrating online billing to view, pay and manage invoices online.
Powerful decision support tools are key in the exchange marketplace to provide an intuitive, personalized shopping experience. A successful private exchange enables employers to develop a communication strategy that will empower their employees to make more informed decisions using integrated cost estimators and plan comparison tools that personalize benefit selection and explain the relationship between their healthcare usage and benefit costs. These tools help consumers project estimated costs for different plans, viewing in real-time the benefits that best fit their needs and their budget.
With the right technology platform, exchanges can provide your clients with resources such as videos, interactive symptom checkers and apps that help their employees become educated, cost-conscious healthcare consumers throughout the year. For example, videos can explain the benefits of regular checkups and preventive care visits that are often covered at 100 percent by health plans. Making these types of educated decisions are small but important steps toward controlling the industry-wide issue of rising healthcare costs.
Convenience of marketplaces
Private exchange marketplaces offer employers and their employees the opportunity to shop, enroll, and manage all their benefits in one place.
Cloud-based technology and mobile capabilities makes enrolling in benefits more convenient than ever which leads to increased participation rates. Employees have access to explore all available plans their employer has chosen to offer at any time through a portal that offers one cohesive, engaging workflow.
Private exchange technology allows employers to automate the enrollment process with integrated payroll deduction and billing options, saving them time and money. Exchange marketplaces are changing the benefits landscape. In order to stay ahead of the curve, consider sponsoring a private exchange for your clients’ benefits management strategy.
Shandon Fowler is the director of product management, marketplaces for Benefitfocus (www.benefitfocus.com)