Health insurance giant Highmark announced its plan to pilot a private health insurance exchange for small employers, the first of its kind in Pennsylvania.

Highmark, an independent Blue Cross Blue Shield plan based in Pittsburgh, Penn., said today it's partnered with Array Health, a technology company, to form the exchange. The exchange will give small employers the ability to offer a defined contribution to employees, who then use the contribution to purchase health, dental or vision insurance from a variety of Highmark plan designs.

"Because of cost, many small employers find it difficult to provide employee health insurance," says Steven Nelson, senior vice president of health services strategy, product and marketing at Highmark. "We believe that if they can offer their employees a fixed dollar amount toward the purchase of insurance, then we can help insure more individuals and the employer can manage long-term health care costs."