There's plenty of discussion about private exchanges these days.Can a single-carrier platform really be called an exchange? Is anexchange just an enrollment platform with a defined contributioncapability? What if it doesn't include medical? Is it just anenrollment capability wrapped in some new marketing hype? And whatdoes “private exchange” mean anyway? These are all fair questionsand the debate will continue.

But there may be a more fundamental issue underlying privateexchanges. Even if the exchange carries multiple products frommultiple carriers, the most important issue may be whetherdelivering an exchange to a client changes the position of theexchange owner with respect to that client.

An employer who commits to offering benefits through a privateexchange mechanism is obviously making a major, strategic decision.The products, access, financing and functionality are all majorstatements that the employer is making to its employees. And it'sone that the employer will probably be very reluctant to walk awayfrom, at least in the short-term. And assuming the employer alsohas adopted a defined contribution strategy, changing platforms canbe a major logistical and financial headache, as well as anemployee public relations disaster.