Private exchanges are growing fast, but changing rapidly.Benefits platforms and private exchanges continue robust growth,with 12 million enrollments projected in 2016, but the technologylandscape is set for shake-out. Employers are focusing on value —better cost management, benefits choice, and user experience. Whilemore than 15 percent of brokers plan to spend $1 million+ ontechnology in 2016 to assistemployers, they will need to leverage the right technologyplatforms to take on both established and emerging competition andfulfill employer (and employee) expectations with value.

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Employers feel the squeeze and seek solutions:Small to mid-size employers often lack the resources to access arange of benefits and affordable choices in a convenient way, evenas they compete with large employers to attract and retainemployees. In a pulse survey of 30 small to mid-sized employers inthe Mid-Atlantic and Northeast conducted by hCentive, nearly 75percent said they use an agency or broker for employee benefits.However, employer experience with brokers is inconsistent ininvolvement and support. Cost containment is an overwhelmingconcern for employers and they look to brokers to assist them inremaining competitive and controllling costs at the same time(e.g., propose different carrier or plan design or alternatecontribution strategy).

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Employers want transparent choice of benefit designs to controlcosts but also to configure benefits and contribution strategiesthat fit best with their business, employees and budget. Forexample, decide between changing carriers due to high premiumincrease or selectinghttp://www.benefitspro.com/2015/09/24/many-employees-regret-choosing-high-deductible-pla pairedwith a health savings accounts (HSA).

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Employers rely on brokers to provide better choices that areeasy to understand as well as offer tools to help guide thedecision. Small to mid-size employers are underserved and holdgrowth potential, but face challenges in benefits choices andmaking the administration simple for all.

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In 2016, we expect continued strong demand from the broker andemployer community for benefits marketplace platforms and privateexchange solutions that specifically include solutions for smalland mid-size employers. Employers who bypassed their brokersand turned to technology vendors promising easy-to-use “freemium”offerings across HR/payroll/benefits realize they still need brokerguidance and robust compliance support.

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Brokers who adopt a benefits marketplace platform toefficiently serve the group market clients (employers andemployees) to select, configure and package the right benefits willwin in this market.

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Product range is a key driver of value: Avariety of health plan models (narrow networks, ACOs, HDHPs) allow brokers and employers totake control and trade-off plan design veruss cost to employees. Wesee growing demand for ancillary, voluntary and non-insuranceproducts that augment core medical to provide a comprehensiveoffering on benefits marketplaces or private exchanges –particularly life and disability insurance, hospital and illnessworksite benefits, financial and wellness products.

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Brokers who offer an expanded product range accessiblethrough a single marketplace platform for employers and employeesto have control and flexibility will gain advantage.

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Brokers must go digital to compete and differentiatewith value: In the post-ACA world, brokers need tomaintain their status as “trusted advisors” and become the ultimatego-to for health insurance and benefits education, experience, andengagement. For example, addressing the millennial workforce withdifferent attitudes and understanding on health insurance andbenefits. One in three American workers is a millennial,making them the largest segment of the U.S. workforce. Employeesspend little time on benefits decisions — nearly half spend 30minutes or less. Thus the majority (90 percent) simply keep thesame benefits year after year, which can be costly. Forty-twopercent of employees estimate they waste up to $750 a year due tomistakes with their benefits, according to Aflac. Decision-supporttools can tackle this challenge as they get more sophisticated andoffer ease of use and convenience in benefits shopping and selection. Smartdecision support tools serve as intuitive aids foremployees/individuals backed by personal support from brokers.

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The employee benefits landscape is changing rapidly. Brokerscan lead the way by investing in the right benefits marketplacesolutions to offer better value and service that combine thequoting of core benefits and expanded ancillaries,decision-support, enrollment, and benefits administration into oneintegrated experience for brokers, employers andemployees.

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