Delay in Cadillac tax doesn’t deter interest in private exchanges

Forty-six percent of employers have implemented or are continuing to look at private health insurance exchanges to offer health benefits for their covered populations, according to a survey of employers conducted by the Private Exchange Evaluation Collaborative (PEEC). Over the last few months, PEEC has polled employers for a broad study on their views and intentions related to exchanges. A second shorter study was conducted in January to gauge strategies in light of the two-year delay in the implementation of the excise tax.

“Overall, interest in private exchanges remains strong. This year’s results show interest is highest among small and mid-market employers, with fifty percent showing interest,” says Barbara Gniewek, Principal at PricewaterhouseCoopers (PwC), which is involved in PEEC. “Interestingly, these employers are thought to have the most to gain from a private exchange, but noted a lack of available information and education on the solutions. Thirty six percent of employers over 10,000 have or are considering private exchanges.”

Key findings. When asked if they would consider using a private exchange for full-time active employees before 2019, six percent of employers responded they have contracted with an exchange, the same percent as in 2014. Somewhat fewer (40% versus 41%) indicated they are still considering this strategy.
The survey also found that:

• over half of employers (53%) agreed that if an industry peer moved to a private exchange they would be more likely to do so;

• the rate of employers considering the public exchange for full-time active employees did not change year over year (16% in 2014 and 2015);

• key attributes considered when evaluating private exchanges have remained stable from 2014 to 2015, with high priority placed on cost of moving to an exchange, customer experience, and networks available from the exchange plans;

• almost half of early adopters of exchanges said they were able to save money;

• company size is a determining factor in whether or not a company will consider a private exchange, with greater interest from small and mid-sized firms than larger ones, and

• while over sixty percent of employers anticipate the excise tax will be repealed, employers continue to aggressively look at ways to reduce their exposure to the tax law.


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