Private exchange option used by less than 1 percent of employers for active employees

Less than 1 percent of employers currently use a private exchange for active employees, according to the Fifth Annual Employer Survey on Private Exchanges from Chelko Consulting Group. In addition, 74 percent of employers are not even interested in exploring a private exchange as an option for delivering benefits to their active employees. Chelko noted, “It appears this once heavily touted option lacks any real forward momentum.”

Retiree coverage. However, over half of employers believe private exchanges have a future for providing coverage to retirees. Only 55 percent of responding organizations provide retiree medical benefits, but among those organizations that do provide retiree coverage, exchanges seem to be a popular solution—especially for Medicare-eligibles—with one out of four currently opting for an exchange to cover this segment and another 42 percent considering the option.

Chelko found that things are moving more slowly with respect to pre-65 retirees, as only 5 percent of employers currently use an exchange for this group and only 35 percent are considering the option.

Uncertain future. The survey found that many employers are unsure regarding the future of private exchanges for their active employees and retirees. The majority of respondents reported no change in their level of interest pertaining to private exchanges when compared to a year ago. Approximately three times as many are “less interested” as compared to those who are “more interested” when it comes to their active employees. Also, about 50 percent more employers indicated they were “less interested” than before when it came to exchanges for their retirees.

SOURCE: chelkogroup.com

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