Association Gives Members Access to Healthcare Marketplace
With less than eight months before the Affordable Care Act is fully implemented, both for-profits and nonprofits are considering an alternative to state-run healthcare exchanges: the private insurance marketplace.
As states continue to wrestle with decisions about how to establish and run healthcare exchanges required under the Affordable Care Act (ACA), at least one association is joining a trend that’s been gaining traction in the corporate world, announcing plans to offer its members access to expanded health benefits through a private exchange program.
Officials for the Self Storage Association (SSA) say the exchange, created in partnership with the MiniCo Insurance Agency, will give its members another option when offering increasingly expensive healthcare coverage to employees. The program will include access to major medical, dental, vision, and hearing benefits as well as a prescription drug plan and temporary medical insurance coverage.
Why now? The ACA requires that all employers with 50 or more employees extend health benefits to full-time workers by 2014 and imposes stiff fines—$2,000 per employee, per year—for failing to do so. But here’s the rub: Critics say those penalties could pale in comparison to the skyrocketing cost of employer-provided healthcare coverage (double-digit premium increases have already been reported by some carriers), even with the current subsidies provided under the law. If that’s the case, might employers be better off taking the fine? It’s an intriguing and potentially unsettling question—one the SSA hopes its new Health Insurance Marketplace will prevent members from seriously entertaining.
How does it work? At its most basic level, a healthcare exchange acts like a massive benefits depot. A range of providers agree to offer services through the program, which relies on a high volume of covered beneficiaries (private citizens and their families) to increase competition among participating providers and drive down costs. Participants can pick from a menu of options to find the combination of healthcare benefits that best meets their needs.
Public vs. private health exchanges. By 2014, the ACA mandates that every state establish a public healthcare exchange, either its own or one run by the federal government. But many midsize and large organizations have entertained the idea of launching their own private health exchanges for members and employees. Not unlike public health exchanges, supporters say these private alternatives offer employees a wider menu of healthcare options at more affordable prices than if they bought health coverage individually. But critics say the approach places the burden of purchasing healthcare insurance on the employee: Rather than pay for employee healthcare upfront by providing a traditional plan, employers would essentially give their employees a set allowance to purchase services from the exchange, which could become a problem if the prices in the exchange go up.
Who else is doing it? A recent Forbes article reported employers and insurance providers are “flocking” to private healthcare exchanges and similar online marketplaces in preparation for Obamacare. At least 10 major healthcare providers, including Aetna, Cigna, and Humana, have signed on to participate in an exchange program through Mercer, a large employee benefits group.
“With 56 percent of employers considering a private exchange to provide benefits to their active employees or retirees, the transformation of the U.S. healthcare landscape is well underway,” Mercer President of Health Benefits David Rahill told Forbes.
What’s your take? Would your organization consider providing a private exchange to members? Would it be a valuable benefit? Let us know in the comments.