by Holley Maher
Change can be scary, but it often results in innovative solutions. One such improvement to emerge from health care reform is the introduction of private exchanges. At its core, an exchange is a platform that allows consumers to easily shop for benefits, control cost and enroll in an insurance plan.
Much like the 401(k), an employer-sponsored private exchange uses a funding strategy called “defined contribution.” In a 401(k), an employee receives money each month from the employer and can apply those dollars to a variety of investment options and even contribute additional dollars. Likewise, employers offering a private exchange use a technology-based platform to provide employees with pricing and benefit options as well as streamline compliance and administrative duties. This model is gaining significant traction and being applied to the purchase of employee benefits – including health insurance and complementary products like vision coverage, dental insurance and life insurance, among others.
Today’s workplace is more diverse than ever. At the same time, health insurance rates are skyrocketing, plan designs are ever-changing and compliance regulations are more confusing than ever. The private exchange model is a relevant and timely solution, especially for businesses that find managing benefit costs to be a significant challenge.
The majority of private exchange platforms support only employers with 100 or more eligible employees. SmartBenefits Marketplace, which is based in Missouri, is one of the only private exchanges in the country that serves employers with as few as 10 eligible employees. Begin to research private exchanges today to see how your small business could benefit.
Holley Maher (hmaher@SmartBenefitsPlus.com) is a partner at Maher, Rosenheim, Comfort & Tabash LLC, specializing in group and individual insurance.
Submitted 9 years 130 days ago