Survey: Large employers remain wary of private healthcare exchanges
- Private health-insurance exchanges, pitched as a promising alternative to traditional group healthcare plans, don't seem to be getting much traction among large employers, according to Human Resource Executive (HRE).
- For example, the article cited Mercer's 2015 National Survey of Employer-Sponsored Health Plans, which found that only 6% of large employers either use a private exchange or plan to implement one in time for open enrollment in 2016.
- HRE also mentioned Starbucks' recent decision to move its 160,000 workers to a private health-insurance exchange, designed and delivered by Aon, as one large employer swimming against the tide right now.
Starbucks' move notwithstanding, Pacific Resources, an independent employee benefits advisory firm in Chicago, told HRE that its online survey found Fortune 1000-ranked companies cited unproven cost savings (64.6%) and potential employee disruption (53.9%) as their main problems with the private exchange model. Plus, close to 60% of respondents said they are not confident that private exchanges can replace established models of giving healthcare benefits to active employees. Along those lines, 42% have no plans to evaluate private exchanges, 28.9% decided to pass after exploring the option, and 80% "want help evaluating" exchange vendors.
In Starbucks' case, Ron Crawford, Starbucks vice president of global benefits, said in the Starbucks announcement that much like using an online travel app, employees will be able to navigate an easy-to-use online platform to choose between more insurance carriers and coverage levels at more competitive prices to help them "find the right plan for their own needs."
While large employers seemingly remain unconvinced during the ongoing debate, Starbucks is doubling down on its efforts to attract and retain talent, based on the latest series of benefits-directed announcements including higher hourly wages and free college tuition. Also, there has been growth with the exchanges in the middle market, according to a report from Accenture.
- HRE Online Is Starbucks Leading or Following?