By Jeff Yaniga, Chief Revenue Officer, Maestro Health
In the post-ACA world of private exchanges and self-funding, two trends continue to proliferate: private exchanges continue to add employees (albeit slower than the early predictions); and, self-funding continues to be a key strategy for employers. Both offer “catered” experiences, but when the two strategies intersect, the results can transform employee health & benefits.
The Intersection of Employee Choice and Employer Decision Making
A self-funded private exchange offers greater choice, easier decisions, and more control for both constituents.
No two employees are ever the same. Recognizing that they have different needs is critical to an optimized benefits strategy. Private exchanges connect employees (the buyers) and benefits suppliers(the sellers), in a similar way that Amazon.com might connect a retailer with an online shopper. Benefits, specifically the process of choosing benefits, can be very complex. As part of this buyer-seller engagement, technology helps simplify the process for buyers down to a few mouse clicks and answering a few relevant questions. The result: a people-friendly user experience, or what we in the industry refer to as “decision support.” Regardless of what you call it, it’s all about granting employees more control over their benefit needs.
Similarly, no two employers are ever the same. Limited by the rigid plan designs found in the fully-insured world, self-funding frees employers to align health benefits with company goals, giving them greater authority over their benefit requirements.
Greater Selection at the Right Price
When private exchanges are done right, employees benefit in major ways. Whereas benefit plan decisions used to be limited to “yes” or “no” selections, employees now have the opportunity to fill their “cart” with the benefit “groceries” they really need. For some, a high deductible plan makes perfect sense. Others have needs that mandate a richer and more comprehensive plan. For example, growing families might add supplemental life insurance to their cart. Active young adults may protect themselves with an accident policy or pet insurance. When given the opportunity, employees are capable of buying exactly what they need, avoiding wasted money on over-insuring, or even worse, not having enough coverage for an unexpected claim.
A self-funded exchange helps employees and employers control cost. When executed correctly, employers can offer rich benefits or address their budget needs by adjusting benefits design, rather than simply reducing benefits. The best self-funded service teams deliver strategies that observe how employees are using benefits and nudge them toward the appropriate care. Great self-funded strategies guide employees beyond the day they enroll. Today’s innovators drive well-being, education, and utilization the other 364 days of the year. Effective self-funding expertise drives cost control in addition to fully-insured claims reserve surcharges.
A Smarter, More Informed Benefits Experience
If claims data is the treasure map for employees and employers, the private exchange is where the “X” marks the spot.
When self-funding and private exchanges intersect, one has the power to inform the other. Because claims data is the property of the employer in a self-funded model, the HR professional has complete visibility into benefits usage and can provide the employee with greater support and guidance when it comes to wellness and future plan selection. Innovative, people-friendly private exchanges serve information back to employees via a personal online dashboard, creating a richer user experience.
Actionable knowledge is where transformation happens. When self-funding and private exchanges intersect, the model can educate and guide employees toward new benefit products and plan options, as well as empower them to take immediate action in the best interest of their health. At the same time, employers can optimize their benefits strategy with greater cost control, more options and deeper insights. Overall, the entire benefits process becomes smarter, personalized and more efficient for everyone involved.