5 Recommendations for Private Exchange Stakeholders

1. Industry participants should prioritize educating the broker channel 1. Industry participants should prioritize educating the broker channel

Increasing employer understanding is crucial, according to the report, is the biggest short-term barrier to success. Key communication areas include defined contribution, private exchange group models, and the pros and cons of public versus private options. Additional tools such as cost benefit calculators will stand out in the early stages.

2. Private exchange vendors should not overlook payments 2. Private exchange vendors should not overlook payments

Stakeholders should not assume the “old” way of doing things is the long-term answer. Payroll deductions are critical, yet payment capabilities will need to be advanced to support a dynamic retail environment.

3. Commercial insurers should create a B2C brand strategy 3. Commercial insurers should create a B2C brand strategy

Insurers need to be ready when multi-carrier exchanges become mainstream, even taking a page out of the auto insurance playbook (e.g., Progressive), launching campaigns focused on consumer brand recognition and keeping an eye on Highmark’s retail store pilots.

4. TPAs should not overlook private exchanges 4. TPAs should not overlook private exchanges

This is especially true as HSAs become a leading product offer, and the opportunity to sell voluntary benefit products becomes lucrative to offset declining FSA sales.

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5. Small to midsize employers should get into the private exchange marketplace 5. Small to midsize employers should get into the private exchange marketplace

Benefits remain a key perk to attract and retain top talent, and the lure of exchange group markets, defined contribution and high-deductible plans present a luring mix to meet compliance, reduce total cost of ownership and receive tax benefits while continuing to offer competitive benefits packages.

Slideshow Photos: Fotolia

More than 50% of commercial insurer and third-party administrator (TPA) respondents indicate their organization is currently participating or planning to participate in a multi-carrier exchange, versus 20% in a single-carrier exchange. Given their prominence, Aite shares the following recommendations.

 

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