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Private HIX Show the Way to Transformed Benefits

Margaret Dick Tocknell, for HealthLeaders Media, January 29, 2014

The 2,006 survey participants, all with existing employer-sponsored coverage, were set up with a mock private HIX and asked how they would spend a defined contribution on insurance in the HIX. In real life, defined contribution works something like a gift card for healthcare insurance. Each employee receives a set amount of pre-tax dollars from their employer to spend on the HIX to purchase whatever level of coverage is preferred.

And remember, this is cold, hard cash. Not cash-in-hand money, but a defined benefit, be it $2,000 or $6,000, is more tangible than a monthly premium that just disappears from a paycheck each week. Did that make a difference in how survey participants spent the money?

Yep. Survey respondents selected lower coverage levels with lower premiums than their employer-sponsored insurance provided. In fact, 25% of the survey respondents say they would trade healthcare benefits for a lower healthcare premium.

"The survey is about the propensity for employees, when given the opportunity, to make benefit trade-offs," says Rich Birhanzel, managing director of Accenture Health Administrative Services. "That 1 in 4 employees would be willing to make that benefit trade-off is significant. It impacts the level of coverage the average employee is going to have and [creates] opportunities to sell other benefits to those individuals who are spending less on their medical benefit."

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