Health Insurance Exchanges Put Defined Benefits to the Test
In terms of defined contribution exchanges, the emerging single-carried players include the Bloom Health-WellPoint-Michigan Blues-Health Care Service Corp. partnership, Highmark, and Towers Watson. On the multi-carrier side there's ADP, Aon Hewitt, and Walgreens.
Javanmardian explains that these defined contribution HIE are just beginning to develop so there hasn't been a lot of testing to understand the market and how it will operate.
The million dollar question: How will employees react?
Kaura says the answer could depend on employer size. For small and mid-size employers who don't already offer health insurance benefits, defined-contribution plans could provide a means to offer the benefit because costs will be more predictable.
The same goes for small and mid-size employers that face a significant cost burden by offering health insurance. Defined contribution will provide a way for those employers to continue to offer insurance.
Kaura says large Fortune 500 companies are looking at the defined-contribution model and trying to figure out where the market is going. "They may not want to be the first to adopt that model but they would like to be the second or third."
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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