Benefits

Health Insurance Industry Expects Move to DC Benefits Model

June 17, 2014 (PLANSPONSOR.com) – Members of the health insurance industry, including insurers and brokers, expect more employers to adopt defined contribution (DC) strategies for health care benefits.

By Kevin McGuinness editors@plansponsor.com | June 17, 2014

A survey by exchange technology provider Array Health found 33% of respondents anticipate more employers will use a DC model than will use the traditional health benefits model within three years. Sixty-nine percent say more employers will be using a DC model over a traditional model within five years, and 88% believe more will be using a DC model within six years. Ninety-three percent of respondents believe more employers will be using a DC model over a traditional model after 2020.

Nearly all (99%) of survey respondents say employers are at least "somewhat aware" of private exchanges for health insurance. Fifty-seven percent of all survey respondents say they think the majority of employers will offer their benefits through an exchange before the end of 2016. Health insurers are slightly more optimistic, with 63% predicting the majority of employers will use a private exchange to provide benefits to their employees by the end of 2016.

The survey, which included responses from 88 leaders across the health service industry, was conducted in late May. The majority of respondents were either health insurers (28%), or state or federal government agencies (34%).

The full text of the survey report can be downloaded here.

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