Understanding Health Care Exchanges

May 2, 2013 ( – Legislation will soon necessitate that qualified health care plans (QHP) be offered through a marketplace or exchange.

By Kevin McGuinness | May 02, 2013
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Karen McLeese, vice president, Employee Benefit Regulatory Affairs, for CBIZ Benefits and Insurance Services, told PLANSPONSOR, “It should be understood that only certain plans will have access to such exchanges, namely smaller employers. How is a ‘smaller employer’ defined? Generally it’s defined as having fewer than 100 (and in some cases, 50) employees. In terms of advantages [for employers to use exchanges for their employee offering], the jury is still out, as it will depend on what products are offered in the marketplace.”

One factor that plan sponsors will need to consider when deciding whether use such an exchange is whether it is even available due to the company’s size, said McLeese. “If the state opens up exchanges to larger employers, those plans will have to meet the required standards such as covering at least some essential benefits (i.e., surgery, etc.). Other factors to be considered include how many providers there are, whether there is enough expression in benefits design, and whether you can contract with different providers and hospitals.”

McLeese noted that something else to be considered is that employees can go to an exchange themselves to get coverage, either because their employer does not offer coverage or because their employer’s plan is too expensive for them. Depending on the circumstances, this might enter into the area of employer shared responsibility risk and necessitate the paying of an excise tax by the employer. “If you have questions about something like this, you should check with your benefits adviser,” she said.