Survey Finds Employers Rejecting Private Exchanges

October 7, 2014 ( - Private health insurance exchanges have gotten more attention recently as a potential solution for controlling health benefit costs, but a recent survey finds the majority of employers reject private exchanges as a cost-control option.

The 2014 Inside Benefits Communication Survey from Benz Communications, in collaboration with the National Business Coalition on Health, found more than half (55%) of respondents say they will “never” have employees purchase health coverage through a private exchange. However, nearly one-third (32%) say they are considering moving to a private exchange within three to five years. Eight percent are planning such a move within one to three years, and 5% already use a private exchange to provide employees’ health benefits.

The survey also found despite the potential impact of health care reform, status quo is the rule—not exception—when plotting future health plan design. Nearly 40% of respondents say they are maintaining current benefit plans and coverage levels, without increasing employee costs—such as deductibles, coinsurance, and copays. Nearly one-third (32%) indicate they will maintain current benefit and coverage levels, but increase employee costs.

The Patient Protection and Affordable Care Act (ACA) “Cadillac tax” also will not drive cost shifting or other major health benefit changes, according to the preliminary survey results. The “Cadillac tax,” which goes into effect in 2018, is a 40% excise levy on employer plans valued at more than $10,200 for individual coverage and $27,500 for family coverage. More than one-quarter (26%) of respondents say they plan to maintain current benefit plans and coverage levels without increasing employee costs; nearly 20% plan to maintain benefit levels, but increase employee costs; 15% say they will reduce benefit plans and coverage levels while also increasing employee costs.

Nearly three-quarters (73%) of respondents report that the ACA will have the biggest impact on their benefits communication strategy in the year ahead. The law’s increased wellness incentive allowances also factor highly for respondents: 22% say that provision will make the biggest impact on benefits communication strategy next year.

The research gathered key data from 333 HR/benefits professionals about their benefits communication approaches, strategies and results. Respondents spanned a wide cross-section of geographic regions, corporate industries, and business coalition affiliations. On average, respondents largely are concentrated in the service and technology industries, located mainly in the Southeast and West regions of the United States. Most respondents’ have a population of 1,000 to 5,000 U.S.-based employees.