A private exchange , also known as private benefit exchange or private healthcare exchange is an online store or health insurance market where employees or retirees buy health insurance and other benefits, usually using funds donated by their employers.
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Personal exchange is an online marketplace that allows employees or retirees to shop for personal benefit packages from a wide selection of benefits plans, which often include medical insurance plans, vision, dental, life and disability, as well as other offers including non-insurance products such as prepaid legal, OJK, identity theft protection, and so on. Employers choose the plans and products they want to offer on a personal exchange and allocate funds that their employee or retiree can use to buy the benefits in the market. Exchange users have the option to donate additional funds beyond their employer's contributions if they wish to purchase more from the contribution contributions of the employer.
Exchange users log into web-based portals to choose the benefits that best suit their needs. On portals, users are guided by decision support tools, such as educational articles and videos, plan comparison tools, doctor aids, cost estimators, and recommendations to help them make informed choices.
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Features
Features of personal exchange include the following:
- Funds for coverage: For active employees, it is usually a particular contribution model in which an employer allocates dollars for each employee to shop for their profits as opposed to a certain allowance in which the employer pays for a particular benefit (s). For retirees, employers often form the Health Reimbursement Arrangement (HRA), a type of employer-financed health benefits plan that reimburses employees' expenses for out-of-pocket medical expenses and sometimes other expenses as well.
- Inventory medical plan: Choice of medical plan with different types of plans, cost sharing options, and price points. Some exchanges offer multiple plans from one operator, while others offer packages from several - from three or four operators in the private exchanges to employees, to over 100 operators on private Medicare exchanges. Voluntary products: Although broad voluntary products are more typical for current employees, compared to retirees, products often include teeth, vision, life, critical illness and disability insurance, health savings accounts (HSAs), flexible expense accounts (FSA )), legal plans, and Wellness programs that offer additional financial protection to employees for their unique risks and benefits beyond insurance.
- Decision Support: Support, including education, cost estimators, doctor's aids, and plan recommendation tools, to help employees determine the right plan for them
- Comprehensive support services: Phone and email assistance for employees in choosing and using benefits, as well as managing accounts, customer service, and administrative portals.
History
Although the concept of personal exchange has been around for decades, the first successful personal exchange emerged in the pension health care sector in the form of Medicare exchange. Medicare exchanges provide retirees with options: the Medicare Advantage Plan (a more comprehensive Medicare plan offered by private insurance companies); Medicare Part D Prescription Medication coverage; and the Medicare supplement policy, also known as Medigap.
The first Medicare exchange was operated by Extend Health, which was launched in 2005, and allowed Chrysler automakers to move their retirees from cost group plans to the individual Medicare market, where pensioners could choose their coverage to fit their budget and health care needs. (Extend Health was acquired by Willis Towers Watson in 2012.).
It is unclear exactly when the first personal exchange for employees was formed. Some pioneers include bswift (1996), Liazon (2007) Bloom Health (2009), and Connected Health (2009).
Type
The three main types of companies are building personal exchanges:
- Operators: Most national operators develop "Medicare connector" deals such as exchanges during the years between 2005 and 2010 to compete with the emerging success of private Medicare exchanges that have entered the market. This connector provides options in the form of a number of plans from one operator, as opposed to a large number of plans from several operators available on private exchanges. In the group market, many regional operators have partnered with technology platforms to build private exchanges, and some major national carriers have also invested in their own technology. In 2014, Cigna launched a personal exchange for small entrepreneurs. In 2011, United bought Connextions, a technology services company in the health care industry. In 2011, WellPoint and two Blue Cross Blue Shield regional plans bought a majority stake in Bloom Health, a personal startup exchange platform. And in 2014, Aetna bought bswift, a technology exchange company.
- Benefits consultants: Four of the major benefit consultants sponsor personal exchanges - Aon (called Aon Active Health Exchange), Buck/Xerox Consultant (recently spun and now called Conduent), Mercer (called Mercer Marketplace 365), and Willis Towers Watson (called OneExchange).
- Technology platforms: Various technology vendors support personal exchanges to different levels. While certain platforms only provide technology to run data and exchange interfaces, others go as far as contracts with operators and provide complete exchange solutions directly to entrepreneurs. Vendors include: Maestro Health, Bloom Health, Liazon, bswift, Array Health, Connecture, Connextions, hCentive, Colibrium Partners, Benefitfocus, and ADP.
Public exchange
Private exchanges and public exchanges, also known as public health insurance exchanges, both enable the purchase of benefits through the online marketplace. However, private exchanges are offered by employers for use by active and/or retired employees and include health insurance and other types of benefits. Public exchanges, on the other hand, are established under the Affordable Care Act to give individuals an opportunity to purchase health insurance, often with government subsidies if eligible. Private exchanges are operated by private entities such as brokers, operators and technology companies, while public exchanges are operated by individual states or federal governments or through federal/state partnerships. Finally, personal exchanges usually offer different levels of decision support, or ways to guide employees through the process of choosing benefits, through educational and system recommendations. Private exchanges may be accessed by employees throughout the year to review their benefits or make qualifying changes to their scope, while public exchanges do not currently have decision support and are accessible only to Open Registration except in the case of qualifying events.
![Private Exchange Implementation Among Employers [Infographic]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uJTjEAsvt_LtJ4OEphZXkPkklQXu2_VUJ0gHo1_VXeZNRjhlzFK5vFqEkRm7WabJHrIuPwNualrKprJCMIsC3J8ZnHkknX8EGSZPwX1EfHt5JlfEQPXTO-swvVDyX0dniwanzQsNVU7w=s0-d "Private Exchange Implementation Among Employers [Infographic]")
Benefits of the administrative platform
Although personal exchange platforms and benefit administration platforms utilize technology to simplify benefits and reduce administrative burdens on HR, personal exchanges take a consumer driven approach to benefit. The benefit administration platform only allows transition from registration to online registration.
The defined contribution strategy is common to private exchanges, allowing entrepreneurs to control costs by setting a defined budget and then letting their employees shop for benefits. In addition, personal exchanges provide meaningful choices through different types of benefits and plan offerings together with decision support to guide employees through shopping experience.
References
Source of the article : Wikipedia
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