Why wait for 2014, when state health insurance exchanges for individuals go into effect, or 2017, when states can establish exchanges for large employers? At least that's what Aon Hewitt decided. The company will begin offering large companies—those with 1,000 or more workers—an exchange as early as next year.
Companies, including those that are self-insured, will select from a group of insurers providing plans that meet standards set by Aon and offer these to employees, with the company providing some portion of the premium.
Ken Sperling, global leader of Aon Hewitt's healthcare practice, says companies will offer sets of five plans, ranging from the most basic, dubbed bronze, to platinum. A company might provide employees with most or all of the cost of a bronze plan, with employees free to add their own funds to move up the ladder to plans that are more comprehensive or have lower deductibles.
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He says the exchange flips the risk from the employer, where it resides in typical company-funded coverage, to the employee.
Aon's exchange resembles the cafeteria plans many companies currently offer, but in this case, the employee will buy the insurance instead of signing onto the company's plan. "It's more like buying your own auto insurance," Sperling says.
All the company does is offer the list of plans and pay employees a share of the premiums. Aon handles the paperwork and advocates for employees with insurers and health providers.
Initially, Sperling says, workers will sign on to plans through the company, because otherwise insurers would ask about pre-existing conditions and charge accordingly. But as more reforms take effect, employees will buy directly from insurers.
Sperling doesn't expect all large employers to opt for an exchange. A recent Aon Hewitt survey found about half said they prefer to offer their own insurance plan to control risks and attract and retain good employees.
"Frankly, most employers are still committed to having their own plan," says Michael Thompson, a principal at PricewaterhouseCoopers. That could change if a company's competitors shift to the exchange model, Thompson says.
Helen Darling, CEO of the National Business Group on Health, expects Aon's offering to be popular with the target market of large corporations.
"If it's done right," she says, "for instance, if Aon assures that the participating insurers provide good customer service and high-quality networks—and Hewitt has a huge amount of experience in health insurance administration—this could be a very interesting development."
For a look at what companies would like to change in the Patient Protection and Affordable Care Act, see Tweaking Health Reform.
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