Towers Watson & Co. says it expects enrollment in its private health insurance exchange to hit 1.2 million this year, a 50% increase from 2014.
Our model lets employers leverage plans from several top carriers in each area across the nation and gives employees greatly expanded plan choice — a competitive environment that is difficult for any employer to create on its own,” Jim Foreman, a Stamford, Connecticut-based managing director for Towers Watson’s Exchange Solutions unit, said in a statement.
One of the new employers moving this year to Towers Watson’s OneExchange exchange — Oak Brook, Illinois-based Envision Healthcare Inc. — says it did so to give employees more plan choices.
The exchange “allows our employees more provider, health plan and price options than previously available, which is almost unheard of in today’s health care marketplace. Expanding insurance carrier options spurs competition, which improves long-term cost mitigation opportunities,” Don King, Envision Healthcare’s vice president of benefits and compensation, said in a statement.
Other private health care exchanges also are growing. For example, Aon Hewitt earlier reported that 33 employers with more than 850,000 employees and dependents would participate this year in its Active Health Exchange, up from 18 employers with 600,000 employees and dependents who offered coverage through the exchange in 2014.
In addition, Mercer L.L.C. last year projected a fivefold increase in 2015 in both the number of employers and employees using its exchange, known as Marketplace, compared with 2014.
A report released last year by consulting firm Accenture projected that by 2018 private exchange enrollment will hit 40 million — or roughly one quarter of all individuals with employment-based coverage.
The exchange model deploys a defined contribution approach in which employers agree to provide a fixed premium contribution with employees paying more or less for their share of the total premium depending on the level of coverage they choose.
Through that approach, an employer can cap what it will pay for health care plan coverage for its employees.
In addition, the role of the employer as a health care plan sponsor becomes much more limited, with exchange insurers handling claims and the exchange vendor negotiating premium rates with insurers and assisting employees with questions they have.