Dive Brief:
- Private health insurance exchanges are quickly becoming a popular option thanks to their ability to increase employees' options and simplify employers' administrative logisitics.
- The online shopping type of experience is revolutionizing the way benefits are offered and selected.
- In 2015, six million employees enrolled in employer-sponsored benefits by using private exchanges, twice the number that did so in 2014. In addition, about one third of employers say they're considering a switch to the model within three years, reports the Orlando Business Journal.
Dive Insight:
Private exchanges are "quickly becoming part of healthcare’s future" and are ideal for employers looking to adopt a defined contribution model, as well as for small and mid-size employers looking to compete with larger companies by offering wellness, life and voluntary benefits, suggests the Orlando Business Journal.
The defined contribution model allows employers to provide employees with a fixed amount of money to spend on whatever selection of benefits they choose. It also allows employers to forecast their benefits costs and make their contributions tax deductible.