Here are five things to know about private health insurance exchanges.
1. Private exchanges allow businesses to contract with benefits providers to offer health insurance to employees. The providers offer various health plans from a number of health insurers on the exchanges. Through private exchanges, employees shop for coverage from participating payers based on their individual medical needs, the contribution from their employer and their individual budget.
2. A report from Accenture, a management consulting and technology services firm, found enrollment on private health insurance exchanges could outpace enrollment on public exchanges over the next five years, with 40 million Americans purchasing health insurance from a private exchange by 2018.
3. Several large employers have signed up with private exchange operators to manage their healthcare benefits. Sears moved to a private exchange in 2012, and in 2013 Walgreens announced it would begin using a private exchange to provide its employees with company-subsidized health insurance coverage.
4. Some of the leading private exchange operators include Aon Hewitt, Mercer and Towers Watson.
5. Private insurance exchanges have recently picked up steam. However, private exchanges for Medicare-eligible retirees began to gain traction in 2004 and have been overall very successful, according to a Forbes report.
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