Western Pa. employers explore private insurance marketplaces to lower costs
Western Pennsylvanian companies looking for ways to control rising health insurance costs are contemplating private marketplaces where their workers can take a set pot of money to buy the coverage they want.
Not to be confused with public health insurance exchanges being set up in Pennsylvania and other states for individuals who don't get coverage from their employer, the private exchanges are being developed for businesses that offer insurance.
Many of the 90 companies that belong to the Pittsburgh Business Group on Health are exploring the possibility of signing up with a private exchange, Executive Director Christine Whipple said.
“Ultimately, it is about managing costs moving forward and flattening trends as much as possible,” Whipple said. “And part of this strategy will be activating the employees through choice of plans so they make decisions based on their needs and what they can afford.”
Private exchanges are like their public counterparts in that consumers will access both via online shops.
But while public exchanges are being driven by the Affordable Care Act's mandate that virtually all individuals have health coverage, the move to private marketplaces is being prompted by employers' interest in controlling health insurance costs.
In these so-called defined contribution plans, an employer provides a fixed amount of money each year for workers to buy coverage. Just as defined-contribution retirement plans, such as the 401(k), are pushing out traditional pensions at many companies, these plans may begin to overtake the traditional health plan most employers provide to workers.
Once a business decides to go the fixed-contribution route, an employee needs a place to cash in their company contribution, which is where the private exchange comes in.
“The defined contribution is the concept where we can have a known spend each year and the exchange is the mechanism to make that happen,” said J.T. Shilling, a benefits consultant who runs the Pittsburgh office of consulting firm Mercer.
Mercer is one of several companies rolling out a private marketplace for health insurance for 2014. Buck Consultants, which has an office Downtown, was marketing its version to local employers on Thursday.
“One of the things that employers are really struggling with is the cost of delivery of benefits to their employees,” said Sherri Bockhorst, a Buck consultant.
Neither Mercer nor Buck have signed up Pittsburgh-based companies yet. But Shilling said he expects more companies to enroll.
A national survey of 2,800 employers by Mercer last year found 56 percent were considering a private exchange, up from 18 percent in 2011.
Highmark Inc., the state's largest health insurer, has been at the forefront of private exchanges in Pennsylvania. It was the first company to launch one, with a pilot private marketplace for small businesses in 2011.
For 2013, Highmark expanded its exchange, which it calls myBenefits, to employers of all sizes, spokeswoman Kristin Ash said.
“We currently have more than 100 companies using myBenefits, and we're talking with many, many more businesses as interest in this option is high,” she said.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Oilfield employee cutbacks may benefit long-haul trucking
- Rue21 plays to tough teen crowd with new store in Cranberry
- Few in Westmoreland County opposed to expansion plan for Mariner pipeline
- Rocket firm hired to probe deadly air bags
- Whistle-blower incentives advance
- Refinery turbulence drives up pump prices
- Western Pa. builders earn top honors for work
- Make me a match: Fidelity to match some IRA contributions
- Giant Eagle to close all 8 Good Cents locations
- Oil stocks drag on Dow, S&P 500; Nasdaq moves closer to record
- Wolf tax proposal puts Beaver County Shell plant at risk, gas group head says