RI’s Health Insurance Exchange: A Tough Choice for Employers
Tuesday, January 10, 2012
To date, the Rhode Island Health Insurance Exchange discussion has been focused on serving the 44,000 individuals who will be eligible for the subsidy based on income guidelines. However, the Exchange will also be an option for small businesses, adding an estimated 90,000 to its reach.
Once the Exchange is operational in 2014, small businesses will have two markets from which to select insurance options for employees. While the private market will continue to exist in its current form – with employers purchasing group plans for their employees, deciding on carrier and plan design (s) and cost sharing arrangements, handling enrollment and billing and communicating benefits to employees – the Exchange market will likely offer an alternative for employers by catering to their employees.
Hands-Off Employers, Hands-On Employees
The Exchange option will likely mean a more hands-off approach for employers. Instead of purchasing on behalf of its employees, employers will be able to offer a defined dollar amount to employees, who can then buy and select their own plans through the Exchange, rather than the employer making the decision for them.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe Exchange will likely decide which insurance carriers are offered and which plan designs are available (some in accordance with minimum essential standards set by the rules of healthcare reform). Each employee can then select their own plan through an online portal or, for those who can’t access it, navigators of some sort will be able to provide assistance by phone or on site.
Employees could have more options within the Exchange compared to more limited selection offered through employers. But will more choice lead to more confusion?
How to Decide?
Employers will need to assess which option is better for them, and their employees. While an employer who switches to a defined contribution program alleviates some responsibility for its employees, perhaps reducing some of the administrative burden that goes along with providing healthcare benefits, will the employees become more vulnerable as a result?
If the employer doesn’t organize communication activities like open enrollment meetings, web portals, total compensation statements, newsletters, and other efforts to educate employees, the employee is left to seek out the information. Sounds easy enough, and if we’re pushing for more consumer engagement, then arguably employees should be able to self-educate about health benefits. But with employees all having different plans, communicating to each becomes more complicated.
And with health illiteracy on the rise, what will be the consequences of less employer support? Traditionally, employers have served as vocal advocates for employees to insurance carriers and the state regulatory agencies, leading to improvements in benefits, provider networks and quality of care.
While the Exchange is designed to make care more accessible and affordable, without an organized communication effort by employers, only time will tell whether Rhode employees stand ready to go it alone…and what the fallout may be if they aren’t.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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