Regardless of the healthcare reform’s long term future, the private exchanges are here to stay. The idea of private health exchanges came at a time when employers were eager to explore new options due to the rising medical costs and the exchanges gave them that new option.
Already there are several pre-developed solutions available in the market; some of them are great and some are half-baked. I think there is definitely an opportunity in implementing the private exchanges for the insurance companies as long as the right features are integrated within it.
At the minimum the private exchange should have two portals namely: The Employer Portal and The Member’s Portal. Each of these portals would have sub functions as follows:-
- Employer Portal
- Plan Bucket Management
- Contribution Management
- Employee Database
- Finance reports
- Usage reports
- Employee Portal
- The Exchange
- Plan Selection
- Ancillary Products
- Cart system
- Account Management
The Employer Portal
Employers will use this portal to manage their employees, view reports, select plans and set contributions. More specific sections as below:
Plan Bucket Management
Employers should be able to create a “plan bucket” consisting of 10-15 different plans for their employees. The employees will make their selections from theses plan buckets or “arrays” during their enrollment processes.
The bucket could be created using price ($100 – $1000), benefits or types etc. as a measuring tool.
Contribution management will allow employers to enter the amount they are willing to contribute towards their employee purchases. Depending on how this is implemented, this feature can be very simple or very complex. On a simpler level this would be a single amount dedicated towards the employees on an annual basis. On a more complex level the employers would dedicate customized amounts based on the ranks and salaries of the employees.
One way to make private exchanges less cumbersome is by minimizing the amount of data required to be entered by the enrollees during the enrollment period. The simplest way to achieve this is by pre-uploading the employee data required for enrollments. When the majority of the data is already present on the exchange, all the enrollee has to do is make a plan selection.
The exchanges should offer employers a means through which the employers would upload the employee list. This list can be in excel, txt or other file formats. The employee file should contain employee SSN or other pre-calculated ID that can be used as identification during enrollment process.
Finance reports should be made available to the employers so that they can plug them into their HR/Finance database. These reports are important because they can help determine how much money each employee spent on the exchange and whether a deduction from the payroll is needed (in case the employee has gone above the dedicated amount by the employer).
As the name suggest the usage reports can show how many employees have registered and selected a plan so far etc. (basically a stats dashboard for company executives).
The employee portal is essentially the actual public facing private exchange. The exchange will offer different services such as plan selections, balance management, ancillary products and enrollment management.
Before employees can use the exchange, they must establish account credentials. The reason for having usernames and passwords is because visits to the exchange will not be a single time thing. Employees will have to return to the exchange for making changes to their policies and lookup balances.
The credential screen should allow employees to login using their existing credentials or register using their SSN or other ID.
The plan selection should work in an easy Expedia-like manner. Enrollees should be able to easily locate the plans matching their needs. The pricing, benefits and plan comparison should be easy to use.
Exchange can also be a great medium for ancillary products. The ancillary products can be shown to the enrollees if there is still some money left after the plan selection.
The checkout system should be simple and easy as Amazon. The buyer should know what he is buying, how much it is and how much of will be coming out of his/her paycheck.
Employees should be able to check how much they have spent on their healthcare. How much of their spending is covered under their employer’s contribution and how much they will be paying through their salary.
Once a plan has been purchased and the policy has been started, the enrollee should be able to return to the exchange any time and make changes like adding dependents, marital status or adding or removing products.
I have not discussed other very important portals for Brokers and Vendors because this post is limited to Employer and the Employee. The bottom line is that exchanges are not a simple thing to implement, however they are not a rocket science either. If planned carefully and implemented using the right features, they can bring blissful opportunities to the employer, employee, insurance plans and the brokers.