Small groups could head to exchange system

By | December 14, 2012

For groups with two to 50 people, some employers might consider moving to the health care exchange system,
especially as the private exchanges come into play, says Ron Goldstein,
founder and president of CHOICE Administrators, a developer and
administrator of health care exchanges in Orange, Calif.

With private health care exchange systems, there are many
valued-added benefits, such as stand-alone dental, vision and even
chiropractic care, Goldstein says. State health care exchanges are also
an option for employers, but the value-added benefits are not ready for
the most part in the state health care exchanges. Goldstein believes
that the value-added benefits will eventually come to the state health
care exchanges because of the way the Patient Protection and Affordable Care Act (PPACA) was built, though it may take some time.

“You’ll see probably two to three years from now that the states will
be sound enough to go out and add those value adds, but the carriers
themselves might be able to offer more value adds initially than the
state exchanges,” Goldstein says.

However, micro-groups, which have somewhere between two and six
lives, are more likely to disband and send their employees to the health
care exchange system to buy individual coverage, and many of these
employees will probably qualify for subsidized care, Goldstein says. By
2017, larger groups might consider the exchange system, as well, but
with the current focus being on 2014 and 2015, Goldstein doesn’t expect
to see much movement from that size of employers.

Employees can especially benefit from the health care exchange system
because of the variety of choices available, Goldstein says. When using
an exchange, employees can choose from multiple carriers, all of which
that are offering several plan designs. This allows employees to
research a variety of plans and pick the one that best suits their
“This could be better for employees because they have a choice,”
Goldstein says. “If I go directly to a carrier, I’m buying that product,
but in an exchange, it’s typical to have three or four carriers and
three or four benefit designs per carrier, so the private exchange
offers more choices versus a direct carrier.”
See also: The math behind PPACA
Of course, many workers hear of state-run health care exchanges and
immediately worry about the quality of service, but this isn’t
necessarily an issue, Goldstein says. Depending on the health care
exchange, many are partnering with a business process outsourcer that is
responsible for customer service activities, such as maintaining a call
center. That outsourcing is designed to improve the quality of customer
“A lot of people are worried that the state exchange will turn into
the DMV, but most of the state exchanges will have some type of
outsourced customer service, so I don’t think the level of service drops
at all,” Goldstein says.
While Goldstein believes the health care exchange system has its
potential benefits, there are some unknowns as to exactly how everything
will operate. The health care exchange systems are still being created
and are likely to continue to adjust once they are in place.

“Everything is being built as we speak,” Goldstein says. “There’s
about 15 states that will establish exchanges, and the rest will default
to the feds, so you’ll have probably 15 different types of models out
there, and then you’ll have the federal model. It’s hard to say what
model works best with an employer, what model doesn’t, and there are all
going to tweak once they go live.”