Why Private Exchanges are a Win-Win in ACA
Since it was signed into law in 2010, many changes have taken place because of the Affordable Care Act. Businesses of all sizes are now focusing more of their attention on the health insurance coverage that they provide to their employees. Employees, on the other hand, are now assessing their coverage and determining what their best options for coverage are.
One option that many businesses are relying on more than ever before is private exchanges. These are a fantastic option when it comes to offering health insurance coverage for employees. Learning about the benefits of this system can help any business to determine the reasons that private exchanges are a win-win in ACA.
What is a Private Exchange?
Private exchanges have greatly changed the way that people shop and purchase health coverage. In fact, it is estimated that by next year over 25 million individuals will use a private exchange to purchase coverage for themselves and their family.
Basically, a private exchange is exactly like the online marketplace that has been set up by the government. Through this website, people are able to compare plans and companies in order to find the best option to fit their needs. However, while this type of exchange is open to all individuals, a private exchange is only available under certain circumstances.
It is important to note that a private exchange is not technically a part of ACA. Instead, they have been set up by private companies, such as health insurance companies or brokerage firms. To use these exchanges, employers will offer their employees a set amount of money and instruct them to make their insurance purchases through a private exchange.
Benefits of this System
Naturally, there are many benefits that both employers and employees can enjoy when they are a part of a private exchange. For starters, employees will find that they have more options. Since it is difficult to customize a group plan to make everyone happy, this will allow employees to have more flexibility in choosing their coverage. They will have the opportunity to choose the coverage that benefits them the most and will have more control over the price and options of the plan.
Employers will also see a huge benefit when they choose to go this route. For example, they will not need to worry that they are not staying compliant with ACA. This is something that will greatly cut down on the amount of time and effort that they must put into the insurance process.
They will also no longer need to worry with filling out new employment forms or making changes throughout the year. Choosing to enlist in a private exchange will greatly cut down the amount of time that is spent managing health insurance policies.
Finally, they will also save time and money by not needing to have an annual enrollment period. Every year, businesses spend months going through negotiations and preparing packages for their employees. They then must orchestrate delivering the paperwork and making any necessary changes to payroll and with the insurance company. This will no longer be necessary when a private exchange is used instead.
In the end, a private exchange is simply a better option both for the employer and the employee. It offers a simplified option for both parties to enjoy and will cut out the headache that is normally associated with employer-provided insurance.
With the many benefits, it is no surprise that the number of private exchanges continues to increase. Because of this, employers are now able to enjoy these benefits as well as the expert advice that is provided when they are a part of this type of exchange. To learn more about private exchanges and how you can add one to your business, please contact us.