Larger employers hesitant about private exchanges News added by Benefits Pro on March 18, 2014

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Joined: September 07, 2011

My Company

By Allen Greenberg

LAS VEGAS – Health care costs are on everyone’s mind but few large employers are racing to shift their full-time workers to the private exchanges.

“Until we see something that the exchanges can do that we can’t do on our own, it’s not happening,” Brant Suddath, director of benefits at Home Depot, told the audience at a session Monday of the Health and Benefits Leadership Conference and Expo.

Employers are looking for ways to trim expenses as health care costs continue to rise and the Patient Protection and Affordable Care Act increases the required benefits.

Home Depot already has sent 20,000 part-time workers to government-sponsored insurance exchanges, but Suddath seemed to dismiss the notion of doing anything more.

Suddath was one of three HR executives on a panel asked to address the question of whether they were considering a shift to the private exchanges, a number of which have sprouted up following the 2010 passage of PPACA.

His co-panelists, Marriott’s Rick Morrow and Pitney Bowes’ Andrew Gold, seemed more open to the possibility of such a shift, though neither gave any hint of an imminent move.

Pitney Bowes, Gold said, was in evaluation mode.

“Whatever we’re considering, I don’t see anything happening before 2016,” he said.

Morrow said Marriott also was still weighing its options.

The number of private exchanges has increased as major consulting players such as Aon Hewitt, Towers Watson and Mercer have launched or expanded their own and begun to sign on employer clients. Consulting firm Accenture predicted as many as 40 million Americans would get their coverage via private exchanges by 2018.

The comments from Gold and the others suggested that large employers haven’t seen evidence that private exchanges can do much to rein in costs. On the other hand, the consensus seemed to support the notion that the exchanges offer a good strategy for mid-sized and smaller employers that need help managing employee benefits.

Regardless, finding ways to control costs is top of mind for all, they said.

“My CFO is asking more questions, wanting more budget information earlier in the year, so that we can do something about it,” Gold said.

The list of things Pitney Bowes has done or is considering includes covering certain tiers of medications at different levels and narrowing provider networks.

Morrow said that, in a “perverse sense,” the PPACA has “gotten us more support to do some more esoteric things,” such as new wellness initiatives.

Suddath agreed, adding the elimination of spousal coverage to the list of items that growing ranks of employers are considering.

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