Health Insurance Exchanges Put Defined Benefits to the Test

Margaret Dick Tocknell, for HealthLeaders Media , May 23, 2012

The advent of private health insurance exchanges may provide employers with the opportunity to shift from defined-benefit healthcare coverage to defined-contribution. That's a paradigm shift that can be likened to the corporate shift from defined-benefit pension plans to defined-contribution plans such as 401 (k) retirement accounts.

For private exchange operators such as Aon Hewitt and Highmark, the defined contribution health insurance model is a way to address employer concerns about healthcare costs.

What we can expect to see is employers offering premium assistance through health savings accounts. Employees would have the option to select from a menu of essential benefits available through the HIE and would use the defined contribution option to help cover premiums and other medical expenses.

The model would enable employers to cap their healthcare costs. This would improve control of current expenses and future liabilities, while offering opportunities for employees to customize their healthcare benefits.

So, it may come as a bit of a surprise that employers are hesitant to embrace this new model.

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1 comments on "Health Insurance Exchanges Put Defined Benefits to the Test"

mtguide1 (5/24/2012 at 12:18 PM)
There is plenty of confusion in the regulatory arena already. In future articles, please be clear if you are writing about HIE (Health Information Exchange) or HIX (Health Insurance Exchange)




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