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Most Employers Reject Private Exchanges According to NBCH and Benz Communications Survey

Organizations jointly polled HR/benefits practitioners on how the Affordable Care Act affects future plans for health benefit design and benefits communication strategies

WASHINGTON — October 7, 2014 — In a departure from other industry polls, employers said they plan to reject private exchanges as a way to control rising health care costs, according to a new survey of more than 330 employers conducted by the non-profit National Business Coalition on Health and Benz Communications.


More than half (55%) of the respondents indicate they will “never” stop sponsoring employee health plans in favor of giving employees money to buy coverage through a private exchange. Almost one-third (32%) said they are considering moving to a private exchange within 3-5 years, 8% are considering such a move within the next three years, and just 5% say they already use a private exchange to provide employees’ health benefits.    


These findings are in the first of two reports resulting from the 2014 Inside Benefits Communication Survey, a collaborative effort of NBCH and Benz to learn how companies are strategizing and implementing benefits communication through the lens of the Affordable Care Act (ACA), compliance mandates and industry trends. The research gathered key data from 333 human resource/benefits professionals about their benefits communication approaches, strategies and results. Respondents spanned a wide cross-section of geographic regions, corporate industries, and business coalition affiliations. On average, respondents largely are concentrated in the service and technology industries, located mainly in the Southeast and West regions of the United States. Most respondents’ have a population of 1,000–5,000 U.S.-based employees.


“America's health care industry has functionally captured the regulatory process and dominated markets,” said Brian Klepper, PhD, CEO for NBCH. “In this environment, only one group—non-health care business leaders—are larger and more powerful. The question is whether they can be mobilized to become a counterweight to health care's influence. Our survey findings indicate that employers want to continue playing a key role in providing benefits for their employees. And one of the obvious problems with private exchanges, especially those developed by consultants, is that there’s an obvious conflict of interest.”


Additional findings

The ACA looms large for employers in creating benefits communication strategies. Close to three quarters (73%) of respondents report that the ACA will have the biggest impact on their benefits communication strategy in the year ahead. However, plan design strategy seems to maintain the status quo with 39.4% saying they are maintaining current benefit plans and coverage levels, without increasing employee costs—like deductibles, coinsurance, and copays.  Slightly more than 32% indicated they will also maintain current benefit and coverage levels, but increase employee costs.


When asked how their company is preparing to comply with the ACA “Cadillac tax” in 2018, 26% responded that they are maintaining current benefit plans and coverage levels without increasing employee costs; almost 20% said they are maintaining levels, but increasing employee costs; 15% are reducing benefit plans and coverage levels while increasing employee costs.


“However employers choose to respond to the administrative and cost burdens of the ACA, it’s imperative that they frame those actions in a way that clearly communicates to employees the high value of their benefit plans,” said Jennifer Benz, founder and CEO of Benz Communications. “Blaming or shaming the law as the reason for making—or not making—benefit changes doesn’t move the needle in helping employees make informed decisions about choosing plans, getting appropriate care, managing their health or controlling health expenses. As one of the last remaining sources for reliable and trusted health information, employers have everything to gain—and nothing to lose—in using ACA as a conversation starter to improve employees’ understanding and perceived value of their benefits.”


An executive summary and infographic on today’s findings can be found here. The full results around employer benefits communications strategies will be released at the NBCH 19th Annual Conference in Washington on November 11, 2014.


About Benz Communications

Benz Communications is a benefits communications strategy boutique creating integrated employee benefits campaigns for employers committed to nurturing high-performing and satisfied employees. Benz Communications' clients include Fortune 500 companies and Fortune 100 Best Companies to Work For. The firm has also created a group of innovative toolkits and resources to help companies educate employees about health and financial benefits.


About National Business Coalition on Health

National Business Coalition on Health (NBCH) is a national nonprofit membership organization of purchaser-led health care coalitions, representing more than 4,000 employers, unions and local governments, and approximately 35 million employees and dependents across the United States. NBCH and its members are dedicated to value-based purchasing of health care services through the collective action of public and private purchasers. NBCH seeks to accelerate the nation’s progress toward safe, efficient, high-quality health care and the improved health status of the American population.


Media Contact:

Cary Conway