Employers are moving more quickly than forecasted to offer health insurance to their workers through private exchanges, according to new data from Accenture, a consulting firm.
Three million people signed up for workplace health coverage for this year through private exchanges, Accenture said. That’s roughly three times the number of people the firm had estimated last fall would enroll for coverage through the private exchanges — online systems that are separate from the state and federal health insurance marketplaces.
The growth was driven largely by smaller and midsize companies — those with no more than 1,000 employees, said Rich Birhanzel, who leads Accenture’s health administration services.
Accenture estimates that total enrollment in private exchanges by active employees will reach about 40 million by 2018, surpassing the number of people enrolling through state and federally funded exchanges.
Private exchanges are similar to the public marketplaces but are offered by employers to their employees. Consulting companies, including Aon Hewitt, Mercer, Towers Watson and Buck Consultants, operate private exchanges, and some insurers also offer their own versions. Walgreen and Sears, for instance, participate in Aon Hewitt’s offering, known as the Corporate Health Exchange.
Some employers are shifting employees to the exchanges to control costs and reduce administrative burdens, and to give workers more plans to choose from. (The idea is that offering plans from multiple insurers will help lower costs through competition.)
Roughly a quarter of employees who signed up through the private exchanges ended up with less coverage than they had under employer plans, Birhanzel said. They might have chosen to lower their monthly premiums or chosen to trade off some health coverage for other types of coverage — like disability insurance or life insurance — offered through the exchanges.
Lowering health insurance premiums generally means higher deductibles — the amount you must pay for care before coverage begins. High-deductible plans typically come with lower monthly premiums, but employees are responsible for more out-of-pocket costs.
The shift toward higher out-of-pocket spending has implications for doctors and hospitals as well as for patients, Birhanzel noted, in that they will be faced with collecting a greater share of payments directly from patients, rather than from insurers. Accenture estimates that out-of-pocket collections from patients with employer-based coverage will increase by 7 percent by 2018.