insurance
Private insurance exchanges
How they benefit you By Linda Heuer, MBA, RPA
What is a private insurance exchange? A private insurance exchange is a website that functions as a marketplace where individuals comparison-shop for medical insurance. While that description also applies to the State of Minnesota’s public insurance exchange, MNsure, and to exchanges sponsored by other states or the federal government, there are differences between public and private exchanges. Before we compare the two types, let’s first understand private exchanges.
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MiNNESOTA HEAlTH cArE NEWS December 2013
While public exchanges and some private exchanges offer only medical insurance, other private exchanges may also offer dental, vision, and life insurance, as well as pretax accounts such as flexible spending accounts (FSAs) and health savings accounts (HSAs). Some private exchanges have individual health insurance products and offer multiple insurance carriers, while others offer group health insurance plans from one insurance carrier. Health insurance options available on a private exchange may consist of different plans from one insurance company. Or, a private exchange may consist of plans from multiple insurers. Some private exchanges are linked to public exchanges where employees can find and apply for health insurance and, if they qualify, obtain subsidies to help lower the cost of buying coverage on public exchanges. Private vs. public exchanges Private exchanges differ from a public exchange such as MNsure in the following ways: • Public exchanges only offer health insurance. Private exchanges can offer other insurance products besides health insurance, including home insurance, auto insurance, and pretax accounts such as FSAs. • Private exchanges can be customized websites that offer all benefits sponsored by the employer, as well as other insurances not sponsored by the employer. • A private exchange’s support team of licensed insurance agents can help visitors to the exchange understand and enroll in all the products and services available on the exchange. This differs from MNsure, whose navigators help visitors choose among only health insurance plans. How to use private exchanges Using a private exchange is quite easy, much like using an online travel site such as Travelocity or Expedia. Simply enter basic demographic information on the private exchange website, and the website will list the options available to you and the cost of those options. Beginning in 2014, the cost of individual health insurance premiums will be based on a limited number of criteria: age, geo-