Page 1

ISSUE || May/June 2013

Exchange

The Next Frontier Defined Contribution & Health Care Consumerism The Current Acceleration of Change and Innovation in Health Care Potential Legal Issues with Private Exchanges Exchange Profile: Willis Advantage

www.theihcc.com


INSIDE

FEATURES 11 Defined Contribution: The Next Frontier of Health Care Consumerism With the acquisition of Workable Solutions, Alegeus created its innovative WealthCare Marketplace, believing exchanges to be the next evolution of the health care consumerism movement. Alegeus CEO Tom Torre covers the basics of defined contribution and how their exchange platform works with their existing CDHC business. By Tom Torre, CEO Alegeus Technologies

DEPARTMENTS 4

Publisher’s Letter

exchanges from a benefits broker and attorney specializing in insurance regulation

CEO Doug Field covers the latest in the private exchange and defined contribution industry and what’s happening at the Institute around exchanges

7

News Briefs & Innovations Keeping you up-to-date with the latest news, research and innovations in defined contribution and health insurance exchanges

8

Regulatory & Compliance: Potential Legal Issues Around Private Exchanges An update of potential state and federal legal issues for private

By Elena Merino, President/CEO, The Meridian Group & Trey Sivley, Associate, Locke Lord LLP

9

Exchange Profile: Willis Advantage With the announcement of their entrance to the private exchange game, Willis covers what employers, brokers, consultants and other industry stakeholders need to know about the Willis Advantage.

By Rob Harkins, VP of Private Exchanges, National Human Capital Practice, Willis Group

10 Tech Innovation: The Current Acceleration of Innovation in Health Care Shandon covers the technological fundamentals that will be essential for the continued success of any health insurance marketplace, including data analytics, decision support tools, cloud-based SaaS platforms and a consumer-centric experience. By Shandon Fowler, Director of Product Management, Marketplaces, Bene tfocus

15 Exchange Solutions Showcase

www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013 3


PUBLISHER Exchange www.theihcc.com VOLUME 1 NO. 2 | MAY/JUNE 2013

Published by FieldMedia LLC 292 South Main Street, Suite 400 Alpharetta, GA 30009 Fax: 770.663.4409 CEO

Doug Field @ theihcc.com MANAGING DIRECTOR

Brent Macy

In less than four months, the rubber will meet the road in regards to the execution of defined contribution plan and the performance of both public and private exchanges. Yet

MANAGING EDITOR

Jonathan Field

there remain many questions: will public exchanges even be ready? If so, how will they work?

ASSOCIATE EDITOR

Kelvin Hosken

The goal of HealthCare Exchange Solutions and its related properties — including the

ACCOUNT MANAGERS

Exchange Solutions e-newsletter and web community — is to provide you with answers to

Joni Lipson

your most pressing questions and help you find the right solution for your company or your

Rogers Beasley

clients and their employees. ART DIRECTOR

Kellie Frissell

In this second issue, we have a number of articles that work toward that goal, including the cover feature “Defined Contribution: The Next Frontier of HealthCare Consumerism” by Alegeus Technologies CEO Tom Torre. Alegeus, a market leader in consumer-directed health care solutions, recently announced its acquisition of Workable Solutions, a leading provider of private exchange technology.

ASSOCIATE DIRECTOR OF EDUCATION SERVICES AND PROGRAMS

Dusty Rhodes CHAIRMAN OF IHC ADVISORY BOARD

Ronald E. Bachman, CEO, Healthcare Visions EDITORIAL ADVISORY BOARD

The acquisition has allowed Alegeus to launch its integrated private exchange and defined contribution platform called WealthCare Marketplace. Torre discusses the reasons behind the acquisition and his beliefs about where benefit solutions are heading in the near future.

Kim Adler, Allstate; Diana Andersen, Zions Bancorporation; Bill Bennett; Doug Bulleit, DCS Health; Jon Comola, Wye River

HSA Rewards; Roy Ramthun, HSA Consulting Services LLC; John Young, CIGNA

We are also proud to feature Shandon Fowler, Director of Marketplaces, Benefitfocus,

WEBMASTERS

covering the necessary technological innovations that must drive change in health care.

Kevin Carnegie

Rob Harkins, VP of Private Exchanges, Willis Group, reveals the details of their newly

Tom Becher

launched private exchange, Willis Advantage. And Elena Merino and Trey Sivley look at potential legal issues around private exchanges on the state and federal levels.

DIRECTOR OF CONFERENCE SPONSORSHIP/ CORPORATE MEMBERSHIP/REPRINTS

Rogers Beasley

Sincerely,

BUSINESS MANAGER

Karen Raudabaugh

™ Volume 1 Issue 2 Copyright ©2013 by FieldMedia LLC. All rights reserved.

Doug Field CEO/Publisher dfield@fieldmedia.com

is published eight times yearly by FieldMedia LLC., 292 South Main Street, Suite 400, Alpharetta, GA 30009. Periodical postage ™

magazine 292 S. Main Street, Suite 400, Alpharetta, GA

PRINTED IN THE U.S.A. ™

is designed to provide both accurate and

Send letters to the editor and editorial inquiries to the above address or to

4

May/June 2013 I HealthCare Exchange Solutions™ I www.TheIHCC.com


www.buckconsultants.com

In today’s economic climate, properly managing your health care plans helps both your people and your bottom line. But finding the time and the resources can be a challenge.

Buck can help. Together with Xerox, we: • Touch two out of every three insured Americans who use health care annually • Process 900 million health care claims every year • Have contracts with 36 state Medicaid organizations

• Provide RightOpt™, our private health insurance exchange, to manage costs for both you and your employees • Supply Accountable Care Organization technology to 2000+ hospitals • Support every major insurance carrier

By leveraging our experience across the health care industry — from providers and payers to employers and government agencies — you can make your health care plans more accessible, affordable, and efficient. To learn more, visit www.buckconsultants.com


BRIEFS

PRIVATE EXCHANGES Employers Interested, Need Guidance On Integrating Insurance Exchanges InsureXSolutions recently announced the results of a poll conducted among employers and producers on public and private health insurance exchanges. Results showed that nearly 50 percent of responding employers believe that exchanges are going to be very or somewhat useful to their organizations, despite less than a onethird indicating that they have a good understanding of exchanges. On the other hand, two-thirds of health insurance producers and consultants that responded had a good understanding of exchanges. Nearly 100 percent of producers indicated that they plan on integrating them into their sales portfolio.

Alegeus Technologies Acquires Workable Solutions And Introduces Integrated Private Exchange Solution Alegeus Technologies, the market leader in health care and benefit payments, recently announced its acquisition of Workable Solutions, a leading provider of private health insurance exchange technology solutions, to fuel the launch of its integrated private exchange and defined contribution platform — which will be called WealthCare Marketplace. The new solution supports a market shift in how health benefits will be delivered, and offers distinct value for Alegeus clients — creating new opportunities for revenue expansion, cost savings and efficiency gains.

More Carriers to Provide Bene ts via Mercer Marketplace Private Exchange Mercer announced that several nationally known providers of dental, vision, life, disability, and other benefits have signed on to offer coverage through Mercer’s comprehensive benefits exchange for active employees and their families, Mercer Marketplace. Employers that make Mercer Marketplace available to their employees for the 2014 plan year will be able to offer a wide range of benefits in addition to medical coverage. The following insurers have agreed to partner with Mercer: Allstate Benefits, Delta Dental, EyeMed Vision Care, ING U.S., MetLife, Prudential Group Insurance, The Hartford, Unum and VSP® Vision Care.

CieloStar Adds Two to Executive Management Team CieloStar has added two senior executives to its management team. Paul Boemer has joined CieloStar as executive vice president, emerging markets and provider solutions and Frederic D. Thierbach has been named vice president of sales for the company. Boemer has over 25 years of payment solution experience in health care, banking prepaid, consumer, commercial and government markets. Thierbach is an accomplished technology, product management, marketing and sales executive with over 32 years of experience in the employee benefits and health plan administration markets.

Leading Health Insurers to Provide Health Plans on New Towers Watson Private Exchange

active employees: Aetna, Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross Blue Shield, Kaiser Permanente and UnitedHealthcare. The offering is part of Towers Watson’s OneExchange, which delivers proven, end-to-end and seamlessly integrated exchange solutions for all employee and retiree populations. OneExchange’s active employee exchange solution will enroll participants this fall for Jan. 1, 2014 health plan start dates.

Bene tfocus Announces New Edition of Private Exchange Marketplace and Mobile Technology Benefitfocus recently revealed its latest benefits marketplace solutions and mobile apps including a new private exchange offering, BENEFITFOCUS HR INTOUCH MARKETPLACE® 2014 Edition. These new tools will be available for employers and insurance carriers as they prepare for the impacts of the Patient Protection and Affordable Care Act (PPACA) and rise in health care consumerism.

ConnectedHealth Expands Team, Company Growing Quickly in Evolving Marketplace ConnectedHealth, provider of a revolutionary health insurance exchange and decision-support platform for employers, health plans and consumers, is proud to announce and welcome David Shevock as its new Senior Vice President. Shevock will play a vital role, leading the development and operational teams that define the vision, technical architecture and roadmap for the company’s products.

Crawford Advisors Announces Private Exchange Partnership with bswift Crawford Advisors, LLC, a nationally recognized employee benefits firm, announced that they have selected bswift, a leader in software and services for employee benefits administration, to provide the exchange technology platform for Crawford Advisors’ private exchange. By providing choices to best meet the individual needs in a diverse workforce, Crawford Advisors’ exchange will reinforce the firm’s dedication to providing its clients with reduced health care costs, improved productivity, increased employee understanding and greater recruiting ability.

InsureXSolutions Private Exchange Adds Dental Bene t Plans from Aetna, Assurant and Delta Dental InsureXSolutions® has announced that dental plans from Aetna, Assurant, Inc. and Delta Dental have been added to their private insurance exchange. The dental products from these leading insurance companies offer a variety of price and benefit options for employees shopping in the online insurance marketplace. The InsureXSolutions private exchange features individual health, dental, Medicare, short-term and vision insurance plans in select markets throughout the U.S. InsureXSolutions offers businesses a viable option to the increasing cost of health care through the use of a defined contribution benefits strategy.

Towers Watson announced the first group of health insurers to agree to offer health plans on Towers Watson’s new private exchange for

www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013 7


REGULATIONS & COMPLIANCE

BY ELENA MERINO » PRESIDENT/CEO » THE MERIDIAN GROUP AND TREY SIVLEY » ASSOCIATE » LOCKE LORD LLP

Private Exchanges: Regulatory Morass or Panacea?

I

f the consensus is affirmed, then private exchanges are the panacea to expanding plan options while relieving employers of administrative and regulatory burdens. Private exchanges are not new concepts, but with at least 56 percent of employers interested enough to consider a private exchange, private exchanges are experiencing a renaissance in the wake of the Affordable Care Act (ACA). Simply stated, a private exchange is where employees shop for health plans and pay for them from a defined contribution funded with either employer money or employee monies. Unlike the small employer health option exchange (SHOP) created under the ACA, a private exchange can be open to any size employer and can include benefits other than comprehensive qualified health plans, including ancillary benefits such as life, disability, critical illness, etc.

POTENTIAL LEGAL ISSUES FOR PRIVATE EXCHANGE Federal Law A private exchange may run afoul of antitrust laws or the Health Insurance Portability and Accountability Act (HIPPA), or be subject to the laws governing multiple employer benefit arrangements (MEWA).1 A private exchange is basically a collective of buyers that retrains trade insofar as it’s designed to purchase (or arrange for the purchase) of insurance, which can constitute a monopsony (i.e. buyer domination) or illegal pricing restraints. It is worth noting that exchanges that are organized and regulated under a specific state law may avoid federal antitrust law. For example, most states, including Georgia,2 adopted a version of the private health care voluntary purchasing alliance model act proposed by the National Association of Insurance Commissioners (NAIC).3 A private exchange will be authorized to handle private health information of individuals and will likely be subject HIPPA privacy rules, and depending on how it is organized, a private exchange may be MEWA.

State Law A private exchange may need to work though licensed agents, brokers, or consultants4, and the private exchange itself may be required to obtain licensure as a third-party administrator.5 Additionally, the private exchange will be subject to market conduct scrutiny by state insurance regulators. Finally, most states have unfair trade practices acts6 which include provisions that are analogous federal antitrust laws.7 In the case of Georgia, the unfair trade practices act was used to prohibit certain contractual 8

May/June 2013 I HealthCare Exchange Solutions™ I www.TheIHCC.com

provisions between insurers and health care providers.8

THE PRIVATE EXCHANGE — ADMINISTRATOR OR SOMETHING ELSE Generally, the plan administrator will be named in the plan document, and in the absence of administrator being named, the administrator will be the plan sponsor (generally the employer).9 A private exchange that restricts its activities to those that do not involve exercising discretion or control over the plan may avoid being deemed an administrator. Nevertheless, the determination of the “administrator” and “fiduciary” roles under ERISA can be complex, particularly given the novelty of many of the issues arising in the context of private exchanges. Given this circumstance, it is advisable to consult with legal counsel with both strong ERISA and state insurance law background prior to entering into an arrangement with a private exchange.

IS STATE REGULATION DESIRABLE? The absence of specific regulations or standards to govern private exchanges means that private exchanges can differ considerably, which is good for innovation. Unfortunately, lack of regulation opens the door for less than reputable actors which can result in reactionary overregulation and unwarranted scrutiny. Association groupings, professional employer organizations, and MEWA failures provide an object lesson in this regard. There is ample precedent for insurance and insurance-related industries working with NAIC and the National Conference of Insurance Legislators (NCOIL) to promulgate national regulations and standards, and doing so without a crisis, real or perceived, almost always yields a better regulatory result. ___________________________________________________________ 1 Health Insurance Exchanges: Legal Issues


PRIVATE EXCHANGE PROFILE

Willis Advantage Combines Robust Private Exchange Capabilities With Focus on Rewarding Healthy Lifestyles and Consulting Expertise BY ROB HARKINS » VP OF PRIVATE EXCHANGES » NATIONAL HUMAN CAPITAL PRACTICE, WILLIS GROUP

Employee benefit plans have come a long way in the past few years. The days when an employer selected one or two health plans, a few other benefits and paid a fixed percentage of the costs for participants is coming into question. More recently, defined contribution programs have gained increasing interest from employers and employees alike. The defined contribution approach is made more appealing when coupled with a private exchange. Yet for all of the publicity and initial success of private exchanges, the underlying cost of health care and the unsustainability of rising health care costs are not adequately addressed in this new environment. The Willis Advantage provides a private exchange solution that marries population health management with a proven strategy to increase member focus on health improvement. Further, The Willis Advantage allows an employer to incent member health improvement. These components provide for all of the advantages and benefits of a private exchange for employers and their members, while more thoroughly addressing the underlying cost drivers of health care. The result? A sustainable, long-term solution that provides increased participant choice and employer cost predictability. However, The Willis Advantage is not a one-size-fits-all solution. Rather, the Willis Advantage is a private exchange that offers a continuum of benefit solutions and wellness engagement levels. Finding the right combination for an employer’s organization of benefits, incentives and participant engagement in healthy behavior is achieved through the comprehensive consultative process of our Human Capital Practice Consultants. We start with a consultative process to determine an employer’s approach to health care, wellness and a total benefits approach. Based on this collaboration, we develop a multi-year strategy to incrementally improve the health of an employer’s population.

Working with the employer, Willis also designs a private exchange suite of benefits, partnering with insurance and service providers that best meet the unique needs of each employer. Of course, we also help to design a health outcomes solution that will most effectively improve the health of their population.

The Willis Advantage: Taking Consumerism to the Next Level The Willis Advantage exchange platform analyzes employees’ health care preferences, utilization, financial position and risk tolerance, and recommends a customized benefits solution. The platform includes educational tools to help employees understand their options. In addition, The Willis Advantage proactively engages employees to become better health care consumers and lead healthier lives by combining the exchange platform with innovative health management programs. The insurance exchange environment is moving quickly. We place our clients’ interests first so they can always be confident that their Willis consultants are prepared to assist them in evaluating all viable exchange options.

The result? A sustainable, long term solution that provides increased participant choice and employer cost predictability. www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013

9


TECH INNOVATION BY SHANDON FOWLER DIRECTOR OF PRODUCT MANAGEMENT, MARKETPLACES BENEFITFOCUS

The Current Acceleration of Change and Innovation in Health Care

T

he Supreme Court’s decision to uphold the key tenets of the Affordable Care Act (ACA) has disrupted the American way of providing health coverage and care to its citizens. But what does that disruption mean? And which way will it lead us? Still early into one of the most profound moments of change in the history of the industry, consumers, providers and insurers alike are anxious to see what the future of health care holds. Luckily, there is plenty of room for optimism, even with the uncertainty that this year’s open enrollment promises as key provisions of the Affordable Care Act (ACA) kick in for individuals, employers and health insurance providers. Necessity is the mother of invention and new technologies are driving innovation throughout the industry at a record pace. For the rise in health care consumerism, that innovation has concentrated itself into the concept of purchasing coverage through private exchange marketplaces. For years, consumers have reaped the rewards of the socio-technological transformation brought on by the Internet and the constant connected world it creates. Amazon changed our attitude toward online shopping. A legion of travel websites convinced us that we could make our own travel arrangements while saving money for ourselves and the industry. Now, with pressures coming from all sides, it’s time for those innovations to take hold in health care benefits. For health insurance carriers, private exchange marketplaces represent an alternative to public marketplaces, allowing them to offer more flexibility, decision support and a diverse set of product offerings. For employers, private exchange marketplaces represent a combined ability to offer a more comprehensive benefits package in one place online for their employees while also providing streamlined, efficient administration for their HR administrators. And for consumers, whether they receive benefits through an employee or shop for benefits on their own, private exchange marketplaces represent the promise of health care consumerism, offering shoppers more transparency into health care costs, more choice and personalization in benefits and better tools to take charge of it all. We’re still early in the evolution of private exchange marketplaces 10

May/June 2013 I HealthCare Exchange Solutions™ I www.TheIHCC.com

and the great diversity of offerings, but the technological fundamentals that will lead to success remain consistent from marketplace to marketplace. Cloud-Based, Software as a Service Platforms. In addition to meeting the evolving needs of consumers, marketplaces need the flexibility to address changing regulations and requirements, many of which still haven’t been finalized! Data Analytics and Reporting. With the financial and regulatory pressures bearing down, it’s more important than ever to “measure twice and cut once”. Big data and the groundbreaking new tools being developed to manage it will lead employers and consumers alike into a future that we can more readily predict and control. Consumer-Centric Experiences and Support Tools. Perhaps the greatest shortcoming of many existing benefit administration systems is that they address administrative needs without equally addressing consumer needs. New tools are providing the greatest hope of optimism for the future. Decision support tools can harness big data to help consumers better understand their choices so they can make the right ones. Measurement tools help administrators refine and update far more rapidly to meet employee/consumer needs. The systems feed on themselves, which drives efficiencies that save everyone money and, naturally, making us all happier! Reliable, Secure and Compliant Infrastructure. We can argue about the impact that the ACA has had and will have on health care consumerism, but we can’t argue that compliance is at the forefront. Technology needs to be the driver of security and should facilitate managing health care to remain compliant. Thankfully, new platforms can remove much of that burden from HR administrators so that they can focus on making employees happy. With an emphasis on innovation in these areas, a picture is emerging for what the future will look like. That picture includes private marketplaces of all kinds — marketplaces that focus on the consumer by also addressing the challenges of employers and their HR administrators. The one certainty is that, in a generation, the uniquely American benefits and health care system will look nothing like it looks today. By focusing on technology and innovation, we can assure that it looks great for all of us.


Defined Contribution: The Next Frontier of Health Care Consumerism BY TOM TORRE » CHIEF EXECUTIVE OFFICER » ALEGEUS TECHNOLOGIES

www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013

11


A winning combination Our unique experience in both the healthcare and payment services industries means unmatched expertise and reliability utilizing the most advanced card processing technology in the industry. Known for our elite levels of customer service and a long-term commitment to the industry, TSYS Healthcare速 is focused on lasting relationships and people-centeredpayments . SM

Integrity | Relationships | Excellence | Innovation | Growth

Learn more at www.tsyshealthcare.com or call us at +1.706.649.5080

Get to know us. 1.706.649.5080 healthcare@tsys.com www.tsyshealthcare.com

息 2013 Total System Services, Inc.速 All rights reserved worldwide. TSYS速 is a federally registered service mark of Total System Services, Inc.


Defined Contribution in the News The significance of this market shift toward defined contribution was underscored last month when Alegeus Technologies, the market leader in consumer-directed health care solutions, announced its acquisition of Workable Solutions, a leading provider of private exchange technology. The Workable acquisition allows Alegeus to fuel the launch of its integrated private exchange and defined contribution platform called WealthCare Marketplace. The new solution allows Alegeus clients to capitalize on the market shift toward defined contribution — creating new opportunities for revenue expansion, cost savings and efficiency gains. This acquisition also reinforces Alegeus’ commitment to delivering industry-leading benefit solutions to help clients succeed as the market evolves. “We identified and met a market need in order to stay at the forefront of the industry and deliver the most complete solution to our clients,” said Bob Natt, Alegeus Executive Chairman. “The transaction with Workable Solutions delivers distinct value for our clients and stakeholders, and we’re excited for the continued growth it will bring to our business.” To fully understand the rationale for this acquisition, it’s best to start at the beginning. This article will provide a primer on the defined contribution market opportunity — including the changes private exchanges bring to the industry, the value it delivers for each stakeholder, and the importance of having the right solution to ensure success.

more choices to select the plan that is right for them versus a limited amount of options.

The Next Frontier of Consumer-Directed Health Care This movement toward defined contribution and private exchanges represents the next frontier in the health care consumerism movement — continuing to shift more responsibility for health care to the individual. Adoption of high-deductible health plans and related taxadvantaged benefit accounts (such as FSAs, HSAs, HRAs) has grown exponentially over recent years. These plans are designed to lower costs by shifting more financial responsibility to the consumer and increasing engagement in health care decision-making. Defined contribution takes the shift a step further by also giving individuals greater choice and greater responsibility for selecting and funding the plan design that is right for them. In fact, faced with a wider array of benefit choices, greater cost

Defined Contribution — Explained The defined contribution concept for health care benefits shares similar principles to the shift to defined contribution retirement benefits — from pension to 401(k). In a traditional defined benefit model, the employer bears the majority of the responsibility by selecting a few plan options and subsidizing the costs — often controlling costs by adjusting aspects of plan design such as deductibles and limitations on networks. In the defined contribution model, the employer designates a specific monetary amount toward their employee’s health benefits and the employee chooses how that money is spent from an array of plan options with ranging premiums and deductibles. Defined contribution benefit models will be enabled through private health insurance exchanges. An exchange is a web-based platform that consumers and employees use to evaluate plan options and enroll in plans/accounts (similar to how one might evaluate travel options through Expedia or Orbitz). Beyond plan selection and enrollment, exchanges also facilitate premium aggregation, billing, collection, reconciliation and other underlying financial and operational support processes. Defined contribution is an attractive option for employers and employees alike. Employers benefit from more predictable health costs, while ensuring higher employee satisfaction and talent retention through more competitive health benefit packages. Employees benefit from

transparency and more financial accountability for plan selection, a greater percentage of consumers will choose high-deductible plan types. Enrollment data from the Alegeus exchange platform supports this fact — with 63 percent of employees choosing a different plan design than they had the year before, with 51 percent making a significant change to a new plan type. Alegeus also believes that private exchanges will serve as a natural distribution channel for CDHC accounts — which further demonstrates why this acquisition is in perfect alignment with the core Alegeus CDHC business. Defined contribution and private exchanges are the next logical step for Alegeus, in order to continue to grow our existing CDHC business. Our new exchange platform will facilitate the next era of consumer-directed health care and benefit programs.

Private Exchange Myths – Debunked Although closely related, exchanges and defined contribution are not interchangeable terms — one enables the other. The employersponsored insurance market is moving toward private health insurance www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013

13


exchanges in order to adopt this new defined contribution health benefit model. Public exchanges will also play a role in distribution of insurance moving forward — but most likely for the unemployed, uninsured “retail” market and those that are eligible for government subsidies. Consumers themselves will ultimately determine which distribution channel best meets their needs to acquire insurance coverage. Despite some popular misconceptions, exchanges can be quite flexible and accommodate multiple operational models. Exchanges can support both group and individual plans. They can support both large and small group employers. Exchanges can be linked to one or more carriers, and can include health benefits as well as other supplemental benefit options. Multi-carrier exchanges include multiple plan types through multiple carriers (Cigna, Aetna, etc.). Whereas, single-carrier exchanges, sometimes referred to as “walled-off” exchanges, offer multiple plan types through one single carrier. As the market shifts toward exchanges, employers will be faced with an interesting dilemma about how much involvement they want in defining and administering health benefits — but they need not fear losing control of their benefit offerings. Traditionally, employers have had deep involvement in selecting and designing group insurance policies for their employees. In this new world of exchanges, employers could theoretically choose to have no involvement in plan design/choice and provide no employee support beyond the monetary contribution — effectively driving a shift toward more of a retail model with individual insurance policies. The majority of employers will likely end up somewhere in the middle — continuing to offer health benefits to attract and retain talent, while controlling cost by dialing up or down the contribution levels. With the right exchange solution in place, employers can maintain as much or as little control/involvement as they desire. Exchanges don’t just benefit employers and employees — carriers benefit too. Exchanges make it easier for carriers to acquire and maintain subscribers, therefore reducing administrative overhead. And, by integrating with the carrier’s existing IT specifications, an effective exchange solution can further streamline carrier resources required to enter the marketplace.

The Anatomy of an Exchange Solution The benefits derived from a defined contribution model rely on the successful operation of private exchanges. There are several critical components of a complete, end-to-end exchange solution: t Plan selection/recommendation engine – collects personal data and integrates analytics and cost comparison tools to make consumerspecific plan recommendations t Online enrollment – enables combined benefit enrollment based on eligibility and risk adjustment and determines appropriate payroll deductions based on individual choices and contribution amounts t Eligibility maintenance – provides ongoing access to manage life events and changes , interfaces with appropriate carriers and systems to allow centralized profile management t Billing and payment – facilitates fund settlement between individuals, employers and carriers, performing premium billing, aggregation, reconciliation and contribution account administration t Underlying operational support (ex. call center, system of record) 14

May/June 2013 I HealthCare Exchange Solutions™ I www.TheIHCC.com

Not All Exchange Solutions Are Created Equal Many exchange solution providers have opted to focus heavily on the front-end consumer experience, at the expense of the back end. While the consumer experience must be intuitive and easy to use, the back-end functionality is equally critical, if not more so. If the exchange doesn’t also support the underlying customer service, funds movement and operational processes — then the solution is incomplete and the model doesn’t work in reality. For example, the exchange must function as a year-round tool for managing qualifying life event changes, not just an open enrollment solution. It must be the central warehouse for all benefits-related processes and information. It must deliver on-demand education in an easy-to-understand format. It must manage the money movement associated with premium aggregation, billing, collection and reconciliation. Without all of these foundational elements in place, the house cannot stand. “Working in the exchange business for over a decade, we have supported some of the industries longest running exchanges,” said Terry McCorvie, President of WealthCare Marketplace Solutions at Alegeus (and former founder and CEO of Workable Solutions). “As such, we understand the complexity of exchanges and the importance of having the proper back end to support this new model of care seamlessly. Without the back end, the solution is little more than a selection tool.”

Alegeus Answers the Call The new Alegeus private exchange solution is among the most comprehensive, end-to-end exchange platforms available in the market. The solution combines a powerful recommendation engine to facilitate benefit selection based on personal data input, an enrollment tool to capture elections and payroll deductions for all benefit options, robust payment settlement features to enable premium aggregation, billing, collection and reconciliation, and a maintenance interface to facilitate life event updates. Through integration with carriers, payroll systems, and benefit account platforms (including the Alegeus CDHC platform), the solution enables combined benefit enrollment, consolidated premium billing/payments, and centralized member account maintenance — all online, through one single interface and workflow. As the health reform takes full effect, we will see continuous changes within the industry; however, the shift toward health care consumerism is here to stay. Defined contribution and private exchanges are gaining momentum in the marketplace. With employer adoption expected to grow exponentially in coming years, industry intermediaries, such as health plans, third party administrators, brokers and other third party operators (who are already engaged in offering benefit-related services to the employer market), are scrambling to offer enabling solutions and services to capitalize on expected demand. Solution providers like Alegeus are answering the call – delivering a comprehensive solution to enable these intermediaries to differentiate and compete in a rapidly changing marketplace.


EXCHANGE SOLUTIONS SHOWCASE

HSA/HRA/FSA TECHNOLOGY: ADMINISTRATION & MANAGEMENT

TSYS HEALTHCARE TSYS Healthcare® provides end-toend strategic payment solutions for 706.649.5080 consumer directed healthcare. We www.tsys.com/healthcare partner with benefits administrators, healthcare@tsys.com financial institutions, health plans, and software providers to navigate all aspects of HSAs, HRAs, FSAs, transportation accounts, cash reimbursements, and lines of credit. TSYS Healthcare cards offer participants the security they expect along with the ability to conveniently access funds from multiple accounts and manage their benefits payments with simplified single-card access. Clients and partners benefit from simplified processes, reduced paperwork and cost savings that can contribute to improved return on investment. “We built the TSYS Healthcare platform to meet the market demand for reliable, configurable and intelligent solutions. Understanding the dynamic U.S. healthcare market, our customers rely on our option-driven system to prepare them for the future.” — Trey Jinks, Group Executive, TSYS Healthcare HSA / HRA / FSA ADMINISTRATION AND FINANCE

WageWorks helps employers

WAGEWORKS

support consumer directed

1100 Park Place, 4th Floor San Mateo, California 94403 United States of America

pre-tax benefit programs, including health care (FSA, HSA, HRA), wellness

888-9905099 www.wageworks.com

programs, commuting and child and elder care. Wage Works also offers retiree health care and COBRA Services. More than 100 of America’s Fortune 500 employers and millions of their employees use WageWorks.

BENEFIT ADMINISTRATION/PRIVATE EXCHANGES

Since 1988, CieloStar (formerly OutsourceOne) CIELOSTAR has helped brokers, employers and employees 530 U.S. Trust Building navigate the ever-changing world of benefits. 730 Second Avenue South Now, with the dawn of “Defined Contribution Minneapolis, MN 55402 Health Care” we are again on the leading edge. With a team of industry thought leaders, CieloStar 612.436.2706 makes navigating healthand benefits choices john.reynolds@cielostar.com easy for employers and employees by offering comprehensive benefits administration solutions with a high-touch, high technology model—most recently launching a proprietary private health insurance exchange.

“Fueled by the far-reaching impact and complexities of health care reform taking effect in 2013 and 2014, employers and employees increasingly find themselves in a ‘farmer’s market’ of benefits choices. Cielostar is uniquely positioned with enabling technology that helps purchasers and consumers make the best possible decisions and create a best-in-class benefits administration process. Our unique comprehensive approach to benefits offers everything from back room technology for enrollment, data, billing and call centers to complete solutions for COBRA, CDHP and health insurance exchanges.” — John Reynolds, CEO, Cielostar HSA / HRA / FSA ADMINISTRATION AND FINANCE

Evolution1 and our Partners serve more EVOLUTION1, INC. than 9 million consumers, making us 952.908.9056 the nation’s largest electronic payment, www.evolution1.com on-premise and cloud computing sales@evolution1.com healthcare solution that administers reimbursement accounts, including HSAs, HRAs, FSAs, VEBAs, Wellness and Transit Plans. It is the only solution that offers a single end-to-end user experience, provides innovative auto-substantiation technologies, and automates workflow for Partners, employers, and consumers. It does all this on one technology platform comprised of 1Cloud™, 1Direct™, 1Pay™, 1View™, 1Plan™, and 1Mobile™. Evolution1 and our Partners are dedicated to delivering value, reducing costs and simplifying the business of healthcare.

“The combination of our innovative products will further our leadership position in a rapidly changing healthcare market. Together with our Partners we are committed to reducing costs and simplifying the business of healthcare.” — Jeff Young Chairman and CEO, Evolution1

www.TheIHCC.com I HealthCare Exchange Solutions™ I May/June 2013

15


HealthCare Consumerism: Helping Employers Move to a Partnering Approach FREE LIVE WEBINAR

5VFTEBZ +VOF to1.&5

In the move towards a Partnering Approach vs. a Parenting Approach, employers partner with their employees and offer true choice rather than dictate plans and carriers in a limited fashion. This webinar presented by a top broker, Brad Davis who represents Aflac, will provide insights and solutions that will make this process easier for everyone involved. Through this webinar you will learn: t

How Defined Contributions and “exchanges� are interconnected

t

The advantages of this model to employers related to controlling costs and the employee experience

t

The advantage of this model from the employee perspective and what employee feedback has been

t

The tools and strategies employers need to take in order to properly navigate employees through open enrollment

Brad is a Certified Employee Benefits Specialist (CEBS) at Wraith, Scarlett, and Randolph Insurance Services in Woodland, CA. He offers a wide range of skills as a tactician, economist, and educator for health, dental, vision, life, disability, and voluntary worksite insurance. Brad also advises clients in the area of retirement products including 401(k), Medicare, and long-term care. Education is vital to the success of an Employee Benefits package. Brad is able to communicate complex insurance strategies on a detailed yet simplified and personal level to both employers and employees. By offering choice and understanding, employees will appreciate their benefits package exponentially more and allow employers to recruit and retain effectively.

t

What employees need to learn about Voluntary Benefits and how to approach educating them about the importance of this kind of coverage

t

How the right technology can make or break the enrollment and benefit management process for employers and employees, and the benefits of the right technologies for your company size

t

Aflac Case Studies: Company A (white collar employees), Company B (blue collar employees)

t

Sign up for this FREE Live Webinar at www.theihcc.com/webinars/aflac

Brad Davis

Certified Employee Benefits Specialist (CEBS) Wraith, Scarlett, and Randolph Insurance Services Incoming President Sacramento chapter, National Association of Health Underwriters (NAHU)

Date: Tuesday, June 25, 2013 Time: 2:00 p.m. ET Info: webinars@theihcc.com Live & On-Demand: www.theihcc.com/webinars/aflac

To learn more, check out the Institute for Healthcare Consumerism’s website at www.theihcc.com

Profile for The Institute for HealthCare Consumerism

HealthCare Exchange Solutions  

About Innovative Health and Benefit Marketplaces

HealthCare Exchange Solutions  

About Innovative Health and Benefit Marketplaces

Profile for theihcc
Advertisement