By Jerry Geisel, Crain News Service
CHICAGO (March 19, 2013) — More than 40 percent of employees opted for a less expensive healthcare plan than what they previously had when their employers offered them coverage through a private health insurance exchange, according to an Aon Hewitt analysis released March 18.
The analysis involves a private exchange Aon Hewitt launched last year, with the first policies effective Jan. 1.
The exchange offers coverage to nearly 100,000 employees, including the U.S. employees of Aon Hewitt parent Aon P.L.C., Hoffman Estates, Ill.-based retailer Sears Holdings Corp. and Orlando, Fla.-based chain Darden Restaurants Inc.
The coverage is provided by nine insurers, including HealthNet, Kaiser Permanente, UnitedHealth Inc. and Healthcare Service Corp., which operates Blue Cross/Blue Shield plans.
The exchange model deploys a defined contribution approach in which employers provide a fixed premium contribution, with employees paying more or less depending on the level of coverage they choose.
According to then analysis, 42 percent of employees selected a less generous plan compared with what they previously had, 32 percent selected a plan similar to what they had previously and 26 percent opted for a richer plan.
Offering a wide choice of plan designs and insurers is what employees want, said Ken Sperling, Aon Hewitt's national health exchange strategy leader in Norwalk, Conn.
"The election patterns we observed prove that a well-designed exchange does not just drive employees to less comprehensive coverage. Employees who want richer coverage are free to purchase it—and they do.
"Healthcare is personal, and people have different needs. This model lets employees decide which plan and which insurance company is best for them, and they are free to modify that choice on an annual basis," Mr. Sperling said in a statement.
This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.