Private exchanges: costly experience, or a way to lower healthcare costs?

Numerous companies have moved to using private exchanges to manage health care costs while giving employees the flexibility to make their own insurance choices. Private exchanges can take a number of forms, offering consumers the chance to purchase a variety of insurance products from just one carrier or insurance offerings from multiple carriers. In a private exchange plan, employers give employees a set amount of money to use, and it’s up to the employees to make their benefit choices. Indeed, the freedom of choice is a clear potential benefit for employees in private exchanges.

However, there are potential benefits for employers with private exchanges, too. Here are three examples:

Private exchanges are defined contribution plans, which give companies greater cost certainty.

The plans are usually administered through a third-party electronic platform, which reduces the amount of time human resources departments need to explain and administer benefits.

With multiple-carrier exchanges, there’s always a chance the price of benefits will go down for employees, which makes everyone happy.

There is evidence private exchanges are gaining steam. According to consulting firm Accenture, private exchange enrollment is expected to double from 6 million in 2015 to 12 million in 2016 —and is on pace to increase to 40 million by 2018.

Furthermore, there is evidence the exchanges can help companies realize cost savings. In a survey conducted by the Private Exchange Evaluation Collaborative, a joint effort of multiple employer health care provider organizations, 64 percent of companies indicated they have reduced costs in a private exchange, according to the Society for Human Resource Management.

If you would like to know more about private exchanges, contact The Plexus Groupe today at 847.307.6100 (Chicago), 972-770-5010 (Dallas) or 405-241-9462 (Oklahoma City), or visit us at



Kuehner-Hebert, Katie. “Are private exchanges really the next big thing?, August 11, 2015.

Sammer, Joanne. “Employers Slow To Adopt Private Health Exchanges.” Society For Human Resource Management, June 1, 2015.

Enrollment in Private Health Insurance Exchanges Doubled, to 6 Million in 2015, According to Accenture.” Accenture, April 7, 2015.