Simply moving to a private exchange system may increase the variety of voluntary benefits an employer offers, and the number of products employees take up.
About 20 percent of employees who use Liazon-based private exchange programs to buy any product in 2015 bought seven or more products, and some bought 12 or more products, according to Steven Nyce, an analyst in an Arlington, Virginia-based Willis Towers Watson research unit.
The average of number of employee-paid products that a typical Liazon employer exchange offered increased to 14.2 in 2015, up from an average of 13.1 products in 2014, and an average of 12.9 products in 2013.
The average number of products purchased by employees who purchased at least one exchange product increased to 4.4 in 2015, up from 3.7 in 2014, and up from 3.6 in 2013.
Nyce presented that data in New York City at a press conference organized by the Private Exchange Research Council.
London-based Willis Towers Watson acquired Liazon, a Buffalo, New York-based private exchange company, in 2013.
Liazon and its parent formed the Private Exchange Research Council, together with brokers and consultants, in an effort to collect and analyze the benefits shopping and selection data pouring out of Liazon-based private exchange programs.
Christopher Condeluci, a Washington-based health policy specialist who served as a moderator for the event, and who served on the staff of the Senate Finance Committee when the committee was shaping the legislation that gave birth to the ACA, said the committee staff always craved the kind of data now streaming out of Liazon systems.
“Data is king,” Condeluci said.
Nyce showed in a report released at the press conference that analysts can slice the exchange transaction data in many ways to come up with many kinds of answers.
Nyce presented evidence suggesting, for example, that use of private exchange programs might also improve how employees use their benefits. He showed, for example, that 63 percent of the Liazon exchange users who had access to health savings account-compatible medical coverage and chose the HSA-eligible coverage option actually set up an HSA when they bought the HSA-eligible coverage.
That worksite HSA election rate appears to be about twice the off-exchange average, according to Alan Cohen, Liazon’s chief strategy officer.
For some other slices of data, read on:
Almost all employers that offer a private exchange program and several different medical plans put an HSA-compatible plan on the menu. (Image: Thinkstock)
1. Sponsors of private exchange programs that give workers a menu listing at least four different medical plans tend to offer great benefits.
Analysts tried to get an idea of how serious Liazon exchange program sponsors perform by looking at employers with 10 or more employees that offer at least four medical plan options. They also focused on data on the employees themselves, because, in many cases, employees make benefits selection decisions for dependents.
The analysts started with data on 375,205 employees and dependents for 2015, up from 173,541 for 2014 and 59,064 for 2013.
The filters the analysts applied cut the number of people in the sample to 159,588 people for 2015, up from 84,152 for 2014, and up from 22,750 for 2013.
Even in that group, the quality of the benefits the private exchange-using employers offered was striking, presenters said.
Just about all of the employers offered employees access to a major medical option that as compatible with opening a health savings account, compared with just 26 percent of off-exchange employers, Cohen said.
More than 90 percent of the employers offered vision insurance and dental insurance through their private exchange programs in 2015, and 87 percent offered voluntary life insurance. In some cases, the employers might not have offered voluntary versions of products because they offered traditional employer-paid group versions of those products.
The Liazon results suggest that a little bit more effort could lead to a big increase in pet insurance sales. (Photo: Thinkstock)
2. An automated decision support system may help sales of some products more than others.
Liazon promotes use of automated product recommendation and benefits purchasing advice tools, to help employees deal with long lists of available types of product, and long lists of options within each category.
Analysis of actual transaction figures shows that the recommendation systems have a big effect on transactions, Nyce said.
Analysts found, for example, that about 51 percent of the employees who had received a recommendation to buy child life insurance bought it. Only 3 percent of employees who bought child life insurance did so without a recommendation.
The gap was even more dramatic for pet insurance: 21 percent of the employees who bought it did so after receiving recommendations. Only 1 percent of the employees who bought it did so without seeing a recommendation.
Liazon’s advice system says many employees would be better off increasing flexible spending account contributions than paying for dental coverage. Some of the workers who get that advice reject it. (Photo: Thinkstock)
3. Many workers will buy dental coverage no matter what the darn computer says.
Although the recommendation system may be powerful, private exchange users still think for themselves.
The Liazon system told some workers they would be better off, financially, if they contributed more to flexible spending accounts or health savings accounts, rather than paying for voluntary dental insurance. But 67 percent of employees who received no recommendation to buy dental coverage, or received recommendations to skip it, bought it anyway.
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