Most employees who recently started buying their insurance through a private exchange report a fair amount of satisfaction with their choices, although whether that ends up saving employers and employees money still isn't clear.
In a survey of 207 employees from 54 small, mid-size and large companies using the insurance exchange Liazon (now a part of Towers Watson), over 70 percent said they were satisfied with both the online shopping experience and the variety of health benefit plans they could choose from, compared to their previous experiences having to enroll in a group policy selected by their employer.
All of the employees who were surveyed, in August 2013, had a choice of at least five different health plans, many had 10, and a number of them had the option of buying plans for flex spending accounts, dental, vision, disability, legal, telemedicine and pet insurance.
Critics who think that wide variety choices in healthcare are overwhelming for consumers could find some evidence to support their view: 10 percent of the employees surveyed said they had too many choices.
But most of the employees preferred having lots of options, and about one-third said there "can never be too many options," while 17 percent said they thought there weren't enough.
A majority of those surveyed also said they liked the flexibility of being able to annually change their plans or benefit levels. About 60 percent said they planned to modify their portfolio or choose a new plan the following year.
Based on the survey's findings, Liazon leaders argue that private exchanges are starting to debunk what they call the myth that cost is the major factor in employee plan selections.
Although employer-sponsored health insurance costs have grown by as much as 80 percent in the past decade according to some estimates, more than half of the employees Liazon surveyed said they selected their plans because they offered "the right level of coverage."
Just less than a quarter of the employees said they chose their plans because they were the lowest cost, and the rest said they based their selection on coverage comparable to their old plans.
Whether or not employees end up paying more or less for plans bought on private exchanges compared to their old policies, Liazon argues that most employers moving to private exchanges do see savings or at least a slower rate in the growth of their annual insurance costs. Forty-four of the 54 employers included in the survey said their employee benefit costs have remained flat or decreased.
Either way, private exchanges probably leave employees more cost-conscious than they were previously.
As Heather Gumbert, the HR director at the Valley Brook Country Club in the Pittsburgh suburbs, told Liazon in a testimonial: "I witness them comparing costs with different providers and asking providers if the procedures they are recommending are truly necessary."
Although Liazon's surveys suggest not many U.S. employees are familiar with private exchanges, a number of other surveys have found many employers at least considering transitioning to the defined contribution private HIX model as way to try to limit their healthcare costs -- one reason why Towers Watson bought Liazon for $215 million to add to its own exchange.