Expert Q&A

I like Cora’s explanation. I’m an agent in Utah. We have a health exchange that’s currently up and running.

Just a few things to add. The health insurance options offered in the exchange are also offered outside of the exchange in the regular health insurance market.

As Cora suggested, part of a health exchange’s goal is to help businesses who haven’t been able to afford a group health plan in past offer them to their employees going forward. The problem with this is that nothing has been done to control the actual cost of health care. So, yes, health exchanges (at least ours) do allow the employer to offer a defined contribution (ranging from $0 per employee per month and up), but someone has to bare the cost of the health plan.

So if the employer’s portion is not enough to get the required percentage of employees to participate in the plan, the employer either has to increase their contribution until enough employees decide they can afford it, or bag the plan altogether if they can’t meet the participation requirements for the health exchange.

So there are some good things about health exchanges (plan choices, defined contribution). But the concept has limits to the value it can provide in the real marketplace.

I hope that helps!

Jared J. Balis
Utah Insurance Advisors