The number of people who have enrolled in private health insurance in the U.S. for their 2015 employee benefits doubled in the last year from 3 million to 6 million people, reported Accenture, a private consulting firm. The numbers are projected to continue going up, with 12 million people enrolling in private health insurance in 2016, and 22 million people in 2017.
“Consumers’ latent demand for choice and flexibility in a retail-like shopping environment, paired with notable early successes, have contributed to the 6 million that enrolled in private health insurance exchanges this year,” Scott Brown, co-author of Accenture’s private exchange research, said. “Midsize employers with 100 to 2,500 employees drove enrollment growth for 2015, as evidenced by the expansion of the consultant-led exchanges servicing this market.”
When the marketplace was first created, Brown said it was predicted employers would drop coverage. In 2015, that didn’t happen.
“In a survey Accenture conducted of 2,709 employees, three-in-four (76 percent) said health insurance was the primary or an important factor for continuing to work at their current employer,” Brown said. “As employers seek a compelling alternative, the private exchange model of reducing costs and administrative burden emerges as a clear favorite.”
The Accenture study predicts companies will switch to the private health insurance option because of: the “Cadillac” tax of 40 percent on employer health plans, which starts in 2018; growing market funding; looming mandate and a maturing market; and compliance burdens.
Currently, employers choose to offer private health care for their employees for a variety of reasons, including to reduce or stabilize their contribution to employee health benefits from moving from defined benefits to define contribution, Brown said.
“Some are interested in offering employees a broader set of products and services that are delivered in an online marketplace,” he said.
This was the third year Accenture studied enrollment in private health insurance exchanges. The March survey included 2,709 U.S. employees between ages 18 and 64 who received benefits from their employer.