Employee Benefits and the New Health Care Landscape: How Private Exchanges are Bringing Choice and Consumerism to America’s Workforce

281 Pages·2017·12.923 MB·English

by  Alan Cohen

Praise for Employee Benefits and the New Health Care Landscape
“When Alan Cohen opened the doors at Liazon in 2007, he revolutionized the way insur-
ance was sold. Though the idea was simple, it was also ahead of its time. Liazon was
among the first companies to establish a private health insurance exchange, a trend that
has since exploded. Employee Benefits and the New Health Care Landscape gives us a rare,
inside look into the mind that created ‘the exchange wave’ ten years ago.”
—Kathryn Mayer, Editor-in-Chief, Employee Benefit News
“Regardless of your political affiliation, sitting out the current debate on health care and
benefits is no longer an option. Private exchanges offer one solution to one part of the
problem; this book explains why.”
—Christopher E. Condeluci, CC Law & Policy PLLC, ACA expert 
“It has been my pleasure to work with Alan Cohen over the years and observe the private
exchange evolution firsthand. The industry has been in need of a book like this for a very
long time.”
—Rhonda Marcucci, Vice President, HR & Benefits Technology
Consulting Practice at Gruppo Marcucci, a division of
Gallagher Benefit Services, Inc.
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EMPLOYEE BENEFITS AND
THE NEW HEALTH CARE
LANDSCAPE
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EMPLOYEE BENEFITS AND
THE NEW HEALTH CARE
LANDSCAPE
How Private Exchanges Are Bringing Choice and
Consumerism to America’s Workforce
ALAN COHEN
With
JAMI KELMENSON
© 2018 Liazon Corporation
by Pearson Education, Inc.
Editor-in-Chief
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time they were obtained, and like health care and benefits, are
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s ubject to evolve over time.
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ISBN-10: 0-13-466530-9 Compositor
ISBN-13: 978-0-13-466530-6 codeMantra
Pearson Education LTD.
Pearson Education Australia PTY, Limited
Pearson Education Singapore, Pte. Ltd.
Pearson Education Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educación de Mexico, S.A. de C.V. Pearson Education—Japan
Pearson Education Malaysia, Pte. Ltd.
Library of Congress Control Number:  2017946910
1 17
CONTENTS AT A GLANCE
Acknowledgments .............................................................................xiii
About the Author ................................................................................xiv
How to Read This Book ......................................................................xv
Introduction ...........................................................................................1
Part I The Changing Benefits Landscape ...........................................13
1 Building a Better Benefits System .....................................................15
2 Benefits: The Accidental Entitlement................................................35
3 They Don’t Know What They’re Missing: Flipping the Status
Quo on Its Head ................................................................................51
4 Making Sense of Benefits Solutions: Public Exchanges
and Private Exchanges ......................................................................75
Part II Stakeholders: Making the Move from
“One Size Fits All”..........................................................................97
5 Employers Find Skin in the Game ....................................................99
6 Six Questions to Ask Before You Choose a Private Exchange .....109
7 Brokers and Exchanges: Better Together ........................................123
8 Insurers Find a New Way to Move Product ...................................137
Part III Future Vision ...................................................................................155
9 Innovation in Benefits (Yes, Benefits) .............................................157
10 The “Law of the Land,” Insurance Tax Reform,
and the November Surprise ...........................................................175
11 Who’s Afraid of the American Consumer? ....................................193
Part IV Appendixes: A Practical Guide to
Private Exchanges .........................................................................215
A Private Exchanges 101 .......................................................................217
B Making Sense of Benefits Terms .....................................................223
C Real-World Data and Applications ..................................................233
Index ....................................................................................................251
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TABLE OF CONTENTS
Acknowledgments ...................................................................................xiii
About the Author .....................................................................................xiv
How to Read This Book...........................................................................xv
Introduction 1
Attracting and Retaining Employees .........................................................3
A New Paradigm Shift for Benefits ............................................................5
The Exchange Evolution ....................................................................................8
“Try It, You’ll Like It” ...........................................................................................9
Overcoming the “Wait and See” Mindset .............................................11
Part I: The Changing Benefits Landscape 13
.................................................
1 Building a Better Benefits System 15
Principle #1: Give Them Money and Let Them Shop .................19
Principle #2: Provide True Price Transparency ................................23
Principle #3: Provide Meaningful Choice ............................................24
Principle #4: Offer Guidance in the Form of
Decision Support .........................................................................................27
Principle #5: Optimize the Shopping Experience ...........................29
Principle #6: Ensure a Cultural Fit Within
the Organization ..........................................................................................33
Principle #7: Refine, Iterate, and Improve............................................33
Summary ..................................................................................................................34
2 Benefits: The Accidental Entitlement 35
Not Really an “Exchange” ..............................................................................38
“Modern-Day” Insurance ...............................................................................40
Benefits as Compensation .............................................................................41
So Where Does This Leave Us? ..................................................................46
Brokers Join the Bandwagon .......................................................................49
Summary ..................................................................................................................50
Table of Contents ix
3 They Don’t Know What They’re Missing: Flipping the
Status Quo on Its Head 51
The Problem with the Status Quo ............................................................53
Disrupting the Status Quo ............................................................................56
Meaningful Choice .....................................................................................57
Price Transparency and Defined Contribution ........................59
Personalization ..............................................................................................67
Consumerism ................................................................................................70
Summary ..................................................................................................................73
4 Making Sense of Benefits Solutions: Public Exchanges
and Private Exchanges 75
The View from the Top: Public Versus Private Exchanges ........75
Who Runs These Things Anyway? Types of Private 
Exchange Operators...................................................................................79
Pure-Play Providers ...................................................................................79
Benefits Providers .......................................................................................80
Benefits Advisors .........................................................................................80
Traditional Benefits Administration Companies .....................81
What Should You Consider When Moving to a
Private Exchange? .......................................................................................83
Single- Versus Multi-Carrier Exchanges .......................................83
Self- Versus Fully-Insured Models ....................................................84
Funding Strategies ......................................................................................86
Who Can Benefit from Private Exchanges?
Markets Served .............................................................................................86
A Look at Products in Private Exchanges ...........................................89
What Else Can Private Exchanges Offer? ............................................95
Summary ..................................................................................................................96
Part II: S takeholders: Making the Move from
“One Size Fits All” 97
..........................................................................................
5 Employers Find Skin in the Game ..................................................99
A Big Bet Pays Off: TitleMax, Part of the TMX Finance
Family of Companies .............................................................................100
Customer-Focused Luxury Resort Gives Back to
Its Employees: Sandestin ......................................................................104
Summary ...............................................................................................................107