Insurance Broker Blog

Private Exchanges: Just a Fad or the Future of Insurance?

Private exchanges have been the new buzz word floating around now that the ACA dust has begun to settle. But it begs the question: are private exchanges just a fad or are they the face of insurance now and in the future?

As a marketer by profession, this transition in the health care industry feels a lot like when social media emerged to me. Marketers, techies and end users were skeptical. Many felt social media was simply a flash in the pan trend that would burn out as quickly as the use of Palm Pilots. Social media, however, has done the opposite; it has revolutionized the way we communicate across generations. What many people were cynical of trying at first has now become the new “morning paper” routine. Private exchanges, in my opinion, are creating the same revolution in the health care space.

So, are you ready for a Private Exchange?

A good portion of insurance brokers and employer groups are beginning to kick the tires of private exchanges to see what they are all about…all while standing on the sidelines waiting to see how they pan out with those who have already signed up for one.

Recognizing private exchanges as a game changer can put you ahead of the curve. You’ll be positioning yourself for success ahead of your competition. Plus, your clients and employer groups will appreciate knowing you’re adept at using this new technology before the bulk of the industry decides to hop on the proverbial bandwagon.

What does this mean for you as a broker?

When it comes to this new era of health care, be open to learning how private exchanges can enhance your business offerings to your clients and make you more valuable and relevant in the long term. There is a wide array of private exchanges out there; start by finding which type of platform works best for your business needs. Much like the changes in health care consumerism, private exchanges are not one-size-fits-all so it’s important to do some research on the system that best suits your needs.

Beyond leapfrogging over your competition, private exchanges offer a viable sales avenue for voluntary products as well. Private exchanges encourage the sale of wide array voluntary products for employees to select which, in turn, provides added revenue for you the broker. Plus, exchanges offering single source billing remove the administrative hassles of managing multiple lines of coverage by HR. The end result: Employees have more choices; benefit admins see a reduced workload and you see more commission.

Things to Consider in a Private Exchange

Ready to be ahead of the curve? Or want to do some research before investing in a private exchange? No matter when you take the plunge, there are a few things to think about before making the financial investment in an exchange.

  • Cost. If you’re an independent broker, you will want to look at exchanges that won’t break the bank but also offer you big features without costing a fortune.
  • Benefit to your clients. What tools does the private exchange offer to your groups. The more value it gives them, the more valuable you become to your groups. Many exchanges offer HR admin functions to save on administrative time sucks and some even offer single source billing.
  • Benefit to you. What tools does a private exchange provide to you, the broker? Can you manage your groups and plans in one place or is it difficult to maintain? Do you have support to help you bridge the technology gap?
  •  Usability. Are there mobile features? How accessible is the system to you and your clients? Take a test drive of the systems you’re considering and see how they were designed. Are they simple to use on the employee side or will they create questions and confusion for the group? Be sure to ask your private exchange partner how they created a positive user experience.
  • Health Literacy Tools. Does the private exchange give employees tools they need to make informed health care decisions? If it doesn’t, there’s chance HR will be bombarded with questions which in turn means you’ll be bombarded with a few unhappy clients.

The next time you hop on Facebook or check your LinkedIn account, think about how private exchanges could be the next major shift in your industry. Be a trailblazer, be ahead of the curve and start exploring the transformative tools offered by private exchanges. It never hurts to see what’s out there.

Free Private Exchange   Comparison Tool

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