The Private Exchange’s Spread in the Workplace
Benefits exchange expert Alan Cohen seeks to demystify the private exchange in his new book.
After co-founding Liazon, one of the industry’s leading benefits exchanges for employers in 2007, benefits expert Alan Cohen extensively analyzed the current American health care landscape and the place of the private exchange within it. His new book “Employee Benefits and the New Health Care Landscape” explores how private exchanges are bringing choice and consumerism to the workforce.
Workforce Associate Editor Andie Burjek recently discussed with Cohen the growth of private exchanges and the importance of employers making rational decisions when it comes to the health plans they choose.
Workforce: What do you think is holding back the spread of private exchanges in the workplace?
Alan Cohen: Change is always hard. Frankly, we’ve seen clients who try to present it to employees that it’s not much change. That hasn’t worked very well. It actually is a big change.
It’s worked far better with our clients who embrace the change. We’re very vocal about how you have to think of this as a dramatic change in your employee benefits strategy and in your human capital strategy. It’s not just changing your health plan or benefits program. It’s changing your human capital program. Anything that’s going to have that much effect is not going to explode overnight.
WF: What would you tell employers uncertain about moving to a private exchange?
Cohen: I would tell them to think hard about why they offer benefits to begin with. We are so focused nowadays on how we can reduce the cost of health care and make our population healthier, that we’ve lost track of the reason for employee benefits.
It’s not to have the lowest possible health care costs for employees. In the job markets we have now, which are getting tighter and tighter, we have to look back at the reason we have benefits, which is to attract and retain employees in a cost-efficient way. If you use that as the measure of your benefits program, I’m sure you’ll find private exchanges are an excellent way to do that. We’ve seen 10 years worth of proof that employees are happy, make good choices and want to be in control.
WF: What do you hope employers get out of your book?
Cohen: The demystification of exchanges. In any new area, there’s a lot of mystery and it’s kind of obtuse and it’s hard to understand. What I try to do here is shed light on this area and boil it down to simple choices a company has to make, which is: What is the goal of your employee benefits program? I hope it makes the idea of exchanges more understandable and digestible to employers so that they can make a rational decision.
They still might not choose it, but at least if you’re not going to choose an exchange, do it from a point of knowledge as opposed to not choosing it because you believe it’s something that it’s not.
Andie Burjek is a Workforce associate editor. You can find Workforce on Twitter at @workforcenews. Comment below or email email@example.com.