With looming healthcare costs on the rise, the trend of employers shifting their employees to a private exchange continues to grow.
In 2014, nearly 3 out of 4 brokers had clients who stopped providing coverage for their employees and told them to purchase their own health insurance, according to a recent survey from Benefitter, the company announced.
The survey, which questioned more than 1,000 insurance brokers, found that the 78 percent of brokers' clients who dropped group benefits this year did so because "for some employers, health insurance is no longer affordable," according to Employee Benefit Adviser. "For others, their employees can actually find more affordable options on the individual market."
Over the past few weeks, as premium increases became public, nearly three-quarters of brokers saw premiums for small and mid-sized businesses rise more than 10 percent; individual market rates, on the other hand, saw a rise of 3 to 5 percent. What's more, over one-third of brokers saw at least one rate hike that surpassed 60 percent, noted the announcement.
Employer size matters, too. Brokers noted that double-digit increases affected 77 percent of employers, 75 percent of mid-sized employers and 60 of large employers.
Next year, this trend is expected only to accelerate--17 percent of brokers expect at least 25 percent of their clients to no longer offer coverage to their employees, according Employee Benefit Adviser.
However, hope may be on the horizon. Private exchanges have the potential to to reshape employer-sponsored health insurance, especially since the goal of private exchanges--which now cover more than 1.5 million people--is to generate new revenue and retain existing employer groups.