Private Insurance Exchange Enrollment Doubles


According to new research from Accenture, the number of people enrolled in health insurance through a privately managed health insurance marketplace doubled in 2015. The findings show that midsize employers represent the biggest cohort using private exchanges.

3 million people enrolled through private exchanges in 2014. Private exchange enrollment is expected to grow to 12 million in 2016 from the current 6 million in 2015, and will grow to 22 million in 2017.

Enrollment will continue accelerating into 2018 due to the looming penalties for “Cadillac Plans” that are expected to hit 38 percent of large employers — as well as 17 percent of American businesses — with a 40 percent excise tax on high-cost employer plans.

By 2018, Accenture estimates total enrollment in private exchanges will ultimately surpass state and federally funded exchanges, reaching 40 million.

Part of this activity is driven by private sector investment in health insurance exchanges. Aetna recently acquired bswift, a provider of health insurance exchange software that more closely resembles retail shopping experiences. bswift offers benefits administration technology and services to employers. The transaction was valued at approximately $400 million. Mercer too has recently invested in Benefitfocus, a provider of online enrollment portal and HR process software. This activity makes private exchanges operate more easily and consistently over the public sector options, adding to their growth.

Findings show that the number of large employers who have been on the fence in determining whether to adopt private health insurance exchanges is expected to drop over the next two years due to looming mandates and a maturing market. Accenture expects that increased compliance requirements mandated by regulations, such as the Affordable Care Act, HIPPA and the Employee Retirement Income Security Act, may drive employers to further reduce their role in benefits administration and adopt a private exchange model.