Benefits Advisory

Private Exchanges
Exposed: Risk International
Shines a Spotlight on
the Grand Illusion

Like so many companies, our client, a large, publically-traded manufacturing company was getting squeezed by rising healthcare costs and the complexities of the Affordable Care Act. This, coupled with the universal need to reduce spending led them to choose a private exchange to help their employees buy insurance that best met their needs.

The Problem

Healthcare is in the midst of dramatic change. Private exchanges are being deployed left and right and employers are being lead (somewhat blindly) by brokers and consultants who have an overwhelming interest to protect and enhance their revenue stream. In turn promoting the exchanges they own and operate.

The real problem: private exchanges are too often being offered to benefit the broker and not the employer.

For example, in this case the solution offered would have increased the broker’s compensation by five times. The experts at Risk International Benefits Advisory found this to be an egregious conflict of interest brought on by the inherent nature of broker-owned private exchanges. In other words, whose interest was the broker looking out for when they were selling their own product?

That’s where RIBA came to the rescue and provided much-needed, objective, third-party analysis with no vested interest in the choice of the private exchange.

RIBA’s objective: Perform an independent analysis, find and assess all options and make a recommendation aligned with the cultural and financial needs of our client and their employees.

The Risk International Solution

Following Risk International’s careful analysis of all the private exchanges offered, we found a flexible solution, less rigid than a pre-stocked and locked vending machine, and at a significantly less cost.

Our first discovery was exposing all of the money flowing in and out of the arrangement the broker offered such as direct fees, general costs, costs associated with commission and costs associated with claims, among others. It’s then that we were able to show the client where their money was going.

The Results: Risk International’s relentless advisors found $2 million dollars in savings.

In addition to the financial benefits, we were able to demonstrate exchange offerings – choice, satisfaction and protection – with the client’s cultural and employee needs as well.