Private Exchanges for Health Benefits: A Popular Choice for Employers and Employees Alike


| 3 min read

Just six short years ago, the term ‘private exchange’ barely existed, and even a few years later, only a handful of employers nationwide were using these online platforms to enable employees to learn about, compare, and purchase employer-sponsored health benefits. Today, private exchanges are hotter than a scalding city sidewalk under the midday July sun. How muy caliente? Consider these findings recently released by the consulting firm Accenture.
  • Three million people signed up for employer health benefits this year through private exchanges --roughly three times more than what was originally estimated a year ago.
  • Accenture projects that employee enrollment in private exchanges will reach about 40 million by 2018, which would surpass the number of enrollees in public exchanges.
And, according to a recent Aon survey, one-third of employers plan to move employees to a private exchange in the next few years. Why the sudden popularity? It’s really quite simple: Private exchanges offer unique benefits that appeal to both employers and employees. For employers, the major benefit is cost predictability and control. Private exchanges use a defined contribution finance arrangement, similar to 401(k) retirement plans, which allows employers to set a fixed budget for each employee’s benefits. The exchanges also help to reduce administrative burdens complicated by Affordable Care Act reporting and compliance. But the most exciting part, private exchanges get employees more engaged by offering more plan choices and putting employees into ‘shopping’ mode each year. Decision support tools help them make informed decisions during the enrollment process. One survey of employers and consumers found that 70 to 80% of respondents would prefer a private exchange to a public one due to greater product choices, design flexibility and customer service. As Accenture reports, the growth in private exchanges has been driven largely by smaller and midsize companies with no more than 1,000 employees. As employers get more comfortable with the concept, more are jumping into it. For example, GlidePath, Michigan’s premier private exchange, operated by Blue Cross Blue Shield of Michigan, has nearly five times more participating employers today than it did at the end of 2013. Employer concerns over disruption are really being eased as early adopting employers have good experiences. In fact, 94% of employers who’ve transitioned to GlidePath indicated they would recommend it to other employers, and 94% of their employees expressed satisfaction with their enrollment experience. “GlidePath provides the stability of knowing what my monthly cost are going to be and gives our employees more plans and opportunities to get coverage designed just for them,” said Scott Chouinard, CFO at Grand Traverse Resorts. For more information or to request a quote, visit or follow GlidePath on LinkedIn here. GlidePath Rising benefit costs and employee engagement are real challenges for all companies. GlidePath from Blue Cross Blue Shield of Michigan and Blue Care Network offers Michigan businesses an innovative way to manage spending and risk, while putting employees in the driver’s seat. With the GlidePath private exchange solution, you get cost predictability, world-class support during and after enrollment, and greater choice for your employees – all with the peace of mind that comes with coverage from the Blues. Coverage for CompaniesCoverage for Companies, operated by Blue Cross Blue Shield of Michigan, is an online private exchange for small groups with up to 50 employees. You determine an amount you'd like to spend on each employee's health insurance coverage. Then, you select a collection of plans to offer your employees. We have HMO and PPO options. Your employees can then shop online and get help finding a plan that fits their needs. For more information or to request a quote, visit
MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association