Dear Addy: Private Exchange

 
Dear Addy,
I have health insurance through my employer. Next year my employer is giving me a lump sum each month to pay for health insurance on a “private exchange.” What does that mean?
Signed,
Month-to-Month
_________________________
Dear Month,
Private exchanges are online marketplaces that allow employers to offer their employees a range of choices for health-insurance coverage. These exchanges are different from the Marketplace through which each state will offer health insurance plans to individuals and small businesses in accordance with the Affordable Care Act (ACA). On private exchanges, employees can shop for different types of health plans from a variety of insurers as well as other types of benefits like as dental or vision plans. Since your employer is offering you a lump sum, or “defined contribution,” each month to pay for health insurance, if you choose a plan that cost more than that monthly sum it is likely you will have to cover the difference.
You are not alone in having your employer choose to use a private exchange. Accenture PLC projects that around a million Americans will get employer health-insurance coverage through private exchanges next year. That number will increase to 40 million by 2018. Get ready to go shopping.
Sincerely,
Addy
Have a question? Send us an email at: dearaddy@hemophiliafed.org. Your name will be changed in the response. 
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HFA frequently receives questions from the bleeding disorders community related to advocacy issues. The questions often impact the entire community. In an effort to reach the largest audience possible with our responses to these widely applicable questions, HFA developed “Dear Addy.” Questions submitted to this column are edited in order to protect privacy and should be considered educational only, not individual guidance.