In Yesterday’s Advisor, we heard about a recent report that suggests that most employees prefer to choose their own benefits with a private exchange. Today we’ll take a look at how employers can benefit from these systems as well.
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By Ruth Berkowitz
As we saw yesterday, employees like to be able to choose their own benefits. What’s more, as time goes on, employees who use benefits exchanges like them more. Finally, we saw that cost was not the major factor for how employees choose benefits; rather, how well those benefits fit their lives had the biggest influence. There are also a few benefits to employees—other than attracting talent—for using private exchanges.
Are There Employer Advantages to Private Exchanges as Well?
You bet. When employers were surveyed about what they thought of their experience, they revealed similar sentiments.
Fifty-seven percent of employers in their first year on an exchange said they spent the same or less on benefits than the previous year. However, this number increases to 86% for second-year employers, indicating that longer-term exchange users are better able to control benefits costs.
Furthermore, 65% of the employers surveyed thought their employees were more aware of the company’s contribution than they were in the previous year. With companies vying to attract and retain employees through more valuable benefits offerings, this insight alone provides strong evidence for the merits of private exchanges in a competitive marketplace.
Ruth Berkowitz is a vice president at Liazon Corporation, operator of the industry-leading private benefits exchange for businesses.