Strengthen the employer-employee benefits relationship

For each year that health insurance outpaces the consumer price index (CPI), fewer employers can afford defined benefit health plans. Provide a defined contribution arrangement to lock in your employer clients for years to come.

As costs rise, defined benefit medical plans are becoming increasingly unaffordable for many employers and the percentage of small employers offering coverage has declined dramatically over the last decade.

In contrast, defined contribution arrangements allow employers to split the cost of benefits from the cost of insurance. With defined contribution arrangements, employees receive a monthly health benefits allowance from their employer. Employees then use this allowance to purchase the coverage that is best for them and their family through the Private Exchange.

Defined contribution arrangements strengthen the employer-employee benefits relationship. If employers can stabilize their health benefit costs indefinitely, they have no reason to ever cancel coverage.

The employer-employee benefits relationship is vital to insurers, because it allows you to maintain a cost-efficient wholesale distribution and management model. When the relationship is broken, you must switch to a more expensive retail model for insurance distribution and management.

Read about how you can use the Private Exchange to retain revenue from small employers.