SEPTEMBER 23, 2014

Employers who moved to Aon Hewitt’s multi-carrier fully-insured private health care exchange experienced overall health care cost savings for the 2014 plan year — providing some of the first data on the impact of post-Affordable Care Act private exchanges.

Of the 18 large employers — more than 5,000 employees each — representing more than 600,000 employees and their dependents, each company reduced their overall health care cost for medical coverage by more than $750 per employee compared to their expected 2014 spending, Aon says.

Aon calculated the savings by including the mixture of employees who bought less rich coverage as well as those who chose to purchase richer — and often more expensive — medical plans. Average cost per employee was $8,342, down from $9,098 per employee, Aon explains. Most of the savings were shared with employees through reduced payroll contributions and through more affordable health care coverage options.

In building the exchange, Ken Sperling, Aon Hewitt’s national health exchange strategy leader, says Aon wanted to build a model that used competition to reduce the “unsustainable” health care cost trends over the last 10 years which affect both employer and employee.

He said when exchange offerings were first announced, critics warned while cost savings might be present in year one, the exchange might experience increases in year two and three. “Well, that is not happening,” Sperling says. “Second and third year [exchange participant] rates are below market trend.

Rates for medical coverage across the 18 companies utilizing the Aon exchange — all of which renewed for 2015 — increased an average of 5.3 percent.

“[We’re] very pleased with the growth and the adoption, and even more pleased with the cost results. … [It is] validation that the concept is actually working.”