Looking to offer employers and consumers with a one-stop shopping experience, health plans are aggressively adding ancillary products to their private exchanges?
Ancillary services are employee offerings that don’t fall under major medical coverage; auxiliary or supplement services used to support diagnosis and treatment of a patient’s condition. Integrating ancillary services can help to improve health plan profit margins, complementing health insurance offerings that are offered on the Marketplace. When properly integrated, ancillary services can help control costs, provide additional revenue streams, and enhance convenience for busy patients.
Responding to this opportunity, health plans have increasingly added ancillary services that include, but are not limited to, vision, dental, pet, critical illness, life, long and short term disability services, pharmacy services, home health services, retirement, Employee Assistance Program, and travel assistance. Adding these types of coverage options enables employees under a health care provider to get full insurance coverage at a much lower rate than if they were to get the various types of ancillary products separately.
Despite the obvious increases in flexibility of cost management and the financial benefits that ancillary products allow for, many large and small business still aren’t offering their employees these benefits as part of their available offerings. Insurance brokers who want to enhance their commissions can do so by offering these ancillary benefits. There are endless reasons why payers should want to take advantage of this, such as having the ability to fill the gaps of a limited benefits package, allowing plans to be paid for with pre-taxed dollars and providing benefits at very low cost for employers.
Diversifying Benefit Offerings
Trying to diversify, broaden benefit offerings, and uncover new sources of revenue isn’t exclusive to just health plans. Brokers also view ancillary products as an attractive revenue stream. With employer contribution models and a variety of self-service products, these private exchanges provide an ideal breeding ground for voluntary commission. The strategy of ancillary benefits allows for an easy up-sell; a broker could inform their client that their carrier offers discounted ancillary benefits on top of their regular insurance. Brokers who sell ancillary benefits can go a long way with employees’ trust, increasing morale and productivity among employees. The overarching theme surrounds the ability to provide a broad offering with the ability to:
- Design and customize your client-facing storefront. This includes colors, layout, verbiage, plan details and plan summaries for your specific benefit designs.
- Configurable rating factors based on your state’s specific needs.
- Customized portals such as the Payment Portals, Carrier Portal, Individual/Family Portal, Small Business Portal, Broker Portal, and Provider Portal.
- Set access role settings, permissions for issuers, brokers and members.
According to Gartner*, Health Payer CIOs should assess private exchange solution vendors on their ability to support a wide variety of health, wealth and ancillary products. In the private exchange sector, ancillary products have grown to become a critical component, permitting employees to utilize defined contributions from their employer, and design benefits packages that tailor to their needs.
Far beyond simplifying financial and logistical benefits for insurance companies and brokers, ancillary services also assist in the goal of overall preventative health. Their aim is to create a more consolidated and health-conscientious plan that covers all aspects of a healthy livelihood.
For more insight into the benefits of Private Exchanges, download our complementary whitepaper.
*Gartner, Market Guide for U.S. Healthcare Payer Private Exchange Technology, Constance Sjoquist, 11 April 2016
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon, Inc. or any employee thereof.
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