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Mercer health insurance exchange growing rapidly

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Mercer health insurance exchange growing rapidly

Thirty-three employers have signed up with a Mercer L.L.C. health insurance exchange to offer their employees health coverage next year as employer interest in private exchanges continues to grow.

Employers that will participate in the exchange include Addison Group L.L.C., a Chicago-based staffing company; Petco Animal Supplies Inc, the San Diego-based pet supply company commonly known as Petco; and DineEquity Inc., the Glendale, Calif.-based parent of the Applebee's and IHOP restaurant chains.

In all, Mercer said Tuesday, 165,000 employees and dependents will receive coverage through its exchange, Mercer Marketplace.

“Adoption is taking place in a wide range of businesses,” Eric Grossman, a Mercer exchange business leader in Norwalk, Conn., said in a statement.

The design of private insurance exchanges offered by Mercer and others, which also are growing rapidly, is appealing to employers and employees, experts say.

Through the exchange model, employers agree to provide a fixed premium contribution, with employees paying more or less for their share of the total premium depending on the level of coverage they choose. Through that approach, employers can cap what they will pay for health care plan coverage for their employees.

In addition, the employer role as a health care plan sponsor becomes more limited, with exchange insurers handling claims and the exchange operator negotiating premium rates with insurers and assisting employees with questions.

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“In an environment where (human resources) staff resources are severely constrained, the ability to go to an exchange and say, 'You handle compliance. You handle employees' questions,'" is a big resource saver for employers, Julio Portalatin, president and CEO of New York based Mercer, said at a Mercer briefing in Washington last month.

For employees, the exchange approach typically means a wider choice of insurers and plan designs.

The Mercer exchange offers five plan designs, including consumer-driven health care plans that will be linked to health savings accounts or health reimbursement arrangements.

Mercer said three-fourths of its 33 exchange clients have fewer than 2,000 employees, which it said is a “testament to its appeal for mid-market employers looking for cost savings, compliance support, ease of administration and employee satisfaction.”

Twenty-eight insurers, including Anthem Blue Cross/Blue Shield, Aetna Inc., Cigna Corp. and UnitedHealthcare Insurance Co. are offering coverage through the Mercer exchange.

Mercer also disclosed Tuesday that 19 employers, with 35,000 retirees, including energy company Kinder Morgan Inc. of Houston and St. Louis Metro Transit, have opted to participate in its health exchange for Medicare-eligible retirees, which also is starting operations in 2014.

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