WALTHAM, Mass.--(BUSINESS WIRE)--Alegeus Technologies, the market leader in healthcare and benefit payments, today released the results of an original market research survey – commissioned by Alegeus, and conducted in July 2013 by a third party research firm. The study polled more than 500 health benefit decision-makers at a cross-section of US employers on the topics of defined contribution health benefits and private insurance exchanges. Survey participants reported high levels of familiarity and interest in exploring defined contribution and private exchanges – with strong evidence that 2015 will be a ‘tipping point’ year for adoption.
“The Alegeus research results mirror what we’re seeing in our own research – which predicts that 2015 will be a pivotal year in the adoption of private exchanges and defined contribution benefit programs”
As defined contribution and private exchanges gain traction in the market, it’s clear that education and support will be needed to ease the transition for employers and consumers. Of the research participants that have heard of defined contribution and private exchanges, the majority expressed high degrees of familiarity - with 73% claiming to be familiar with defined contribution benefit programs and 55% claiming to be familiar with private insurance exchanges. However, the research findings reinforced that a significant education gap still exists. Many of those individuals that claimed familiarity were unable to correctly answer basic questions about what they are, how they function, who they are best suited for, and the benefits they offer – and several common misconceptions were revealed.
Despite these misconceptions, participants still see significant benefits in defined contribution and private exchanges – including the potential to lower their organization’s health benefit costs, offer a greater variety of benefit plan options to employees, and continue to offer benefits that might otherwise have been in jeopardy. And interest levels in adopting are high. Of those familiar with these benefit programs, 90% expressed interest in exploring defined contribution and 85% expressed interest in exploring private exchanges for their own organization.
Defined contribution and private exchanges represent a logical next step in the evolution towards a consumer driven health/benefit marketplace – and the research data supports this. The survey revealed a strong correlation between consumer directed healthcare (CDH) adoption and defined contribution. Employers that have already adopted high deductible health plan offerings are 34% more likely to consider defined contribution programs; and those that offer CDH accounts (such as HSAs, FSAs, HRAs) are 12% more likely to express interest in these new benefit models.
The research points to 2015 as a clear ‘tipping point’ year for the adoption of defined contribution and private exchanges. Of those that expressed interest in exploring/adopting defined contribution programs, 36% indicated they would make the switch in 2014, 39% predicted 2015 and another 17% indicated 2016 or further out. Of those that expressed interest in exploring/adopting private insurance exchanges, 28% indicated they would make the switch in 2014, 45% predicted 2015, and another 19% indicated 2016 or further out.
Leading independent research and advisory firm Aite Group concurs with this prediction: “The Alegeus research results mirror what we’re seeing in our own research – which predicts that 2015 will be a pivotal year in the adoption of private exchanges and defined contribution benefit programs,” said Michael Trilli, Senior Healthcare Analyst for Aite Group.
“Our research results underscore the tremendous market interest in defined contribution benefit programs and private exchanges,” said Tom Torre CEO, Alegeus. “It’s also very apparent from our research that employers recognize the need for comprehensive solutions that go beyond the front-end benefit enrollment experience to support critical back-office functions like premium aggregation and billing, as well as ongoing eligibility and life event maintenance. This supports the direction Alegeus has taken with our private exchange and defined contribution technology platform.”
Alegeus will discuss the full results of this research on an upcoming webinar on August 29. To register, please visit: http://www.alegeus.com/webinars/research-results-unveiled-employer-perceptions-regarding-private-exchanges-and-defined-contribution
About Alegeus Technologies
Alegeus Technologies is the market leader in healthcare and benefit payments – offering the industry’s most comprehensive platform for the administration of tax-advantaged benefit accounts (FSAs, HSAs, HRAs, MERPs, VEBAs, DCAPs and transit accounts), the industry’s most widely-used benefit debit card, and leading services for the outsourced management of claim payments and associated data exchange. Over 500 clients – including health insurance plans, third party administrators and financial institutions – leverage Alegeus’ deep expertise and proven technology to administer benefit accounts for more than 17.5 million members and process more than $18 billion in healthcare payments annually. As the healthcare and benefit markets continue to evolve, Alegeus delivers solutions that enable clients to evolve their service offerings, operate their businesses more efficiently, and focus on their customers. The company is headquartered in Waltham, MA with operations in Carrollton, TX, Orlando, FL, and Milwaukee, WI. To learn more about Alegeus, please visit www.alegeus.com.