Third-Year Enrollment Results in the Aon Active Health Exchange Underscore Long-Term Sustainability of Private Exchanges

Issued by: Aon Corporation

Date: May 6, 2015

The Aon Active Health Exchange, the industry's first and only fully insured private exchange built for large companies, creates a competitive marketplace for health insurance by featuring multiple insurance carriers that compete for each employee's business by offering a standardized menu of plans and coverage levels. All of the companies and insurance carriers that participated in the Aon Active Health Exchange in 2014 returned in 2015.

Companies that went through their second-year renewal had average annual health cost increases of 2.6 percent over the two years they were in the exchange, including costs associated with the Affordable Care Act and administration. This compares favorably to industry data reflecting the average health care cost increase for large U.S. companies for comparable plan designs will be approximately 6.5 percent to 8 percent /1/ in 2015.

"The Aon Active Health Exchange continues to deliver on its promise of providing a better way for many companies to offer health benefits through cost savings and engaged consumers," said Cary Grace, CEO of Aon Exchange Solutions. "With three years of consistently positive results, our model is bending the trend curve of health care spending for companies, while delivering more choice, affordable health care and a great experience to their employees."

Engaging Consumers

According to Aon, bringing consumer-like elements and transparency to the exchange enrollment experience engaged individuals in selecting a health plan option. Aon's post-enrollment survey, conducted by an independent third party /2/, found that:

• 97 percent of individuals completed enrollment through the Aon Active Health Exchange website.
  
• 87 percent liked being able to choose among multiple carriers.
  
• 79 percent of individuals who enrolled said they had a good understanding of how they share the cost of group medical coverage with their employer.

"Hallmark's employees play an important role in helping us maintain our leadership position, and benefits are one of our most important investments in attracting, retaining and motivating our workers," said Tresia Franklin, HR Director for Total Rewards and Employee Relations, Hallmark Cards. "The Aon Active Health Exchange creates a competitive health care marketplace that provides more choice than our traditional employer-sponsored plan, while enabling us to focus more on investing in other employee-centric initiatives."

Election Patterns Remain Consistent

Aon's enrollment data across its Aon Active Health Exchange client base shows consistent buying patterns year over year, with a broad distribution of elections across its four metallic tiers:

• 44 percent of individuals chose a Silver plan
  
• 24 percent of individuals chose to purchase Gold or Platinum coverage (16 percent and 8 percent, respectively).
  
• 32 percent elected a Bronze-level plan
  
• Voluntary participation in Health Savings Accounts (HSA) more than doubled in 2015, with an average contribution of approximately $2,100.  

*The four "metallic" tiers provide individuals with options regarding the "richness" of plan coverage, with Bronze being the leanest level of coverage and Platinum being the richest.

"For the past three years, our enrollment patterns have reflected purchasing behaviors similar to what you see in other consumer-based retail markets," said Ken Sperling, Aon's National Health Exchange Strategy Leader. "While most individuals migrated toward a plan that was close to what they had before, there were still a meaningful number who chose to buy richer plans for increased coverage or who bought down in terms of coverage to secure a lower premium. Our model lets employees decide which plan and insurance company are best suited for them, and they can modify those choices on an annual basis."

When choosing a coverage level, most individuals surveyed said they based their choice on:

• Price (34 percent)
  
• Desire to choose a plan that offered coverage similar to their current plan (20 percent)
  
• Coverage that offers the best level of medical benefits for them (18 percent)

• Lowest cost carrier for their selected coverage level (35 percent)
  
• Network of doctors (23 percent)
  
• Carriers with which they had a good past experience (11 percent)

The election patterns of those individuals who renewed their health benefits through the Aon Active Health Exchange in 2015 are also consistent with prior years. Of those re-enrolling in health benefits for 2015, 20 percent switched plan levels, with 12 percent electing leaner plan designs and 8 percent electing richer coverage. Sixteen percent switched insurance companies. When asked the reason for switching insurance companies, 77 percent of individuals cited price, and 5 percent said it was because their doctor left the insurer's network.  

"People moved around as prices changed, which is exactly what we expected in a consumer-based, retail marketplace," added Sperling. "But when price was not a driver, most consumers stayed where they were both in terms of plans and insurance companies even though they had the ability to easily switch. This leads us to believe that they understood the choices they made in the first year of the exchange and were happy with their decisions."

About Aon

Aon plc (NYSE:AON) is a leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. For further information on our capabilities, access to in-depth analyses and to learn how we empower results for clients, please visit: http://aon.mediaroom.com

/1/  PwC's Health Research Institute (HRI), Medical Cost Trend: Behind the Numbers,  June 2014; Aon, 2014 Health Care Trend Survey, August 2014

/2/  Survey conducted by IPSOS between October 28, 2014 and January 6, 2015

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