This document discusses private exchanges as an alternative for employers to provide employee benefits. It notes that 56% of employers are considering a private exchange based on a 2013 Mercer study. Private exchanges allow employees to choose from multiple medical and ancillary insurance options while employers take a defined contribution approach to funding. The document uses an example of one company, Choice Industries, that migrated to a defined contribution model through a private exchange operated by Lawley Insurance. Choice Industries saw 92% of its employees choose new options on the exchange rather than sticking to the previous plan. Lawley Insurance's private exchange has seen over 2,500 new enrollees. The document raises final considerations for employers in adopting a private exchange model.

1. Private Exchanges
In The Era Of The Affordable Care Act
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2014 DiVal Safety Summit
Lawley Insurance
Michael Szymoniak Jr.

2. Why We Are Here
With healthcare reform legislation taking effect, healthcare premiums
skyrocketing, and consumers demanding better coverage options,
Lawley Benefits Group must be proactive in creating a more cost- and
time-efficient product for businesses to administer their employee
benefits. But how?
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3. A 2013 Mercer study shows 56%
of employers are considering a
private exchange*
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*Wall Street Journal (4/15/13): “With 56% of employers considering a private exchange to provide benefits to their
active employees or retirees, the transformation of the US health care landscape is well underway,” said David
Rahill, President, Health & Benefits, Mercer.

4. According to Accenture Research, one
in five Americans will purchase benefits
from a health insurance exchange*
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*Accenture Research (5/17/13): “Are You Ready? Private Health Insurance Exchanges Are Looming”.

5. Who We Are
Lawley Insurance is a Top 100, independent regional firm of
insurance professionals specializing in property and casualty,
employee benefits, and risk management consulting.
•Lawley Benefits Group specializes in employee benefits consulting
and brokerage
• Medical and Group Insurance
• Executive Benefits
• Retirement Plans
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6. An online group benefits platform for employees to purchase
insurance and employers to administer insurance
• Typically operated by brokers or insurers
• Employer funding based on “Defined-Contribution”
• Inventory of multiple medical and ancillary products
• Decision-support tools for personalized recommendations
Private Benefits Exchange
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7. 7
Paradigm shift from gatekeeper of access
to gatekeeper of funding

8. Defined-Contribution
•Contribute a fixed dollar amount to control costs and increase
consumerism
•Long-term budget forecasting based on overall, internal compensation
growth, not medical trend
Administrative Functions
•Streamlined open enrollment period
•More efficient processing of new hires, terminations, and life events
•Accurate and current reporting capabilities
Employer Roles
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9. Defined Benefit
Offer one HDHP to all full-time employees
• Pay 80% of premiums
• Fund deductible through HRA
• $2,000 singles (annual)
• $4,000 families (annual)
Choice Industries
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10. Migration to Defined Contribution
•$3,500 single, $9,750 families (annual)
•Elimination of HRA
Results
•8% of employees chose the most similar health plan
•92% chose one of six other options
Choice Industries
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11. “Private exchanges will be the platform on which the new health
care consumer is built and supported.”
“Private exchanges are the technology employers need to truly
enable consumerism which, in turn, can transform employees
into engaged consumers.”
- Barbara Gniewek, Principal & Jonathan Har-Even, Manager
PricewaterhouseCoopers
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12. Employees
Choice and Flexibility
• Employees are demanding greater access and choice
The Right Fit
• Buying behavior not made on price alone
Satisfaction and Engagement
• Employees using an exchange have higher satisfaction and
engagement levels than those in traditional benefit programs
Source: Liazon Corporation, 2014
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13. • Built on the foundation of defined-contribution, employee choice,
and decision-making support
• Strategic partnerships with regional and local carriers
• Continual education and service during and after open enrollment
• Over 2,500 new enrollees since October 1, 2013
Lawley Marketplace
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14. Lawley Marketplace Health Plan Elections
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Narrow Network
18.5%

15. 15
Lawley Marketplace Dental Plan Elections

16. 16
Lawley Marketplace Product Elections

17. • Does management believe in defined-contribution?
• Do the products and networks meet the needs of the workforce?
• What type of decision-support technology meets the needs of the
work force?
• What type of enrollment support will your broker/advisor provide in
year one?
Final Considerations
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18. Questions?
Michael Szymoniak Jr.
Benefits Consultant
Lawley Insurance
mszymoniak@lawleyinsurance.com
716.849.4347
Thank you!