More Employers Overhaul Health Benefits

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from The Wall Street Journal,

Some Let Their Workers Pick a Plan From an Online Marketplace.

This fall, tens of thousands of U.S. workers will learn that they’re getting their health benefits next year in a radical new way: Their employers will give them a fixed sum of money and let them choose their plan from an online marketplace.

The approach, which gained a high profile last year when it was adopted by Sears Holdings Corp. and Darden Restaurants Inc., has the most momentum among small and midsize employers. But interest is growing among companies of all sizes, research shows. Accenture PLC projects that around a million Americans will get employer health coverage through such marketplaces next year, and the number will increase to 40 million by 2018.

More health-industry players are launching the online employer marketplaces, known as private exchanges, that let employers offer their workers a range of choices to shop from. Companies now jumping in—including benefits-consulting firms like Xerox Corp.’s Buck Consultants, Marsh & McLennan Cos.’, Mercer and Towers Watson & Co., as well as insurance brokerages such as Willis Group Holdings PLC and Digital Insurance Inc.—are betting that 2014 will be the start of a ramping up over the next few years.

The private exchanges for employers are separate from the government-operated marketplaces that are being created in each state under the federal health law, which will serve individual consumers and small companies.

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