HR software provider ADP, GoHealth insurance technology firm offer a private health exchange in the USA
15 August 2015
Payroll software and services provider ADP and the GoHealth Insurance platform that offers subsidized health insurance plans under the Affordable Care Act, have together launched a private health exchange that enables employers to assist both full-time employees and the contingent workforce, i.e. part-time, temporary and contract workers ineligible for employer-sponsored coverage, in selecting health plans.
Apparently in an effort to leverage up-to-date, detailed employee data from its clients’ payrolls, ADP de facto adds distribution of insurance products to its core businesses, HR software and outsourcing. Whilst ADP professes a willingness to work with any broker, there is no reason why it could not set up its own captive brokerage and/or insurance carrier in the future. It remains to be seen whether a deployment to countries other than the US is possible, given more stringent privacy protection laws, especially in the European Union.
In January 2015, GoHealth had already teamed up with Assurex Global, the global brokerage network, offering essential the same service. Since then, GoHealth has announced deals with large employers of contingent workforces, such as Walgreens and H&R Block.
As of mid-August 2015, neither ADP nor GoHealth appear to make a great marketing effort in support of their new offering. ADP mentions the private health exchange in passing on its website and issued a press release; GoHealth did not go further than linking to an August 6, 2015 article from Bloomberg Business in the media section of its website.
As of 2015, only 2% of employers offer employees access to a private health exchange, despite major employee benefits players such as Towers Watson and Aon launching their own. Many industry observers expect the so-called “Cadillac” tax, to take effect in 2018 — a 40% tax on the portion of health plan premiums that exceeds $10,200 for single coverage and $27,500 for family coverage – to accelerate the growth of exchanges.