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Hypergrowth in HIXs can be expected to continue through 2018


An estimated 6 million1 members enrolled in their benefits on a private health insurance exchange for the 2015 plan year, continuing a remarkable adoption trend in excess of 100 percent annual growth since 2013.

The mid-size employer segment of 100 to 2,500 employees is driving initial growth, as evidenced by the expansion of the consultant-led exchanges servicing this market.

Accenture forecasts enrollment of employees under 65 years old and dependents will grow to 12 million in 2016 and 22 million in 2017.

Accenture projects growth will remain on track to reach 40 million enrollees by 2018.

1 Figures exclude non-group private exchange models, such as retiree exchanges or group to individual conversions


Two key factors limiting private health insurance exchange growth in the initial years will dissolve in the near term: capacity constraints by a lack of mature solution providers, and adoption delays among large employers.

Capacity constraints: Private health insurance exchange adoption has been capacity constrained by a lack of mature solution providers with the scale required to adequately service market demand. As the market and service providers mature, adoption rates of private health insurance exchanges are expected to accelerate.

In the mid- and larger market segments, the majority of technology vendors have been nascent players. These “startup-like” companies have capital and resource constraints that inhibit the rapid deployment of their platforms. During this first wave of private exchange rollout, large scale rollout successes have been limited to more mature market players operating with the scale needed to service their customers (e.g., the national benefit consultant exchanges).

In the small employer market (100 employees or less), few technology providers have emerged. This may be the result of business reluctance to compete with public Small Business Health Options Program (SHOP) exchanges. However, these public small group exchanges have seen initial enrollment well below expectations2. The door may now be open for new commercial alternatives to provide an exchange experience for small firms.

These capacity constraints will naturally erode as new entrants, continued consolidation (e.g., acquisition of bswift), capital investment (e.g., equity investment in Benefitfocus), and organic growth enable exchanges to effectively implement and service new employers.

2 Small Business Health Insurance Exchanges: Low Initial Enrollment Likely due to Multiple, Evolving Factors, US Government Accountability Office Nov 13, 2014


Many large employers have been reluctant to be early adopters of the emerging private health insurance exchange model.

Historically, highly customized benefit designs have been important to large employers. The standardized solutions that most exchanges offer are not aligned with traditional employer offerings. Furthermore, the complexities of the exchange selection process, new configuration options such as defined contribution, implementation and ongoing benefits administration have taken some prospective buyers by surprise. Others still remain wary during an environment of continued regulatory uncertainty and evolving requirements. Finally, risk-averse employers are seeking proof of the cost savings and enhanced customer experience touted by leading exchange sponsors.

Now that the initial wave of private exchange launches has commenced, private health insurance exchange providers are taking action to address these concerns:

  • New entrants are designing specialized exchange models to cater to the needs of varying employer demands—such as single-carrier exchanges now offering more customizable plan designs.

  • Sponsors are enhancing implementation and change management services, as well as back-end benefits administration.

  • Early adopters are publishing their business cases, consumer satisfaction data and lessons learned from the first two years to demonstrate exchange successes in the market.


Several accelerators looming in the marketplace will further spur adoption over the next few years. Increasing administrative requirements:

Increasing administrative requirements: Employers face increasing administrative requirements each year under the Patient Protection & Affordable Care Act (PPACA), such as new minimum essential coverage reports due to the IRS (section 6055). These requirements add to an already substantial compliance workload (e.g., ERISA, HIPAA, COBRA). Private health insurance exchanges can significantly reduce these requirements with robust reporting and compliance services.

Employer Mandate: The Employer Shared Responsibility Provision, more popularly known as the Employer Mandate, will compel employers to revisit their benefits strategy. Coupled with lower than expected SHOP enrollment, smaller firms in particular may increasingly consider the merits of private exchanges to deliver a simpler path to comprehensive coverage in a compliant fashion.

Employers maintaining coverage: Many employers have not dropped coverage altogether, as some initially forecasted.

In fact, most employees view health insurance as a critical employer-provided benefit, limiting some employers’ ability to drop or defund health coverage. Accenture’s 2015 Private Health Insurance Exchange Consumer Research shows that 76 percent of consumers see health insurance as the primary or an important factor for continuing to work at their current employer. As employers seek a compelling alternative, the private exchange model of reducing costs and administrative burden emerges as a clear favorite.

Cadillac Tax: Finally, the 40 percent excise tax on high-cost plans, often termed the Cadillac Tax, will go into effect in 2018. This could affect as many as 38 percent of large employers and 17 percent of all American businesses3 if insufficient action is taken. Private health insurance exchanges will provide an ideal alternative to simultaneously migrate away from these legacy high-cost plans, and provide employees with new options to manage their health. Accenture expects private exchange enrollment to spike in 2017 as employers look to avoid these looming penalties.

3 The Impact of the Health Care Excise Tax on U.S. Employees and Employers, American Health Policy Institute © 2014


Consumers’ latent demand for choice and flexibility in a retail-like shopping environment, paired with notable early successes, are increasingly overwhelming capacity constraints and employer inhibitions. Employers’ drive to meet consumer expectations, spurred on by key accelerators, will lead to 40 million members on private exchanges by 2018.

Accenture Private Health Insurance Exchange Consumer Research 2015: Methodology

For the third year, Accenture conducted an analysis and projection of US enrollment in private health insurance exchanges, focusing on individuals and dependents under the age of 65 who receive group health insurance through an employer. Current 2015 enrollment was calculated by assessing enrollment activity in private health insurance exchanges through March 2015. Where relevant, findings are included from an Accenture survey of 2,709 US employees, between the ages of 18 and 64, who receive health benefits from their employer. The research was conducted in March 2015.

Authors: Richard Birhanzel, Scott Brown, Joshua Tauber