And Obamacare currently exempts self-insured plans from many of its mandates, including the $6,350 cap on out-of-pocket expenses for individuals and $12,700 for families.
What this means is that self-funded companies will be able to utilize the personalization that an insurance exchange can offer. All other plans, including those on Obamacare's exchanges, will be much more constrained by the law's mandates.
The exchanges may appeal to many smaller companies in particular. More and more smaller firms are looking to stabilize their health costs by giving employees set amounts of money per month to purchase individual health insurance plans. While this approach has been tried in the past, it turned out to be an administrative nightmare, since companies that had a relationship with a single insurance carrier suddenly found themselves having to deal with five or more carriers. Under the new public and private exchange systems, though, the administrative details can be taken care of much more easily with Internet-based management software.
"In the old days, we might have to give the employee an 11-by-17 piece of paper in 8-point font that had 25 different plans on it," says Aon Hewitt's Mr. Sperling. "We would totally confuse him."
• • •
The genesis of the current employer-sponsored health insurance model, historians say, sprang from the competition for workers during World War II. Wage and price controls constrained employers from using higher pay to lure talent. So firms instead began to include health benefits as an added value – and the idea took hold and shaped the basic private system the country has today.