The Associated Press | Posted: Monday, Nov. 03, 2014
HARTFORD, Conn. Health insurer Aetna will spend $400 million on a technology company that could strengthen its push into a relatively small but growing area of employer-sponsored coverage: private exchanges that let workers choose their own plans.
Aetna said Monday it is acquiring privately held Bswift, a Chicago-based company that provides technology for benefits administration and insurance purchases on private exchanges.
More employers have been considering private insurance exchanges in recent years as a way to improve control over health care costs that consistently rise faster than inflation and consumer bigger portions of their budgets. Under this approach, businesses generally give their workers a set amount of money to purchase health insurance and then send them to a private exchange, where they pick from a number of plans.
That contrasts to the more traditional approach where companies give employees a single plan to choose from or only a couple options.
The exchange-based approach, known as defined contribution health insurance, has been limited largely to small businesses and retiree coverage, but benefits experts say bigger companies are starting to consider it.
Big employers like Darden Restaurants Inc. also see private exchanges as a way to offer their employees more coverage variety.
These exchanges require employees who for decades may have just used whatever insurance their company gave them to become more knowledgeable about the limits of their coverage options and what they need.
Aetna Inc. has said that some of its employer-sponsored coverage has converted to private exchange business, but it doesn’t say how big that business is.
The Hartford, Connecticut, company said Monday the Bswift acquisition will close before the end of the year and should be neutral to operating earnings this year and next.
Aetna shares climbed 26 cents to $82.77 shortly after markets opened Monday. The stock has advanced about 21 percent so far this year.
Source: The Charlotte Observer
http://www.charlotteobserver.com/2014/11/03/5286965/aetna-spends-400m-on-exchange.html#.VFoz_WexUnF