- Principle #1: Give Them Money and Let Them Shop
- Principle #2: Provide True Price Transparency
- Principle #3: Provide Meaningful Choice
- Principle #4: Offer Guidance in the Form of Decision Support
- Principle #5: Optimize the Shopping Experience
- Principle #6: Ensure a Cultural Fit Within the Organization
- Principle #7: Refine, Iterate, and Improve
Principle #2: Provide True Price Transparency
As with any other true “exchange” of goods and services, benefits marketplaces have to ensure that participants receive unbiased, credible market information in order for a free market to thrive. When consumers log on to a benefits exchange, they must rely on the true pricing and coverage information for comparison shopping. Sellers must understand that if they misrepresent their policies or pricing, the system cannot work efficiently.
Employers have a responsibility here, too: For a true free market to work, employers shouldn’t be steering employees to any plans they deem “better” for them (or for the company’s bottom line) but should offer a broad range of plans, transparency in costs, and proper guidance so that each employee can determine the best plan for his or her situation. This is how inefficiencies associated with overinsuring a substantial portion of your population while underinsuring others gets smoothed out from an economic perspective. An effective recommendation engine (the mechanism that drives decision support in a technology platform) takes into account each individual’s risk outlook and financial concerns, among other factors, along with the true prices of plans, when suggesting the optimal plan for that individual. Artificially adjusting plan prices based on a current desire to push employees into certain plans is ultimately a futile exercise.