What is a Private Exchange?

An online store or marketplace where employees purchase benefits using funding contributed by their employer

How Private Exchanges Work


Employers choose the benefits plans and carriers

Employers fill an online “store” with a variety of benefits, including multiple medical, vision and dental plans as well as a variety of additional ancillary products.


Employers provide funding

Employers allocate money toward their employees’ benefits, which employees can use to shop for the benefits they want.


Employees shop

Employees access an online portal where transparent pricing, coupled with education and decision support, helps them make informed choices.


Employees choose benefits

Employees choose the benefits that make sense for their unique needs, creating a personal portfolio of coverage. They use the money allocated by their employer and can add their own if they choose.


Employees can manage their benefits

Bright Choices is a year-round destination that employees can visit to engage with their benefits, such as making changes due to a life event.


Public vs. Private Exchanges



Used primarily by individuals purchasing insurance on their own for themselves and their families

Used by active and retired employees of companies that provide benefits

Operated by government bodies—individual states or the federal government

Operated by private companies

Offers medical, dental and vision

Offers a wide range of benefits, including health insurance plans across a range of price points

Subsidies available

Subsidies not available

Benefits Administration Platforms vs. Private Exchanges

Benefits Administration Platform:

Paperless enrollment

Both leverage technology to simplify benefits and lessen the administrative burden on HR.

Private Exchange:

Provides meaningful choice through multiple product and plan offerings and aids in making good choices through decision support tools

ACA Compliance

Complying with ACA regulations is critical for employers. When your company uses a Liazon private exchange for employee benefits, you are supported in your compliance efforts. The Affordable Care Act (ACA) has introduced myriad requirements that can seem quite vexing for many employers that are otherwise focused on the daily operations of their businesses. Liazon and the exchange help employers to navigate these rules.

Form W-2 Reporting

The exchange provides a standard report containing the annual cost of each employee’s health coverage to support the calculation employers must report on Form W-2s.

Distribution of SBCs

The exchange enables electronic posting of Summary of Benefits and Coverage (SBC) documents.

Wellness Programs and Rewards

The exchange can integrate with third-party wellness programs to facilitate the delivery of associated wellness rewards to employees.

Dependent Coverage Until Age 26

The exchange allows enrollment in coverage for dependents up to age 26 and provides advanced notification of termination thereafter.

Patient-Centered Outcomes Research Trust Fund Fee, Transitional Reinsurance Program Fee

The exchange’s ad hoc enrollment reports help employers calculate required fees.

Health Flexible Spending Account Limit

The exchange has built-in guardrails to ensure that Health Flexible Spending Account contributions do not exceed the prescribed limit.

Minimum Essential Coverage (MEC)/Minimum Value (MV)

Liazon works with carriers to provide offerings in which the carrier certifies that the plan designs contained within them (1) provide Minimum Essential Coverage (MEC) as defined by the ACA, and (2) satisfy the Minimum Value standards as set forth under the ACA (save for designated MEC plans).

Notification of Public Exchanges

The exchange enables the posting of company-specific documents, such as a notification of the existence of the public exchange, in the Company Corner section.

Internal Revenue Code Sections 6055/6056 Reporting

The exchange provides reports to assist employers in completing IRS Forms 1094-C and 1095-C. The data provided in these reports help employers comply with the ACA reporting requirements under IRC Sections 6055 & 6056 by providing information on offer of medical coverage, whether the employee was enrolled in medical coverage and the amount an employee contributes toward the lowest-cost self-only plan for the year.

ACA compliance is ultimately the responsibility of the employer. Check with your broker or consultant to see if they provide ACA compliance guidance as part of their service offerings. Note: Employers should use their HRIS or Time & Attendance system to track employee hours to establish full-time status.