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By Caroline Humer

Dec 15 (Reuters) - Healthcare companies includingAetna Inc, Mercer and Towers Watson Co haveinvested hundreds of millions of dollars to build exchanges thatallow company employees to buy their own insurance, betting thatCorporate America wants to get out of managing workers' healthbenefits.

By last year, blue chip names like Sears Holding and Walgreen Co had signed on and industry expertspredicted that more than 20 percent of the nation's employeeswould soon buy their health insurance in this way, compared withless than 2 percent today. But Reuters interviews with nearly adozen industry executives has found that no major U.S. companysigned up their employees for the first time to a private healthinsurance exchange for 2015.

Many of those executives expect a similar situation in 2016,as blue chip employers wait for proof that the new exchangeswill save them enough money to warrant the switch, raisingdoubts about this new business model.

"We have a lot of wait-and-see going on with largeemployers," said Brian Marcotte, chief executive of the NationalBusiness Group on Health, a lobbying group for largecorporations. "They are not quite sure yet how they will deliveron managing costs better."

U.S. employers provide health benefits for more than 160million people, mostly by contracting with large health insurersto administer the healthcare benefits that the company funds,with contributions from employee-paid premiums. But ashealthcare costs rose steadily, and President Barack Obama'shealthcare law required coverage of more medical services, manysought ways to rein in those expenses.

Private exchanges such as Aon Hewitt, part of Aon PLC, aim to be the Amazon.coms of the insurance world, whereemployees choose and pay for their own plans and competitionhelps keep prices down.

Employers contribute a fixed dollar amount to help theirworkers buy coverage, but can save money by no longer managingthe benefits within their companies. They are not directlyrelated to the state-based Obamacare insurance exchanges thatoffer government-subsidized health plans.

Since 2012, employers covering as many as 3 million peoplehave signed on to use the exchanges. A recent report from MercerLLC, part of Marsh & McLennan, found that 3 percent oflarge employers were using private exchanges and that 28 percentof employers would make the shift within 5 years, taking a biteout of the business served by major insurers like UnitedHealthGroup Inc and Anthem Inc, previously known asWellPoint.


Industry executives are now projecting more caution aboutwhen private exchanges will take off. Aon Hewitt said in Octoberthat it would lose money on its private exchange this year,after previously expecting the business to be mildly profitable.Aon didn't say how much money it would lose. Insurer Cigna Corp will sell health plans on the Aon exchange in 2016.

"This is coming. It's just the pace at which we believe themarket is going to make the transition" that is slower thanexpected, said Patty Fontneau, who runs Cigna's private exchangebusiness.

Mercer and Towers Watson's Liazon unit are still seeinggrowth from serving more mid-sized businesses, which are signingup for exchanges at a higher rate since they have less investedin managing health coverage for employees.

Other insurance experts question whether the forecasts willever materialize.

"Private exchanges were over-hyped from the beginning," saidDan Mendelson, chief executive of healthcare research firmAvalere Health. Large employers enjoy significant leverage innegotiating down the price of benefits for the many members oftheir workforce, an advantage that an exchange can't match, hesaid.


Darden Restaurants Inc, owner of the Olive Gardenchain, was one of the first large companies to move to AonHewitt's private exchange. Medical costs were rising 8 to 10percent per year and it had used the same insurer for 15 years.In 2012, it made a "leap of faith" that Aon Hewitt could do abetter job, said Danielle Kirgan, Darden's senior vice presidentfor human resources.

It took four months to overhaul Darden's benefits systemsand explain the change to employees. The pay off has been loweryear-over-year increases in healthcare spending. "We have overthree years of seeing rates, and they have been dramatically andconsistently less," Kirgan said in an interview.

Starbucks Corp, however, took a close look at theprivate exchanges to understand them, but has never planned tomove its 136,000 employees.

"What we tended to learn is that what we do is just easierand better for people," Starbucks Chief Operating Officer TroyAlstead told Reuters.

Large companies who are open to joining the exchanges arenow asking to see at least two or three years, and as many asfive years, of data on insurance premiums and medical claimsfrom plans sold on the exchanges to be sure that there will notbe a sudden increase in premiums to contend with, benefitsconsultants said.

Some corporations also describe a sense of fatigue afterseveral years of getting their coverage compliant with Obamacareand are loath to make additional changes in short order.

Many have introduced health plans with high deductibles toshift costs to employees and want to see whether that will beenough to save money. They are also uncertain about what may berequired of them if the Affordable Care Act is changed by a newCongress with Republican opponents of the law in charge.

Aetna said last month it would spend $400 million to buyprivate exchange company Bswift and remain competitive againstAon and others. Kerry Sain, who runs Aetna's private exchangebusiness, acknowledged that large companies are just "dippingtheir toes" into the new model.

Aetna said it will still benefit from Bswift's technologyeven if the private exchange market does not end up as large asforecast.

Leerink Partners analyst Ana Gupte said large companies needa catalyst to spur them to move onto the exchanges, namely thecut to U.S. corporate tax benefits that come from providinghealth coverage planned for 2018.

"If that doesn't do it, I think we're pretty much done onthis thing," she said. (Additional reporting by Lisa Baertlein in Seattle; Editing byMichele Gershberg and John Pickering)