A Minnesota firm, quietly working for two years on employer-sponsored private insurance exchanges stimulated by Obamacare, plans to double in size over the next year, thanks in part to the Affordable Care Act.

CieloStar soon will announce the first of several agreements it has reached with state chambers of commerce that could help thousands of small employers and their workers acquire health and other types of insurance through chamber-sponsored exchanges on CieloStar's customized online benefits-selection system.

"The public federal and state exchanges that launched Oct. 1 are primarily for individuals," said CieloStar CEO John Reynolds, a veteran banking and payments-technology executive who joined employee-owned CieloStar in 2012. "We focus on employers and their employees, where most health insurance is bought. The Affordable Care Act provided the impetus to drive this business.''

The company is basically an "electronic broker,'' Reynolds said. "We provide a lot of information, education and options. We have a technology platform that already facilitates decisionmaking for employees. And we already had the programs to move information and payment between insurance carriers, the employers and the individuals."

Later this month, the North Carolina Chamber of Commerce will be the first of several state chambers to announce that it has reached a deal with CieloStar to offer member businesses "access to a one-stop, online marketplace for health insurance," according to the chamber.

CieloStar already has 325 insurers represented on its platform that serves about 750,000 employees through employers.

"The chambers want a partner who doesn't have a bias toward a particular insurance carrier," Reynolds said. "They want a free-market solution that offers choice in a transparent way. There are insurance companies out there saying they offer 'private exchanges,' but that's not what they are."

Employer-provided health care is starting to move from a "defined benefit" to a "defined contribution" system, just as retirement moved from defined benefit pensions to 401(k) plans.

Employers provide employees with a sum of money and access to education and assistance through third-party counselors who assist them in assembling economical packages of benefits that best fit their family situations.

For companies, the cost of health care is a major concern.

"Due to the increased uncertainty in predicting costs, we believe that more employers will move to a 'defined contribution' for health care," Jim Simpson, chief operating officer of the North Carolina Chamber, said in a statement. "This approach allows employers to budget for the defined contribution and a set increase each year, which brings an enormous amount of certainty to one of a company's historically most uncertain processes.''

Executives of CieloStar (formerly Outsource One) said the downtown Minneapolis-based company expects to double revenue over the next 12 months and grow employment from 70 to up to 180 by 2015.

Expanding CieloStar also will become the anchor tenant in what is now the U.S. Trust Building.

CieloStar aims to be a significant player in the trend that Reuters said in a recent article is "sending shock waves through the health care industry by moving a rapidly growing number of employees onto privately run online exchanges for their medical coverage."

Health insurance companies and pharmacy benefit managers, who typically sold directly to companies, are migrating to private online exchanges that will allow employees to acquire customized insurance packages.

Some experts say moving to private exchanges, such as those being set up by huge insurance brokerage Aon, will increase competition among insurers.

Alan Cohen, chief strategy officer of technology company Liazon, told Reuters that employees are saving 25 to 30 percent when they choose plans through a competitive private exchange.

CieloStar focuses on businesses of up to 250 employees, particularly the long-neglected 50-or-fewer employee firms.

"We figured out how to [electronically enroll] small-group employers" who lack the resources to negotiate their own best deals, said CieloStar Chief Strategy Officer Pierce McNally. The majority of employers do provide health insurance, he said.

"Most view benefits as important. We provide a wide array of benefits, in addition to major medical, such as vision, life, accidental death and disability and dental,'' McNally said. "Typically, the small-group market hasn't had access to these various, voluntary benefits.''

CieloStar was founded in 1988 as an independent benefits administrator for employers.