In the first year of open enrollment on its private benefit exchange, brokerage Lovitt & Touché made some mistakes. But the firm won’t be repeating them, says the Phoenix-based brokerage’s senior vice president. Clients were not prepared enough for the enrollment process — Lovitt & Touché could have done a better job explaining what information employees would need and even how to access the Internet, says Doug Adelberg. However, the company has smoothed out the kinks and its ClearPath Prime exchange is ready for a growth-driven round two, Adelberg says.

What is the structure of your exchange? Why makes it different?

What makes it different is we are not actually selling an exchange. We see payroll companies or brokers sell an exchange. What we are positioning it as is a platform where an employer executes a strategy. Every employer gets something customized specific to their needs and specific to their employee needs. When an employer comes into the exchange, we figure out exactly what it is they are looking for. We’ve got enough products that we can build something very specific and customized.

Also see: How a private benefit exchange can bend the health care cost curve

How do you recruit clients?

We have been doing seminars. In the past 12 months, we have done probably 15 to 20 seminars. We have a learning academy above our offices. In each seminar, we are seeing 50 to 60 clients and prospects. We are presenting our exchange and having follow-up meetings. Our sales force is out talking about it. We start with our clients and hit our prospects as well to generate interest. We have a curriculum we are putting people through to teach people, what is an exchange? It is a very different concept then what they are doing today. So we are spending a lot of time educating them.

What is your relationship with brokers?

We compete against them. We are a brokerage consulting firm. At this point our exchange is captive to us; it is for our clients and our prospects. But, we have had discussions about working with other brokers outside, potentially. At this point we are not ready for that. We are seeing enough activity from our own client/prospect base.

How did 2015 open enrollment compare to 2014?

In 2014 we had one client. We purposely led slowly. For Jan. 1, 2016, we will have 21 groups enrolled in our exchange. We learned a ton and we changed a bunch of what we did with the learning process the first group went through. It is tremendous growth and we’re planning 40 to 45 more groups next year.

With our learning, some of it was how it actually worked. When you go through the first one, you learn so much about what the employee experience is like. It was a wonderful client of ours, the first group that led through, they were very patient. When we set things up, some of the employee experience, how to prepare employees, that was the biggest thing we learned. We just said, ‘Go to the website, go to the website.’ … Now we talk about how to get to the Internet and what to do when you get there. We are preparing them for everything they are going to need when they go on the exchange website. We are printing up maps of all the public libraries in metro Phoenix.

Also see: Private benefit exchanges face challenges on backend systems

That’s the stuff we learned, it is really not a piece of cake, and you have to prepare them. It is simple things, like you need Social Security numbers. The first group was a construction company. All these guys, they went it in, they didn’t have their and their children’s Social Security numbers, so they had to log back out. Their wives had to help them log back in the evening with that information. The decision support tool also has questions: How often do you go to the doctor? What type of medicine do you take? Liazon, which powers our exchange, guides you through this. With the first group we didn’t prepare them for that, so they didn’t have a lot of that information during the open enrollment process. 

How do you see private benefit exchanges fitting into health care moving forward?

We see it as a huge answer. It’s a great answer to the Cadillac tax. You have employers saying, ‘I want out of the game. Here is how much money I am willing to spend on benefits.’ Employers are getting out of benefits. They don’t have to pick plans. That’s not their job anymore. Their job is to set aside a certain amount of money, let the employees get what they want for that.

Editor’s note: This story is part of an continuing series of one-on-one interviews with private exchange leaders and top decision-makers across the U.S. Know of an exchange expert who should be profiled? Email

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