Private exchanges are more than a way to provide employee benefits they are changing an incredibly essential component of our society, not just our industry, says Shandon Fowler, director of marketplaces at Benefitfocus. Fowler shares about his company, which has its own private exchanges and provides the technology behind the private exchange offerings of many of the major players, including Aetna and Mercer.
What is the structure of your exchange? What makes it different?
The primary differentiators for the benefitfocus private exchange really fall into two categories. The first is best understood as a build-your-own-exchange approach. Our flexibility covers a multitude of potential configurations which are generally agnostic of benefit providers or broker relationships and whether they are defined contribution or defined benefits. This flexibility really makes it an ideal platform for companies that want to get the consumer-driven benefits of a private exchange and the deep integration that streamlines administration.
Second is our vast data stores combined with our deep integration. Through our data analytics offering, we are able to provide transparency down to the employee level, for claims data, risk assessments, many different data sources, including prescription drugs, to help boost the relevance of the shopping experience. Over time, that data the drives those decisions helps us to refine those results even more. It has this circular effect of making the experience ever better over time. For employers, access to that same claims data gives them information they need on-demand to make smarter decisions about plan designs, wellness programs and much more.
Overall, the structure of our exchange starts with data and then the data really powers the consumerism and the administration, or what we refer to as the marketplace plus administration, to provide this highly scalable exchange solution.
How do you recruit clients?
First off, we have a direct sales team that sells our platform directly to employers and insurance carriers. Many of the largest insurance carriers are both our clients and partners. Many of the Blue plans are a good example of that. Our employer sales team targets groups that have 1,000 employee lives or more. But through our carrier partnership, we really cover all markets.
Additionally, we have a channel sales team that facilitates partnerships with brokers and allows our platform to be used by thousands of smaller employers that we would not target directly.
What is your relationship with brokers?
We have an excellent relationship with brokers. Thousands of them are registered users of our administrative platform. This is in the small- and mid-market segment where frequently brokers are not just brokers but helping to administer the benefit programs for their clients employees.
We also find that a lot of brokers over our history in the employer side have brought us into deals, and when there, employers identify Benefitfocus as a solution that they like. In many cases, the brokers themselves have looked to us as a best and great solution that they can bring into their clients to help give them the best possible offering.
How does 2015 open enrollment compare to 2014?
We dont break down our numbers based solely upon our private exchange enrollment because of this build-your-own-marketplace approach. With that said, as a whole, weve seen tremendous growth over the past year. We now have 44 insurance carrier customers, most of them among the largest in country.
Weve seen our most visible growth with our employer clients. As of end of third-quarter, September 2014, we now have 540 large employer customers, defined as 1,000 or more employees. This compares with 379 in December 2013.
Where do you see private HIX fitting in the health care game moving forward?
They are integral to our market space. I mean generally, not just benefitfocus. Many employers are transitioning to defined contribution models, some are not, but all want a solution that fits the times, so to speak. Its no longer acceptable to be enrolling using paper and its no longer acceptable to doing an enrollment through a system that is not fully integrated.
Private exchanges have really become a proxy for an industry-wide revolution in the kinds of systems that are used and way they are administrated. A lot of the initial hoopla around the exchanges was focused on the consumer experience and theres no question that the consumer experience is absolutely essential. What I think we are entering is a period where companies and individuals have really started to understand a little bit more about what health insurance exchanges provide and what the potential of them is.
Theyre extending their expectations of the exchanges beyond simply providing a next-generation consumer experience and also providing a solid administrative experience with the data to continually make the consumer and administrative experience better and better.
In a way, we as an industry are catching up to other industries. But in another very fundamental way, private exchanges are really changing an incredibly essential component of our society, not just our industry.
Editors 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 Brian.Kalish@sourcemedia.com.
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