Acquired by Towers Watsonin November 2013, private exchange provider Liazon is navigating a unique space. It is both owned by a consultancy and used by that firms competitors. Alan Cohen, co-founder and chief strategy officer of Liazon, discusses how all brokers fit into the exchange equation and what, in his view, makes an exchange, an exchange.
What is the structure of your exchange? Why makes it different?
From our point of view, an exchange has four key elements to it and what makes us different is that we deliver all of those elements. The four elements are:
1) Its really about the money. That means a defined contribution approach to benefits. We help brokers and help clients with how much money they should allocate into the system. Our technology is all built around the concept that a company will allocate certain dollars to its employee and show it to them in very rich ways.
2) Second is the store which is whats available for purchase. We provide up to 20 different categories of insurance and accounts: Health, dental, vision, accident, critical illness, HSAs and FSAs, etc.. Its a really rich and wide variety of choices. We work with the carriers, the health plans, the providers of other types of benefits, like financial benefits, to fill our store shelves. Our clients already have this preconfigured store they just plug their employees into.
3) Third is the employee service. This is the software where employees can go log on the Internet and get this advanced decision support and really manage their personal elections. They can manage their plans over time, so its not just a place where you go to buy things. Beyond the technology is a very robust call center. If somebody is having problems or are confused, they can call a live person who can talk to them.
4) Handling all the administration. That means making sure all the plans people elect are purchased properly, all the billing is done, all the payroll deductions happen properly and its all those administrative elements.
When we think what an exchange is, it really is these four things. Managing the money, managing the store, managing the employee experience and managing the employer experience. We provide everything for all of those things. Other providers will focus on one area and we think you have to provide the whole solution.
How do you recruit clients?
Clients purchase our solution exclusively through insurance brokers, benefit consultants and insurance carriers that we work with. We dont distribute directly. We work with the top insurance brokers in the country, many of the top insurance consultants and even numerous carriers.
What is your relationship with brokers?
We think brokers are a huge part of the future. We think brokers are even more important in an exchange world than they were before an exchange world. Some brokers tend to be worried that an exchange or marketplace will marginalize them or diminish their responsibilities. I think its the opposite.
Guiding clients to choosing the right exchange, to choosing the right marketplace, to how they will set up their defined contribution program to how they will reward their employees. That is really complicated and is in fact far more complicated than things that typically brokers had to be doing in the past. We believe there is a really big future for insurance brokers. We think all companies should use insurance advisers and we work with most of the top insurance brokers and benefit consultants in the country.
How does 2015 open enrollment compare to 2014?
A lot busier, we are more than two times as busy as we were last year as far as number of people who are going to go and make elections substantially more than two times. We recently launched a lot of new functionality. Its not just way more people using our system but its way more people using our system and our system has advanced dramatically.
Where do you see private HIX fitting in the health care game moving forward?
I think it is the future. Five years from now, the vast majority of companies will be giving their employees money and letting them shop for the benefits they need, which to us is really the definition of an exchange. Certainly five years now that will be the normal way in which companies handle their benefits program.
Editors note: This story is the second in a 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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