For a private exchange to be successful, it needs to offer a full service solution in a box, says David Holton, vice president of private exchange business development at HealthPlan Services. His Tampa, Fla.-based companys My Consumer Link is an individual exchanges for group brokers to offer. These brokers, Holton says, dont want to walk away from the money of the individual sales, but dont have the time to commit to it.
What is the structure of your exchange? What makes it different?
For our private exchange, it focuses strictly on individual business and individual benefits. It has a primary focus on three channels which is somewhat unlike our competitors in that we support brokerages as one, then associations and distribution. Distribution can be a lot of things, it can be carriers, health plans but also distribution like State Farm and Allstate.
In the technology and architecture for a private exchange owner, once the base site is built, they can clone their site and have a second level of hierarchy. For example, if a broker has an opportunity to sell to an association themselves, they can have their site cloned where we copy the architecture but then tailor it completely to that organization. Thats done at a dramatically reduced cost.
Each site is tailored, it is not a white label, and we hate that description. The exchange becomes an extension of a brokers website and their marketing. White label to me is do I have a template that I throw a logo on. With our competitors, you can get a free site because all they do is put your logo in the top left and then everything is the same. Our process goes through an eight phase discovery, where we sit down with a sales relationship manager who goes through a methodical process, like the interior design of a house.
Small group employers are our focus and we let our broker distribution manage the direct relationships at the employer levels. This way we never are perceived as a threat or the competition. Been this way for 45 years. As employees are directed to my team and our platforms we become the catchers mitt to enroll and counsel each employee as these 50 and under groups all transition to individual.
How do you recruit clients?
We are very active in the conference arena that goes on throughout country. We do very well because we are the oldest and longest standing third party administrator in the country. We sign on clients that worked with us 20-plus years ago that liked us then and moved onto different roles. We recruit heavily from our brand. We also have proprietary lead gen methods that work on a list of leaders within these channels.
What is your relationship with brokers?
Our company started out 45 years ago as broker support model by three life insurance salesman who wanted to be able to take the burden of brokers having to run their own quotes and spend that time when they should be help helping their customers. Thats how this company matured to what it is. That same mantra has carried over to the individual world. We position ourselves to never be a competitor of brokers. We do not go directly to businesses.
How did 2015 open enrollment compare to 2014?
The sales were dramatically busier, we grew from 25 private exchanges at the launch of open enrollment in 2014 to 100 at 2015. Our sales were up but also our conversion rate stayed steadyat 40% at medical on and off exchange. We also managed 80% at a retention rate.
Also see: Why waiting is no longer an option
Where do you see private HIXs fitting in the health care game moving forward?
We have a position that you have to look for an insurer in the box or a private exchange that can offer a full service solution in a box. There are brokers who specialize in certain areas of the industry, be in long term care or P&C. For private exchanges, it needs to become a one stop shop for all of that, but at the same time it may not be one firm that does all of that. It becomes really crucial to partner well and have a trusted partner.
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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