Some of the early entrants to the private benefit exchange market may see attrition because “their strategy to sell exchanges is flawed,” says Craig Hasday of Frenkel Benefits. In a Q&A with EBA, Hasday discusses why he sees an exchange as a service and not a product to sell.

Craig Hasday

EBA: What is the structure of your exchange? What makes it different?

Hasday: I believe that a private exchange is a marketplace, a vehicle for employers to make products available to their employees. I don’t think it is much different than a benefit admin platform. Any benefit admin platform, if it’s properly structured with defined contribution and decision support, can be called a private exchange.

We have the Frenkel Benefits Marketplace and we have about 75,000 employees on that exchange. It is customizable, the products are varied and we don’t try to force our clients into any particular structure or products. The uniqueness of our exchange is that we are very flexible. We did that because I felt I wasn’t in the business to sell a product — the exchange. I’m in business to service clients. First and foremost, I wanted to provide a flexible solution that met all of my clients’ needs and not necessarily my needs for revenue growth.

EBA: How do you recruit clients?

Hasday: I find a solution that meets a client’s needs. It is not so much selling an exchange, it is selling a solution. The way we sell the product is we fit clients into a box. We don’t have an overwhelming majority of our clients on the exchange and we don’t hard sell it like other brokers that have to because they built this massive infrastructure and need revenue to support the infrastructure. We don’t have that demand so our sale is a much softer sale.

EBA: What is your relationship with brokers?

Hasday: We are a broker and we have third-party brokers using our platform. It is not what we do mostly, but it is something we are very comfortable doing.

EBA: How does 2016 open enrollment compare to 2015?

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"I think some of the early starters are going to see attrition because the strategy to sell exchanges is flawed."

Hasday: It has been quite good. We are looking at at least 20% growth in enrollment. Right now we have enrollment slots to fill. We haven’t filled them all. If I don’t get 20% enrollment growth, I will be fine. We are targeting 20% enrollment growth. Why only 20%? I don’t feel compelled to sell a product. I don’t need to grow 200% year-over-year to feed a technology horse.

EBA: Where do you see private benefit exchanges fitting in the healthcare game moving forward?

Hasday: I think some of the early starters are going to see attrition because the strategy to sell exchanges is flawed. You need to sell solutions and not exchanges. The concept of exchanges really simplifies the administration of programs and facilitates communication of very complex products to employees. I see the means, the exchange, growing dramatically but I see these single purpose exchanges that ignore the economic implications as well as the needs of each individual client are going to just be a product. People are going to jump from product-to-product because it is a product. I don’t have any attrition because I have a solution, I don’t have a product.


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