Six years ago, Alan Cohen had a crazy idea.
The idea was simple, yet powerful: Let employees choose the health insurance plan they want, rather than having their employer do it for them. It would be done by allowing workers a fixed amount of money from their employer to spend in an online marketplace where they could purchase an array of benefits.
Liazon gained a foothold, and most recently caught the attention of executives at global consultant Towers Watson. In late November, the consulting giant bought the Buffalo, N.Y., based business for $215 million. Liazon will remain intact, doing business “as usual,” Cohen says, but now as a Towers Watson subsidiary.
Cohen, who continues to act as Liazon’s chief strategy officer with the deal, says partnering with Towers Watson will put his former startup in a whole new playing field by offering a significant growth opportunity.
You’ve talked about how brokers are helping drive your exchange and its success.
Bright Choices is distributed almost exclusively through deep partnerships with insurance brokers. Insurance brokers and insurance companies is the only way people get Bright Choices. We now partner with over 350 insurance brokers, including 12 of the top 15, so the vast majority of the top insurance brokers are partners of ours. Right now, they’re putting their products on Bright Choices or we give them an opportunity to have a private label to create the proprietary exchange, using our technology. Many of the top brokers are doing that.
What about the public exchanges? Has reform — and its exchanges — spurred interest in the private exchanges?
Absolutely. I think a couple things about the public exchanges: The talk of the exchanges has spurred great interest in the private exchanges, so I’m thankful for them for that. We also don’t really compete with them. The public exchange is mostly about individuals who don’t have insurance through their work or don’t work. And we work exclusively with companies. What I don’t like about [the public exchanges] is the challenges they’ve had. Honestly, I think about them as part of our industry, and we’ve gotten numerous questions saying things like, “your system isn’t like the public exchanges; yours will actually work, right?” Any company in this broad industry that is publicly breaking down is bad for this industry.