Toledo-based Hylant has entered into a partnership with a company called Liazon to offer business clients more insurance choices.
“Hylant made the decision to provide a private exchange platform to offer our clients and their employees more options,” said Lisa Hawker, executive vice president of employee benefits for Hylant, which is one of the nation's largest privately owned insurance brokerage firms. “Healthcare reform is changing the way we do business and the way our clients provide benefits for their employees. We want to stay on the forefront of innovative solutions to meet those changing needs.”
Five years ago, a startup called Liazon began offering businesses a new way to provide health insurance to employees. On Liazon’s Bright Choices Exchange, an online marketplace, a company can specify how much money it wants to spend on each employee’s benefits, and employees can use that contribution to buy the plan of their choice.
Liazon was among the first companies to establish a private health insurance exchange, where the benefit provided by the employer is a defined contribution rather than a defined benefit (competing private exchange operators include Aon Hewitt and Towers Watson).
“A company can make a budget, and decide exactly how much money they want to allocate to benefits,” said Alan Cohen, who founded Liazon along with Ashok Subramanian and Tim Godzich. “It has nothing to do with what some insurance company happens to say in a given year.”
It also gets employers mostly out of the business of choosing health plans for their work force.
And, Mr. Cohen said, the company’s experience with 2,500 business customers, which have enrolled 45,000 employees, shows that workers “make much more prudent decisions” about where to spend their money. “Eighty percent of employees choose a plan that’s different than what the company chose for them,” he said, “and 90 percent of those people choose something less expensive.”
This week, of course, the landscape of small-business-sponsored health insurance is changing, as the insurance exchanges established by the Affordable Care Act begin operations. Mr. Cohen says he expects the new law to be a net plus for Liazon, primarily because more people will become acclimated to the idea of employees making their own decisions.