An Augusta company is hooking up with a national company offering a private health insurance exchange model that allows employees to choose their own health plan, much the way public health exchanges will work under the federal health care overhaul beginning in 2014.
Ironically, Liazon was financed in part by Bain Capital, the company co-founded by Republican presidential candidate Mitt Romney, who has vowed to repeal the reforms and do away with the exchanges.
Liazon is partnering with Group & Benefits Consultants in Augusta to offer the first private exchange in Georgia, said Russell Head, the vice president of the Augusta firm.
There is a big difference between the public and private exchanges, said Michael Karp, Liazon’s chief revenue officer. The public exchange will offer different levels of plans but is designed primarily to help deliver government subsidies for those whose incomes qualify them for help.
“It was set up to get people benefits or provide benefits to people who couldn’t get access to benefits or couldn’t afford the benefits,” Karp said. “The government has decided that the way they are going to do that is through the public exchanges because they can control the subsidies that way, forcing the states to set them up.”
Private exchanges, using technology such as Liazon’s Bright Choices program, are “helping companies and employees find a better way to get benefits, giving employees access to benefits they have never had access to before,” Karp said.
Typically, someone in human resources at a company sits down every year and tries to pick the best one or two plans to offer to dozens or hundreds of employees.
“They know nothing about their personal lives; they don’t know what their children’s needs are, what their spouses needs are,” Karp said. “And yet they’ve got to figure out how to pick the one or two plans that make the most sense for this massive group of people they know nothing about.”
The employer gives the same contribution, but now the employees can take that and shop for the plan that works best for them, Karp said.
Using the Bright Choices Web site, employees can spend about 20 minutes answering a confidential survey about their needs and the needs of their families.
“And what it is doing while you are answering those questions is it is narrowing down all of these choices to give you the lowest out-of-pocket cost with the best coverage,” Karp said. It also offers a wider array of coverages, such as life insurance or even pet insurance.
Head said the partnership gives Group & Benefits Consultants the flexibility to serve more companies, large and small, he said.
“We’re bringing technology and choice down to companies as low as 10 employees,” Head said. “That’s huge for the small businesses that have 20 or 50 or 100 employees or 500 employees. They’ve never had choice.”
Insurance companies like it because employees tend to stick with plans that work with them, and insurers have actually seen lower claims costs, in part because of the higher prevalence of high-deductible plans coupled with health savings accounts. That makes the consumer more conscious of their health care spending and more price-sensitive, Karp said.
“They spend it better; they spend it more wisely,” he said. “No longer is it free.”