Towers Watson & Co. has purchased Buffalo, N.Y.-based Liazon Corp., which operates the Bright Choices private health insurance exchange for $215 million, the benefit consultant said Friday.

The acquisition of privately held Liazon, which was founded in 2007 and now has 120 employees, strengthens its offerings in the rapidly growing private insurance exchange market, Towers Watson said in a statement.

While Towers Watson's exchange, known as OneExchange, primarily serves larger employers, Liazon's Bright Choices has been more focused on smaller employers.

Liazon has “the most sophisticated insurance platform by a mile in this market,” Bryce Williams, Towers Watson's managing director of exchange solutions in San Mateo, Calif., said in an interview.

“The OneExchange and Liazon solutions together will help organizations of all sizes deliver self- and fully-insured benefits to both employees, as well as pre- and post-65 retirees in new and cost-effective ways,” Towers Watson said in the statement

Liazon's online benefit markets offerings are distributed through more than 400 insurance brokers, either under the Bright Choices brand or as a third-party proprietary exchange. Towers Watson said it plans to continue the relationships and use the Liazon name with broker partners.

The $215 million acquisition comes amid significant growth in the private insurance exchange market. For example, the number of employee enrollees obtaining coverage in an exchange launched by Aon Hewitt tripled to the more than 330,000 in just one year, while exchanges organized by Mercer L.L.C. and Buck Consultants L.LC. will launch next year.

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The private exchange model, experts say, is appealing to employers and employees. It deploys a defined contribution approach in which employers agree to provide a fixed premium contribution with employees paying more or less for their share of the premium depending on the level of coverage they choose.

Through that approach, an employer can cap what it pays for health plan coverage for its employees.

In addition, the role of the employer as a health plan sponsor becomes much more limited, with exchange insurers handling claims and the exchange provider negotiating premium rates with insurers and assisting employees with questions.

For employees, the approach typically means a wider choice of insurers and plan designs than they had previously.