Q&A: Ashok Subramanian, Liazon Corp.Reprints
Ashok Subramanian is CEO of Liazon Corp. After co-founding the company in 2007, Mr. Subramanian sold Liazon to Towers Watson & Co. in November 2013 for $215 million. As of February, more than 900 employers were offering health care coverage to active employees and/or retirees through Liazon's “Bright Choices” exchange platform. Mr. Subramanian recently spoke with Business Insurance Associate Editor Matt Dunning about his expectations for the private exchange market in 2015 and beyond. Edited excerpts follow.
Q: How do you see private health insurance exchange utilization among employers progressing over the next one to two years?
A: We've all heard the latest predictions, from exchange growth tripling over the coming year to the Private Exchange Evaluation Collaborative's latest survey, which says 47% of employers have already implemented or are considering a private exchange. From our experience, once companies become aware of the benefits of a private exchange, they typically choose to adopt quickly. Over the next couple of years, we expect to see not only more companies migrate to a private exchange ... but also to observe companies comparing different approaches in the market to best meet their specific goals and objectives.
Q: What do you see as the primary reason(s) employers have been reticent thus far to embrace private exchanges as a means of delivering and managing group health care benefits?
A: We're actually not seeing much in the way of reticence but, rather, healthy levels of interest and adoption. Health care and benefits are emotional decisions and, appropriately so, companies treat their strategies in these areas thoughtfully. The uptake of private exchange adoption feels consistent with other innovations in benefits over the last 30 years, such as 401(k) plans, managed care and health savings accounts.
Q: How important is it for employers to obtain independent advisory services if they are contemplating moving their group health benefits into a private exchange?
A: Employers should always strive to get good, quality advice for their key business problems, and certainly how to manage benefits is right at the top of that list. Whether it comes from an insurance broker, a benefits consultant or another third party, advisory support is essential so long as the adviser offers meaningful expertise and market knowledge.
Q: What do you see as the “next frontier” in private exchanges from a technological perspective?
A: Technology has come a long way to create a simple yet engaging experience to help employees choose and use their benefits. There is still a lot of room for improvement. We expect to see continued breakthroughs and refinements in the areas of user experience, decision support and data aggregation, including information from third parties such as carriers, account administrators and wellness providers. Overall, continued innovation will enable the private exchange to function as the 24/7/365 information and action hub to help people become both smarter shoppers and healthier individuals.
Q: What do you think are employers' most common misconceptions when it comes to private health insurance exchanges?
A: The most common misconception is that exchanges need to be all about cost savings. The reality is that in addition to helping companies secure more value from their benefits spend, private exchanges are an incredible tool for enabling employees to personalize their benefits and fully value their total compensation. Exchanges offer an easy solution to help attract and retain the type of workforce that employers need to thrive in the 21st century. So, yes, while cost savings can be realized, forward-thinking companies that want to position benefits as an area of strength can benefit tremendously from adopting a private exchange.