Towers Watson eyes HIX growth with Liazon buy

Consulting firm Towers Watson announced Friday it bought private health care exchange provider Liazon, which operates the Bright Choices exchange. The purchase price is $215 million.

Liazon’s online benefit marketplaces are currently distributed through over 400 insurance brokers, under either the Bright Choices brand or as a third-party proprietary exchange. Towers Watson says it plans to continue these relationships based on their current terms and use the Liazon name in the market with its broker partners.

Benefit Advisors Network, a 50-member group of brokerages largely serving small- and midsize employers, partnered with Liazon in August to offer the Bright Choices platform.

“We have a call set up with Liazon on Monday afternoon to sort through our questions and the impact it might have on our business … relative to the business partnership between Towers and Liazon,” says Perry Braun, executive director of BAN. “I don’t think there will be an immediate impact … but we will enter a discovery process to find out more information.”

BAN communicated with members immediately after the group heard the Towers Watson news, informing them of the meeting Monday. Braun says he has not had an influx of calls today from members as a result.

Towers Watson will continue to offer its OneExchange Active marketplace, which is a self-insured exchange serving active employees. The company also offers OneExchange Access, a concierge service that connects part-timers, early retirees, dependents and others who don’t get the company health plan to the state exchanges.

“Liazon has built a growing business by offering customized private exchange approaches through an extensive network of partners,” said John Haley, CEO of Towers Watson. “We are delighted to team with them and serve a part of the market that Towers Watson had not previously reached.”

The purchase of Liazon comes 18 months after Towers Watson’s purchase of Extend Health, which, at the time, operated the country’s largest private Medicare exchange. That exchange has since been renamed OneExchange Retiree.

Towers Watson’s acquisitions, along with the recent initial public offering of Benefitfocus, another private exchange, signal continued interest in the private exchange industry, says Joe Donlan, president of ConnectedHealth, a private exchange provider.

“I think this [Towers Watson] transaction certainly underscores the fact employers are still looking for innovative solutions to help control costs,” he says. “Leveraging a defined contribution approach and providing more choice and personalization for employees is becoming increasingly important.”