Businesses have been moving their employee-sponsored health coverage in recent years to private insurance exchanges. This approach, called defined contribution health insurance, involves giving employees a set amount of money and then letting them pick their own coverage through a private marketplace or exchange that helps them sort out the choices. That compares to giving employees an option or two that the company has selected.
Towers Watson is a consulting firm that specializes in human resource capabilities, and in May of 2012 it announced it would be acquiring Extended Health, which operates the largest private Medicare exchange in the United States.
The acquisition of Liazon Corp. will in turn strengthen Towers Watson's position in the private health exchange marketplace through its OneExchange, which is its health benefit solution product. OneExchange allows employers to give their full- and part-time employees, as well as their retirees, access to private and public health insurance exchanges.
When OneExchange was announced in January 2013, Bryce Williams, the managing director for Exchange Solutions at Towers Watson, highlighted it was in response to the passing of the Affordable Care Act, aka Obamacare. "Employers that decide an exchange is right for some or all of their workforce and retirees can provide access to OneExchange and realize the benefits of these regulatory changes," Williams was quoted as saying at the time. "They can use OneExchange to fund and oversee the quality and cost of their health care coverage with the counsel of a trusted and experienced advisor from a unified platform."
Liazon is located in Buffalo, N.Y., and has 120 employees. It was founded in 2007 and it offers cloud-based products to change the way employees access their benefit solutions. Its flagship product is the Bright Choices Exchange. The co-founder and CEO of Liazon, Ashok Subramanian, will be brought into the leadership team of the Towers Watson Exchange Solutions business. The acquisition is anticipated to reduce Towers Watson's adjusted earnings per share between $0.10 and $0.15 in 2014.
"As more employers evaluate private exchanges, bringing Liazon into the Towers Watson family will help us -- and Liazon's distribution partners -- offer employers scalable, cost-effective and high-performing benefit plans to their employees," said CEO of Towers Watson, John Haley.
-- Material from The Associated Press was used in this report.