Alan Cohen co-founded Liazon, operator of one of the industry’s leading private benefits exchanges for businesses of all sizes, in 2007. Liazon was acquired by Towers Watson, now Willis Towers Watson, in 2013. Alan has been a leader in the benefits space for over two decades. Prior to cofounding Liazon, he was CEO and cofounder of Online Benefits, one of the first web-based benefits technology companies in the United States. He led the company through its sale to A.D.A.M, a global provider of consumer health information and benefits technology solutions, and later served as president of A.D.A.M. Prior to cofounding Online Benefits, he worked in the insurance industry for Prudential, Mass Mutual, and Cigna and served as managing director for a division of Northwestern Mutual Life. Alan is often sought out for his insights on private exchanges, their role in the new health care landscape, and their effect on businesses. His expert commentary has appeared in Bloomberg Businessweek, Forbes, The New York Times, USA Today, The Washington Post, Yahoo! Finance, CNBC.com, and numerous benefits publications, including Employee Benefit News and Benefits Pro. In 2016, Alan was a recipient of an “Industry Innovator” award by the Institute for HealthCare Consumerism (IHC). IHC’s 11th annual “HealthCare Consumerism Superstars and Industry Innovator Awards” recognized the year’s top executives for their work in transforming the landscape of corporate health and benefits. In this book, Alan draws on his in-depth experience in the benefits industry to share how the key principles he used to create one of the first private exchange platforms over 10 years ago is still relevant to anyone interested in forging a better system for all. Alan holds a BA from Cornell University, an MBA from Columbia Business School, and an MBA from London Business School, where he won the Award for Academic Excellence. Alan resides in Westchester, New York, with his family and spends summer weekends in Woodstock, New York. The Cohens are avid skiers and outdoors people.

“When Alan Cohen opened the doors at Liazon in 2007, he revolutionized the way insurance was sold. Though the idea was simple, it was also ahead of its time. Liazon was among the first companies to establish a private health insurance exchange, a trend that has since exploded. Employee Benefits and the New Health Care Landscape gives us a rare, inside look into the mind that created ‘the exchange wave’ ten years ago.” —Kathryn Mayer, Editor-in-Chief, Employee Benefit News “Regardless of your political affiliation, sitting out the current debate on health care and benefits is no longer an option. Private exchanges offer one solution to one part of the problem; this book explains why.” —Christopher E. Condeluci, CC Law & Policy PLLC, ACA expert “It has been my pleasure to work with Alan Cohen over the years and observe the private exchange evolution firsthand. The industry has been in need of a book like this for a very long time.” —Rhonda Marcucci, Vice President, HR & Benefits Technology Consulting Practice at Gruppo Marcucci, a division of Gallagher Benefit Services, Inc.

• Introduction     1 Attracting and Retaining Employees     3 A New Paradigm Shift for Benefits     5 The Exchange Evolution     8 “Try It, You’ll Like It”     9 Overcoming the “Wait and See” Mindset     11 PART I:  THE CHANGING BENEFITS LANDSCAPE     13Chapter 1  Building a Better Benefits System     15 Principle #1: Give Them Money and Let Them Shop     19 Principle #2: Provide True Price Transparency     23 Principle #3: Provide Meaningful Choice     24 Principle #4: Offer Guidance in the Form of Decision Support     27 Principle #5: Optimize the Shopping Experience     29 Principle #6: Ensure a Cultural Fit Within the Organization     33 Principle #7: Refine, Iterate, and Improve     33 Chapter 2  Benefits: The Accidental Entitlement     35 Not Really an “Exchange”     38 “Modern-Day” Insurance     40 Benefits as Compensation     41 So Where Does This Leave Us?     46 Brokers Join the Bandwagon     49 Chapter 3  They Don’t Know What They’re Missing: Flipping the Status Quo on Its Head     51 The Problem with the Status Quo     53 Disrupting the Status Quo     56 Meaningful Choice     57 Price Transparency and Defined Contribution     59 Personalization     67 Consumerism     70 Chapter 4  Making Sense of Benefits Solutions: Public Exchanges and Private Exchanges     75 The View from the Top: Public Versus Private Exchanges     75 Who Runs These Things Anyway? Types of Private Exchange Operators     79 Pure-Play Providers     79 Benefits Providers     80 Benefits Advisors     80 Traditional Benefits Administration Companies     81 What Should You Consider When Moving to a Private Exchange?     83 Single- Versus Multi-Carrier Exchanges     83 Self- Versus Fully-Insured Models     84 Funding Strategies     86 Who Can Benefit from Private Exchanges? Markets Served     86 A Look at Products in Private Exchanges     89 What Else Can Private Exchanges Offer?     95 PART II:  STAKEHOLDERS: MAKING THE MOVE FROM “ONE SIZE FITS ALL”     97Chapter 5  Employers Find Skin in the Game     99 A Big Bet Pays Off: TitleMax, Part of the TMX Finance Family of Companies     100 Customer-Focused Luxury Resort Gives Back to Its Employees: Sandestin     104 Chapter 6  Six Questions to Ask Before You Choose a Private Exchange     109 What Makes for a True Private Exchange?     111 1 Is Elasticity Built into Its Foundation?     113 2 Does It Include Decision Support and Educational Tools?     114 3 Are Prices Transparent?     116 4 Does It Integrate with Value-Added Services?     118 5 Does It Provide Year-Round Support?     119 6 To What Extent Does It Handle Benefits Administration?     120 Chapter 7  Brokers and Exchanges: Better Together     123 Rick Strater, Arthur J Gallagher & Co     127 The Role of the Broker     128 Overcoming Misconceptions     128 Employees Don’t Care About Choice     128 Cost Is All That Matters     129 Defined Contribution Is “Cost Shifting”     129 Rob Harkins, Willis Towers Watson     130 The Changing Role of Brokers     131 How Can Brokers Win?     131 The Role of HR     133 Technology Is the Future of Benefits     133 Chapter 8  Insurers Find a New Way to Move Product     137 The Private Exchange: A Bridge to the Future?     139 What Insurers Can Gain from Private Exchanges     143 Innovators Embrace Private Exchanges Early On     148 Jessica Moser, MetLife     148 Kevin Hill, Oxford Health Plans/UnitedHealthcare     150 Insurers Aren’t the Only Ones Innovating     152 PART III:  FUTURE VISION     155Chapter 9  Innovation in Benefits (Yes, Benefits)     157 Expanding the Aisles in the Benefits Store     163 Letting Individuals Create Their Own Preferred Networks     165 Creating a National Individual Insurance Market     169 Chapter 10  The “Law of the Land,” Insurance Tax Reform, and the November Surprise     175 “The Law of the Land…for the Foreseeable Future”     178 The Viability of the Individual Market     183 What Else to Note on the Legislative Front     185 The “Cadillac” of Taxes—And Other Pending Legislation     186 The Medicare Marketplace as a Model     187 Small Businesses and Individual Benefits Marketplaces     188 Tweaking the Tax Code     190 Chapter 11  Who’s Afraid of the American Consumer?     193 Some Potential Ways Forward     196 Tax-Protected Savings Accounts     197 Employer Funding for Individual Insurance     198 Consumer-Centric Provider Networks     200 Data and Digital Tools for Patients and Consumers     201 Patient-Empowered Healing     204 The Utopian Vision     206 Shopping for Care     208 Using a Marketplace to Purchase Non-Emergent Health Care on an As-Needed Basis     209 An “In-Network” Conundrum?     212 Final Thoughts     213 PART IV:  APPENDIXES: A PRACTICAL GUIDE TO PRIVATE EXCHANGES     215Appendix A  Private Exchanges 101     217Appendix B  Making Sense of Benefits Terms     223 Terms Related to Benefits     223 Terms Related to Health Care Consumerism     226 Terms Related to Private Exchanges     227 Guide to Common Benefits Products on a Private Exchange     230 Appendix C  Real-World Data and Applications     233 What Really Happens on Private Exchanges?     233 Data from the 2017 Private Exchange Research Council (PERC) Analysis     233 What Do Employers and Employees Really Think About Liazon Exchanges?     237 Data from the Liazon 2017 Employer and Employee Surveys     237 The Exchange Experience: A Look at How Benefits Are Selected on Liazon Exchanges     240 For the Benefits Geeks: A Health Care Timeline     246 Index     251

Alan Cohen co-founded Liazon, operator of one of the industry’s leading private benefits exchanges for businesses of all sizes, in 2007. Liazon was acquired by Towers Watson, now Willis Towers Watson, in 2013. Alan has been a leader in the benefits space for over two decades. Prior to cofounding Liazon, he was CEO and cofounder of Online Benefits, one of the first web-based benefits technology companies in the United States. He led the company through its sale to A.D.A.M, a global provider of consumer health information and benefits technology solutions, and later served as president of A.D.A.M. Prior to cofounding Online Benefits, he worked in the insurance industry for Prudential, Mass Mutual, and Cigna and served as managing director for a division of Northwestern Mutual Life. Alan is often sought out for his insights on private exchanges, their role in the new health care landscape, and their effect on businesses. His expert commentary has appeared in Bloomberg Businessweek, Forbes, The New York Times, USA Today, The Washington Post, Yahoo! Finance, CNBC.com, and numerous benefits publications, including Employee Benefit News and Benefits Pro. In 2016, Alan was a recipient of an “Industry Innovator” award by the Institute for HealthCare Consumerism (IHC). IHC’s 11th annual “HealthCare Consumerism Superstars and Industry Innovator Awards” recognized the year’s top executives for their work in transforming the landscape of corporate health and benefits. In this book, Alan draws on his in-depth experience in the benefits industry to share how the key principles he used to create one of the first private exchange platforms over 10 years ago is still relevant to anyone interested in forging a better system for all. Alan holds a BA from Cornell University, an MBA from Columbia Business School, and an MBA from London Business School, where he won the Award for Academic Excellence. Alan resides in Westchester, New York, with his family and spends summer weekends in Woodstock, New York. The Cohens are avid skiers and outdoors people.

“When Alan Cohen opened the doors at Liazon in 2007, he revolutionized the way insurance was sold. Though the idea was simple, it was also ahead of its time. Liazon was among the first companies to establish a private health insurance exchange, a trend that has since exploded. Employee Benefits and the New Health Care Landscape gives us a rare, inside look into the mind that created ‘the exchange wave’ ten years ago.” —Kathryn Mayer, Editor-in-Chief, Employee Benefit News “Regardless of your political affiliation, sitting out the current debate on health care and benefits is no longer an option. Private exchanges offer one solution to one part of the problem; this book explains why.” —Christopher E. Condeluci, CC Law & Policy PLLC, ACA expert “It has been my pleasure to work with Alan Cohen over the years and observe the private exchange evolution firsthand. The industry has been in need of a book like this for a very long time.” —Rhonda Marcucci, Vice President, HR & Benefits Technology Consulting Practice at Gruppo Marcucci, a division of Gallagher Benefit Services, Inc.

• Introduction     1 Attracting and Retaining Employees     3 A New Paradigm Shift for Benefits     5 The Exchange Evolution     8 “Try It, You’ll Like It”     9 Overcoming the “Wait and See” Mindset     11 PART I:  THE CHANGING BENEFITS LANDSCAPE     13Chapter 1  Building a Better Benefits System     15 Principle #1: Give Them Money and Let Them Shop     19 Principle #2: Provide True Price Transparency     23 Principle #3: Provide Meaningful Choice     24 Principle #4: Offer Guidance in the Form of Decision Support     27 Principle #5: Optimize the Shopping Experience     29 Principle #6: Ensure a Cultural Fit Within the Organization     33 Principle #7: Refine, Iterate, and Improve     33 Chapter 2  Benefits: The Accidental Entitlement     35 Not Really an “Exchange”     38 “Modern-Day” Insurance     40 Benefits as Compensation     41 So Where Does This Leave Us?     46 Brokers Join the Bandwagon     49 Chapter 3  They Don’t Know What They’re Missing: Flipping the Status Quo on Its Head     51 The Problem with the Status Quo     53 Disrupting the Status Quo     56 Meaningful Choice     57 Price Transparency and Defined Contribution     59 Personalization     67 Consumerism     70 Chapter 4  Making Sense of Benefits Solutions: Public Exchanges and Private Exchanges     75 The View from the Top: Public Versus Private Exchanges     75 Who Runs These Things Anyway? Types of Private Exchange Operators     79 Pure-Play Providers     79 Benefits Providers     80 Benefits Advisors     80 Traditional Benefits Administration Companies     81 What Should You Consider When Moving to a Private Exchange?     83 Single- Versus Multi-Carrier Exchanges     83 Self- Versus Fully-Insured Models     84 Funding Strategies     86 Who Can Benefit from Private Exchanges? Markets Served     86 A Look at Products in Private Exchanges     89 What Else Can Private Exchanges Offer?     95 PART II:  STAKEHOLDERS: MAKING THE MOVE FROM “ONE SIZE FITS ALL”     97Chapter 5  Employers Find Skin in the Game     99 A Big Bet Pays Off: TitleMax, Part of the TMX Finance Family of Companies     100 Customer-Focused Luxury Resort Gives Back to Its Employees: Sandestin     104 Chapter 6  Six Questions to Ask Before You Choose a Private Exchange     109 What Makes for a True Private Exchange?     111 1 Is Elasticity Built into Its Foundation?     113 2 Does It Include Decision Support and Educational Tools?     114 3 Are Prices Transparent?     116 4 Does It Integrate with Value-Added Services?     118 5 Does It Provide Year-Round Support?     119 6 To What Extent Does It Handle Benefits Administration?     120 Chapter 7  Brokers and Exchanges: Better Together     123 Rick Strater, Arthur J Gallagher & Co     127 The Role of the Broker     128 Overcoming Misconceptions     128 Employees Don’t Care About Choice     128 Cost Is All That Matters     129 Defined Contribution Is “Cost Shifting”     129 Rob Harkins, Willis Towers Watson     130 The Changing Role of Brokers     131 How Can Brokers Win?     131 The Role of HR     133 Technology Is the Future of Benefits     133 Chapter 8  Insurers Find a New Way to Move Product     137 The Private Exchange: A Bridge to the Future?     139 What Insurers Can Gain from Private Exchanges     143 Innovators Embrace Private Exchanges Early On     148 Jessica Moser, MetLife     148 Kevin Hill, Oxford Health Plans/UnitedHealthcare     150 Insurers Aren’t the Only Ones Innovating     152 PART III:  FUTURE VISION     155Chapter 9  Innovation in Benefits (Yes, Benefits)     157 Expanding the Aisles in the Benefits Store     163 Letting Individuals Create Their Own Preferred Networks     165 Creating a National Individual Insurance Market     169 Chapter 10  The “Law of the Land,” Insurance Tax Reform, and the November Surprise     175 “The Law of the Land…for the Foreseeable Future”     178 The Viability of the Individual Market     183 What Else to Note on the Legislative Front     185 The “Cadillac” of Taxes—And Other Pending Legislation     186 The Medicare Marketplace as a Model     187 Small Businesses and Individual Benefits Marketplaces     188 Tweaking the Tax Code     190 Chapter 11  Who’s Afraid of the American Consumer?     193 Some Potential Ways Forward     196 Tax-Protected Savings Accounts     197 Employer Funding for Individual Insurance     198 Consumer-Centric Provider Networks     200 Data and Digital Tools for Patients and Consumers     201 Patient-Empowered Healing     204 The Utopian Vision     206 Shopping for Care     208 Using a Marketplace to Purchase Non-Emergent Health Care on an As-Needed Basis     209 An “In-Network” Conundrum?     212 Final Thoughts     213 PART IV:  APPENDIXES: A PRACTICAL GUIDE TO PRIVATE EXCHANGES     215Appendix A  Private Exchanges 101     217Appendix B  Making Sense of Benefits Terms     223 Terms Related to Benefits     223 Terms Related to Health Care Consumerism     226 Terms Related to Private Exchanges     227 Guide to Common Benefits Products on a Private Exchange     230 Appendix C  Real-World Data and Applications     233 What Really Happens on Private Exchanges?     233 Data from the 2017 Private Exchange Research Council (PERC) Analysis     233 What Do Employers and Employees Really Think About Liazon Exchanges?     237 Data from the Liazon 2017 Employer and Employee Surveys     237 The Exchange Experience: A Look at How Benefits Are Selected on Liazon Exchanges     240 For the Benefits Geeks: A Health Care Timeline     246 Index     251

Alan Cohen co-founded Liazon, operator of one of the industry’s leading private benefits exchanges for businesses of all sizes, in 2007. Liazon was acquired by Towers Watson, now Willis Towers Watson, in 2013. Alan has been a leader in the benefits space for over two decades. Prior to cofounding Liazon, he was CEO and cofounder of Online Benefits, one of the first web-based benefits technology companies in the United States. He led the company through its sale to A.D.A.M, a global provider of consumer health information and benefits technology solutions, and later served as president of A.D.A.M. Prior to cofounding Online Benefits, he worked in the insurance industry for Prudential, Mass Mutual, and Cigna and served as managing director for a division of Northwestern Mutual Life. Alan is often sought out for his insights on private exchanges, their role in the new health care landscape, and their effect on businesses. His expert commentary has appeared in Bloomberg Businessweek, Forbes, The New York Times, USA Today, The Washington Post, Yahoo! Finance, CNBC.com, and numerous benefits publications, including Employee Benefit News and Benefits Pro. In 2016, Alan was a recipient of an “Industry Innovator” award by the Institute for HealthCare Consumerism (IHC). IHC’s 11th annual “HealthCare Consumerism Superstars and Industry Innovator Awards” recognized the year’s top executives for their work in transforming the landscape of corporate health and benefits. In this book, Alan draws on his in-depth experience in the benefits industry to share how the key principles he used to create one of the first private exchange platforms over 10 years ago is still relevant to anyone interested in forging a better system for all. Alan holds a BA from Cornell University, an MBA from Columbia Business School, and an MBA from London Business School, where he won the Award for Academic Excellence. Alan resides in Westchester, New York, with his family and spends summer weekends in Woodstock, New York. The Cohens are avid skiers and outdoors people.

“When Alan Cohen opened the doors at Liazon in 2007, he revolutionized the way insurance was sold. Though the idea was simple, it was also ahead of its time. Liazon was among the first companies to establish a private health insurance exchange, a trend that has since exploded. Employee Benefits and the New Health Care Landscape gives us a rare, inside look into the mind that created ‘the exchange wave’ ten years ago.” —Kathryn Mayer, Editor-in-Chief, Employee Benefit News “Regardless of your political affiliation, sitting out the current debate on health care and benefits is no longer an option. Private exchanges offer one solution to one part of the problem; this book explains why.” —Christopher E. Condeluci, CC Law & Policy PLLC, ACA expert “It has been my pleasure to work with Alan Cohen over the years and observe the private exchange evolution firsthand. The industry has been in need of a book like this for a very long time.” —Rhonda Marcucci, Vice President, HR & Benefits Technology Consulting Practice at Gruppo Marcucci, a division of Gallagher Benefit Services, Inc.

• Introduction     1 Attracting and Retaining Employees     3 A New Paradigm Shift for Benefits     5 The Exchange Evolution     8 “Try It, You’ll Like It”     9 Overcoming the “Wait and See” Mindset     11 PART I:  THE CHANGING BENEFITS LANDSCAPE     13Chapter 1  Building a Better Benefits System     15 Principle #1: Give Them Money and Let Them Shop     19 Principle #2: Provide True Price Transparency     23 Principle #3: Provide Meaningful Choice     24 Principle #4: Offer Guidance in the Form of Decision Support     27 Principle #5: Optimize the Shopping Experience     29 Principle #6: Ensure a Cultural Fit Within the Organization     33 Principle #7: Refine, Iterate, and Improve     33 Chapter 2  Benefits: The Accidental Entitlement     35 Not Really an “Exchange”     38 “Modern-Day” Insurance     40 Benefits as Compensation     41 So Where Does This Leave Us?     46 Brokers Join the Bandwagon     49 Chapter 3  They Don’t Know What They’re Missing: Flipping the Status Quo on Its Head     51 The Problem with the Status Quo     53 Disrupting the Status Quo     56 Meaningful Choice     57 Price Transparency and Defined Contribution     59 Personalization     67 Consumerism     70 Chapter 4  Making Sense of Benefits Solutions: Public Exchanges and Private Exchanges     75 The View from the Top: Public Versus Private Exchanges     75 Who Runs These Things Anyway? Types of Private Exchange Operators     79 Pure-Play Providers     79 Benefits Providers     80 Benefits Advisors     80 Traditional Benefits Administration Companies     81 What Should You Consider When Moving to a Private Exchange?     83 Single- Versus Multi-Carrier Exchanges     83 Self- Versus Fully-Insured Models     84 Funding Strategies     86 Who Can Benefit from Private Exchanges? Markets Served     86 A Look at Products in Private Exchanges     89 What Else Can Private Exchanges Offer?     95 PART II:  STAKEHOLDERS: MAKING THE MOVE FROM “ONE SIZE FITS ALL”     97Chapter 5  Employers Find Skin in the Game     99 A Big Bet Pays Off: TitleMax, Part of the TMX Finance Family of Companies     100 Customer-Focused Luxury Resort Gives Back to Its Employees: Sandestin     104 Chapter 6  Six Questions to Ask Before You Choose a Private Exchange     109 What Makes for a True Private Exchange?     111 1 Is Elasticity Built into Its Foundation?     113 2 Does It Include Decision Support and Educational Tools?     114 3 Are Prices Transparent?     116 4 Does It Integrate with Value-Added Services?     118 5 Does It Provide Year-Round Support?     119 6 To What Extent Does It Handle Benefits Administration?     120 Chapter 7  Brokers and Exchanges: Better Together     123 Rick Strater, Arthur J Gallagher & Co     127 The Role of the Broker     128 Overcoming Misconceptions     128 Employees Don’t Care About Choice     128 Cost Is All That Matters     129 Defined Contribution Is “Cost Shifting”     129 Rob Harkins, Willis Towers Watson     130 The Changing Role of Brokers     131 How Can Brokers Win?     131 The Role of HR     133 Technology Is the Future of Benefits     133 Chapter 8  Insurers Find a New Way to Move Product     137 The Private Exchange: A Bridge to the Future?     139 What Insurers Can Gain from Private Exchanges     143 Innovators Embrace Private Exchanges Early On     148 Jessica Moser, MetLife     148 Kevin Hill, Oxford Health Plans/UnitedHealthcare     150 Insurers Aren’t the Only Ones Innovating     152 PART III:  FUTURE VISION     155Chapter 9  Innovation in Benefits (Yes, Benefits)     157 Expanding the Aisles in the Benefits Store     163 Letting Individuals Create Their Own Preferred Networks     165 Creating a National Individual Insurance Market     169 Chapter 10  The “Law of the Land,” Insurance Tax Reform, and the November Surprise     175 “The Law of the Land…for the Foreseeable Future”     178 The Viability of the Individual Market     183 What Else to Note on the Legislative Front     185 The “Cadillac” of Taxes—And Other Pending Legislation     186 The Medicare Marketplace as a Model     187 Small Businesses and Individual Benefits Marketplaces     188 Tweaking the Tax Code     190 Chapter 11  Who’s Afraid of the American Consumer?     193 Some Potential Ways Forward     196 Tax-Protected Savings Accounts     197 Employer Funding for Individual Insurance     198 Consumer-Centric Provider Networks     200 Data and Digital Tools for Patients and Consumers     201 Patient-Empowered Healing     204 The Utopian Vision     206 Shopping for Care     208 Using a Marketplace to Purchase Non-Emergent Health Care on an As-Needed Basis     209 An “In-Network” Conundrum?     212 Final Thoughts     213 PART IV:  APPENDIXES: A PRACTICAL GUIDE TO PRIVATE EXCHANGES     215Appendix A  Private Exchanges 101     217Appendix B  Making Sense of Benefits Terms     223 Terms Related to Benefits     223 Terms Related to Health Care Consumerism     226 Terms Related to Private Exchanges     227 Guide to Common Benefits Products on a Private Exchange     230 Appendix C  Real-World Data and Applications     233 What Really Happens on Private Exchanges?     233 Data from the 2017 Private Exchange Research Council (PERC) Analysis     233 What Do Employers and Employees Really Think About Liazon Exchanges?     237 Data from the Liazon 2017 Employer and Employee Surveys     237 The Exchange Experience: A Look at How Benefits Are Selected on Liazon Exchanges     240 For the Benefits Geeks: A Health Care Timeline     246 Index     251