Mercer Focuses on Benefits With Benefitfocus Deal

By Sarah Sipek

Feb. 25, 2015

The Affordable Care Act is helping introduce a new concept into health care: choice. Now more than ever employees have the ability to pick and choose the coverage that best suits them.

In recognition of this changing dynamic, global human resources and financial services firm Mercer announced Feb. 24 that it will expand its relationship with cloud-based benefits technology provider Benefitfocus Inc. Mercer made an initial 9.9 percent investment with the option to increase its ownership over time, according to a written statement.

Expanding its relationship with Benefitfocus will allow the company to remain competitive in the private exchange marketplace, the company said.

“This is a milestone for Benefitfocus and a testament to the power of combining our technological expertise with Mercer’s proven execution and broad client reach,”said Benefitfocus President and CEO Shawn Jenkins in a written statement.

Mercer Marketplace has become a leading private benefits exchange “for active employees,” said Julio Portalatin, Mercer’s president and CEO in a statement. “The success of Mercer Marketplace is driven by the flexibility that allows it to meet the needs of a wide range of companies and individuals. Our proprietary solution, powered by Benefitfocus technology, is critical to that flexibility as we continue to innovate and grow together.”

Given the current state of the industry, Mercer’s move is a smart one, according to R. Ray Wang, principal analyst and founder of Constellation Research Inc.

“This is a smart move by Mercer in building out its ecosystem,” Wang said. “The benefits marketplace is a very hot area, especially post-ACA. Employers are looking for one-stop shops and also to have economies of scale.”

Mercer Marketplace said it grew the number of participating employers, eligible employees and eligible lives by five times in 2014. The expansion combined with Mercer’s flexible offerings has allowed employers to save up to 15 percent on medical plan costs and up to 10 percent on nonmedical benefits such as voluntary life and disability, according to a statement.

Sarah Sipek is a Workforce associate editor.

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