First Niagara says private insurance exchange will give employer clients more options

BUFFALO — First Niagara Benefits Consulting (FNBC), a division of First Niagara Risk Management, Inc., last month announced its launch of a private-insurance exchange.

FNBC will offer the First Niagara Benefits Exchange to companies that employ 100 people or more.

The exchange “can accommodate a wide range of employer-contribution approaches to offering employee benefits,” First Niagara said in a news release.

Businesses can use the exchange to offer their employees more choices and to reduce their “overall health-care spend,” FNBC contends.

FNBC is “always interested” in looking for new solutions for our clients, says Thomas Henschke, manager of exchange solutions at FNBC.

“It’s a natural extension of what we already do,” Henschke says.

Henschke spoke to the Business Journal News Network on May 2 while traveling in Chicago. He’s based at the FNBC office in Mechanicsburg, Pa.

The private exchange gives the employer the opportunity to offer its employees more choices in their benefit selection.

“It gives the employee the opportunity to pick and choose what they want … to tailor for their situation,” Henschke says.

When asked what carriers are involved in the new exchange, Henschke would only say that FNBC has had meetings with “all the major carriers.”

“All we’re doing right now is just fine tuning a little bit but we’ve got good reception and good carrier participation in the market, so they’ll be plenty of choice for the employer and the employee … We’ll be [announcing] that in future [news] releases,” he says.

When asked how many companies are using the private-insurance exchange, Henschke indicated FNBC has heard interest from companies across its service area, which covers New York, Connecticut, and Pennsylvania, but didn’t provide a specific number.

Calling it an “emerging solution,” FNBC is working with potential clients to help them understand how it works and what it could do for their employees, according to Henschke.

“Some employers … it may have ramification for this year.  Others, maybe next year… It’s the kind of thing that we expect will continue to evolve and grow over the next couple years,” he says.

The exchange platform that FNBC has developed provides employers flexibility in  figuring out how much they want to contribute, how they want to assign those dollars, and how they want to assemble their contribution strategy, which may evolve over time for the employer, Henschke says.

For company employees, the FNBC exchange also includes embedded decision-support tools to help with plan selection, he adds.  The tools help them understand their total premium cost and their potential out-of-pocket cost for each plan.

The exchange also offers a call center for customer support in First Niagara’s Mechanicsburg office, he adds.

FNBC will partner with Chicago–based bswift, a firm that specializes in software and services for employee-benefits administration and exchange services.

The company will provide the exchange-technology platform for the First Niagara Benefits Exchange. FNBC and bswift currently partner in the administration of private exchanges in New York, Pennsylvania, Connecticut, and California, the company said.

First Niagara Risk Management, Inc. is a wholly owned subsidiary of First Niagara Bank, N.A.

First Niagara Bank is a unit of Buffalo–based First Niagara Financial Corp. (NASDAQ: FNFG).

First Niagara is a multi-state bank with about 420 branches, $38 billion in assets, $27 billion in deposits, and about 5,800 employees providing financial services across New York, Pennsylvania, Connecticut, and Massachusetts.

First Niagara employs about 400 people total in Central New York and ranks third in deposit market share in the Syracuse metro area.

Contact Reinhardt at ereinhardt@cnybj.com