Two rival Richmond insurance brokers are now playing on the same team.
BeneFinder, a 3-year-old startup that sought to be to health insurance what Kayak is for airfare, was acquired in July by Virginia Group Benefits, a life and health insurance seller.
Terms of the deal were not disclosed.
BeneFinder’s four employees will join Virginia Group Benefit’s 12 employees at 707 N. Courthouse Road in Chesterfield. The combined company will use the BeneFinder name going forward.
The Virginia Group Benefits brand is being phased out but its Medicare education division known as Virginia Senior Services will continue to be used.
Virginia Group Benefits has been around since 1984 selling life insurance products and offering educational seminars. Lee Biedrycki was previously Virginia Group Benefits’ president and is now president of the new BeneFinder.
David Blanchard formed BeneFinder in 2013 with an office just west of Scott’s Addition. His company focused on helping individuals under the age of 65 find and compare health insurance plans. Benefinder is free for consumers to use and makes its money off a brokerage fee built into the plans.
“I’d say we were friendly competitors for a while,” Blanchard said of Benefinder and VGB, adding the merger will help the new company scale up and service more customers. “It’s been really kind of the next chapter for BeneFinder that I’m really proud of. It’s an affirmation of the model.”
The two sides began talking about how they could help their customers in an increasingly complicated market. The result is a company that offers more insurance products like dental, vision and group insurance, offers more information on customers’ options, and has more employees to power it.
“The industry is very fluid in how the rules are designed these days,” Blanchard said. “Joining together with an established firm like Lee’s made sense.”
Most individuals get health insurance either through their employer, government exchanges or the private marketplace. BeneFinder’s pitch is that consumers need help deciding the best route for buying individuals health insurance plans and the company can act as an unbiased third-party marketplace.
“We are insurance-company-neutral,” Biedrycki said, adding BeneFinder is licensed to sell products for all the major insurance companies. “Partnering with an agent is built into the cost of these plans. If you don’t use BeneFinder, use somebody.”
BeneFinder makes most of its money during the open enrollment period: the time when customers can enroll in a health plan no questions asked. Outside of the open enrollment period, the only time customers can make a change in their plans is if they have a major life event like a marriage, death or divorce, Blanchard said.
The open enrollment period for people under 65 begins Nov. 1 and goes to Jan. 31. For senior products, the enrollment period runs from Oct. 15 to Dec. 7. For customers under the age of 65, the only time BeneFinder can make its commission is during the open enrollment period. If a customer under 65 signs up outside the open enrollment window, insurance companies don’t have to pay the brokerage fee, Blanchard said.
“We recognize that we can’t turn away clients that need help,” Blanchard said.
BeneFinder gets most of its business from Virginia, South Carolina, Kentucky and Maryland. The company says its clients number in the thousands.
An issue the company is watching is the effect of CoventryCares of Virginia changing its name to Aetna Better Health of Virginia. Aetna Inc. acquired CoventryCares of Virginia in 2013. The name change means every Aetna and Coventry policy has to reenroll before Dec. 15, Biedrycki said.
“There is a very big deadline coming and not many people know about it,” Biedrycki said.