Connecture acquisition of ConnectedHealth will help streamline benefits decision-making
Connecture, an IT company that provides web-based solutions to the health insurance industry, in June 2016 acquired its Chicago-based competitor ConnectedHealth, a benefits technology company that offers an e-commerce platform that helps businesses control costs and ease the process of shopping for personalized insurance benefits online. ConnectedHealth is a private company and was founded in 2009.
Based in Brookfield, Wisconsin, Connecture is a provider of a web-based consumer shopping, enrollment and retention platform for health insurance distribution. They serve clients such as Blue Cross and Blue Shield affiliates with streamlined health insurance automation, and maintains the technology behind Medicare.gov and select state-based exchanges for the Affordable Care Act (PPACA).
The acquisition of ConnectedHealth will bring together complimentary technology platforms and capabilities, enabling Connecture to address current gaps in the market.
The purchase is seen by some as a bid to spark its struggling operations. Connecture has yet to turn a profit, showing $96 million in revenue in 2016 and anticipated revenue of $110 million for 2016. The company began publicly trading on the Nasdaq in December 2014 at $9 a share, reaching a high of $12.90 in April 2015, but falling to $1.85 a share as of September 27, 2016. Partly to blame are private health insurance exchanges, which have not gained the popularity expected with the passage of the PPACA. The acquisition of ConnectedHealth will marry both revenue and midsize employer clients, as well as new, larger affiliates such as Capital BlueCross of Pennsylvania, Blue Cross and Blue Shield of Michigan, and Kaiser Permanente.