Innovation Destination Hartford visited Hartford-based BlueBack Advisors and spoke with Principal Eric Thompson and Vice President Meghan Martinez about how their startup got off the ground, some of the challenges the company has faced, and its unique benefits solutions.
IDH: Eric, you launched the startup, correct? When was that?
THOMPSON: Yes. I founded it in 2008.
IDH: Did you always know you were going to own your own company? Did you always have an entrepreneurial drive?
THOMPSON: I did. When I graduated from college with a finance degree, I spent the first 11 years of my career at Aetna, which provided a tremendous learning opportunity in the health insurance benefits space. In 2000, I took over the local franchise for the Northwestern Mutual employee benefit consulting practice as an equity partner. At that time, Obama Care was coming and it was such a change in the marketplace I knew I needed to be a lot more flexible than I could be under a corporate heading.
I started BlueBack Advisors because I wanted to create a company that could be much more fluid and react to the marketplace at a time when large consulting firms, which obviously have some limitations, are slower to change. That was the impetus for creating BlueBack.
IDH: So the business concept was a reaction to what was going on in the marketplace?
THOMPSON: Correct. It was a combination of what was happening in the market and noticing there was a lack of flexibility as well as transparency. We wanted to create a company focused on helping businesses improve not only from a benefits perspective but also from a human capital perspective. In addition, I saw the need to invest in people, technology ,and process at a time when the market was changing due to healthcare reform and increasingly complex and costly benefits.
IDH: What kinds of challenges have you faced as a small business?
THOMPSON: One of the biggest challenges is making sure that you’re covering all bases with government regulations. Another challenge is that there’s limited opportunity for financing for what we do, so along the way you have to be proactive and resourceful.
The challenge is changing the existing dynamic in which employers have suppressed innovation and improvement of benefits for their employees because they have a longstanding relationship and probably have become complacent. So the biggest challenge is to show them that our approach and strategies are noticeably different.
IDH: Speaking of your approach, Meghan, can you describe your BlueChip program?
MARTINEZ: About two years ago, most of our clients started showing an interest in moving forward with wellness and health improvement programs. So aside from the benefits we manage—which tie into better health and hopefully lower costs—they were ready to implement wellness initiatives.
We have built award-winning custom health improvement programs for clients and for the past year we have been working on building BlueChip, which is a unique, turnkey model. BlueChip is designed for any size company that wants to start offering a wellness and health improvement program for their employees. The program includes technology combined with our advisory and support.
For the employee, it’s about improving their habits. For the employer, it’s about improving the culture and the overall health of their employees. The BlueChip community is about bringing together like-minded people who are all working toward a common goal of being healthier and happier and giving them a way to connect with others who are doing the same thing. We’re very excited about developing the program because we think it’s unique and different from anything anyone’s doing.
THOMPSON: BlueChip takes a 360° approach and our BlueChip community really goes beyond the employer, which is why we have the website teambluechip.com and the social media strategy behind that.
People in today’s workforce are seeking progressive, forward-thinking companies that value employee well-being. Look at Hartford—more young professionals want to be in the city. They want a more vibrant setting and want a sense of community. We see the connectivity between the benefit program you’re provided as an employee of a company and wanting to be part of a healthy community.
The BlueChip program offers an opportunity for employees of different companies to come together, whether they’re training for the 5K at The Hartford Marathon or doing a community fitness event.
IDH: It does seem to be a very niche approach.
MARTINEZ: It’s definitely a different concept. A lot of smaller companies have traditionally thought they are too small to do anything formal as it relates to wellness because there are limited resources for that. Smaller companies are not going to see a return on investment (ROI) on their medical claims for a wellness program, but they are seeking ways to improve their culture and retain and attract employees. And they know that healthier, happier employees make a better company overall. The productivity increases. Morale increases. So for them it’s important to have a program in place.
THOMPSON: Companies are not necessarily going to see a bending of the curve in the near term on rates, but insurance carriers want to invest in companies that are committed to improving overall employee wellness.
Providers like UnitedHealthcare, Aetna, Anthem, and Cigna are all investing what they call “health funds” into these types of programs, so we have some insurance carriers that are partially financing the cost of BlueChip via these funds. It is a unique and exciting approach to what we have seen in the past.
IDH: BlueChip takes a very different approach than what is provided by traditional insurance carriers.
THOMPSON: Right. The insurance carriers do have some wellness components to their offering and we definitely look to leverage those offerings as part of our program design. BlueChip is cohesive as it’s an offering for all employees verus just those who are on the health insurance plan, which could be anywhere from 55% to 80% of the employee base. We are looking at 100% of the employee base.
Also, BlueChip is sustainable and not tied to the insurance carrier. On average, employers in our target market change carriers every three years. So it is important to have a company-centric wellness program that remains in place and unaffected during these transitions.
IDH: A need wasn’t being met and you realized you could fill it.
MARTINEZ: Yes, definitely. In talking to employers, we reframed the discussion and educated them on the value of employee wellness programs. Instead of asking: What’s your return on your investment—as far as medical claims? We asked: What’s the value of the investment you’re making into wellness? Is it happier, healthier people? What are the things we can measure that are important to you? Is it productivity? Is it retention? Absenteeism?
We’re also educating employees on how to be better healthcare consumers. With the prevalence of high-deductible health plans, people are now consuming healthcare in a different way. Unlike before when they could go to the doctor and pay only a co-pay, now people are faced with a much greater out-of-pocket health related expense.
IDH: You’ve mentioned working with small and large companies. Who is your target market and how are you reaching clients?
THOMPSON: We traditionally work with privately held businesses of all sizes across many industries, not-for-profits, and community banks. This is not normally a mass-market business, so we believe in building lasting relationships that result in a strong referral network.
We’re a member of the MetroHartford Alliance, which has been very beneficial to us. We also sit on a number of boards, for example we’re part of a new chapter that’s emerging in Connecticut called Conscious Capitalism where we are serving on the board with other community business leaders, including Allison Holzer from InspireCorps.
IDH: Your office is located in downtown Hartford. Why Hartford? Was it important for you to be located in the city?
THOMPSON: For me it’s important. That was a conscious decision. I started the company in West Hartford Center, hence “Blue Back.” We believe that Hartford is a great place to work, people like to be here, and also our culture and personality really is that of being in the thick of it.
MARTINEZ: We’re excited about all of the positive things that are happening in Hartford right now. There is an energy here that resonates with us as a company and contributes to our growth and overall success.