FirstPerson buys FlashPoint HR unit

Indianapolis-based benefits brokerage FirstPerson Inc. acquired the small-employer human resource division of Indianapolis-based consulting firm FlashPoint last week in a bid to provide a wider array of services to small businesses.

FirstPerson added one FlashPoint employee, Deb Hunter, as part of the deal, as well as acquiring FlashPoint’s customer lists and intellectual property. The acquired unit includes materials for conducting HR assessments, building employee handbooks and policy and procedure manuals, and providing onsite support.

Bryan Brenner, FirstPerson’s CEO, declined to disclose the purchase price. But after referring lots of his benefits clients to FlashPoint for years, he said it was a step that made sense.

“We’ve gone from being kind of insurance-based to offering a lot of wellness programming and services, a lot of communications. You’re really talking about culture change at that point. And that starts to get into HR-type issues,” Brenner said. “We really get kind of stuck sometimes with employers. We can’t make any more progress on the things that we do because of some of those issues.”

FirstPerson has been moving for years to do more consulting than brokering of employer health benefits—a strategy that it thinks can win even though the federal health reform law has pushed many benefits brokers to sell their businesses to larger firms.

Florida-based Brown & Brown Inc. and Illinois-based A.J. Gallagher & Co. have been especially active in recent years buying up central Indiana benefits brokers.

The Patient Protection and Affordable Care Act puts pressure on benefits brokers in two ways: It no longer allows health insurance companies to roll brokers’ commissions into the premiums paid by employers, and it will create government-run exchanges to offer standardized health plans to small employers, possibly eliminating the need for brokers’ guidance.

“There are definitely clients in that small-business unit that we will lose due to health care reform,” Brenner acknowledged. But overall, he noted, the health law will still leave employers needing a lot of guidance for designing their health benefits and pursuing strategies to get employees to be healthier, such as wellness programs and on-site clinics.

“Health care reform’s not going to change any of those needs,” Brenner said. “It only helps our business, frankly.”

FirstPerson was formed by the 2009 merger of two smaller firms, and has now grown to employ 40 people with revenue of $7.5 million per year. Its small-business unit, which serves employers with 100 workers or less, accounts for about one-fourth of that revenue.

FlashPoint, which was founded in 2002, said in a statement that demand from large- and medium-size clients has grown recently, forcing it to narrow its scope of services. The firm will now focus its consulting on talent development, compensation and improving organization's strategy and performance.

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