The Carmel office of A.J. Gallagher & Co. kept the local consolidation of benefits brokers rolling with two more deals this month.
But Gallagher is now shifting its buying spree away from health insurance while the health care reform debate plays out in Washington.
Locally based The Benefits Group and Louisville-based Creative Benefits Solutions came to terms with Gallagher on June 1, said Dane Hudson, the Indiana president for Illinois-based Gallagher. It is the fourth-largest benefits firm in the nation.
Offering the resources of a large firm has proved attractive to many benefits brokers in the past two years. That’s because employers no longer look to brokers merely to find a cheaper plan, but also to help their employees improve their health and use health care more economically. Employers also want Web tools to make health plan enrollment and wellness efforts easier.
In the past two years, 12 Indianapolis-area benefits brokerages have been swallowed up in acquisitions or merged into another firm.
One merger between local benefits brokers is still on schedule. Indianapolis brokers Benefit Consultants Inc. and Benefit Associates Inc. said in March they expected to complete a merger by June 30. The firms are on track to meet that timeframe, according to a spokesman for the companies.
The two firms acquired by Gallagher will bring with them 70 employer clients, running to 300 the total number of clients handled by Hudson’s Carmel office.
Hudson declined to disclose the purchase price for either firm.
Adding the two firms will grow Hudson’s revenue to $5.7 million by year-end, up from about $4.1 million last year.
In an interview last November, Hudson hoped to top $6 million in revenue this year. He might still get there if he makes another acquisition. But the health reform debate has changed his focus a bit.
Instead of looking primarily at health benefits brokers, Hudson is now eyeing human resources consulting firms, brokers of retirement services, and firms offering voluntary benefits – programs offered through employers but paid for entirely by workers.
“I still have the opportunity to go out and pursue health acquisitions,” Hudson said. But, he added, “a lot of people are waiting to see what’s announced in August by the Obama administration regarding health care reform before we turn up a little bit more.”