Sweep Up That Paper!

A small start-up helps big firms save on employee health insurance by taking bids over the Internet

Think you've got problems choosing a health-care plan? Consider Michael Scarpa, benefits manager for the 13,000 U.S. employees of ABB, the power-and automation-technologies giant based in Zurich, Switzerland. Until recently, as contracts expiredevery May, 20 HMOs in 40 states would send in six-inch-thick binders containing detailed bids for ABB's business. Scarpa, 37, and his staff would spend days plowing through the paperwork. Then Scarpa would often pay a consultant as much as $45,000 to analyze the bids for each contract up for renewal.

That all changed earlier this year when Scarpa learned about IE-Engine, a privately held software firm based in...

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