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Dave Olson, Published May 10 2013

Fargo-based Evolution1 thriving in health care payment world

FARGO - Fargo-based Evolution1 describes its software platform as the nation’s largest electronic payment solution for companies that offer health savings accounts and flexible spending accounts to pay for health care and the consumers who use them.

With offices in Edina, Minn., St. Louis and Hartford, Conn., Evolution1 is a big outfit, and it shows every sign of getting bigger.

When two companies merged in 2011 to form Evolution1, the firm served about 7 million consumers and 50,000 employer groups through 400 corporate partners

Today, Evolution1 software serves more than 75,000 employer groups through nearly 500 partners that range from third-party administrators and health plans to insurance companies and financial institutions.

Those partners use Evolution1 software and other technology to help client companies manage health savings accounts, flexible spending accounts and health reimbursement arrangements, as well as defined contribution and wellness plans, said Tiffany Wirth, director of marketing for Evolution1.

Even though Evolution1 software serves more than 9 million consumers through partners such as Blue Cross Blue Shield of North Dakota and U.S. Bank, the name Evolution1 often stays in the background.

“Third-party administrators use our platform, but they roll it out with their own branding to their employee groups,” said Todd Reynolds, chief technology officer for Evolution1. “We don’t go direct to employees at all. We sell through partners.”

In addition to helping employers manage benefits, Evolution1 officials say the company’s technology makes it easy for consumers to pay for health care expenses while allowing them to use cellphones and other devices to keep track of things like account balances.

Beating costs

All of that leads to greater efficiency and cost savings, said company leaders, who say they saved customers and their employees more than $2 billion last year through annual health care cost reductions and tax savings.

Evolution1 said it also saved its partners more than $80 million in annual operating costs through claim and payment automation.

“That’s why they come to us. We help make it (health care payment) easier to understand,” said Jeff Young, the company’s chairman and CEO.

Evolution1 was formed in 2011 when Connecticut-based Evolution Benefits acquired Lighthouse1, which at the time was based in Fargo but had most of its team members in Minneapolis.

Genstar Capital, which invested in Evolution Benefits in 2010, remains an owner of Evolution1.

Fargo-based Bell State Bank and Trust, an investor in Lighthouse1, is also part owner of Evolution1.

Since 2011, Evolution1’s Fargo office has evolved to become home to the company’s executive, human resources, marketing, development and call-center functions.

Fargo office grows

How fast has the Fargo office grown?

Four years ago, two employees worked at the Fargo office of what was then Lighthouse1. Today, about 120 of the company’s estimated 300 workers are based in Fargo, where the company has its main building at 4324 20th Ave. S.

A point of interest about Evolution1’s workforce: About three dozen employees are alumni of Great Plains Software, a company founded by Fargo entrepreneur Doug Burgum.

Great Plains was acquired by Microsoft about 12 years ago.

Reynolds said Evolution1 likes the Fargo area for many reasons, including its colleges and universities, which Reynolds described as an employee feeder system for firms like Evolution1.

The company’s founders decided early on that they would conduct much of their business and communication online. That decision has been a huge factor in Evolution1’s success, said Matt Gustafson, vice president of product development.

“It’s a website, at the end of the day, and we’re still reaping the benefits of that,” he said.


Readers can reach Forum reporter Dave Olson at (701) 241-5555