Xerox Forms Alliance with CHOICE

Office automation and equipments major Xerox Corporation (XRX - Analyst Report) recently announced that it has forged an alliance with CHOICE Administrators Exchange Solutions for providing broad and secure cloud-based Health Insurance Exchange (HIX) solution. The alliance will be offering the service across 50 states.

CHOICE will provide the framework of the HIX Solution Suite, a could-based platform that helps participants in making informed enrollment decisions and also provides their sponsoring employers the means of maintaining affordable budgets. Xerox will deliver business process and technology solutions to the states for handling large quantities of information in a swift, secure and efficient manner.

States across the U.S. can initiate the implementation and customization of the solution with immediate effect so that the HIX can be up and running for enrollments in October 2013 and for January 2014 coverage effective dates. This timeline is in accordance with the cut-off dates set by the Patient Protection and Affordable Care Act.

Discussions with the states revealed that most of them wanted to have maximum autonomy over health reforms, wishing to retain control over their HIX rather than concede to the federal solution. This is where Xerox and CHOICE will come in handy since their solution will help the states save time as the certification deadline approaches.

Moreover, the states would be freed of the labor to build a product from the scratch and the solution developed by Xerox and CHOICE will instead enable them to focus on customization. The states can modify the HIX solution as per the requirements of their residents and small businesses.

Xerox has been working with state governments for over four decades now. Thus, the company has a sound knowledge of the dynamics of the health care market and its association with CHOICE will help it further to implement the HIX design.

We currently have a long-term Neutral recommendation on Xerox. The company, which competes with Canon, Inc. (CAJ - Snapshot Report) and Hewlett-Packard Company (HPQ - Analyst Report), maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.