Latest / Get Savvy...Demystifying Healthcare / Episode 141: From Corporate to Nonprofit: Dan Cosgrove's Fight to Fix Broken Employee Healthcare

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Episode 141: From Corporate to Nonprofit: Dan Cosgrove's Fight to Fix Broken Employee Healthcare · Get Savvy...Demystifying Healthcare

0:00
SPEAKER_00: In 2008, there's the creation of the Affordable Care Act.
0:02
SPEAKER_00: And for most Americans, actually for 99.9% of Americans, I don't think anybody saw a reduction in their cost.
0:08
SPEAKER_00: In fact, most people's premiums increased by 200, 300, maybe a thousand percent.
0:12
SPEAKER_00: So to course correct the Affordable Care Act, there was an amendment in 2016-2017.
0:19
SPEAKER_00: And that was geared to incentivize employees and employers to focus more proactively on their healthcare.
0:26
SPEAKER_00: Now, why would the government do that?
0:32
SPEAKER_01: If healthcare has ever left you feeling frustrated, overwhelmed, or stuck, then show it's for you.
0:38
SPEAKER_02: Welcome to GetStabby, the Mystify Healthcare weekly podcast, where we take complicated healthcare topics and make them simple.
0:46
SPEAKER_01: We bring you experts in the real-world strategies, from 50 healthcare trends to lower interesting costs, the basic advocacy and the latest healthcare trends, so you get more options on your turn.
0:58
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1:08
SPEAKER_03: Hello everyone, before we get into the show, just a quick 90-second update.
1:13
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1:18
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1:21
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1:26
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1:28
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1:38
SPEAKER_03: As always, I am doing what I do best, and that is demystifying those confusing topics and making them simple.
1:46
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2:00
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2:17
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2:21
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2:23
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2:25
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2:31
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2:34
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2:38
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2:40
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2:46
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2:48
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2:49
SPEAKER_03: Let's demystify AI together.
2:52
SPEAKER_03: And now on with the show.
2:54
SPEAKER_03: Hello, everyone, and welcome to the show.
2:56
SPEAKER_03: Navigating a costly and fragmented healthcare system is their hope.
3:01
SPEAKER_03: Healthcare spending has increased from approximately 5% of US GDP in the 1960s to nearly 17% today.
3:09
SPEAKER_03: For many employers, healthcare is one of the largest and least predictable operating expenses.
3:15
SPEAKER_03: Many consumers and employers feel powerless over this unpredictability and ever-increasing cost for healthcare.
3:21
SPEAKER_03: What are our options?
3:22
SPEAKER_03: To help us get into this topic, I have Dan Cosgrove on the show.
3:26
SPEAKER_03: Dan is the CEO of Better Benefits USA, a nonprofit on a mission to close the healthcare gap on care, cost, and coverage for hardworking Americans.
3:35
SPEAKER_03: Dan is passionate about the structural incentives behind U.S.
3:39
SPEAKER_03: healthcare, including how brokers, insurers, and employers interact and why many cost-saving efforts fail due to misaligned initiatives.
3:47
SPEAKER_03: Dan also explores preventative care models, wellness programs, and tax-efficient benefit design to improve retention and employee health outcomes.
3:56
SPEAKER_03: Welcome to the show, Dan.
3:57
SPEAKER_00: Thank you so much for having me, Sandy.
3:59
SPEAKER_00: I am pumped up for this conversation.
4:00
SPEAKER_00: I think it'll be fun.
4:01
SPEAKER_03: Me too.
4:02
SPEAKER_03: Me too.
4:03
SPEAKER_03: I always love talking about healthcare.
4:04
SPEAKER_03: And so let's get right into it.
4:07
SPEAKER_03: Tell us your story and how it led you on the journey that you're on today.
4:10
SPEAKER_00: Well, hey, I mean, my quick background.
4:13
SPEAKER_00: I went through the corporate world.
4:14
SPEAKER_00: I was at PG, Berkshire Hathaway, Nike.
4:16
SPEAKER_00: Uh, really enjoyed all those stops.
4:18
SPEAKER_00: In fact, one of the things I worked on at PNG was a thing called salary sacrifice, how we could create better employee benefits while saving the company money.
4:26
SPEAKER_00: And, you know, I guess it comes full circle.
4:27
SPEAKER_00: 15 years later, I'm working on that.
4:29
SPEAKER_00: I really fell into this because uh I run two nonprofits actually.
4:33
SPEAKER_00: One is a mental health company.
4:34
SPEAKER_00: And we've got about 40 employees.
4:36
SPEAKER_00: And so if you're a business owner out there, you you've probably gone through the same pain that I went through, gosh, three or four years ago, where I was looking at it and I'm doing my absolute best to take care of my employees because truthfully, my employees aren't employees, they're my people.
4:48
SPEAKER_00: Like I know them, I know their family, I know their kids.
4:50
SPEAKER_00: And like when you're a business owner, you really care about your people.
4:53
SPEAKER_00: Um, and I was just considering continuing to see costs increase.
4:57
SPEAKER_00: I'm just like, this can't be possible.
4:59
SPEAKER_00: So I went down a massive rabbit hole, challenged all the status quo and assumptions that people, you know, have just previously accepted as fact.
5:07
SPEAKER_00: And I found that, yeah, I was being sold a lie from our broken healthcare industry.
5:13
SPEAKER_00: And so I did it first on my own employees.
5:15
SPEAKER_00: I saved$3,600 a year per employee and I gave them better benefits.
5:19
SPEAKER_00: And so that is ultimately what then sparked me creating the nonprofit Better Benefits USA, uh, because I want more business owners to become aware of what they actually can do to save money for the company, well, more importantly, taking care of their people.
5:32
SPEAKER_03: Well, I know if somebody's out jogging on the treadmill or walking the dog, you have their ears perked up with like the numbers.
5:40
SPEAKER_03: So that's pretty awesome.
5:41
SPEAKER_03: But well, let's just start before we get into that note is what is going on with our healthcare system and why is it costing employers so much money simply to take care of their employees?
5:53
SPEAKER_00: Well, it's simple words, it's broken.
5:55
SPEAKER_00: You know, my boss Warren Buffett once said America's healthcare system is the tapeworm to American businesses, which I know is such an appealing idea, but yeah, it's extremely broken.
6:04
SPEAKER_00: Look at the incentive model.
6:05
SPEAKER_00: Historically, you know, brokers in our nonprofit is also a broker.
6:09
SPEAKER_00: So brokers do get paid by insurance companies.
6:11
SPEAKER_00: And sometimes it can be a peppum, sometimes it's a percentage of how much you convince that client to overpay on insurance.
6:17
SPEAKER_00: So when you have a misaligned incentive structure, you commonly are not getting the right results for a client.
6:23
SPEAKER_00: And a client, because healthcare is not a sexy topic, a client tends to allocate that responsibility to a third party, aka the brokers, such as us.
6:32
SPEAKER_00: And we know brokers, we're just keeping our heads above water, managing all these different things.
6:36
SPEAKER_00: So sometimes we're just not even aware of all the things out there that we should be bringing to our clients.
6:41
SPEAKER_00: So it's just a very broken industry, and we're trying to change it by bringing more value to the clients and getting paid on a different model.
6:48
SPEAKER_00: We get paid based on the savings we generate for clients instead of getting paid for the insurance company.
6:54
SPEAKER_03: That is so important.
6:54
SPEAKER_03: And I often say this and that healthcare illiteracy is high.
6:59
SPEAKER_03: Oh, yeah.
6:59
SPEAKER_03: And it's not because consumers don't care, brokers don't care, employers don't care, but it's just it's to your point.
7:05
SPEAKER_03: It's not the most favorite, you know, cocktail party conversation, but it's also fragmented and complicated.
7:12
SPEAKER_03: As a broker, I myself just I spend half my time educating consumers, and those conversations are frustrated, they're angry, they're sad, they go without.
7:24
SPEAKER_03: And it's truly, truly a sad state.
7:26
SPEAKER_03: So I appreciate what you're doing.
7:28
SPEAKER_03: So let's get into those numbers.
7:29
SPEAKER_03: I think my listeners were like, hey, Sandy, let's get back to those numbers.
7:33
SPEAKER_03: How did Dan do that?
7:34
SPEAKER_03: So tell us more about the story of how you saved the money that you did and got better health care for your employees.
7:41
SPEAKER_00: Yeah, so it's you know, it's a multi-step process.
7:43
SPEAKER_00: It's not going to happen overnight.
7:45
SPEAKER_00: But if if we do a step-by-step process, let's start with the lowest hanging fruit.
7:48
SPEAKER_00: So in 2008, there's the creation of the Affordable Care Act.
7:51
SPEAKER_00: For most Americans, actually for 99.9% of Americans, I don't think anybody saw a reduction in their cost.
7:57
SPEAKER_00: In fact, most people's premiums increased by 200, 300, maybe a thousand percent.
8:01
SPEAKER_00: So to course correct the Affordable Care Act, there was an amendment in 2016-2017.
8:08
SPEAKER_00: And that was geared to incentivize employees and employers to focus more proactively on their health care.
8:14
SPEAKER_00: Now, why would the government do that?
8:17
SPEAKER_00: Because we spend four and a half trillion dollars a year in the United States on chronic care conditions.
8:22
SPEAKER_00: That's not a great way when your government is running at what, a$37 trillion deficit, increasing it by about$2 trillion a year.
8:29
SPEAKER_00: Not a great way to get out of debt if you're spending four and a half trillion on chronic care conditions.
8:33
SPEAKER_00: So a little light bulb went off in Washington.
8:35
SPEAKER_00: They're just like, wait a second, if we start incentivizing employees and employers to focus more proactively on their healthcare, there's a greater chance, not today, but you know, in a future year, that we can reduce chronic conditions here in America.
8:47
SPEAKER_00: So let's, you know, let's hypothetically do some math here.
8:50
SPEAKER_00: If all of a sudden we can half the amount of chronic conditions, like in the rest of the world, then all of a sudden the US government's spending 2.2 trillion, the verse 4.5 trillion.
8:59
SPEAKER_00: Well, that's a great way to pay down your debt.
9:01
SPEAKER_00: So that's how it started.
9:03
SPEAKER_00: Now, you have to motivate the employees and employers to want to do these programs.
9:08
SPEAKER_00: And that's where I call it a preventative health care program.
9:11
SPEAKER_00: So there's various tax codes written.
9:13
SPEAKER_00: Uh simply it's a section 125 cafeteria plan or IRC tax code 125.
9:19
SPEAKER_00: And any employer can put this in place for their employees.
9:22
SPEAKER_00: And it's a uh direct benefit for both the employees and employers.
9:25
SPEAKER_00: It's like the the average employer will save about 600, 700 bucks a year per employee.
9:30
SPEAKER_00: More importantly, what you're giving to your employees are really powerful employee benefit packages tied to healthcare.
9:37
SPEAKER_00: So if you want me to list off a few, like free virtual healthcare for the entire family.
9:42
SPEAKER_00: It's the Netflix model applied to the healthcare space.
9:43
SPEAKER_00: So it's value-based care.
9:44
SPEAKER_00: The free accident claims.
9:46
SPEAKER_00: So it's covering that gap, that delta, since most people, when they buy their health insurance, they're moving to a high deductible.
9:51
SPEAKER_00: So it's it's gap coverage.
9:53
SPEAKER_00: Um free blood panels, free prescriptions for like 94% of all drugs in America.
9:58
SPEAKER_00: Like that's the power of these programs.
10:00
SPEAKER_00: And that's just like the first phase.
10:02
SPEAKER_00: I'll pause though, Dave, see if there's any questions there.
10:05
SPEAKER_03: That's very helpful.
10:06
SPEAKER_03: I didn't even think about the tax write-off and establishing that program within and taking advantage of preventative benefits.
10:13
SPEAKER_03: And you're right, it's also a win to the employer as well to really help people be proactive.
10:18
SPEAKER_03: So I think that's to your original point about taking care of your employees, but they're people, they're families that you know that too.
10:25
SPEAKER_03: So I just think that's awesome.
10:27
SPEAKER_03: No, carry on.
10:28
SPEAKER_03: Yeah.
10:28
SPEAKER_00: Well, so to the still phase one part, you're focusing really like the core objective is preventative healthcare.
10:34
SPEAKER_00: You want to give people free access to healthcare 24-7, 365, no matter where they're traveling in the world.
10:40
SPEAKER_00: And you want to make it available not just for the employee, but any spouse and kids up to the age of 26.
10:44
SPEAKER_00: You care about the whole family if you're an employer here.
10:46
SPEAKER_00: And by doing this, again, follow trends, right?
10:49
SPEAKER_00: What are the trends going on?
10:51
SPEAKER_00: If you Google it, value-based care is in on Google right now.
10:54
SPEAKER_00: Like more people are pushing to value-based care.
10:56
SPEAKER_00: That's why this group called Amazon purchased this other group called One Medical for a couple billion dollars.
11:01
SPEAKER_00: It's basically subscription-based healthcare.
11:03
SPEAKER_00: That's what it is.
11:04
SPEAKER_00: And that's where the puck is going.
11:06
SPEAKER_00: That's ultimately what we're just trying to do is help people understand it's like, will our plans cost something?
11:10
SPEAKER_00: Yes, they cost something because all forms of insurance cost something.
11:13
SPEAKER_00: But the way we structure it is we get paid based on the tax savings.
11:16
SPEAKER_00: So it is still cost beneficial for the employer to offer these plans because they're saving more money than they are actually paying us.
11:23
SPEAKER_00: That's how we felt we we function it as like a gain share model.
11:27
SPEAKER_00: We get paid X percent of what we save clients.
11:29
SPEAKER_00: So that's what it is for the employer.
11:31
SPEAKER_00: But the employee, since they're also saving money on taxes, they're not only getting all these healthcare benefits, they're getting a net pay increase, which most people living paycheck to paycheck would be happy with an extra 50 bucks per pay period in their pocket.
11:42
SPEAKER_03: Oh, for sure.
11:43
SPEAKER_03: So it almost sounds so easy to hear you talk about it, but you figured all of this out to employer groups or that person that's listening that thinks about, okay, why didn't I think about that?
11:54
SPEAKER_03: I mean, we talked about earlier, there's so much going on, but why aren't more employers doing this?
11:59
SPEAKER_03: It sounds great.
12:00
SPEAKER_00: Oh, it sounds great, right?
12:01
SPEAKER_00: But uh all you have to do is Google it.
12:03
SPEAKER_00: And then they'll be like, oh no, no way in hell I'm touching this.
12:07
SPEAKER_00: And and so you know, and it's it's an unfortunate fact for most people.
12:11
SPEAKER_00: We make decisions based on fear, not on fact.
12:13
SPEAKER_00: Uh so rightfully so, the IRS has their job.
12:15
SPEAKER_00: Their job is to collect tax revenue.
12:17
SPEAKER_00: So the IRS put out memos in 2016, 2017, even 2023, saying, hey, these programs should be a taxable benefit for the employees.
12:26
SPEAKER_00: And that that's what they said.
12:28
SPEAKER_00: Now, where people get confused a bit is that the IRS is writing memos.
12:34
SPEAKER_00: Memos are opinions.
12:36
SPEAKER_00: You and I can have an opinion, it does not make it a law.
12:39
SPEAKER_00: So although the IRS wrote memos and created opinions, people think that's fact.
12:44
SPEAKER_00: That is not fact.
12:45
SPEAKER_00: And in fact, all they have to do is now look at more tax legislation.
12:49
SPEAKER_00: There's a chevron being overturned in 2024 by the Supreme Court, in which they said agency overreach is dead.
12:55
SPEAKER_00: So what was the IRS doing?
12:57
SPEAKER_00: They were doing agency overreach.
12:58
SPEAKER_00: They're trying to scare people into believing that this tax code that was legally allowed was not legally allowed based on their opinions.
13:04
SPEAKER_00: So again, people just Google things and they say the IRS said you can't do it.
13:09
SPEAKER_00: Well, the IRS doesn't make a law.
13:11
SPEAKER_00: That's Congress.
13:12
SPEAKER_00: And show me any Republican or Democrat that thinks it's in their best political interest to make healthcare even worse in America.
13:19
SPEAKER_00: I haven't found one yet.
13:20
SPEAKER_00: So that's that's the main issue, is people get confused and they shut down because the moment they see one thing that says you shouldn't do it, fear overcomes any forms of fact.
13:30
SPEAKER_03: That's such a good point.
13:31
SPEAKER_03: And uh so tell me more uh about uh Better Benefits USA because to the employer listening who's sitting there thinking, yeah, I don't have because time, time is always the issue.
13:42
SPEAKER_03: There's the fear factor, of course, but there's also time.
13:45
SPEAKER_03: I just don't have time to do it.
13:47
SPEAKER_03: Yeah.
13:47
SPEAKER_03: So tell us more about what Better Benefits USA does for employer groups.
13:52
SPEAKER_00: Yeah, I mean, honestly, we try to make it like the Amazon one-click type experience.
13:56
SPEAKER_00: So as the consultant here, we're gonna do the analysis for people.
13:59
SPEAKER_00: We're gonna come back, we're gonna show them on a step-by-step process how we're gonna do it for them.
14:03
SPEAKER_00: And it is a done-for-you service.
14:05
SPEAKER_00: Like we will actually do the setup for them on this phase one portion of helping them get it set up in their payroll system, educating the clients, giving them the dedicated account manager so that when employees have questions, they're not going back to that very skeleton crew size HR department to try and answer those questions.
14:21
SPEAKER_00: So we do that in phase one.
14:22
SPEAKER_00: And then all the other phases, we do a very similar model as well of carrying the baton on behalf of the employer to take care of them.
14:30
SPEAKER_03: So let's make it simple for me.
14:32
SPEAKER_03: I'm the employer group, I'm the benefits person, and I'm looking at we have a Cigna plan, I'm making the scenario up.
14:38
SPEAKER_03: I have a Cigna plan, I have a united plan, and I'm just gonna stick with it.
14:43
SPEAKER_03: I know the rates are going up, but I'm not sure what to do.
14:46
SPEAKER_03: I mean, are you helping them kind of look at what their plans currently are?
14:51
SPEAKER_03: Yeah, what's the expense to the employer, and should I consider renewing this plan?
14:56
SPEAKER_03: Or if I do, how do I take advantage of those tax benefits?
15:00
SPEAKER_03: I'm trying to get in the head of my listeners and see how you guys address that.
15:04
SPEAKER_00: Absolutely.
15:05
SPEAKER_00: And so the answer is it depends because the the last thing we want to do is steal any business from a another broker trying to help their client.
15:14
SPEAKER_00: Right.
15:14
SPEAKER_00: So sometimes we'll have the broker be the in-between trying to provide the advising because again, we don't want to replace anybody that's actually trying to take care of their client.
15:23
SPEAKER_00: If a client came to us and said, hey, we hate our broker, we want to get rid of them, then yes, we could play the role role of the broker, but that's not our goal.
15:29
SPEAKER_00: Because we know the way real way we create change is by helping the brokers understand this benefit and the other benefits that we offer in bringing it to their client because more people working on providing better value is better than one nonprofit trying to provide value to all these clients.
15:42
SPEAKER_00: Um, so but let's just pretend like I'm playing the role of the broker here to make this simple.
15:47
SPEAKER_02: Sure.
15:48
SPEAKER_00: If the client said, Hey, I'm I'm looking at these things, all we just ask them for is, well, send us the proposals, send us your most recent health insurance bill, and ideally a recent census.
15:58
SPEAKER_00: And we'll do an analysis and we're gonna come back and tell you, well, okay, this is what you're currently looking at is these two options, but have you even thought about option three or option four?
16:07
SPEAKER_00: Because option three will save you an extra 40%, option four will save you an extra 60%, and provide your employees better benefits.
16:14
SPEAKER_00: So, like that's how we unpack it, is we just need to understand on a case-by-case situation what they're going through in order to give them the right recommendations.
16:22
SPEAKER_03: No, and what I love about that though is just that I always say it takes a village in healthcare, and it does.
16:27
SPEAKER_03: You know, if you have a good broker who's going to really, you know, have your back as quarterbacking things, I like to say, but to bring in better benefits to really be that advisory group to kind of uncover those additional layers if I'm articulating it well, then employers can make smarter decisions.
16:45
SPEAKER_03: Can you give us a case study maybe and just of a group maybe you worked with that can help folks better understand?
16:51
SPEAKER_00: Yeah.
16:52
SPEAKER_00: I mean, we have a number of different case studies.
16:53
SPEAKER_00: Would you want me to do sub-50 or over 50 employees?
16:58
SPEAKER_03: Let's if we have time, let's just do both if we can.
17:01
SPEAKER_03: Because I I want to I want to support wherever anybody may be.
17:04
SPEAKER_03: Yeah.
17:04
SPEAKER_00: 100%.
17:05
SPEAKER_00: Okay.
17:05
SPEAKER_00: So let's do this then.
17:06
SPEAKER_00: We'll start sub-50 and then we'll work up.
17:09
SPEAKER_00: Okay.
17:09
SPEAKER_00: So if you're a sub-50 employer, that means you are definitely doing a fully insured plan.
17:14
SPEAKER_00: And one of the first mistakes we actually could be making as a group that has less than 50 employees is you're actually offering group health insurance.
17:21
SPEAKER_00: I hate to say it, but but that's just a fact.
17:23
SPEAKER_00: So I'm not saying don't offer health insurance.
17:25
SPEAKER_00: I'm saying don't offer group health insurance.
17:27
SPEAKER_00: Because how is insurance price and price insurance is price based on risk?
17:30
SPEAKER_00: And they're going to take the most unhealthy employee and dictate your premiums based on that most unhealthy employee.
17:35
SPEAKER_00: So you're overpaying on group health insurance.
17:38
SPEAKER_00: You can just look at the rates charged in hospitals.
17:40
SPEAKER_00: They make money off of group sponsored plans.
17:42
SPEAKER_00: They get to charge 200 to 300% above the Medicare rates.
17:46
SPEAKER_00: They don't get to do that on marketplace plans.
17:48
SPEAKER_00: So let's let's start there.
17:50
SPEAKER_00: First step, we're gonna do the preventative care program.
17:53
SPEAKER_00: No question about it.
17:54
SPEAKER_00: Might as well get that quick 600, 700 bucks for the employer, save the employee a few thousand dollars, give their entire family better access to value-based care that's on demand 365 with what I call a safety net in an accident plan to protect those out-of-pocket medical expenses that health insurance won't.
18:10
SPEAKER_00: Well, by doing that, we've now done, we've now taken ourselves into step two.
18:14
SPEAKER_00: We've reduced the individual employees' taxable income.
18:18
SPEAKER_00: And you know, you have a lot of people here that are still earning less than$60,000 a year or$63,000.
18:25
SPEAKER_00: That's the the subsidy cliff.
18:26
SPEAKER_00: So if you have somebody that was making$63,000 a year and you just reduce, we'll just make it up, you reduce their taxable income by$15,000 by using this preventative care program.
18:37
SPEAKER_00: If you did that, now their modified adjusted gross income, or what shows up in an employee's box one of their W-2 at the end of the year, it's gone down from$63,000 to$48,000.
18:47
SPEAKER_00: Well, what does that do?
18:48
SPEAKER_00: That allows somebody to go and buy a health insurance plan for a fraction of the cost in the health insurance marketplace because they qualify for subsidies.
18:57
SPEAKER_00: So that would be the first part that we would do with an employer is oftentimes, even if you have 10 employees that don't qualify for any subsidies, the majority of them probably will.
19:05
SPEAKER_00: So now you've been able to reduce your health insurance costs by 40, 50% and allowing your employees to have more freedom of choice of saying, I I want the United Healthcare Plan or I want the BCBS plan.
19:15
SPEAKER_00: Like give them choice instead of just giving them a group thing.
19:19
SPEAKER_00: So that's that's what we would do on a sub-50 is preventative care to then look on an individualized basis for the types of subsidies people might qualify for to ultimately then drive the cost there, oftentimes being about 40 or 50% less than what the group plan was.
19:35
SPEAKER_03: Wow, no, that's that's amazing.
19:37
SPEAKER_03: I I I'm ready to dial your digits already.
19:39
SPEAKER_03: Keep talking.
19:41
SPEAKER_00: So so like we did that, for example, on like a 35-person group.
19:46
SPEAKER_00: Um and it I feel for them we saved them$312,000.
19:52
SPEAKER_00: Like that was stupid how much they were overpaying for their healthcare.
19:55
SPEAKER_00: Um but um but yeah, so like it it's just unfortunately when you turn a blind eye to things, you just lose track of it.
20:04
SPEAKER_00: And uh again, since you know I hate to say this about my dear friends in HR, math is not an HR person's favorite thing to do.
20:12
SPEAKER_00: Uh we tend to shut down when we have to do math.
20:15
SPEAKER_00: So yeah, uh math gets confusing.
20:18
SPEAKER_00: And oftentimes this is actually a math equation that we're solving for somebody in HR, which is is always tough to deal with.
20:24
SPEAKER_03: But the one thing I'd say to that is to the person in HR too, and I don't like math either, but this person, what you're describing is way beyond lovingly, their their pay grade to try to figure out all of the tag side of it in healthcare.
20:38
SPEAKER_03: And that's often too often it happens that people, and this isn't a condescending statement by any means.
20:44
SPEAKER_03: I mean, they're just trying to do everything they can to help employee along with their 75 other tasks.
20:50
SPEAKER_03: And sometimes I think this is where it becomes important to to know what you can do and what you need to seek help for.
20:58
SPEAKER_03: So yeah.
20:59
SPEAKER_00: Yeah, again, to in HR's defense, like what happens for them?
21:02
SPEAKER_00: They because they're overworked, who do they go to for advice?
21:06
SPEAKER_00: Typically their current broker partner.
21:07
SPEAKER_00: And brokers, people just think brokers are doing nothing.
21:10
SPEAKER_00: Like brokers are overworked too.
21:12
SPEAKER_00: And if brokers aren't familiar with the programs we're talking about, what are they gonna do?
21:17
SPEAKER_00: They're gonna Google it or they're gonna search AI.
21:19
SPEAKER_00: And what is Google going to spit out?
21:21
SPEAKER_00: It's going to spit out the IRS memos because that is the key opinion leader.
21:24
SPEAKER_00: And so, what is that broker then gonna do?
21:26
SPEAKER_00: They're gonna do their quick research, write it up in a nice email and say you shouldn't do this program.
21:29
SPEAKER_00: Group, good.
21:30
SPEAKER_00: They've done their work, they've helped them understand that they shouldn't do it.
21:33
SPEAKER_00: They've saved everybody time, not money.
21:35
SPEAKER_00: So, like that's how the current process works.
21:38
SPEAKER_00: Now, does it change when you talk to CEO and CFO and you explain to them the benefits and they get it?
21:43
SPEAKER_00: And then they're saying to HR, hey, we're going to do this program, figure out how to do it.
21:47
SPEAKER_00: Yes.
21:48
SPEAKER_00: That is when you actually get buy in at the executive level to make real change for the employees, is when HR knows they are empowered to actually consider something new versus make this decision on themselves.
21:59
SPEAKER_00: Like Like we're all here to manage risk, right?
22:02
SPEAKER_00: Show me any person that's been fired for sticking with the status quo.
22:06
SPEAKER_00: Nobody.
22:06
SPEAKER_00: So when you're challenging the status quo and showing people that you can do something bigger and better, well, new is scary.
22:13
SPEAKER_03: Yeah.
22:14
SPEAKER_03: No, absolutely is.
22:15
SPEAKER_03: So let's go to the second scenario, the larger group.
22:18
SPEAKER_00: Second scenario, okay.
22:19
SPEAKER_00: Let's just make it up 150 person group.
22:21
SPEAKER_00: So there's two different options.
22:22
SPEAKER_00: We're gonna go down two different channels on this.
22:24
SPEAKER_00: Okay.
22:24
SPEAKER_00: Uh, because again, had a client in New York, awesome people.
22:27
SPEAKER_00: Most of our employees, though, were earning about 50, 60K a year.
22:31
SPEAKER_00: And uh, again, they were already using the preventative health care program.
22:34
SPEAKER_00: So for them, this is very uh different thinking.
22:38
SPEAKER_00: But for them, they were paying uh the employer in total about$20,000 a year in health insurance premiums for pretty crappy coverage, honestly, for their employees.
22:49
SPEAKER_00: And again, since we had reduced the taxable income of the employees, we had found that the majority of those employees could now in the New York state marketplace qualify for a$0 a month premium,$0.2,200 maximum out of pocket plan.
23:03
SPEAKER_00: So now we just were able to give all those employees free health insurance.
23:07
SPEAKER_00: Well, the only way you can actually give them free health insurance, since legally speaking, an employer must offer health insurance if they have over 50 employees, is if you make the plan unaffordable.
23:17
SPEAKER_00: So what do we do?
23:18
SPEAKER_00: We made the plan unaffordable for the people that were lower income.
23:22
SPEAKER_00: So now they could legally go out and get that free insurance plan for themselves and their entire family.
23:29
SPEAKER_00: Well, what does that do to the employer?
23:31
SPEAKER_00: And this is again where people make decisions based on fear.
23:34
SPEAKER_00: Yes, the employer now is going to pay a$5,010 fine for every employee that gets a subsidy in the marketplace.
23:42
SPEAKER_00: Well, let's do the math though, because people immediately shut down when they say, Oh my gosh, the IRS is hitting me with a tax penalty of$5,000 per employee.
23:50
SPEAKER_00: Well, you were just paying$20,000 per employee per year for health insurance premiums for a crappy plan.
23:56
SPEAKER_00: Now you're gonna pay$5,000 a year, meaning you saved$15,000 and gave your employees actually a better health care plan.
24:03
SPEAKER_00: It's math.
24:04
SPEAKER_00: It's it's legitimate math, but people again shut down when they hear tax penalties, tax penalties.
24:09
SPEAKER_00: Like, sometimes the smartest thing you can do is actually pay a penalty.
24:13
SPEAKER_00: Let's go down the second channel though.
24:15
SPEAKER_00: Um you have I I work with a really, really generous group.
24:20
SPEAKER_00: Uh they've got uh a couple thousand employees, and and again, they really want to take care of their people.
24:24
SPEAKER_00: It's a more blue-collar industry.
24:26
SPEAKER_00: And and so they they have some really comprehensive health insurance.
24:28
SPEAKER_00: Again, preventative health care programs in place, so that's already there.
24:32
SPEAKER_00: And now we've reduced the taxable income.
24:34
SPEAKER_00: It it took them a while.
24:35
SPEAKER_00: It took them like a full year to warm up to actually talking to us more than just like the phase one stuff.
24:40
SPEAKER_00: And it's like, well, yeah, we're we're having a tough conversation with our, you know, with our board on like what do we do about the employee spouse or the family plans?
24:50
SPEAKER_00: Because like 25% of their cost was like on the spouses that are getting close to that like 65 range.
24:57
SPEAKER_00: And it's like, well, you want to hear what you should do?
25:01
SPEAKER_00: Um and and so I I explained to them the tax glitch, which have you heard of the tax glitch?
25:08
SPEAKER_03: I I haven't, no.
25:09
SPEAKER_00: Okay.
25:09
SPEAKER_00: So again, employers have to legally offer health insurance to their employees if they have over 50 full-time employees.
25:17
SPEAKER_00: But the key word there is offer health insurance to their employees.
25:21
SPEAKER_00: They do not have to offer health insurance to the employees' family.
25:26
SPEAKER_00: And employees cannot go out and get subsidies in the marketplaces if they're being offered affordable health insurance by their employer.
25:35
SPEAKER_00: Employees' family members can go out because of the tax glitch and go and get subsidies in the marketplace.
25:41
SPEAKER_00: So, what an employer should actually be doing, especially if you have more employees that are lower income.
25:47
SPEAKER_00: Like if you're a tech company and everybody's making$300,000, no, don't follow this advice.
25:51
SPEAKER_00: But if you're a grocery store, if you're a logistics company, if you have more people working closer towards that, you know,$40,000 to$60,000 a year, yes.
25:59
SPEAKER_00: Do this every single day.
26:00
SPEAKER_00: So what we are able to show them is okay, we're still going to offer health insurance to our employees because legally you have to.
26:07
SPEAKER_00: But we're now going to discontinue offering any form of coverage for any spouse or family member.
26:12
SPEAKER_00: And now we're going to let that spouse and family or kids go out into the state marketplace and with their lower household income, input that and see what type of subsidies they might qualify for.
26:23
SPEAKER_00: And just like that overnight, especially if you're of a larger employer, you're self-insured, we eliminated like a thousand belly buttons on their plans.
26:30
SPEAKER_00: So greatly reduced their self-insurance costs or claim costs, while simultaneously actually giving again those most of those kids got free health insurance under the CHIP program.
26:40
SPEAKER_00: And most of those spouses got plans for like 300 to 500 bucks a month.
26:44
SPEAKER_00: So again, it was a massive way to provide the employees better benefits while reducing the cost exposure and saving the company money.
26:52
SPEAKER_00: Now, all of this is scary and hard to explain, and that's where people shut down.
26:57
SPEAKER_00: But like once what I always say is once the pain is bad enough, people are willing to listen.
27:02
SPEAKER_00: And for this group, you know, they'd been with us for over a year before they finally said, okay, what would you do in healthcare?
27:08
SPEAKER_00: It took them a full year to finally like warm up to, okay, there maybe we should think differently.
27:13
SPEAKER_03: Yeah.
27:14
SPEAKER_03: Well, I will say this, and I always try to be positive but realistic.
27:18
SPEAKER_03: And I don't see any hope on the horizon for fixing the fragmented and costly healthcare system.
27:24
SPEAKER_03: And that's just the truth.
27:25
SPEAKER_03: And as a broker, and you know, we talked about this in the beginning, and I'm moving on from that for many reasons, but tough job, and it's a tough message to tell consumers, employer groups, small groups, you know, to deliver the message every year, you're gonna pay more, but get less.
27:42
SPEAKER_03: And so I think there has to be another way.
27:44
SPEAKER_03: And I love that the advice that you had shared is just absolutely mind-blowing.
27:49
SPEAKER_03: And things, you know, even I'm in the industry, and I was not aware of that.
27:53
SPEAKER_03: So, what does that tell you?
27:54
SPEAKER_03: So we will make sure and uh put a the link to Better Benefits USA to make sure that people can reach out.
28:01
SPEAKER_03: It's a conversation, right?
28:02
SPEAKER_03: That's exactly where to start.
28:04
SPEAKER_03: And I because it's not lovingly, but yet candidly speaking, it's not going to get any better.
28:09
SPEAKER_03: So it's time to look at alternative solutions.
28:11
SPEAKER_03: So thank you for offering that.
28:12
SPEAKER_03: So, with that, as we draw to a close, what are any final thoughts that you would give to listeners who are just kind of struggling with this and just saying, okay, I know I need to pick up the phone, but I I don't know, I'm not sure.
28:24
SPEAKER_03: What would you say to folks?
28:25
SPEAKER_00: Yeah, I mean, hey, we we are here when the pain is bad enough.
28:30
SPEAKER_00: For some people, the pain's not bad enough yet.
28:32
SPEAKER_00: But just know, like, there are actual solutions.
28:35
SPEAKER_00: It doesn't have to feel overwhelming.
28:36
SPEAKER_00: Like, again, this is a foreign concept because unfortunately for us, we have purposely made our healthcare system as confusing as possible because with confusion, the the current, you know, groups make more money off of it.
28:51
SPEAKER_00: So yeah, I I wish I could simplify it down to like as easy as possible.
28:55
SPEAKER_00: And our group tries to do our best, but at the end of the day, we do have to accept that it's gonna be different.
29:00
SPEAKER_00: It's gonna be change, and change is scary.
29:02
SPEAKER_00: But at the end of the day, if you can save 2,000, 3,000 bucks per employee and better take care of them, I would be willing to go through a lot of change in order to do that.
29:12
SPEAKER_00: And so hopefully people have the hope and knowing that like hard work does pay off, and we're here to help them with that hard work.
29:20
SPEAKER_03: Well, awesome.
29:20
SPEAKER_03: Well, Dan, it has been such an enlightening conversation.
29:24
SPEAKER_03: I appreciate all that you're doing and your time and expertise and really opening up this option to people to know that there's hope to another option to reduce that cost.
29:35
SPEAKER_03: So I'm so grateful to you and really appreciate you being on the show today.
29:38
SPEAKER_00: Yeah, thanks so much, Sandy.
29:40
SPEAKER_00: Have a good one.
29:40
SPEAKER_03: I enjoyed having Dan on the show.
29:42
SPEAKER_03: What an incredibly enlightening conversation.
29:45
SPEAKER_03: And I appreciated the alternatives he is giving employer groups to really think about how they can take care of their employees and provide better options and more affordably.
29:56
SPEAKER_03: The link to Better Benefits USA is in the show notes.
30:00
SPEAKER_03: So make sure and check it out if you want to start that conversation.
30:04
SPEAKER_03: In our next episode, once again, we're talking about a healthcare and how expensive it is, confusing, and for many people, sadly, one hospital bill away from creating a financial crisis.
30:16
SPEAKER_03: Even worse, some people are avoiding getting the care that they need because the very system meant to help them feels too difficult, overwhelming, and costly to navigate.
30:27
SPEAKER_03: To help us talk more about this, I'm bringing on Dr.
30:30
SPEAKER_03: Terry Adderham.
30:31
SPEAKER_03: Dr.
30:31
SPEAKER_03: Adderham is a board-certified pediatric emergency physician and physician executive with more than 30 years experience spanning academic medicine, federal health leadership, and health policy.
30:43
SPEAKER_03: She's the author of the Prepared Patient, Your Guide to Surviving the Healthcare System from Johns Hopkins University Press.
30:51
SPEAKER_03: She's also the editor and lead author of Digital Health, AI, and generative AI in healthcare.
30:56
SPEAKER_03: Dr.
30:57
SPEAKER_03: Adam will translate all of this into plain practical advice you can use the next time you're staring at a hospital bill or denied claim.
31:06
SPEAKER_03: So you don't want to miss this episode, so make sure you follow us so you get a notification of the episode so you don't miss it.
31:13
SPEAKER_03: Until next time, get savvy.