Latest / The Tech Matchmaker / What's the Catch? $650 Per Employee in Payroll Tax Savings | Jordan White
Transcript
- Gina: Good morning everyone and welcome to the Tech Matchmaker Podcast. Today's gonna sound like a bit of a detour, so let me tell you why it isn't. A lot of you listening, whether you are a customer or a vendor, have W-2 employees, and both of you are facing the same challenge of rising costs when it comes to healthcare. We talk a lot on this show about technology that helps you do more with less, but we rarely talk about employee retention. And so today's episode is for all our finance, human resource leaders, and CEOs looking to save money on healthcare. My guest is Jordan White, Director of Benefit Strategies at EBS Health, and his job is finding money that's already sitting inside an employer's benefits and payroll structure. Jordan, welcome to the Tech Matchmaker. Jordan White: Thank you, Gina. It's great to be here. Gina: Now let's start with the basics. Jordan, tell us a little bit about yourself. Jordan White: Well I'm a native New Yorker. I've been in the insurance space for a little a couple of years now. have ranged the gamut in careers from finance to professional athlete to now I found a I finally found a career that allows me to help people and earn and help businesses. And in sales, it's the career that I've chosen makes people want to have me in rather than not another one of these products. What I do now actually genuinely helps people, helps businesses, is good for our economy, is good for our longevity, and there's so many benefits to what it is that I do now that it allows me to sleep really well at night and when I go out into that workforce, smile all day long. Gina: I love that. I do like to ask Jordan, tell us one thing about yourself that we probably wouldn't find on LinkedIn. Jordan White: That I am a tremendous dog lover. I've got three Bernese mountain dogs, Atlas, Athena, and Bourbon currently, and I always have three. And if anyone knows about dogs, Bernese mountain dogs are a lot to love. Gina: Love that. Okay, let's get into it. Give us the EBS Health pitch. Give us your elevator pitch and and what your program actually does and and who it's built for. Jordan White: So we're I create a tax relief for businesses. And then especially in the space now with healthcare premiums on the rise, what my company does is I find money that's already there with programs that have been around for quite a while to help employers save in their payroll, tremendous amount in their payroll, up to $650 per W-2 employee. And it also helps with employee retention because the lion's share of the benefits that we are able to find are for Employees that only earn typically between $30,000 and $60,000, $30,000 and $90,000. So some of the ancillary benefits that typically they wouldn't be able to afford, we're able to facilitate for them at no out-of-pocket cost. We create a tax savings from their FICA from the payroll. And with that tax savings, we just reallocate those funds towards ancillary benefits. And in some cases, a lot more recent than previously. We're able to not only get them ancillary benefits that they never thought they could afford, but also give them a slight boost in their check. And that's something that in this economic climate, with I'm in New York, gas prices five dollars a gallon and eleven dollars a carton of for eggs, if I can get a little bit more money in the pockets of our W2 employees, because that's the backbone of America, and I can also get them some ancillary benefits that'll help them to stay healthier and stay in the workforce for longer, who's better than us? Gina: Yeah, that's fascinating. And there's a lot to unpack there. So I'm gonna kind of break it down. Who like when you look at your typical employer and how they're structured in their benefits and payroll today, talk about where the money is being left on the ground. Like where where are where's the savings coming from? Jordan White: So that's actually a really, really good question. The savings that we're creating for both the employer and the employee comes from money that's already spent. In 2013, as part of the Affordable Care Act, the Obama administration came up with a program that was called the Preventative Care Management Program. That preventative care management program, or PCMP, was devised to incentivize business owners. To keep their employees in the workforce a little bit longer. Because if unless you've been under a rock, you see that chronic illness is on the rise. We're at a we're an all-time high. We've never had this much chronic illness. And unfortunately for that, once a person is diagnosed with a chronic illness, it's only a matter of time before they're pulled out of the workforce. Now, Bright Minds at the time said, okay, well, if we can kind of create a program that will allow employees To visit their doctors more frequently, then perhaps we can get ahead of the chronic illness and keep the employees in the workforce a little bit longer, which is going to be good for our overall GDP, which is going to be good for our overall health as a nation, and which is also going to help to benefit our economy. So this program they allow for a slight reallocation of previously spent tax money back into. to be reallocated towards health benefits. So we create a a a pre-tax deduction and a we lower your taxable income of an employee so that the money that they've saved can be reallocated. Gina: And what's the size threshold? Like what's the smallest employer where this is worth having a conversation and and kind of what's the top number ceiling that that you deal with? Jordan White: So the top number ceiling that we've dealt with thus far is upwards of nineteen to twenty thousand. Because we are a growing company, employees that by the way, because we are a growing company, we will be able to facilitate 30,000, 40,000 within the next 18 months or so, but that's just a matter of staffing. And in order to qualify for the program, the threshold is five lives, five W-2 employees. But the truth of the matter is, is depending on the size of the company. Fifty lives, twenty-five to fifty lives is really where we start to see making the difference because a company that has 10 or 15 W-2 employees probably is only going to see a savings of anywhere between six and ten thousand dollars, which is still very, very good savings. But Gina: Significant. Jordan White: at six fifty per W-2, when you talk about a company that has a hundred employees, that's sixty-five thousand dollars we're saving. Company has a thousand employees, six hundred and fifty thousand, and it just extrapolates up. Gina: So let's talk about that. So if it's $650 and an employee that they're saving, like when you're talking with customers and you mention that that number, because like you said, even for a small company, like $6,500 is probably half a payroll or whatever the case may be for that small company. for the larger companies, those numbers are are fantastic. But when you mention this to a customer, what's their typical response? Like, is it kind of disbelief? Is it you know, like Jordan White: Ha ha ha. Gina: How am I am I gonna end up paying more? Like what's the Jordan White: Right. Gina: typical reaction and and how do we help our listeners kind of get get a picture of it's not gonna cost you more? Jordan White: Okay, that's actually a good question too, because that is the typical response is what's the catch? Because, you know, especially in our economic climate, there's always a catch. Gina: Yes. Jordan White: Fortunately for business owners, the catch doesn't pertain to them. The catch pertains to us. So our job and what makes our program and our execution of the program different than others is just that making sure that we check every box, that we cross every T, that we dot every I. Number one for us is making sure that we are compliant. Because these types of programs were not there, this is not the only program that's out there. There's a ton of programs that are similar, but none that are structured with this type of guideline where you're actually helping people, where you're actually creating and presenting real medical services. So therein lies the the catch, if you, so to speak, if you want to call it that. Is that we have to make sure that we hit every compliant angle that we can. And we actually send this back to our compliant chief compliance officer and our compliance team five times throughout the process. So the biggest concern for most companies is just that, because we don't want to put anyone on the radar, we don't w wanna open anyone up to scrutiny. So when that becomes an issue, we've got a a litany of fail-safes to make sure that everything is on done as it was supposed to be. And we're compliant. Compliance is tantamount to any dollar savings or any ancillary benefit given. Gina: Interesting. So walk me through the mechanism. Like where is the money coming from? Jordan White: Okay. so what ends up happening is a typical W2 employee contributes to FICA, which is your Social Security and Medicaid. They contribute to federal and state taxes in every single paycheck. You cannot get around it. It's how our system is built. So when you do enter into a vehicle that's like this, whether it's any this or any other one twenty five cafeteria plan, there are certain parameters that you have to meet. So it If they participate in a wellness pro in a health care program, major medical, a group plan, there's a pre-tax deduction. So you take a gross of let's say four thousand dollars. The gross the pre-tax deduction for major medical would round number three hundred dollars, right? So now then you if they participate in a 401K there's another maybe two hundred dollar deductible. So there's five hundred dollars being deducted from their gross pay to get to their taxable income. With this particular program, There's an additional pre-tax deduction that will generate and lower the taxable income. And it goes in as a 125 cafeteria plan under a self-insured premium, but it's not self-insured, and the company doesn't have to be self-insured. The way that we're able to offer it as a self-insured premium is because we're actually offering medical services. We're 213D, which is another IRS code. Compliant. And that 213D just means that we're actually offering legitimate medical services rather than the wellness programs that you hear companies offering in order to take advantage of a tax relief program like this. Now, once we lower your taxable income, obviously your contribution to state, federal, social security, and Medicaid are a little bit lower. Typically around 7 to 9%. Now that seven to nine percent savings is the money that we're now allotted in order to utilize to pay for those ancillary benefits or true medical services, like telehealth, like virtual urgent care, like pharmaceutical, like mental health care, like short-term, long-term disability, vision, dental. We can range the gamut in ancillary benefits, but a huge portion of that savings has to go back. And be used for those ancillary benefits in order to be compliant. And then, and this is the kicker. Because we are 213D compliant, we get to take advantage of another program. It's 105.11, which is a self-insured medical reimbursement program. So that pre-tax deduction that lowered your taxable income is paid right back to the employee in the same check. So that there's never a period of time where an employee has to pay out of pocket for any of the services that we've aligned. There's no deductible, there's no copay, and now there's no cost. So that is what really sets this particular program apart from all of the others. And the fact that we are compliant all the way through is what allows us to continue to grow and do great business with companies. Gina: Okay, so what happens to the employees coverage? Like take home goes up a little bit, which is great, right, for the employee. But if their care, like, how do we how did they measure the level of care? Because if that goes down, that's not a win. So do they Jordan White: Watching. Gina: lose or how does that impact? Jordan White: No, as a matter of fact, not only does their quality of care and their available options not go down, it increases because we do not change their major medical. If they have a major medical program where they're offered vision and dental already, or they have short-term, long-term disability, we will pivot and create a package of offerings that's most beneficial. And we deal with the HR department or the control. Or whomever we're dealing with in a position of authority in a company or in a school district or in an entity that will help us decide what's the best package options to put out there for their for their employees. So, no, not only does their coverage not go down, it increases because they keep their major medical as is. This is an addition to, not in replacement of. So that's the key with this. And that's a a totally different conversation. For an employer, because no employer wants to go start from scratch. And if their Gina: Yeah. Jordan White: people are happy with their coverage, they want to give them more, not less. Again, this is about employee retention. And this is about bringing more to the people. So we don't want to create a cost so for the employees, nor the employers. Employers don't even have to create a budget for this because even the fees at EBS are collected post-savings. So it's no not the company and not the employee. comes out of their own pocket with a dollar. This is all funding from that is supported by the government. Gina: Which is wonderful. So walk us through the company's made the decision. They're gonna move ahead. Walk us through what the setup is. You've just mentioned you don't have to change your healthcare provider, which I'm sure, you know, that's a that's a nightmare for companies to go through. So that's wonderful. Jordan White: Sure. Gina: So what does onboarding look like? How quickly do people come up to speed? And and like what's the ask of the employers team? Is it a heavy lift on their side? Jordan White: So that's actually one of the biggest things that we've worked on in the past two years is our l true white glove service. And I know you hear that in a lot of industries, but our white glove service is legitimately a white glove service. It's a little bit different than others. From start, we have the conversation, the initial conversation about the program, the business decides, okay, this sounds great. Let's do it. We do an initial census to figure out How much of the workforce is actually qualified, because there are certain parameters that you need to reach in order to qualify for the program, both as a business and as an employee. So we do a census. And that census will give us real numbers. So now we go back to the company with an official proposal. Once that proposal is spoken about and we come to terms and it makes sense, then we work with the HR team or the controllers and whoever is has the finger on the pulse of the culture of the company. And then we'll decide what offerings to make. Once we come up with a good benefits package that's going to benefit and enrich the lives of the W-2 employees of that company, then and only then will we begin to start the messaging. We don't ask the HR department of any company to deviate from their daily in order to roll this out. We don't even consider this an open enrollment. We handle everything from pre-onboard messaging. And we'll work with whatever integration that the company uses, whether it be workday or Slack or text message, email, however they communicate with their employees, we'll jump on board and integrate with that and communicate through those channels. We come up with the pre-onboarding messaging because it's very important that the employees understand, A, they don't have to pay for this, B, they're getting more than what they had before, and C, this is coming. And the ownership, we use we use verbiage like. company sponsored so that they understand that the ownership of the company has thought to advance their healthcare benefits to make sure that the employees get more out of this. And it's again for selfish reasons they want employee retentions. But most companies and most leadership of companies just want a more healthy, productive and happy workforce. And this helps them do that. So we'll take care of the pre-onboarding messaging and we'll do that for a few weeks. Just so that everyone has a really good understanding. And we can do that through those channels. We can actually come to the facility depending on where you are in the 50 states. We'll get that messaging across. Then we come to the onboarding. We do all of the onboarding, we'll and an enrollment. Either we'll do an open enrollment, we'll do a auto enrollment, we'll do in-person or some type of hybrid again, depending on what the culture of the company calls for. And even after enrollment. We have 24-hour live chat as well as a full team of enrollment specialists that speak nine different languages that can answer any question that an employee or leadership has as to what are the next steps in the program. And then we'll create a start date. And from day one, each individual employee that's actually enrolled in the program can start accessing through their own admin login, through with using their own login credentials, they can start using the platform. And it's a proprietary platform. Owned by EBS Health. So any changes that need to be made can done be done almost simultaneously within a week's time, week or two. and any questions that need to be answered, each one of our enrollment specialists as well as our live chat are up to speed with each individual need and each individual person of that company. Gina: That's incredible to have that level of of as you said, white glove service is a is an overused term, but it sounds like that's truly the case here. Jordan, is there anything that you'd like the audience to know that I haven't asked you? Jordan White: Over 40% of our tax burden is on the backs of W-2 employees. And unfortunately, most times W-2 employees have thankless jobs. They go to work, they provide for their families, they do all the things that they need to do in order to be a functioning member of society. But they get overlooked quite often because there's not really much that we can do to give back. This was one of the few programs, and it's part of the Affordable Care Act that and it's one of the programs of it. That didn't have an expiration date. So I don't see this program going away anytime soon. This actually allows for companies to encourage their W-2 employees to take advantage of preventative care measures because it doesn't cost. You don't think that every W-2 employee wants to participate in short-term disability in case they get hurt, wants to participate in life insurance in case of their untimely death, to leave something for their family? Unfortunately, if you're earning $35,000 a year and you have a mortgage and/or rent and/or kids, that may not be part of your part of your package. But with this particular program, because the government has allowed for reallocation of some funds that they would have taken in to put somewhere else in order to get W-2 employees these ancillary benefits, it will truly enrich their lives. And the word Just needs to get out to more employers that this is a way, it's a win-win for everyone. And there's not many programs that are like that, that you don't have to jump through hoops of fire. This particular one, we've created at EBS Health a system where all the hoops of fire have been extinguished. We have to jump through some hoops, but that's the problem for us, not for the employer. We make it as simple and as easy as possible for employers to take advantage, and it could not be easier. For employees to take advantage. Gina: I love it. It's such a fantastic program, absolutely. And it's part of why we have you here, because a lot of the the people in the contact center are in that wage bracket that that you that you described. So to wrap things up, I have always been a fan of James Lipton and we do a few little rapid fires to close it off. So what sound Jordan White: Love it. Gina: or noise do you love? Jordan White: A a basketball going through a chain hoop to chain net. It's one Gina: Mm-hmm. Jordan White: of the most pure sounds in sports and I've grandkids, so the sounds of their laughter. Gina: love it. And what sound or noise do you hate? Jordan White: Silence. Gina: What profession other than your own would you like to attempt? Jordan White: Well I've that's a conversation for another time. I've had so many careers. Gina: I think it's really. Jordan White: I'm actually I I run a few businesses now. I would like to be a professional golfer. Gina: Hmm. And Jordan, if somebody wants more information on EBS Health, who should they call? Jordan White: So my contact information is JordanWhite@EBS.health EBS.health is the website and the number to reach me directly is area code 631-807-8425 I'd be happy to answer any questions from any employer or any person that has an interest in this particular program and how that it can help them and or their business succeed, grow and thrive. Gina: Awesome. Jordan, thank you so much for joining us. And the way you're finding real savings for both the employers and the employees in a space that just typically shows rising costs is fantastic. So really appreciate your Jordan White: Thank you. Gina: time and thank you for being here. Jordan White: Gina, it was my pleasure and thank you for helping me get the word out. I'm I'm very, very confident that we can help a lot of people based on this talk. Gina: Love it. Thank you.