VANNOY:

Hello everyone. My name is Mike Vannoy with Asure. I wanna thank you for joining today’s webinar. I see a bunch of people still climbing on the numbers ticking up fast, so I’m gonna give it about 60 seconds. We’ll go ahead and get started. Wanted to let you know you’re in the right place.

Hello, everyone. My name is Mike Vannoy with Asure and thank you for joining today’s podcast webinar. Top Five Myths about Fully Insured versus Self-Assured Insured. First of off, let me introduce my guest today, Matt Williamson, who’s the managing partner of Employee Benefits and p PEO services at the Insurance Office of America. And, and as Matt and I were talking in preparation for, for today’s discussion, you know, it just kind of came to the realization that this, this whole world of, of insurance and in benefits in, you know, for going on, you know, what, since 2008 with the Affordable Care Act that, that so much change in this benefit world and attempts to bend the cost curve. And there’s, and what I think has maybe been hidden under the, under the, the, the scene here is what, what opportunities really do still exist for small and mid-sized businesses, specifically as, as it as it relates to being self-insured, right?

 Where in the past, this was kind of a known thing for really big companies, that there was a you know, you think about your risk pool and you got a big pool group of employees, and, hey, we can do this more cost effectively by self-insuring. But largely this has kind of gone unnoticed in, in the small business world. And so that’s really today’s discussion. I, I think Matt and I want to kind of set the stage and talk about what self-insured even means, but for those who do know what it means you know, there’s a lot of myths that I think most people think that this is a big business play or it’s too risky of a play. You know, we couldn’t, we couldn’t handle this on a cashflow basis. Matt’s gonna help us kind of put a bunch of those concepts to bed.

So, with that, I wanna, I’m gonna welcome Matt, and, and, and maybe before we jump into the five myths, let’s, let’s just talk about what does it actually mean to be self-insured? And, and so Matt, maybe, maybe if you could tee us up here, when I, when I think about, you know, all the nameless faces of a big risk pool, right? So you got a big insurance carrier, a or a really big company with thousands of employees. You know, you have somebody who has a heart attack, somebody has cancer. Those are expensive claims, but you also got, you know, hundreds or thousands of really healthy people that kind offset all that. But you know, what, what does it mean for a small employer who does not have this giant risk pool in a heart attack? Could really, you know, if done wrong, could, could devastate a business kind. Kind of walk us through this continuum that didn’t necessarily exist even just a few years ago.

WILLIAMSON:

No problem, Mike. Thanks so much for having me on. I greatly appreciate it. We created this healthcare cost continuum based on the fact that a lot of groups are fully insured right now, and they don’t understand how they can first off get data. Because when you’re fully insured, especially in the mid-market, the small market, it’s impossible to get data on your group. So we started on the left hand side, and the fully insured means basically that you pay your premiums, you get your renewal, you pray that it’s, you know, a single digit renewal, but where it comes in, the plans are all basically made for you. You can choose between plans and you get your renewal and you hope it’s single digits, but most of the time it’s not. It starts with trend, which is usually 12 to 14% per carrier. And there are, you know, through the aca there are some additional percentages built in there, but the fully insured market is you pay your premiums, they pay the claims.

When your renewal comes up, you get your number. If you don’t like it, people start moving deductibles around and try to get creative. And that’s how the fully insured market works. Obviously, everybody, if you’re under a certain threshold, a lot of states throughout the United States have basically filed state state filed rates, so you can’t even move them. And it’s, it, all you do is choose a broker based on the fact that you have a good relationship and then give you good service. Well, the next level, the level funding with the, the BUCA stand for, obviously the Blue Cross is United, Cignas, Aetnas, and Humana of the world. That’s, that’s the acronym buca. So that’s all the big players that are out there. Now, there are other regional carriers that can provide great service, but that’s kind of what they use for the, the leading groups.

The level funding now is the ability to have a product that is considered, considered self-funding, but it gives you the ability to, it looks just like a fully insured product, but it does fall under the regulations of self-funding. But what happens is, if you have, I’ll give you an example. If you have a $400 rate on level funding, a hundred of it goes towards the administration, which you can’t recoup. However, 300 will to the claims bucket at the end of the year. If you have a good year, you can have the ability to receive half or 75% of that claims bucket. And that’s called level funding. And Cigna and Humana are primarily two of the big carriers that introduced that. So, and now, when you start going into partially self-funding, this is where you’re starting to introduce more of, you’re getting more ability to assume risk, and this is wherever the conversation starts where you, the stop loss comes into play.

And what the stop loss is, is, as you alluded to Mike previously about a large claim, a heart condition, a cancer, preemie baby, something of that nature that’s really gonna move the needle on your claims, you establish a stop loss. So that one incident doesn’t go over a certain threshold, usually around 25,000 on the smaller groups. And it has, and it sets where you don’t get dinged higher than that towards your claims. Now, partially self-funding with a tpa, which is a third party administrator using blue Cross, or United or Cigna’s network, is another way in which you can really start moving the needle. So what you would do is hire a third party administrator that would be, that would do all the claims adjudication, but now you have more ability to move the fixed cost as far as administration, some of the different products that they have within, you know maybe if you do have a cancer situation, the TPA might say, Hey, look, we have these nurses on staff.

They reach out to people full time that they’ll reach, they’ll help ’em with their cancer situation, make sure they’re going for their, taking their medications. They do a lot more follow up. Now, I’m not saying all the BUCAs don’t do that, because they do, but sometimes with the tpa it’s more of a personal level. And what they do is you can, you can lease or rent, and there’s a network access fee that’s built into the TPA for Cigna or Aetna or any of the Anthem networks. You can do that. So now you get into, we’re getting in larger groups and, and this all kind of is mid-market to moving to larger groups where you have the law of large numbers, and now you have the network with the rental network we discussed with the BUCAs. And then you have medical management vendors for guidance with steerage to lower cost or high cost or high quality of service.

For example, I’m in Orlando, we’ve got two not, we have two tremendous networks down here that both do a fantastic job. We have the ability to negotiate with one of these networks, and we have steerage we call an accelerated network, or, you know, obviously means that we have steers to push ’em towards that network because we’re getting better claim prices. And what we use is we can use a route network, which would be one of the BUCAs or something else in addition. So what you would do is have a plan that would steer people to a narrow network or accelerated network, or whatever title you wanna call it. And then you have a second plan maybe that has higher deductibles and higher out of pocket that you can still go to anybody you wanted within the national carrier. And then finally you have, you replace the networks with reference-based pricing.

It’s a solution now for centers of excellence. And what happens in these models is you can use, there’s many providers out there that have gone and done all the research on these centers of excellence all over the country. Obviously, Moffitt, Shands, Cleveland Clinic, I mean, just, these are just a few of them, you know, that show the top of my head. But these centers of excellence are in the network. And then you have a tremendous steerage towards these centers of excellence. And then you have it all wrapped around the fact that you will be working with these centers to keep claims down. So that’s kind of a wordy, lengthy walkthrough, but hopefully you could understand.

VANNOY:

Yeah, you know, Matt, so a couple things to jump out to me. You know, one is it’s not a binary thing like it used to be, right? It used to be I was fully insured and I went with the, the, the big carriers or an unknown carrier of your choice or I was self-insured. There, there wasn’t all these gradient layers in between. It, it walk us through maybe the last kind of decade about how that, you know, how that’s kind of e evolved o over time with it. You don’t, you don’t have to reexplain each of the buckets, but, you know, h how, how has this changed? And so I, cuz I think it kind of underpins why a lot of us in the market and the small business market particularly don’t know about it.

WILLIAMSON:

So, and that’s, that’s a, that’s a great remark right there, Mike, because in the last 10 years we have seen things and, and I’ve been in the business, just take a step back. I’ve been in the business 28 and I’ve been on the broker side for 15, but I’ve been in insurance for 28 years. But if everybody recalls back when the PPOs came out and really discounted medical pricing that you had to use a network, that really changed a lot of the mentality because now you are saying to folks, okay, look, you use this network, you’re gonna save a tremendous amount of money. You’re gonna have these distinct copays for e you know, you go to the hospital, it’s $200, you go to the urgent care, it’s $25. I mean, the copays were extremely low. So we had, that came out and really changed the game because everything was more of a P P O go wherever you want.

And you, you know, it just, it just, it wasn’t working. And then all of a sudden this, you know, HMO came out and it was like a radical change because now everybody’s saying, oh my goodness, I have to use this low network. But through education, we changed the mindset of folks because it made sense, because you saved on premium dollars, well, claims caught up and those, those networks started charging more. So as you look at the wheel things started changing on that. So then we started getting into health savings accounts and, and then we really started looking at which is kind of like self-insuring because it’s a lot more education. So now you had dollar one programs, which is kind of like, basically you’re, you’re ensuring yourself for knowledge and now you’re forcing folks that they have to get an mri, they’re calling around because they don’t wanna get dinged if it’s $1,500 whenever they can get it for 300 by just making a few phone calls and having a little price war between the, the, the facilities and everybody knows if you go to the hospital, it’s gonna be a lot more.

So that kind of started really educating and along those same lines, then we started having companies come out with level funding and started the TPAs really started making a move. And it’s a, it’s a great thing because it created competition. So then a lot of, a lot of the BUCAs that we referred to, obviously the acronym started saying, Hey, look, we need to play ball with these guys, these TPAs because we can still make money on the network access since we already have it available instead of just selling our product. So that’s kind of how it worked. But now you see recently the level funding strategy is really starting to take hold and this strategy can go down to groups as low as 10, you know, and, and, and realistically the sale on it is, why would you not take a chance? It looks just like a fully insured product, but you have the opportunity to get money back. So it’s almost like a dividend program on the workers’ comp. Whereas you have a, you have a great year and you get money back for having a productive year. So if you are able to manage and educate your employees and when it’s, when it’s on a level funding you, you’re able to get all the data too, which a lot of you can never get whenever you’re fully insured. So I hope that kind of helps us kind of a Yeah,

VANNOY:

No, Matt, I I think that helps a ton help, it helps me too. So I, I think about, you know, I know it’s more nuanced than this, but I think about, you know, experienced entrepreneurs and business owners executives who you have been doing this for you know, doing their thing for quite a while. You know, they, they, they most, I I would think fall in the category of, I know what self-insured means, but think it was for big companies without realizing those, this level of funding and this partially funding alternatives that have emerged, I think unfortunately relatively silently. And then there’s the other bucket, I think that is, I’m a brand new entrepreneur. I, I’ve started a company and I, it’s cuz I’m really, really good at building, you know, this widget or providing this a certain service and just didn’t even know such a thing existed. You know, there’s learning about insurance. So either way, to me, this is a really helpful fou foundation. So anything you wanna add to just what is self-insurance before we kind of move on and kind of address these myths? Cause I think the myths are important for everyone to understand wherever you are, you know you know, new brand new to insurance versus you’re a seasoned pro experienced entrepreneur. Any, anything you’d wanna add?

WILLIAMSON:

The only thing that I’d like to add is just maybe through the reform, the filings are a little bit different with each, so, but it’s, it’s still, once you hit certain thresholds and you’re working with somebody who does a good job, there’s a calendar that you know, when things are coming up or, you know, on a self-insurance side it’s the PP Corey fees. And then on the other side it’s, it’s mostly just the aca you know, fees that you’re trying to, and it hits that threshold over 50 employees. But if you’re working with somebody who’s very valuable, the compliance aspect of all of these are just extremely important because the last thing you wanna do is have the ability to get fined. But that, that’s just primarily the, the little nuance. But in reality, the fees on the self-funded side are less than the fully insured side.

VANNOY:

Yeah, you know, it, it’s interesting you say you know, I think most of us know that, you know, the ACA has this 50 employee threshold and through a lot of HR legislation, you know, coming from, from, you know, our world at, at, at Asure we think, you know, payroll, we think HR and compliance, there’s a lot of le HR legislation that has this 50 employee kind of a marker. I think the real opportunity here is for these firms, you know, 10 employees and up to have an opportunity to, to, to, to really meaningfully cut benefit expenses is, is, is so cool. So, alright, with that, let’s go ahead and jump in and, and, and talk about these top five myths. So the, the, the first one and, and you kind of alluded to it you know, but you know, I I, I think there’s this perception, and I think it used to be right, that self-insuring is just simply too risky. If I’ve got 10 employees and one of ’em has a heart attack, those claims are gonna crush me, therefore I can’t do it. But you, you, you know, put a little more detail around that, that explanation you gave earlier of why that doesn’t have to be the case.

WILLIAMSON:

Okay, no worries. So with the smaller to mid-market, you’re still going into a pooled group. So even though you are looking at self-funding and you’re doing it on a partial, partial basis, you’re still in a large group, which does protect you. And there is stop-loss coverage built in. So you would never be dinged for a tremendous amount because there is a stop-loss and it’s usually 27 5 or 25,000. You will never have a claim over that. And you, and that’s part of the administrative fees that you pay, is the purchase of the stop loss coverage. So that’s one of the things that a lot of folks say, oh my goodness, if I have a a tremendous cancer claim, I’m gonna, you know, I have 200 employees, I’m gonna spending all this money out of pocket. This is, this is gonna be drastic. We’ll know, as long as you structure it correctly and you’re able to purchase the stop loss, you’ll always have protection.

VANNOY:

So for that young entrepreneur, maybe not young, but a new entrepreneur starting out in business, they’re just learning about insurance. A way to think about this, the stop losses, maybe it’s almost like, hey, this is insurance on your insurance, right? The insurance is for your employees correct. To provide healthcare. And then it’s a layer on top of that insurance policy to make sure that you’re not gonna pay too much in a claim. You’re not gonna, just, like your employees wouldn’t pay the full cost of their heart attack. They’re gonna have their deductibles and, and their max out of pockets. Same for you in paying claims, right?

WILLIAMSON:

Correct. Correct. It’s insurance on your insurance,

VANNOY:

So, so who pay? So, so, so I guess talk us through this concept of the standard specific deductible. What, what is that?

WILLIAMSON:

So you’re talking about just a deductible. So the three things, let’s even take a step further back further. We’ll do one on one. The, the things that drive the cost of a, of a medical plan for an employee and an employer. The three main drivers are the deductible, the co-insurance and the out of pocket. So, and the way those work is, if you have a l if you have a large claim, like let’s say it’s $10,000 and you have a thousand dollars deductible, the deductible comes off the bat first. So you’re remaining 9,000. If you have 10% co-insurance, you’d pay 10%, the employee would pay 10% on the 9,000 remaining. So they would have a 1900 would go to their out of pocket. Those are the three drivers. So, I mean, obviously there’s copays for everything else. And the other thing about self-funding is you have the ability within a program to fluctuate those copays.

So if something doesn’t, like, let’s say, I’ll give you an example. So we had, we had a a construction company and we had a, a very high Hispanic population, and for some reason we noticed that like 400 of these employees were going to the emergency room all of a sudden. And we, we were like, why are they gonna the emergency room for everything? Well, it turned out one of the best doctors in the area that was Hispanic moved to the emergency room. So they therefore moved to the emergency room. So we said, okay, so we had to do some education and we did that. But what, what I’m, and this, the reason I brought that example is you can fluctuate and say, Hey, look, we wanna drive people to the urgent care. We’re gonna make that copay $50 and we’re gonna put 500 for the emergency room so people know we want to use the urgent care, and we will also educate them as well. So you can do different things like that within a program on a self-funding space.

VANNOY:

So talk us through who pays, who’s paying the bills after, after the, the deductible is met in, in, in this case.

WILLIAMSON:

So once you’re out of pocket is met, the insurance company picks up the total cost for the year, your deductibles and your out of pocket run on a calendar year basis, nine out 10 times. Now, you can have a policy year, but most people run them on January to December. So you run them on a calendar year. It’s just easier for tracking, especially with a health savings account. But I mean, I do have clients that do, they would rather, their fiscal year runs in July, so they’d rather do a policy year. So yeah, it’s, it’s, it’s, it’s interesting what people choose, but that’s, that’s how it works.

VANNOY:

So, so may maybe talk us through and, and if, if this is the right place, you know, how, how does, how does, you know, F S A H E S A play into this in, into a, in a small business entrepreneur strategy for insurance?

WILLIAMSON:

So the, so a lot of people get confused with an HSA or an fsa. So the FSA is a flexible spending account. Anybody can have that on any program. It used to be the account that’s the user or lose it. But now there are, you do have the ability to roll over $500 if you fill out the correct paperwork that’s remaining on your program. The hsa, you have to have a high deductible plan attached to it. So when you have a, a high deductible plan, HSA qualified, there’s basically two components. You’ve got the health plan component and you’ve got the banking component. Now, you don’t have to open up the banking component, you can just do the health savings account, the high deductible plan, and work it like a regular plan. But if you choose to use the banking component, you could put proceeds in that pre-tax, which is a tremendous savings, and you’d have to use it.

You could use it for dental, vision medical, anything that you choose like that. So it’s, it’s a great tool and it, if you choose it, you don’t even want to use a debit card which comes attached to it. You can it rolls over, but I mean, it’s an interest bearing account. It’s very low, it’s like 0.025. So it doesn’t do a lot of interest. And basically the rules that govern the HSA banking portion are similar to those with 401k. So if you went out and bought a TV and you were audited, you’d be taxed accordingly based on whatever tax bracket you’re in. So the HSA is a great component, but the problem with the HSA now is folks used to, to choose the HSA plan alongside the copay plan because they could take the difference in the HSA from the copay plan and just dump it into the hsa. Well, nowadays the programs are almost the same, and the HSA from my perspective, really benefits those that have the liquidity or those that are very ill, that they know they’re gonna blow through it and everything’s covered at a hundred percent after their max out of pocket is hit.

VANNOY:

Got it. And so you know, all the more reason to, you know, when you’re, you’re self-insured to understand your data and your claim structure Right.

WILLIAMSON:

Versus correct

VANNOY:

Blind, all that. Right. All right, well, so we, we can keep talking about this one. Cuz this is, I, I think this whole risk pool notion in, in, in, in, in the stop-loss is kind of the foundation of, of self-insurance. But looking at the clock, let’s move on to, to, to myth number two. And and obviously these are, these are related, right? So they

WILLIAMSON:

They are related.

VANNOY:

I got a healthy, healthy group. Somebody has a heart attack, somebody has a cancer diagnosis, all of a sudden, you know, it, we, we talk about it from a risk perspective and I think from a premium that, that the downstream premium impact impact, but upstream of that, there’s like, you know, scary cashflow implica implications. So it’s kind of, kind of talk us through that.

WILLIAMSON:

So the nice thing, the nice thing about the way self-funding has moved in the past as we’ll say 10 years, is that it has become more predictable. But a lot of people think just because it’s self-funding automatically, they assume it’s unpredictable because they assume that if you have a big claim, you’re gonna have to dump money into the bucket. Now, in a large case, a large case scenario, they do have groups that have a very high threshold for their stop loss. Previously we said it was 25,000. We have some groups that have 125,000, 175,000 because they’re large and we’re able to fund the claims bucket, we’ll say quotes the claims bucket fully that they can, if somebody does hit that large deductible on the stop loss, then we can fund it. So, but on the smaller stuff, it’s, it’s not as palatable. And that’s why you do, you do have the threshold of the, the, the level funded product instead of the fully insured product. So cashflow, this, this myth is very alive, but now with the level funding, it makes it kind of obsolete.

VANNOY:

And then now what’s the difference between level funding and self-funding?

WILLIAMSON:

The level funding is more of a safe harbor, dipping your toe into the self-funding world, whereas it looks just like a fully insured product, but you’re actually self-funding a portion of it, and you have the ability to get money back at the end of the year.

VANNOY:

So, so that behaves a little bit like maybe workers’ comp does it?

WILLIAMSON:

Yeah, it’s just like a dividend program on workers’ comp. Exactly. Okay. It’s a good way to learn and understand and to start collecting data and, and know the health of your population because it does provide the data necessary to do that.

VANNOY:

So is it, is it safe to say the smaller risk pool that you have, you can level fund to get a more predictable cash flow stream but to, to maximize the savings you’d want to pay on actuals, not estimates? Is that a good way to think about it?

WILLIAMSON:

That’s, that’s kind of a true statement. But the nice thing also, when you’re a smaller group and you’re on level funding, you do get monthly monthly claims analysis that allow you to know how you’re trending and what’s going on. And usually on the smaller companies, people know whenever somebody’s gone to the hospital or they had a procedure or something anyway, so they know it’s gonna hit. So, but it allows you to start seeing if you’re in deficit or not.

VANNOY:

So what, what happens if you, you have you know, a a a tough year for claims. You, you know, you got a couple of key employees with a couple employees that have some, some significant health issues. I mean, could you, could you start out with level funding and still have to, you know, be in a position where you gotta, you gotta add to the fund, so to speak?

WILLIAMSON:

No, the great thing, that’s a great question because it, just like you do, whenever you’re fully insured, you get your renewal and luckily you have a group of a large group around you that helps protect you. So it’s the exact same as just fully insured. It looks the same.

VANNOY:

That’s awesome. Okay. All right. I’m gonna move on to myth number three here. I, I think there’s this I, I’ve heard, heard the business owners talk about this concept of kind of, no, there’s no going back. Like this is some tipping point. Like, okay math doing a good job, putting me at ease, <laugh> about myth number one and two that, you know, is not as risky and it’s not gonna hit my cash flows. But that as I thought, but I I, if I do this, there’s no going back cuz I’m, I could get stuck with claims that I’m, I’m now stuck in this world forever. But is isn’t that even a true statement? And it, and if it is or isn’t, you know, walk us through the evolution of, of that story.

WILLIAMSON:

No, it’s not true statement. Let’s say that you, you’ve got over 50 employees and you just have some severe claims that are ongoing and you’re like, look, we’re, we’re, we’re bleeding. We need to go back to fully insured for whatever reason. Or let’s just say, let’s say this, let’s say we go to market on your behalf and the fully insured quotes come back extremely competitive and it’s gonna save the organization a lot of money that has happened. And they say, you know what, we’re gonna go back the fully insured. Absolutely you can. But there’s a misnomer that people say, okay, well what if these large claims are are still ongoing when we transfer over? Well, there’s what’s called run out. It’s usually six months after the, after you term your policy on the self-funded side. And it gives you more of a, a long period for those claims to run out. And then the fully insured would pick ’em up up.

VANNOY:

So I, I don’t wanna make any claims. So this is not to be a sales pitch for insurer or a sales pitch for, for, for your, your firm. You know, we’ll give share contact information at the end, but just kind of ballpark you know, so appreciate you kind of level setting expectations for what is factually out there. But what kind of expectations do most small businesses see or achieve when making these switches? You know, what kinda percent of those actually do wanna end up, for whatever reason, wanna go back to fully insured?

WILLIAMSON:

So last year I probably had, and I’ll just use my numbers, I probably had 25 groups that were small to mid-market that were level funded. We’ll use that number 25 groups. I had two that went back to fully insured that had terrible claim years out of 25. Out of the 25, I had probably 16 get money back, which is a huge number. And it might not have been a ton of money, but I had one group that was 125 received $56,000 back.

VANNOY:

Wow. Okay. All right. So, so a as we think about risk of making a move, not, not only is, is this not a tipping point of no return you can go back, walk it back if you want. Mm-Hmm. <affirmative> just, and this is anecdotal cause 25 is not a huge sample set. I, I I get but over half of those saw meaningful savings in their first year from that then.

WILLIAMSON:

Absolutely.

VANNOY:

Yeah. And so just to repeat, yeah, for our audience, our, our mission with these podcasts and these webinars is to help provide education for small businesses to save money, to make money to grow. So that, that, that’s it. And so if this is an avenue that works you know, if you wanna call Matt, awesome. If you want to work with your in, in current carrier’s, awesome. We, we just wanna help people grow. So I, to me, that, that that’s huge. Can you just talk maybe more about what it looks like and, and how that process would work about, you know, cuz as we talked in the beginning, this isn’t binary, I’m fully insured versus self-insured, you know, taking two steps forward, maybe one step back. What, what, what does, what does it look like changing if people want to, maybe they stuck a toe in, they wanna go deeper. If they stuck three toes in and then they want to come, I gotcha. They don’t wanna, yeah,

WILLIAMSON:

It’s, the process is just how everybody does it today. It’s just finding somebody you’re comfortable with that can provide you the data and educate you as you go on this journey. I would suggest working with somebody who has a strategy that’s not 12 months, that’s two to three years because it, because the evolution of the company does ever change. And folks health change. But you can want to be with somebody who has the ability to pivot quickly and allow your employees to become educated throughout the process because it’s gonna change. So really a change management strategy is, is something that everybody should talk about because when you, healthcare is the number two line item for a company as far as expenses to payroll, I mean, it, it’s, there has to be something that’s, that changes, you know, there has to be, cuz this, the cost and just dealing with these astronomical numbers is ridiculous.

And it, and it, and it’s like, sometimes I feel like the grim reaper walking into places, but we always find a solution and it’s just, you have to educate and just work together as a team. But it takes, when you dip your toe in, you know, that you have to have somebody who’s gonna be able to, to provide the data to you, but also be able to understand the data. And then when you do that and you feel educated and, and comfortable and also confident that the time’s, right? That’s whenever you make the move and honestly of you have to be a certain size to really wanna move forward, to get to where you’re using the BUCAs and the TPAs. But when you hit that and, and you are comfortable with it, you really have the ability to move the risk needle in your favor. So it’s just finding somebody who’s educated that can help you through that journey.

VANNOY:

Hey, Matt, you’ve mentioned a few times now about, you know, the data and so it’s important to have the data. I mean being in the space, I know what that means for the, for those who are new to insurance, the entrepreneur who is a brilliant code science person, and she just built an amazing SaaS product, is take it to market and now has to provide benefits to her employees for the first time. What, what does that mean? The data as, as it relates to, to healthcare and, and, and benefits

WILLIAMSON:

The data. The data is the driver of the cost. So upon looking at information that’s provided, even even on the, the level funding, let’s, let’s start with the smallest groups. When we receive the information, you always receive the large claimants, how much those are. And then a lot of times the carriers will project out what they think is the total amount that’s gonna go towards the claims at some point over its lifetime. But then when you start getting into more like Cigna as a gray report and it has all the pharmacy on there, all the prescriptions folks are taking, what are how many times have folks gone for their wellness visits? How many times have they gone to the doctor? How many times they go to urgent care versus the emergency room? How are things trending from a, the prescription percentages on what do they use for generic? How often are they having home delivery versus going and picking it up? I mean, this is all data that’s in there that you can build around your population to see what is important and how can you move the needle to keep your premiums down and design a plan that’s gonna be beneficial to all of your folks that work for your organization.

VANNOY:

Yeah, perfect. You know, here, here’s the big thing that kinda just jumps out to me. This whole point of no return is that there, there is no such thing anymore <laugh>, right? No,

WILLIAMSON:

No. It’s gone

VANNOY:

To, to, to me that’s, that’s almost like the biggest takeaway. It’s kinda like a, I got a light a light bulb moment for, for me in, in this conversation is that, hey not only is it not a a point of no return, that if you’re not pushing the envelope and trying something new every renewal season or year at least exploring the options, even if you don’t make a change, then you’re spending too much money, right?

WILLIAMSON:

It’s, it’s wise to shop every year and it’s wise to, to be on the frontline of technology and the different things that are available because it’s ever-changing in each community and each state and each region. You need somebody who’s on the frontline and that totally understands and it can pivot quickly.

VANNOY:

Yeah. Yeah. Cool. All right. Let’s move to bit number four here. So I, you know, I think there are concerns, and maybe in some pockets this is a legitimate thing, but, you know, hey, I, I don’t wanna self-insure because I’m not gonna be with, with one of the big BUCAs in, I’m not gonna stick my employees with some unknown carrier and they, therefore it affects my brand as an employer cuz they think I’m, you know, cheap and not, I don’t have their back. You know, talk us through that.

WILLIAMSON:

So a lot of times we see this and it’s, it’s this all on the education front end. And we see this a lot of times whenever you use a third party administrator. So let’s just, there’s one here. Local preferred benefit administrators. So preferred benefit administrators is like on the card, but really we’re using the Cigna network. So a lot of the, the providers will say, I’ve never heard of preferred benefit administrators. Well, it’s not, it’s the Cigna network. Preferred Benefit Administrators is simply the, the folks that are processing the claims through the network, they go through the, the network for the discounts. So what the providers would do is send the claims to preferred the tpa, and then they would receive the discounts and they would help do the adjudication of that. So a lot of times what we’ve done recently is allowed the carrier to be more visible than the tpa. And that’s changed a lot of the the misnomer about that. They, they, because they assume that TPA is the insurance company and it really is not. And that’s, that’s the confusion. But it’s all part of the education process. Mike,

VANNOY:

And, and when you, Matt, when you say the education process, you’re, I’m assuming you’re talking about educating your employees about what they, what they have, right?

WILLIAMSON:

About Yeah, the company’s employees, about the programs, how they work, videos, conferencing. I mean, a lot of, you know, I I grew up, up north and you know, we pay for, you wanna understand it, you know, and I take that personally when I work with the organizations I do, and one of the big things we do is I, I hate to see, you know, a a man or a woman come up to me and they’re like, I have no idea what I’ve got. And I’ll, I’ll, I sit down with them and my team sits down with them and is like, okay, here’s what you got. Here’s how it works. If this happens, you need to do this. You know, and insurance, it’s insurance is is not the, the employer’s headache. It’s, it’s the broker and the carrier’s, you know, it’s, it’s for somebody to guide through these times, because I still get things to my house from an exclamation of benefits. I’m like, what the heck is this that I don’t even understand? You know? So I bring it in and say, Hey, what is this? And you, and you need that person that is in your pocket that you need, you need to be able to sleep well at night with somebody you’re comfortable with.

VANNOY:

So I I, I get the employee training side, so the, you know what, it might not be as self-evidence. So we gotta communicate a little bit more on this topic, train our employees, let ’em know that, hey, you really are participating in, in, in, in an awesome nationally known brand name network. How about on the, how on the claims side? So you know, I, I, I, I, my, I I hear it, the frustration of my wife’s voice when she says, Hey, your insurance card isn’t working what’s, what’s wrong? And it turns out it was, you know, it was the, maybe the reception desk at the facility. She was, you know, trying to, you know, pay for a service, right? Or a, a a, an office visit. And they were the ones screwing things up. Is there any extra complication by, you know, Cigna not being on the card and the TPAs name is on the card when it comes to actually presentation for payment,

WILLIAMSON:

I think, I think when your wife would say to your spouse would say, your insurance card not, is not working, there’d be a couple more adjectives in there, <laugh>. So they’re happy, you’re correct, <laugh>. So, and we’ve all, we’ve all gone through that, but

VANNOY:

All by the words you need to

WILLIAMSON:

Yeah, exactly. Exactly, exactly. But no, what what a lot of, so what it is, is that the cards have changed because you wanna, if you’re using the Cigna network or the Anthem network, that needs to be in bold and needs to be a big part of the card, and it makes it easier for the, the person in the front desk to understand. But it also helps if the employee comes in and says, Hey, I know it says preferred benefit administrators, but my network is Cigna. Here it is right here. And they’ll say, oh, okay, no problem. So that’s, that’s kind of, we talk about the education process.

VANNOY:

Got it. Okay. All right. Does the employee ever have to interface? Is the employee going to interface with the TPA all or are they primarily dealing with their, their healthcare providers and their employer? Do, do, do they get, does the TPA get involved in that mix?

WILLIAMSON:

They do. They do. A lot of times, A lot of times with our relationships, they do. If they want another card or whatever, we usually hand handle all that stuff for everybody. So we just have the employees come to us. But sometimes it depends on how the employer is. Like we have a, we have employers that they want all their employees to go to HR and the HR will handle it. They’ll call us or they’ll call the tpa. And it just depends on how they wanna structure it. But a lot of times, you know, most, most folks now in HR are putting on five different hats and, and just so busy and so inundated, you know, especially in the mid-market that we’re talking to in the small market, those are the folks that don’t have this huge resource team put together and, and need help. And what you have to do is structure that help around them and let ’em know that easy is the way that we wanna live and sleep well at night. And have the folks understand that they could come to you or then come to, you know, whoever it is directly, and then they’ll go to the TPA or the carrier on their behalf.

VANNOY:

Hey Matt, so I know you’re in Florida, you gotta gotta, all your firm has offices all over. But you know, we have people on this call from, you know, coast to coast here and probably have existing relationships with, with their own broker. They would, they would want to carry this conversation on, you know, what, what guidance would you give everyone for, you know, how to, how to think about working with and maybe vetting TPAs? Cuz I, I think about all the moving parts, right? I think about the employer, I think about the direct employee who has to deal with, you know, processing claims and presenting payment for healthcare services. And there that should be as frictionless as possible in when I, when there’s a tpa, which may be a known company you know, us in the payroll, HR bus benefits world. But is it this a foreign concept to maybe the employer? Certainly the employee. And there are, I think, I’m not overstating thousands of ’em, you right, TPAs, there’s certainly hundreds. Hundreds, there’s thousands, right?

WILLIAMSON:

Thousands. So,

VANNOY:

So how do you, what, what guidance do you give you know small business entrepreneur, employer that you’re never gonna meet? How should they be vetting and thinking about working with their broker when it comes to, to properly vetting and working with these TPAs?

WILLIAMSON:

So the TPA model, I don’t think would come in until you have about a hundred insured, where you would use a third party administrator that would have the ability to use network access for the boot from the BUCAs. But on, on the converse though, if you are looking at level funding that looks more like the fully insured product, you still have to have a partner that you feel comfortable with. And, and now it’s different, you know, I mean, we, I’ve got clients everywhere and folks just want to, everything is is virtual now, you know, and it’s just a different world. So just finding people that you’re comfortable with that you know, are gonna respond and get back to you right away. And the, and it’s just changing so much. And that’s just like telemedicine is really, really starting to take hold. You know, the telemedicine being able to go on your phone and, you know, go face to face with a doctor or be able to call a provider like that has just exploded through this whole covid thing. I mean, the numbers are astronomical, but it’s fantastic because it forced employees to realize, Hey, I don’t have to go to the doctor’s office. We’re in this virtual world right now. Now I can just go ahead and and start using the, the doctor that I have on my phone, and I get a prescription right down the street and it’s perfect.

VANNOY:

Yeah. Right. Beautiful. All right. Looking at the clock, I’m gonna get the last myth here in so we can save a few minutes for some questions, and if you guys do have questions, use the OME meeting interface. You can go ahead and lo start logging ’em now, and that way we, we can take them at the, at the end here. So the last one is, is not wanting to get stuck with a claim. You know, I, I, I think that what, what we need people need to understand is what you, you, you talked about a little briefly earlier, but what is runout and how and how does that work? How do dwell carriers offer cetera?

WILLIAMSON:

Yeah, runout is what you purchase additionally for the six months after the con the contract is termed and that, and that helps you with any claims that would incur in the last few months that you would be able to have them or claims were filed afterwards to make sure that they get paid so you don’t get stuck with them.

VANNOY:

All right. A a any other thing? Anything else you’d want to guide people here to, how to think about how they’re not gonna get stuck with claims?

WILLIAMSON:

Well, just, you need to make sure that the runout is, is on there. A lot of times people don’t ask for, or it’s called t o termin Terminal Loss offering. So you gotta make sure you ask for T l O or the runout same, it’s, it’s a synonymous word, but just make sure that that’s in the quotes and the information whenever you get it.

VANNOY:

Got it. So I I maybe my, just my kind of two sentence recap here before we jump into some, some q and a for me as I think about how do, how do we help small business owners and entrepreneurs grow their business? You know th this could be a great way to save money, right? So there’s real, it’s benefits is one of the biggest line items in, in the p and l in there are very real meaningful, mid single digit, maybe even double digit cost cutting opportunities that lie here. It may in fact require a little more complica co complexity to administer, cuz you’re talking about insurance on insurance and a deeper level of understanding. But the, the savings potential is just simply too big. And, and this cost curve is not bending itself. It, it’s, it’s gonna happen from, from employers insisting upon the types of plans that they provide employees because that’s how insurance works and it’s gonna be market driven.

So with that just 30 seconds o on ashore you know, we provide human capital management software that’s payroll and tax time and attendance, HR software and HR services to help companies grow. So no matter what type of company, what industry you are we, we come at human capital Management from an entrepreneur’s mindset. And think about all, it’s all about finding the right people developing the talent that gets behind your mission, your vision, your values that can help you get to the next level. And then doing so in such a way that you don’t have a big IT footprint and you can conserve cash and allocate those expenses towards towards the thing that help grow your business rather than building a back office infrastructure. And that includes in today’s covid world, which sure has thrown some serious complexity into the mix HR services. So if you are not yet ready to hire a full-time HR staff, or if you wanna outsource part or simply access an online database we can be your, your outs outsourced HR function or at least augment and support your HR function as well. So with that, Matt, I’ll give, I want to give you an opportunity to kinda share some contact information and explain who your firm is, and then we’ll go to q and a.

WILLIAMSON:

Just real quick, I mean, everybody can tell what we do here from the call. I appreciate the opportunity greatly to be on here to help you guys out. And we’re available. We, we are a full service organization. We’re the largest privately held in Florida, and we’re one of the fastest growing and I think we’re up to seventh in the privately held in in the country. But this, this is some information about us here. If you have any questions or even what ifs, just you can email me or call me, and I’m always here to help.

VANNOY:

All right. Thanks Matt, I appreciate that. Okay. If you wanna go to the q and a portion of the GoToWebinar tool and we will do our best to answer your questions. And I don’t see any in there yet, so go ahead and pop in. Any questions you might have for Matt, this is not a sales pitch where we’re trying to sell you our software or his services but just any, any question you might have on self-insuring, Matt, any of what wait to see if any questions come in. Any other comments or, or, or, or things that come to mind that you’d wanna share with the team?

WILLIAMSON:

No, I think, I think as we said though, I think for any size company, I don’t, I don’t, doesn’t matter how many lives you are, everybody should just look at level funding at a minimum. That’s something for sure. And I would look at it from multiple carriers, not just one.

VANNOY:

I agree. I I, I think that is the, the, at minimum it’s the toe in the water that didn’t exist few years ago for even very, very small groups. I think you send it, you know, 10 10 employees or more.

WILLIAMSON:

Correct.

VANNOY:

All right, Matt, we must have killed it cuz there’s not questions coming in <laugh> now. We, we’ll so we, we have recorded today’s session. We’re gonna send everybody an email with that recording along with contact information for Asure and for Mass firm. So if you’d rather hop on a phone call or send an email happy to communicate that way and answer any questions. With that, I wanna thank everybody for their time. I really enjoyed today’s session. Matt, I wanna thank you for your time. This is, this is a cool area that I think people, people don’t wanna insult, but I don’t think everybody in the world always thinks that insurance is cool. I’m sure you do cuz it’s your career. But this is a cool opportunity for, for small business owners to save real money that could then be reallocated to growth initiatives.

WILLIAMSON:

I appreciate you letting me on the call and like I said, anything you need Mike or Stacy, please let me know.

VANNOY:

All right. Thank you guys.