Kaely Christensen - Unlocking Health Insurance & Employee Benefits: A Guide for Home Service Business Owners

Kaylee Christensen, a health insurance broker, joins Branden Sewell on the Off the Ladder podcast to discuss the challenges of offering health insurance to employees in small businesses. They explore the complexities of the health insurance system, including the impact of the Affordable Care Act, pre-existing conditions, and rising costs. Kaylee provides tips for small business owners on understanding when they are ready to offer health insurance, such as getting quotes, conducting employee surveys, and exploring alternative options like captive plans. They also discuss the need for reform in the health insurance industry to make it more affordable for small businesses. The conversation explores the challenges of offering health insurance for small businesses and provides insights and resources for navigating the complex healthcare system. It discusses the impact of the Affordable Care Act on small employers and the limitations they face in negotiating rates. The conversation also highlights alternative options such as level funding and the importance of understanding cash prices for medical services. It emphasizes the need for small business owners to find a broker who will listen to their needs and help them make informed decisions about offering benefits.

Takeaways

• The health insurance system is complex and challenging, especially for small businesses.
• Getting quotes and conducting employee surveys can help small business owners understand the cost and feasibility of offering health insurance.
• Alternative options like captive plans and supplemental coverage can be considered for smaller businesses.
• Reform is needed in the health insurance industry to make it more affordable and accessible for small businesses. The Affordable Care Act penalized small employers and limited their ability to negotiate rates.
• Level funding is a middle ground between self-funded and fully funded plans that can be beneficial for small businesses.
• Understanding cash prices for medical services can help save money.
• Finding a broker who will listen and provide guidance is crucial for small business owners.
• Resources like Health Rosetta, The CEO's Guide to Restoring the American Dream, Never Pay the First Bill, and Dollar4 can provide valuable information and assistance.

Chapters

00:00
Introduction and Purpose of the Conversation

03:47
Background and Services Offered by Harbor Financial Group

16:15
Tips for Small Business Owners on Offering

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Transcript

Branden Sewell (00:00.903)
Hi everybody, I am Brandon Sewell. I am the owner of Seal Pro Painting and now also Seal Pro Seal and Wash located in central Florida. I'm also the host of the Off the Ladder podcast where we exist to help home service business owners learn so that they can lead well and ultimately live life off of the ladder. Today's guest is Kaylee Christensen. She is a health insurance broker with Harbor Financial Group. Welcome to the show, Kaylee.

Kaely Christensen (00:31.246)
Thank you for having me. I'm excited.

Branden Sewell (00:34.021)
Yeah, absolutely. So for the listeners, the whole purpose of this show is to help educate home service business owners. And once you get to that place where you are off of the ladder or you're focused on growing and scaling a business, now you have employees.

And those employees have needs and wants that they want met by you as their employer. And one of those things that often comes up is health insurance. So one of the things that we try to do as employers is stay competitive in the marketplace for employees and trying to be attractive to those potential employees that would want to work for us.

Kaely Christensen (01:22.03)
Mm -hmm.

Branden Sewell (01:22.051)
And I know that insurance is like, it's this crazy thing that it's really nuanced and it's expensive and it's hard to like grasp. And for a lot of small business owners like myself, you can kind of have trouble wrapping your mind around like, okay, well, how in the world does this work? Where do I get started? Where do I need to be at? So I'm excited to hear from you. What is your background? Can you tell me a little bit more about yourself?

what you do and what you offer.

Kaely Christensen (01:55.822)
Yeah, so Harbor Financial Group is a full service health insurance agency. We do employee benefits for commercial groups that are mostly small and medium sized businesses. Small business is defined as any business under 50. And then medium businesses are kind of in the 50 to 200 to 50 range. We also do individual insurance. So that's people getting a marketplace policy, otherwise known as a

exchange or a private health insurance policy straight from the insurance company and then we also do Medicare which is for folks who are older than 65 and are hopefully in the golden years of their life. So we do kind of all three components of health care. My focus as a broker is the employee benefits side. I've been doing this for almost seven years now.

Harvard Financial Group is actually my mom's agency. She started it in 1994 when health insurance looked a lot different and it was a lot more affordable. I think there wasn't, it wasn't quite as controversial. It was a little more accessible. The premium increases year to year, here what they are today.

there was nowhere near as much legislation. There were some downsides and then, you know, legislation probably overcorrected and pulled things in the wrong direction. But yeah, she started in 94 and I started working for her in 2017 and have slowly been building my own book of business. Yeah, that's pretty much it.

Branden Sewell (03:47.291)
Well, that's awesome. So, you know, coming from a background of having your mom work in insurance, I'm sure is great for you and a great resource for you. Probably also gives you some added perspective to like how insurance has changed and developed over the years and maybe how much different it looks now compared to then. So that's really cool that you have that.

Kaely Christensen (03:56.014)
Yeah.

Kaely Christensen (04:03.662)
Have fun.

Branden Sewell (04:15.546)
that increased perspective. Now you mentioned really quick, I just want to... So you also can work with like individuals. So let's say like a business owner is listening to this and we're going to get to this later on, but let's say a business owner is listening to this and they're like, wow, like I'm not there yet. I can't offer anything. You could handle like a referral. So like if they say, hey,

employees. I'm not going to, I can't offer this right now, but let me refer you to Kaylee. She could help you out with getting like covered individually. Is that what you're saying?

Kaely Christensen (04:52.782)
Yep, that's something we do pretty frequently with really small businesses and like the five to 10 employee range or even under five employees. Sometimes if they're local, we'll even go bring our laptop and sit down with a few of them for a few hours and go through all the different options they have on the marketplace. But yeah, we.

Definitely can handle individual health insurance policies. Usually it makes the most sense to go through the marketplace for those employees, but we can also do private policies directly with the carrier.

Branden Sewell (05:26.198)
Got it. So let me ask this, what are some of the major challenges from your perspective that we face just as Americans who are trying to maybe get healthcare coverage and get insured? What are the challenges of the system right now? What are some of the things that are making it seem unaffordable?

hard to access, what are some of the challenges that small businesses face in being able to offer it? Could you jump into just those common challenges that you see and what's affecting health insurance?

Kaely Christensen (06:11.662)
Yeah, that's a loaded question. So really, health care took the biggest turn in 2014 when the Affordable Care Act was passed. Pre -Affordable Care Act, there was still a lot of health care legislation, health insurance legislation to be fair, but that was kind of the big turn because there were a few things. One was insurance companies were no longer allowed to charge more based on gender.

Branden Sewell (06:15.285)
Nah.

Kaely Christensen (06:40.558)
So a lot of times a policy would charge more if there was a high population of women in their childbearing years. And so companies would try to hire as much young males as they could to kind of circumvent that. So that was made illegal. So also pre -existing conditions was a big one. Companies used to be able to either exclude certain pre -existing conditions.

or they could charge way more for pre -existing conditions. That was made illegal, so you weren't able to do that anymore. And also, you were not able to, how do I put this? There were certain,

sanctions imposed on how much profit an insurance company could make that actually ended up having the reverse effect. So it used to be MLR is the definition of how a plan is running. So that stands for medical loss ratio. So it's for every dollar you pay in premium, how much is the insurance company paying in claims? Usually a good MLR is defined as 80%, but you know, an insurance company is

motivated to try to get that as low as possible. So they're trying to pay as little claims as possible. So if I'm paying $10 to an insurance company, they really, as a goal, want to negotiate those claims down as low as they possibly can so that they're paying as little as possible. Does that make sense? So the Affordable... Yeah, so Pre -Affordable Care Act, that was kind of the structure and that allowed insurance companies to...

Branden Sewell (08:12.817)
No, it completely does, yeah.

Kaely Christensen (08:22.638)
kind of work in the capitalist market. They kind of work under basic capitalism structure. After the Affordable Care Act, one of the things that was implemented was every insurance company cannot show more profit than an 80 % MLR. So now, insurance companies know that every single year, they're going to make exactly 20 % margin on a plan. So what...

Incentive is there for them to negotiate claims anymore. There's no incentive for them to negotiate claims. If they get a high bill, they'll just pay it. And then that's just more, that's a reason to increase the premiums that much more. They're able to show, look, we were not able to make our 20%. We're just going to have to increase the claims this much more next year. And really, what do you think these massive companies would rather have? A small piece of,

you know, 40 % of a smaller pie or 20 % of a much, much, much bigger pie. They're always gonna choose the much, much, much bigger pie. So that's kind of the biggest reason that claims have escalated or premiums have escalated as much as they have is there's just no incentive for insurance companies to...

to negotiate claims. They'll pay whatever comes on their desk. And it's just a reason for them to increase the premiums more and more and more. Another big thing is pre -affordable care act. And one of the things I say is that both political parties are pretty guilty of, I think, selling out the American people. The Democrats passed

the Affordable Care Act in 2014, but when the Republican, President Bush was in office in 2004, the Prescription Drug Act for Medicare was passed. And that made it so that, well, they required any citizen on Medicare to purchase what's called a Part D plan, which is prescription drug coverage. That's when prescription drugs started increasing in cost a lot more. So Medicare was like, okay,

Kaely Christensen (10:36.622)
To be able to finance this, every single Medicare citizen needs to be on a prescription drug plan. Prescription drug plans are often not that expensive. You could get them for five or six dollars. It wasn't really that huge of a deal. But the pharmaceutical companies lobbied so that Medicare is not able to negotiate the cost of prescription drugs, and Medicare is the biggest purchaser of prescription drugs.

So that kind of creates a really wild West situation where there's no good standard for what prescription drugs should cost. So, you know, the costs are wild. We see it all the time. So, you know, you have your hospital care and the plans and then prescription drugs and all around. There's really no protection for plan members from these crazy rising costs. So I would say in a nutshell, it's that. And then also,

One of my personal opinions is that maybe health insurance covers too much in the first place. It's kind of common for health insurance or it's common for health insurance plans. Everything you have a copay. You have a copay to see the doctor, you have a copay for your blood work, you have a copay for minor x -rays, you have a copay for every single time you interact with the health insurance system. But if you think about other forms of insurance you have,

like your car insurance or your home insurance, you don't use your insurance when you get an oil change, and you don't use your home insurance when you replace a sink faucet. And if those things were insured, how much higher would the premiums be? So we've created a system where every single thing falls under the health insurance, and I think it was designed intentionally that way. But I think that's one of the biggest things too, is just like every interaction.

is billed through insurance and inevitably that's going to add administrative bloat to the system and end up costing plan members way more than it should. So those are kind of just my opinions on why the cost is increasing exorbitantly. And you can look up the cost of consumer goods. TVs go way down over the years, clothes go way down, but hospitals, it's just like an exponential increase on the curve. And it's...

Kaely Christensen (12:53.71)
It's crazy because technology is getting better. So when technology is getting better, the cost should be going down, right? So it's bizarre why they're able to charge so much more for medical technology as it improves. The cost should really decrease, but it doesn't. And there's just, that's because there's no protection for plan members. And that's the legislation is designed that way. The lobbyists, you know, I think big pharma.

spent the most on lobbying for like 20 years in a row. So none of this is an accident. It was all designed this way and it's really sad. And I think it's kind of demoralizing for people that just want affordable hospital care or not to be surprised with these massive bills when they need an MRI. But yeah, I think those are my opinions of the biggest culprits in the system.

Branden Sewell (13:50.532)
Yeah, so, you know, when I.

Kaely Christensen (13:51.63)
and then consolidation. Yeah. Basic consolidation. We see that in every industry. Hospitals are consolidating and insurance companies are consolidating. And, you know, in any system that just like reduces any sort of competitiveness. You know, for you as a business owner, you have a choice as a small business owner, you probably have three carriers to choose from. Like, that's not a lot of competition. So that's another huge thing is just.

So many insurance companies pulled out of small group, offering small group coverage. You know, if you were a large group with a hundred employees, you would have a ton of options, but it's hard to insure small groups because of all this legislation. And so a lot of insurance companies have pulled out of the small group market. So that leaves a huge opportunity for the ones that are left to just charge whatever they need to charge or whatever they, not whatever they need to charge, but whatever they want to charge.

Branden Sewell (14:51.105)
Yeah, so I mean it sounds like an extremely nuanced and challenging problem, but I think when you get down to the bottom of it, it comes down to I think greed. When you have these large corporations who are profiting off of that system and the way that it's structured,

Kaely Christensen (15:07.95)
Yeah.

Branden Sewell (15:17.888)
And obviously, they've created a lifestyle, a life that demands that level of return. Well, they're not going to give up their lifestyle if greed is motivating them. And so I think that's a hard thing to address and to change. And it could get pretty... We could probably sit here and talk about this for hours, all those challenges. But...

The reality is there are challenges, right? And that's kind of inevitable. So what I want to jump into now, obviously you've clarified that it's challenging for smaller businesses. So if someone has 20 employees or less, or maybe even less than 10 employees, it can be something that seems really daunting for them to take on.

Could you maybe give the listeners some tips on understanding what it takes to offer health insurance to your employees? Maybe at what point in your business you might be ready to do that. Whether that's like, okay, you need to be allocating X amount of dollars per employee.

like setting aside like X amount of dollars in your budget and be able to afford that? Is it like once you get to a certain amount of employees, is it like a revenue metric or just if you could help the listeners understand like how do you know when you're ready and where should your business be at to be able to afford it?

Kaely Christensen (16:58.19)
Mm -hmm.

Kaely Christensen (17:03.118)
Yeah, that's a really great question. And I think the thing I would start with is to find a broker and just say, hey, I don't know where I am right now, but I just need a quote so I can understand what the cost would be if I were to offer insurance today.

and shouldn't take a good broker very long to get you something back. And that way you can kind of benchmark, this is what it's gonna cost, do I have the cash flow to do it? And you know, cash flow is so different for different companies. Some companies have, you know, everyone's overhead is different. So I don't know if I can speak to a specific metric, but when you get that quote, you can kind of see what the different premiums are.

And as a business owner, you're required to pay 50 % of the employee premium for the lowest cost plan you offer. So if you offer three plans and you know, you call one of them the base plan and one of them the mid plan, one of them the high plan, you're required to pay 50 % towards that lowest cost plan for the employee only premium. And then whatever that dollar amount is, say it's $250, that would be the amount that you apply towards your...

apply to employees enrolling in the mid -plan or the high plan. And then the other thing is that there's a participation requirement. And this kind of gets a little bit, this is kind of where the finesse comes in because the participation requirement is either 50 % or 75 % depending on what carrier you go with. Usually it's 50%. So if you have 10 employees,

and all 10 are willing to sign up, five of them would need to sign up in order to meet participation for the group to write you. Now, if those employees, if some of them, maybe two of them have coverage through their spouses, that doesn't count. So then you're working with eight employees. Out of those eight employees, you need four to sign up in order for the carrier to write you. And then, so when you have that quote, that's a good starting point, that's a good benchmark to project your costs.

Kaely Christensen (19:11.182)
And then the other thing I would say is to do an anonymous employee survey. This is something we help employers with a lot. And based on the quote and what kind of the premium ballparks are going to be, I would ask your employees what they would be willing to pay for insurance or what deduction they would be comfortable with. Say, are you comfortable with, you know,

I don't know if you have weekly or bi -weekly or monthly paychecks, but would you be willing to pay $10, $20, or $40 weekly for a health insurance plan through your employer? And if they're willing to pay way less than what you as a business owner can afford, I would say not to offer it yet, because that probably means that they're getting their health insurance on the marketplace, probably getting a good tax credit, and they're happy where they are. Now, if they're willing to pay a lot,

That's probably because they don't qualify for a tax credit and they're gonna pay either way. And they would probably rather get it through their employer than have to deal with it and manage their policy themselves. I would also say what kind of deductible are you comfortable with? And if they say they only want $1 ,000 deductible, but the ones that you're looking at have like three, four, $5 ,000 deductibles.

That's something to measure up. And then also, are there any other benefits that would be important? Some people would rather just be paid more and get a good time off package. Another thing is if you are offering, if you don't offer health insurance yet, you can always offer supplemental coverage and help your employees get access to marketplace. Supplemental coverage is like Aflac, Colonial, those types of things. It's like if you're in an accident, off the job.

and you get hurt, the supplemental will pay you directly in order to help pay down your medical claim. So that's kind of something you can offer in the short term to help employees. There's virtual care programs like Healthiest You. I think that's like $12 a month per employee. So it's really pretty affordable, extremely affordable, and employees have unlimited primary care virtual visits on their phone and unlimited mental health visits on their phone.

Kaely Christensen (21:28.398)
That's crazy for like $12 to $16 a month. That's a fantastic benefit. And even though it's not major medical insurance, as long as you're connecting your employees with resources to help them, what I see is that's pretty valuable. I think that another sign to offer health insurance is if you have a really hard time retaining employees and keeping them, and health insurance is something that comes up in the conversation for people leaving.

that would be assigned to, obviously assigned to. But for a lot of companies, people have a lot better on the marketplace and that's just one of the realities of small businesses is you need to balance kind of just reality because it's so expensive for small businesses. Once you get bigger, a lot more options open up and you have...

a lot more to play with in terms of carrier choices and plan options and financing mechanisms. But in the small market, you have three carriers. You need 50 % participation. You need to pay 50%. It's really kind of pretty much set in stone the requirements. So I would say those are the biggest markers. Does that make sense?

Branden Sewell (22:50.221)
Yeah, no, that's good. Let me ask you this. Why is it that the... I mean, I don't know if you have an answer to this, but why is it that the business owner, the small business owner has to cover so much of that premium? I feel like it would be...

easier if it was like more flexible on that. I guess that 50 % like minimum is like, you know, I just wonder. Yeah, I mean, I've kind of looked at it in the past. Like I had 12 employees at once and I was looking into health insurance and I was like, holy smokes. Like, it's crazy how expensive that would be.

Kaely Christensen (23:29.39)
a very big expense.

Branden Sewell (23:48.683)
to cover 12 employees, even just assuming that, and you said that it's a minimum requirement that half of them, it's 50 % participation.

Kaely Christensen (24:03.086)
50 % participation for all eligible ones. So, you know, if anyone has coverage, if someone's on TRICARE, on Medicare, on their spouse's coverage, they're taken out of the equation and then just, you know, say you have, you had 12 employees, four of them are on spouse coverage, then it's eight. So you need 50 % of eight. But some carriers, it's 75%. So you need six of the eight, which is pretty hard to get to.

Branden Sewell (24:04.586)
Yeah.

Branden Sewell (24:28.232)
Yeah, yeah, it's pretty interesting how that works. I mean, and you know what I found is like I don't necessarily have employees coming to me and asking about health insurance all the time. But, you know, as a business owner who's wanting to build something that is

Kaely Christensen (24:31.886)
Yeah.

Kaely Christensen (24:46.126)
and that's it.

Branden Sewell (24:55.439)
you know, valuable to the people that I employ that's taking care of them. I think any good business owner wants to feel like they're able to take care of their employees, right? I mean, for me, that's like at the heart of why I want to be able to offer it is not just from like the marketing standpoint of being able to go out and tell people, you know, hey, come work for me. I offer health insurance and try to get...

you know better people but it's just from the standpoint of like these people come to work for me and they give their time you know their energy and they're working hard for my business I would love to be able to give back to them in the way of saying like hey I want to be able to make sure that you can have health insurance to take care of yourself and your family and then when you're faced with this like you know problem of wow it's incredibly

expensive, would this even be sustainable? It's kind of demoralizing to a certain standpoint and you're just like, man, how in the world can I do this? And you want to be able to make that impact on your employees. So yeah, it's a little frustrating to not be able to do that.

I guess there's not, do you know if there's any, like what are some of the things, I don't know if you know the answer to this, but is there anything in the works now to try and help make health insurance more affordable for small business owners and is there anything going on that's on the horizon that might bring some reform or do you know anything of that nature?

Kaely Christensen (26:49.294)
Yeah, there's an organization called Health Rosetta, like Rosetta Stone Health Rosetta. And they are kind of an organization of physicians, health insurance brokers, carriers, and just health insurance kind of thought leaders, I would say. And they are their whole mission and kind of statement is that health insurance,

And the state of healthcare is one of the biggest things that is robbing the middle class, middle class America. I think 60 something percent of big pharmacies are due to health insurance and healthcare and not being able to pay. And most of the people that that happens to have almost nothing in savings. So yeah, it's a huge issue.

for something that's such a huge percentage of our GDP, you would think it's figured out. It's not. So anyway, Health Rosetta, they are every day trying to work to innovate new concepts. But the thing is, they test their concept on, and they're pretty new, they're since 2018 or something like that, they test concept on bigger employers because bigger employers are the ones that,

kind of have the most room to play with different factors and then they try to bring it down market. So I think the solutions are coming down slowly. They're coming down to employers over 100 at this point, under 100 at this point. I would say one of the things that you could look into is a captive plan. Captive plans, sometimes they'll accept really small employers depending on the one.

but a captive employer looks, they make all your employees fill out questionnaires and you know, if everyone's healthy enough, they'll accept you and they'll insure you. If not, they won't. So basically you're pooled with other, you know, employers that also meet this kind of like standard of health. And so there's, it kind of creates a bigger pool. One of the good ones is Pareto Health.

Kaely Christensen (29:12.526)
P -A -R -E -T -O, Pareto Health. So I would say, yeah, captives can be a good solution. Self -funding is by far the best way to purchase health insurance, but as of now, I could in no good conscience recommend it to an employer, probably under 50 employees. I would say you need at least 50 for it to be worth the kind of risks associated with it. But you know, it's slowly coming down market.

and becoming more and more accessible for small employers. I am pretty honest with really small employers, though. It is really hard to find a good solution. And sometimes when you do, like cost sharing, if all your employees are faith -based, you could do either the Good Samaritan Cost Sharing Program or Christian Care MediShare. Both of those are kind of similar concepts to captive programs. You sign a statement of faith.

and you agree and also, you know, if you're over a certain weight and height percentage, basically if you're unhealthy or if you smoke, you're not covered. So you do need to fit certain parameters, but the idea, kind of like a captive program, is that if everyone aligns and is healthy and is working to be healthy and agrees with our lifestyle parameters, then we'll kind of pool our risk together and operate that way.

So that could be an option as well. Sometimes these things all click and a small employer is able to maneuver in a way that really works out financially, but it just varies so much from small employer to small employer. And it's really hard. It is, I agree with you, it is demoralizing. And I think that really small employers are hit the hardest by it. You know, once you get into,

the bigger markets, it becomes a lot more affordable. It is just really hard and you want to take care of your employees. And I think that in a lot of ways that was that's stolen from small employers with this over legislation that's bad for plan members and bad for small business. I think it's I think it's an enormous tragedy without a doubt. It's it's demoralizing. There's no other way to put it.

Branden Sewell (31:33.975)
Yeah, I mean to me I almost feel like why couldn't you create an incentive for You know the Those who are being insured and I don't know if this if this exists you could probably tell me or not but when I think of it from like a business owner standpoint like obviously incentivizing employees is like a great way to motivate them and so it's almost like you want to

Kaely Christensen (31:51.886)
Okay.

Branden Sewell (32:03.639)
in my opinion is like I want to live a lifestyle where I don't need to worry about like going to the doctor. I want to like eat healthy, go to the gym, work out, like stay active and all of those things and mitigate the risk of even needing to go to the doctor all the time. I mean I have friends who you know like I surf with who are in their 50s, 60s and like

Kaely Christensen (32:25.07)
Absolutely.

Branden Sewell (32:30.711)
haven't had to go to the doctor in forever because they just stay active and they're healthy and they eat well. So my thought process is like, and I don't know if this exists, but do health insurance providers offer incentives for premium to come down if you're able to prove your activity or your diet? Would there be a way to like...

Kaely Christensen (32:34.83)
Yeah.

Branden Sewell (32:57.431)
track that and then based on like, hey, you're doing these things to be healthy, that's going to help to, you know, bring your health care costs down or your premiums down. And I don't know if that's too like intrusive to like, you know, the customer, if you will. But I mean, it's just like, man, what can you do to...

Kaely Christensen (33:15.278)
Okay.

Branden Sewell (33:24.791)
make it accessible in the case of like, you know, just that one off chance that an emergency comes up and you need it, but not making it like, you know, something that you're giving to somebody who just lives a completely reckless and, you know, lifestyle where they don't even care about their health. Does that make sense? I don't know if that's...

Kaely Christensen (33:43.918)
Yeah.

Kaely Christensen (33:48.846)
Yeah, no, that's a great question. And unfortunately, that's one of the parts of the Affordable Care Act that kind of penalized small employers the worst. Pre -Affordable Care Act, you were able to, based on claims data, even as a small business, negotiate those rates down. Also, if you had a good plan here, or if you were a group of 10 healthy people, it really worked out in your favor. But...

The health insurance industry or whatever legislation felt that that penalized people who had conditions that were beyond their control. And in some ways it did, you know, people with cancer, people with conditions they were born with. But I mean, let's be honest, a lot of conditions are lifestyle based and a lot of those claims are from things that were under people's control. So the Affordable Care Act said that for employers under 50,

Branden Sewell (34:30.007)
Sure, sure.

Kaely Christensen (34:48.398)
the fully insured rates are gonna be filed with the state of Florida on a quarterly basis. And it's just gonna be based on the average age of the census. There's no negotiating, there's no room for improvement or dis -improvement. It's just the rates are based on the average age of the census and the plan and carrier you choose. So if you have 10 employees and they're all in their 30s, it's just,

They average out your ages and this is the rate for this Water Blue plan and this is the rate for this UnitedHealthcare plan. Which one do you want? And then when it comes time to renew, it's like the plan has gone up seven to 12%, which is crazy for a cost to increase seven to 12 % every single year, but there's no room to negotiate. And they're like, well, it's not based on claims. It's just based on the healthcare costs this year.

So they build in 7 to 10 percent and that's just what the rate is for a fully insured group under 50. When you're over 50, then over 50 employees, then you can negotiate your rates. Then you can say, hey, look, our claims were low. We had a good year. Our employees are healthy. They're young. We have XYZ markers and you can negotiate the claims down. So I think that that's just another way that small businesses are.

penalized, you know, most people spin it in a way that says, well, you know, it's to protect them from large claimants. And that's true. You see both sides, but I think that, you know, if you just look at it with common sense, most people would say that small businesses are penalized by that. There's a product called Level Funding, which is kind of in the middle of self -funding and fully funded. I would say you really need,

Branden Sewell (36:28.727)
Yeah.

Kaely Christensen (36:40.494)
Probably 15 employees minimum for level funded to make sense. But level funded is, so self funded is when you, the company, pay the claims yourself and then there's something called stop loss built in. So if someone has a really catastrophic claim to stop loss insurance that you as the employer purchase would kick in and pay the overages. But level funded is kind of a product in the middle of fully funded and self funded where.

You pay a premium and then part of your premium splits into what's called the administrative bucket and that's, you know, healthcare administration and then the other parts splits into a claims bucket. And then you as the employer are kind of like funding, funding your claims bucket. If you have really low claims, you get that money back at the end of the plan year. And I think that's a great way of doing it. And it really mitigates your risk as a small business. So you're not having to front up money. There's no,

There's no unseen risk. It's like you pay the premium and then if you have a really bad year and you drain your whole claims bucket, then stop loss insurance kicks in and you don't get any money back. But if you do have a good year, if your employees are working out, staying healthy, avoiding tobacco products, and you have, and you know, it's a good year, everyone is blessed, no one has any crazy unforeseen hospital incidents or chronic conditions that pop up, you have a lot of money left in the claims, then you get usually,

a little over half of that back as the employer. So that is a really good solution. You can always quote it for a 10 person company. Usually they don't set the rates to be favorable though, in my experience. Yeah, there's a number of options to maneuver. It's just really hard for small businesses, but that's a really good question.

Branden Sewell (38:19.223)
Yeah.

Branden Sewell (38:30.199)
Yeah. Yeah, so I mean, I think overall it's just it's a challenging, you know, topic in general. I mean, even like so like for me, I'm on my my wife's plan, like she works for a big corporation. They offer health insurance. But even being on her plan.

Kaely Christensen (38:49.614)
Okay.

Branden Sewell (38:56.567)
and having like family coverage, it's like it's crazy how much we spend and what comes out of each paycheck just to cover health insurance. And you know, not to mention like there's there's so many other challenges with that too, like you know, you mentioned deductibles and whether a provider's in your network or out of network or whether a certain

Kaely Christensen (39:03.886)
Yeah.

Branden Sewell (39:26.135)
Like if you choose one healthcare provider, but well, they're not in my network. So I can't, you know, we experienced that recently with my most recent daughter. You know, we ended up being out of network, you know, so had to pay out of pocket for her birth. But so there's all of those challenges as well, you know, that I think come up and I don't even understand like,

the whole situation in the way that you do. But what I can say is like just as a entrepreneur at heart and like a person who just like wants to solve problems, I'm like, man, I could, you know, I'd love to try and figure this out. Of course, I don't have the time and energy to do it, but yeah, I just...

Kaely Christensen (40:14.638)
Yeah, I know, I know.

Branden Sewell (40:24.791)
Are there ways that, let's say somebody is listening this and like me, maybe as they're listening to you share the details, the challenges and all of that. Are there ways for small home service business owners to get involved in that discussion? Maybe some of the activism that goes on around healthcare to try and be a part of that discussion.

part of bringing change and reform to that? Do you know of any ways that, whether like on a local level or national level, that small home services could maybe have a voice in that reform? Do you have any resources there or feedback?

Kaely Christensen (41:10.542)
Yeah, I would say to follow Health Rosetta on LinkedIn. And then Dave Chase, who's the founder of Health Rosetta, big fan of them obviously, he wrote a book called The CEO's Guide to Restoring the American Dream. And it's a great, really practical read. And he even admits that most of the viable solutions are at this point in time for larger employers, but they're working to bring it down.

but he really outlines the big picture kind of, you know, bird's eye view of what is wrong with the system and that you're not crazy. You're not crazy to be really frustrated by the massive deductions and high deductibles and then like what the heck, your daughter's birth is not even in network. Also, there's a really good resource. There's a guy named Marshall Allen.

He's on LinkedIn and then he also wrote a book called Never Pay the First Bill. And I think that that's a really great resource to be able to give your employees when you hear something about like a really large bill. He actually has on his website kind of like a, I don't really understand it, it's like an AI bot that helps you figure out if your bill is bogus.

So he helps people fight their bill. He teaches them how to go through the itemized receipts. By the way, that's another big thing. Once you get a hospital bill, the first thing you do is always, always, always go get the itemized receipt. Like think how crazy that is that they don't give it to you upfront. Like that'd be like going to a grocery store and you check out and they just give you one total. And you're like, well, how do I know if my BOGOs went through? Like you need the itemized receipt to know that you were charged correctly for the...

thousands and thousands of dollars of services. So that's the first thing that you do. You make sure you weren't up -coded. He can help you figure that out. Medical up -coding is a really big problem where something that should be a pretty minor procedure, like putting an IV in, just like the regular IV, they'll up -code it to a trauma four and then they can bill it for more. So stuff like that. Were you double billed for anything? Were you billed for a service that didn't even happen? Are you a male that received a pregnancy test?

Kaely Christensen (43:23.598)
Like 80 % of medical bills, 80 % of medical bills have errors on them. So it's crazy that they don't give you the itemized receipts or give you any agency to check for yourself. So Marshall Allen, Never Pay the First Bill is his book, but he has a website that offers a lot of resources. That is a fantastic resource for just helping.

Branden Sewell (43:23.927)
Nah.

Kaely Christensen (43:44.174)
lay people that are not health insurance experts navigate, you know, I was charged for this and I don't think it's right, that kind of thing. He even teaches people how to sue in small claims court, which I think is awesome. Like that's a, for people that, one of the biggest issues is the NICU. A lot of times the people that are employed there are contracted employees. They're not W -2 employees. So they're not technically in the hospital's network.

And same for ER. So how are you supposed to, like your hospital is a network, you did your homework, how are you supposed to know that the NICU nurses are not in your network? Like that's criminal, if you ask me, that's criminal. And then another organization is Dollar4. And the guy's first name is Jared, I can't remember his second name, but Dollar4 is the organization. And he helps connect people with either

people who can help negotiate their bill down or charity programs that will cover the bill for them. So I recommend dollar four to anyone who's received kind of a crazy hospital bill that they don't know what to do with. And then my other advice to people is just ask what the cash price is. A lot of times the cash price, you know, for services, for services, not for the expertise of a physician, but there's a lot of things that you do when you interact with the healthcare system.

like x -rays, MRIs, your blood work, those are all pretty standard things. And I would argue you don't need health insurance for those things. You should be able to just pay a cash price that makes sense. When I did my labs at my preventative primary care visit earlier this year, I asked what the cash price was and then my insurance price. And I go to a direct primary care physician, so I like to do a lot of blood work and kind of like see what...

see the interesting stuff. So the insurance price was almost $500 and then the cash price was like $30 something. Like that makes no sense. It makes no sense at all. But like yeah, it's like that's just administrative bloat, administrative just up charging like crazy for just like a decent blood panel.

Branden Sewell (45:47.031)
Right, yeah.

Branden Sewell (45:57.367)
Yeah.

Kaely Christensen (46:00.462)
So I would say ask for the cash price when you're doing something and then shop around too, especially services that you, you know, you want, you might need to pay more for your knee replacement based on your deductible to get the guy you want to get. And that's one thing that's important. That's someone's expertise, but an x -ray is an x -ray most of the time. So shop around for those things. Don't be afraid to be pushy about price when you're with a physician.

Branden Sewell (46:24.343)
Yeah.

Kaely Christensen (46:29.678)
and compare cash price to your copay because a lot of times cash is a lot more competitive.

Branden Sewell (46:37.111)
Yeah, it's crazy that it works that way. And I feel like if there's any integrity on the whatever healthcare organization that you're going through for your care, I feel like there should just be, well, one, a level of oversight or accountability, but then also just standard common decency or integrity to say, hey, your cash price is better.

you know, just pay cash or hey, this is your cat. Like they should be taking care of those people. And I know not everybody has that decency. You know, some people are just, you know, in it for the money. But, you know, and you brought up such a frustrating point to me as like the fact that if you go to, you know, let's say ER and you have something done, you have no idea.

what bills you're going to get. I mean, we've had situation like when I was younger, I went to ER once and you just have no idea what the cost is upfront. And I loved your analogy of like the grocery store or could you imagine if you like went to the grocery store and you got your groceries and then you had no idea what it was going to cost and then you just got a bill for like some random number. You're like, well, well.

Kaely Christensen (47:37.39)
Yeah.

Branden Sewell (48:02.903)
If I would have known that it was going to be $1 ,500 for my groceries, I wouldn't have. I would have gone and made a garden in my backyard. But yeah, it's funny. Because of all of these problems, I avoid going to the doctors. I avoid if I feel... I might have...

Kaely Christensen (48:09.646)
Yeah.

Yeah.

Branden Sewell (48:28.137)
going through something questionable, I'm like, maybe I should go to the doctor. And I'm like, I'll just tough it out, you know, cause I don't want to go and then get this like random bill for like, you know, $4 ,000 and be like, my goodness, like I didn't die. I shouldn't have gone. You know, it's like, I could just, you know, work through this on my own, stay at home and you know, just embrace the suck if you will, for a couple of days or whatever and just get through it and then.

Kaely Christensen (48:44.11)
Yeah.

Branden Sewell (48:58.185)
you know, avoid paying $4 ,000 for what? You know, it's like to get admitted into a hospital bed and sit there for a couple of days.

Kaely Christensen (49:03.502)
Yeah. Well, you brought up the people you served with. Yeah. Like, no thanks. You brought up the people you served with who stay in really good health and really interact with the health system. And I think that's awesome. And I think that that's an ideal that, you know, I think we, we view affordable healthcare as a right, but kind of in a distorted way that I should be able to consume as much healthcare as I want without any repercussions and you know,

Branden Sewell (49:13.32)
Meh.

Kaely Christensen (49:33.326)
These are physicians. They went to medical school for a long time. They took on obscene amounts of medical debt and their services are not free. And while there's a lot of administrative bloat built into that, it's like we can't expect to go to the doctor as frequently as so many people do. Sometimes I do think that there should be a little bit of an expectation, and this is just my personal view, there should be a little bit of an expectation to interact with the medical system less.

and definitely interact with it without getting your insurance involved. Kind of back to what I said toward the beginning, like it would be crazy if we build our home insurance, you know, for every little thing that went wrong in our house. Like, you know, if you scuff the wall and then you wanted to copay to get paint to repair it, or, you know, if you're a plumber king and replaced a toilet and you wanted to put that on, like think how bloated the premiums would get.

Branden Sewell (50:24.452)
Yeah.

Kaely Christensen (50:30.862)
so that's part of it is just, it covers every possible interaction. And then the whole other aspect of that is prescription drugs. Those should definitely be, you know, cash prices, not deductibles are not copays and we pay so much for those, when they really could just be much lower cash prices. yeah, so we just, every single interaction is through insurance and it bloats the premiums like crazy.

Branden Sewell (50:31.684)
Yeah.

Branden Sewell (50:59.778)
Yeah.

Kaely Christensen (51:00.046)
Yeah, so I think that that's a huge factor in it. And it all comes down to really hurt small businesses in the end. And I think it is hard to view your place in it. It's demoralizing to business owners, and I see that every day. And it's kind of demoralizing as a professional broker in the industry, because it's like, well, I honestly think you're better.

Branden Sewell (51:09.633)
Yeah.

Kaely Christensen (51:27.63)
directing your employees and helping them get coverage on the marketplace, it'll save you money and it'll save your employees money. And, but it like, that's not what you want. You want to be able to offer medical benefits. And I think it's, I think that that part is really sad and definitely probably one of the most under -talked about things of the, why our healthcare system is broken is that it's so untenable for most small businesses to offer healthcare.

I think I where I've landed in it is I Will offer I will do quotes as many quotes as I need for a small business and not charge them anything for the quotes and then I'll Sit down with them year after year and I Try to be brutally honest like it does not make sense for you to offer health insurance I really think you know you kind of you want to but I really think that your money is spent

better elsewhere. You know, give your employees a steady raise and direct them to, you know, marketplace plans. And I will sit down with all of your employees personally and help them pick a plan that works for them. And, you know, we can do that. But, yeah, it's hard. It really is hard for really small businesses.

Branden Sewell (52:45.051)
Yeah, for sure. Well, you know, I think that there's been a lot of value shared here, a lot of good perspective for like small business owners who are listening to this to kind of grasp the challenges, kind of see where they fit into the mix and then understanding that there are maybe some other options out there to be able to at least try to take care of your employees. And I think to your point, even

Kaely Christensen (53:12.494)
Mm -hmm.

Branden Sewell (53:14.905)
being a connector of a resource, right? So even if I was to say like, excuse me, hey, Kaylee, I'm gonna set up this day for my employees to all come in and sit down with you and talk about how you can help them. Like, at least you're doing something to try and create an opportunity, create a connection.

and at least show them like, hey, here are your options because in and of themselves, they might not even pursue that. They might not even try to go out and see what's possible. But as employers, as small business owners, we do have connections maybe that our employees don't and we can make those connections for them to try and at least have some sort of solution there. So,

Kaely Christensen (54:02.286)
Thank you.

Branden Sewell (54:08.887)
That's where my mindset goes is like, okay, maybe I can't take care of my employees in the way that I would like to by offering health insurance, but I can at least create an opportunity to connect with someone who can be a solution for them. So we'll have to talk more about that offline because I would like to set something like that up.

Kaely Christensen (54:11.63)
Thank you.

Branden Sewell (54:37.269)
And then also, as we bring this to a close, I'd also like, if you don't mind, could you send me an email just with the different resources that you had mentioned, like the CEO's guide to, what was it, restoring the American dream, never pay the first bill, you know, those different things. Yeah, and then maybe even, I'm not sure,

Kaely Christensen (54:38.446)
Yeah, absolutely.

Kaely Christensen (54:57.55)
Yeah, yeah, definitely dollar for it. Yep.

Branden Sewell (55:05.876)
who you're able to provide your services to if you're like just in state like Florida or if you can if there's like a listener on here who's listening from you know, let's say Ohio, you know, are you able to help them if not? Could you also provide me with some type of resource to put in the show notes? for those who might want to reach out to you if they live here in Florida or

Kaely Christensen (55:21.422)
and then.

Branden Sewell (55:32.691)
what resource would you recommend if they live in another state or somewhere where you can't service them. But yeah, if you could do that, that would be appreciated.

Kaely Christensen (55:43.246)
Absolutely, yeah. I work in Florida, so any business that's headquartered in Florida or anyone that lives in Florida, I can help them with insurance. I will refer out either to someone in the BNI network that I look up to or that I can look up and read into or a Health Rosetta advisor. They have a list of advisors on their website.

So either one of those I'll connect people with if they're out of state and part of that is I just don't know The network is such an important piece of it and I just don't really know networks in other states And so I don't really feel comfortable signing something up signing someone up with something that I don't really know that well So I would refer out for out -of -state but anyone in the state of Florida I can help with

Branden Sewell (56:29.585)
Awesome. Well, yeah, so I'll make sure that I get those from you. I'll make sure that they're in the show notes once all of this is posted out there for everybody. And then just as we wrap up, are there any final thoughts that you would want to share with the small business owners that might be listening to this? Any final thoughts you would want them to...

Kaely Christensen (56:30.606)
And I will, yes, I need those resources.

Branden Sewell (56:54.449)
you know, keep in mind about health insurance or being able to offer that as a solution for their employees.

Kaely Christensen (57:02.254)
Yeah, I think just like you're not crazy for thinking it's way harder than it should be, it is definitely way harder than it should be and definitely kind of a microcosm of the whole broken system. But get a broker who will sit down with you, listen to you, who's not anxiously asking when you're gonna hire more employees and be more profitable for them. There are definitely plenty of brokers out there who...

really care about helping small businesses and they will be able to build a relationship with you over a number of years and help you come to your own conclusion about when is a good time to offer benefits. And then just trust your instincts. I think you'll kind of know when it's the right time and I know that's not a hard and fast rule but I think...

If you are trying to really grow your business, you'll kind of get to the point of growth where you know you'll need to offer benefits to keep growing. But if you really like where you are at your under 10 employees and you're able to hold onto employees, I would definitely hesitate before making that enormous investment because once you offer a benefit, it hurts more to take it away than it does to offer it initially.

employees never like when you take something away from them. So really be, exercise great caution if you're a really small business starting to offer health insurance. It's not for everyone, but definitely find a broker who will work with you. I think that's it.

Branden Sewell (58:40.779)
Awesome, good stuff. Well, thank you so much, Kaylee, for bringing insight to health insurance for small businesses and offering some solutions for small business owners out there. If you are listening to this podcast on YouTube, I hope that you have gotten value from this show today. Maybe you feel more informed or more equipped to make a decision on

healthcare for your business and your employees and have a better grasp on which direction you need to go. Definitely check out the resources that we're going to put in the show notes so that you can educate yourself even more, get more just educated on how that all works as a small business owner. And it's going to be a process, I'm sure, and a journey as it is for me.

But definitely invest into learning more about it. I think that's a start. And then connect with somebody in, like Kaylee said, a broker in your area who is willing to just sit down with you and come up with a viable plan that fits where you're at, your business, your employees, and your unique situation. If you're listening on YouTube, please like this video.

Subscribe to the channel, leave a comment, let me know what your thoughts are. Also turn on the notifications so you will know about other episodes that are coming up. And lastly, if you're listening on Apple or Spotify, I would really appreciate it if you could rate and review the show. That will help us to rank higher, get the show out there, help more people, help more home service business owners and small business owners alike.

and we will see you next time on the next episode of the Off the Ladder Podcast.