Transcript:

[00:00:00] Voiceover: Welcome to the Life Unlimited Podcast with Larry Heller. You deserve complete financial advice so you can confidently live your life your way for life. Now let’s get into this week’s podcast episode.

[00:00:19] Matt Halloran: Hello and welcome to another Life Unlimited podcast with your host Larry Heller. Today we’re gonna be talking about high deductible health insurance plans with Jeff Weiner.

[00:00:26] Matt Halloran: Now he’s the CEO of HKM and Associates. Uh, HKM Associates strives to provide excellent service in the areas of life insurance, health insurance, and financial services, both and the personal and professional and even corporate marketplace. So Jeff brings lots and lots of experience over 40 years. So with that, Larry, take it away.

[00:00:45] Larry Heller: Thanks, Matt. Jeff, thank you so much for joining us today. the audience is gonna learn a lot, especially how to save money by using a high deductible plan. So, so before we kind of go into some examples, Jeff, why don’t you tell the audience, you know, when and, and why did you get started in this business?

[00:01:04] Jeff Weiner: So I started 40 March will be 43 years ago. dumb luck actually prior to, uh. All through college, I was gonna be an attorney. And then senior year of college, I decided, well, do I really wanna go to school for three more years? The answer was, yeah, no. Okay. What am I gonna do? And coincidentally, I graduated from SUNY Albany, I.

[00:01:26] Jeff Weiner: And, uh, Adelphi, one of the regional colleges was up [00:01:30] there and they said, if you’d like to see what it would be like to be an attorney without going to law school, come to our paralegal program. Hmm. So I said, okay, that gives me three months to figure out what I want to do. Uh, went to the paralegal program and, and one of the categories or specialties was employee benefits and pensions.

[00:01:49] Jeff Weiner: So I did that, graduated from the program, looked around for paralegal jobs, got to actually like a fourth interview with Chase, and I’ve always been very entrepreneurial. And Chase said, well, we’re not gonna hire you because you’re too entrepreneurial. We don’t think you’re gonna stick around for the three-year training program.

[00:02:11] Jeff Weiner: So I was like, okay, well I can’t argue with that. And. Looked through the times and came across financial services and it said, be your own boss. Sales help, wanted no experience necessary. We’ll pay the train. I was 22. I said, all right, let me go in. Walked in the door and said, do I really wanna sell life and health insurance?

[00:02:34] Jeff Weiner: Okay, let me try this ’cause I need a job till something better comes along and March will be 43 years.

[00:02:42] Larry Heller: Wow. Yep. that’s a great story. So, uh, so then tell us a little bit about H-K-M-A-A associates and kind of what you, what you do and who you service and types of clients.

[00:02:53] Jeff Weiner: Sure. HKM Associates is my own firm. As I said, I’ve been in business 43 years and we do MRIs and [00:03:00] CAT scans, but on insurance policies, what does that mean? We, you know, you have a problem, whether it’s the rates, whether it’s the plan, whether it’s the carrier. You don’t just don’t know what exactly the problem is, but people are not happy.

[00:03:13] Jeff Weiner: We go in and we meet with clients, and our clients are everything from international tech startups, small group, multi-state, to hundreds of employees. We’re licensed in now 40 states, so we can write business pretty much anywhere in the country. How we do a deep dive analysis of people’s benefits and try to find the holes that they don’t even know exist.

[00:03:34] Larry Heller: And is there a size and industry of your typical client?

[00:03:38] Jeff Weiner: Typically my clients are two to 100 employees. I mean, I have clients that are larger, but we treat our small businesses like a, like a large business, and our service model is much different than a typical broker. I. We sit down with a company, we take a look at their bill and benefits.

[00:03:55] Jeff Weiner: Then we shop the market to see if there’s something better, less expensive. If it’s a different carrier that’s better, less expensive, we get a list of the doctors and the employees doctors, and we do doctor searches and all the doctors. This way, nobody has to switch doctors, even if they’re switching carriers.

[00:04:12] Jeff Weiner: Second thing we do is we run employee meetings for all our groups. And when I run the employee meetings, we tell the employees to pull out their cell phones and put my cell phone number on their speed dial. So we’re available 24 7, not only to the owners of the company, but every employee of everyone of [00:04:30] our clients has my cell phone.

[00:04:31] Jeff Weiner: So we service differently. We take care of adding people on, taking people off, getting them ID cards like most brokers, but we deal with all the claims and the billing and the service and the grunt work. So the owners like it because the employees don’t have to spend business time dealing with their personal issues.

[00:04:49] Jeff Weiner: ’cause we’re available 7:00 AM to 12:00 AM seven days a week. The employees like it ’cause who wants to sit on the phone and fight with the insurance company all day? And for the companies that have office managers and hr, they love it ’cause we do all their work.

[00:05:04] Larry Heller: Right. When you say we, you have a team, you have a team behind you?

[00:05:07] Jeff Weiner: Yeah. So I have actually two teams. So my direct team is three of us, soon to be four of us, and we have over a hundred years of experience. And then I have a back office company called Benefit Mall. They’re the largest general agency in the country. So they give me the cloud to negotiate best rates for large groups and the ability to service thousands of employees with everybody calling three people.

[00:05:29] Jeff Weiner: I have a huge team behind me at Benefit Mall that helps me service my clients.

[00:05:34] Larry Heller: Hmm, great. So we talked about the typical size between two and a hundred. So, uh. So I, I know in New York it’s a little bit different than other states. So, uh, why don’t you talk a little bit about the, you know, the two to a hundred market in New York versus some of the other states and some of the challenges behind that.

[00:05:52] Jeff Weiner: Sure. So New York is what’s called community rated state, meaning flat rate, single flat rate family regardless of age.[00:06:00] So you can’t really do anything with the rates if you have all New York employees. So what, what we thought about is, okay, well what about going to a higher deductible plan? And when we started doing the, the analysis, and especially over the last few years, because when high deductible plans first came out, it was $5,000 savings, but $10,000 in claims.

[00:06:23] Jeff Weiner: And it got the reputation of, oh, high deductibles are good for young people who never go to the doctors.

[00:06:29] Larry Heller: Lemme back, lemme just back up a second. I don’t mean to cut you off there. So for those that you know what community rate it is, so, so basically any. Company that has less than a hundred employees, you pay the same rate whether you’re 21 years old or whether you’re 80 years old.

[00:06:46] Larry Heller: Correct?

[00:06:47] Jeff Weiner: Correct.

[00:06:47] Larry Heller: Right. And and above that would be, based upon, your history, how, well, how much claims you had. So a larger group, you could, that would be, could be rated depending upon the history. So if you had a younger group. In theory, they may have get lower premiums than an older group, but in New York, it’s, you’re stuck with one rate, no matter.

[00:07:08] Larry Heller: No matter what. Is that correct?

[00:07:10] Jeff Weiner: That is correct. Yeah. Okay. So up to a hundred employees, whether you have a bunch of 20 year olds or a bunch of 60 year olds, the rates of the rates of the rates, whoever you buy it from, the rates of the rates are the rates.

[00:07:22] Larry Heller: Okay, so now you started talking about high deductible plans, and this is where it gets a, a little bit, uh, I guess a little bit [00:07:30] tricky to really understand how you can do this and where the value that you, comes into place and how you can really save companies, companies’ money.

[00:07:40] Larry Heller: So, well, let’s just start from the beginning. What, what is a high de, what is a high deductible plan?

[00:07:45] Jeff Weiner: So in our world, the high, I mean, theoretically, anything above a $1,500 deductible is considered a higher deductible plan. But what we looked at is we looked at as, okay, what’s the highest deductible we can buy?

[00:08:00] Jeff Weiner: Because that’s gonna save the company the most premium. And let’s look at the difference in the, premiums and say, well, you know, ’cause the biggest problem about health insurance, it’s so expensive, and I never use this stupid plan. And, and that’s the biggest complaint. So, well then why pay the insurance company a platinum or a gold rate, you know, for a very low copay plan if you’re not gonna use it anyway?

[00:08:27] Jeff Weiner: And then what’s happened is over the last few years, the numbers flipped. So it wasn’t a $5,000 savings with a $10,000 in claims. It’s a 10, $15,000 claim, uh, uh, savings or more. With a $5,000 deductible. so it, what ends up happening is companies end up saving tremendous amounts of money, even if they do fund part of the deductible, to offset the cost so that employees don’t get stuck with paying [00:09:00] $10,000 that are their pocket.

[00:09:00] Larry Heller: So let’s just wa let’s kind of walk through that. on a high deductible plan, for example, uh, well, let’s say a, a goal plan would be Cost them what? Versus doing a high, you know, a high deductible plan. So there’s, I guess there’s a premium savings to both the employer and possibly the employee if they’re paying for some of that.

[00:09:21] Jeff Weiner: Sure. so a typical gold plan in New York is around $3,000 a month. A typical bronze plan is around $2,000 a month, so the company saves a thousand dollars per month per family. So the way we set this up so that employees win and companies win. The employees pay the first $500 of claims. They put it on something called a flexible spending account, which is pre-tax.

[00:09:52] Jeff Weiner: They can roll it over. So if they never go to the doctor other than routine checkups, there’s no risk for the employee about losing that money. Okay? And actually in 2024 it’s $640. and then the company funds the next $7,000. Something called an HRA, which is basically pay as you go health insurance. So the company will fund that $7,000 when and if the employee has $7,000 worth of claims.

[00:10:24] Jeff Weiner: Well, most people don’t have $7,000 worth of claims because what counts? What’s [00:10:30] is called a contracted rate? So I had a $28,000 surgery last year. I didn’t get a bill for $28,000 from the hospital. I got a bill for 3,200. So most people don’t hit $7,000, but even if they do well, the company is saving 12,000 funding seven, which means the absolute worst case scenario.

[00:10:51] Jeff Weiner: Company is saving 5,000 per family and about $2,000 per single.

[00:10:57] Larry Heller: Lemme just walk, let’s just walk back through the saving 12,000 because they’re saving a thousand dollars a month on the premiums. Correct. So therefore they’re saving 12,000 out of pocket. So even if they had to pay 7,000, they’re still see worst case scenario, they’re still saving 5,000, $5,000 per family.

[00:11:17] Jeff Weiner: Correct? Absolutely. and employees win also because we know companies are gonna save 5,000 to 12,000 per family, and about a third of that per single. But three things can happen to employees. And the biggest fear is, oh no, my employee can’t afford $10,000 deductible. You know, out of their pocket if they got really sick.

[00:11:39] Jeff Weiner: But what it’s exactly the opposite. ’cause under a gold level plan, ’cause all plans have what’s called a max out of pocket. The Max Outof pocket under a gold plan is 10 and half thousand. The max Outof pocket under a bronze plan is 13 and half thousand, so it’s a $3,000 risk. However, if an employee has a [00:12:00] $50,000 claim under the gold plan, they’re gonna pay 10 and a half.

[00:12:03] Jeff Weiner: Under the bronze, it’s 13 and a half, but the company is giving you seven, which means from an employee point of view. It sounds kind of crazy and kind of defies conventional wisdom. The sicker an employee gets, the more an employee saves because it would cost an employee $4,000 less out of their pocket with the company still saving $5,000 out of theirs.

[00:12:29] Larry Heller: Can you explain that to me? ’cause I’m not, I lost you there. How, how, how they would save. pay less if as they got sicker.

[00:12:36] Jeff Weiner: Okay? Because most of the claims are being covered by the company, so they have a $13,000 maximum, but if they submit claims of above 10, 12, 50, a hundred thousand dollars. They’re gonna pay that 13 five, but the company funds $7,000 on that, on that HRA account.

[00:12:58] Jeff Weiner: So they get like a Visa MasterCard that has their 500 that they paying, plus the company’s 7,000 that they’re funding. So if they, now they get a bill for 13 and a half thousand dollars from Northwell Hospital. They’re gonna not have to pay 13 five ’cause they’re gonna have $7,500 on the on their card.

[00:13:21] Jeff Weiner: So what are they gonna end up paying? They’re gonna end up paying 6,500 with the gold plan. The company’s not funding any of the deductibles, any of the co-pays any of the [00:13:30] co-insurance because their premium is so high. So the employee’s gonna pay thir a 10 and a half thousand dollars. So that’s how an employee saves $4,000 out of their pocket, but the company is still saving 5,000 out of theirs ’cause of the premium savings of 12 and the funding of seven.

[00:13:50] Jeff Weiner: So everybody wins with high deductible.

[00:13:52] Larry Heller: Yeah. So it, it seems like it’s a win-win win situation here in this case that you’re, you’re describing

[00:13:59] Jeff Weiner: it’s, there is no what if. You know, I’ve had conversations with clients. They say, well, I have a, a much older population. They have a lot of stuff that’s going on.

[00:14:10] Jeff Weiner: Okay, do the math ’cause it’s just the numbers. Because when you look at your health insurance, you gotta, you can’t look at it and say, well, it’s just my premium and, and a platinum plan is better than a bronze plan. No, it’s not. A claim is a claim is a claim. The only difference between a platinum plan and a bronze plan is who’s paying for that claim.

[00:14:30] Jeff Weiner: With a platinum plan or a gold plan, you’re gonna pay a much higher premium. And yes, you’d pay copays. With a bronze plan, you’re gonna pay a much lower premium. And yes, you pay a deductible. When you add up a gold plan with the premium plus the claims, the best case scenario under a gold plan is now worse than the worst case scenario under a bronze plan for a family.

[00:14:54] Larry Heller: Yeah. So in this particular scenario, I guess some plans, some companies that [00:15:00] don’t pay for all the health insurance and numbers may not work as the same, but if they’re paying for all these, that’s a big savings when you look at it amongst numerous, numerous families.

[00:15:10] Jeff Weiner: Yeah. And even if the employees cover half and the company covers half of the premium.

[00:15:16] Jeff Weiner: Okay. So either you’re gonna cover more of the deductible ’cause the company’s still saving all that premium. Or you’re gonna lower the employee’s cost and they’re gonna pay less premium and you’re still gonna fund part of the deductible. So the savings is, are there? Mm-Hmm. How you divvy up the savings is up to the company and the employee.

[00:15:35] Larry Heller: Right. So the, the one thing that I just popped on the top of my head, that may be a little bit of a distraction, but not for the amount of savings that they could make. ’cause the actual, accounting for this, like the employer has to get involved in figuring out. Bills and, and paying. How does that work?

[00:15:50] Jeff Weiner: No, it’s very simple. We contract with a third party administrator. They charge, you know, a few hundred dollars to set up the document, the H-R-A-F-S-A-H-S-A document, and then they typically charge between three and $5 a month per employee, per month to administer the plan. They get all the cards, they do everything.

[00:16:13] Jeff Weiner: And then when the claim, when the claims happen. The third party administrator contacts the employer and says, okay, Joe, you had $4,000 in claims this month. Please put $4,000 into the checkbook. From an employee point of view, they get a Visa, [00:16:30] MasterCard, they go to a doctor. They do not pay anything at time of service.

[00:16:35] Jeff Weiner: Mm-Hmm. The doctor then submits to, let’s say Ox Oxford. A doctor submits a claim to Ox Oxford for a flu. ’cause obviously all the routine stuff is free, regardless of which plan. So they go to the doctor because they got a bad cold. He does a chest x-ray. He submits $400 worth of bills. The insurance company is gonna say, okay, doc, on that $400, you’re entitled to $84.

[00:17:00] Jeff Weiner: The doctor will then turn around and bill the employee $84. If you look at an explanation of benefits under a gold plan, it’s gonna say, contract bill 300, contracted rate 84, your responsibility is zero ’cause you paid your copay. Now you’ll get a. A bill that’ll say your responsibility, $84. Where do you get the $84 from your FSA and the company’s HRA Once it kicks above $500 and the card is called the Smart card.

[00:17:33] Jeff Weiner: It reads employees 501st, then company’s money second. Hmm.

[00:17:38] Larry Heller: I mean, it, it, it, that sounds, that sounds great, and I’m sure a lot of people aren’t aware of this is, can you give us another example of something where, where this, you know, where this works for?

[00:17:49] Jeff Weiner: Yeah. I, uh, perfect example. I have a law firm, we’ve, we actually had the meeting recently for their renewal and he said to me.

[00:17:57] Jeff Weiner: You know what? It was a pain in the neck, [00:18:00] putting the money in the account and you know, things like that. But how much did I really save? And he is got about 20 people and about 10 singles, 10 families. And he knew he was gonna save about $70,000 because of that 5,000, 2000 worst case scenario number. He saved $120,000.

[00:18:19] Jeff Weiner: Need this to say, once we did the numbers, I said, look, I’m happy to move you back to a traditional plan. I make a lot more money if you go back to a traditional plan. ’cause our, our commissions are based on the premium, but let’s do the numbers. Once we did the numbers, he is like, yeah, nevermind. Fine, we’re renewing as is.

[00:18:37] Jeff Weiner: Have a good day. Thanks for the thanks for the phone call. And that’s what happens because most businesses. Have the, it ain’t broke. Don’t fix it. Nobody’s complaining about the plan. You know the rates of the rates, and you can’t do any better on the rates, but brokers don’t take the time. To educate and that’s what the high deductible is about.

[00:18:58] Jeff Weiner: It’s all about education. And in four years of promoting high deductible plans, ’cause that’s when the numbers started flipping. Not one of my clients has gone back to a traditional plan. Now we’ve moved them from Aetna to Oxford to Blue Cross to whoever because of rates. But they’ve always stayed with the high deductible concept.

[00:19:18] Larry Heller: This works for a single, employee rather than a family as well?

[00:19:23] Jeff Weiner: Yeah, I mean, the spread isn’t as big, but it’s still, there’s still little to no risk [00:19:30] even for single people. the bigger bang for the buck is obviously family people. but yeah, there’s, there’s a savings no matter who you are, whether you’re singles or families, you know, just.

[00:19:41] Jeff Weiner: Expands the savings if you have more families than more singles.

[00:19:44] Larry Heller: Right. So I think, I think you mentioned it to out there, but I guess a lot of other brokers don’t wanna do this because they make less money by installing these high deductibles. So I guess that’s one of the reasons that kind of sets yourself apart from them.

[00:20:00] Jeff Weiner: Yeah. We lead with high deductibles. I just became broker on a group this morning, and they have a traditional plan, a platinum plan. He said, you know, my guys are great. He’s an investment banker. He, my guys are great. I want to give him the best of the best. I said, yeah, but do you like throwing out money?

[00:20:18] Jeff Weiner: And he goes, well, no, of course not. I said, well, he goes, my broker shop, he said, I only got a 4% rate increase. I said, yeah, you only got a 4% rate increase. ’cause your rates are so crazy to begin with, the state wouldn’t approve more than 4%. He’s paying $3,700 for a family and $1,500 for a single, well, the high deductible plan is $2,000, so he is gonna save $22,000 in premium with a $10,000 deductible and no copays.

[00:20:52] Jeff Weiner: They said you wanna be a good guy, fine fund their entire $10,000 deductible if you wanted to [00:21:00] give them a hundred percent coverage. With no copays and you’re still gonna save 10 grand a family.

[00:21:06] Larry Heller: Yeah, I, I mean, it, it, it seems great and I, and I think obviously it’s also a great thing for, employee retention, because not every company’s gonna have this.

[00:21:16] Larry Heller: So it, it’s something that the employees must really appreciate.

[00:21:20] Jeff Weiner: Yeah. Because, and employees love it because they’re paying employees care about three things. What doctors can they go to? What’s my cost out of pocket? Those, and what’s the premium? And when the premium is the same or less, depending on how they split up the savings, the out of pocket is less.

[00:21:39] Jeff Weiner: And they can use their same doctors, the employees, after. When I run, most of the time when I run the employee meetings, they’re like, why didn’t we do this sooner?

[00:21:47] Larry Heller: Hmm. Yeah. Any final words? This is all great stuff and, and you know, a lot of people don’t, don’t know about this and should know about this. Any final words you’d like to mention to the audience today, Jeff?

[00:21:58] Jeff Weiner: No, just that if you have health insurance and you haven’t looked at it and you’re not getting the kind of service we offer, feel free to give me a call. 5 1, 6 3 1 6 1 2, 5 5. And it’s Jeff Weiner Hkm Associates, or you can email me at jeff@hkmassociates.com.

[00:22:19] Larry Heller: Great. Thank you so much for, uh, joining us today, Jeff.

[00:22:21] Larry Heller: That was great.

[00:22:22] Jeff Weiner: My pleasure.

[00:22:23] Matt Halloran: This is exactly why you wanna know somebody like Larry. ’cause he brings on [00:22:30] these super wicked smart people like Jeff, who can open your eyes to things that you didn’t even know exist. Now this is a perfect podcast for you to share with your friends and family, your business associates, because this is the sort of actionable items that really do help you truly live a life unlimited.

[00:22:47] Matt Halloran: So for Larry and Jeff, this is Matt Hallan. We’ll see you on the other side of the mic very soon.