Dashboard: How Gene Marks Stopped Sweating Health Insurance

[Music] welcome to another 21 hats dashboard I'm Lauren Feldman I'm here with Gene marks to talk about the stories and issues we think business owners should be following this week welcome Jean hello Lauren how are you I'm doing great great to have you here as always uh this week Jean as usual this past week uh you wrote about issues that all kinds of issues that matter to business owners including how to save on health insurance whether businesses should offer discounts to clients that are nonprofit and what last week's midterms mean for business owners let's start with the piece you wrote about health insurance which I found really fascinating let let me quote you if you don't mind sure as a business owner I must negotiate health insurance with big insurance companies every year for my employees with little control over the inevitable annual cost increases I'm often forced to analyze the demographics and health histories of my Workforce which is knowledge I don't want nor should I know I have to pay someone to administer their claims answer questions about coverages and go through a regular review of benefits I'm just a humble CPA I'm not a healthare expert why am I involved in all of this I think that's a great question Jean I I mean I'm I'm the one asking the question I'm waiting for an answer Lauren why am I involv I don't have it yeah it's it's insane there is no reason that health insurance should be set up this way that employers are forced to make these decisions and offer options to employees it's just crazy crazy it's crazy and then you know I you know a lot of it comes from my wife I remember you know when she my wife is from England and when she when we got married was like 30 32 years ago she moved over here she started working at ernston Young and she had to go through and meet with HR and talk about you know get the health insurance options and she's like why why is my employer even involved in this I don't understand what's going on like it's nobody's business you know absolutely see they have National Health you know in the UK which has you know obviously it's pros and its cons too but you know it's it's just such a burden um for employers to have to go and do all of this yeah and it's one thing if it's a big Corporation for for small business owners it's just insane it's so much time and effort and and you're just and you got a gun to your head like you know you know like what you're going to go to like Blue Cross and you know their competitors these people like you're not getting any deals you're not you know I mean there's it's like you're you're just your handcuffed as to what you're going to do it's like I have so many clients right now they're they're hearing from their benefits inmin is oh expect a six% a 10% increase and then you're like oh gez what can I do not much I mean we can you know I don't know you know you increase your deductibles to your employ you know it's like Jesus or go to a different provider which is an incredible Hassle and you may have employees who have to switch doctors and then you're like changing People's Health but that's why I've been writing about the you know the the individual health care plans the the health reimbursement Arrangements um which I think are like the best choice I mean they um you know I you know I just I I was talking and actually I wrote a piece on behalf of a company that I really like called to they're they're they're called total command and what they did is like they're like a an an HRA consultant and um what these people do is like they advise their clients a lot of benefit Consultants are getting into this now they're they're they're telling their clients listen get an HRA because if you get an HRA a health reimbursement you know arrangement you get out of the health care business you know you just you put the money away it's pre-taxed explain how it works yeah you put the money you you put the money away pre-tax for your employees so they don't they don't pay any taxes you get a deduction for it so it's all the same and hopefully even you're putting the same amount of money away that you were paying for your health insurance so hopefully you're not you know you know it's not like that that's saving you any money because you want to provide the same benefit to your employees but the thing is with an HRA you then say to your employees essentially you go and get your own health insurance I'm going to give you the money right so you get all the tax benefits you get your own health insurance go on the health exchanges because for all I know you might have credits available to you on the health exchanges or here's a list of Brokers that we recommend go and talk to your broker or if you belong to some Association you know a rotary club or whatever maybe you can get your health insurance through there I don't want to know about your health thing I don't want to negotiate with health insurance companies it's none of my business what your situation is so it saves employers a lot of time it saves um you know you know fiduciary responsibilities Hippa responsibilities you know um you're just basically writing a check and telling your employees go and do it on your own the the take command you know um you know you place Total command total command I'm so sorry total command what they do is um they contract I think with the employers and then they provide um help to the employees because that's a whole other thing you realize that you know if you you know you're being told by your employer to go and get your own heal insurance I don't know if you've ever been on um by the way're it's called take command I'm so sorry it's called take command Okay I I thought it sounded like an Arnold Arnold Schwarzenegger movie I know I know like going back and forth but it is taking me they but what they'll do is um is like you I don't know if you ever been to the health exchanges but it's like you need like a PhD in biology to like figure out the right health insurance for yourself it's not easy so you know what they you know what what these guys do is that they you know they consult with the employees and they help them find the best you know employee you know Healthcare arrangement for them so you're not just leaving the employees dangling out there to figure it out yeah out in the Lurch and then you know a lot of employees just like thank you I don't really want you knowing about my health care and also well how did your you you implemented this a year ago if I recall correctly yeah and it's been great because then everybody just goes out and just gets their own stuff and your employees were happy with it yeah yeah yeah yeah yeah they were fine they were like on their own it was a little bit of a surprise to them at first um but now they you know they've got the options I gave them names of Brokers to begin with I'm probably going to be using take command in the future um since I've become aware of them um but you know it just gives them the employees the ability to go out and and get their own stuff I just you know it's just and it's taking me completely out of the Whole Health uh you know Insurance conversation because I got other things to you know waste my time on one of the things you emphasized in the column is that it it gives you a certain amount of cost certainty you know how much you're you're paying does can that be a problem for the employees yeah it can be I mean you know I you know I can say to my employees Hey listen uh I'm going to contribute X dollars and that's it you know like I'm not you know you know I have the ability to do that but I don't I mean I I do increase it if I see that overall health you know costs are going up um you know so I am aware of that or I incre I can adjust it with inflation and I have I have an administrator that helps me and they you know they advise me on you should be contribute a little bit more to stay compe comptitive because you want to stay competitive but you do have the option though I mean if you just have like a Blue Cross plan and their premiums go up 10% you're just paying 10% more you know what I mean y here you know you could say like no I'm not going to do that I'm I'm gonna still contribute the same this year that I contributed last year um again there's risk to doing that because your employees might it might upset them or you know you know that kind of thing but you at least you have an option you can decide what you want to do with an HRA and I think that's really you that's really helpful and no no big bad surprises nothing went wrong when you implemented no I mean it was just you know now again I have a very small company so it depends on how many employees you have and it might not be something that you do you you you know right away you educate take a year to educate your people and make sure that they're you know that they understand what their options are um but no I mean I think it's a it's a really good you know it's a really good thing what's interesting about the whole uh uh HRA is that they really weren't you know that kosher under the Affordable Care Act act and then when um when Trump became president he issued an executive order that expanded their use and you know made them more available and then when when Biden became president you know as you know he overturned like every one of Trump's executive orders except for that one you know because that was it's been pretty popular you know so I think that's indicative of of of you know the the number of businesses that are using this and taking advantage of this so it's definitely something you should consider if you're a business owner interesting all right next topic you also wrote recently that you don't feel compelled to give special pricing to nonprofit organizations that use your services yeah you know I love to disagree with you Jean but but I'm not sure I do disagree with you on this one uh ex ex but you know you can understand you might feel a little bit of guilt doing this explain your thinking yeah I yeah it's true about the guilt I didn't really think about that because like I wrote this I was on a rant and uh there it's always because I get that I get that pretty regularly like you know I I sell CRM systems to small and midsize companies and sometimes they're nonprofits and then I get this thing saying oh you know we're a nonprofit do you have like a nonprofit rate and can we I just just went through that with somebody was like insisting on a discount to my hourly fee you know and you know so first of all I give okay all right maybe I'm not Mother Teresa but like I do give to Charities nonprofits my wife runs a nonprofit you know to help children learn how to read you know and I I like we give a substantial amount of money to that my business does to her nonprofit uh to help these kids get funded so they can get tutoring to learn how to read so okay so I make my choices if I have some client and they're a nonprofit I don't know anything about their nonprofit I don't know what cause they support I don't know if I even agree with it for all I know it's something that I'm I'm opposed to because you're a nonprofit that doesn't mean I'm going to give you a discount because basically means I'm contributing to your nonprofit and I got a business to run you know I can't do that for for everybody and you know so I'm not not trying to be like a bad guy here but it's just like I you know here's what I'll do for your nonprofit you pay me and we do a great job so your nonprofit can use your CRM system to raise more money and hopefully benefit you okay that's what I'm going to do for your nonprofit but I'm not going to give you a a discount on my fees for doing it because I'm a small business too you know just like they are um and I there are plenty of nonprofits out there that are you know that I know they're a nonprofit but you know they're CEOs making 300 Grand a year and they're you know they got big administrative costs and all that and I'm like why am I I don't really want to fund that by giving you a discount so you know so yeah when I get that pitch from nonprofits or people asking for the nonprofit rate it makes me bristle a little bit um but I'm always like no I'm sorry we don't we don't offer nonprofit rates sorry H have you lost potential clients because of that yeah I I I think I have I mean and I have you know in the past I've had people you know they because some people are Dopey enough to offer non profit rates and yeah they might get their they might get the client but I don't know if they're making much money on that client you know what I mean so that's another thing to consider some big companies offer nonprofit rates you know um you know Salesforce and you know Microsoft you know if you're a qualified you know 501c3 or whatever you get I'm guessing it's not for just any nonprofit they probably look at who they're giving a good rate to don't you think I don't know Lauren I I think it's like you just have to show you're a qualified nonprofit yeah cuz then you're like then you get into a sticky situation you're Microsoft saying like well we're going to give you the discount but we don't like what you guys do so we're not going to give you the discount you know what I mean so I think it's across the board if you if you you know can show proof that you're a qualified you know 501c3 or a nonprofit organization interesting and then of course then that's why the nonprofits think they should get a special deal from you too yes because they get it from other big companies and it's not fair for a small business to then say well we're not a big company and you know we're just a small business trying to you know do our thing so it's a little I know you're a nonprofit maybe you're a small nonprofit but so are we you know it's not fair so like ask you make too many of those deals you'll be a nonprofit too yeah exactly right I don't want to be a nonprofit like you so all right last topic you also wrote last week that there's one clear takeaway for business owners from the midterm elections and that's that the economy is stronger than most us thought yeah why do you why do you come to that conclusion yeah I we've been talking I kind of been writing so much about this and talking about the economy the economy and like there's so conflicting information Lauren you know going on you know you got you know oh manufacturing is down real estate's having troubles and the tech industry laying off all these people and inflation and interest rates you know they're high and going up and then meanwhile you know there's all this good news about the economy as well you know household wealth and credit card spending and Retail spending still pretty strong and you know you know there is a uh the banks say they're doing good It's just tough to tell like people are ask me all the time like are we in a recession are we not and then so we just have the midterms this week and you know the the Republicans ran on the economy you know they they ran on you know we are you know you know you know High inflation and Biden's screwing up the economy and you know you know you you you want to you vote for us because we reain in spending and get things back on track um and then you know the Democrats are running on more social issues I mean abortion was a big thing voters rights you know preserving our democracy and you know some people consider abortion an economic issue as well yeah true that's true it's true but you know you I'll tell you what was like surprising was like the day after the election and I was at a client um for the morning and I was talking to like different people I was talking to somebody in their warehouse I talked to a few people in their customer service they every was talking about the election and people are pretty pretty open about who they voted for and a lot of them voted for like you Democratic candidates in I'm in Pennsylvania so they voted for like John fedman for example that was the big race and um you know these are people that like they're not like the 1%ers I mean these are people that are like you know making 50 60 Grand a year 70 grand a year um I know that because you know I have access to those records and you know and like so those you would think those would be the people like most impacted by inflation and you know the high price of gas and you know the you know grocery store bills or whatever and you know a lot of them voted for you know for Federman and a few of them said you know listen I I I'm nervous about abortion rights in this state and I want to you know I voted for Federman because of his stance on abortion now if they were really suffering economically I believe as much as you say that abortion is an economic issue I believe that people will vote with their pocketbooks and be like you know it's more important that we get our grocery bill down you know what I mean or i g i you know my gasoline price down um and might want to change well that was the whole narrative going into the El election that's what everybody thought was going to produce a red wave yeah that's what everybody thought and I and I thought everybody's talking about well it's you know Trump and it's these awful candidates and there's definitely some truth to that because there and fear of losing democracy yeah there you know obviously all of that um but I do believe what James Carville said 30 years ago when he was running the Clinton campaign about it is the economy stupid you know I do believe that people that's the core core issue for everybody you know is just you know taking care of their famili sure um and you know after seeing the results of this election I'm like I don't know if the econom is as bad as the Republicans are making it out to be right now now that doesn't mean 2023 isn't going to be a challenge you know could be but I don't know I walked away saying I I thought maybe you know and it isn't it's just I think that's proof of the pudding and by the way the client that I was at which is like a small manufacturer they had a great year this year you know what I mean like you know you know I've talked to I mean it's such a complex thing cuz you can find so many business owners who've had a great year and and don't see any problems on the horizon either yeah yeah I you know now these guys and then of course well it's a big country because these guys are concerned because their their backlog is is starting to dry up a little bit and they're concerned about that and buying stuff from China they're concerned about oil or Ukraine and affecting their energy costs in their business because they're the products they sell are you know you know you know have petroleum based products as their core material everybody's different you know what I mean but I don't know if you feel the same way like I walk around Philly you know all the you know retail stores are pretty much we had riots here two years ago Walnut Street in Philly is like pretty much occupied uh the restaurants seem to be doing great I travel I mean Jesus I'm sitting I mean the planes are packed the hotels you know are busy I mean people are out in about you know what I mean you know it just doesn't seem like we're in a recession right now um you know and the economy doesn't seem as bad as and even the final thing I can say to you is uh you know you I know inflation is around like 7.78% ADP just reported their numbers from their database just from two weeks ago and they said the average company they did raises to their existing employees was about 7.7% right I mean over the past year so if you're running a business you should be increasing salaries and compensation your employees between 7 and 8% because that's what has what ADP is showing that's their actual employment data this is not a survey and for people that left jobs and started a new job the average increase was about 16% 15 to 16% if you can imagine so no one likes inflation but if you're getting an wage increase along those lines that's my point like employers have been stepping up you know and yeah they've been raising their prices they've been passing it down to their employees so the employees don't seem to be really hurting um and then I was also thinking about gas price like you remember Lauren when we were younger you know in you know like in the late 70s early 80s um you know like when there was that you know obviously the oil prices and you know all that you know the the the problems of the oil crisis I mean that was back then I mean I don't know what your dad was driving but you know my dad's car got like 27 gallons to the mile you know like that's good that was good back then I remember those days yeah it's like a Buick station wagon you know like 8 cylinder what ever so when an oil crisis happened then that was really a crisis now it's like everybody's driving you know you know electric vehicles or hybrids or even very fuele efficient cars so yeah it cost more to fill up our tank than it did but I I feel like our tanks are going a lot longer than my dad's tank went back in the 70s which means it might not be taking as much of a bite out uh of people's Lifestyles although everybody Compares it to what they were paying a year ago not to what they were paying three decades ago but it's true I take your point I take your point it's true anything you're working on uh that we should look for this week yeah I'm G to be working I'm going to be rating a piece for the inquire this week all about uh well it's more of a Philadelphia piece about like free re resources available uh you know for employees and then um um you know some technology pieces I'll update you when I'm there again I'm going to be in North Carolina uh and this week as well as New Orleans speaking to a bunch of CPAs and a bunch of software people from all over the different Industries so I can report back to you next week on what people are saying what's going on out there that sounds great Gene marks is a CPA who rites weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times Forbes and entrepreneur you can also here I'm on ABC radio's eye on the world with John Bachelor Jean hosts two small business podcasts with paychecks Corporation and the Hartford thank you Jean thank you Lauren we will see you shortly next week take care always a pleasure have a great week everyone [Music]