What’s The Benefit? – Episode #1 – ICHRA

There is a paradigm shift happening in the group benefits space. It may be slow to develop. It may be on the fringe. But it is happening, it is growing and it is something for you to watch and possibly offer to your group clients.

In this episode, Dominic interviews Aaron Spurlock, Sales Representative from The Cason Group about his extensive experience and work in the ICHRA space. The Cason Group is a national General Agency and specifically in South Carolina, ICHRAs have been a meaningful option for small group since 202). Aaron has headed up Cason Group’s ICHRA initiative and has been involved with hundreds of quotes and 170 new ICHRA implementations. He has also participated in the research team to find a national partner for the large group space.

We discuss Aaron’s experience; the basic definition of ICHRA; what legislation made it relevant; and why it is becoming a real alternative for groups in the 50+ self-funded or experience-rated space. We dive into the ‘family glitch’ executive order which now allows for employees’ dependents to access a subsidy on the exchange, a subtle but powerful game changer for the ICHRA space. Finally, we discuss the negatives to the concept. What exactly is an agent’s role in this process? How do we address enrollment? Does the technology work? What is the ramp up and timeline?

I am very proud that this is our very first episode because it is entirely relevant and useful now and very much into the future.

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Hello everybody, this is Dominic Siciliano, your host of What’s the Benefit podcast. This is episode one. And in today’s episode, I’m super excited to introduce you to Aaron Spurlock, who’s my colleague from The Cason Group on the Individual Medicare side. He’s located in Columbia, South Carolina. Aaron will tell us how long he’s been with The Cason Group and what his specific role is there. But recently, he and I, alongside Dean Ferris and Brian Harman, who’s our vice president in that space, have been really working to bring ICHRAs not only to Michigan here, obviously through Benefit Profiles, but Aaron has been working in his territories with The Cason Group. So, Aaron, welcome. Thank you so much for being here. 

Happy to join and excited to talk about this crazy thing called ICHRA. 

So let’s get going. So if you don’t mind, why don’t you tell the audience, just set it up for us, how long you’ve been with The Cason Group, kind of your history in the insurance business. I spent time with you face to face and obviously working virtually and really have been impressed and enjoyed our time together. But if you don’t mind, give me the background.

Yeah. So my background to insurance is, I had no idea that I wanted to be in insurance 10 years ago. Got married seven and a half years ago now and have been with The Cason Group for coming up on six years. So the reason why I mentioned the marriage is because we were young and happy and in love, but very, very broke. And then the Lord blessed us with a daughter and in that, in that pregnancy time period, I was looking at the finances.  I was like, man, making 11 bucks an hour as a woodworker is not going to cut it. So started looking around for some jobs and luckily found The Cason Group and fell in love with the culture here, fell in love with the people here and honestly with insurance as a whole. So really glad that the Lord guided us into this industry. And I never thought I would say that. But there’s obviously a bunch of blessings along the way. 

 Yeah. And Aaron, I didn’t know that background and someday I would love to dig into that, but that’s not for today. But natural question. There’s a lot of folks in Michigan who will be listening to this who really, even though we’ve been partners with you all for two years as an affiliate, do you mind just giving them a background on The Cason Group, you know, kind of like the minute to two minute explanation of who you are. You and I could talk about why we’re partnered together, but just kind of introduce Michigan to who you all are. 

Yeah. So The Cason Group has been around for over 32 years now, was started by Louis Cason back in 1990 or 91, I believe. And he started it as a group GA. So very broker centric here to support you from a service standpoint with all the different carriers that we represented over time that grew into a financial services on to o. So now you have group services and financial services. So life and disability insurance. And then over the last really last 10 years or so, the individual medical arm started growing as well. And so that’s the team that I’m a part of. So now we have three different divisions, group services, GA services, which is a lot of technology and enrollment centric these days, financial services, life and DI, and then individual medical, which is ACA and Medicare primarily. I’m one of those weird ones that kind of cross pollinate between two of the departments. And that’s the group and the individual medical space, which is where we’re at today with ICHRA. 

Exactly. And it’s really neat. I would say that the reason, you know, individual Medicare was a bridge where we started our relationship, The Cason Group and Benefit Profiles. Last year, we entered the individual Medicare space, but as a GA here in Michigan, a group GA primarily, it was nice to have The Cason Group to support us in the background with all the things you need, certification, compliance, commissions, technology, all of that. So it’s been a really good partnership. And Benefit Profiles is an official affiliate of The Cason Group. And we can, we’ll talk about that through our podcast throughout this year. But I will say one thing you left out, Aaron, you talked about the business side, but I think you mentioned this, you know, The Cason Group you were attracted to from the personal side as well. And that was what anybody who’s got a chance to interact with anybody from The Cason Group, just some of the best people you’ll ever work with in the industry. And that will come through as well. So awesome. So you’re in the individual Medicare space. And if you don’t mind talking about how did ICHRA become a thing for you? How long has it been a thing? Because it’s not like, oh, last two months ago, you’ve been really in the space for a while. 

Yeah. So like I said, I’ve been with Cason Group coming up one six years. I’ve been, I was internal for three years. And then the last three years, I’ve been able to be an external sales rep working with brokers. And so I was internal on the group side and then took a external position on individual medical, ACA and Medicare. And then this new product comes out called ICHRA. And it was positioned to all the group reps and said, hey, do you all want to take this to market, promote it, learn about it, all that stuff? And the group reps, like most group brokers back in 2020 were like, no, we’re just we’re going to focus on what we got going right now.

Yeah. 

And so it was tossed over to me. I was, you know, cutting my teeth on a lot of other stuff. So I was like, yeah, why not? I got time to bring it over. And so it enabled me to spend a lot of time and research and learning this product from the legal document side to the implementation side. And then over the last three years, specifically with Blue Cross and South Carolina, I’ve been able to, you know, work on hundreds of cases that we’ve either quoted out and said, hey, this is going to get fit or we implemented 170 cases, I believe at this point with Blue Cross of South Carolina. So we knew that this would come in and this has been in the making for some time. And that made us look out into, hey, what can we do outside of South Carolina to get to. 

That’s so great. So OK. So there’s two questions I have that folks in Michigan will find very interesting. One, ICHRA being that much activity, 170 groups and much many, many more you’ve quoted. Why is that specific and unique to South Carolina? You and I have talked about this. Do you mind sharing that?

Yeah. So and I don’t know if this is happening in any of the other 49 states out there, but Blue Cross of South Carolina, they from the get go, as soon as they knew that this was going to be a product offering, they said, hey, let’s bring this in-house and let’s have a third party administrator that can handle the HRA portion of these individual policies and auto substantiate. They already had in the individual space the ability for a small group that wanted just to drop group coverage for them just to put the individual policies on a list bill so that the group is paying it and payroll deducting what they need to. So they already had that in force and play and then they just added the ICHRA portion to it. So now they have a full force solution from start to finish that really functions like a group product in the eyes of the group administrator or the owner of a small group. And that’s really where they were focusing in on is that two to 50 space. And they’ve been very successful because there’s a lot of things that you can do with ICHRA in the two to 50 space because you’re not having to deal with the ALE mandates of offering affordable coverage. You can class it out and you can push maybe some of the hourly wage earners to the marketplace to get a subsidy that’s greater than what an employer could offer their employees. So there’s a lot of different things that we’ve been able to do as primarily because of the carrier backing this ICHRA. And yeah, across the time, one thing is last thing I’ll add about that is like in 2020 they started doing that in 2021 they came out with individual policies that had a national blue card network attached to it. So the biggest concern of switching from a group plan to an individual plan is the network limitations. Well, they solved that by offering six plan options that were really geared to drive more ICHRA membership. 

So unique. And this is all background to where we are today. But do you mind talking about and some folks listening they may be asking like what generally is an ICHRA and why now? You know, why did it happen in 2020? You and I both know that. But if you don’t mind doing that background then we’ll talk one more thing about Blue Cross of South Carolina. But go ahead. 

Yeah. So ICHRA is an acronym individual coverage health reimbursement arrangement. So HRA is not anything new to the group market. It’s been around for a while. But typically with an HRA you’re just getting a claim. You go to, you know, you have an emergency or you go and get a surgery or whatever. You get a bill, you pay that bill, you have that claim and you substantiate that claim with the group’s HRA and then you get reimbursed for a specific dollar amount.

Right.

So take that concept and apply it to individual coverage premiums is what an ICHRA is. And it was rolled out through the Trump administration to the idea was to give the employers and employees more autonomy in the market to go and choose the plans that’s best for them, while also providing that tax benefit to the employee and employer. So that’s ICHRA and kind of the background of what it is and how it started. 

It hasn’t taken off in other states because if you look here in Michigan in the small market, our group rates are still pretty significantly less than our individual rates. In South Carolina, that’s not necessarily the case, correct? 

That’s correct. Yeah. So the two size segments are very important to you, right? The small groups, two to 50, and then the applicable large employers, 51 plus. So two to 50 is how ICHRAs were initially marketed. Okay, this is a great solution for two to 50 groups. Well, if you don’t have a good implementation and integration piece for these ICHRAs to run smoothly with that substantiation of that claim, so reimbursing that monthly premium, which has been so unique in South Carolina as a solution with Blue Cross. If you don’t have that piece, then it’s not going to go well from an administrative standpoint, and it’s definitely not going to go well in the large group space whenever you have, it’s not just four employees, you got 400 employees that you got to substantiate claims each month. 

And not claims, but substantiate premium.

Exactly. When I’m saying claims, I mean for ICHRA, I mean premiums. 

Premium. Yeah. Okay, that’s wonderful. So in South Carolina, the rates are good. South Carolina blue, which is your state is very similar to Michigan where the Blue Cross is a dominant player, correct? And you guys are a huge partner for blues of South Carolina. So that all came together very well. You mentioned to me one time, Aaron, that the small group reps who work for blues have for an agent through a GA or to direct to an agent, they can offer them ICHRA, they can offer them ACA medical rates, fully insured, or they can offer them level funded. Is that correct? So in your state, groups have three options. Even the blue world. Here in Michigan, we have all those options. But again, probably in the two through 50 space, what we’ve seen so far is that our group rates are still, the ACA group rates are still less than the individual rates. Okay, great. So that brings us up to speed. So you are an expert because you’ve done a ton of groups. You’ve worked in the ICHRA side. Then you decide, okay, you and The Cason Group decide, all right, let’s take this concept, let’s take it up market and let’s take it outside South Carolina. Is that correct? That’s where we are at the timeline, right? So when did that timeline occur? 

Yeah, it actually came to us two years ago when we were actually talking to a large group blue agent and he was saying how they lost a client, a 300 life client to an ICHRA platform. We’re like, what in the world? How did you, how did that size group get an ICHRA? And so then we did some more digging and realized kind of back to your point earlier of, well, Michigan might not be a great ICHRA market just yet because in the two to 50 space, the rates just are better in the group space than the individual space. Well, once you get into the self-funded, partially self-funded, level funded groups in the large group area, it really is grouped by group. So is the individual rates better than the rates that this unhealthy group is getting? If the answer is yes, then ICHRA might be a good solution. But it was always that administrative piece that was kind of the missing piece of the puzzle for us as we were trying to go market because Blue Cross and South Carolina, they just work at this point, they just work with Blue Cross of South Carolina plans. And so if you have five employees in North Carolina, they’re obviously not going to get a South Carolina individual policy because it’s based off where they’re located and it just kind of starts falling apart from an administrative standpoint. So we knew that we needed a national solution that made it seamless so that they could get those reimbursements on a pre-tax basis, payroll deducted, and really technology as well so that it’s a good experience for the employees and the employer.

Okay, so then that’s perfect. And I want to reiterate to the audience, this is where I’m getting excited, but Aaron and I have looked at some examples of 50 plus groups and it blew my mind because like he said, I just want to reiterate, yes, two through 50 here in Michigan, the group rates are less, the ACA rates are less than individual. But as everyone on the audience, anyone who’s listening who’s worked in the 50 plus space here in Michigan, there are some cases that experienced rated nowhere to go or self-funded nowhere to go. And so now groups are saying, do we even need to be in the insurance business? Should we be in the defined contribution business? So hold on that. So coming back to that, so you guys go out and start looking for solutions, Aaron. You interviewed a lot of third party administrators, correct? Because they are popping up nationwide. Is that correct? 

Oh yeah, nationwide. There are even some that are like in Puerto Rico, which you know, province or whatever, but it’s like they’re everywhere. And we probably interviewed and went through the vetting process that we called it for about 20 to 25 different vendors that were saying that they could be the solution. And yeah, and there was a lot that looked great, but there’s usually one to two or more missing pieces that they didn’t have a good solution for. And luckily we landed on one. We were like actually at the point where we were getting kind of weary of the two year process and we were like, man, are we ever going to find this thing that we need in order for this to be successful? And then sure enough, we stumbled upon a recommendation from a broker to a company called SureCo, that’s based out of California. And we’ve been partnering with them really since the middle of the summer and kind of fleshing out this partnership and what it looks like for us to be a distribution partner with them. And yeah, I mean the initial part of that relationship, at least from a distribution model is, hey, is there savings in this space going to ICHRA? And can you present the savings in an understandable way to both the broker and to their groups? And if you can, then they’ll understand the concept and then we’ll start talking about what it looks like for implementation, integration with payroll, and how to make this go well, not just for, I mean, if you got a million dollars in savings and it’s like great, we’re going to move to this 1/1. And we do that, we get those savings for the group, but then the second day in January, somebody goes to the doctor and realizes they don’t have coverage. Well, that’s the piece that you got to make sure it never happens in order for the million dollar savings to actually be worth it.

And moving from this concept to going from an employer based health plan, whether it’s self-funded, fully insured, I don’t care, with one carrier, let’s just say Blue Cross, and going to ICHRA. It’s not like you could decide on 11/15, we’re going 1/1 like you can in our world, our current paradigm, because you are changing the whole way you’re doing this, right? You’re going to a defined contribution where each and every employee will log in and look at his or her options in their own zip code. And now we have instead of like, oh, three options in my plan, a high, a mid, and a low with one carrier and one group education meeting that, you know, the whole team comes in, there’s donuts in the corner. That is gone, right, Aaron? Like that paradigm is gone. Is that correct? 

Yeah, yeah, it is. Once you move to this ICHRA model, now, I mean, technically, can you say in January, hey, we want to move to an ICHRA 1/1?  Technically you can say that, right? You can find one of those 30 vendors that I mentioned before and they’re going to say, hey, we’ll take the case. But what does it look like once 1/1 happens is the important piece. But again, going back to your point, yeah, the days of old, once you move to an ICHRA, it is no longer. This is very individual centric. How I explain it to groups is saying, hey, you’re used to owning the group policy and managing that from a claims standpoint, right, standpoint and benefits standpoint. You are getting out of that. That is no longer the realm that you play in with an ICHRA. You are doing a defined contribution to your employees so that they can theoretically take cash in hand to a market and find a plan that best fits their needs. Now, how that’s implemented will determine how well it’s received. And so you mentioned the group education with donuts in the corner. Honestly, that’s where The Cason Group has found success with these groups is we still take the same education model and enrollment model that we had in the group space and we now inject individual medical knowledge, market knowledge into those educators to be able to walk hand in hand with these employees who are used to looking at two options on their benefit portal and now they’re seeing 40 to 60 plan options and they have no idea what to do. 

And so that is really melding your history and excitement with employee education when it comes to voluntary benefits in Michigan. Maybe probably people would understand like worksite enrollment firms when we discussed that at the beginning but The Cason Group has years of experience in that side. So what’s fascinating about this partnership is you all have the background in helping members choose plans and helping educate plans. You have the background in individual and Medicare space and you’re really melding all these features into one. You haven’t named the TPA yet. Do you mind telling us who you chose and why you chose them? I mean you kind of already told us why, but yeah. 

Yeah so SureCo is the TPA that we went with for a national solution. There’s many reasons why like I said there’s a vetting process that we’re going through different line items to make sure they cover but what really stood out to us were a few things. So one was just the ease of their portal from both an employer and an employee standpoint. What we’re really looking for because we you know we have a great partnership with Employee Navigator on the group side from a technology standpoint. We were looking for that but specific to ICHRA essentially, and they have that and so that’s the first thing right awesome that’s great. They handle all the important ICHRA  documentations, the 5500 reporting data, 1094, 1095 data… 

The paperwork you have to have on file, right, because it’s an HRA, correct?

Exactly, so they handle all of that the legal side of it is all handled as a TPA portion. They’re not just a tech vendor but they’re a TPA and they’re also handling the substantiation of those premium claims each month right. So it’s a seamless process and what impressed us the most about them is their attention to detail to deliver the best employee and employer experience. So it’s one thing if you have that platform but what again what does it look like after we enroll what’s happening how are these plans being funded all the details that go into making an ICHRA work they checked off the list as you go down it and so at the time of the vetting process they had 25,000 employees nationwide on their platform and they’ve gone through two open enrollments at this point and this is going to change in years to come but they’ve gone through two open enrollments and they have not lost a single group. 

Wow.

What that tells me is that you’re doing the implementation right.

Yes and the service, the ongoing service. 

Exactly.

For the audience you can only imagine say you have a 500 person group and you have 450 people all with different individual plans. You have to be able to explain that to the employer how it works explain that to the employee on a portal this is my contribution this how much I owe. Collect that money send substantiated per member send it to the carriers so those individual policies remain in force. That is a quite an administrative situation, correct?

Yeah and brokers for the longest time and rightfully so they’ve just been like all right yeah that’s that’s too much we’re not even going to talk about that because of all the moving parts of it so if you can solve the moving parts issue then now you have a solution that brokers are going to say oh this is a feasible thing to save the group money and benefit the employees as long as those moving parts are moving appropriate. 

And this is great all right so Aaron so let’s take it to the real world level. Let’s talk about a real example you and I are working on right now large group 1200 lives and it’s self-funded and every year it’s low income folks and every year they see people dropping off the plan a) because the employer or contribution the employee contribution folks are like I don’t want to pay for that there’s no individual mandate. It’s being adversely selected against because less and less people are enrolling, which leaves all the folks who absolutely need it are on it. So the spend is in the millions on the self-funded side and the employer is saying to the insurance agent, you have to find us a way. You’ve got to find us a solution. So previously the agent solution was, I already have you self-funded. What do I do? Take your specs higher. Go shop your stop loss. Try to get people involved. Create a wellness plan. You name it, right, Aaron? We’ve all got those big gadgets and tricks up our sleeves. But the reality is we could go to Medicare-based pricing, all of the group solutions, right? What ICHRA does for this particular group is it’s a paradigm shift. We are getting out of the insurance game. We are no longer funding claims. We’re taking that money. We’re funding claims. We’re giving you a defined contribution. And guess what? We can now project what our contribution is going to be forever, or not forever, but at least for, you know, we can say, hey, this is a very defined thing. But there’s something that just blew my mind when you and I were together at the rep retreat two weeks ago. For the audience, The Cason Group does a rep retreat every year where we kind of come together and discuss all things, stay the industry. And what it was was the family glitch. So do you mind explaining in a world where a large market, why that is so interesting and powerful?

Yeah, absolutely. So the family glitch, for those that aren’t familiar with it, it’s a phrase that was coined back on the ACA was first implemented in 1/1 of 2014. And what it stated was essentially if anybody in the household is offered affordable coverage for themselves through an employer, then the rest of the household is ineligible to go to the marketplace and apply for a subsidy.

So play that out. You could have a family of five with a $40,000 household income that would be getting a tremendous subsidy and tremendous plan offerings in the marketplace. But that person who’s bringing in the $40,000 a year is also offered affordable coverage for themselves, employee only affordable coverage. And then that means the other four members in the household are disqualified from going and getting a subsidy. That has been done away with, it’s been revised as of 1/1, 2023. 

And why was that revised again? Was it a Supreme Court ruling or was it a…? 

No, it was an executive order, essentially, within the ACA and all politically driven. And so I don’t think that there’s any way that this is reversed. And the future regardless of the political parties and we could get into that. But essentially, why they did this was to increase the marketplace membership. 

So let’s talk, let’s unwind that a little bit more. So if I could just repeat what you said, what we’ve always understood is A family of five offering Mr. Employee affordable coverage on the individual side, but probably not family. But because he was offered coverage or she was offered coverage, the rest of the family is not qualified for a marketplace subsidy. Boom. Okay. As a 1/1, 23 executive order that says that’s no longer the case. That person who’s offered the health insurance, they cannot get the subsidy, but his or her dependents, they can. Correct, Aaron?

Correct. Yeah. 

So let’s talk about what that means for our large groups.

Yeah. So in general, I mean, you could as a large group, you know, this example that you’re giving, you could just say, hey, we’re going to stop offering contributions and maybe they have two dependents and force the dependents to go to the marketplace. You could just do that as a sweeping declaration for all your large groups, because there’s no mandate requiring you to give an affordable contribution to dependents. There is a mandate to give it to the employees. Now, administratively and from a perception of employee standpoint, that might be a hard pill to swallow if they’re offered this, you know, Cadillac coverage on the group side, $2,000 deductible, great co-pays all the way through. And then you’re pushing the dependents to the individual space. 

Not a great feeling. 

Not a great feeling. But if you say, this is where the ICHRA and the Family Glitch kind of marries each other, you say, hey, we’re as a company, we’re transitioning to the individual market. You guys are going to get the plan of your choice and great news. You’re also based off the payroll, based off of our assumptions. You’re also likely to get even greater contribution through the subsidy marketplace for your dependents. And then, you know, here’s the The Cason Group, here’s the Benefit Profiles to help you navigate your options for both the employee options and the dependent options in the individual market, because it’s like a brand new space. Right. So that message is a little bit cleaner than, hey, sorry, we’re not offering anything to your dependents anymore. Good luck on the marketplace. And here’s healthcare.gov.

So let’s take it out real world. Employee logs in to SureCo, starts looking like, well, this is overwhelming. The Cason Group steps in. We’ve worked with the group and say, this is how we’re going to help each and every employee. What’s it look like for the employee working with a Cason Group representative?

Yeah. The Cason Group representative is a person who has been in this industry for quite some time. Our call center has been around since 2014. And they’re all W2 employees with the The Cason Group that are trained in the individual market to help somebody navigate those plan options. So I would do it every day that they’ll call into our number or they’ll schedule a time to, for us to give them a call. And then we’ll have their plan options pulled up in front of us and we’ll walk them through from their end or you can do it virtually or if it’s the right size group, we’ll do it in person one on one, sit down with you with the laptop in front of us to walk through your options. So there’s essentially those three different avenues, but hopefully the experience for the employee will be the same, which is them getting clear direction based off of their personal needs to the plan that they need the most.  Financially and medically. 

Right. So because the The Cason Group enrollment support will say, okay, Mr. and Mrs. Employee, you have a subsidy. We’re going to shop with that from your employer. Your dependents qualify for the subsidy for the marketplace. We’re going to shop with that for them. But that’s complex and that is a, I mean, that’s an individual meeting. And that’s where your enrollment education background really marries the SureCo platform and the ICHRA platform. And that’s what makes me so excited to bring that to Michigan because what’s really cool is that The Cason Group has learned the Michigan market through our partnership for two years now. So now it’s just let’s go, you know. Okay. All right, Aaron, this all sounds awesome. Right now you and I are just excited about it. Let’s be naysayers. Mr. Naysayer agent. Okay. Like why would an agent not want to do this? And what is your, what’s your kind of response to that? 

Yeah. I mean, honestly, it’s, it’s pretty easy to poke holes on a new product regardless of what it is. So that’s going to be the number one thing is, hey, it’s only been around for three years. Why would I transition my 1500 life group to an ICHRA? It’s not proven to be a good solution. Let’s wait it out and see what happens in the next couple of years. My response to that would be we’ve been testing it out and proving it in the last three years and SureCo has as well. And it’s a tried and true solution. Now, again, is it a great fit for every group? I say, no, it’s not. You know, I always tell brokers completely honestly, and I’m the biggest ICHRA pusher out there, but it’s, it’s your third or fourth option, especially in the large group space. It is not number one, because if you can, I said this, you know, we had a webinar last week, I said, is that if you have a $300 premium on a thousand dollar deductible plan and you’re self-funded and you’re running great, there’s no reason for you to get it. 

No, not a solution.  It’s for the, it’s more that group, like I talked about where that group told that agent, you better go find us something because we’re done. You know what I mean? Like it’s like, hey, we are at our end. Or you gave me an example. What’s your rule of thumb on the individual rate? 

Yeah. So I, I typically will say it’s not a good fit if the cost savings aren’t there. So that cost savings that we look at is we want it to be between 15 and 20% at the very least of savings versus their current rates, not renewal rates versus their current And so we can run these quotes year round because we get the premiums for the individual landscape once a year, it doesn’t update quarterly or anything like that. It’s once a year, so you come to me in March and say, hey, I got the 7/1 group that I think might be a good ICHRA fit, we can quote it out even though you don’t have the renewal yet for that 7/1. So yeah, and that’s a good kind of, I guess, benchmark for you to look at is 15 to 20%. 

And you kind of mentioned that $600 individual rate was that kind of yeah, yeah, that’s what you said to me.

And that does vary right varies on the market and it varies in terms of the age because these are all in the individual space they’re all age banded rates. And so if you have a $600 composite rate on a group whose average age is 55, then it’s like, okay, that’s a pretty good rate, all things considered. But if you have a 600 composite rate on a 40 year old average group or 30 year old whatever, that’s worth looking at for a group.

We looked at a group that I sent you that is in New York, it’s headquartered in New York and that’s a thousand dollar individual rate. And that’s a side note, but for the audience, I mean, look, you were selling insurance in Michigan and the rates are doing nothing but going up. Whether you think this is a solution today, I just think it’s important to understand like this is coming our way, period, just rate pressure alone. The other naysayer that I’ve heard from insurance agents and it’s a tougher thing, you’re changing the paradigm for sure. The insurance agent now is no longer servicing one policy or in one carrier for an entire population. So the old model of employee has a problem at the prescriptions, they call it to the HR, HR calls the agency, agency is Superman, solves that claim issued in the hour and they look amazing, right? Like that is kind of gone now. Is that correct, Aaron? I mean, go ahead. 

It is, it is, yeah. That’s definitely a, I was talking to one broker, he was like, all right, so what’s the point of me? And I was like, yeah, that’s a great question. These individual policies, they’re going to be written through that TPA and so there’s very little, there’s some service that can be done on individual policies, but again, these employees, they own their policy. So that’s the part of that pre-education that’s very important for them to understand. Hey, if I have a claims issue, I go to the carrier directly and then if it’s not being solved, yes, there’s some level of support that an agent or The Cason Group can provide there, but it’s very limited to what they’re used to, like you said, solving claims issue within the hour. And so you got to, as a broker, just as always, we got to figure out ways to provide value outside of what you’re used to providing value to. It’s a shift in the market, something for y’all to prepare for, something for us to prepare our agents for is, okay, what other ways you provide value? How do we increase those levels of value outside of the medical because it is really outside of shopping it back into the large group space? If it’s on ICHRA, you’re just kind of… 

You’re doing financial… Yeah, you’re talking about defined contribution. You’re working with your team at The Cason Group or Benefit Profiles. Like what are y’all seeing? Is our contribution large enough? What’s the individual market look like? It’s a different conversation, isn’t it? It’s not managing risk. It’s not looking at stop loss. It’s not… I’m talking large market. And also, from a fee perspective, large market agents are used to working on a very transparent fee in the self-funded large group experience-rated space. So we transition that to a fee perspective on the TPA, right, Aaron? So they could kind of build that into the admin fee, correct?

Exactly. Yeah, that’s how brokers get compensated on these is a fee-based structure for bringing the solution and finding good ways to transition into this solution. And so that’s really what the broker is getting paid on.

And the agent also, though, can talk now. They can focus on non-medical benefits, the life, the disability, the voluntary benefits and still find value there, right? And you like to SureCo, they’re probably not right where you want to be in terms of integrating with the Guardians, Unums, Sunlives principles of the world, right? They’re still working on that? 

Yeah. So, you know, some ICHRA vendors, they’re just like, all we do is ICHRA. SureCo was one of the few that understood that they’re entering into the group benefits space. Now, they’re a new platform because this is a new product. So all of these platforms are new. So the integration pieces that, like you’re probably used to with an Employee Navigator, they’re just not there yet with these other carriers that you just mentioned. They are working their way to get there because they know that they need to be there in order for their platform to be the end-all, be-all solution for their benefits systems. What we’re doing right now with our groups is we’re saying, hey, we have the integrations on the Employee Navigator side. We don’t have it on the SureCo side. So we’re just going to handle health on SureCo, Employee Navigator. Yeah. It’s going to handle all the other benefits. Again, as long as it’s communicated well up front, it’s not an issue. 

Right. And Benefit Profiles, as your affiliate, we will work with Aaron’s team to decide, is it better to be on your system, our system, their system. We’ll worry about the non-med stuff if we get into a case. I think I would just reiterate that that’s what’s pretty fascinating and awesome about where you all are. I believe you’re way farther ahead. And I think you could offer so much value to our agents in Michigan because of your experience and all this work you’ve done and the real-world experience of writing cases. So to your point, yeah, it’s not the smoking gun that’s going to solve everyone’s problems? It’s actually a real solution, though. It’s not, it’s absolutely real. You found a technology that works. You have a system that works. But here’s the caveat for the whole audience, and this is another reason I wanted to do the podcast today. Aaron mentioned to me in passing, like, hey, man, we’ve got to get these commitments for 1/1 like this week. And now we’re recording this on 9/20. It may not go up until, like, you know, Monday 9/25. But Aaron, the reality is, SureCo doesn’t want to take a bunch of cases shortly. Do you mind mentioning that?

Yeah. So the sales cycle is something with the ICHRAs that brokers are going to need to adjust a little bit, too, because, again, a lot of them aren’t getting their renewals until 10/15, and maybe even later than that, especially not the negotiated rates down. So they don’t know which direction they’re going to go, really usually right until open enrollment. That is not a good model for an ICHRA to go well. If you say, you know, 11/15, hey, we want to go ICHRA 1/1, is that possible? Technically. Is it possible with SureCo? No. And that excites us because what they are promising to us, to our agents and to the groups is a great experience in moving to the ICHRA model. In order for that to happen, you’ve got to have those integrations, which are custom integration at this point with SureCo and your payroll vendor and your employers are well educated on what this looks like and all the different moving pieces. They need to see those mini-cogs on the wheel in order for them to know, oh, okay, hey, this issue came up. I already know who to go to for that. And if you just implement it on a whim, you’re going to be begging to go back to… 

Yeah, it’s not going to work. It’s too much. Too many moving parts. So what are folks doing? If we missed a deadline for 1/1, what do you think? 

A lot of the groups that we have right now going 1/1, we’re 10/1 or 11/1 renewals that are renewing as is. And so we encourage folks to say, hey, take the renewal for a month or two months while we’re getting this implemented. Educate your employees during that open enrollment season. Hey, we’re having another one in a couple of months. Here’s what we’re transitioning to. Just know if you have any elected procedures, make sure to hold off on those for a couple of months because your deductible and you’re outside of pocket. All that’s restarting once we move to the ICHRA. But then once you go 2/1 or 3/1, now, because it’s the individual market, now you’re back to that 1/1 cycle. So 1/1, 2025 is when that renewal hits.

Which leads to a question. So if we start this 2/1, are we going through education for the employees next fall due to the marketplace opening up? 

Yeah, so our model is obviously educating them on the initial enrollment period. And then for that 2/1 effective date with 1/1, 2024 rates and playing the time. And then that following year, we still offer renewal education too. And so it’s ongoing enrollment support. 

Which is going to be intense year after year, right, Aaron? I mean, it’s just going to be nuts for 1/1, right?

Correct. I mean, it’s just building on top of each, in terms of the pipeline, in terms of how many clients we’re servicing, it’s just going to be building on top of each other year after year. So our goal, and we’re close to this goal, is to have about 4,000 lives on their platform for 1/1 and 2/1 effective dates. That is 4,000 lives. Our goal is to make sure that they have a great experience so that they’re still here next year too. And then we add another 4,000 and you know how the sales goals go. And so, yeah, there’s going to be a lot more positions here at The Cason Group and Benefit Profiles. So if you guys know anybody that needs a job. 

And I would say that, obviously William Cason, who is your president and leader and Louie’s son, I believe that’s one of you all’s superpowers is staffing. And that’s what makes you such a great partner and outsourcing partner on the navigator side, on the enrollment solutions side, and this side will be as well. It’s just something you guys do incredibly well. I feel excited just to be able to represent this solution in Michigan. And that’s really what my team wants to be is the regional sales office for this solution. I believe it’s going to be a great marriage. I have full trust in you guys. I wouldn’t have done it had I not. Gosh, what did we leave out? That’s a lot, right, Aaron? It was a lot longer than we expected to, but that really is it. You know, agents are going to have more questions, certainly. If you have a question for me, you know, you’ll see in the feed my email address. Aaron and I are literally a team and he has his department at The Cason Group. Every one of them is a team. We work with them day to day so we can help you and we’ll just go from there. Aaron, number one, I really, really appreciate you taking the time to do this. Anything we left out that you wanted to add before we sign off?

No, not that we left off. I would just say that implementation timeline… I’ve had this conversation with many brokers, sometimes it scares brokers and they’re like, it’s not a solution. I’m telling you, if it makes sense for the group and they are attracted to the idea, they’re going to be okay with holding off for a month or two to make sure it goes smoothly whenever they transition to it. So we’re here to help with that. Me and my team, Dom, his team, we’re collectively a joint partnership. So looking forward to the opportunity to come out of Michigan. 

Harder to do that when you’re self-funded. It is. It is harder to, you know. But it’s a planning situation. And then we won’t talk about it because one thing, Aaron, that most of the audience probably knows, I have three teenage daughters, which means I have three huge Taylor Swift fans in my house. And I’m probably not even a closet Taylor Swift fan. I’m definitely a Taylor Swift fan. So your partner was able to kind of bless you with a pretty fun trip this year, you and your wife. So that’s pretty cool too, right?

Yeah, yeah. SureCo is a great partner. They had a key investor that actually got them a box at the SoFi arena for the Taylor Swift concert. And so they were very generous and rewarded their key broker partners. So there were folks from Marsh there. There were folks from Brown and Brown. And, you know, luckily they also extended it to me and my wife and got to meet the great Robert Ory. 

You did? He was in the box. Oh my gosh, that’s hilarious, man. You didn’t tell me that. 

So yeah, it was cool. I’m a huge basketball nut. So I got to talk to his ear off for about an hour straight while… 

He was probably like, man, I just want to watch this concert. 

He actually, a little inside story, I asked him how many Taylor Swift songs he knew and he goes, I think he has two daughters of his own. And he was like, “I honestly couldn’t name a single one.” 

Oh really? Gosh, I know every lyric. I probably shouldn’t have admitted that on the first annual podcast. I’m not going to, especially with your buddies who you work with, I’m probably not going to live that one down, Aaron. But that’s okay, you know, proud pop. 

It’s all good. 

Well, thank you so much for your time, man. For the audience, please give us a call. We’ll be there for you. Have a great week, everybody.

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Dominic Siciliano

President, Agent Consultant

Over his 18 years in the benefits business Dominic has worked in the Medicare Advantage, small group Blue Cross medical, ancillary GA and large group benefit admin space here in Michigan. His parents and biggest influences, Patricia Siciliano and John McClain, instilled in him the key pillar to GA benefits business—relationships with agents and carriers. Dominic has served as the NABIP West Michigan President twice. He’s run the golf outing several years going and he served at the Legislative Co Chair for the State Board during the passing of PPACA. His Friday morning classes, Employee Benefits 101, is highly regarded in the industry as a practical, real world introduction to the business for new folks. In short, he is passionate about our business and about seeing agents succeed. 

Dominic loves golf and basketball but as he gets older, golf more. He’s a Western grad but a State fan! He most enjoys spending time with wife Janelle and four children outdoors and Up North! From the very early days of BPI when it was just him and Lena in a tiny little office, he hasn’t changed, it’s about getting the job done for agents.