19. HEALTH INSURANCE FOR BUSINESS OWNERS WITH ERIK PETERSON

SUMMARY KEYWORDS

employees, people, health insurance, eric, carriers, employer, adrian, health coverage, expert, business owner, business, offer, demographics, salon, agency, insurance carrier, group, understand, wife, big

SPEAKERS

Rob, Intro, Adrian

Intro  00:02

Welcome to the get rich, slow podcast. This is the stuff we and our expert guests wish we knew a decade ago to get the most out of our financial life will provide you with insight into wealth building activities and practices that can expand your net worth exponentially. get insight from top professionals who will reveal how to build wealth the long way, work smarter, not harder and identify your financial blind spots. With over 25 plus years of experience as licensed real estate professionals and a long track record of winning for their clients. Robin Adrian will teach you what it takes to be an everyday real estate millionaire.

Adrian  00:41

Hello, future millionaires and welcome back to the get rich slow podcast. I’m your co host, Adrian Shermer with my other co host, Robert Delavan. here and we are joined today. Hey, Rob. Good morning, everybody joined today by Eric Peterson. Hey, Eric. Yeah, Eric works in the health insurance industry. And I think this is a really important thing to touch on. Because let’s face it, everybody gets sick. Even those among us with great immune systems, bad immune systems, whether you’ve got, you know, a long term issue that you deal with, or you just need something to cover yet, in case insurance is something that’s pretty much a requirement. It’s literally requirement in certain situations. And one of the groups of people who struggle most with this is those who don’t have the buying capacity of a big mega company, to just offer them an insurance policy that’s potentially supplemented by that employer especially. And I know that I’m gonna throw my wife out there as an example, she owns a salon. Insurance for her is by grace of me having a job. So I think a lot of people end up having to choose who they’re going to work for. To make sure that they have coverage. I know that when my brother was in the hospital, my father had to keep his job that he didn’t particularly like at a car dealership, just because we couldn’t get medical coverage, otherwise, him leaving would have been the end of my brother’s coverage for his condition. So Eric, thank you so much for your time. I appreciate you being here with us today.

02:15

Yeah, awesome. Thanks for having me. Absolutely.

Rob  02:18

This is this is also a fun topic. People just don’t know about it. But there’s this, there’s this, you know, over the last one decade or so, Affordable Care Act, Obamacare changes. I mean, this thing has been evolving. This podcast will not be about, you know, judgment one way or the other. And nobody’s going to solve the national problem of health insurance and uninsured and preexisting conditions, and all the tag words, and you know, all of that sort of thing. You know, I we’re not so arrogant as to think that we can do that.

Adrian  02:54

Yeah. But the ethics of health care, this is no exact way to attack this problem. That is just, it’s out there. It’s real exact, says whether you have one opinion or another on it. So what’s the most effective way to get through it?

Rob  03:07

So we just we just want to pick Eric’s brain and a little bit more background with Eric. He’s, he’s been in the insurance industry for what a little over three years? Yeah. And he is in primarily focuses on everything from like one or two people health insurance business all the way up to you can do 200 500. I mean, you could do basically unlimited number of employees on the top end. Is that right? Yeah,

03:39

totally. Yeah, that’s exactly right. And it like you were kind of saying, Rob, it could be as small as two employees, a business with two employees, up into the hundreds, it really doesn’t matter the size. What matters more is the demographics of that group. And so that’s what we that’s the information that we need to gather is just the basics, you know, their, their name, their age, their gender, and their home zip code. So then we understand like, Where does this this core of employees live? I think you guys kind of said this, but our focus is on group health insurance for businesses, we can help individuals, we can help those unique situations like your wife, Adrienne, like a business owner that owns a salon that has contractors who are not necessarily w two employees, but they’re still members of her workforce. This is businesses are all different shapes and sizes. And so it doesn’t really matter to us. We don’t hone in on a specific type of business or a specific size. What we hone in on is the ability to understand what the needs are, understand what the demographics of the company are, and then go out there and see what options are available to them. Because a lot of people and a lot of business owners, they don’t have the time nor the expertise or the experience to be able to have strong opinion about what works, what doesn’t work, they might have strong opinions about like you guys are saying the healthcare industry. But our job is to shine light on what options are available to them. So that’s kind of what we try to focus on is really understanding what the business is what their employee profile looks like, and then just take it from there.

Rob  05:19

So let me let me back up just a touch. Because I want to make sure that our audience knows how deeply you’re steeped in this. And why Adrian and I consider you our personal experts. Yeah. Or expert. So JB Nibley. You guys, you told me a story. I don’t know in the last few months, about how I think it was your what was it your grandfather in law? That was one of the first health insurance like brokerage companies ever in this country in the history of this country?

05:58

No, not I don’t want to overstep the bounds on that. But okay, he was us involved very early in the state of Oregon for group health coverage for those cases, exactly what we do now, he was early in that and so what, what era? Well, our agency was founded in 1962. So it was a shared time. After that, you know, group health insurance hasn’t been around forever. You know, I don’t have the Wikipedia page of Group Health in front of me. But it hasn’t existed forever. And so when it was getting started in the state of Oregon, because as you know, health care varies across state lines. So when it was getting started, and really ramping up in Oregon, yeah, my grandfather in law. My wife’s grandfather was really at the forefront of that. And so that’s been a big part of our agency for JV nibbly insurance basically, since then. So for a lot of years, our office has experienced I might be new is to the game, certainly by comparison. But, yeah, it’s been something that our agency has been involved with for a really long time.

Rob  07:04

Right. So you have the team behind you the experience yourself, obviously, they we consider you that expert that the go to person. And obviously, you know, we refer business to you and so on. So there’s a level of trust here. So let’s build out like an avatar of, of just and let’s use Adrian’s wife. Her name is Erica. She owns vivid chromatics over in, I would call it Southeast Portland, east side of Portland. Yep. It’s right on the border of southeast northeast but beautiful salon. She’s had it up and running for what, two years now?

Adrian  07:50

Well, no, it’s a year because our pandemic and Pandemic Yeah, there you go to shut her down in about a week and a half opening, but she just had her one year anniversary. So okay, and she slayed it out with gosh, there’s probably a gals in there right now.

Rob  08:04

Yeah. And all of them are independent contractors, right. Yeah, basically. And but they pay rent, almost none of them have, you know, any kind of health insurance. So what does that look like? You know, how would you tackle something like that, Eric, because that’s a big deal, especially for business owners, or, you know, people that are working for small business especially, is does it offer insurance? Oh, it doesn’t now, I got to go get it from you know, my partner, whatever. This is a thing. And this is, I mean, you would know these numbers more than I would, but my understanding is medical reasons for bankruptcy is the single biggest reason. Now, I know divorces, that’s other things follow that. But, you know, you have serious medical issues without the safety net of good health, health insurance coverage. You know, chances are you’re going to probably declare bankruptcy. So, so you know, take it from there. There’s the avatar, eight hairdressers all work in Erica’s salon. You know, how would you tackle that? Yeah,

09:15

it’s a good question. And there isn’t a clear cut answer for every situation. But if we were to take Adrian’s wife situation where she owns a business and basically rent space to individual contractors, what she would first want to do is decide to what extent she wants to support or contribute toward health coverage for her quote unquote employees. In an like, in its most basic form, group health coverage, doesn’t care as much about what type of business what type of product you’re selling, or what service you provide. They care more about this group of people that needs health insurance, right? And that’s why the demographics of that I grew up is much more important than whether we’re selling widgets, or we’re a hair salon. And so what Adrian’s wife would want to do is decide like, do I want to contribute to these individuals health plan, like an employer would do if they were regular w two employees, and sort of offer that contribution as sort of a just a benefit to working there. Right? You know, really, in a nutshell, health care coverage is part of your employee benefits package, right? Sure. There’s just certain benefits to working at certain companies and health, health insurance happens to be probably the biggest, most common one with an employer. But you’d want to start with

Adrian  10:42

that, like, so figure out like, a certain level, I think, I mean, yeah, they’re making over a certain amount per year, you’re like, Okay, what are what’s the health insurance?

10:50

When you’re interviewing for a job, I would imagine that comes up a lot. And you know, in fact, they probably just proactively tell you what it is, and show you what’s available. In the case of a business owner, who basically rent space to other workers, she would just have to decide, like, do I want to be involved in that? Or do I just want to like, help steer them toward finding it themselves? You know, and those are two very different things. Because one, you’re financially invested in the other, you’re just sort of like, giving them a flyer in a pamphlet and making a suggestion about, hey, here’s, here’s where you might try to go find it yourself. But from a money standpoint, she’s out of it. So that’s where we would start. And if she decides that, you know, what I want to contribute, like a typical is like, an employer will pay 50% of the premium for health insurance. So if she says that I want to do that, then that would then we would be able to pencil that in and say, Okay, well, that’s what the employer is going to contribute. And then we would just collect the demographics of it again, just like name, age, gender, home zip code, to understand then which carriers provide coverage in those areas. So let me then there’s little questions that can come up along the way. But that’s really how you get that conversation started.

Rob  11:57

Let me let me stop you there, Eric. So I want the audience to hear the specifics. So like the why, right. So when you say name, age health, that sort of thing. Demographics? If the average hairdresser in that salon is 60.

Adrian  12:17

Yeah, it’s gonna be different. She suddenly hires a bunch of

Rob  12:23

is different than 30. Right? Like, you’re gonna have different cost structure there. Right? Like, it’s based on costs and 60 year old’s are much more expensive to insure on average, than 30 year olds, right.

12:40

Totally. Yeah. And that’s why the demographics is hugely important. They’re not going to ask you if who smoke cigarettes are if you have pre cut pre existing conditions, it’s no longer legal to ask questions like that. But, yeah, they definitely want to know your age, because that has a huge impact. They also want to know your gender, because there’s all this stuff, all these statistics about, I mean, you guys have been a part of underwriting and you understand like, in any industry, underwriters want to know what’s really going on. And so you can learn a lot about the likelihood of something bad happening based on certain information, right? And so in the healthcare world, your age and your gender are the two biggest factors. You know, and so they you put that information in, and then they returned quotes based on how many people were talking about and what that average age is. Because Robert, like you said, yes, it’s more expensive to insure someone who’s 60 than someone who’s 22. Right.

Rob  13:35

And then it’s important to know with your guyses model, a JB nib leave your then you’re basically I believe the word is like a pointed in that you can broker out and find the best fit based on you know, age and gender and location, that sort of thing. Through Providence, or Kaiser or regions, Blue Cross Blue Shield, which is very national, Kaiser is very national Providence is more like, I think it’s more west coast. But most Pacific source, I mean, like you can go across that you have choices. And that’s the idea is is you can then shop for them as the expert. Right?

14:19

Exactly. Yeah. And that’s what we do, we actually have a quoting tool where we input the demographic information in the system. And then quotes are returned from each of the carriers that you mentioned. And so from that, we have a great initial start of like, Hey, here’s what’s available. Now, as you guys know, and as your as your listeners know, there’s a lot of options within one insurance carrier, right? Yeah, choose your own deductible. You can choose do you want in network out of network opportunities, like there’s just all these different choices that you have as an individual with one provider. So what we try to do is try to either insulated or narrow it down to maybe one or two carriers that we feel like fit your profile and fit the from a cost standpoint are the most economical, and then hand that over to you as as the business owner or the HR professional, or whoever the primary contact is, and just then have them take a look at it. It’s no small decision. So we always encourage folks to take a little bit of time to look at it, maybe ask for feedback from some key employees maybe who have specifically wondered, hey, what’s our situation with health coverage? Sometimes you don’t want to open up too big a can of worms by taking a poll of all your employees. Here, they won’t push her, you know, just figure out the best way to kind of narrow it down, and then we answer questions go back and forth to try to make sure that they land on something that makes sense for not only them in their business for the business owner, but also for their employees, right, because that’s something that’s really, health insurance is really personal, it’s expensive. It’s a big decision for an employer to make on behalf of their employees.

Rob  15:59

Does. Go ahead, Adrian,

Adrian  16:02

I’m just I want to dig into this. What’s the what’s the drive then of Why does someone like my wife choose to do this policy? Let’s say she, whether she is or she isn’t contributing? Is there a collective bargaining power that comes into play here? Is there a difference between this and these a girls maybe just going out on their own and finding an insurance company? I mean, obviously, the shopping is a factor. But you know, let’s be honest brokers exist in all our fields, right? There’s people out there who can cross shop, that’s not a novel idea. So what? Yeah, let’s use this great. We keep using these group of girls as our avatars. You say, Rob? And you know, what’s, what’s the win for them? Smashing all their resources together?

16:43

Yeah, good question. So most carriers if not all, that I’m aware of, they don’t just open their doors up for anyone to walk in any individual to walk in and buy insurance coverage from them, they have to do it through either a group plan through their employer and or through a licensed agent, like ourselves. So that’s the strength and having an independent agent do it for you, is to that we have that relationship, we are appointed by that insurance carrier to sell their services, their plans on their behalf. And we can then be sort of that middleman that understands like, Okay, here’s, here’s what your options are, here’s why this makes sense. Here’s why it might not make sense, we can kind of like run interference, so to speak, to make sure that they’re actually landing with the best coverage that’s available. So it just gives them like power that, okay, I’m having someone kind of do the legwork for me to understand what’s available. And quite frankly, this, this option wouldn’t be available to us if we didn’t go through a licensed appointed agency. So.

Rob  17:47

So let me dispel a little bit of a myth for our audience is you’re being paid by you know, that carrier, and nobody’s going to pay extra? Because they’re going through a professional such as yourself, is that correct?

18:04

That’s correct. Yeah. Yeah. It’s compensated that comes directly from the insurance carriers.

Rob  18:10

Right. So you know, people who are like, Oh, I don’t know, you know, Eric’s, you know, gonna make a bunch of money on this.

Adrian  18:17

There’s no cut out the middleman.

Rob  18:19

Exactly. There’s, there’s no like, your sigh. Save 30%. You know, it, it just, it doesn’t work that way. So that’s correct. I just, I just want to make sure

18:32

also be clear just about the cost, like, similar to home and auto insurance, those costs and prices are regulated by the government. So you don’t have even if we wanted to say, you know, I feel like we could really squeeze some extra dollars out of this client, which we haven’t ever do. And it’s hard, like, so I’m kind of laughing. But if if we wanted to do that, it’s not legal to do that. Right? Can’t as an agency, you can’t mark up the price. And the cost is what it is, it’s on, like, they literally have a rate sheet, you know, and they haven’t an actuary table that shows like that, like that line of like, it’s more expensive to insure people as they get older. As those are the rates, they are what they are. Some carriers have an appetite for people in certain zip codes, because that’s where they have physicians offices and hospitals. And that’s why they’re able to offer those rates, other carriers there, they just have different sensitivities. And so that is what it is, it doesn’t depend. It doesn’t vary from one agent to the next, what what varies from one agency to the next is the service level. And that’s where we try to really make sure that we’re going the extra mile to make sure that like clients feel like, hey, they know what they’re talking about. They follow up, they follow through, and they’re a good resource for us. And so that’s really our position.

Rob  19:49

So audience I’m sure you’re hearing a common theme here. In every one of our episodes is you need to have somebody who is an expert in their field and act truly cares and is trustworthy. Yeah, on your side, don’t waste your time, you don’t need to google it. Google is a shitty lawyer, we all know that.

Adrian  20:13

Legally, also,

Rob  20:15

probably a not so good health insurance broker, amongst just about every other topic. The point being is, is surround yourself with these professionals. Let’s remember, we’re playing chess, not checkers. So let’s, let’s have somebody like Eric and JB nibbly on your side, and make these decisions, knowingly with a focus with with intention. What else

Adrian  20:46

you got employees, especially for self employed, oh, man, this is gonna be a major, there are people who will use this as the opportunity to save money. And that’s just not the way to do it. When you’re self employed. It’s it’s such a, it’s such a sad mistake that a lot of small businesses make that they don’t even research down this pathway, because, hey, I’m not going to call this guy up and find a way to spend extra money each month, I’m probably finally got profitable, I want to spend the extra cash, it’ll find its way out of your pocket, when something happens. So it’s, it’s, I think it’s better to just get out in front of it. And to, you know, take this on as soon as you can. Or you said you could take it, so could be me and one employee.

21:23

Yeah, I mean, literally, we were gonna be insured for businesses that have two employees.

Rob  21:28

Right, that’s great. Um, the the, I think, and this is for the business owners out there, but frankly, our all of our employee audience, too, is it matters, what insurance your employer has, and what you’re providing as an employer to your employees. So have that conversation with somebody, you’re going to be more competitive, you’re going to people and keep people from a talent standpoint, at a much higher level, if you’re offering this. And the flip side of that is, if you’re an employee, and you’re out there, and you’re trying to hack life, which is the whole point of this, this podcast, yeah, you know, what we’re trying to do is hack life in a smarter way. you shop around, look at what your employers are offering. And, you know, frankly, you can an expert, you can talk to an expert. So that’s, that’s the key. We’ll make sure to copy your website, all of your contact information, Eric, in the comments, when we post, and so on. You can also you know, we’ll be able to direct people to be able to get in touch with you. Thank you for for be just dropping a little bit of knowledge. I know, we could probably talk for hours about this. But, you know, this is such an important topic. So thank you for that. I’m just that much more educated. You know, we all need it. Idiots in the room. Right? That’s yeah, that’s

23:00

okay, guys, like, and I’m sure you talked about this in other podcasts, like, when you’re talking with an expert, you’re not committing to anything as you’re having that initial conversation with an expert. Yeah, what if, you know, I’m sure you guys have really upstream early conversations with individuals where you know that they’re not going to make a decision on whatever it is that day. But what you’re trying to do is just plant the seed, put the line in the water, you know, whatever the the cheesy line is, so that when it floats downstream, that they feel more educated as, as a consumer, as an individual, as a business owner, whatever their profile may be, and that they know that you’re there with them in the rash. You know, if we keep writing a little down the river, that that’s what we try to do is like, I’m not wearing a carriers logo on my polo trying to sell a product for a certain price to a certain consumer. Yeah, we’re more about calling

Adrian  23:52

you by Monday to get the deal that there’s not a fire sale going on. And I’m going to miss out on

23:56

Exactly, yeah, we just tried to be like, Hey, who are you? What do you think you need, maybe we can offer some suggestions about what they maybe they don’t know what they need, you know, but those are just suggestions as all those are. And then we just sort of like put one foot in front of the other. And maybe it will lead to something that they’re like, You know what we need to do this, this makes sense for our business. This makes sense from a talent retention standpoint. If I’m an employer, this makes sense. And they feel good about all the legwork we’ve done upstream from that. And that’s really my MO is to just try to educate people to try to shine light on things. And you never know where it’s gonna lead. But at the end of the day, if we can just sort of hang our hat on, we gave them the information that they needed and let them make the decision. That’s all we can ask for. I love

Adrian  24:39

it. Education forward, guys.

Rob  24:41

Thank you for being our expert, Eric, thank you for your time today. And we’ll catch you next time future millionaires.

24:51

will wear a flower shirt too. Sorry, I didn’t get that. There you go.

Adrian  24:56

Thanks, guys. Take care. Look at whatever. We’ll see you next week. Bye bye.

Intro  25:01

Thank you for listening to the get rich slow podcast. If you liked what you learned, please subscribe rate and review so we can grow wealth for even more families.