This week, at The One Thing Podcast by The Horton Group, we spoke to two of the leaders of our nonprofit insurance group: Robin Bettenhausen, Executive Vice President, and Tom Kallai, Sales Consultant.
Robin and Tom bring a unique perspective to this sector, as they are involved with the nonprofit community outside of work. In addition to volunteering at various organizations, they have children with developmental delays and have used nonprofit services to help them thrive.
“Call it fate or circumstances, but the assistance provided by agencies in the human service and nonprofit space is going to be a part of my life for the rest of my life,” Tom said.
Their personal connection makes them even more driven to help their nonprofit clients navigate the challenges in today’s marketplace, including but not limited to inflation, increased premium rates and high turnover. With costs increasing, Robin and Tom need to help their clients find ways to spend less on their healthcare plan while also ensuring they are providing competitive employee benefits.
“Tom and I agree: as a parent of a kid who receives therapies, there’s nothing harder than that therapist going to work somewhere else,” Robin said. “I never want the benefits to be the reason why that person leaves. This means we need to get creative with our clients, helping them spend those dollars appropriately and find new ideas in the market.”
Listen to our podcast above for the full interview with Robin Bettenhausen and Tom Kallai to learn more about what kinds of insurance, risk management and employee benefits trends nonprofits can expect to see in 2023.
Well hello and welcome to the one thing podcast brought to you by the Horton Group, where we specialize in insurance employee benefits and risk advisory. And I’m your host, Jason Helfert. Bonnie and Clyde Jack, Jill, Sonny and Cher. These are famous Duo’s throughout history that we all know about. But I’m going to argue, we should add one more famous duel to that list and as it so happens, that famous Duo is actually our next guests on the next Next guests are not only colleagues of mine but good friends who have known throughout the years. And folks, unlike our other podcast, this one’s going to take somewhat of a more predictable turn for today’s podcast. The topics are going to be insurance and employee benefits. Now, I know, I know, I promised everybody would never do it. Podcast on insurance or employee benefits. However, we keep getting feedback from you, from all you that you want to hear a podcast on what happened, the insurance and benefits Market in 22, and what’s going to happen in 20. So, we had a choice to make either lean in and listen to you or ignore you completely. Well, that’s not our Mo. So, we’re leaning in we’re listening and I’m excited to have on the podcast, two liters of our business that are going to help with the conversation today, insurance, and employee benefits, broker extraordinaires Robin, Van Heusen, and Tom coli, how we doing my friends. Good doing good. Happy to be talking insurance is always just your typical Friday morning. That’s right.
I know Robin and I know Tom that you are household names in the insurance Community when it comes to serving the nonprofit Community. Well what I’d love to hear or love for you to share for that matter is why the interest in the space? How did you get started and why you spend so much time in it?
Yeah so when I when I think about the why I always think back to one of my first Arc of Illinois conferences, I was sitting in a meeting and Kim Zailor from RE G Talking and she was talking about it was, this is during the time they were putting up Billboards and Springfield to try and advocate for DSP rate increases and she said something that kind of stuck with me forever. Which is this is something that everyone cares about. They just don’t know it yet. And she might as well have been talking directly to me. Because shortly after that, we started noticing some developmental delays and my son and cut 25 years later after seeing the impact of service. Is like, you know, EI from Easter Seals. And right now, he’s getting one-on-one swimming lessons from CPSAR. It’s something that I can’t help but be passionate about and by call it fate or circumstance, the services that agencies in the Human Service nonprofit space provide are going to be a part of my life for the rest of my life. So can’t help but feel a little bit attached to it.
Yeah, for me, I think it started as a kid. I’ve always just been drawn to the power of community, and my parents were really involved in our church and in service hours. And so that was something that we just really grew up doing. I remember going and building houses and New Mexico and just really trying to help in the communities that you were in. So whether you were home or were, you were visiting somewhere just understanding that the power of community and the agencies within those communities, really into Tom’s Point Drive the success SAS and really are for everyone whether you know you need those services or not. And so similarly to Tom about 11 years ago, when my second son was born we needed something he had some delays and really was medically fragile and it was interesting. I was already in the nonprofit space for those other reasons but gosh it made navigating it so easy. Right. Just picking up the phone and saying you know what, about a delay with speech? What could we do and certain nonprofits that? Helped us get an iPad for him and I think you know just exactly what times that I don’t know how we landed in this. I think it’s just because our hearts were drawn to it but the fact that we can now help our own families and our friends that walk through similar paths to navigate through the, you know, pretty incredible work of all these agencies and I really appreciate your stories and I’ve known you both for quite some time.
And I would say you’re you lead by example in your wonderful examples of who I want like my kids to grow up Be. And so when I hear stories about your families and the work you do in the community and how much you get back to the nonprofit space, is always a good reminder, to me, it’s like, hey, stay focused right? This is what’s really important. And so I thank you for being not only a friend, but a little mentor to me in that respect. And you know, I just really appreciate, you know, who you guys are in your family too. And Robin you mentioned community and Tom, you mentioned the community to. And so there are different communities. The nonprofit is certainly one of them, but Robin, one of the communities. You spend a lot of time and is healthy. Are employee benefits, right? And so if you look back and if you were to identify Trends or issues or opportunities things, you noticed, and you recognized in 22, what would they be? Yeah, I think the biggest one is just this sort of covid wave coming to somewhat of an end, not that covid is gone. And I don’t think it ever really, will be gone, but just what has happened as a result of walking through the last few years and so some of That is really compliance based and lots of changes there. But I think the one that impacts us as consumers and also our nonprofit clients, as you know, the providers of healthcare is the shortage of providers. I mean, we saw over 300,000 Physicians and nurses, simply exit Healthcare. As a result we would say of the burnout and of the experience. Sure covid. And so, what does that mean? Long-term, I just think it’s going to mean a lot more difficulty accessing. Assessing providers, and being able to be seen quickly and being able to feel like us Healthcare is really accessible. I just think that’s going to create a big crunch at least over the next five to ten years. Yeah that’s interesting. And so you I’m sure some just retired out age, the Boomer population retiring and enjoying the next phase in your life and what’s your men’s, your point. Some people did burn out in rows. This wasn’t the industry for me. And so what I’ve known them, certain industries do really well with change. Respond accordingly, they adapt and so have you seen the health care Market adapt at all? And so, hey, look, we have a shortage of Physicians or nurses wear maybe. However, we’re going to do this better than anything like that happened in 2022 that our clients were able to take advantage of. I think the biggest thing is not really surprising. But telemedicine, I mean, we weren’t able to leave our homes for a for a while. And so we had to adapt and providers had to adapt. And so being able to reach out to someone from your own home. Over a iPad or over your phone was huge, some of that has remained. Obviously, you know, you’re not treating broken arms over telemedicine, but for some of those things I think it really made a difference. I think, personally, one of the best things was the telemedicine that has resulted for mental health, that has been an unbelievable Trend. And one that’s really concerning and really heartbreaking for all ages. And so that’s something a lot of our nonprofit clients have Doubt is telemedicine through for specifically for mental health and so I think that that was one way that’s a great adaptation because you know, they don’t need to check my, you know, broken arm. But we do need to talk and it’s important to be face-to-face even if I’m in my house. So I think that was a really great adaptation now that makes sense. And so I’ve been some of those things as far as, you know, access to Physicians or or telemedicine surround our around like utilization, right? That’s how Healthcare is utilized. And, you know, ability, To to get utilized Healthcare and but what about cost what happened in 2022 from Asia Trend. Standpoint from that perspective,
Well, this is always a tricky one, because no one typically goes on these podcasts and say costs are going down great news, right? I mean, we all know you go to the grocery store and things cost so much more inflation is real and it does impact Healthcare as well. So things have definitely gone up and cost and some of that is due to just emerging Trends, which I think will talk about in A while just what is changing within Healthcare, but costs are going up. And so what does that mean? It means that nonprofits specifically because I can’t just charge more for this widget that I’m making, I’m dependent a lot on what the state has already. Decided my budget is and what my reimbursement rates. Are that, how am I going to use those dollars? What can I do with in my health care plan, in order to potentially spend less? But also make sure that these are really great benefits because we don’t want to see this. Same levels of turnover. I mean Tom and I have talked about this before as a mom of a kid that receives therapies, there is nothing harder than that. Therapist going to work somewhere else, right? Her child, finally, trust someone they’ve made progress and so I never want the benefits to be something. That is the reason that someone needs to leave that you know that person that’s involved in so many you know kids or adults lives decides to go somewhere else so it does require getting creative Spending those dollars appropriately and just trying to find new ideas that are out there in the market? Yeah, I get that and so Tom if you have last word there was market, right? And so that’s the answer, the benefits side Healthcare side. We can talk more about that too. But how about on the property? Casually workers? Compensation said, what did you see in calendar year 2022? We know, it’s not just a physical about calendar year 2022. What did you see, what were some Trends in 2022? Would you hear what our clients feel from a cost perspective? Was there a tightening on a coverages? You know what would you say? Yeah. So there’s good and bad to talk about here on the property and Casualty so only the good stuff please. Okay. Got you
so on the good stuff. We’re calm. So we’re copper Mains a soft Market. There was a little bit of concern coming out of covert or actually going into covid that
Carriers might be on the hook for exposures to covid-19 and that might blow up the market for work comp in Illinois, didn’t turn out to be the case. So that’s remained to be a soft Market. Unfortunately, the other, the other lines of coverage have been a little bit tougher, everybody probably remember. Just turning on the news and seeing hurricane Ian taking
out Fort Myers. I believe that was the largest single event property loss since 9/11 about 70 billion dollars that comes on the heels of your And years of additional tropical storms and hurricanes as well as wildfires which have just been out of control. So, traditionally in the midwest, we’ve been pretty insulated from those losses but they’ve been so bad that we are starting to see that affect the marketplace here. And that means stricter lost control. Meaning carriers want to come out. Take a look at the property. Make sure everything looks safe, but also rates going up and we expect that that’s going to be the case next year as well. Rates are going to continue to climb on property on auto Otto has been a tough market for the past 15 years and that’s not going to change. Maybe until everybody has autonomous vehicles, but that is going to continue to go up as well. Liability and umbrella, so I think carriers are still working out in the aftermath of Illinois, getting rid of the statute of limitations on abuse and molestation. So that was a litigation that came out in 2018 carriers really, never price their product to be on the hook for everything. /. And when that litigation past that lever, got pulled and they’re getting a little, I would say concerned about it. Where we’re now seeing umbrella, coverage sub limit abuse and molestation. Maybe you had full limits prior 5 million 10 million. Now they’re saying, we’re only going to cover up to a million. We’re seeing the same with professional liability as well.
Cos also going up on both of those lines. So The agencies that are controlling their costs are offsetting those increases with a strong workers comp program because that is still the soft market. So, in order to offset those increases on the other lines, you want to do, what you can on the work comp to keep that as low as possible. And it’s interesting, I was with you and I think many people were in this camp and I think he’ll I think nonprofits is more akin to healthcare and traditional Healthcare. Then other settings like a non-profit people in that because your we don’t have a choice or health care. Not Provides one of the choice not to go to work, right? They are in close proximity with a lot of people, you can work from home. I can work on Robin. Come home. A DSP has to be in a Scylla taking care of the people, they serve. And so I think most people thought, oh my God, how do we control covid? How do we control these costs? It’s going to take this and just blow up the system and health care, you know, more hospitals, original settings, very much worse. Some cures got really slammed on that, and I was surprised as you wear them, the amount of law. Scissor or severity of lost on the certain where I’m not trying to be insensitive here. I think the modeling would have said, this is going to be way worse than it actually was. And I agree with you on the property side. I haven’t seen, I’ve mentioned this before. I haven’t seen a property market like this since 9/11. I haven’t seen an insurance market for that matter and so much upheaval. Maybe after they see a came out with so much confusion and so much on Clarity, I don’t know what’s going to happen. The property Market, that cost standpoint. I’ve never seen anything like it. I’ve never seen it as bad. I mean, people can’t get coverage in certain respects so it’s I think people are definitely feeling that last year, then, go continue. But hey, at least sybers. Okay? Now right. Yeah, no cyber and cyber is about as tough as it could be right now as well. So everyday forms are changing requirements are changing what used to be a one-page application for million dollars. Worth of coverage on Cyber is now a 20-page document and you need to have multi-factor authentication and point detection and we’ll see what comes out next but it always just seems that the hackers are one step ahead of the in These companies,
what happened there, there was a large amount of of clients policyholders, who were with an organization, an insurance company that actually got out of the market. So, they non-renewed everybody who they had, which made a huge surplus of people looking for cyber Insurance in the marketplace. Basically gave all the cars to the carriers who still wanted to be in the market place, to dictate what we need to see for controls and what we want to charge for coverage. So that has Continue to increase. Hopefully that starts to level out but I don’t see any indications that it will, okay? So speaking of indications, Robin Healthcare 22, 23. What are you telling our clients? What are you, suggesting they be prepared for what are the carriers, I’m telling you, what’s trending. What’s, what’s going on? What’s what are the buzzwords? What people need to know about? Yeah, I think there are definitely some Buzz words right now and a lot of that is around specialty medications so that’s not a new word, right? We’ve heard about specialty meds injectables things that really cost the plan a lot of money, right? If I go to Walgreens and I fill a normal script, it might be 13 bucks but if I fill a specialty medication it could be thousands and thousands of dollars. So those have been around but the newest things to hit the market are actually able to change. Your genetic makeup. So it’s a really exciting for someone that suffers from one of these conditions, maybe it’s blindness or some sort of muscular dystrophy spina bifida. There are drugs that are hitting the market place that could potentially cure a disease or a disorder through a drug which is, you know, wild. There’s a few on the market right now but there are a ton more hitting, so that’s really exciting. Guess what? That not so exciting part about that is that drugs cost? Millions and millions and millions of dollars to research and develop and pops and we’re cops going down. So you’re fine. Don’t worry about. Yeah. Right. So Tom go ahead and get those decreases on the comp because these drug costs, you know, are are huge. Just in terms of the development of them. The fact that only one in 10 that is developed actually hits. The market means that these drug providers need to, or want to write. I You could argue either way, get a lot of money back. So these are going to cost potentially millions of dollars to plans. And then there’s there’s a recent one that drug that was developed for diabetes is now being marketed and used as weight loss. And so all of a sudden that’s hitting the market. And so some of these things I just think are you know, concerning their really great in some ways there concerning from a cost perspective. And in terms of, are we using them for the right things? But that’s what I think. We’re talking a lot about with our groups. Right? Now just how to be prepared for those potential costs because that is one that’s hidden. Okay, what else? Well, we talked a little bit about the shortage in providers. I think that is definitely going to continue to be an emerging Trend and then I would say the third and maybe last one for this conversation is just that the demographics of our country are changing, right? A lot more Baby Boomers are retiring or even if not retiring reaching Medicare age. And the way that our Healthcare System was set up, who knows when but is that the Medicare rates are a lot lower in terms of reimbursement to hospitals. In a private plan that you would get through your employer or your agency. And so what happens is, those people on Medicare, go in and receive services but reimburse the hospital at a much lower rate. And so the hospital would say they’re actually losing money on some of those Medicare patients. So where do they gain the money back? They charged the commercial policies or the users. That show their Blue Cross. No card, or UnitedHealthcare PPO card much more. And so, the more pressure that we get, by more people being Medicare, Eligible. The more pressure that they will put on Commercial plans to raise that cost in order to still maintain their profits. So I think that’s the other big one is just the shift of the demographics. Yeah, that’s a, that’s a macro Trend that boils down to certainly an individual plan. If you look at the nonprofit space, specifically, it may be a tough question to answer. Maybe this is a fair Almira, not a good question asked by going to ask you anyways, and so what are outside of I guess with all that noise, and all those pressures, how are nonprofits,
controlling costs outside of not having any claim? So you might be realizing any plant find great, right? But how they controlling cost are their number. I think they are as best as they can write. Some of the things that we just talked about are things that none of us have any control over. So those are the ones that are hitting everyone just like you said, but what can they do? I mean, we’ve got clients that have gotten really creative with gap plan. Is with, you know, being heavily into an HMO where some of that care is managed and so they don’t feel as much of an influx with cost based on visits you there, the carriers are coming up with narrow networks. The carriers are coming up with performance drug list to try to help employees, make better choices about the drugs that they’re taking. And when I say better, I really mean in terms of cost, they might potentially not be the best fit and there’s always a feels that can take place, but just trying to really focus. Hassan, how can we be good for our employees and therefore offer them? Rich benefits, but also be aware of how they’re being used a lot of our groups have utilized our Wellness team or population Health. How do we understand what is facing our group and what can we do to help address it. So, you know, maybe diabetes is really prevalent, well then let’s put together a program, maybe musculoskeletal, you know, that can even cross over into Tom’s world like how do we address the problems or the high-cost claims that we see? Yeah, that makes sense. And so I think Tom that has a certain the carryover effect to we used to on your side, I mean, especially with workers compensation, right as far as, you know, being able to control some of those costs. And so maybe if you could answer kind of two questions for the group, if you don’t mind, one is, you see anything changing in 23? You know, in relation to 2022. I think you’ve highlighted on a couple of things already and also following that same Narrative of controlling cost. What are those top agencies doing that you with our helper on their own? From a work comp standpoint to take full advantage of that Marketplace and it’s, you know, kind of flexibility on cost right now.
Yeah, I think the agencies that are having the best results on work comp are really taking an active role in managing it, and that means managing your mod score managing Indemnity claims to get them as low as possible or to eliminate them with creative return to work. You know, if somebody is injured and they’re at home, traditionally what we find is that it’s going to take them longer to get back to work. If you sit at home and you watch TV, you’ve probably seen commercials for attorneys that. Say, were you injured at work? Call us get an attorney so we can get employees back to work and doing doing things that you know anybody could do. I mean look around the office and find out what are three things that literally anybody could do, that would take it off of the desk. When your Administration people, let’s get our injured employees who are on light duty back to work and doing that
beyond that Accent review. Boards have been hugely impactful for agencies that want to control their work cop. What that is, is a group of Above sea. Level leaders getting a room, talk with injured employees, their managers. And just say, what can we do to get better? How can we avoid this from happening again? And what we’ve seen from that is that it starts to change the culture of the organization. It starts to change Behavior because all the time, people get injured and we say, what do we need to do? We need to train them more. We need to train them on safe, behaviors. But if you were flying the wall in those training sessions, people say, oh, we have sit through this And we already know all this, they already have the information. We just need to get them to use the information and Accent review boards have been hugely impactful and changing that behavior and producing good results which gives us better results in the workout Market. That makes sense. And so as looks likes a forward-looking work, comp is an opportunity for top-performing agencies, take advantage of some cost flexibility there. And what I’m hearing is that the property Market is still going to be bad, right? So be prepared for that speak. Your broker obviously or Tom Tom preferably in regards to how to manage that. There’s are there other like what? I’ve also noticed the nonprofit space. There are nine million carriers to go through like a manufacturer and so anything new with any carriers, any new ones coming in that you’ve had Success With or how’s that been going? We’ve seen a carrier to dip their toe in again on the workers comp. So not many jumping in on the package side, if anything, we’ve seen some care Is get more restrictive on the package side re underwriting their books of business. There’s a number of organizations. We started working with last year who were with a different carrier. We’ve got notices of non-renewal, we were able to place them with the right one so it’s hugely important. That if you’re an agency you’re working with a broker who knows who will write you. I can’t tell you. The number of times, we’ve seen marketing list and say they went to 27 companies for us and we say why only 70, right? Yeah. You know, so and none of them are on the list. So, You’ve got to work with somebody that knows the space and can find the right home for you and you know, put you in the right light, tell the story as best they can to get you the best results that make sense. Well, speaking of putting people in the right light, telling a good story, tell our listeners clients. What they could expect at the client, appreciation event that you two are hosting in April at our Horton, oral, and location coming up soon. Yeah, I mean we’ve always found that sorry Robin. I don’t Step on your toes but I will we’ve always found it. That this community is really that it’s a community. It’s not like other, you know. It’s not like manufacturers are doctors who you can’t get in the room together. Everybody’s really collaborative and kind of rowing in the same direction and sharing best practices. So we always found that. It’s good to get everybody together and just talk about what’s going on.
We’ve got Kathy Carmody from the institution is going to be there, so always good to hear her perspective on. Early anything in the space. And then Robin and I are going to be sharing some, some benchmarking and some additional results from 2022. And what to expect in 2023. Yeah, I I’m super excited about it. I think we have always done some events but this one is really about celebrating the clients that we work with. And just a lot of what we talked about today, how personal, and how much we appreciate the physicality of the job. This sometimes thankless nature of the job and
what? I’m said is exactly true. We’ll talk to our colleagues and they’ll say, they’ll all like all of your especially idb agencies will get together and talk about what’s working. And we’re like, yes, they you know, they really they share ideas. And I think it’s because the heart of what our idd clients. Do they really do? It’s Client First, it’s people first. And so what that means is being willing to share ideas of what’s working, super excited about Kathy, and what she’s going to share. And to Tom’s point, we’re going to talk A little bit more we’re going to unpack those trends that we talked about on today’s podcast so that you know, a little bit about what’s coming and then we’re going to send you home with a gift.
Love it. Well what I also love is you mentioned appreciation and sharing of ideas and every time I walk away from a conversation with either one of you I’m appreciative of you. Sharing your ideas and your friendship to me, it means the world and like Tom, right next door. So I’m going to see in a minute anyways. But you know, I love seeing your smiley faces and that’s one reason why. It makes my job so good. And so I want to say thank you both for your time. Thank you, both for your mentorship and friendship. I really do appreciate it. So until next time, Jason helper the Horton groupthink. Thank you for tuning into the one thing podcast.
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