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Welcome to This Week in Benefits, a new biweekly podcast from Mployer Advisor, the company that is changing the way employers search, evaluate, and select insurance advisors online.
In each episode, our team will bring you the latest news and industry updates in the world of employee benefits. We’ll break down top headlines, bring you interviews with top industry insiders, and highlight market trends and stories we’re following.
In case you missed Episode 1, click here to listen and here for the show notes.
Date: April 6, 2022
Episode Title and Number: Season 1, Episode 2
Episode Title: Origin Story
In this week's episode, we're going back to the beginning. Mployer Advisor Founder and CEO Brian Freeman shares Mployer Advisor's origin story, including why transparency is critical within the brokerage space and an explainer on the power of employee benefits. To listen to Episode 2 of This Week in Benefits, click here.
White Paper: Employer Feedback on Broker Fee Disclosures and New Transparency
A Conversation With: Founder & CEO Brian Freeman on the No Surprises Act
Webinar Recap: [Part 1] The No Surprises Act: Employee Impact & Broker Fee Disclosure
Webinar Recap: [Part 2] The No Surprises Act: Employee Impact and Broker Fee Disclosure
Abbey Dean: Hi everyone, and welcome to this week's episode of This Week in Benefits, a new podcast from Mployer Advisor. I am your host, Abbey Dean, Mployer Advisor's Head of Content. Now in this week's episode, I am going to be joined once again by Brian Freeman, who is Mployer Advisor's Founder and CEO telling a story that I believe only Brian Freeman can tell, which is about the origin story of Mployer Advisor or how this company came to be.
Now, when I think about origin stories, as I believe most of us do, I can't help but think about comic books or graphic novels, origin stories explain a character's beginning or how they become who they are and why. So think how Bruce Wayne became Batman or how Steve Rogers morphed into Captain America. Now, I wish, I really do, I could tell you that Mployer advisors founding began with a Peter Parker-style spider bite, but I don't think that's the case, but who better to set the record straight than the man himself? So with that, have a listen to my discussion with Brian Freeman about Mployer Advisor's origin story. Let's start at the beginning. When did you first have the idea for Mployer Advisor?
Brian Freeman: Good question. So I had the opportunity to work at a very large healthcare company for a number of years, and working through that there was really kind of a small cohort of patients, those that had an employer-sponsored healthcare that made up the vast majority of profitability really for our health system. But that's how it works. Really, every healthcare company or every healthcare system across the country, patients on employer-sponsored healthcare really are the vast majority of profitability.
So if you take that into a step further and you look a little bit deeper, employer-sponsored care is actually driven and primarily controlled by an insurance broker, an insurance consultant. They act as a fiduciary for that employer, which means they're responsible for making decisions on behalf of that employer. And what they're there to do is basically design benefits and design healthcare with that employer. And so it's a small group of insurance brokers and consultants across the US that really control employer-sponsored healthcare, which is about $1.3 trillion a year and covers about 150 million Americans or over half of Americans.
Abbey Dean: So pretty low stakes, then right?
Brian Freeman: Just a few people here and there probably. Everybody listening to this at this point in time is on healthcare provided by their employer, or somebody's employer.
Abbey Dean: So while you were at this very large healthcare company, did you see certain things over the years, or was this something that kind of started a long time ago that you kind of wanted to step into? When was the move from, I see this problem to I want to build something and fix it?
Brian Freeman: Yeah, absolutely. So we had the opportunity to stand up a team of insurance advisors across the country and just trying to learn more about that space. You really realize that there's nothing out there for employers today to help them understand which brokers are available for them, which insurance consultants have experience in which areas, and who really can help them design the best plan and the most cost-effective plan.
And so our goal is really how do we provide resources for employers and create more transparency? Who they select as their broker is 10 times more impactful for the cost that they pay each year than actually which insurance company they select, and there are no resources out there to help them do that today. So that was our goal in starting Mployer Advisor.
Abbey Dean: Break down that last stat you just said, again, explain to me why that's true and for listeners why that's true.
Brian Freeman: A lot of the different networks, let's take the city of New York as a good example. There are going to be several medical carriers in the area. They're all going to provide access to specific hospitals, specific physicians, et cetera. But the way those plans are designed, how much you pay as an employee in terms of copay, how much you pay when you get to the hospital, how much you get billed afterward for imaging labs, et cetera. Your broker that works with your employer actually is the one that helps them work through that design. Hey, by the way, they also set up and help them work with how many days off you get a year, whether you have unlimited PTO, a fixed number of PTO, number of holidays, et cetera. So there's this individual that you've never heard of that has a significant impact on your life that you're actually paying by the way, every single month as a part of your insurance premiums, whether you realize it or not.
Abbey Dean: Okay. So Brian, one thing I want to talk about, which I think is really interesting here is the idea of transparency in this space. Transparency can obviously mean a lot of different things to different people. So why has that historically been a problem in the brokerage space and what do you think could be done to make transparency better?
Brian Freeman: Yeah, that's a great question. Transparency in this space has such an opportunity for the employee, the employer, the broker, and the carrier really have an aligned interest across every single participant really lists up the whole space and helps everybody. And honestly, brokers would agree, carriers would agree and employers would agree. So what that means in reality is basically the way your employer buys insurance for you is they work with a broker. The broker helps that employer select a carrier, and then that carrier then gives the broker a fee at the end of the, well basically based on what's spent as well as another kicker on the back end of the year for basically helping them to select that insurance carrier. So it's very similar to a real estate agent helps you buy a house and they get a percentage of the fees that come back to that real estate agent through there.
Traditionally in the brokerage space, a lot of those fees haven't had to be disclosed in the past. So there could be fees going to that broker that the employer never saw, never knew, et cetera. So just being honest. So I'm working with you Abbey. We come to you and we've got two plans where we've got a Cigna plan and a Blue Cross plan, and honestly they're like $2 difference for you. But if I get you to choose a Cigna plan, I actually get a $15,000 check at the back end of the year. If I get you to choose the Blue Cross plan, I only get a $3,000 check. I don't have to tell you as the employer that I get those checks in the back end of the year. So which one human nature, would the person <laugh> try to work with you to get you to select?
Abbey Dean: I'm assuming the larger one, Brian <laugh>.
Brian Freeman: Yeah, absolutely. And that doesn't make an insurance broker a bad person or anything like that. It's just how the structure of the system has been set up and has run for a number of years. That actually same also occurs if they're different HR vendors. So there are things called stop-loss programs or stop-loss payments et cetera. Medical management vendors, time off trackers, anything like that that are really sold to these employers. They know the broker is the channel to get to the employer. And so a lot of these different vendors in this space will offer brokers really contingent payments on the backend that if their product is selected, that broker gets a fee. And historically, those haven't had to be shared with the employer. We're entering a new dawn, which is great. Abbey and team just produced a great white paper and really nowadays brokers will have to start disclosing any fees and compensation like that to the employer in writing in advance, which is phenomenal.
Abbey Dean: And that's not to sidebars too much, but that's not just a good thing for employers in the space, but it can be for all of these brokers who have been disclosing for such a long time a way to differentiate themselves competitively in the marketplace. Is that right?
Brian Freeman: Absolutely. It was fun when this legislation was being proposed and then rolled out. You heard from certain brokers in the space that said, finally, we're at an even playing field. I've been providing this information all along. Others that I've been basically competing against haven't shared this information and have won because they haven't been disclosing all the fees that have been coming through. So this really is a tailwind for great brokers in the space and really helps to build up literally the entire space and create more integrity and trust between all parties.
Abbey Dean: I think the other part of transparency, which is something that I believe is core to the Mployer Advisor mission is about education. I feel like there's a lot more brokers now trying to think how they can communicate with their clients year -round about benefits, about how they could better utilize those benefits. Do you think communication in that way is an additional part of being transparent and being a good partner?
Brian Freeman: Absolutely. If there are any services that a broker can provide to an employer, these are individuals that are really smart people in this space and they're well-compensated and they should be a resource to that employer, whether it's around designing time off plans, incentive pay, anything like that. Brokers are such a valuable and smart resource and they're well comped, so <laugh> use them.
Abbey Dean: For both the brokers and the employers listening today, what are the different services that Mployer Advisor provides? What makes Mployer Advisor an attractive marketplace for them?
Brian Freeman: Yeah, great question. If you're an employer, what we have set up for you really is like a Glassdoor-type approach to the insurance brokerage space. We've got ratings, reviews, we've got independent benchmarking, a number of different things, almost like a Kelly Blue Book-type approach for an employer buying benefits. Finally, what others that look and feel exactly like you, same size, same geography, same industry, what types of benefits they're providing to their employees, what it costs, etc. And it's coming from an independent third party. We're not trying to sell you anything as an employer, we're just trying to be a transparent free resource for you.
Abbey Dean: Right, and that makes sense because if I think about wanting to go buy a car or a fridge or an oven or anything else, I wanna go look at reviews, I wanna feel informed before I make my choice. Is that kind of the same basic idea?
Brian Freeman: Yeah, exactly. And so that exists in literally every other facet of life except for about 10% to 15% of literally GDP in all of America. You have no insight into as a buyer. So, <laugh> about 85% of GDP in America. Yep, absolutely. That exists everywhere. The other 15%, that's healthcare employer-sponsored, that doesn't exist today, which is amazing or it didn't exist pre-Mployer, Advisor and pre this awesome team.
Abbey Dean: So how old is Mployer Advisor today? Right now.
Brian Freeman: Good question. The platform launched in February of 2020. About 10 minutes later Covid shut down the entire country.
Abbey Dean: The timing was, the timing was not on your side. Yet, here we sit.
Brian Freeman: Yeah, absolutely. And so we're about two years in so far it's been fun. We've got 10 to 15,000 employers on the platform a month, which is great. We've got 15,000 brokerages listed on the platform and just so many other things coming down the pipeline, which is great.
Abbey Dean: So in that time, if I'm thinking about the sort of big moments that have defined Mployer Advisor, one of them I know because I was here for, it's when a little over a month ago, the Greater Nashville Technology Council awarded Mployer Advisor the Top Tech Startup of the Year, which was really cool and very, I thought validating and I didn't found this company. What are other moments for you that have been very important or significant in this company?
Brian Freeman: That one was a fun one. I think that's just such a great compliment to the team, Abbey Dean included. I was so excited for us as a group. Nashville's just an awesome community. It's literally the kind of home of healthcare really <laugh> across the country, and there's so many great startups. So we really did feel like it was a great honor to win that really across our full team. So that was phenomenal.
Abbey Dean: So not to harp on the award, but let's harp on it for a second because it's only timely for so long. Did that moment when we won, did you feel validated about starting this company or what did that feel like?
Brian Freeman: I was so excited to get to see you all honestly. So we go behind stage and all right, set up and take a picture, and the guy's like, what are you doing with your phone out? And I was like, I'm calling everybody else at the table. And he is like, well, let's take a picture. And I was like, no, no, no, hold on. Everybody else is still coming up here. And he is like, what do you mean? Everybody else is still coming up here? I was like, yeah, just give it two minutes and the whole team will be back here. So it was just fun and fun for all of us. It's been a long journey, or not a long journey, but it certainly hasn't been the easiest journey being a brand new company and standing up and growing. So it's been fun and a compliment to the full team. It's been awesome.
Abbey Dean: Are there certain questions you were always asked about Mployer Advisor, are there certain myths about it aside from the way our name is spelled for everyone listening, if you go to Google Mployer Advisor, please spell it. M-P-L-O-Y-E-R. But yeah, other than that, are there certain questions you get asked about people who are maybe less familiar with the space or unsure about what we do?
Brian Freeman: It's interesting. They're kind of two cohorts of people and you think, I don't mean this negatively, but you think checkers and chess you've gotta be able to think two steps beyond to realize what a broker does and then the broader impact they have in the control of the space. So credit to the Martin Ventures team. We sat down, we had the initial discussion, and he immediately got it. I mean, it was complete chess like yep, I get it. This controls this and this makes sense. Other feedback has been, what does an insurance broker do? What does this space, I've never heard of it. This doesn't sound like anything I'm familiar with.
Abbey Dean: I think one of the first facts I remember that kind of startled me aside from the sheer amount of money involved in this marketplace is, you're going to have to correct me. Most people find their brokers because it's a friend or family member, it's because that company's always had the same broker for X many years, or they're simply not sure. Is that correct?
Brian Freeman: Yeah. It's too funny. When we first started this, I told a team of brokers what we were working on and what I was going to do and they all laughed and said, that's not how this space works. This is a referral-based business. This is a person-to-person business and kind of laughed and you walk away and you think, yep, that's what people said about stock brokers. That's what people said about real estate agents and everything else. So it's been interesting. And so Abbey and team, they did a survey recently and it showed that really for a couple hundred employers, 50 lives are above and asked them, where did you find your current insurance broker? 50% of 'em said they found them they inherited 'em. They were here in this service in this company. When I got here, another quarter of 'em said they found them through a referral or an RFP, and then another quarter basically said they found them through online research. So that's been a fascinating stat to share with the broker community and with the employer community. Employers are actually out there looking for brokers and resources and really a resource didn't exist until Mployer Advisor to help them kind of find the right fit for their needs.
Abbey Dean: So Brian, what are you most, we've built a lot here and you're very Brian is, he's a very humble man. He does not always take as much credit for everything as he deserves, which is very admirable. But I will push him on this because I think he needs to be pushed a little bit. What are you most proud of so far regarding Mployer Advisor? And your first answer cannot be the team I have built.
Brian Freeman: Oh, so certainly the team. Absolutely. From our team here, to the advisors, to the board investors, we really do have just a phenomenal group of people. I really do think it's the opportunity to impact employers on a daily basis. Yeah, coming from the healthcare delivery side of this, the part I loved about being there was that you were so close to patient care every day and you felt like a change that you could make an impact, an emergency room visit or a family that was kind of in the worst moment of their lives. So it's been a little bit more interesting being on this side, being one step further away from that.
But the nice part about where we are is this really has the opportunity to impact the 150 million people on employer-sponsored care. So whether it's plans are a little bit different, has anybody ever had a hospital or a healthcare bill or a physician bill where you've had to sit on hold for three hours you can't fight through et cetera. By the way, you all know this, that's that's also a tactic and that helps only calls that really truly need to get through to get through. So there are a lot of different things that if we can unite employers together and help provide more resources that we can provide true value to literally everyday people, myself included, Abbey included, all of us.
Abbey Dean: I think the thing that I forget sometimes is how personal this actually is. When you think about what we're trying to do and how we're trying to help people, it kind of startles me sometimes when I think about it, how many lives we can actually touch, not just through the platform, but through better broker transparency and employer education in general.
Brian Freeman: I think the same. $1.3 trillion a year in employer spend. That adds about $50 to $60 billion a year that goes up, which is two x the rate of inflation. That's just a ludicrous comment. We were joking earlier that growing up a little sandwich for McDonald's is like five bucks and now it's $10. So the same thing is basically like, Hey, that was five. Can you imagine something at McDonald's now costing basically like $25 for a breakfast sandwich? Basically that's what has happened in healthcare over the past 15 to 20 years?
Abbey Dean: So thinking about where you would like Mployer Advisor to be a year from now, five years from now, 10 years from now, what does that vision look like?
Brian Freeman: Yeah, that's a good question. I think it would be phenomenal if we had every employer out there utilizing our benchmarking report every single year before they went into annual enrollment, before they chose their benefit plan for the year, just to understand what the market was doing in the cost. I feel like that gives them such an information leverage that they don't have today to better understand what they need to purchase. And I do think the impact there would be lower cost across the board.
Abbey Dean: Okay. Brian, thanks for letting us pick your brain today about all things Mployer Advisor, and now we finally have settled the mystery and the origin behind the company. So thank you very much.
Brian Freeman: Yeah, I appreciate you taking time. It's just fun and there's such an opportunity for so many people across this country and brokers and carriers as well. So it's just a ton of fun, and thank you for taking time to talk through it.
Abbey Dean: Well, that wraps up the second episode of This Week in Benefits. Thanks so much to Brian for telling us the story behind Mployer Advisor. Hopefully all of you listening have a much better idea of not only what we do here every day, but why it is so important to us and to the industry as a whole. Now, if you haven't yet done so, please subscribe to the podcast. You can even leave us a voice message requesting ideas for future episodes as well. So please do that. I do take requests. So thanks so much for tuning in and we'll see you next time.
Thank you for listening to this week's episode of This Week in Benefits, brought to you by Mployer Advisor. Mployer Advisor is changing the way employers search, evaluate, and select insurance brokers. Our intuitive platform connects employers and employees to get great benefits and insurance plans by providing employers with actionable data to easily evaluate and select the best advisor for your company's specific needs. To learn more about Mployer Advisor and our suite of products, please visit our website at mployeradvisor.com and tune in next time. Thanks.
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