Speaker 1: 0:00

Icarus. Not to be confused with Icarus, because one flew too close to the sun and his wings melted. The other may keep your client's wings from melting. Can that actually happen? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:17

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shifts. And now here's your host, david Salzman.

Speaker 1: 0:38

And to help us answer that question, we've invited Maya Pearl. Maya is co-founder of Zorro and Icarus is what they do. Welcome Maya.

Speaker 3: 0:47

Thank you so much, David. Happy to be here.

Speaker 1: 0:49

Our pleasure. Our pleasure. Tell us a little bit about your background. How did you end up doing what you're doing?

Speaker 3: 0:55

Sure, I'd be happy to. So my background is a combination of business, technology and policy in healthcare. I was always very fascinated with helping people and I found a healthcare business to be the perfect kind of, the perfect industry and the perfect avenue in order to do that, was and was always fascinated with the dynamics, and when I had to choose my first job out of college, I wanted to do something that's a combination of has both the business dynamics and the financials and the data, but also the policy aspect of healthcare, because it just has the opportunity to touch so many lives. And I found myself in healthcare consulting, working with carriers, doing a ton of interesting work just at the onset of the ACA, and then, from there on, just found myself in various different positions and really fascinating roles all into healthcare business Through the years.

Speaker 3: 1:52

I then added on technology as well. So I ended up working at an early stage startup in the digital health space with a really unique and cool advanced technology and I got to see kind of that go to market of unique medical technology bringing it to the hands of patients, and then ultimately I realized that one of the biggest challenges in healthcare is really not just a specific technology for a specific medical condition or a particular kind of risk problem for a carrier. It's really just that whole intersection of the financial aspects of healthcare and the affordability and access to healthcare, and that's how Zoro claimed about. So Zoro is really the culmination of all of these things, where we're building a really unique technology platform that does personalization of financial products based on each individual 's and members' unique needs in order to really increase and allow that access to healthcare, and affordable healthcare at that.

Speaker 1: 3:00

Let's start at the beginning. What is an IKRA, in all of its glorious little pieces and be? What problem does it solve?

Speaker 3: 3:10

Sure, sure, happy to have to answer that. So IKRA stands for Individual Contribution Health Reimbursement Arrangement. It's a long and scary acronym, but what it means really is that it is a way for employers to change the paradigm and, instead of offering a group plan to employees, which we are typically thought of or used to thinking about as a defined benefit, to shift that to a defined contribution model where an employer is able to give a particular amount of money, as we call it an allowance or stipend to employees, and that's your health reimbursement arrangement. That's the kind of the reimbursement part, in order for that employee to go and shop for an individual health plan on their own in their local market, depending on their unique needs and characteristics and desires. So it's really a way to satisfy right a medical plan and all of its definition and according to all of its compliance and strategic objectives from an employer's perspective, but just a way to do health care differently. Now, in terms of employer.

Speaker 1: 4:24

What is? What problems does that solve for me? What's the pitch there?

Speaker 3: 4:29

Sure, sure. And then your question, your second part of your question, is why is it attractive or why do we need it and what problem does it solve? So think about a typical employer that is facing a renewal right and is looking suddenly at, you know, not just your typical 10% rate hike, which we've all gotten accustomed to to just facing, but maybe had a bad claim year with a couple of you know individuals with a chronic illness or a specialty drug in their on their roster, and Then you're looking at a premium rate hike of 20 and sometimes even 30 or more percent Across your population. And you're in it as an employer, or maybe as a benefit advisor, even to some of your listener, thinking, gee, how am I going to help this, this client, how am I going to help this group? Everyone's facing this rate hike.

Speaker 3: 5:17

What Iqra solve is exactly this the situation and really the lack of predictability and the uniform net nature of group health plans. So, instead of just being kind of captive of that carrier and needing to face those rate hikes, you're in here and if you go to market, all the other carriers are going to price you the same way, right? We all know that. What Iqra allows you to do is to break that cycle, and so you as an owner or CEO, cfo Cjaro, you as a benefit advisor, are now at the driving seat and you get to say how do I control my budget? You set a budget that is now predictable and controllable and you're able to Allocate that budget in a smart way across your entire population. So that really solves both the rate hike and kind of lack of predictability problem, and I explain how that works in terms of just a premium pricing etc. In a moment.

Speaker 3: 6:08

But then the second, the second problem that roots really helps us address is also the uniform nature of group plans. So everybody across you know you're hundreds of people needing to be on one or maybe two, three plan options, and if I live in New York and I'm, you know, 55 years old and need carrier X and you know a low deductible and you're in California, you know young and Need something completely different. Iqra enables each individual to then go to the market and choose the right carrier, the right plan, the right plan design that's good for them and their family, and so it allows a lot of that flexibility.

Speaker 1: 6:48

When you send a bunch of individuals out into the marketplace and say here's some money, here's a stipend, go find a plan. That might be very hard for them. Do you also provide some education for the employees To help them know how to shop, where to shop, what to look for, etc.

Speaker 3: 7:10

Absolutely so.

Speaker 3: 7:11

Zorro is really an end-to-end platform in the sense that what we do is a full service solution for both the broker, consultant, employer, as well as the employee to understand what ICRA is, understand how to build an ICRA plan and then ultimately go to market, pick and roll and pay for a plan.

Speaker 3: 7:34

And so, from the employee perspective, zorro actually have developed a very unique, advanced AI algorithm that takes into account each individual's particular needs. So we ask you things about your healthcare utilization and how much care you're going to consume next year, and then we ask you other questions about your preferred providers and medications. We ask you questions about your risk tolerance, and then we combine that with a lot of external data, also about heuristics around people like you and your demographic, etc. To then take the 50 or 100 or 150 options that you have on your individual market and rate them according to the best fit for you. And so we make that transition, we make that choice easy, smart and understandable for the individual. So it's not it's not an analysis, paralysis or a paradox of choice, but it's actually a ranked kind of top recommendations of plans that are personalized and tailored just for you.

Speaker 1: 8:32

And so the employees go out of your system to enroll.

Speaker 3: 8:35

And no, in fact, on Zorro we actually do everything on the platform. So again, from an end to end perspective, everything from selecting the plan, issuing a form of payment to mimic the feeling of a list bill for employers, everything happens in the Zorro platform and the individual, really we kind of closed the loop all the way from that to setting up auto payment, to making sure they receive the member cards, understand how to use and engage with the plan and the carrier, and then reporting to the employer to make sure that all of that is understood.

Speaker 1: 9:09

So if I'm a benefit advisor and I'm knocking on the door of a client or a prospect, this is new to them. What's that conversation like? How do you school benefits advisors to be able to get past the oh wow, I've never heard of this. This seems weird. Is it legal? All those questions that CEOs, chros et cetera come up with?

Speaker 3: 9:31

Great, great question, and I think market education anytime you have a big shift in the benefits industry is both a challenge and an opportunity right.

Speaker 3: 9:42

So for us at Zorro, we use technology in order to enable that, together with a lot of really smart people that we have in-house to help us engage with the benefit community and the broker and consulting community, and we also make our product and our technology accessible right, so people can experiment with it and touch it firsthand to understand, first of all, what would ICRA look or feel like for my client? Right? We have a really easy and smart, neat way to quickly assess, side by side, what is my current group plan and then what would my people see if we were to switch to ICRA? What would each individual get at a click of a button again, kind of a smart allowance model from Zorro. At a click of a button each individual would get so and so, according to all of the compliance requirements and then also their preferences and optimization objectives for the employer. And then we allow the benefits community to touch and feel and play with that in order to get a better understanding of what an ICRA plan could look like for their client, and that makes it that much more accessible and easy. And I'd say the second thing we add on top of that is also communication strategy, again also automated and digitized to everything kind of according to cadence, with really smart, engaging content being sent out both to the employer admin you know who's in charge of being the internal champion for it and then, ultimately, for employees, and to employees as well.

Speaker 1: 11:07

Are there any legal or regulatory hurdles that an employer or broker needs to deal with?

Speaker 3: 11:13

Non-particular to ICRA.

Speaker 3: 11:15

So, despite the long name and the long acronym, icra is an applicable large employer plan in every sense of the word.

Speaker 3: 11:27

The reason ICRA's work and I mentioned this before in terms of the cost savings and this is important to understand, I think, for the benefit community how come it saves money?

Speaker 3: 11:36

Right, the reason why taking a group of several hundred employers to the individual market and generating cost savings is because the individual market is not claims-based or medically underwritten. So every individual out there who's 45 years old in ZIP Code X is going to get the same rate, no matter their medical history, gender etc. Or any other condition. And so what happens in groups of several hundred folks, when you have those individuals, perhaps with chronic disease or complications and pregnancy etc. Is that you're taking those claims that were before associated with a particular employer of the several hundreds and you're putting that in a much larger risk pool from a carrier perspective and the size of a metro area or a rating area, and that's what generates the cost savings. Now, in terms of the compliance or any other regulatory barriers, this is exactly what the regulation was meant to do. In fact, it's to allow small employers to better deal with some of these issues by building a completely compliant medical plan that simply takes them out of the risk business, and that's what ICRA does and that's what we at Zora do.

Speaker 1: 12:51

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Speaker 1: 13:27

And then that, dear listeners, is why you need a top flight compliance firm. Yes, mzq handles all the usual compliance stuff, from ACA reporting and tracking to rap documents, 5500s, mental health, nqtl and QTL analysis and a whole lot more. But the heat is being turned up on fiduciaries who don't act like it In this environment. Using an Orissa attorney led compliance consulting firm is your best strategy, your clients too, and MZQ Consulting is where you should go For more information. Go to wwwmzqconsultingcom or email them today at engage at mzqconsultingcom. Now back to our conversation. So if I'm an employer, how do I know what allowance to give, what stipend to give? I obviously want to make sure that when my employees go out into the marketplace they're not heavily out of pocket, but I also want to save money. How do I calculate that? How do I determine that?

Speaker 3: 14:34

Great question.

Speaker 3: 14:35

So that's perhaps the biggest challenge of introducing IKRA as a benefit advisor to your clients, and that's exactly what we, as our experts in.

Speaker 3: 14:46

Allowance setting is a complicated exercise because, particularly when you have folks in different classes, in different geographic areas, etc.

Speaker 3: 14:55

You want to make sure that you're giving the right buying power according to your strategic people objectives.

Speaker 3: 15:01

All employers are there to bring benefits because they care about their people and they want to combine it into their HR strategy, and so there are multiple ways to do this. If you'd like to mimic your typical group plan design of giving 80% to your employee only on average, and then maybe 50% to your family and you know folks with children, etc that is easily doable and you know the calculation with assets or happens behind the scenes. If you'd like to make it even smarter, to say, hey, I want to be on par with my industry, or I want to do something more advanced, or I have this objective or this other objective, we're able to put that into an engine to automatically calculate that across all of the different people in your organization, and that's one of the big challenges. But that's exactly where data and technology come into play, because they enable you to do that, you know, at a click of a button, whereas you know doing it offline could be a hairy and messy exercise that may, you know, seem challenging for some employers.

Speaker 1: 16:09

Yeah, there's no question about that. Do employers who employ this strategy find that it's helpful to them in attracting and retaining employees? Kind of a you get to choose what plan you want and we're going to pay for most of it?

Speaker 3: 16:26

Absolutely. You said it, david. That's exactly the pitch. I mean, imagine a world where you get a budget when you join an employer and you are free to bring your old plan right. So when Iqra's increase in popularity and they are, and they're going to get more and more prevalent, we're going to see more and more employers in areas where they're a highly, highly popular choice you're going to get to an employer.

Speaker 3: 16:52

You're going to say, hey, I actually want to keep my old plan, so I'd like for you to offer me an Iqra and offer me that budget or that form of payment to actually keep the plan with the carrier that I love and you know enjoy, so I can have my continuity of care Right now. Absolutely, we're seeing this as an HR as a very attractive offering for employees, where an employer is able to say, hey, I offer this unique benefit, you're going to get a cool payment method. We're going to tack on a bunch of really great benefits and ancillary products on top of this, but at the heart of it, you're going to be at the driver's seat. You're going to get to choose the carrier and plan that's right for you and your family.

Speaker 1: 17:34

You know you kind of anticipated my next question, which is how far beyond core medical does the Iqra integrate?

Speaker 3: 17:42

Great question. So Iqra is a budget to buy core medical as well as some basic insurance premiums for other ancillary products. There's also, of course, the possibility to allow for additional medical expenses. So if you're giving an employee 500 bucks and they're actually single, you know, want to buy the most basic bronze plan with the highest deductible and cheapest premium. They can also use the remaining stipend or the remaining allowance to pay for their coinsurance or their co-payments, etc. So it's really a very, very versatile tool, right, because you're able to not just get that major medical insurance and coverage, you're also able to add on top of it many additional things. And then the cool thing, when you start thinking into prism and the form of putting the employee there at kind of the driver's seat, you're also able to add additional dollars right With Asatsura, beyond just the ICCRA funds, to then also pay for additional benefits, because the individual and the employees really starting to think of themselves and their family in a holistic fashion.

Speaker 3: 18:55

What do I need? Not just in major medical, dental and maybe some out-of-pocket but hey, do I need accident insurance? And how do I use my FSA in a smart, personalized way as well? And how do I optimize, kind of my entire health-to-wealth journey, and so it really changes the thinking and that's what we do at Zora is we use technology in order to help employees really have the tools to do that in a smart way.

Speaker 1: 19:20

Is there a minimum or maximum size of employer for which this is applicable?

Speaker 3: 19:26

Good for everyone, across all sizes. So, in fact, from very small employers of under 10 to we're seeing clients of multiple thousands of enrolled members. This is becoming increasingly popular and increasingly attractive. We typically work with clients from just above 50, so your ALEs to several hundreds in size, but really it runs the gamut and it offers benefits to clients and employers across that spectrum.

Speaker 1: 19:58

And if you go out in the marketplace, the subsidies are still available to you that have always been available as to an individual purchaser.

Speaker 3: 20:05

Great question. So, similar to any other group plan, when making an affordable offer to an employee, the employee is there to determine hey, is this an affordable offer? And am I better off taking my employer plan or going to market on my marketplace and taking the APTC, the Advanced Premium Tax Credit? So ICRA is no different in that sense. You as an applicable large employer if you're above 50 employees in most states are there to determine hey, is this affordable from an organizational perspective? And we help you actually make that determination if it's needed. But then each individual employee then makes their own particular determination. Okay, actually, according to my circumstances, this is or is not the right fit for me. If an individual decides it is not an affordable plan and they wish to go to the market, then they can continue taking their subsidies. If they do not, then they're able to take advantage of the employer plan in this particular case to ICRA and use those funds to then get the individual policy on the Zora platform.

Speaker 1: 21:09

What are the objections that are most commonly heard? That? You know that advisors hear from employers.

Speaker 3: 21:14

When broaching this concept, I think the first one is one you alluded to before, and that's just the lack of familiarity. Sometimes you know you don't want to be the first one to do something. You want to know that there has been someone else in your seat who's taken a similar approach and taken the same decision before you. And when you're looking at an area or a market where perhaps you haven't engaged in ICRA before with your clients as a benefit advisor, then you're not going to be a benefit advisor. Perhaps that's, you know, a common challenge and a common objective. You might hear from clients.

Speaker 3: 21:51

The most important kind of thing we see with employers that they want to know is that there's someone there to help their employees in making the choice, so that they do not get Objections later on for deciding to make this transition right. As a CRO, what you're most concerned about is that you are coming up with this new strategy that's going to do a ton of good for your employees, but because something's misunderstood, miss communicated or mishandled, you're going to get kind of the heat about it or you're going to get repercussions from it later on. And so I think the most important thing that we tell benefit advisors is to educate their employers and their clients. Find that internal champion, make sure everyone knows how things are going to work and, of course, that the employee really has someone there for them in the decision making platform or in the decision making process, in order to close the loop and make sure that you know they're making the right choice and that they're taking care of.

Speaker 1: 22:49

Do you yet have any year over your retention numbers?

Speaker 3: 22:54

Absolutely, absolutely we do and we're very, very proud to say that it's, it's nearly at 100%. I mean once, once someone makes the switch, the switch is hard. The switch is quite hard and you know, sometimes an employer is not ready to do it at the first time and you may pitch the IKRA, may pitch the concept, and you know it takes time to warm up to it. But once making the decision, we see folks just really kind of falling head over heels with it because once you see, you know that 30% cost savings, you're facing a 30% renewal and suddenly your budget stays the same. You don't have to pass that increase to your employees, you don't have to take that in your budget. You see everybody getting the right, the right carrier, the right plan for them. You see your employees content and happy and you hear that upward feedback there's. There's really very, very few instances where it makes sense to to go back to the group world.

Speaker 1: 23:49

Is. Is there a scenario where this does not make sense for an employer?

Speaker 3: 23:55

Sure, absolutely, I mean you know there's there's attractive, attractive advantages in IKRA for many. But like any other benefit solution, not, it's not always right for everyone at all times. If you have a very young population of employees where everyone's generally healthy, perhaps you know you are not seeing those rate increases, you're getting a great rate From from your carrier. If you fully insured or you know your self insured kind of ASO is under your full control, no problems with your stop loss. Absolutely, you know.

Speaker 3: 24:30

Maybe maybe it's not the right time for you to switch. If you're very, if your population is very homogenous, you're in a single region, everyone's content with the carrier, you have a great local network. Absolutely, you know, maybe maybe not the right choice for you, for your client, but once you get start to get into those nuances where you have folks in more than one or two areas, where you have maybe a couple of those individuals on under roster who are increasing everyone's premiums, that's generally when we we start to see the value and oftentimes we see we see the solution offering savings of 20 and 30% to some employers. So really, really significant.

Speaker 1: 25:14

You just alluded to something, and maybe this question is a great place to end our conversation today, but this can be used across state lines.

Speaker 3: 25:22

Absolutely, absolutely. It can be offered to your population across that lines. There are options and really competitive markets in most states today. So the individual market has grown tremendously. More and more carriers are entering it. More and more carriers are offering really attractive plans with PPO networks, with some of those really really sophisticated and attractive plan design. So as long as that continues to happen to attractiveness of Iqra that's relying on that individual market is going to continue as well.

Speaker 1: 25:58

Maya Pearl, co-founder of Zorro. Thank you for a great conversation and for sharing your expertise with our audience.

Speaker 3: 26:04

Absolutely, david. Thank you for having me.

Speaker 2: 26:07

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