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S2:E2 Coffee Conversations With Tom Shanahan- TRANSCRIPTION

Coffee Conversations with Tom Shanahan
September 24, 2020 at 7:25 a.m.

Editor's note: The following is the transcript of an interview with Tom Shanahan, NRCA Vice President, and Ted Ryan with Vault Strategies about a new health care plan for roofing contractors. You can read the interview below or listen to the conversation here.

Heidi Ellsworth: Good morning and welcome to Coffee Conversations from RoofersCoffeeShop. I am Heidi Ellsworth, and I'm a partner with RoofersCoffeeShop. Today we are going to be breaking some news, a really great initiative coming from the NRCA. We have Tom Shanahan, who is a VP with NRCA with risk, right Tom?

Tom Shanahan: That's right.

Heidi Ellsworth: Risk, health. You've done everything I think. You're across the board. We also have Ted Ryan who is with Vault Strategies. These two gentlemen are going to help us today to understand what the NRCA is doing. For years and years, I've been hearing about, "Let's figure out how we can do healthcare." I know many of you out there are involved with captives, but you all struggle with healthcare. I know as a small business owner, we struggle with healthcare, so NRCA has stepped up and they are going to help us which is just amazing. We're going to start the Coffee Conversations a little bit different today. We're going to start it out with a presentation. Because I don't know about all of you, but when it comes to insurance, I need as much information as I can get. We're going to hear about the program what's going on, and then we're going to open it up to live, as always, Q&A so that you can ask your questions and you can find out how this can help your business and really what it's going to do for the industry overall. Let's get started. Tom, Ted, I'm turning it over to you, maybe you can introduce yourselves a little bit better than I did, and then we can go into the presentation.

Tom Shanahan: Sure. Thanks, Heidi. It's great to be here with you and with everybody. Really appreciate the opportunity to have a chance to share, really what's exciting news for our industry. For those of you that saw the picture that Heidi used of me, all I can say, it's been a rough year. I am excited about it because I've been at NRCA for 30 years. I've been responsible the whole time for the risk management area. The quasi safety director for the industry and the insurance guy. We have had so many different programs, health insurance-related programs over the years. The reason for that is, I'm getting calls, my department is getting calls, every week, and sometimes every day, from members requesting, "Hey, do you guys have any kind of health insurance for us to offer?" Over the years, because we get that request so often, have offered, and looked at, and found different programs over the years. The challenge has been, is that over the years, the laws change. Offering a national program is tough because state laws are different state by state. There's just all these hurdles, and often the programs that we would get would be terrific, but they would tend to serve just one slice of our membership base. We haven't had the opportunity, until now, to have a program that really offers products to wherever you are in your need for providing some kind of benefit for your workers. I just wrote an article for a professional roofing magazine. One of the things that I found in my research for that article on this topic was the idea that Generation X, Millennials, Y in terms of retention and even attracting workers, they're looking for health-related benefits. That's key to us in our industry, we're competing for really a finite group of people that will work in our industry. I was just talking to a contractor the other day, who was telling me that, "I thought with the pandemic it'd be so easy for us to hire and find workers, but the fact of the matter is it isn't. The reason for that is because we're an essential business." The roofing industry is still working, which is a blessing in and of itself. Anyway, so with all of that and knowing that, having this chance to really create a comprehensive healthcare program that really meets each individual member's needs is one of our goals. Then the other idea was to help them gain control over their healthcare costs and their employee benefit program. In some cases, for example, an employer, a contractor, may want to offer one level of coverage for maybe the office, or maybe his senior group of people that work with him all year long, and then have another level of coverage for the seasonal workers, and maybe another level of coverage for those who are really part time. Well, that's what we can offer here is that there's those different layers of offering, and that is what I think is so great. We partnered with a company called Vault Health Strategies. Vault has been doing this for quite a while, they've been working with associations for quite a while. We've had our insurance board of governors, which is responsible for... they're my bosses at NRCA. Through the insurance board of governors, which is made up of six roofing contractors who each serve a six-year staggered term, and through that effort they, as I find things they go through them. They act as a, not only a sounding board, but like a judge and jury of the various different products. They're very experienced in all of this stuff and have really worked hard over the years to help me and help NRCA find a product to do that. I can tell you that, not only they wholeheartedly recommended this to our executive committee, but then once we were able to, and Ted did a fabulous job explaining all of this, because insurance is never easy. It's a lot of things that we need to know and not necessarily we want to know, but it's so important to our businesses. With that, I want to introduce Ted Ryan and have him give you a little bit of what he does with Vault and start sharing about our program here and what it offers. We like to say, we want it to meet members where they are, and I learned that from Ted. I really like that framing, because the idea is, wherever you are in your health insurance quest, you don't have to worry that you have to offer this total bells and whistles thing. You can offer that if you like, you can just get down to the bell if you want as well. With that, Ted, maybe you could jump in and talk about yourself a little bit and Vault and then share with us our program.

Ted Ryan: Thank you, Tom. I appreciate it, and thank you, Heidi, for inviting me today. I'm very happy to be speaking on behalf of Vault and to your membership. My name is Ted Ryan, I'm the executive vice president for business development with Vault Strategies. Vault is both a healthcare consultancy as well as an insurance company. Our healthcare consultancy is based out of Bloomington, Illinois, so just down the street from the NRCA by Illinois standards. Also our insurance company is domiciled out of the State of North Carolina and regulated by the Department of Insurance in the State of North Carolina. In our engagement with the NRCA we began talking to NRCA about 18 months ago. As Tom mentioned, we worked with the insurance board over that period of time to answer all of their questions and to also understand where they had been with this topic in the past, and understand that they've spoken to quite a few people before they settled on Vault. We did get a chance to look at the membership and understand the membership and what makes up the membership. We understand that there are five-man groups, there are 10-man groups, there are 100-man groups and so on and so forth all the way up to really large companies and manufacturers. We quickly realized that there was going to be no one solution that met each and every member's needs. The needs of the membership varied. The membership is diverse, and that the product mix for those members also needed to be diverse and reflect the needs that we're solving for. Whether you're a small company, whether you're a company that is more seasonal than other companies because of where you're located in the United States, or whether you're a very large company that may even have four or five different medical plans operating at the same time, we are a company that has experience and the diversity of a product set to meet each member right where they are. That's where that came from. Our overall goal with the program is to meet each member where you are today and to solve for the future. Currently, the options available to most companies, most companies are familiar with our options that have to do with the players and the business that you all know, like a Blue Cross Blue Shield, a United, a Cigna, or an Aetna. Those are all very well recognized names in the industry. There are also a lot of companies that do not even use those companies, larger companies that use self-funded solutions. There are literally hundreds of other insurance companies out there that offer solutions for healthcare that are at a cost point that are affordable. I just wanted to mention that because we're all familiar with the brands, but many of the large companies actually put together their own insurance programs. I say that because the overall objective here, we've all heard the expression in the past that there is strength in numbers. The overall objective is to meet each member of course where they are today and to solve their issues and helping curb the costs of their own healthcare today. But the ultimate goal is to rally the membership under one roof so that we can go to a carrier and negotiate one contract for the membership. Much like the way a union might approach benefits for a larger company, we're looking to pool all of the members eventually under one roof for the purposes of bartering with the carriers and getting a preferred rate. That's a strategy that'll take anywhere from 18 months to three months to achieve that strategy. But in the meantime, we need to meet each member where they are today. That's just a broad stroke of the overall program. I'm going to get into the presentation now. Heidi, if you'd be kind enough maybe to flip to the next slide we'll start there.

Heidi Ellsworth: There you go.

Ted Ryan: Again, just really quickly recapping. Why did the NRCA launch the healthcare initiative? Tom alluded to this earlier. The number one, by far, outside of cashflow and the cost of supplies in one's business, the cost and quality of employee benefits is always the number one reported concern for employees. If you're an independent roofing contracting company and you're trying to solve for that, that's what we're here to do and here to help, to expand your choices and to help curb the cost of healthcare. Healthcare costs, whether you know it or not, are rising at a rate of 10 to 25% per year in almost every single state. There is no end in sight with this. The reason why there's no end in sight is because there's really been very little innovation in the industry. The larger companies who have a large percent of market share have no incentive to change what they're doing. If you follow the news, you can see that these executives at these large companies like UnitedHealth are pulling in bonuses of $270 million a year. Well, ask yourself where that comes from, that comes from folks that are buying their product. That gives you an idea of the type of margin that they have in their product. Now, our solution is a self-funding solution. This is a solution where we take those margins out because we're not paying the stockholders and we're not paying the CEOs those types of benefits. We can literally customize around programs that take those costs out, but still deliver the same benefit that you are used to, and that your employees desire. Just want to make a point of that. Employers, obviously, are having difficulty affording healthcare. If we can maybe go to the next slide, Heidi. Why did the NRCA launch the healthcare initiative? Tom, again, alluded to that. Essentially, this is a problem that is rampant across the board. It's something that you all have in common besides being obviously in the industry and being NRCA members. The one thing that every business in the United States has in common is that they're trying to curb the cost of their healthcare while maintaining a benefit level or improving a benefit level to attract quality employees and keep the quality employees that they have. This is an absolute critical part of planning for your company. Moving to the next slide. Why did the NRCA launch the healthcare initiative? Again, the cost of quality of employee benefits is paramount. In terms of the response, our goal obviously is to create a healthcare program that addresses each and every member's needs to help control their overall healthcare costs and to universally improve the industry and certain other aspects of healthcare that are [inaudible 00:15:15] pervasive in this industry. Specifically, opioid and substance abuse which is pretty rampant in the roofing and contracting industry. We're going to put together some special program around these types of things that will help you help your employees. The next slide. Again, Vault Strategies is a healthcare consultancy and insurance company with an expertise in developing cutting-edge solutions for associations. Whether you're a small business or a large business, we have a solution for you. I think, as Tom alluded earlier, we'll get into some discussions around the types of companies and types of solutions we have, but typically everybody thinks of healthcare as just major medical. If I need to go to the primary care physician, if I need to go to the hospital, that I have coverage. There are some companies that have a large independent workforce that is part-time, or that has a seasonal workforce. Those folks still have needs but the company can't afford to put them on the major medical plan. We have a whole series of different types of products that would help an employer offer some benefit to those employees based on those employees' needs, based on affordability, all of those things. That's an example of looking at the problem that we're solving for that particular employee and providing a solution that meets that specific employer and employee's need. Those solutions exist. I just want to make sure that we are really stressing the point that there's not an NRCA member that we can't have a conversation with and that we can't develop a solution for. Next slide, please. What does the program offer to you the employer? Well, once again, we are both a consultancy and an insurance company. I'm going to go off the slide a little bit and just let you know that there are many products, without getting into all of the products, that... Really the starting place in all of this is about 60 to 70% of you that are offering benefits today, or that would be offering benefits for the first time, are going to be looking at renewing your benefit or signing up for benefits between now and January 1st. That is true in the industry, about 60 to 70% of companies renew their healthcare benefits between now and the end of the year. The timing on all of this is great. You're all going to be looking at your benefits and renewing your benefits. Now is the time to see what the NRCA program has to offer you. All we would ask for is the opportunity to speak to you, to schedule some time with a Vault consultant and let us speak to you about what you're currently doing. Let us reach into our bag of solutions to see what we can offer by way of a competitive offer, and to see if we can meet your needs and/or improve your benefits. Again, the goal of that is to serve as many members as possible so that at some point we could put you all together and negotiate with a carrier on the collective [inaudible 00:19:04]. Next slide please. The time, obviously, to do this is now as I just alluded to. Heidi, we can go to the next slide.

Heidi Ellsworth: There you go.

Ted Ryan: How do you get involved? Of course, any program that an association such as the NRCA has, whether it's their safety program, whether it's their health benefits program, all these programs depend on the membership support. Membership inquiry is what I'm talking about. Ultimately, we have to earn your business at the end of the day, nobody is going to leave their current provider to join the NRCA program if it's not one that serves their needs, and is not an improved situation in terms of the cost of the benefit that's being offered. We know we have to be competitive, we'll be competitive on many, perhaps not all. But the goal is to be competitive on as many as possible. We can't get there if we don't get up to the plate. What we're asking for by way of member support is just the opportunity to speak with you, to learn a little bit about you, to learn a little bit about what you're currently doing so that we can put forward a solution from the program that hopefully at the end of the day will help earn your business and help us achieve the overall objective of pooling all the members together to negotiate a discounted rate for you all. That's really it on this slide, Heidi, and I think that's probably going to bring us pretty close to the end here. Again, how do you get involved? There are several ways to get involved and we can move to the next slide, Heidi, and I'll explain that you can get in touch with either myself, Ted Ryan. My email address is Ted@AllThingsVault.com, and my telephone number is there as well, (214) 334-1396. Or you can call Rich Trewyn, who's one of the directors at the NRCA. Rich's email is rtrewyn, T-R-E-W-Y-N,@nrca.net, and his number is (847) 493-7575. Lastly, if you haven't checked out our new website yet, I would just encourage everybody to go to www.nrcahealth.com. Once again, that's www.nrcahealth.com. We're here and we're happy to answer any questions that you may have.

Heidi Ellsworth: Okay. Ted and Tom, I'm going to come to you because I have a question for you. Before we go to the next thing, I just want to encourage everybody, this is the time, as you know in the past, use your sidebar to fill out the questions. Just write your questions in, raise your hand, however you want to do that. Megan is in the background and she'll be chatting with you and she will be bringing you on as a live panelist. Now, if you're on the West Coast and you just don't feel like getting on video, you can do it by audio, or we'll ask the question for you, so don't be shy. But before we start taking some questions, I do have a question, Tom. I would love you to talk just a little bit more about how this relates with NRCA membership. Because I know we have a wide range. I wish I could say every single person out there watching right now are NRCA members, but let's talk about that. How does this program work? How does membership work? Just so that people understand.

Tom Shanahan: Thanks Heidi. It is an NRCA member program, however, you do not have to be a member to get a quote. It's really important. Like Ted was saying, we really want to get to the chance to use our program at the very least to compare and contrast. We work with your broker. Ted mentioned that, and I just want to underline that, that... if you don't have one, well then, Vault can do that for you as well. But, importantly, this is a program that works with your broker or your agent, just like every other program. Then after you go through the process and see, and think, and feel, "Wow, this is a really great quote that I just got from Vault, I'd really like to do that," and you're not a member, then we'll talk to you about membership as well. In all likelihood it'll pay for itself anyway. That's the beautiful thing about this program. Ted really was right. The idea is, as we get more lives in the program, of course then it becomes more robust and your ability at just offering a better group program increases.

Heidi Ellsworth: Yeah. I think that's so important too, because when I think about... Well two weeks from now we have Trent Cotney and Alison LaValley on here about the legal seminar. I'm not just sitting here making a pitch for NRCA membership, but I do want to say, when you look at these kind of programs, it's so worth just at least finding out what the quotes are because sometimes the membership pays for itself. I don't want people to be put off just because they're not members of NRCA right now. Tom, talk a little bit too about just, I know we went through it in the slides, but talk just a little bit more about what you're seeing. You have been so influential with NRCA, within the industry, with FEI, everything. What are you seeing? What are contractors saying? What do they need from this?

Tom Shanahan: I think the biggest thing that they're needing is flexibility. The challenge that all, and I buy the insurance I know for NRCA. I know what it's like to be out there in the marketplace getting quotes, debating what's going on. So often you just feel like you just want to blow your head off because it's so frustrating. You're offering something and it seems like somebody's always not happy with something or whatever. What happens over time is you develop an appetite for a certain type of product. That's what we hear so often is, "Can you do X, or can you do Y?" That to me is what's so impressive and valuable about this offering is that we can do the whole alphabet.That is, to me as somebody who is a purchaser of insurance, gives me a lot of satisfaction that we can offer, through this program, not only just... Ted was talking about the medical side of the equation. We can offer, we can offer major medical, we can offer just prescription care if that's all you need. That's something that's really important to appreciate. Also, I think folks are pretty familiar with the Aflac type, those additional benefits. Even those products are available through Vault as well. It really is this multivariate approach here. I really want to stress that, regardless if you just want to offer... for some reason, somebody will say, "All we want to offer is dental care." Well, guess what, you can get a quote for dental through us as well, or vision, or whatever it is. All of those products are available here. That's, to me, what I hear so often from everybody is yeah, but. "Yeah, you got that, but can I?" This is the answer to the, yeah, but.

Heidi Ellsworth: Yeah, and I think that's so important because, I loved your comment about the Millennials and the Gen Z coming in, because I've done a lot of work in that area myself and I have a couple of my own. Healthcare it's on all of those Deloitte surveys and everything that's out there globally. Healthcare is one of the top ones, especially for Gen Z, and I thought that's really interesting. I like this idea of flexibility so that maybe if they can't get dental with their current program, but that's something they could start putting their toes in and figuring out, that's going to really be a huge recruitment issue.

Tom Shanahan: It really will be. Yeah, Ted. Go ahead.

Ted Ryan: One of the things I was just going to mention, and this is backing up a little bit, is that, under this program, these are all self-funded solutions. When members are buying typically from a Blue Cross Blue Shield, a United, a Cigna, or an Aetna, those are very large carriers. I alluded to earlier about some of the CEO bonuses involved with that. All of those programs though, if you ever try to get information on your health plan that you purchased from one of those companies to see how you as a group are performing, the answer is you don't get information from them when you make that request or when your broker makes that request. Those companies guard that information. The information that they're guarding about your employee healthcare claims history is they guard it because that is the key to controlling costs. If you were to know what that information contained, not from a employee patient privacy standpoint, but if you just knew generally what the claims information indicated and how your employee healthcare plan is working, you could make informed choices and more informed choices going forward about whether or not you need that program. For instance, you may have a Blue Cross Blue Shield that has a wellness aspect to the program, and you might have 100 employees. But 100 employees, none of them use the telehealth function or none of them use a particular wellness benefit under the plan. Well, you're paying for that benefit. Why would you want to pay for that if no employees are using it? Those are the types of things that we can get into a position and with each of the memberships under our plans, because we actually share that data with you. There's a fundamental difference between the large carriers and the self-funded carriers, which we are, is that we work with you to offer, yes, a great benefit, but we work with you actively to control your costs. Employees are not using a benefit under your plan, we're informing you of that. Maybe that's a call to action for an education with your employees, or maybe that's simply eliminating that benefit in the following year so that you're not paying for something that no one's using. Those are the freedoms that we get when you move into the self-funded environment.

Tom Shanahan: I like that too, that flexibility. I mean, again, I'm going to go, you said that, Tom, before, that flexibility, Ted, is just amazing. I want to bring... we have a couple people with some questions. Megan, if you want to bring Rod on. We have Rod Petrick. Rod, I'm so excited that you're here this morning. She'll be bringing him on video here in just two seconds, but-

Megan: Rod, you are unmuted if you want to unmute yourself and I can also get video if you would like.

Rod Petrick: All right, I'm unmuted.

Heidi Ellsworth: Okay.

Tom Shanahan: There we go [crosstalk 00:31:25]-

Rod Petrick: [crosstalk 00:31:25]. There we go.

Heidi Ellsworth: Hello, good morning. Welcome.

Tom Shanahan: Hey Rod.

Rod Petrick: How are you guys-

Heidi Ellsworth: You have some questions and comments?

Rod Petrick: More of comments. Tom had alluded early on that he has a group called [inaudible 00:31:40] that he's got to work under. I've been on the [inaudible 00:31:43] committee for some time and this insurance thing has been just something that's been banded around for years. I'm surprised Tom's got any hair left on his head because, Nelson [inaudible 00:31:55] as chair of that is just, we've been pushing for this healthcare. We've gotten so far along. Typical of what Ted said is, when contractors are trying to get their data from their current agent, they run into a wall and we just couldn't get things put together. Now with this relationship with Vault, contractors are able to use their existing broker. They don't have one, we have availability to get you one. It's opened this program up where people are going to be... it's going to be a lot easier for people to move forward to be able to get a quote. As I said a little bit earlier, the heavy lift on this. I know early on [inaudible 00:32:40] guys just said, "Are we ever going to get there?" Because Tom, this probably goes back 20 years we've been fighting to try to get a health plan. But it's interesting in my position at NRCA as chairman, we just had a meeting in Ohio and one of the questions are, how do we get into your health plan? It was another association. Now we have to sit down with Tom and [inaudible 00:33:03] and [inaudible 00:33:03] and come up with solutions because now the affiliates, they know what's out there and their members are asking because they want in. Because for the bigger contractors or contractors like myself who are a signatory, the health plan is already in our... like for me it's in my collective bargaining agreement. But for the smaller contractors that... First of all, buying insurance sometimes can be intimidating. They look at it, the quotes come in and... we're roofing contractors, we're not attorneys, we're not insurance people. Trying to get a grasp of what's out there. I mean, there's times I look at some of the stuff that comes in to me and I'm like, "Okay, who do I call now so that I can get this... get it out of attorney language, get it into roofer language?" Now we have an opportunity for the smaller NRCA members that could be a five-man crew and an owner, ten men, up to contractors that could be 100 or 200, we have flexibility. I think this is going to be a big deal for NRCA and the roofing industry. It's going to have contractors be able to have an ease into a healthcare initiative for their employees. My hat's off to Tom, I mean, this has been probably most of his career trying to get this thing resolved, and we finally got a relationship with Vault. Whoever hooked us up with them, I owe you a thanks.

Heidi Ellsworth: Hey, Tom and Ted, before you respond to that, Rod I know... I think everybody does know you, but can you just give an introduction about your company, about being the chairman of the board for NRCA, and maybe just real quick what's happening right there.

Rod Petrick: All right. My name is Rod Petrick, I am the president of Ridgeworth Roofing Company in Frankfort, Illinois, which is a suburb right out of the city. I've been working in this company, I started with my dad right out of high school. I've already had my 45th anniversary here. Sometimes it seems like it's 44 years too long, but I love it. My son is like, he says, "I don't know if we'll ever get him out of here because he loves what he does." I've actually been president of both the local and the regional associations. Then, it seems like I was late in life getting involved at NRCA. I remember walking into my first board member orientation and having and Bruce McCrory look at me and say, "Aren't you old for this?"

Heidi Ellsworth: [inaudible 00:35:45].

Rod Petrick: I've enjoyed it. The industry has been very good to me. I've met many lifelong friends and I've had an opportunity to work with people like Tom and with staff at NRCA, CRC, and MRCA. It's been a long career and I've enjoyed it, and I don't plan on leaving it quite yet. Although my son would probably like to show me the door a little bit faster as he's a graduate from Tom's FBI program. I think they actually teach a course on how to push the man out the door.

Tom Shanahan: [inaudible 00:36:18].

Rod Petrick: Yeah. In NRCA, my chairmanship started on June 1st, so I am the COVID president. I've been on two different trips, we've been to Ohio twice. I don't think I've been to Ohio twice in my life. Within the last two months I've been there twice meeting with two different manufacturers, and we actually met with MRCA the other day just to let them know where we're at. It's difficult I think. Calls like this, people are suffering from Zoom fatigue and now content and presentation are going to be very important because myself, and I'm sure everybody on this call, you all know I got another call to get on. But we're out there and until things improve and a vaccine gets out there, this has become the new way of communication and life in business. If anybody's got questions for [inaudible 00:37:25] NRCA thing, I'm willing to take those, or if you contact NRCA they'll get you my contact information. I'm sure Tom has all my numbers that he can give it to you.

Tom Shanahan: [inaudible 00:37:36].

Heidi Ellsworth: Well, Tom, and... I mean, I think what Rod said is just, we need this as an industry. One of the things I wanted to mention was, this is not just for roofing contractors either, it's for any member of NRCA. RoofersCoffeeShop is a member so now we're... actually, I've been talking with Ted and so this is really opening that data from the roofing industry overall.

Tom Shanahan: Right. I'm so glad Rod mentioned that and the idea that it is... I talked earlier about, for a roofing contractor member and whatever size they are, our old programs tend to be just for one group. But this is literally not only for all the groups of contractors, but for all of our members. If you're a supplier, if you're a manufacturer, if you're an affiliate, all of that, whatever. If you're an NRCA member, the program is open to you. It really is worth, and Ted mentioned that. In fact, he mentioned if you're... I think he's talked about five employees and so on. But, I got a question from an affiliate the other day that just has one. I said, "Gosh, Ted, is there any?" Because a group is two or more. It's a group program. I said, "Hey, [inaudible 00:38:58] can do for this one guy?" He said, "Sure, we got something. Don't worry about it, we'll look at him." It actually is for one or more, so that's awesome.

Ted Ryan: Yeah. I mean it really is. I mean, obviously you have some members that are all the way down to one. But you have some members that are 3,000 employees and they have an established relationship with a broker that they've been working with for 10 years and they like the plan that they're on. They feel as though they have done their due diligence and that they are at a cost point that is satisfactory to them. There are still ways to improve plans like that. There are still programs within the program offering that can enhance the value of that plan without adding any real cost. When I mention something like that, I'm talking about, for larger groups we have a second opinion program or really the catastrophic type diagnoses that can cost the healthcare benefit plan quite a bit of money. It's a program that overlays on top of an existing plan that offers a second opinion to make sure the underlying diagnosis is correct to begin with. Assuming it is, or assuming it isn't, there's a pathway to make sure that the best diagnosis and the treatment plan associated with that can be directed. Of course, it's up to the member to take that if they want it or not. But all those things are cost containment type strategies. Even if you have an existing healthcare plan that you're happy with, you might want to give us a call. Let's talk about how you can enhance the existing plan you're at at no cost to you.

Heidi Ellsworth: That is cool. We have another question coming in. Rod, you are more than welcome to stay, although I know you had some appointments. Please stay if you want, if you want [crosstalk 00:40:58]-

Rod Petrick: I'm going to stay.

Heidi Ellsworth: Okay, good. Because the next question goes right to what you just said, Ted. Megan, do you want to bring Wendy on? She had a question about some alternative medical and some different ways of looking at things.

Megan: Wendy, you are good to come on.

Wendy Marvin: Good morning.

Heidi Ellsworth: Good morning, Wendy Marvin out of Vancouver, Washington, introduce-

Wendy Marvin: Pacific Northwest. You're not getting a camera on me this morning for sure. I come from a really unique background with this stuff. I worked for Kaiser for 20 years and actually used to sell large group and small group benefits. This is big. I don't know if people in general really understand the offering we're talking about. My company represents a 50 and smaller group and we've uniquely had health insurance benefits for about three years. But two things struck me. One, I wanted to ask about alternative benefits because the mention of someone at this magnitude of healthcare, not just catastrophic is huge in that, finding alternatives to offer to your employees that help them stay healthy, not just give them medical benefits, is a big deal. But then, also talking about alternative care and then the other, keeping employees right now is just huge for all of us. With my plan we've had for four years now I think, we have zero utilization. The demographic of the guys that I have tend not to go to the doctor. They don't trust our healthcare system, they're typically from other countries. Finding a provider that actually can help us navigate those waters is huge. Throwing out a couple of questions to you guys there, I guess.

Heidi Ellsworth: Wendy, you had mentioned specifically acupuncture and chiropractic services, right?

Wendy Marvin: Yeah. Health services that keep you away from the doctor, that are generally ignored at large by a lot of carriers.

Ted Ryan: There are wellness programs within the major medical plans. If you're talking about specifically a wellness program with chiropractic in it, some of our programs do include that. But if you're talking about peeling that out and offering more of a limited benefit package with specific benefits and putting pricing around something like that, that is not something we currently have within the NRCA offering today. But depending on the demand, it's something that we are capable of looking at and capable of putting together if the demand is there. You're familiar with Kaiser, and we do compete with Kaiser out on the West Coast. There's a healthcare system there called Dignity Health System. We developed a direct-to-employer healthcare plan with Dignity as the provider that competes directly against Kaiser. One of the things we didn't talk about, Tom, and I'll touch upon it briefly here, because this question, I think, from Wendy is really about innovation. Vault is an innovator in this space. We have many direct contracts with hospital systems throughout the United States. If you happen to have a company that is regionally based, and we have a regional-based provider in your space, we have the ability to go directly to those hospital providers and their physician networks and make that your network under your plan. What that means is that, not only are you keeping local dollars local, but it means that we have negotiating power at that regional level with that provider that is likely going to be less costly than participating in a large network that you're never going to use. If you're based and your entire business is based out of, say, Seattle, Washington, and all 70 employees are within 25 miles of Seattle Washington, and we have a healthcare system in Seattle, Washington, then that is going to be a better solution than doing this huge broad network where you're paying for all kinds of things and subordinating all of the costs associated with that when you're never going to use those facilities. You could still design your healthcare plan in a manner so that if you had to use a provider outside of your geography, you would not get penalized for it. You could still have coverage, but you could really reduce your costs by taking more of a regional specific approach to your healthcare plan. I mention this only in that this is an example of how flexible and some of the things that we can do meeting each NRCA member where they are. If you're in Chicago it may be a little bit different. If you're somewhere down in the Southeast, it may be something different. We literally look at each and every opportunity as its own standalone opportunity.

Wendy Marvin: That's a huge thing for us, Ted, because you guys mentioned brokers. As an employer of 50 and under, our brokers don't have a lot of time or interest in us. They offer you, "Here's your two plans, go have fun and, and have a good day."

Ted Ryan: You got it, Wendy. One of the things you see with brokers... to be quite honest and fair to brokers, brokers have had very few options until maybe the last 10 years or so in this space. I say this space, I mean the mid-market space, employers between five and 500 employees. Self-funding solutions weren't really available to that block of business. Now they are. Like everything, over time, things get fine-tuned and it becomes available to the masses. That's what's happening in the insurance business. Unfortunately, a lot of brokers have done what's easy and that is, every year their client comes to them and says, "Jeez, my healthcare costs are rising. What can I do?" Well, the brokers traditional reaction to that is to go to Blue Cross Blue Shield, to go to United, to go to Cigna, to go to Aetna, obtain four quotes on the same or similar plan design that the employee has had for the last 10 years and they solicit a bid. Well, if you didn't need a broker to buy insurance you could do that. Spreadsheeting the major carriers year over year and choosing between a 5% increase or a 15% increase over your incumbent is not a healthcare strategy. That's not a strategy. A strategy is getting into your health plan, understanding what you like and what you don't like, and looking for alternatives that get you off of the fully-funded plans if you are suitable for self-funding. Generally speaking, roofers groups are suitable for self-funding. The reason being is, they're largely male-dominated organization, with no offense.

Heidi Ellsworth: I was going to say, "Oh, oh."

Ted Ryan: That is a group that does not have the cost of healthcare associated with it when you're talking about males between the ages of 20 and 55. The cost of healthcare for treating that population is less expensive. Self-funding solutions are, generally speaking, for healthy groups and because of that, the NRCA membership is a good fit for the self-funding type options. In the self-funding world, you can obtain basically the same benefit and you can have it, if you're a healthy group, at 15 to 30% savings across the board. I talked to an NRCA member over the last week that we spoke with a larger employer within your membership, roughly 1,000 employees. I can tell you, our preliminary numbers were that we could save them about $750,000 a year moving from the fully-funded environment that they're in today, with one of those major carriers I mentioned, and just going to a self-funded environment. They'd offer the exact same benefits, they'd have the exact same network, but they'd reduce their costs overnight by simply changing their structure. Now, I mention that because it will be relative across the board if you find yourself as a similar company, whether you're 20 employees or 100 employees, or 1,000 employees. If you're a decent, healthy group, you will see huge savings in the self-funding arena.

Wendy Marvin: Yeah, we were laughing, Ted, that that is a... I'm actually a female owner of a roofing company and so.... But to your point-

Ted Ryan: I know that, Wendy, and I think that's great.

Wendy Marvin: To your point, understanding age banding and risk association is a big deal when you're starting to talk about all this stuff. Yeah, if you're looking at a company that the demographic of most of the workers are age-banded under the age of 30, then yeah you do have a great risk class to be able to work with. Understand what you're saying, sorry we laughed there.

Ted Ryan: No, no. I knew I was walking into it by the way.

Heidi Ellsworth: I just want to-

Ted Ryan: I think it's good to have a good laugh this early in the morning, especially if you're on the West Coast it's really early in the morning.

Heidi Ellsworth: We have just a little bit of time left so I just want to make sure. I know that Lisa [inaudible 00:51:39] was speaking of women owners in Pacific Northwest we're just-

Wendy Marvin: Two of us.

Heidi Ellsworth: ... cornering it. Yeah. Lisa, I don't know if you want to come on or not. Megan's going to unmute you. I know you had a couple words or, I'm not 100% sure. I know I got you up at six this morning although you're probably up way before that. I just want to make sure that everyone knows out there we've had a lot of great questions. Wendy, thank you. You always have the best questions. I'm voting for the chiropractor too, just saying. Ted, when we talk about that plan, I want to make sure we are looking at that stuff.

Ted Ryan: Mm-hmm (affirmative).

Wendy Marvin: Thank you guys.

Heidi Ellsworth: Thank you, Wendy. Thank you so much for coming on. This is the kind of information, what we're talking about right here and really accessing the groups. This is how we can do consulting or how Ted can, not me, let me tell you. Ted, just in this last... we have a little bit, about seven minutes left. How do people... I know they go to the website, nrcahealth.com. But can you give just a little bit of a picture of the journey, what will happen once they start doing the consultation?

Ted Ryan: Absolutely. It's really, really basic. If you're a smaller group anywhere between two and say 75 lives, we ask for a current census, we ask for a copy of your existing plan, we ask for a copy of your renewal if you have it. If you don't have this year's yet, supplying your last two years' renewals, even if they're from different carriers is great. Because what that does is it just shows us your trend over the last couple of years, which is an indicator of how your population is managing its health. We ask for a copy of your last invoice to your carrier. It's four basic pieces of information. It's your current census, it's your copy of your current plan design you're offering, it's a copy of your renewal, and it's a copy of your last month's invoice. With those four pieces of information, we are able to give you a quote. If that quote is competitive and we're finding that about 80% of the time we are right in the ballpark or better, then we move into the process of getting that rate secured. If you are a larger group, larger groups we would still require an updated census for starter point. We like to see 18 months of data, then we would go through the quoting process there as well. If data is not available to you through your insurance carrier or your broker, there are some other things that we can do but that's a little bit more entailed process. But we can go and launch which is a web-based secure HIPAA portal to do personal health questionnaires, and we can gather information that way. I think the critical thing in all of this is understanding that if you are doing what you're doing today and you're not getting different results, that's the definition of insanity. Everybody on this call and every member of the NRCA that is looking at their healthcare solutions should be accessing the NRCA program to see what it has to offer them. There's no arm-twisting here. At the end of the day, once we collect the information, we're going to provide a quote, and we're going to provide consultation. You can use your existing broker if you've got a good relationship with him or her. We encourage you to do that. We're happy to work with your existing brokers. If you want to solicit a quote and look at things behind the scenes, we're happy to do that as well, and then later get an introduction to your broker. You drive the boat, not us. We're here to serve you and all we would like is the opportunity to do just that.

Heidi Ellsworth: That's perfect. I want to wrap up here. Rod, I just want to say thank you for being on here. As chairman of the board of NRCA, just any words as a fellow roofing contractor and a longterm member of encouraging people to take chance to look at this and what they should... some thoughts?

Rod Petrick: I would encourage everybody to take a look. I mean, it's been a long time coming. It's been a unbelievable lift for Tom, his group, and even the [inaudible 00:56:35] committee. Now that we've got Vault on board, and you can see the flexibility you had mentioned. I didn't know they went down to one person, and that's fantastic because we all know there's that one and two-man operations that are out there. Take a [inaudible 00:56:50], give it a look. It's a great opportunity and it helps our industry, they have this opportunity out there. I thank Ted and I thank Tom for his diligence and not giving up.

Heidi Ellsworth: Exactly. I love what you said earlier too about the affiliates. The contractors who are out there who are maybe members of Western States or [inaudible 00:57:13] or Florida or Midwest, wherever you are, state, local, also mention this in your board meetings. Mention this in what you're doing, let's spread the word because the more involved the better it will be for everybody. Tom, we're going to have you wrap it up before I talk about next week. Any last words?

Tom Shanahan: Well, yeah. First, just to thank Ted for all his hard work on this and his team. It's been just a lot of fun putting this all together if not a lot of long days getting it to here. But we're here, it's launched, people are getting quotes. [inaudible 00:57:51] along Rod. Thanks so much for joining us [inaudible 00:57:54] we really appreciate that as well, and Heidi for having us. Thank you so much.

Heidi Ellsworth: Thank you so much. Rod, thank you for being here. Ted, so informative. We all appreciate so much. Tom, as always a delight to work with you and to work with NRCA. I want to thank everybody who was on this morning. We had just a great group of folks, large numbers. We are so happy to be able to bring this kind of conversation this Q&A to the industry. Watch for Coffee Conversations. As you all know, it's under the Read Listen Watch section of rooferscoffeeshop.com. You can find past Coffee Conversations recorded. This today has been recorded so we're going to be able to share this. If you want to take it to affiliates, or other companies, or to share this information, really easy to access. I'm highly excited. I'm feeling just a little bit very blessed in the fact that in two weeks we're going to have more NRCA awesome people on Coffee Conversations, and that will be Trent Cotney and Alison LaValley, both dear friends of mine. But they're going to be here talking about legal, which almost is as scary as insurance. They're going to be talking about what's happening right now on the legal plane with COVID, what's out there with legal resources from NRCA, and most of all, the awesome legal conferences coming up in October. That is all going to be virtual, and it's going to be able to help your business like no other. Join us in two weeks, same time, Thursdays, six o'clock in the morning on the Pacific. I thank you all for being here today. Have a wonderful day. Thank you all our panelists and thank you all who are watching. Have a great day.

Ted Ryan: Thank you.

Tom Shanahan: Thank you. all

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