Here is a stat that should make every leader uncomfortable: most companies are overpaying for employee healthcare while their employees are still underserved, afraid to use it, and one medical bill away from a crisis. My guest today is Dan Cosgrove, CEO of Better Benefits USA. Dan spent over a decade at some of the most iconic companies in the world before channeling that expertise into healthcare. His mission is simple and urgent: close the gap on care, cost, and coverage for hardworking Americans.
Dan makes the case that better employee healthcare is not just the right thing to do; it is one of the smartest business decisions a leader can make. We get into how employers can actually lower costs while improving the care their employees receive by leveraging tax codes and building plans that prioritize preventative care. We talk about why the status quo feels safe but is actually costing you, and why treating employees as individuals rather than offering cookie-cutter benefits is not just empathetic; it is what they now expect. And Dan shares the story of one nonprofit in New York that took the leap and is now saving approximately 1.2 million dollars per year, which they are reinvesting directly back into their mission.
If you have ever thought better benefits were out of reach for your organization, Dan is about to change your mind completely.
To access the episode transcript, please scroll down below.
Listen in for…
- Why your employee benefits package may be costing your employees and your business.
- The ROI of changing the way your organization does healthcare.
- Why we need to think about our healthcare system as three things: a sword, a shield, and a safety net.
“Employee health plans should not be a one size fits all. It should be customization and curation based on meeting the people where they are in life. So that’s where I talk about dignity. Understand the individual.” — Dan Cosgrove
Join Maria at The Rising Executive Women’s Retreat, Nov. 4-7. Use code “Edge500” to get $500.00 off! https://retreat.therisingmastermind.com/
From Our Sponsor:
Check out this offer from our sponsor, Better Benefits USA: Are You Overpaying for Employee Benefits Without Knowing It? Take the free 10-minute benefits audit at https://findbetterbenefits.org/
Episode References:
- Take the free audit at www.findbetterbenefits.org
- Rich Dad, Poor Dad by Robert T. Kiyosaki and Sharon L. Lechter
- Tax Free Wealth by Tom Wheelwright
- Forbes Article: Your Employees Aren’t Resisting Change. Their Brains Are
About Dan Cosgrove, CEO, Better Benefits, USA:
Dan spent over a decade at Procter and Gamble, Berkshire Hathaway, and Nike before he broke away to focus on his passion of healthcare. The first healthcare company he started broke $4m in under three years. Now his nonprofit Better Benefits USA was just recognized by P&G as one of the top ten companies run by P&G alumni. His group is all about disrupting our broken healthcare system, so hopefully a few insights he shares today can be really helpful for you as well!
Connect with Dan:
Better Benefits USA: betterbenefitsusa.org
LinkedIn: linkedin.com/in/myhealthandwealth
LinkedIn: linkedin.com/company/bestemployeebenefits
Connect with Maria:
Get Maria’s books: Red-Slice.com/books
Hire Maria to speak: Red-Slice.com/Speaker-Maria-Ross
Take the LinkedIn Learning Courses! Leading with Empathy and Balancing Empathy, Accountability, and Results as a Leader
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Courtesy of our sponsor, JLG Lawyers – Download “The Human Middle,” Your free guide to resolving workplace conflict: https://thehumanmiddle.ai/
FULL TRANSCRIPT:
Maria Ross 00:04
Welcome to the Empathy Edge podcast, the show that proves why cash flow, creativity, and compassion are not mutually exclusive. I’m your host Maria Ross. I’m a speaker, author, mom, facilitator, and empathy advocate, and here you’ll meet trailblazing leaders and executives, authors and experts who embrace empathy to achieve radical success. We discuss all facets of empathy, from trends and research to the future of work to how to heal societal divisions and collaborate more effectively. Our goal is to redefine success and prove that empathy isn’t just good for society. It’s great for business. Here’s a stat that should make every leader uncomfortable: most companies are overpaying for employee health care while their employees are still underserved, afraid to use it, and one medical bill away from a crisis. That is anything but empathetic employee care. My guest today is Dan Cosgrove, CEO of Better Benefits USA, a nonprofit disrupting our broken healthcare system from the inside out. Dan spent over a decade at some of the most iconic companies in the world, including Procter and Gamble, Berkshire Hathaway, and Nike, before channeling that expertise into healthcare, his first healthcare company broke $4 million in under three years, and Better Benefits USA was just recognized by P&G as one of the top 10 companies run by P&G alumni. His mission is simple and urgent: close the gap on care, cost, and coverage for hardworking Americans. Today, Dan makes the case that better employee health care is not just the right thing to do; it’s one of the smartest business decisions a leader can make. Yes, both and in action. We get into how employers can actually lower costs while improving the care their employees receive by leveraging tax codes and building plans that prioritize preventative care. We talk about why the status quo feels safe, but is actually costing you. Why pre-funded HRAs and direct primary care models remove out-of-pocket fear and keep employees engaged and operating at full capacity, and why treating employees as individuals rather than offering cookie-cutter benefits is not just empathetic; it’s what they now expect. And Dan shares the story of one nonprofit in New York that took the leap and is now saving approximately, wait for it, 1.2 million dollars per year, which they are reinvesting directly back into their mission. If you’ve ever thought better benefits were out of reach for your organization, or you’re wondering how to exactly operationalize empathy within your organization, even with some of the non-sexy stuff. Dan is about to change your mind completely. Take a listen, Dan. Welcome to the Empathy Edge podcast. I am so excited to talk to you today about a way to show empathy to your employees that I don’t think many of us have looked at in the past as leaders. So I’m really excited to have this conversation, and I love that one of the threads of this conversation is the ROI of dignity for your employees and giving them the best benefits you can, so they can do the best work for you. So, welcome to the show.
Dan Cosgrove 03:22
Hey, Maria, thank you so much for having me. I am very excited to have this conversation today.
Maria Ross 03:27
Yeah. So, let’s start where we always start. Tell us a little bit about your story and how you even got here, and what’s the passion for this work right now?
Dan Cosgrove 03:35
Yeah. Well, a little bit about myself. Well, one on the personal side, I’m from Boston, Massachusetts. I’m originally from Cincinnati, though. Married a beautiful woman, and we have two kids, so we live in a suburb of Boston. But I started my corporate experience at Procter and Gamble. I had a lot of great experiences there. Ended up getting sold to Berkshire Hathaway, so I went over and got some experiences working for Warren Buffett. A few years after that, I got poached by Nike. Went over was the chief of staff to the CMO. Now all of those experiences taught me a lot of great things about a lot of great companies. But I’m German in nature. My mom’s name is Ilsa, and when I graduated from Richmond University, Richmond, I set a goal that 10 years after my undergrad, I wanted to break away and do my own thing, and I wanted to do my own thing specifically in the healthcare space, so it’s amazing how things line up. Is that 10 years and one month that I took a package from Nike during COVID, and I first started in the healthcare space, first trying to solve mental health, and the reason being is when I was studying the minds of consumers at Nike, I was finding that anxiety and depression were at all time highs, and people were searching for a sense of being oneself. So that’s what I first wanted to tackle. And I also know in the mental health field that I do not have the skill set. We’ll just say to sit in a room and listen to somebody talk to me about their feelings for 60 minutes. Like my wife will be the first one to tell you that. But I can do business.
Maria Ross 04:59
Yeah,
Dan Cosgrove 05:00
and so I launched a mental health company where I focused on taking care of all the back office and like the employee benefits and like pulling in potential patients, and I let my people focus on their superpower, which is actually taking care of people, because I wanted to minimize burnout because we knew that was ultimately hurting patient care. Well, as many business owners have seen when you try to really take care of your people, that involves employee benefits and healthcare and all those fun things, and
Maria Ross 05:29
the non sexy stuff, right?
Dan Cosgrove 05:30
The non sexy stuff that is just necessary in the United States, necessary to do. And I went down a rabbit hole, and I found that ultimately, for the past couple decades, we’ve been not lied to, but told a creative story as to what employee benefits should be from the insurance companies in their respective groups. So I challenged the status quo. I did something different for my own employees, and I created an employee benefits package that gives us 95% retention, and in an industry, by the way, that has only 70% retention. And I found a way that saved me as the business owner about $3,600 a year per employee, while simultaneously giving my employees better benefits. So that’s where it’s like, oh my lord, if I can figure this out, why can’t I bring this to more businesses out there because that’s what I’m trying to serve. So fortunately for me, I’ve got an awesome business partner and a great team over there, and they run things on the mental health side. So I was able to launch a new nonprofit called Better Benefits USA about four or five years ago now, where we try to challenge the current model in our healthcare industry. There’s a lot of things that are broken, but I say misaligned incentive structures are one of them. So we establish that as a nonprofit, we call it a sustainable funding model. We will only get paid if we pay if we save clients money, not how much we convince them to overpay on their various healthcare costs. So that’s a little bit about like what brings us here full circle.
Maria Ross 06:58
Yeah, yeah. Well, I mean, there’s so many things in there because you started out as an employer, as a founder, trying to figure this out. How do I give my employees the best environment so they can focus on the work, right? And this is this is the thing that some leaders who don’t embrace empathetic leadership or even really understand the power of employee benefits is it’s not about coddling your employees. It’s about maximizing, you know, if we really want to be bottom line, maximizing your most important asset. Correct. How do you optimize people so that they are operating at full capacity?
Dan Cosgrove 07:33
Yeah,
Maria Ross 07:33
and not at a fraction of it.
Dan Cosgrove 07:35
Yeah.
Maria Ross 07:35
So I love that you came at this from a. This is the problem that I had. Here’s how I figured out how to solve it. Now I want to go help other companies realize there is a better way to do this because I think you’re right. I think the idea of changing how it’s always been done is scary because we’re doing it on autopilot.
Dan Cosgrove 07:54
I mean, change is scary, and that’s why we have people. So many people are stuck with the status quo because, and I saw this in in my corporate experience as well. Sticking with the status quo never got anybody fired, but it also didn’t create any meaningful change. And I think I was put on this world to or on this earth to actually disrupt an industry that’s very broken. So I want to encourage people to challenge the status quo. Don’t believe everything that you’ve been told, and actually look for yourself and do your own due diligence. And find that change can feel scary, but the scarier thing to me is becoming complacent and doing nothing. Because when you do nothing, you lose your your best resource, which is your talent at the company.
Maria Ross 08:37
Right, and then you’re constantly playing catch up, and then your talent’s going to your competitors and innovating for them if they’re being treated well, right?
Dan Cosgrove 08:44
Yep. And your profit margins inevitably shrink, and then you eventually have to shut down.
Maria Ross 08:48
Yeah.
Dan Cosgrove 08:49
And then now you’re really struggling. So
Maria Ross 08:51
right.
Dan Cosgrove 08:51
Yeah, we want to give people a different solution so that they don’t have to be so concerned about what the future because the future is always bleak until you get there. You just have to be willing to you know make some changes.
Maria Ross 09:00
Exactly. Exactly. So, I want to talk a little bit about this idea of the ROI of dignity because this is, you know, like when I talk about the ROI of empathetic leadership and show the skeptics the bottom line. Why does giving employees, and we’re going to get into the model specifically for listeners who are curious in a moment, but I want to talk about the macro lesson here for our listeners: Why is giving employees choice and financial protection in their healthcare? How does that yield returns? So I’m the CFO. You’re telling me I need to change the way we do healthcare, which again we’ll describe in a moment.
Dan Cosgrove 09:36
Sure,
Maria Ross 09:36
that’s scary.
Dan Cosgrove 09:38
Yeah,
Maria Ross 09:38
I don’t know if that’s going to work, but what’s the ROI of doing that?
Dan Cosgrove 09:42
I mean, better retention. Better retention is one of the biggest drivers from any company, and I mean, my group is a walking case study in of itself of a 25% increase. But look at other industries that we’ve helped; at least every single one of them seen about a 10% bump in their retention. So that, in and of itself, is a strong ROI. If you can attract and retain talent, so that you’re not having to constantly, if you’re an HR person, hire a new person, hire a new person, hire a new person. Like that is a hamster wheel that creates no success. So really, retention is the ROI there. But how do you actually, you know, talking about dignity, we’re not looking at an employee as employee number one. We’re looking at them as Maria, as Kaylee, as Lisa, as Patrick, like individual people, and oftentimes we get into these cookie cutter solutions because guess what? Benefits brokers are familiar with group cookie cutter solutions. They’re not here to actually serve the individual. And I learned this part over at Nike. Like every person in today’s world likes customization and curation. Employee health plans should not be a one size fits all. It should be customization and curation based on meeting the people where they are in life. So that’s where I talk about dignity. Understand the individual, not just the macro part of I want this group benefit plan. We’re just going to force it down somebody’s throat. That never seems to work, and that’s not a surprise that it doesn’t work.
Maria Ross 11:02
Well, and that’s empathy right there. It’s really understanding not not just here’s the solution we’re going to put on you, but what do you need from your point of view? What is the type of plan or benefit? You know, whatever it is, whether it’s healthcare or something else, what is it that you actually need to thrive? So I can make sure you’re fully engaged, correct? Engaging your brain, engaging your creative thinking when you’re on the clock, when you’re under my payroll, right? Correct. So I love that. Okay, so let’s talk a little bit because then we can get into more of this. I know people are like, “Well, I don’t. What’s this model? So talk a little bit about the model because I find it interesting that you are a nonprofit. Yeah, and that’s part of this. So, explain a little bit about when you talk about custom medical benefits solutions for employees. What does it look like, and how how are you even able to do this, and not only provide empathetic benefits to employees, but save the company money? That’s the part that I’m like, wow, this is the ultimate both and opportunity. That’s why I had to have you on the show. But so tell us about the model.
Dan Cosgrove 12:05
Yeah. So I’ll take a step back. If people have never read like Rich Dad Poor Dad, it’s a great book. Well, the CPA for Rich Dad Poor Dad, his name is Tom Wilwright, so he’s like a tax attorney. He wrote, and this is just me nerding out on the tax code. He wrote a book called Tax Free Will Strategy. Now, within like those 500 pages of wonderful tax stuff, there was a line that said the majority of people think taxes are written against them because they think about that day in April. Well, in fact, 95% of the tax code is written in your favor. Most people just don’t know where to look, and so like working off of that hypothesis of okay, if 95% of the tax code is actually written in our favor, what needs to be true in order to make these things basically subsidized by Uncle Sam and not subsidized by me as the employer? So it’s just again, you just have to change the lens that you’re looking at the problem from, and you can find some real meaningful solutions. So oftentimes we’re going to do a phase one and a phase two approach. Phase one is truthfully like tax codes out there that we can take advantage of to give employees better benefits while simultaneously saving the employer money and saving the employee money. Once we do that, we then open ourselves up into phase two, which could very well be helping people get access to health insurance and healthcare at a fraction of the cost. So let’s hit a few tax codes that I think people might find really interesting. For one, we have a lot. Careful, I know tax codes. Very interesting stuff.
Maria Ross 13:28
Tell me more, Dan.
Dan Cosgrove 13:30
But you could do like say you have a lot of remote employees. Immediately, you should be giving them basically you cover their internet and like cable expenses and energy expenses or electric expenses because you can give them $1 for dollar out of a non-taxable basis. So, like I can give every employee basically 100 bucks a month to cover their internet and energy, and that can be paid $100 to them instead of losing 30% of that in taxes. So that’s a great way to give people a meaningful bump in pay. All right, so let’s just look at various tax codes, and I’ll I’ll rattle off a few of them fast, and I’ll do a deeper dive into one that I think is really going to be interesting for people in terms of healthcare. One, if you have remote employees, just think about giving them utility or energy stipends because those can be done tax free. Or if you have employees that have young kids, give them the dependent care assistance programs because you can put about $7,500 a year tax free to if you have employees with student loans which we know there’s a lot of those out there you can give them about $5,200 a year tax free so those are just some tax codes but the biggest one that I think is in unlocking where our conversation is going to be centered on today is how do we make healthcare more affordable in America and that is hidden under Section 125, no different than HSAs and FSAs. There’s an optimized Section 125 people can be doing, and it’s focused on preventative healthcare, helping people stop a healthcare condition before it starts.
Maria Ross 14:53
Yeah, because
Dan Cosgrove 14:54
unfortunately, like the data out there is pretty overwhelming. We spend four and a half trillion dollars a year on chronic care conditions. Alone in America,
Maria Ross 15:00
right? We’re horrible at preventative.
Dan Cosgrove 15:02
We’re not good at
Maria Ross 15:03
like well, and I wouldn’t even say we’re good at dealing with it when crisis hits either. But yeah, a lot of our problems could be eased if we had plans that talked. You know, and some of it is nonsensical. You’re like, especially you know, as a woman in the healthcare system, I’m like, you’re not going to cover this, but if this goes wrong, do you know how much more money you’re going to have to spend on me if I don’t get this checked once a year or twice a year or whatever
Dan Cosgrove 15:30
it is?
Maria Ross 15:30
So I love that this poor solution is very empathetic in that it’s giving people that opportunity to prevent the catastrophic. And you know we haven’t even talked about how much stress and anxiety is caused to employees because of medical debt.
Dan Cosgrove 15:45
Correct.
Maria Ross 15:46
Right.
Dan Cosgrove 15:46
Correct.
Maria Ross 15:47
So yeah. So sorry. Go ahead. I just no yes preach go.
Dan Cosgrove 15:50
Well, talking talking about medical debt, you have a million Americans every year file for personal bankruptcy with out of control healthcare expenses.
Maria Ross 15:56
Absolutely.
Dan Cosgrove 15:57
And that’s probably a lower number because like I’m a family of four. If I file for bankruptcy, it’s not just Dan impacted. It’s my wife and kids too.
Maria Ross 16:04
Right, right.
Dan Cosgrove 16:06
So we need to give people proper safety nets because I personally believe we live in the greatest country in the world, but our healthcare systems let us down, and not every American deserves access to healthcare. We just need to find a way to make it more affordable for them. Yeah, and so that’s exactly what we’re trying to do. Is we’re trying to use the tax codes in such a way to make it a financially smart investment for both employees and employers to actually consider their healthcare costs in a more serious fashion.
Maria Ross 16:30
Absolutely. Okay, so talk a little bit about the preventive care component because that’s one that is often missing in the cost cutting measure.
Dan Cosgrove 16:37
Yeah. For sure.
Maria Ross 16:38
Oh, this plan is cheaper, but it doesn’t include any preventive care for people.
Dan Cosgrove 16:42
Yeah, for sure. So let’s think about our healthcare system in three things. I’m going to give you a sword, a shield, and a safety net.
Maria Ross 16:48
Okay.
Dan Cosgrove 16:49
So a shield is going to be your traditional health insurance. We’re going to save that. We’re going to table that for later. So now let’s talk about a sword and a safety net. The sword is going to be focused on preventative healthcare. Why are we doing that? I would say consider the Netflix model. We unfortunately, right now in America, we make money off of people being sick or injured. It’s a fee-based system in our healthcare system, which is truthfully screwed up. So we’re trying to change that model. We want to do value-based care. So that means just like with Netflix, whether you watch one show on Netflix or 100 shows on Netflix each month, you’re still paying the same amount. Same thing with our healthcare. Whether you see one doctor or 100 doctors, you’re still going to pay the same amount each month. So by doing that, now when that you know like that little cough is just a cough, you can still contact a doctor. You know just by having your phone right there. So instead of you know trying to battle through that cough, because unfortunately sometimes when we battle through that, that turns into something more severe. It could be pneumonia. It could be something else that then keeps me out of work longer, or worse yet, turns into a major medical situation, which I’m no longer returning to the workforce.
Maria Ross 17:49
Yeah.
Dan Cosgrove 17:50
So that’s what we’re trying to do: is give every employee plus their spouse, kids up to the age of 26, basically free access to healthcare. That’s our goal there, and we’re all doing that just utilizing the tax codes in their favor.
Maria Ross 18:01
Yeah, I love that. I love that. So, and then talk a little bit about phase two.
Dan Cosgrove 18:06
Yeah, yeah. So once you do phase one, again, section 125 is just like an HSA. What does that mean? You’re it’s a pre tax deduction. So when you’re reducing your taxable income, it could actually unlock the ability for you to qualify for subsidized health insurance, and we know unfortunately the subsidy cliff kicked back into place in 2026. So you need to actually help people get below the subsidy cliff to actually qualify for subsidies. But like in Massachusetts, I’ll just use as an example because that’s where I live. If you are just $1 below the subsidy cliff, you qualify for basically a $350 a month subsidy for your health insurance. If you are $1 above it, you’re paying full price at like 700 bucks a month.
Maria Ross 18:45
Wow!
Dan Cosgrove 18:46
And that is the difference between giving somebody affordable access to healthcare and not. So with phase one, because we’re able to reduce people’s taxable income via all those things that I kind of rattled off earlier. Well, if you’re able to reduce somebody’s taxable income by like $20,000, which truthfully you can. Yeah, you can legally do that. You’ve just found a way to take them from paying 500 bucks a month on their health insurance to sometimes free,
Maria Ross 19:10
right?
Dan Cosgrove 19:10
And that’s all again going to be subsidized by the government and their various tax incentives,
Maria Ross 19:15
right? And for anyone listening, we can have a whole other conversation on if it’s fair to have taxpayers subsidizing for employers, but we’re talking about the majority of people in this country who the reality is they get their health care through their employer. So if we can make that, if we can at least fix one part of the system, we can tackle the rest, right? So I want to talk a little bit about this idea of doing right by your employees, right? Being an empathetic leader and saying, “Oh, this does matter. I’m not just going to burn, churn, and burn through people because I’ve got not only the costs of hiring and recruiting, but training and the loss of institutional knowledge and all the things that come with retention issues. Right? Yeah. So. What has been the biggest obstacle that you hear from companies to actually change to a way that seems to, on this, you know, we haven’t dug in, but it seems to, on the surface, benefit both the employer and the employee? Because I’ll tell you why I’m asking it this way. Because I’m always fascinated by the inability to embrace both and leadership. I talk about that all the time. That we’re stuck in these binary models of it’s either I save money or I do right by my employees.
Dan Cosgrove 20:29
Correct.
Maria Ross 20:30
And you’re presenting a model that is the epitome of both and. Correct. So where’s the objection? Because it
Dan Cosgrove 20:36
feels scary. Different feels scary. Like, and it’s just, and again, I I challenge people. I want to walk them through the compliance piece, and they’re just like, “How is this legal? You know, I’m just like, I’ll show you in the tax code where it is written. But for every person that says it’s legal to do it, you’re going to see plenty of opposition that says, “Nope, it should be taxable. Looking like that, I could go on agnosium of all the various things that the IRS puts out in memos and opinion pieces, but it feels scary. So most people aren’t going to do anything,
Maria Ross 21:05
right?
Dan Cosgrove 21:05
What I try to help them understand is, I believe right now we are in the third evolution of employee benefits. The first one was back in basically the late 70s, early 80s, where tax brackets were really high. So what was created? This thing called the 401k.
Maria Ross 21:21
Yep,
Dan Cosgrove 21:22
and it was a great vehicle for really rich people to put away $50,000 a year at that point in time, which is like $250,000 a year in today’s terms. Right, so they could put $50,000 a year tax free.
Maria Ross 21:33
Right.
Dan Cosgrove 21:33
Well, guess what? A few years later, people start figuring out. It’s like, oh man, I could put this in my employer plan because we know pensions were starting to go away.
Maria Ross 21:40
Right.
Dan Cosgrove 21:41
And so for several years, I think there’s like five or six years. There’s just a battle between these employers putting in place and the IRS saying, no, no, no, all these things need to be taxable income. They need to be taxable income. Guess what? It then became codified into law into the mid late ’80s, and now we know the 401k as it is today, one of the best retirement vehicles for employees out there.
Maria Ross 21:59
And we hardly have companies offering pensions now because of it? Yeah,
Dan Cosgrove 22:02
correct. So, so like it takes time for people to adopt there. Fast forward another 20 years. There’s this thing called the HSA that came out in the early 2000s, and it was called the greatest thing ever outside of a 401k because it had triple tax advantages. Well, people fought back against this so hard, they fought back for a good five years. Then 2008 occurred. People are living paycheck to paycheck. The Affordable Care Act had some impact on, let’s just say, healthcare costs. So what did employers have to do? They had to move to high deductible plans. The HSA became the greatest thing since you know sliced bread.
Maria Ross 22:38
Right.
Dan Cosgrove 22:39
So it took 10 years from the HSA’s creation to basically being recognized as like you should be using this vehicle as the 401k on steroids.
Maria Ross 22:46
Yeah.
Dan Cosgrove 22:47
So fast forward another 20 years, here we are again. We’re talking about another employee benefit under another tax code, and people are pushing back against it because you also have to look at who’s entrenched, who’s getting money right now.
Maria Ross 22:57
Yeah.
Dan Cosgrove 22:58
It’s a complicated and purposely confusing by design healthcare system. Yes, the old guard doesn’t want people saving money on their healthcare costs.
Maria Ross 23:05
No,
Dan Cosgrove 23:05
they need costs to go up because it’s written into law. Like medical loss ratios, they can only take about a 15% profit margin on the cost of medical loss ratios. So that’s why people’s care isn’t going down.
Maria Ross 23:20
Right,
Dan Cosgrove 23:20
they need to grow the pie larger, so their 15% becomes a bigger number.
Maria Ross 23:24
Yeah.
Dan Cosgrove 23:24
So yeah, the old guard is going to fight this tooth and nail. But I just tell people like, look at what’s actually written, and that’s where you’re going to find the truth. Don’t listen to somebody that might have a misaligned incentive structure that’s going to get, you know, a 5% commission on how much your insurance costs. Right.
Maria Ross 23:40
Right. Well, and what I love about this is it dovetails so well into this idea of, as I said earlier, like operationalizing care for your employees, making it real through this kind of thing, and this idea of now that you know this is out there. I talk about this when I present data around empathetic leadership and all the ROI it brings, you can cite all the other horrible leaders or companies with horrible cultures who are successful that you want. Of course, they’re still going to exist, but now you know, so you can do better. Correct. If now you know that this is another way to operate and another way to help your employees, yeah. Now that’s on you. Yeah. You know, it’s not. Oh, it’s the system. I’m stuck in it. I have to do it this way. Now you have to make a conscious choice as a leader of a company, as a head of HR, to say no. We’re going to do this because we know it’s it’s good for us and it’s good for our employees at the same time. So it’s very similar in that there’s so many of these things that even though it’s change, because our brains react to change the same way, whether it’s good change or bad change. By the way, I did an article for Forbes on that. I’ll link to it in the show notes. But this idea of well, now you know, so there’s no excuse to say, oh, I’m a victim of the system. Sorry, we can’t do right by our employees because this is the way everybody does it
Dan Cosgrove 25:00
correct
Maria Ross 25:01
Now you’re making a choice that there’s another way to do this.
Dan Cosgrove 25:04
You nailed it. But when you think about every innovation and disruption, you have that adoption curve, right? We’re still in that early adopter phase. Yeah, you have to have people that you know have the courage, truthfully, to consider something new because they’re the ones that are going to be setting a new benchmark. And like again, I did it first in the mental health field, and yeah, I will. I’ll brag about it. 95% retention. We were 1% off of being one of Inc. best workplaces. Like that’s really hard to do when you’re competing with like the Googles and the tech companies of the world that give away like free cars and free lunch every damn day. Right.
Maria Ross 25:34
Right.
Dan Cosgrove 25:35
So I’m really proud about what we’ve done there, and my goal, truthy, is to force my competition to do the same thing,
Maria Ross 25:41
yeah.
Dan Cosgrove 25:42
Like let’s just raise the bar collectively together across all industries.
Maria Ross 25:46
Yeah,
Dan Cosgrove 25:46
I truthfully want to make the companies that are not willing to take care of their people. I want to make them obsolete because they should be taking care of their people. And if you’re not, if you’re just focused on how much is in it for me, yeah, that’s not a great way to live this life. No. So it’s all about giving back and providing real, meaningful value to to humans.
Maria Ross 26:05
Is that why it’s a nonprofit model?
Dan Cosgrove 26:07
The nonprofit model is for a few reasons.
Maria Ross 26:09
Okay,
Dan Cosgrove 26:10
one, we want to get paid just based on how much we save clients money. You’re a little bit more restricted if you’re like a benefits broker for profit model. Like people can actually say like, oh, you have to do this. Evidence by Gallagher. Like, if you look at them since over the last 10 years, I think they’re up 917% in the stock market price. So again, their value is just significantly higher because people dictate it. The other reason of being a nonprofit, when you look, unfortunately, with a lot of healthcare innovations, the little guys get in there, they start disrupting the big guys, and what occurs, they get acquired,
Maria Ross 26:42
yeah,
Dan Cosgrove 26:42
and then that new disruptive technology or idea or service gets pretty much killed and put on the top front end, yeah, yeah. So as a nonprofit, it doesn’t say we can’t be acquired; just makes it a lot harder,
Maria Ross 26:55
yeah.
Dan Cosgrove 26:56
So we’re we’re purposely trying to make it difficult. Like we like that insurance companies don’t like it.
Maria Ross 27:02
Yeah, yeah.
Dan Cosgrove 27:02
It’s a that’s a badge of honor for us, but that’s kind of why we’re a nonprofit.
Maria Ross 27:06
Oh, I love that. I love that. So, what you know, as we kind of wrap up,
Dan Cosgrove 27:10
yeah,
Maria Ross 27:11
what is your thought for leaders that are listening? Well, actually, before we wrap up, I would love to hear an example of one of your clients and sort of the before and after.
Dan Cosgrove 27:20
Oh man,
Maria Ross 27:21
and how that impacted their employee retention, morale, productivity, all those things.
Dan Cosgrove 27:27
Yeah, gosh. All right, let me let me think of a good one. All right, this is I like this one. So we’re actually working with another nonprofit in New York. I’ll just leave it at that part.
Maria Ross 27:36
Uh huh.
Dan Cosgrove 27:37
And a lot of these people are not earning a great living, maybe 50, 60k a year, which we know in New York is expensive. Yeah, exactly. So
Maria Ross 27:47
yeah,
Dan Cosgrove 27:47
we put in place, of course, the preventative healthcare program. That was phase one, and they had about like 200 or so employees. So we put in place the preventative healthcare program first, where again, with how we structure it with the tax code, we can actually give most employees about a two to 4% net pay increase. Give them our entire family access to basically virtual healthcare, prescription coverage, access to like specialty drugs, like you know the weight loss drugs that are you know crazed right now. We don’t think people should ever be paying 1000 bucks a month for that. They should be paying closer to like 250 a month is really the real price. So we got this preventative healthcare program put in place for the employees. Well, again, since we were able to reduce their taxable income, a lot of these people that were earning 60,000 a year, well, on paper their gross or modified adjusted gross income, which is aka taxable income, it fell from 60 down to 45,000. Well, what did that then do? We then went and looked at their health insurance costs, and we said, “Okay, again, in in New York, health insurance is pretty expensive, so the individual plan was like 1200 or 1500 bucks a month for like not a very good plan.
Maria Ross 28:53
Uh huh.
Dan Cosgrove 28:54
And the employer was paying like 70% of it. The employee was paying 30%
Maria Ross 28:58
Right. Nobody wins. Nobody
Dan Cosgrove 28:59
wins. Nobody wins at all, so we looked at it, and this is again where we we really like to take a contrarian perspective.
Maria Ross 29:06
Yeah,
Dan Cosgrove 29:06
we looked at it like, okay, you just reduce that person’s taxable income. Let’s see what they would qualify if we went to the individual marketplace. Now, again, we took them to the individual marketplace because most brokers don’t take them there because they don’t get paid by the insurance companies when you do that. So we’re just like again, we don’t want to get paid by them, so we looked at it. And in New York, if you’re earning about $45,000 a year of taxable income, you get free health insurance from the state. Free, $0 deductible, $0 premium. I think is like a $2,200 maximum out of pocket.
Maria Ross 29:34
Uh huh.
Dan Cosgrove 29:35
So we went from these employees paying what is that? If it’s 1200 bucks a month, they’re paying like 360 or 400 out of pocket, and the employer is paying 800 to paying $0. So we essentially save the the employer 1000 bucks a month. We save the employee their 300 bucks a month. Now, again, this takes it one step further because they did have 200 employees. They were larger than the applicable large organization. Which is over 50 for an employer. Legally speaking, you have to offer health insurance. If not, you get hit with a tax penalty A. Sometimes a tax penalty B. Well, we looked at and we’re just like, wait a second. Tax penalty B is basically $6,000 a year for every employee that gets a subsidy. You’re paying $12,000 a year for every employee to have crappy health insurance. All right, go ahead. Get the tax penalty. Take the tax penalty. Like pay the $6,000 tax penalty three years down the road. Whenever they do finally come back and ask for it, you just save $6,000 a year per employee. You saved your employees basically $3,600 a year on health insurance premiums, and you just gave them free access to health care instead of overpaying on a absolutely horrible employer plan. And guess what? The only person that pushed back against it was the benefits broker because they get paid on that. So, like, right, that’s just like one example of groups. Like, there are so many creative things you can do out there, but we try to take the emotion out of healthcare decisions because truly, it is an emotional based thing.
Maria Ross 30:56
100% Yeah,
Dan Cosgrove 30:58
we try to apply math and logic, right? And sometimes people like it. Sometimes people are just like, “Nope, no way in hell am I touching this. Because again, different feels scary, right? Nobody’s been fired forever changing the status quo,
Maria Ross 31:09
right? Well, and I think the other thing that you’re changing is, like I said, the amount of care and the quality of what they’re able to access, which again takes a huge burden off your employees from stress, from anxiety, from fear, and now they can focus on their work.
Dan Cosgrove 31:26
100% right? 100% And think about think about this also for that nonprofit. If you just save $6,000 a year after that tax penalty per employee, well, all right. So 200 employees. Help me with my math here. Six. You’re talking the wrong woman, 200,
Maria Ross 31:41
120,000, 100.
Dan Cosgrove 31:43
No, it’s more than that. That might be 1.2 million. 1.2
Maria Ross 31:46
million, maybe.
Dan Cosgrove 31:46
Yeah. So if we do that, I’m just checking my math here too, because yeah,
Dan Cosgrove 31:50
beauty of calculators. Yeah, 1.2 million. Yeah. So imagine you, if you’re that executive director, you just say $1.2 million. It’s going to be a lot easier to fundraise when you’re asking charitable donors not for extra money to cover overhead expenses that you can’t control, because you actually did control that overhead expense, and that 1.2 million can actually be reallocated to actually helping serve the community that your nonprofit was created for. So, like, I love trying to find these solutions for groups because, again, most people are not creating a business to say, “Hey, how much can I pay the insurance companies? That’s typically not why they created their their companies, and so now now we just want to help them avoid the middleman and yeah, actually give their employees more meaningful benefits.
Maria Ross 32:34
Well, and I think the takeaway lesson here is that there’s so many opportunities you have to take better care of your employees within the policies within the the systems that you’re engaging in, and this is where I always talk about operationalizing empathy. It’s not just a feel good thing. It’s how are we taking care of people through our systems, our policies, our decisions that we’re making, so that they know that we have their back.
Dan Cosgrove 33:03
Yep.
Maria Ross 33:03
And oh, by the way, if it benefits us too, great. Yeah. Yeah. So, what would be sort of a parting thought you have for listeners right now, whether they’re an HR leader or a CEO? Yeah. Who are like, this sounds intriguing, but like, what would be the biggest mindset shift you would want people to have around doing more to do right by their employees?
Dan Cosgrove 33:28
Yeah, I would say like if you’re a CEO or CFO listing right now, it starts at the top. It starts with you. All too often, these healthcare decisions get you know CEOs and CFOs and CEOs all just think like, well, this isn’t sexy, so I’m just going to send this over to HR and deal with it. And then HR, I love HR to death, but HR, our strong suit is not math. And so commonly in HR, we’re just like, oh, this sounds kind of crazy. Let me send it to my benefits broker for perspective. Well, that you’re sending information to the same. It’s a conflict of interest. Yeah, yeah. So, so really, the only way that you’re going to create change is if if it starts at the top and they are bought in. They’re the ones in those initial meetings having those conversations, saying like, “I truthfully want to solve for this. It’s not a, “Oh, I want to solve for this, but I really don’t want to spend the time on it. Because if you’re not actually going to spend the time, you’re not going to create more meaningful change. So I just say, starts at the top, buy in, be committed to it. Actually, mean what you say instead of just you know putting words out there.
Maria Ross 34:26
Thank you so much. This has been so fascinating to hear and learn about. And any way that we can amplify solutions like this to organizations and HR professionals and CEOs and founders, I want to use this platform to help them take better care of their employees. So, Dan, thank you so much for coming on today. We’re going to have all your links in the show notes. But for anyone that’s exercising, hopefully, while they’re working out, while they’re listening to us, taking care of themselves, where’s the best place they can find out more about this?
Dan Cosgrove 34:56
Yeah, Emory, again, thank you for having us on the show. We really. And hopefully we can at least impact one company and all their employees just from this show. So the best place to find us is BetterBenefitsUSA.org. That’s our main page. They can play around in there, get in contact with our team. If they actually wanted to do an audit of their benefits without ever having to talk to our team, and they have like 10 minutes of the time, we have a sister site called FindBetterBenefits.org. Like just go there, put in. I think there’s like 12 questions. Just fill it out, and then somebody from our team will quickly get in contact with them to say like, yeah, you would probably save 1000 bucks here per employee, or oh no, you’d save about 5000 bucks a year per employee.
Maria Ross 35:34
Yeah, just do some of the math, and I think we have a special URL for our listeners.
Dan Cosgrove 35:40
It’d be findbetterbenefits.org is the best place to go for their. We’ve created that landing page for them to do that that little audit of their own employee benefits.
Maria Ross 35:48
Great, thank you so much for that, and thanks for reaching out and for sharing this with us. This is great, love it.
Dan Cosgrove 35:55
Thanks so much, Maria,
Maria Ross 35:56
and thank you everyone for listening to another episode of the Empathy Edge podcast. If you like what you heard, you know what to do. Please rate and review and share it with a friend or a colleague. And until next time, please remember that cash flow, creativity, and compassion are not mutually exclusive. Take care and be kind. For more on how to achieve radical success through empathy, visit theempathyedge.com. There you can listen to past episodes, access show notes free resources, book me for a keynote or workshop, and sign up for our email list to get new episodes, insights, news, and events. Please follow me on Instagram at Red Slice Maria. Never forget, empathy is your superpower. Use it to make your work and the world a better place.
