Health care turmoil triggers more consumer use at Freedom Benefits

The past week was a crazy period for U.S. health insurance. Consumers are understandably confused. The turmoil resulted in a higher level of user activity for Freedom Benefits, a web-based service that directs online consumers to various health insurance exchanges.

Within a period of just one week – Monday April 25 to Monday April 1 – we saw the executive branch of the federal government make a surprise announcement that it will not support the popular features of the Affordable Care Act in federal court, then the Trump administration’s new alternate small business health plan was defeated in federal court, then the President denounced Obamacare and promoted his party’s health plan that does not exist, then the White House announced that it will not make any more health care push until after the 2020 election. Whew!

The commotion triggered a higher than usual amount of consumer web traffic, calls and emails to the OnlineNavigator service supported by Freedom Benefits. Our focus is to direct consumers and small businesses on the options as they exist under the law now, and deliberately staying away from the confusing news headlines that cause speculation about what options may or may not exist in the future.

Freedom Benefits’ simple strategy of focusing on facts, not opinion, is apparently paying off in this tumultuous and otherwise divisive environment. The number of enrollments in currently available health plan options effective April 1 appears to be at the highest level since the implementation of the Affordable Care Act that began in 2010.

Freedom Benefits was founded by Philadelphia accountant Tony Novak to provide health insurance support to regional construction workers. It grew to a national service by 1999 when Novak joined the Board of the National Association of the Remodeling Industry. Novak believed that by being insurance-licensed and up-to-date on health insurance legal and market issues in all 50 states and DC, consumers would use an online adviser that eventually became the trademarked OnlineNavigator service. Novak was then asked to testify before Congress on Republican Party ideas to modernize healthcare for small businesses under the Bush administration. Most of Freedom Benefits’ business assets were sold to a public company prior to passage of the Affordable Care Act (ACA). After enactment of the ACA, Yahoo Finance and the Better Business Bureau were critical of our fee-based business model  and so Freedom Benefits has been mostly dormant since then. Freedom Benefits is not an insurance company, producer, exchange or agency. It has no direct revenue and web site operating expenses are paid by another related business. It is still not clear that a business model that does not collect leads or make sales can be successful. Freedom Benefits’ sole function has been to make referrals – both paid and unpaid – based on specific consumer circumstances. Occasionally that advice is combined with basic related personal or business financial planning.

The recent surge in consumer activity triggered discussions about reviving the Freedom Benefits brand and updating the services offered. Last week a Philadelphia area employee benefits and health insurance business wrote that they now perceive Freedom Benefits as a competitor. That strategic business planning is ongoing and no decisions are finalized.

 

Simplify the business of life

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How do you plan to simplify the business of life?

This blog title is a slogan used by the world’s most popular personal and small business software maker. For my purposes as an adviser, I’m using it here to refer to the accounting for essential financial transactions between an employer and employee: payroll, taxes and employee benefits.

Small businesses have wide latitude in some areas of their financial operations (offering employee health insurance, for example) and little margin for variance in others (like employee wage taxes) . Yet the goal is the same for all: accomplish these transactions and reporting requirements timely and accurately at minimal time and expense.

The best practice

Today’s small businesses have enormously powerful tools available at minimal cost. To make the most of these technologies it almost always makes sense to integrate the small business banking, payroll, taxes and employee benefits under one platform with one internal person (often the small business owner) and one outside person (usually the accountant) in charge of these systems. Have a clear written agreement on who is responsible for specific tasks, a timeline and provisions to handle unexpected events. (A copy of my small business engagement agreements are available at tonynovak.com). Integration of services using the latest AI driven technology almost always saves time and money.

What can go wrong?

Of course, very few small business owners deliberately choose to fail on these essential accounting areas. Yet available data indicates that a high percentage have run into trouble in the past. Limited data using newer technology is far more favorable. As an anecdotal observation, the percentage of employers with a wage tax violation is somewhere around 25%. The percentage of clients with a violation using current wage tax platform is 0%. The technology works! The most common problem issue is lack of appropriate budget to accounting functions. A typical small business devotes 2% to 4% of its gross revenues on these requirements. These are benchmarks and certainly some fall outside that range. But businesses that go much below are typically the ones that run into tax, accounting or financial management trouble.

How to look for savings

The easiest way to is to request an initial analysis of your current financial accounting operations. An experienced adviser can compare this to the norms among similar small businesses and recommend approaches that are working better lately. This service is available for a small fee that is likely only pennies on the dollar of savings available. The analysis process from beginning to end likely takes a few discussions totaling an hour or two. When I handle these engagements I prepare a one page report for the business owner in checklist format so that we can discuss and easily prioritize the areas of potential gains. In today’s rapidly evolving technology environment, it makes sense to re-evaluate every two years or so. In most cases, business owners tell me they were not even aware of the existence of the most common cost-saving and time-saving tools.


My question to other small business owners: How do you plan to simplify the business of life? I would be pleased to hear your thoughts. Reach me online or call/text 302-404-3263.