Health Insurance Seminar by John Klimchak - Part 1

Welcome everybody.

I appreciate you, the first time we have a a collaborative event. Looking forward to learn more about your topic.

Especially for the CPA's here, CPA Credentials but definitely looking forward to your talk today.

Thank you sir.

I guess, let's have some quick introductions.

First I want to thank Sherry.

You're Welcome.

And I also want to thank Debbie. And I also want to thank Kyle for being a co-sponsor of this particular event. Thank you so much Kyle.

I also want to thank he's not here but I do want to thank Bruce Ligman from ARG because he's from Total Network Consulting and that's the program that's allowing us to provide the CPE credit this morning.

So that's where we get the credit from.

Fair enough? So while there's only a handful of us. It's very intimate which is great right.

If it's okay let's go around the room a little bit, maybe we'll get a little introduction who you are, what you do a little bit about what you do, and then we'll go into the presentation.

Fair enough? Jay?

Jay Showman, founder of JTS Associates, formerly known as JT Showman Company. We provide services in accounting in several genre including audit, tax, small business.

We personally concentrate on mergers and acquisitions, transactional business need, and we're dealing with multi state international tax, and that has become a big part of the practice in businesses today.

Learning how to do business on AI, as well part of reporting finance you need audits, review level, peer review or peer reviewed firm and it's very interesting and business is great we're looking for more.

John Delillo Association Development Services. My company is an association management company, we specialize in the construction trades and we basically are an outsourced administrative service for all our trade associations.

Good morning everyone, Sherry Julia. Supporting Strategies North Shore Long Island, we provide outsourced, bookkeeping, accounting, and controller services and we provide accurate timely financial statements to companies and insights into their cash flow and profitability.

Cherrie Menda, I'm a senior relationship manager here at City National Bank commercial lending anything banking. We're here to help clients and businesses grow their business or things.

Kent P. Sheldon and I'm a business consultant, fractional CFO, and bookkeeping services but closely help businesses. Work with businesses really to make them as profitable and efficient as possible.

The young ones, we help them scale in a healthy ways working some Eminae stuff as well prepping the cell or kicking the tires for potential buyers and so forth.

Kyle Griffith managing partner of the Emma BB Group, we have mergers acquisitions firm business for 22 years we have clients get ready for exit.

We help them with their assessment needs to figure out their evaluation, timing of sale and who they should sell to. We also help companies grow as well through acquisition as well.

We also have a commercial real estate company, a lot of plans for real estate, help them with their business and real estate needs.

Also the owner of Eminae Network, we are a team of advisors that advise clients on all aspects of the business sales we host a lot of educational events including one like this one co-sponsor with John's Group and yeah that's pretty much it.

My name is Mark Stone I'm a CPA. I have a practice called Sales Tax Defense, where I do sales tax consulting.

And I'm John Kilmchak. I'm gonna be speaking this morning. I'm from Benefits Evaluation Group, we help companies that are frustrated with the high cost of their health insurance concerned about ongoing ACA compliance and want to streamline the benefit administration process.

So today as we all know, healthcare in our country is a fundamental financial crisis if you will but before we get into that I'm gonna share with you a little bit of history if you will on how insurance started in this country.

Fair enough? Does anybody have an idea how health insurance started? Baylor University Hospital before the well, just around the Great Depression, what had happened was they were providing hospital services but unfortunately a lot of the people that were coming in couldn't pay.

So it was a lot of charity care is what it was, so at that particular time the hospital made a deal with a group of teachers in Dallas and they said you know what you pay us 50 cents per employee per month.

We'll provide 21 days worth of hospital coverage, if somebody were hospitalized, so that was the advent of actually Blue Cross which is a hospital affiliation and then that's spread across, that spread across the country.

But interestingly enough at that time, the doctors didn't want to be affiliated with it because they didn't want to be ontrolled by the hospitals and their payments.

Around the same time, around the same time that had happened, Kaiser Permanente was established out of California Henry Kaiser and Doctor Sydney Garfield they formed the Kaiser Permanente in California just before during World War II.

And at the peak for the for the shipyard builders, they had over 190,000 members under the Kaiser Permanente model that spread across California Washington and Oregon.

So that was pretty much the advent of private health insurance or the employer portion. In the 1940s due to the favorable tax laws, more and more employers were providing health insurance coverage.

By 1960 roughly 70% of the US population was covered under private insurance, you know due to the astronomical growth, interestingly enough during that time most of the insurance companies were community rated.

That's in New York is a community rated state which means whether somebody is 62 or 50, the rates are the same. Doesn't matter about healthcare either. In New York on their small group platform, if you're in a small group whatever your claims are, is really it doesn't have any effect on your personal rates.

What'll happen is the whole pool or the whole pool in New York or the counties are rated and that's what determine the rate is and it's not subject to the particular company that you're in.

That worked for a little while but then all of a sudden the unions found out that they were able to get more competitive rates under an experienced rate basis, if you had younger healthy younger healthy and safer industries.

So that started the advent of experience based rating. What you'll notice in most states and in all but four states, the definition of a large group is 50 or more employer employees.

New York, California, Colorado, and Vermont it's 100 or more but once you get over that level that's when the groups are more experience rated on their own loss claims, essentially is how it works.

Then also at the same time due to the experience rating model for employers that were covering their employees, it was good for those employees that were young and healthy. However, the people that are older and sick or were disabled, that became a problem, agree?

That was the advent of Medicare and Medicaid, that's when Johnson in 1960 signed into law Medicare which is basically health insurance for old people.