[00:00:00] Welcome to the KayaCast, the podcast for cannabis businesses looking to launch, grow, and scale their operations.
Tommy: Employee health benefits can be expensive. What do you do if you want to offer health benefits to your team, but can't afford it. Joining us today is Craig from kind benefits. Craig has been helping companies in our industry solve this very problem. We talk about solutions today.
That may surprise you. It was great conversation of you're planning to offer benefits to your team or doing so currently this episodes for you enjoy.
Craig, thank you so much for joining us today.
Craig: You're welcome. I'm excited.
Tommy: Being a business owner in our industry is tough. It's so tough. The margins are thin and sometimes you just don't have enough cash flow to offer your employees health benefits. What are some of the programs [00:01:00] out there that employers can take advantage of to get employees the care that they need within budget?
Craig: Yeah, that's a great question. Well, there's a lot of creative stuff that's happened actually post Affordable Care Act. And so we have a couple of different programs. I call them tax incentive wellness programs and what they do is they allow an employer to offer a voluntary benefit that they can offer literally on day one.
To employees that provides them with access to virtual health care, virtual behavioral health, Physician office visits, urgent care visits, free prescription medicines, and then all kinds of stuff diet, nutrition, wellness, health, Well being, and it's a program that actually frees up tax dollars from an employer.
So I use it as a foundational element And how I'm building benefit programs for my airport based restaurant and retail customers, as well as the cannabis dispensary owners that we're working with.
Tommy: Wait, wait, wait. Walk me through how [00:02:00] this works. It's a program that you can offer employees. What's the cost to the employee? Or what's the cost of the employer?
Craig: Yeah, actually, well, there are fees. So there are fees to it, but the net is actually a savings for the employer because it's a voluntary benefit. Plan that's what's called a hospital indemnity program. So if people are familiar with AFLAC probably everybody knows the duck Everybody knows coach prime coach Saban These programs have been around for a long time And what we've done is we've we're working with companies that have packaged that kind of policy with a lot of health care services To employees and so there's taxes there and one of the few Tax advantages that someone in the cannabis business can take advantage of so What we what we do with these programs is we incent people to participate to get healthier So it's like you're getting paid to be healthier
Tommy: how much, let's say I'm an employee and I work for you and I voluntarily go into this program. [00:03:00] How much does it cost me? Like, how does that work?
Craig: Yeah, it actually doesn't cost you anything. So the people who will enroll in this. So once we get the data, we get it right out of the KayaPush platform and we get the data, we show a proposal to a business owner and it'll show them by employee. Here's, you know, what Tommy would make extra for participating.
It's a voluntary program and you do have to participate. You know, it could be as little as 3 to 5 minutes a month. You could spend more if you're using the counseling services and the wellness coaches and all that. But if you choose to participate, your paycheck as an employee will actually go up. Same, same way that it, uh, same way for medical insurance with the difference in pre tax deductions.
It's the same kind of thing. So everybody who enrolls in this is doing so because they're getting between 10 and 50 bucks per pay period extra in their paycheck for participating because they get a pretty big non, non taxable cash, uh, claim payment in pay right, right through the KayaPush system.
Tommy: [00:04:00] Okay. I think I know what you mean. So let's say hypothetically that I'm an employee and I enroll in this plan. There's a deduction, let's say 1, 000 that gets deducted from my paycheck. And that 1, 000 that gets deducted reduces my taxable income. So I pay less taxes on it, less FICA, less Medicare, etc. And then there's a corresponding cash incentive that, um, I'm guessing it's a claim payment or whatever. That's like 90,
Craig: a claim payment.
Tommy: yeah, so that's like 90 percent of what I paid that's non taxable. So the net
difference is I only pay 10 percent of my, of my income into this plan effectively, but I've enjoyed more than 10 percent in tax savings.
Craig: Right. Exactly. And that's who's going to enroll. So we're not making any, but it's a completely voluntary plan. But we'll have a, [00:05:00] each person will have their own portal, which will describe their benefits. And it will say, Hey, Tommy, if you do this, if you enroll in this, KayaPush is a wellness program. You're going to get all these great benefits, no cost doctor visits, no cost urgent care visits.
Plus your paychecks going to go up and it's all personalized based on how much the person's making, what their withholding looks like and all of this is very easy to do right through KayaPush. Correct.
Tommy: side then, because the initial deduction that the employee takes, say 1, 000 is not taxable. They're not paying taxes on it either. So the employer
is not paying FICA and Medicare
Craig: right? So the employer in this program is going to save an average 573. Per employee per year or let's say per position. So if you're a dispensary and you've got 10 full time people enrolled So even if you're just starting out and you've got 10, that's 5, 700 bucks
Tommy: Wow.
Craig: We're going to use that to seed [00:06:00] the personalized benefits program Which I know we'll talk about later for the for the dispensaries that have under 50 people Yeah, and for uh, dispensaries that are bigger than 50 and are needing to comply with the Affordable Care Act, we can even put in minimum essential coverage for that.
So now, instead of these employers paying for a minimum essential coverage program, which let's face it, that's a private tax versus the public tax of not conforming with the ACA, we can satisfy that and actually put money back to your bottom line. And it's actually better than most minimum essential coverages.
Tommy: I was going to ask you that is, uh, do you have any advice for companies that are ALEs to fit, uh, affordable care within their budget? But I think you just mentioned that, that this
Craig: think it's, yeah, I think, you know, a lot of employees, I think a lot of the brokers that serve that market are used to more traditional employers that are easier, [00:07:00] frankly, like, so maybe if you're in California and your brokers used to working with Silicon Valley employers and they have unlimited budgets and they don't care and they just want the best, that's pretty easy.
If you're working with a company that's got a really diverse workforce where maybe, you know, 10 percent are management types who are earning significant incomes and 90 percent are hourly workers mostly making under 20 an hour and you don't have a huge budget. That's a very difficult problem. That's a whole different problem to solve.
There's a lot of stuff that can be done and it's very different than what's being offered, you know, kind of in an off the rack way right now
Tommy: Wow. If I was an employer and I'm just starting out today, I want to offer my employees health benefits, but I don't know if I have the budget. To do so, what would be your advice?
Craig: Yeah, I always like to tell people to start small and we were talking especially on insurance and keep in mind You know when you when you're hearing stuff about benefits It's way more than [00:08:00] just insurance. I know certainly employees, there will be employees at your dispensary who want access to health insurance and want to have some curation.
So it's important to provide them with some access and some advice and some advocacy, but I think you can really start small.
And again, if you're under 50, it's maybe counterintuitive to you, but most of the time at the incomes, I'm looking at the engine, salary reports, and I'm getting plenty of real life examples of the salaries. That most of the people are the hourly wages that most of the people in dispensaries are making We can actually put them into the affordable care act market with some guidance With help if they want it from from an agent who's going to represent them and we can get them insurance for a lot less Money,
We can put a benefits program in literally for zero dollars and I I kind of call it instant benefits You With KayaPush because we can really do everything through payroll. We've curated a [00:09:00] couple of different platforms People can buy corporate level, corporate quality, dental, vision, pet insurance, insurance for their gear, home, auto, everything For direct payment by the employee.
So if you're an employer, then all you have to think about is how much extra above wages Would I like to provide somebody that I call a benefit allowance? What do you want to do for your benefit allowance? You Again, we can put it right on their paycheck so that they see it's different than their wage And then our our team, um can help them if they want help to get insurance and everybody I call it personalized benefits
Tommy: You mentioned, uh, Affordable
Care Act market. What, like, what do you mean by that?
Craig: So the health exchange, so healthcare.
gov is a place we have a couple of different platforms I've got some service providers Um, and and it kind of varies by state, but we have a couple of different teams So it's a place anybody can buy insurance that that's actually starting November 1st Generally speaking between November 1st and December [00:10:00] 15th of every year Anybody in the US can purchase health insurance and people who are earning under 45 000 a year Generally can get a great plan for a hundred bucks or less per month.
It depends a little bit on On where you are, but what we've done is we've worked with again We've been working mostly with your team and you know, New York and New Jersey two pretty expensive insurance markets and it's amazing how much you can get for somebody by not offering a Traditional group health plan again.
I think the traditional solutions in benefits in insurance Don't work well for restaurant retail dispensaries. I just they just don't
Tommy: Yeah. It's oftentimes it just doesn't fit the business model.
Craig: Right. Unless
you're huge. If you're big and we can do a self funded, you know, if you're a big MSO and you can do a big, and you've got a bunch of HR people and you've got the resources to do all of that. Yeah, that's a different thing that you could put together. But most of the [00:11:00] folks that we're working with, you know, who are trying to get to multi unit, um, it's just easier to start small.
That's the only thing I, because I think, you know, People will be excited when you say, Hey, we're starting out with a hundred dollars, but you know, we've created material so that they can see why you're doing what you're doing. I'm just trying to find you the cheapest medical insurance. Cause again, most of these people are young and healthy.
Frankly, a lot of them can be covered under their parents plan. They might be covered under their spouse's plan. Single parents, we can help them find, like I'm trying to find as many people free health insurance as possible. And then if somebody really needs something more significant or more expensive on the exchange, they have got that opportunity.
Tommy: So the exchange is for individuals that make roughly 45, 000 or less.
Craig: And, and the, the premium tax credits, which makes their insurance way cheaper, and people might call it a subsidy. It's, it's literally, it's a [00:12:00] premium tax credit that gets paid to the insurance company. And that's based on Somebody's adjusted gross income and household size. And so everybody, and we've got all kinds of ways for them to figure that out.
And frankly, a lot of folks that you're hiring, especially if you're a startup dispensary, a lot of folks will already have that. I think something like 15 million people in the U S are purchasing their own health insurance.
Tommy: It doesn't make any sense to me. If I was a dispensary just starting out, I have 10, 15 employees to not usher. If I want to offer my employees benefits, healthcare, give them an allowance and push them towards the exchange because it's so much more affordable there and they're getting
Craig: Right.
Tommy: to a hospital,
Craig: it's right. And or flexibility too, right? So again, I know it's hard to talk about numbers. When you're not looking at something, but let's just say on average a group health plan is 600 bucks, right? And so an employer's got to pay 300 that means the employees [00:13:00] pay is going to be diminished by 300 bucks a month if they want to participate in medical and If they don't want to participate in medical, they don't get the 300 bucks from their employees.
So what ends up happening? I bet you in most dispensaries, let's say a third of the people want, need, whatever, will enroll in health insurance. So now you're spending 300 a person, they're spending 300 and I can promise you people don't like spending more than 100. And you're only providing a benefit for a third of your staff.
I mean that sounds like people are going to walk to somebody else who's providing something that gives them a benefit. Whereas on the, if we don't offer that program, that same 600 premium for most of your employees, So your bud tenders, your inventory. So everybody's south of general manager. Most of those folks are going to be able to get that 600 premium, but the government's going to pay 500 of it within what's called an advanced premium tax [00:14:00] credit.
They're going to send that to Blue Cross or UnitedHealthcare or Cigna. So now the employee only has 100 bucks that they have to pay. So now in this example, the employer has paid 0. The government's chipped in 500, the employee has to pay 100. So now if I'm giving the employee 100, and they want insurance, they're whole, and you just saved 200 out of that example.
Versus if you did it just in the method. Also keep in mind, again, people, well, my son, so he got his first job last year. So we, as good parents, we booted him off of our insurance, but then he changed jobs and he wanted to come back on. So he pays us. He's he's lives on his own. He's supporting himself. So he pays us, I think 150 bucks a month to be on our plan.
Cause that's what it costs me to have him on our plan. Well, if he had a traditional offer, he'd have to. would probably be, cost more than [00:15:00] 150 and then he wouldn't be on our plan. So it's cheaper for him to be on our plan, but then he's also not getting a benefit from the employer that way. Whereas in a personalized benefits approach where you're putting in a benefits allowance in KayaPush, well so now Aiden could choose to, you know, Use that money to pay us or if he didn't care about insurance or he had free health insurance or whatever He could use that hundred bucks for doggy daycare or whatever they want and they're saying hey This is a great benefit because now i'm personal that's why I call it personalized benefits now.
I could do what I want Maybe I want dental insurance. Maybe I want life insurance Maybe I could care less about insurance And I want door dash three days a week because i'm you know, i'm grinding at the store Right
Tommy: That's definitely a different
way of thinking about it. And I feel like I feel like younger adults in the new generation, that's what they appreciate. That
flexibility.
Craig: Yeah, and then people who really need it again, it's still the lowest I mean it's the lowest total [00:16:00] cost of ownership right for if you're under 50 is to do it this way because it comes down to the Employees going to look at it eventually What does this cost me to have the medical and so in my opinion?
again within the context of the culture that you're building at At your business if you educate your folks They're gonna not be so likely to go look at that other place That's paying 50 cents more an hour and has traditional insurance because guess what they might get another 50 cents an hour Which is what?
65 bucks a month and then being a traditional group plan like I talked above where they have 300 to participate in the medical plan. So now they've got now they're minus 235 bucks over your dispensary. This business you're gonna have a lot of turnover But I'm trying to help people build programs that will reduce or eliminate regrettable turnover.
Meaning the people that you really don't want to leave, don't leave. And then frankly with the [00:17:00] other partnership with ICON, we can literally do medical dental vision retirement plan as a day one benefit. And if you're paying in a hundred bucks a dispensary owner, that's going to be a very robust offering for people.
Tommy: Craig, how,
Craig, how hard is it to get help on the exchange?
Craig: It's easy, I mean again, we've got some agents There are now you have to be careful. There are lead engines out there, obviously and they'll start popping up The good news is there's plenty of people who want to take care of you The thing about the exchange is and I would just say this whether you buy Directly from Blue Cross, you buy on healthcare.
gov, you buy from our HealthSherpa platform, you use one of my partners because you want to actually talk to somebody and have them make sure that your meds are covered and your doctors are in the network. The rate's going to be the same, meaning if you buy a Blue Cross Silver plan, In Kansas City where I live if [00:18:00] you buy it straight from Blue Cross, if you bought it from one of our people, you bought it from any platform, eHealth, whatever it is, the rates are the rates are the rates.
So you're not paying any extra to have advice. Some people, they're gonna like, I'll just, whatever's free, you know, and I'll pick that and look and see if this hospital system's in it. Great, and it's very easy. I have to say the healthcare. gov is pretty easy to use. In New York, the New York State of Health, There's also health navigators is again.
It's a little clunkier, but it's pretty easy to use. So there's tons of help. If you, if you need help, we're, we've got it lined up for you, but you don't have to use our team and use whoever you want.
Tommy: Let's say I'm a discountry, I have 15 employees, and maybe I have a management team now, management owners, and I want to offer them benefits. When does it make sense to go to a PEO
Craig: great question. So a PEO is really grew out of some payroll platform and they provide, you know, some human resources, [00:19:00] services, and then they have their own in house insurance programs.
So what I always say to that person with the, whether you're a startup or you're starting to accelerate your growth. Just like anything else that you're buying Make sure you have an under you've got a very clear set of objectives that you want Know what they are and then when you go to the peo the most important thing Is to make sure they're transparent with all their fees and pricing because there are a lot of moving parts
you want to make sure that they're not capturing, unlimited, statutory deductions. And what I mean by that is, as you know, state unemployment, federal unemployment, workers comp, all of these things have maximums. And most PEOs charge that percentage on every dollar of payroll, even when they go above the maximum. So what happens is the business owner has no idea. They show you a proposal and they show you, Oh, here's what you pay for your payroll system. Here's what you pay for taxes. And here's what you pay for our setup. They don't show you [00:20:00] that these things all have caps. So that can add up as you start growing your
Tommy: Wait, that
can't be legal. Is that
Craig: Oh, it is. Yeah. Yeah. I mean, it's all in the customer agreements and if people are reading, so that's why I say, if you, you have to read that and you have to understand that and then. You have to quantify, okay, so if we're paying a hundred dollars a head, that's in your example, that's 15, that's 18, 000 bucks plus fees.
What am I getting for that? And is it worth it? Is it worth it? And I think in the cannabis business, there's probably some major sacrifices you're taking on the payroll and kind of business operations standpoint. Cause there's really, as far as I know, and I've looked, there are. PEOs that will work with cannabis based businesses, leaf touching businesses, but that's not their specialty. They might have a division of that, and there's nothing wrong, that's great. They're able to try to put something together, but I'm, I'm guessing that the nuances of their payroll aren't going to be uber sophisticated because they weren't [00:21:00] built for that.
They were built for, gray collar industries, or they were built for white collar industries that are pretty basic. reporting and functionality and tracking and inventory and demand management, all those kinds of things. You need to go in a clear eyes. I see mostly small business owners thinking. Oh, i've got to go to a PEO Because the medical is less expensive. Well, first of all You It might not be net cost if you know to look for the subsidies that we talked about the premium tax credits And if only a third of your people care about medical So maybe are saving over like typical small group or the traditional approach But then you're also paying an extra thirty or forty thousand bucks for the right To save a hundred bucks a person on five people. Like i'm not great at math, but that doesn't make sense
Tommy: It just really depends on the business fit. And, and that's really business by business.
Craig: Yeah, but I think also you'd be better off. I mean, why not get the best in class operating system for your business? Go get some great. [00:22:00] There's some great HR talent and I, you know, you guys have had people. I, Jessica Cranny, I don't think she's just doing general HR, but go, I would recommend everybody go back, every startup go back and listen to all the HR related, the recruiting and retention, your, you know, kind of six points, all those things. Those are really important. So if you have those and you can find somebody who's been in HR in cannabis, there's a bunch of fractional. Professionals in, you know, accounting, CFO, NHR, go pay one of those people 10, 000 to help come in and help you formulate what you want to have for your cultural plan.
Maybe train and do that. We'll make your benefits program cheap so you're not wasting money on benefits that you could be spending on building your culture and building your team. Right,
Tommy: Cause I don't, as an entrepreneur and as when I talk to entrepreneurs, everybody that I talk to, [00:23:00] they have the growth of scaling their business. And if you want to scale your business, you have to understand your business. And there's, you cannot push aside some critical functions in your business to an external party that does not, they're not financially invested in the success of your business or the growth of your business.
You should have a very good pulse on what you're paying for in your payroll, and not. allow or not give the responsibility on somebody else to run it for you. But I think everybody has, their lane.
Craig: A good PEO will, will answer the phone call when you call and say, Hey, my general manager, just, you know, harassed three of my bud tenders. What do I do? So they're going to respond, right?
But they're not going to be proactive. And most likely, you know, way more about, um, The weed business than they do. I think if you could get someone who's got that skill set again, now you can buy.
I mean, it's great, right? You've [00:24:00] got NetJets. You've got all this fractional stuff. You can get great talent to help you with HR. I mean, they're out there. They're out there on LinkedIn. I connected a lot of them. You guys have resources to HR stuff. The blocking and tackling stuff between what you guys would have and really any broker, not just us.
We've got all kinds of resources for the basic. Blocking and tackling as an employer, you to your points on, you still really want to own that. You can't outsource that cause again, that's part of your culture.
Tommy: Craig, I, I, like your advice. Cause I, I, it's very sound. I've seen instances before where employers just starting out, you don't really understand what your cashflow is going to be. You don't have your head wrapped around 280E, and to announce that you're going to offer your employees full blown benefits, you can't really take that back
without eroding culture. So it's better to under promise and over deliver than it is the other way around, [00:25:00] and starting slow is ideal.
Craig: So that's why we're doing it this way. If you as a small business owner have some sort of an idea about Here's what overwages what I would like to spend on benefits We can figure something out for any budget to your point let's start small and let's add in six months in six months You Call me back. We can always do the traditional thing. We can always go do that. That takes 45 days to implement, so it's not hard.
Tommy: Craig, thank you so much for joining us Where, can our listeners find you?
Craig: Sure, I'm on LinkedIn, Craig Scurato on LinkedIn, kindbenefits. co, that's C O, not com. Um, we'll have a little bit of information, on me. And then soon to be on the partner side on, uh, KayaPush. But yeah, LinkedIn is a great way to do that. And we actually have, if you, are looking for insurance, uh, Instagram sites, if you're bored, and we have an Insta kind underscore [00:26:00] benefits and Twitter kind benefits.
Tommy: Awesome. We'll drop everything in the handle. Craig, thank you so much for joining us
Craig: Great. You're welcome.
Tommy: Thank you so much for listening to this episode. That was a great conversation. If you're looking to implement health benefits in your company. Give Craig a call or look up the solutions that we spoke about. There are solutions out there that are not expensive and even free. And it'll give your team. The healthcare that they need. Again, thank you for listening, please.
Like subscribe wherever you are. It helps us out a lot. Until next time, take care.
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