May 27, 2025 • 34 mins
After a sudden health crisis rocked his family, Patrick Hall made an unexpected move: he bought a flower shop. Elan Flowers wasn’t just a creative venture—it was a lifeline. For Patrick, becoming a small business owner was the only way he could guarantee healthcare, financial stability, and a sense of control in a moment that felt anything but secure.
In this episode, Ben Walter is joined by Dr. Laurie Santos, Yale professor and host of “The Happiness Lab,” to talk about how stability, risk, and security shape our sense of wellbeing. They’re also joined by Dan Mendelson, CEO of Morgan Health, and Stacy Edgar, CEO and Co-Founder of Venteur, to explore the real-world challenges of accessing health insurance as a small business owner—and what it takes to navigate a system that often leaves entrepreneurs behind.
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Speaker 1 (00:04):
Ruby
Speaker 2 (00:08):
When Patrick Hall needed a steady income and solid health insurance,
he did what few think to He bought a business.
Speaker 1 (00:15):
It was out of desperation. We were basically facing medical bankruptcy. I started looking at florists for sale because it was the only thing that I thought I could do.
Speaker 2 (00:26):
He found the perfect fit, a company called Elan Flowers.
That's ELAN, no relation to the famous tech mogul. When
Patrick and his wife bought it in twenty fifteen, the
shop had already been in business for thirty years.
Speaker 1 (00:39):
My father had always said, by an existing business that
has a cash flow and it'll pay for itself.
Speaker 2 (00:47):
Well, it took some time to get the business up
and running under Patrick. It wasn't the core business that
worried him.
Speaker 1 (00:53):
I just loved flowers. I wasn't afraid of that. I'd
grown up working in gardens and with my grandmothers and
great grandmother and it was something that was easy and
fun for me to do. The hardest part was dealing
with leases and landlords, all of the regulations, the not
flowers part, the not flowers part.
Speaker 2 (01:13):
Yeah, and this episode is a deep dive into the
proverbial not flowers part of running a small business. Especially
healthcare and insurance. It's one you might want to listen
to with a notebook because we have some tips for you.
Welcome to The Unshakeables from Chase for Business and Ruby
Studio from iHeartMedia. I'm Ben Walter, CEO of Chase for Business.
(01:38):
On the Unshakeables, we're sharing the daring moments of small
business owners facing their crisis points and telling the stories
of how they got through it. We hear from many
of our clients that the administrative side of running a
small business is often the biggest challenge for them. Now
that makes sense to me. You start a business because
you have a great idea, or you love a product
or a specific service, but then you actually have to
(01:59):
run the administrative side of the business when you start
scaling and bringing in employees, there are certain expectations that
will come from those who want to accept a job
with you.
Speaker 3 (02:08):
We live in a world where small businesses need to
provide health insurance to their workers to compete.
Speaker 2 (02:14):
That's Dan Mendelson, CEO of Morgan Health and one of our guests today. I wanted to use this episode to specifically talk about health insurance and smallPage 2 of 15businesses. We called in the experts to give you some advice firsthand because the marketplace is confusing, and there's a lot of conflicting advice about how small businesses should actually handle benefits. According to the Business Leaders Outlook survey results from January of this year, 65% of small and medium businesses surveyed offer health insurance, but that's down from 71% last May, a concerning trend. We'll hear more from Dan later, but I'd also like to introduce you to Stacy Edgar, who’s CEO and Co-Founder of the health insurance start-up, Venteur.So we're thrilled to add Stacy to the mix.
Speaker 4 (02:56):
Thanks for having me.
Speaker 2 (02:58):
And psychology professor and host of The Happiness Lab, Doctor
Laurie Santos is back to join us. Laurie, so nice
to see you again. Great to have you back.
Speaker 5 (03:05):
Thanks so much for having me back.
Speaker 2 (03:07):
We have a full house today and that doesn't even
include our guest on today's episode, Elan Flowers from.
Speaker 1 (03:13):
New York, New York.
Speaker 2 (03:16):
Tell everybody just to start. What is Elan Flowers? How
did you come to be part of it?
Speaker 1 (03:21):
Elan Flowers is a luxury flower shop in downtown Manhattan.
It's been around since nineteen eighty three. My wife and
I purchased the business back in twenty fifteen, and we
just celebrated ten years on April ninth. So it's over
forty years old and you've owned it for ten that's correct. Basically,
we've always tried to stay true to the Elan esthetic,
(03:41):
the elevated design, the consistency, the quality of our designs
and our curated palettes. That's how we're trying to stay
in the luxury space. It's working with discerning clients that
are flower connoisseurs.
Speaker 2 (03:54):
Were you looking to buy a business? How did this
all start?
Speaker 1 (03:57):
I'm actually a reluctant business owner. Okay, I don't hear
that very out. I came from a small town and
I grew up working in my dad's small businesses. He
had a hardware store and a construction company, and ran
the cattle farm that was my grandfather's, and he did
a sod farm, a portable building business, a laundromat, a
(04:18):
gas station, like so this is really in your blood
a little bit, Well, it was enough in my blood
that I never wanted to do it. I moved to
New York in nineteen eighty nine. To go to graduate
acting school at NYU and fell in love with New York.
Met my wife while I was in grad school, got
married right after, raised two kids here in the city,
and I've been living here since nineteen eighty nine, longer
(04:40):
than I lived in my small town. And were you acting?
Oh yeah, I was acting for the first few years.
And that's actually how I got into flowers. I started
as my survival job. I was working in flower shops.
My first full time job in a florist was in
a flower shop on Park Avenue, and I needed a
day job familiar to me.
Speaker 2 (05:00):
My brother was a professional dancer in Manhattan for ten years.
He worked at a retail store for a very large
consumer electronics company which shall not be named, but he
still works for them twenty five years later. Wow, so
you learn to work with flowers, but now you end
up buying a flower shop. How did that all come about?
Speaker 1 (05:15):
Again? It was reluctant because it came out of a crisis.
I had been working for a destination management company slash
event company for ten years, and my wife was working
for three different nonprofit companies, and she was going as
a teaching artist to work with orphanages teaching the caregivers
(05:37):
how to do music in motion programs that she was developing.
Speaker 2 (05:41):
Patrick and his wife were on a trip to celebrate
their twentieth wedding anniversary when she started feeling ill. She'd
just come back from a work trip to Haiti, so
they assumed it was something she'd picked up there.
Speaker 1 (05:52):
It was clear that we had to go back to
the city to the doctor. We went to an infectious
disease talked her to try to find out what was wrong.
The doctor said that this is not my area of expertise,
but it looks like you have ovarian cancer. So she
sent us to a gynecological oncologist and he diagnosed her
with ovarian cancer and said, I'll do the surgery myself tomorrow.
(06:14):
You can get a second opinion. But I am sure,
and I'm a teaching doctor in a hospital and I'll
do this myself. It won't be one of my students.
But there was a catch. He didn't take the insurance.
Speaker 2 (06:26):
She had insurance, but he didn't accept it.
Speaker 1 (06:28):
Right. But I had been working for this small business
that was wonderful because they paid for the insurance for
the employee, but we couldn't afford it for the whole family,
and I had a family of four, two kids. So
we went through her freelancers union to get insurance, and
I wasn't able to get a hold of the insurance
company or get them to approve anything. So he said,
(06:48):
I'll just take whatever they give me. He sent us
to the hospital, got us a room, did the surgery
himself the next day, and saved my wife's life. It
was only because of his empathy and benevolence that he
just took whatever the insurance company would give him. We
had to switch back to a different hospital to do
(07:10):
her chemotherapy after the surgery. That took our insurance, but
our insurance was actually a co insurance. It covered seventy
percent after we met the deductible, and we ended up
owing the thirty percent after we had met the deductible.
It was more than I made in my salary in
an entire year. So we had to sell the only
(07:33):
asset that we owned, and that was our apartment in Harlem.
We sold our apartment and paid off the medical bills
and I decided to buy a small business.
Speaker 2 (07:44):
I want to take a moment here. This isn't typical
of small business owners, and it really speaks to Patrick's
confidence in his own abilities and to his resilience. I'm
impressed because purchasing a small business for more stability is
not something many would think to do. I asked him
where that motivation came from. My father had always said,
by an existing business that has a cash flow, and
(08:06):
it'll pay for itself. And so I started looking at
florists for sale because flowers was always my favorite part
of designing an event. It was the only thing that
I thought I could do, so that was kind of
like the impetus for buying it was out of desperation.
Patrick looked at a few florists in Manhattan until he
found one nestled in the heart of the flower district.
Speaker 1 (08:28):
And when I saw that it had been around since
nineteen eighty three, I knew that it was an enduring brand,
and there was something about the flowers that was already elevated.
They had customers that they had for years, So I
really liked that about the brand, and I knew that
we could add events and just do even more larger things.
(08:49):
I knew how to make beautiful flowers and give great service,
but I did not know how to own a business.
I had to learn that on the job.
Speaker 2 (08:59):
This is full beauty coming out of tragedy. Yes, but
now at this point you're in financial trouble and you
go buy a business. How did that deal come together?
I had an SBA loan to purchase the small business.
We were getting ready to close on the purchase. It
turned out that the underwriters insisted that the landlord give
us a lease for the same term as the loan,
(09:20):
for ten years. The space was seven hundred square feet.
If Patrick successfully grew the business, he'd outgrow that space
well before ten years. The loan didn't work.
Speaker 1 (09:30):
Out, so I had to take all of the equity
that I had from selling the apartment, the rest after
paying the medical bills, and we put it all in.
I borrowed money from my mother's home equity line to credit.
You really went all in on this thing. Yeah, And
I did a partial payment thing with the sellers, you know,
to work off part of it over six months while
(09:51):
the manager stayed on and worked with me. And it
was just a lot. I just had to put everything
on the line. And you were still working at this point, right,
I was still working full time, so you were working
and running the business. Yes, How did that work. It
was really hard.
Speaker 2 (10:08):
What an interesting business origin story. Doctor Lori Santos is here.
She's a Yale professor psychologist and host of the Happiness Lab. Laurie,
I'd love to get your take on Patrick's journey. We
often hear about the sort of uh oh moments of
businesses that are running. We rarely hear of businesses that started out of that kind of, "Oh crap, here we go." That was new, a business that was started out of that much crisis, and in particular, he talked about he bought the business for security, and that's not really, what we think of you buying a business, you're taking on risk. He sort of came at it the other way, which is, "No, no, no, I'm buying a business because I can do this to take risk off in some ways." Which is a little bit inverse, but talk a little bit please to us about the psychology of risk and security and reward and how people think about this because this is really deep psychological stuff.
Speaker 5 (10:57):
Yeah, yeah, I mean really deep. Evolutionarily, I think we're
wired to seek out safety. If you look at what
natural selection built into us, it's built in all these
sorts of threat detectors. We're just going around looking for
what's the uncertainty out there, what's the risk And most
of what our brain is trying to get us to
do is to find places of safety. I think that's
the evolutionary mode. But if we think about how these
(11:18):
things play out in our psychology, say in the business world,
there's a lot of talk out there about things like
psychological safety. You have your best ideas, you make your
best decisions, you have your best interactions with coworkers at work.
When everyone's feeling a little bit of psychological safety, a
little bit of security, that kind of breath of fresh air,
like things are okay, we can think broadly and innovatively.
I think when we think about these true risky situations,
(11:41):
like the moment of a health crisis, a lot of
financial uncertainty, these are ones that we see as times
of incredible uncertainty. And there's just lots of evidence that
we as humans are built to be uncertainty averse. We
don't like not knowing what's going on, and we really
don't like it when things feel kind of scary, when
out comes far like they could go really badly, And
(12:02):
so I think that we are just kind of wired
to seek out security. I think risk is a kind
of special case, right. Often, nerdy social scientists to find
risk as these moments where the choices you have could
have this big payoff but could have a really bad
payoff and you just don't know. Interestingly, our brains get
a little bit more risk seeking when we're in a
really desperate situation. Think of the gambler who's like really
(12:24):
down on his luck placing that final incredibly risky bet.
I think Patrick's story has a kind of element of
this in this really interesting way. His wife is going
through this horrible healthcare crisis, like financially, it just seems
really desperate, and he's like, let me take on a
new small business that feels kind of risky.
Speaker 2 (12:41):
Yeah, it seems to me, like go work for a
big company that has good health insurance, is what my
instinct says.
Speaker 5 (12:45):
Yeah. I think in an odd way, jumping into a
new small business might be a way to kind of
solve that risk problem. And if it worked out where
he could get some security, find some healthcare and so on,
that might be the thing his brain was telling him
to do. I think again, it was a little bit
different than the normal move of I'll just go get
a job with relatively secure health care. But he was
facing this risky decision and it kind of worked out
(13:06):
for him.
Speaker 2 (13:07):
What about the perceptions of upside versus downside? I mean,
I remember seeing all these things about when you give
people two choices, the way that you frame the upside
and the downside of what could happen has material impacts,
as I recall on how people view the choice. Is
that right?
Speaker 5 (13:21):
Yeah, that's right. And so when you frame things as
a gain the kind of things that you might get
out of a situation, you wind up avoiding risk a lot.
You kind of just want to go with the safe bet,
the safe option. But when you're kind of in what's
called a loss frame, you're just thinking of things going badly.
You're just worried about what you might lose. That can
actually push people more towards these risky decisions over time.
And I think again that's what Patrick was doing. He
(13:43):
was in a complete loss frame. He's losing his ability
to continue his acting career, his wife is in an
incredibly scary health situation. He was in that traditional loss frame,
and I think that comes with taking on more risks
than you might originally think.
Speaker 2 (13:56):
How do we think about that in terms of whether
you work for a business or own a business. That
suggests that the more successfully are, the less risk tolerant
you get. I'm assuming that that's part of why we
constantly see disruption in business. You get secure, you get comfortable,
and you fear the downside now more than you seek
the potential upside. Yeah.
Speaker 5 (14:13):
I think that's exactly right. In general, all of us
just become a little bit more complacent when things are
going well, when there is a sense of security, and
that comfort zone can be good, but it also can
be a little bit stagnant when it comes to new
ideas and innovation, And so I think what we really
want to do is strike a healthy balance between security
and risk seeking. We kind of want to find the
(14:33):
balance between sticking in our comfort zone when it makes sense,
maybe when times are rocky, but also trying out new
things so that we can actually innovate.
Speaker 2 (14:41):
You have to take risk to run a business, I
mean you have to. So are there sort of psychological
coping mechanisms to get more comfortable with risk. Yeah.
Speaker 5 (14:49):
One of the big ones that I talk a lot
about on my podcast, the Happiness Lab, is this idea
of distressed tolerance. We just have to get good at
experiencing negative emotions that might not feel good in the moment.
True for experiencing a little bit of risk, like this
feels uncomfortable, but you know it makes sense to jump
out of my comfort zone a little bit. It can
also be the kind of things that we have to
do with dealing with our self criticism in our head,
(15:10):
having hard conversations with employees. I think so much of
a successful business involves embracing a little bit of distress,
noticing that this is going to feel a little bit uncomfortable,
but where I'm going to get to on the other
side will be better. And I think embracing a little
bit more risk can sometimes be the healthy attitude towards
that balance.
Speaker 2 (15:28):
So this is like the psychological equivalent of going for
a walk and eating your.
Speaker 5 (15:30):
Veggies exactly exactly. It's like the spoonful of sugar to
take the tough medicine, as Mary Poppins would put it.
Speaker 2 (15:36):
Thanks so much, Laurie. Let's hear what Patrick did next.
Even though starting or taking over a small business is risky,
Patrick was right about Elan's ability to endure.
Speaker 1 (15:47):
The business was wonderful. Community based people that had been
buying flowers there for years. So it was wonderful to
just meet the people and the clients. Do you still
have some of the same clients. Absolutely.
Speaker 2 (16:00):
With Patrick and his wife at the helm, Elan grew quickly.
Speaker 1 (16:03):
We grew year over year. We were only about two
years in that small seven hundred square foot space and
I had to find a place and we moved to
a lease of about twelve hundred square feet on Grand Street,
still servicing all of downtown area.
Speaker 2 (16:19):
Patrick had found a perfect spot for Elan to continue
to grow well. The space was almost perfect. There was
a four inch step from the sidewalk to get up
to the shop. I received the summons just before Christmas
twenty eighteen from a federal lawsuit that was filed against
me and the owner of the space, the LLC that
(16:40):
owned the building that I paid my rent to. We
were both named in the lawsuit. The lawsuit was over
the store's eighty eight compliance, which came down to that
four inch step.
Speaker 1 (16:52):
Every place on the block was sued by the same complaint,
and the coffee shop got sued twice. They had never
proved that were trying to buy flowers for us and
couldn't get into the four inches in the front door
either way. I put up a ramp and a sign
and a buzzer, but no one bothered to come. Look.
Speaker 2 (17:09):
Patrick's lawyers ended up settling for seventeen thousand dollars. This
was all so distracting from focusing on doing my business,
being good at it, and growing it. But this is
all the kind of things that small businesses have to
deal with. Obviously, you knew a lot about what small
(17:30):
business was like from growing up, but you'd been working
as a professional for a while. Yeah, what was the
trial by fire? What did you learn about being CEO
in the early days.
Speaker 1 (17:38):
I learned that I don't know what I don't know.
Speaker 2 (17:40):
What about like payroll and HR and insurance and all
that kind of stuff.
Speaker 1 (17:44):
Oh my goodness, that was one of the hardest parts.
I got a 401K before I got health insurance through
the company because we were paying on a single payer
plan over thirty five hundred dollars a month for our
family plan, and I wanted to get it through the business,
and I was able to get one employee to go
on and we did it in twenty nineteen. So we
started in January of twenty twenty. Well, then we were
(18:06):
shut down for forty days as a non essential business
and all the employees were furloughed. I ended up paying
the premium for my own family and for my employee.
I held their job for them. I didn't want them
to be without health insurance during a pandemic. And we
weren't able to open up until just before Mother's Day
(18:29):
of twenty twenty.
Speaker 2 (18:31):
The Empire State Development Commission allowed small businesses who could
fulfill online and phone.
Speaker 1 (18:36):
Orders to operate. My wife was taking the calls herself from home. I would come into the front of the shop and package the stuff. I had one designer in the back of the shop in a separate room that was actually making the flowers. For the year as a whole, I was down 40% over the year before of my revenue from 2019 and 2020. It was just a fight to survive and to keep taking everything that I could get. We were doing Zoom weddings in the park, in people's homes delivering stuff, trying to do anything we could, just trying to figure all the stuff out that we had to do on top of trying to get the business back, so I don't think I took a breath until 2022.
Speaker 2 (19:27):
By twenty twenty two, most of the immediate struggle was over.
By twenty twenty three, Elan was growing again and Patrick
needed a larger space. He started looking for a new spot,
but this time he wanted to buy, not rent.
Speaker 1 (19:41):
I applied for an SBA five oh four loan to
purchase the place that we're in now, wanting to be
my own landlord.
Speaker 2 (19:49):
For those of our listeners who are not aware, five
oh four is an SBA loan program that banks typically administer,
which are for small businesses who are looking to acquire
fixed assets. That's typically a building, our equipment, or machinery,
typically large dollar purchases, and it's a way to keep
the cost down for small businesses. In Patrick's case, it
was the building.
Speaker 1 (20:09):
I bought, a historically industrial place that was built in
eighteen ninety six as of Butter and Egg dispensary, and
then for the last thirty years since it's been a
co op, it's been owned by a rental company that
stored lighting and electrical equipment, so it was more like
a warehouse. So I took this industrial space and made
(20:29):
an industrial flower design studio and retail storefront. The history
of Tribeca is this mercantile kind of spaces.
Speaker 2 (20:39):
And despite everything he's encountered, all the risk he's taken on,
Patrick is still offering healthcare and benefits for all of
Elon's employees.
Speaker 1 (20:48):
It's one of the things I'm proudest of because, as
I shared, my incentive for buying a business came out
of my lack of benefits. It was really important to
me even though we were paying a very very high
premium individual payer plan for me and my family. After
we bought the business and we're making enough money to
buy our own individual policy, I wanted to get health
(21:11):
insurance for the company for my employees, to make that
available for them and for myself. And we started a
safe harbor 401K, and I was so excited and rolled
it out to all the team members. My hope is
that I can create something through my four to one
K for sharing the profits as the company grows with
(21:32):
the people. I would love to figure out how to
help the people that are helping me grow the business
benefit from that growth.
Speaker 2 (21:47):
As you heard in the opening, a huge part of successfully running a small business is to be able to take care of the physical and mental health of your employees. Business owners care deeply about offering affordable quality healthcare. It's considered to be a core business value at this point. At JPMorgan Chase, we try to support our clients with all their needs and especially this one. To help our listeners understand more about how these markets work, we've brought in some experts. Dan Mendelson, CEO of Morgan Health, is here to discuss how small businesses can navigate these challenges. We also have Stacy Edgar, who’s CEO and Co-Founder of Venteur, which uses AI to help small business owners find the perfect plans for their employees no matter their size.
(22:28):
Dan, welcome to the Unshakeables.
Speaker 3 (22:30):
Really appreciate being here, a Ben, thanks for having me.
Speaker 2 (22:32):
I want to talk about healthcare and small business. I mean,
it's not just at the center of Patrick's decision to
buy his business. It's clearly something that's constantly a challenge
for him, for his employees, and for the kind of
culture and business that he wants to build. We've talked
a little bit about it on the podcast, but Dan,
you're an expert in health economics and in healthcare businesses.
We serve around seven million small businesses in the US
(22:55):
here at JP Morgan, and I hear many of them
discuss how challenging this is for small business owners. Why
is this so hard for them?
Speaker 3 (23:01):
I would say that small business owners are passionate about
their businesses, and they don't wake up in the morning
thinking about healthcare and how to provide it for their employees.
It's something that they know they need to do, and
in fact they want to do it because they want
to care for their employees. But it's not their expertise,
(23:22):
it's not why they went into business, and so it
presents a really significant challenge for really all small business owners.
Speaker 2 (23:30):
And so what about the market specifically is challenging. I mean,
I hear large businesses complain about their premiums going out,
but not the way I do small businesses, it's not
nearly as impactful.
Speaker 3 (23:40):
Yeah. Well, there are a couple of things. First is that the products that are being offered to small businesses are more expensive than the ones that larger businesses can afford. Large businesses self-insure and so they take that risk on for themselves, and they do just fine. They pay less markup to insurance companies. And so small businesses, the products are always going to be more expensive. And then in addition, it's a lot more variable. We live in a world where small businesses need to provide health insurance to their workers to compete. Businesses are really being challenged right now by cost, and this year costs are going to go up by more than 10% for most small businesses. Next year, probably the same thing's going to happen. And this tends to get exacerbated when the federal government pulls back on spending for public programs like Medicare and Medicaid, which they're doing right now. So I would say that it's going to be a time when a lot of small businesses are really going to be challenged to provide this kind of coverage for their workers.
Speaker 2 (24:40):
Interesting, what advice do you have dan for small businesses
who are grappling with this, Who are the right advisors?
How should they learn more? Where should they go?
Speaker 3 (24:48):
There are a variety of advisors that help small businesses
with these issues. So the reality is there's no single solution.
Every situation is different, and a lot of small businesses
do spend a considerable amount of time thinking about and
researching their options, and that's certainly a problem and shows
the need for the healthcare system to step up and
(25:09):
give information in a factual way.
Speaker 1 (25:11):
You know.
Speaker 3 (25:11):
It's also promising because we're seeing a lot of different types of insurance designs coming in that give flexibility to small employers to control their costs and also have a higher quality system. You know I'd say that some of the newer options like these ICHRAs are really excellent alternatives, and small business owners are going to need to seek them out because the brokers that have traditionally sold the insurance into this space might not be economically incented to provide that kind of product to small business owners.
Speaker 2 (25:44):
So now we've got a set of mix-matched incentives that the ecosystem's going to have to overcome. And a note here, Dan just mentioned ICHRAs or ICHRAs as they're called, individual coverage health reimbursement account. That's a specific program that allows employers to give money directly to their employees for healthcare. It's a relatively new path for employer-sponsored healthcare. This type of innovation from insurance carriers is essential. Carriers have to bring more innovative, affordable plan designs into the system that are customizable to the needs of smaller businesses. This was core to Morgan Health's most recent investment in Venteur. Stacy is an expert on ICHRAs. So when Dan mentioned them, I knew we had to have her on. Stacy Welcome to the unshakeables.
Speaker 4 (26:26):
Thanks so much for having me.
Speaker 2 (26:28):
For our listeners who don't know what is Ventuer.
Speaker 4 (26:30):
Venteur is building personalized health insurance, and specifically we leverage legislation that took place five years ago, called an ICHRA, that allows businesses to give cash instead of a group health plan. Each employee gets to take that cash, buy an individual plan, and decide how to use this money, whether to keep some more as cash, more as insurance, and it gives us huge amount of flexibility in that each employee goes from having maybe one option to having literally hundreds of options to choose from. That's where the personalization comes in. For the small business owner what this also means, picking health insurance is such a hard and personal decision, instead of you picking for your employees, each employee gets to choose what's best for themselves. And on top of that, the business usually gets to save anywhere from up to 30% on costs.
Speaker 2 (27:19):
This is why we wanted to have Stacy on the show,
because not only does she run her own startup and
small business, but she is largely serving small businesses who
run into this pain point all the time. So we
thought it was the most meta situation we could have.
I'm going to ask a cynical question, which is I
can see why employers like it because they're giving a
fixed dollar amount and that's great, and that means they're
not exposed to the wild swings of health insurance pricing.
(27:41):
Why do consumers like it?
Speaker 4 (27:43):
Consumers like it because you get to decide what's best
for you and you can really hyper personalize. So for example,
one of my favorite moments in being an ICHRA we use
our own product for our employee benefits, was firing a
health insurer who wronged me. And in the past, in
a group model, maybe if something went wrong, it may
(28:06):
or may not have made sense for that company to change.
But in this case, if for you and that interaction,
if something happens or it doesn't work, then you can
make that decision for yourself.
Speaker 2 (28:17):
That's really interesting to me because today if your individual
claim gets denied. Your employer might not even know that right,
and so the person who's buying and choosing the carrier
is not the person who necessarily is living with the
consequences of that decision.
Speaker 4 (28:30):
That's correct. It realigns incentives of the person who is
using the plan has the power to give that market
feedback and have that corrective action.
Speaker 2 (28:41):
It's really interesting. You and I have talked about this before,
but as it exists today, health insurance isn't really health insurance,
right at least employer based health insurance. It's really just
the cost by which you and your employers split the
cost of care.
Speaker 4 (29:19):
It's basically questioning how we pay for healthcare altogether. And there's an insurance component, but one of the things that's unique about ICHRA is you don't have to spend all the money on insurance. So maybe you decide to get that catastrophic coverage where if something really serious happens, the insurance is there to protect you, but maybe you decide to keep more of the money in a wallet that's also pre-taxed and that you use for wellness or for things that keep you well. So that's where this is a really different model. So that's where this is like a really different
model and It really will disrupt healthcare as we know
it in multiple ways, whether it's just putting the consumer
in that center of the value chain or changing how
the money. The one point six trillion dollars spend by
employers every year is allocated one put six trillion dollars.
That's a huge number on premiums. Just on premiums. We're
(29:40):
not even talking on other expenses.
Speaker 2 (29:43):
Wow, so it's growing at three hundred percent. Are you
seeing both small and large employers take this on? We are,
And is it more small more large kind of a mix?
What are you seeing?
Speaker 4 (29:52):
It's more small than large, but the large businesses are coming across the finish line as well. The use case is different. For the small business owner, it's all about employee choice. It's about getting out of the business of health insurance. They get some more time building their robot hand instead of worrying about benefits, that's what it means for them. For the large business, this can mean tens of millions of dollars of cost savings. It can mean jobs saved. It can mean margin improvement. It's huge
Speaker 2 (30:22):
Stacy, it's great having you. Thank you for being here,
and I look forward to more conversations in the future.
Speaker 4 (30:26):
Thanks for having me.
Speaker 2 (30:28):
I have another question for Laurie and Dan, which is,
as I've been listening to both of you speak. On
the one hand, the mindset around risk taking and health
insurance for small businesses sound like to completely orthogonal concepts.
On the other hand, they both tie pretty closely into
mental health, the quality of someone's mental state. Both business
(30:49):
owner and employee, can you talk a little bit each
of you how do you think about the importance of
healthcare and health in the construct of running, operating leading
a business, because they do actually come together in sort
of an interesting way.
Speaker 3 (31:05):
So I'll say, for my part, you want your employees
to have excellent health care. You really feel a burden
and a passion to take care of your workers. They're
the ones who are making it happen for you, and
small business owners really feel that passion. But then you
also have to square out the technical aspect of it.
So I think that small business owners are motivated to
(31:26):
provide this kind of coverage for their people, but they
need help in figuring out ways to do it cost
effectively and in a way that fits into the construct
of their business.
Speaker 5 (31:37):
Laurie, I think I'll just follow up on Dan's point
and saying, you want your employees to have good health care,
but you also want them to have good health, and
that involves having good physical health, and a part of that,
an important part of that is not being stressed out
all the time. And I think providing psychological safety giving
someone security knowing that if something bad happens to them
or a family member they love a lot, that they
(31:58):
just have the security of knowing they'll be okay. And
I think that this idea of psychological safety building insecurity
by giving these kinds of resources to your employees only
winds up helping you. I think more and more we're
starting to realize the importance of good mental health for
allowing our employees and team members to achieve better performance,
better innovation on the job. And so I think these
(32:19):
healthcare systems aren't just an insurance policy to make sure
your employees can pay for something if something comes up.
It's an insurance policy on making sure you have your
workers feeling like they're supported in both their physical and
their mental health.
Speaker 2 (32:30):
I suppose safety from harm, whether physical or mental, is at the bottom of Maslow's hierarchy of needs. I learned that a long time ago. It is the base of the whole thing.
Speaker 5 (32:37):
Exactly. Look at that. Your intro to psych knowledge coming in. I appreciate it.
Speaker 2 (32:40):
I remember, it's been a long time, but I remember,
all right. Thank you for being on the podcast. It
has been tremendous. We really appreciate your insights.
Speaker 5 (32:47):
Thanks so much for having us.
Speaker 2 (32:49):
And usually we end with our guests sharing a piece
of advice that was instrumental to building their business, but
Patrick Hall did that well. If I had to give
just one, it would be the one that my dad
gave me, which was by an existing business that has
cash flow. So I wanted to ask him about another
piece of advice he'd gotten.
Speaker 1 (33:08):
I had a director, a mentor in college in Alabama who had always said to me, "Patrick, if you can do anything else other than acting and make a living and be happy, do that." The only other thing that made me happy was flowers. It's joyous. It's just the joy of working around beauty and creativity with like-minded creatives and people that appreciate flowers, and it's just such a kind thing, and it's such an inflection point of people's lives. It's celebration, it's condolences, it's all the times that you need to convey emotion and kindness. People go to flowers.
Speaker 2 (33:49):
My takeaway, find something in your life that you love
and make sure that you do that thing. It doesn't
have to be your business, your side hustle, or the
thing that you make your money on. You can have
another job, but we're all better off doing something we
love and adding some joy to our lives. Thanks for
joining us today, Patrick, Thank you, thanks so much for
(34:11):
listening to this episode of The Unshakeables. If you liked
this episode, please rate and review it. Next week, we're
heading down south to a man whose global disaster response
organization was born out of an obsession with the underwhelming
meals served to folks in New Orleans after Hurricane Katrina.
He spent months scribbling his business plan and ideas on
legal pets, until finally he just had to get up
(34:33):
and cook. I'm Ben Walter and this is The Unshakeables
from Chase for Business and Ruby Studio from iHeartMedia. We'll
see you back here soon
Ruby
Speaker 2 (00:08):
When Patrick Hall needed a steady income and solid health insurance,
he did what few think to He bought a business.
Speaker 1 (00:15):
It was out of desperation. We were basically facing medical bankruptcy. I started looking at florists for sale because it was the only thing that I thought I could do.
Speaker 2 (00:26):
He found the perfect fit, a company called Elan Flowers.
That's ELAN, no relation to the famous tech mogul. When
Patrick and his wife bought it in twenty fifteen, the
shop had already been in business for thirty years.
Speaker 1 (00:39):
My father had always said, by an existing business that
has a cash flow and it'll pay for itself.
Speaker 2 (00:47):
Well, it took some time to get the business up
and running under Patrick. It wasn't the core business that
worried him.
Speaker 1 (00:53):
I just loved flowers. I wasn't afraid of that. I'd
grown up working in gardens and with my grandmothers and
great grandmother and it was something that was easy and
fun for me to do. The hardest part was dealing
with leases and landlords, all of the regulations, the not
flowers part, the not flowers part.
Speaker 2 (01:13):
Yeah, and this episode is a deep dive into the
proverbial not flowers part of running a small business. Especially
healthcare and insurance. It's one you might want to listen
to with a notebook because we have some tips for you.
Welcome to The Unshakeables from Chase for Business and Ruby
Studio from iHeartMedia. I'm Ben Walter, CEO of Chase for Business.
(01:38):
On the Unshakeables, we're sharing the daring moments of small
business owners facing their crisis points and telling the stories
of how they got through it. We hear from many
of our clients that the administrative side of running a
small business is often the biggest challenge for them. Now
that makes sense to me. You start a business because
you have a great idea, or you love a product
or a specific service, but then you actually have to
(01:59):
run the administrative side of the business when you start
scaling and bringing in employees, there are certain expectations that
will come from those who want to accept a job
with you.
Speaker 3 (02:08):
We live in a world where small businesses need to
provide health insurance to their workers to compete.
Speaker 2 (02:14):
That's Dan Mendelson, CEO of Morgan Health and one of our guests today. I wanted to use this episode to specifically talk about health insurance and smallPage 2 of 15businesses. We called in the experts to give you some advice firsthand because the marketplace is confusing, and there's a lot of conflicting advice about how small businesses should actually handle benefits. According to the Business Leaders Outlook survey results from January of this year, 65% of small and medium businesses surveyed offer health insurance, but that's down from 71% last May, a concerning trend. We'll hear more from Dan later, but I'd also like to introduce you to Stacy Edgar, who’s CEO and Co-Founder of the health insurance start-up, Venteur.So we're thrilled to add Stacy to the mix.
Speaker 4 (02:56):
Thanks for having me.
Speaker 2 (02:58):
And psychology professor and host of The Happiness Lab, Doctor
Laurie Santos is back to join us. Laurie, so nice
to see you again. Great to have you back.
Speaker 5 (03:05):
Thanks so much for having me back.
Speaker 2 (03:07):
We have a full house today and that doesn't even
include our guest on today's episode, Elan Flowers from.
Speaker 1 (03:13):
New York, New York.
Speaker 2 (03:16):
Tell everybody just to start. What is Elan Flowers? How
did you come to be part of it?
Speaker 1 (03:21):
Elan Flowers is a luxury flower shop in downtown Manhattan.
It's been around since nineteen eighty three. My wife and
I purchased the business back in twenty fifteen, and we
just celebrated ten years on April ninth. So it's over
forty years old and you've owned it for ten that's correct. Basically,
we've always tried to stay true to the Elan esthetic,
(03:41):
the elevated design, the consistency, the quality of our designs
and our curated palettes. That's how we're trying to stay
in the luxury space. It's working with discerning clients that
are flower connoisseurs.
Speaker 2 (03:54):
Were you looking to buy a business? How did this
all start?
Speaker 1 (03:57):
I'm actually a reluctant business owner. Okay, I don't hear
that very out. I came from a small town and
I grew up working in my dad's small businesses. He
had a hardware store and a construction company, and ran
the cattle farm that was my grandfather's, and he did
a sod farm, a portable building business, a laundromat, a
(04:18):
gas station, like so this is really in your blood
a little bit, Well, it was enough in my blood
that I never wanted to do it. I moved to
New York in nineteen eighty nine. To go to graduate
acting school at NYU and fell in love with New York.
Met my wife while I was in grad school, got
married right after, raised two kids here in the city,
and I've been living here since nineteen eighty nine, longer
(04:40):
than I lived in my small town. And were you acting?
Oh yeah, I was acting for the first few years.
And that's actually how I got into flowers. I started
as my survival job. I was working in flower shops.
My first full time job in a florist was in
a flower shop on Park Avenue, and I needed a
day job familiar to me.
Speaker 2 (05:00):
My brother was a professional dancer in Manhattan for ten years.
He worked at a retail store for a very large
consumer electronics company which shall not be named, but he
still works for them twenty five years later. Wow, so
you learn to work with flowers, but now you end
up buying a flower shop. How did that all come about?
Speaker 1 (05:15):
Again? It was reluctant because it came out of a crisis.
I had been working for a destination management company slash
event company for ten years, and my wife was working
for three different nonprofit companies, and she was going as
a teaching artist to work with orphanages teaching the caregivers
(05:37):
how to do music in motion programs that she was developing.
Speaker 2 (05:41):
Patrick and his wife were on a trip to celebrate
their twentieth wedding anniversary when she started feeling ill. She'd
just come back from a work trip to Haiti, so
they assumed it was something she'd picked up there.
Speaker 1 (05:52):
It was clear that we had to go back to
the city to the doctor. We went to an infectious
disease talked her to try to find out what was wrong.
The doctor said that this is not my area of expertise,
but it looks like you have ovarian cancer. So she
sent us to a gynecological oncologist and he diagnosed her
with ovarian cancer and said, I'll do the surgery myself tomorrow.
(06:14):
You can get a second opinion. But I am sure,
and I'm a teaching doctor in a hospital and I'll
do this myself. It won't be one of my students.
But there was a catch. He didn't take the insurance.
Speaker 2 (06:26):
She had insurance, but he didn't accept it.
Speaker 1 (06:28):
Right. But I had been working for this small business
that was wonderful because they paid for the insurance for
the employee, but we couldn't afford it for the whole family,
and I had a family of four, two kids. So
we went through her freelancers union to get insurance, and
I wasn't able to get a hold of the insurance
company or get them to approve anything. So he said,
(06:48):
I'll just take whatever they give me. He sent us
to the hospital, got us a room, did the surgery
himself the next day, and saved my wife's life. It
was only because of his empathy and benevolence that he
just took whatever the insurance company would give him. We
had to switch back to a different hospital to do
(07:10):
her chemotherapy after the surgery. That took our insurance, but
our insurance was actually a co insurance. It covered seventy
percent after we met the deductible, and we ended up
owing the thirty percent after we had met the deductible.
It was more than I made in my salary in
an entire year. So we had to sell the only
(07:33):
asset that we owned, and that was our apartment in Harlem.
We sold our apartment and paid off the medical bills
and I decided to buy a small business.
Speaker 2 (07:44):
I want to take a moment here. This isn't typical
of small business owners, and it really speaks to Patrick's
confidence in his own abilities and to his resilience. I'm
impressed because purchasing a small business for more stability is
not something many would think to do. I asked him
where that motivation came from. My father had always said,
by an existing business that has a cash flow, and
(08:06):
it'll pay for itself. And so I started looking at
florists for sale because flowers was always my favorite part
of designing an event. It was the only thing that
I thought I could do, so that was kind of
like the impetus for buying it was out of desperation.
Patrick looked at a few florists in Manhattan until he
found one nestled in the heart of the flower district.
Speaker 1 (08:28):
And when I saw that it had been around since
nineteen eighty three, I knew that it was an enduring brand,
and there was something about the flowers that was already elevated.
They had customers that they had for years, So I
really liked that about the brand, and I knew that
we could add events and just do even more larger things.
(08:49):
I knew how to make beautiful flowers and give great service,
but I did not know how to own a business.
I had to learn that on the job.
Speaker 2 (08:59):
This is full beauty coming out of tragedy. Yes, but
now at this point you're in financial trouble and you
go buy a business. How did that deal come together?
I had an SBA loan to purchase the small business.
We were getting ready to close on the purchase. It
turned out that the underwriters insisted that the landlord give
us a lease for the same term as the loan,
(09:20):
for ten years. The space was seven hundred square feet.
If Patrick successfully grew the business, he'd outgrow that space
well before ten years. The loan didn't work.
Speaker 1 (09:30):
Out, so I had to take all of the equity
that I had from selling the apartment, the rest after
paying the medical bills, and we put it all in.
I borrowed money from my mother's home equity line to credit.
You really went all in on this thing. Yeah, And
I did a partial payment thing with the sellers, you know,
to work off part of it over six months while
(09:51):
the manager stayed on and worked with me. And it
was just a lot. I just had to put everything
on the line. And you were still working at this point, right,
I was still working full time, so you were working
and running the business. Yes, How did that work. It
was really hard.
Speaker 2 (10:08):
What an interesting business origin story. Doctor Lori Santos is here.
She's a Yale professor psychologist and host of the Happiness Lab. Laurie,
I'd love to get your take on Patrick's journey. We
often hear about the sort of uh oh moments of
businesses that are running. We rarely hear of businesses that started out of that kind of, "Oh crap, here we go." That was new, a business that was started out of that much crisis, and in particular, he talked about he bought the business for security, and that's not really, what we think of you buying a business, you're taking on risk. He sort of came at it the other way, which is, "No, no, no, I'm buying a business because I can do this to take risk off in some ways." Which is a little bit inverse, but talk a little bit please to us about the psychology of risk and security and reward and how people think about this because this is really deep psychological stuff.
Speaker 5 (10:57):
Yeah, yeah, I mean really deep. Evolutionarily, I think we're
wired to seek out safety. If you look at what
natural selection built into us, it's built in all these
sorts of threat detectors. We're just going around looking for
what's the uncertainty out there, what's the risk And most
of what our brain is trying to get us to
do is to find places of safety. I think that's
the evolutionary mode. But if we think about how these
(11:18):
things play out in our psychology, say in the business world,
there's a lot of talk out there about things like
psychological safety. You have your best ideas, you make your
best decisions, you have your best interactions with coworkers at work.
When everyone's feeling a little bit of psychological safety, a
little bit of security, that kind of breath of fresh air,
like things are okay, we can think broadly and innovatively.
I think when we think about these true risky situations,
(11:41):
like the moment of a health crisis, a lot of
financial uncertainty, these are ones that we see as times
of incredible uncertainty. And there's just lots of evidence that
we as humans are built to be uncertainty averse. We
don't like not knowing what's going on, and we really
don't like it when things feel kind of scary, when
out comes far like they could go really badly, And
(12:02):
so I think that we are just kind of wired
to seek out security. I think risk is a kind
of special case, right. Often, nerdy social scientists to find
risk as these moments where the choices you have could
have this big payoff but could have a really bad
payoff and you just don't know. Interestingly, our brains get
a little bit more risk seeking when we're in a
really desperate situation. Think of the gambler who's like really
(12:24):
down on his luck placing that final incredibly risky bet.
I think Patrick's story has a kind of element of
this in this really interesting way. His wife is going
through this horrible healthcare crisis, like financially, it just seems
really desperate, and he's like, let me take on a
new small business that feels kind of risky.
Speaker 2 (12:41):
Yeah, it seems to me, like go work for a
big company that has good health insurance, is what my
instinct says.
Speaker 5 (12:45):
Yeah. I think in an odd way, jumping into a
new small business might be a way to kind of
solve that risk problem. And if it worked out where
he could get some security, find some healthcare and so on,
that might be the thing his brain was telling him
to do. I think again, it was a little bit
different than the normal move of I'll just go get
a job with relatively secure health care. But he was
facing this risky decision and it kind of worked out
(13:06):
for him.
Speaker 2 (13:07):
What about the perceptions of upside versus downside? I mean,
I remember seeing all these things about when you give
people two choices, the way that you frame the upside
and the downside of what could happen has material impacts,
as I recall on how people view the choice. Is
that right?
Speaker 5 (13:21):
Yeah, that's right. And so when you frame things as
a gain the kind of things that you might get
out of a situation, you wind up avoiding risk a lot.
You kind of just want to go with the safe bet,
the safe option. But when you're kind of in what's
called a loss frame, you're just thinking of things going badly.
You're just worried about what you might lose. That can
actually push people more towards these risky decisions over time.
And I think again that's what Patrick was doing. He
(13:43):
was in a complete loss frame. He's losing his ability
to continue his acting career, his wife is in an
incredibly scary health situation. He was in that traditional loss frame,
and I think that comes with taking on more risks
than you might originally think.
Speaker 2 (13:56):
How do we think about that in terms of whether
you work for a business or own a business. That
suggests that the more successfully are, the less risk tolerant
you get. I'm assuming that that's part of why we
constantly see disruption in business. You get secure, you get comfortable,
and you fear the downside now more than you seek
the potential upside. Yeah.
Speaker 5 (14:13):
I think that's exactly right. In general, all of us
just become a little bit more complacent when things are
going well, when there is a sense of security, and
that comfort zone can be good, but it also can
be a little bit stagnant when it comes to new
ideas and innovation, And so I think what we really
want to do is strike a healthy balance between security
and risk seeking. We kind of want to find the
(14:33):
balance between sticking in our comfort zone when it makes sense,
maybe when times are rocky, but also trying out new
things so that we can actually innovate.
Speaker 2 (14:41):
You have to take risk to run a business, I
mean you have to. So are there sort of psychological
coping mechanisms to get more comfortable with risk. Yeah.
Speaker 5 (14:49):
One of the big ones that I talk a lot
about on my podcast, the Happiness Lab, is this idea
of distressed tolerance. We just have to get good at
experiencing negative emotions that might not feel good in the moment.
True for experiencing a little bit of risk, like this
feels uncomfortable, but you know it makes sense to jump
out of my comfort zone a little bit. It can
also be the kind of things that we have to
do with dealing with our self criticism in our head,
(15:10):
having hard conversations with employees. I think so much of
a successful business involves embracing a little bit of distress,
noticing that this is going to feel a little bit uncomfortable,
but where I'm going to get to on the other
side will be better. And I think embracing a little
bit more risk can sometimes be the healthy attitude towards
that balance.
Speaker 2 (15:28):
So this is like the psychological equivalent of going for
a walk and eating your.
Speaker 5 (15:30):
Veggies exactly exactly. It's like the spoonful of sugar to
take the tough medicine, as Mary Poppins would put it.
Speaker 2 (15:36):
Thanks so much, Laurie. Let's hear what Patrick did next.
Even though starting or taking over a small business is risky,
Patrick was right about Elan's ability to endure.
Speaker 1 (15:47):
The business was wonderful. Community based people that had been
buying flowers there for years. So it was wonderful to
just meet the people and the clients. Do you still
have some of the same clients. Absolutely.
Speaker 2 (16:00):
With Patrick and his wife at the helm, Elan grew quickly.
Speaker 1 (16:03):
We grew year over year. We were only about two
years in that small seven hundred square foot space and
I had to find a place and we moved to
a lease of about twelve hundred square feet on Grand Street,
still servicing all of downtown area.
Speaker 2 (16:19):
Patrick had found a perfect spot for Elan to continue
to grow well. The space was almost perfect. There was
a four inch step from the sidewalk to get up
to the shop. I received the summons just before Christmas
twenty eighteen from a federal lawsuit that was filed against
me and the owner of the space, the LLC that
(16:40):
owned the building that I paid my rent to. We
were both named in the lawsuit. The lawsuit was over
the store's eighty eight compliance, which came down to that
four inch step.
Speaker 1 (16:52):
Every place on the block was sued by the same complaint,
and the coffee shop got sued twice. They had never
proved that were trying to buy flowers for us and
couldn't get into the four inches in the front door
either way. I put up a ramp and a sign
and a buzzer, but no one bothered to come. Look.
Speaker 2 (17:09):
Patrick's lawyers ended up settling for seventeen thousand dollars. This
was all so distracting from focusing on doing my business,
being good at it, and growing it. But this is
all the kind of things that small businesses have to
deal with. Obviously, you knew a lot about what small
(17:30):
business was like from growing up, but you'd been working
as a professional for a while. Yeah, what was the
trial by fire? What did you learn about being CEO
in the early days.
Speaker 1 (17:38):
I learned that I don't know what I don't know.
Speaker 2 (17:40):
What about like payroll and HR and insurance and all
that kind of stuff.
Speaker 1 (17:44):
Oh my goodness, that was one of the hardest parts.
I got a 401K before I got health insurance through
the company because we were paying on a single payer
plan over thirty five hundred dollars a month for our
family plan, and I wanted to get it through the business,
and I was able to get one employee to go
on and we did it in twenty nineteen. So we
started in January of twenty twenty. Well, then we were
(18:06):
shut down for forty days as a non essential business
and all the employees were furloughed. I ended up paying
the premium for my own family and for my employee.
I held their job for them. I didn't want them
to be without health insurance during a pandemic. And we
weren't able to open up until just before Mother's Day
(18:29):
of twenty twenty.
Speaker 2 (18:31):
The Empire State Development Commission allowed small businesses who could
fulfill online and phone.
Speaker 1 (18:36):
Orders to operate. My wife was taking the calls herself from home. I would come into the front of the shop and package the stuff. I had one designer in the back of the shop in a separate room that was actually making the flowers. For the year as a whole, I was down 40% over the year before of my revenue from 2019 and 2020. It was just a fight to survive and to keep taking everything that I could get. We were doing Zoom weddings in the park, in people's homes delivering stuff, trying to do anything we could, just trying to figure all the stuff out that we had to do on top of trying to get the business back, so I don't think I took a breath until 2022.
Speaker 2 (19:27):
By twenty twenty two, most of the immediate struggle was over.
By twenty twenty three, Elan was growing again and Patrick
needed a larger space. He started looking for a new spot,
but this time he wanted to buy, not rent.
Speaker 1 (19:41):
I applied for an SBA five oh four loan to
purchase the place that we're in now, wanting to be
my own landlord.
Speaker 2 (19:49):
For those of our listeners who are not aware, five
oh four is an SBA loan program that banks typically administer,
which are for small businesses who are looking to acquire
fixed assets. That's typically a building, our equipment, or machinery,
typically large dollar purchases, and it's a way to keep
the cost down for small businesses. In Patrick's case, it
was the building.
Speaker 1 (20:09):
I bought, a historically industrial place that was built in
eighteen ninety six as of Butter and Egg dispensary, and
then for the last thirty years since it's been a
co op, it's been owned by a rental company that
stored lighting and electrical equipment, so it was more like
a warehouse. So I took this industrial space and made
(20:29):
an industrial flower design studio and retail storefront. The history
of Tribeca is this mercantile kind of spaces.
Speaker 2 (20:39):
And despite everything he's encountered, all the risk he's taken on,
Patrick is still offering healthcare and benefits for all of
Elon's employees.
Speaker 1 (20:48):
It's one of the things I'm proudest of because, as
I shared, my incentive for buying a business came out
of my lack of benefits. It was really important to
me even though we were paying a very very high
premium individual payer plan for me and my family. After
we bought the business and we're making enough money to
buy our own individual policy, I wanted to get health
(21:11):
insurance for the company for my employees, to make that
available for them and for myself. And we started a
safe harbor 401K, and I was so excited and rolled
it out to all the team members. My hope is
that I can create something through my four to one
K for sharing the profits as the company grows with
(21:32):
the people. I would love to figure out how to
help the people that are helping me grow the business
benefit from that growth.
Speaker 2 (21:47):
As you heard in the opening, a huge part of successfully running a small business is to be able to take care of the physical and mental health of your employees. Business owners care deeply about offering affordable quality healthcare. It's considered to be a core business value at this point. At JPMorgan Chase, we try to support our clients with all their needs and especially this one. To help our listeners understand more about how these markets work, we've brought in some experts. Dan Mendelson, CEO of Morgan Health, is here to discuss how small businesses can navigate these challenges. We also have Stacy Edgar, who’s CEO and Co-Founder of Venteur, which uses AI to help small business owners find the perfect plans for their employees no matter their size.
(22:28):
Dan, welcome to the Unshakeables.
Speaker 3 (22:30):
Really appreciate being here, a Ben, thanks for having me.
Speaker 2 (22:32):
I want to talk about healthcare and small business. I mean,
it's not just at the center of Patrick's decision to
buy his business. It's clearly something that's constantly a challenge
for him, for his employees, and for the kind of
culture and business that he wants to build. We've talked
a little bit about it on the podcast, but Dan,
you're an expert in health economics and in healthcare businesses.
We serve around seven million small businesses in the US
(22:55):
here at JP Morgan, and I hear many of them
discuss how challenging this is for small business owners. Why
is this so hard for them?
Speaker 3 (23:01):
I would say that small business owners are passionate about
their businesses, and they don't wake up in the morning
thinking about healthcare and how to provide it for their employees.
It's something that they know they need to do, and
in fact they want to do it because they want
to care for their employees. But it's not their expertise,
(23:22):
it's not why they went into business, and so it
presents a really significant challenge for really all small business owners.
Speaker 2 (23:30):
And so what about the market specifically is challenging. I mean,
I hear large businesses complain about their premiums going out,
but not the way I do small businesses, it's not
nearly as impactful.
Speaker 3 (23:40):
Yeah. Well, there are a couple of things. First is that the products that are being offered to small businesses are more expensive than the ones that larger businesses can afford. Large businesses self-insure and so they take that risk on for themselves, and they do just fine. They pay less markup to insurance companies. And so small businesses, the products are always going to be more expensive. And then in addition, it's a lot more variable. We live in a world where small businesses need to provide health insurance to their workers to compete. Businesses are really being challenged right now by cost, and this year costs are going to go up by more than 10% for most small businesses. Next year, probably the same thing's going to happen. And this tends to get exacerbated when the federal government pulls back on spending for public programs like Medicare and Medicaid, which they're doing right now. So I would say that it's going to be a time when a lot of small businesses are really going to be challenged to provide this kind of coverage for their workers.
Speaker 2 (24:40):
Interesting, what advice do you have dan for small businesses
who are grappling with this, Who are the right advisors?
How should they learn more? Where should they go?
Speaker 3 (24:48):
There are a variety of advisors that help small businesses
with these issues. So the reality is there's no single solution.
Every situation is different, and a lot of small businesses
do spend a considerable amount of time thinking about and
researching their options, and that's certainly a problem and shows
the need for the healthcare system to step up and
(25:09):
give information in a factual way.
Speaker 1 (25:11):
You know.
Speaker 3 (25:11):
It's also promising because we're seeing a lot of different types of insurance designs coming in that give flexibility to small employers to control their costs and also have a higher quality system. You know I'd say that some of the newer options like these ICHRAs are really excellent alternatives, and small business owners are going to need to seek them out because the brokers that have traditionally sold the insurance into this space might not be economically incented to provide that kind of product to small business owners.
Speaker 2 (25:44):
So now we've got a set of mix-matched incentives that the ecosystem's going to have to overcome. And a note here, Dan just mentioned ICHRAs or ICHRAs as they're called, individual coverage health reimbursement account. That's a specific program that allows employers to give money directly to their employees for healthcare. It's a relatively new path for employer-sponsored healthcare. This type of innovation from insurance carriers is essential. Carriers have to bring more innovative, affordable plan designs into the system that are customizable to the needs of smaller businesses. This was core to Morgan Health's most recent investment in Venteur. Stacy is an expert on ICHRAs. So when Dan mentioned them, I knew we had to have her on. Stacy Welcome to the unshakeables.
Speaker 4 (26:26):
Thanks so much for having me.
Speaker 2 (26:28):
For our listeners who don't know what is Ventuer.
Speaker 4 (26:30):
Venteur is building personalized health insurance, and specifically we leverage legislation that took place five years ago, called an ICHRA, that allows businesses to give cash instead of a group health plan. Each employee gets to take that cash, buy an individual plan, and decide how to use this money, whether to keep some more as cash, more as insurance, and it gives us huge amount of flexibility in that each employee goes from having maybe one option to having literally hundreds of options to choose from. That's where the personalization comes in. For the small business owner what this also means, picking health insurance is such a hard and personal decision, instead of you picking for your employees, each employee gets to choose what's best for themselves. And on top of that, the business usually gets to save anywhere from up to 30% on costs.
Speaker 2 (27:19):
This is why we wanted to have Stacy on the show,
because not only does she run her own startup and
small business, but she is largely serving small businesses who
run into this pain point all the time. So we
thought it was the most meta situation we could have.
I'm going to ask a cynical question, which is I
can see why employers like it because they're giving a
fixed dollar amount and that's great, and that means they're
not exposed to the wild swings of health insurance pricing.
(27:41):
Why do consumers like it?
Speaker 4 (27:43):
Consumers like it because you get to decide what's best
for you and you can really hyper personalize. So for example,
one of my favorite moments in being an ICHRA we use
our own product for our employee benefits, was firing a
health insurer who wronged me. And in the past, in
a group model, maybe if something went wrong, it may
(28:06):
or may not have made sense for that company to change.
But in this case, if for you and that interaction,
if something happens or it doesn't work, then you can
make that decision for yourself.
Speaker 2 (28:17):
That's really interesting to me because today if your individual
claim gets denied. Your employer might not even know that right,
and so the person who's buying and choosing the carrier
is not the person who necessarily is living with the
consequences of that decision.
Speaker 4 (28:30):
That's correct. It realigns incentives of the person who is
using the plan has the power to give that market
feedback and have that corrective action.
Speaker 2 (28:41):
It's really interesting. You and I have talked about this before,
but as it exists today, health insurance isn't really health insurance,
right at least employer based health insurance. It's really just
the cost by which you and your employers split the
cost of care.
Speaker 4 (29:19):
It's basically questioning how we pay for healthcare altogether. And there's an insurance component, but one of the things that's unique about ICHRA is you don't have to spend all the money on insurance. So maybe you decide to get that catastrophic coverage where if something really serious happens, the insurance is there to protect you, but maybe you decide to keep more of the money in a wallet that's also pre-taxed and that you use for wellness or for things that keep you well. So that's where this is a really different model. So that's where this is like a really different
model and It really will disrupt healthcare as we know
it in multiple ways, whether it's just putting the consumer
in that center of the value chain or changing how
the money. The one point six trillion dollars spend by
employers every year is allocated one put six trillion dollars.
That's a huge number on premiums. Just on premiums. We're
(29:40):
not even talking on other expenses.
Speaker 2 (29:43):
Wow, so it's growing at three hundred percent. Are you
seeing both small and large employers take this on? We are,
And is it more small more large kind of a mix?
What are you seeing?
Speaker 4 (29:52):
It's more small than large, but the large businesses are coming across the finish line as well. The use case is different. For the small business owner, it's all about employee choice. It's about getting out of the business of health insurance. They get some more time building their robot hand instead of worrying about benefits, that's what it means for them. For the large business, this can mean tens of millions of dollars of cost savings. It can mean jobs saved. It can mean margin improvement. It's huge
Speaker 2 (30:22):
Stacy, it's great having you. Thank you for being here,
and I look forward to more conversations in the future.
Speaker 4 (30:26):
Thanks for having me.
Speaker 2 (30:28):
I have another question for Laurie and Dan, which is,
as I've been listening to both of you speak. On
the one hand, the mindset around risk taking and health
insurance for small businesses sound like to completely orthogonal concepts.
On the other hand, they both tie pretty closely into
mental health, the quality of someone's mental state. Both business
(30:49):
owner and employee, can you talk a little bit each
of you how do you think about the importance of
healthcare and health in the construct of running, operating leading
a business, because they do actually come together in sort
of an interesting way.
Speaker 3 (31:05):
So I'll say, for my part, you want your employees
to have excellent health care. You really feel a burden
and a passion to take care of your workers. They're
the ones who are making it happen for you, and
small business owners really feel that passion. But then you
also have to square out the technical aspect of it.
So I think that small business owners are motivated to
(31:26):
provide this kind of coverage for their people, but they
need help in figuring out ways to do it cost
effectively and in a way that fits into the construct
of their business.
Speaker 5 (31:37):
Laurie, I think I'll just follow up on Dan's point
and saying, you want your employees to have good health care,
but you also want them to have good health, and
that involves having good physical health, and a part of that,
an important part of that is not being stressed out
all the time. And I think providing psychological safety giving
someone security knowing that if something bad happens to them
or a family member they love a lot, that they
(31:58):
just have the security of knowing they'll be okay. And
I think that this idea of psychological safety building insecurity
by giving these kinds of resources to your employees only
winds up helping you. I think more and more we're
starting to realize the importance of good mental health for
allowing our employees and team members to achieve better performance,
better innovation on the job. And so I think these
(32:19):
healthcare systems aren't just an insurance policy to make sure
your employees can pay for something if something comes up.
It's an insurance policy on making sure you have your
workers feeling like they're supported in both their physical and
their mental health.
Speaker 2 (32:30):
I suppose safety from harm, whether physical or mental, is at the bottom of Maslow's hierarchy of needs. I learned that a long time ago. It is the base of the whole thing.
Speaker 5 (32:37):
Exactly. Look at that. Your intro to psych knowledge coming in. I appreciate it.
Speaker 2 (32:40):
I remember, it's been a long time, but I remember,
all right. Thank you for being on the podcast. It
has been tremendous. We really appreciate your insights.
Speaker 5 (32:47):
Thanks so much for having us.
Speaker 2 (32:49):
And usually we end with our guests sharing a piece
of advice that was instrumental to building their business, but
Patrick Hall did that well. If I had to give
just one, it would be the one that my dad
gave me, which was by an existing business that has
cash flow. So I wanted to ask him about another
piece of advice he'd gotten.
Speaker 1 (33:08):
I had a director, a mentor in college in Alabama who had always said to me, "Patrick, if you can do anything else other than acting and make a living and be happy, do that." The only other thing that made me happy was flowers. It's joyous. It's just the joy of working around beauty and creativity with like-minded creatives and people that appreciate flowers, and it's just such a kind thing, and it's such an inflection point of people's lives. It's celebration, it's condolences, it's all the times that you need to convey emotion and kindness. People go to flowers.
Speaker 2 (33:49):
My takeaway, find something in your life that you love
and make sure that you do that thing. It doesn't
have to be your business, your side hustle, or the
thing that you make your money on. You can have
another job, but we're all better off doing something we
love and adding some joy to our lives. Thanks for
joining us today, Patrick, Thank you, thanks so much for
(34:11):
listening to this episode of The Unshakeables. If you liked
this episode, please rate and review it. Next week, we're
heading down south to a man whose global disaster response
organization was born out of an obsession with the underwhelming
meals served to folks in New Orleans after Hurricane Katrina.
He spent months scribbling his business plan and ideas on
legal pets, until finally he just had to get up
(34:33):
and cook. I'm Ben Walter and this is The Unshakeables
from Chase for Business and Ruby Studio from iHeartMedia. We'll
see you back here soon
Hosts And Creators
Ben Walter
Kathleen Griffith
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