November 2, 2010
Ric Joyner is not a typical CEO — chief executive officer; instead think “customer experience officer.”
His company (founded with partner Tom Jacobs), eflexgroup, administers consumer-driven health plans — Health Savings Accounts, Health Reimbursement Accounts, Flexible Spending Accounts, and COBRA administration — but FSAs are its specialty. The passage of the Patient Protection Act, the nation’s new health care law, impacts a customer’s experience with health care, Joyner notes, but with two notable exceptions he views as only “cosmetic tweaks.”
Joyner would like to get one part of the Patient Protection Act repealed. His company’s FSA specialty was in the crosshairs of the Patient Protection Act, which changed the definition of “qualified medical expenses” for health FSAs, HSAs, and HRAs to align them with the definition used for the medical expense itemized deduction, excluding over-the-counter medicines prescribed by a health care professional. That means that beginning in 2011, over-the-counter meds will no longer be part of consumer-driven health plans as they had since 2003, when the Bush administration gave people the ability to take over-the-counter medications to a flex plan.
That’s the case even though less than 5% of the purchases on debit cards are for over-the-counter medications.
The part that Joyner really wants to get rid of is a cap on Flexible Spending Account contributions. The new health care law caps health FSA contributions at $2,500 per year after 2012, but indexes them to inflation after 2013. That means the maximum amount people will be able to put into a FSA will be $2,500 in 2013, a restriction that Joyner would like to see repealed even though eflexgroup’s average election in FSAs is under $1,600.
There has been talk of repealing all or part of the Patient Protection Act, derisively branded as “ObamaCare” by its critics, but a presidential veto might render that impossible.
“It was limited before to what an employer wanted to be at risk for,” Joyner said of annual FSA contributions. “Now that is going to hurt a lot of folks with higher-deductible policies, so I don’t know what they were thinking.”
In one sense, the new health care law is a boon to benefits specialists because of the sheer number of questions people have about it, but Joyner said it would also benefit eflexgroup if premiums rise significantly because that leads to higher deductibles. According to local health insurers, that won’t happen in 2011, but it could happen in the long-term as more people are covered by the new law, and as more benefits are added to coverage.
“The higher the deductibles go, the more it makes sense to have an HSA,” he stated, “and it’s the same thing with an HRA. Most of our sales right now are in Health Reimbursement Arrangements, where the employer buys a high deductible health plan, then funds some of that for the employee so there is not as much sticker shock.”
Thanks to another piece of legislation signed by President Obama, the much-maligned American Reinvestment and Recovery Act, eflexgroup has seen its COBRA business double; good, then, that it was called upon to serve on a COBRA seminar panel put on by the National Association of Health Underwriters. The new COBRA requirements are apparently so complicated that a growing number of businesses can’t do them in-house anymore.
Nationwide Company, Local Leadership
Now with more than 100 full-time and part-time employees, and approaching $9 million in sales, eflexgroup has opened new offices in Florida, California, Minnesota, and Oregon. Thanks to technology, it also has remote employees across the country. “The more technology based we become, the more employees can work right in their houses,” he noted. “It’s pretty exciting. A lot of those are what we call remote claims processors.”
Eflexgroup also is looking to secure a patent on its claims process, which Joyner touts as one of the most efficient in the industry — efficient enough to pay claims in under one-half day and to help the company win an international Six Sigma award.
Joyner, a native of Gutherie, Okla., began eflexgroup in 2000 with Jacobs, a former Professional Employer Organization founder and owner. They count among their 2,500 clients the likes of Madison Gas & Electric, Old Country Buffet, and the New Jersey Devils hockey team.
Now 53, all of Joyner’s kids are out of the house, and he and wife Mary already have three grandchildren, so now he gets to do more of the things he likes, including fishing and “hanging out” with those grand kids.
While the day-to-day operations have been turned over to President Steve Funk, who started with the company as CFO, Joyner and Jacobs still spend quite a bit of time promoting the company’s services around the nation. They are asked to speak, write articles, and conduct continuing education programs for brokers, human resources personnel, and attorneys.
Jacobs refers to the increased emphasis on talk by the founders as “putting everyone to their highest and best use.” He says of his partner, “What he’s done is really develop and change the big picture of how all the pieces fit together in consumer-directed health plans. It’s been an educational process for both of us.”
With the value of the business going up, the eflexgroup founders are about at the age when they should start thinking about succession, but they haven’t gone down that road yet. “We have plenty of entreaties to purchase us, but Tom and I don’t really want to work for anybody,” he said. “We can barely work for ourselves.”