Market Leaders Podcast: Navigating health benefits and ACA compliance for home care agencies

Adam Healy:

It's all about accessibility and serving people. With that being said, how do you see technology playing a role in helping home care agencies better manage compliance and benefits offerings moving into the future?

Joseph Kitonga:

My background includes studying computer engineering in school and then interning at Microsoft working on Xbox for three years. I had a full-time offer ready to go. However, I found it compelling to work on technology to increase access to care for a population that has been ignored. I remember my parents at their office; they'd have HR payroll reps, companies like ADP and Paychex, plus workers’ comp vendors, all knocking on their doors. 

However, I thought the most important thing missing was the health plan vendors looking to increase access and design plans to fit this population. And naturally, access is a challenge. We understand what great healthcare and primary care look like, but access is challenging, and technology is uniquely suited to solving access problems. The key is to reduce the cost of the service so you can increase the number of people who can take advantage of it.

The reason our plans are the most affordable plans on the market but still deliver as much impact as they do is largely because of the technology that we've built. We have our own medical group that delivers the care that we have, and our members can be seen by providers either virtually or, in some markets, in-home or at workplace popup visits. And with the inherent scalability of our offering, we're now in 10 markets. We're going to be in 20 by the end of the year, 40 by midway next year, and by the time we get to this point next year, we'll be available across the entire country.

We're able to do that so quickly because technology is the backbone of our entire offering. We've designed it to reduce unnecessary costs and improve the experience for the member, the employer, our providers, and our other partners. 

It sounds simple, but I think the future of healthcare is inherently going to be more accessible by using technology to cut out a lot of the administrative fluff that generally inflates cost.

Adam Healy:

So, tell us what's next for your company?

Joseph Kitonga:

Expansion. We started in Pennsylvania with my mom as our first client. We now work with over 400 agencies ranging from the smallest agencies to the largest. The core belief that they share is wanting to offer amazing benefits that help attract and retain talent while being ACA compliant. We plan to grow from the 10 markets we're in now to 20 by the end of this year, 40 midway through next year and 50 by the time we chat in a year. But it's just taking our current plan and bringing it to all home care agencies across the country. 

So, if you offer a MEC plan, you should speak with Vitable because we believe that we offer the best MEC plan. Our clients have shown that we do; we have over 90 NPS, which is quite rare for healthcare, where the average is maybe 10 and, in some industries, less than zero. I think it's about time that there's innovation in this really important part of both the home care owner-operator experience and the employee experience.

Adam Healy:

I agree. It's very exciting. So, Joseph, where can listeners find Vitable Health?

Joseph Kitonga:

You could go directly to our website or find us on LinkedIn. If you have a MEC Plan, we could likely reduce your costs and offer something that you will be proud to tell your caregivers about. The dirty secret is that most MEC plans suck, and we're the first one that doesn’t just not suck; instead, it's actually quite delightful for the owner, their budget, and for the employee.

Adam Healy:

Well, thank you so much for the chat and I hope we can speak again soon. Awesome. That was Joseph Tonga joining McKnights live from Tampa, Florida.

Joseph Kitonga:

We work with many home care agencies as they approach the 50 full-time equivalent employee mark. They know that once they reach 50 employees or FTEs, they have to offer an ACA-compliant plan or they'll get fined about $3,000 per employee. At that moment, the most important thing is how they can get a solution in place as quickly as possible to meet the ACA obligation and offer their employees access to high-quality preventative care. 

The dirty secret that most employers know, as well as anyone who has been around ACA-compliant plans tailored to home care agencies, is that most of these plans are really awful. I think they’re sold by people who overemphasize the complexity to confuse and extract value from the owners that they work with.

Again, going back to my mom, when her agency was approaching 50 employees, she really struggled to wrap her head around who she could trust and what ACA compliance was. The advice that I'd give her now is to give Vitable a call. Our goal would be to simplify the process for the agency so it could go from being non-compliant to compliant as quickly as possible.

Adam Healy:

Absolutely. It's a tricky landscape. So, what advice do you have for agency owners who may not be compliant but are perhaps a bit more willing to risk it by not offering health coverage?

Joseph Kitonga:

This is a great question. The misconception is that owners don't care about being compliant or offering great benefits to their employees. The more honest answer is that they do care, but the cost is an important consideration. Owners approach Vitable and say, “Hey, I would love to do something, but I just can't afford to do so right now. I think I might be okay taking the risk.” 

We explain that if you do get fined, it will be extremely, extremely expensive for you, about $3,000 for each employee. That means if you have a hundred caregivers or full-time equivalent employees, that's about $300,000 for each year that you're non-compliant. We tell them we understand the choice and explain how our options make the cost more affordable and easier to administer. 

We often hear from owners we have spoken to in the past that are now getting fined, and they come back to us and say, I wish we'd listened to you. We know we are the most affordable option on the market, and we always say if you find a more affordable option, do come to us. 

But we try to make it really simple for owners like my mom that don't have cash to waste to protect the business from those really hefty fines and do so without adding any complexity to their business.

Adam Healy:

Right. There's so much value in that, and Vitable serves a booming industry. The home care field is growing very rapidly and there's already a lot of competition for attracting and retaining those caregivers. So, can you talk a bit about how employers should think about healthcare benefits in their hiring and their growth strategy?

Joseph Kitonga:

If you look at the most successful home care agencies, one thing is fairly consistent across the board, and that is they offer great benefits. If you want to have longevity, offering health benefits for your caregivers and employees is just table stakes. But understandably, cost is an important variable for consideration. Homecare owners and caregivers are not irrational. They understand you can’t offer a Cadillac plan at the lowest cost. 

They're looking for a plan designed to meet the specific needs of this employee population and their employer's budget. Vitable was built for this audience: my mom and the almost 400 home care agencies that we work with. We uniquely understand the needs of owners who really want to build and have longevity in the business, but more importantly, it doesn't break the bank.

The plan must fit into the owner's budget while caring for their employees. The broader point is that health benefits have become essential for attracting and retaining high-quality caregivers. 

One thing we've learned by making primary care more accessible through our health plans is that there's lower absenteeism because the employee doesn't have to take off work to see a doctor or go to the ER or urgent care center. The workers can see a provider via a virtual visit, and often, one of our providers will do a workplace pop-up visit and see multiple caregivers who come in to pick up their paychecks. 

Often, the cost of insurance plans eats into the business’ margins. But with Vitable, we've designed our plans to meet caregivers where they are while also fitting into the relatively tight budget that owners like my mom have in place.

Vitable’s Founder and CEO, Joseph Kitonga, joined McKnight’s Market Leaders Podcast to talk about how his parents’ experience running a home care agency led him to create Vitable, why home health care businesses are among the most likely to be audited by the IRS for non-compliance with the Affordable Care Act, and how agencies can think about health benefits as part of their overall growth strategy.

This interview has been edited for length. To listen to the full interview, please visit McKnight’s Home Care.

Adam Healy:

Let's start by talking about you. Can you tell me about your background and how that led you to start Vitable Health?

Joseph Kitonga:

First, thank you for having me. When my parents and I immigrated to Philadelphia, I had the privilege of a lifetime watching my parents chase the American Dream and start a small business, a senior care agency. They were caregivers themselves and eventually hired caregivers to take care of seniors in their homes. 

Over the last 15 years, they grew it into a meaningful small business with 200 caregivers. Most of those caregivers made too much money to qualify for Medicaid yet too little to afford a “Cadillac” health insurance plan. It was important to my parents to offer a plan. They wanted to take care of their employees and be a competitive employer—but they found that less than 10% of employees opted into the plan.

The majority remained uninsured, which resulted in heavy reliance on emergency room services. I’m sure you have heard a version of this story before, but upwards of 70% of ER visits are unnecessary, costing $1,300 on average, which is a lot of money for anyone, but it's especially taxing for the everyday hourly worker. 

These costs make upward mobility more difficult and, more importantly, generally lead to worse health outcomes. 

I came across a statistic that blew my mind and turned this issue from an interesting problem to one I was excited to dedicate the rest of my career to solving: In Philadelphia, in two zip codes just five miles apart, the average life expectancy difference is about 20 years. 

Sadly, this is true in most major US cities, and it's not rocket science to figure out why. There are a few variables that contribute to the disparity, but the one that we're most focused on at Vitable is the lack of access to high-quality preventative care. 

Vitable was created to solve the question of how we can make affordable, delightful healthcare accessible to this population that's been so underserved, primarily by helping employers take care of their employees. 

Because my background before Vitable was computer engineering, the core of what we've been building at Vitable is this: how can we use technology to make healthcare more affordable and accessible to caregivers and their employers?

Adam Healy:

It sounds like it's been quite a journey, and I want to stick to that theme of growth. So, as Vitable has grown, how has it evolved to continue helping home care agencies?

Joseph Kitonga:

My mom was our first client, and over the four years since we launched Vitable, we have added hundreds of home healthcare agencies, helping over 50,000 members get access to really high-quality healthcare through their employer. 

We started off with this core thesis: Employers and home care agencies, like my mom, needed to offer an ACA-compliant plan to avoid the IRS penalties brought about by the Affordable Care Act. However, although they wanted to offer amazing benefits to help attract and retain employees, the cost was often prohibitive. Everyone who works with home care agencies understands how significant margin constraints are. 

To solve this problem, we designed this delightful primary care-driven health plan to satisfy parts of the ACA rules and avoid penalties. This approach has supercharged our growth because employers can now offer essential health benefits while keeping the business ACA compliant. This is a win-win for everyone: a win for the employees, who get awesome benefits, and a win for the employer, who is able to become ACA compliant, which before Vitable wasn't possible. 

Our primary care membership, which is the core of all the health plans that we sell, has a $0 copay and $0 deductibles, and dependents are included at no cost. It's really tailored for caregivers.

Adam Healy:

Well, I'm so glad you brought up the ACA. As you know, home care agencies are among the most likely to be audited by the IRS for ACA non-compliance. I'm just wondering, in your opinion, why is that?

Joseph Kitonga:

I always think back to my mom. She was so busy every day, handling everything that could go wrong or would come up. The most important thing was how she could focus on spending time with the caregivers and patients. Part of it is that homecare owners and operators are incredibly busy, and there's a lot of confusion around the ACA guidelines. One major piece is tracking full-time employees, which involves complex data collection and often results in incorrect FTE calculations. I'm just imagining my mom, and it's quite overwhelming.

Adam Healy:

You're right; there's so much complexity. So, let's break it down for our listeners. Could you walk us through a typical scenario where a home care agency might face an IRS investigation or penalty for ACA non-compliance, and how might Vitable help mitigate that risk?