Prepare 4 VC presents Aflac and TowerHill: Intro to startup benefits
In this recorded webinar hosted by Jason Kraus of Prepare for VC, representatives from Aflac (Evan Cross) and Tower Hill Financial (Ryan) discuss how startups can build comprehensive employee benefit packages. They explain the evolution and importance of benefits, outline core benefits (health, dental, vision, life, disability) and the gaps they leave, and introduce Aflac’s voluntary indemnity products that supplement traditional coverage without cost to the employer. Funding options—employer‑funded, employee‑funded, or hybrid—are described, emphasizing that small companies can offer the same benefits as large firms. The conversation moves to Tower Hill’s broader financial‑planning services, including tax‑efficient business structures, retirement plan design, equity‑vesting guidance, cash‑flow analysis, and employee‑retention strategies. Both firms stress the educational component needed for founders and employees, note that benefits improve morale, productivity, and reduce bankruptcy risk, and invite startups to schedule a brief consult. Contact information for both partners is provided.
Chapters
This conference will now be recorded. All right, and then, yeah, this is, uh, no, it's great to have everyone on here. Um, so this is a partnership we have between Prepare for VC, which is our consulting, uh, startup consulting and advisory group. It also has a virtual accelerator program. Basically, we work with startups to help them through the fundraising process as well as Growing and scaling internally through different growth strategies, operations, and other aspects of their business. We always like to have strong partnerships lined up for companies. So no matter what your needs are, we can have a partner that can help you in, you know, in the right direction here. And we're excited to have partnered with Both Aflac and Tower Hill Financial, who are leaders in the benefits space and can, yeah, have a lot of great programs, especially for the startup side, to, you know, get involved early on and be a part of, or basically create a better environment where new employees you want to hire, as well as like your founding and co-founding team can have access to benefits that, you know, most companies think are only affordable to high-level corporates, but they've made it really accessible for the startup community. So yeah, excited to have you guys kick it off and have Evan sort of start us off and share a little bit more about what Aflac is doing and how you guys are helping companies through their benefit programs.
Yeah, well, we're happy to be here and we're happy to have the partnership, Jason, with you and Ryan as well, and certainly with any of the startup companies that you're working with. So I think we bring a lot to the table. We bring a lot to the table, not only on the benefits side, and we can touch a little bit on what we do on the benefits side, But largely for your clients who'd like to also work as a consultant. One of the things that Dave and I bring to the table, and Brian as well, but we have years and years and years of experience with employee benefits and as well with employers and employees. So we've seen a lot over the years. And we've got a real good feel for what's out in the market, what employers are offering, what they're not offering. And we'd certainly love to be a consultant free of charge. We're just happy to talk to any new startup companies or even more established companies around benefits and share our experience with them. So, Dave and I represent— largely we represent Aflac, in case you can't tell by looking at us. And I brought the duck too, which I'm sure people are familiar with, our famous mascot. So, on our side of it, we're working with companies in a few different capacities. We're working with real startup companies that are coming to the table with no benefits at all. Started up a company, have a great business plan, hired some employees, are starting to do their thing, and benefits is really an afterthought. As well, we're working with companies that are very established and been around for a long time and have a great traditional core benefit package. And with additional products that we offer, we're really rounding out an already good benefit package and making it a great benefit package. And then Ryan will talk as well. He has some overlap with what we do. We do some of the same things, but he also does a lot that we don't do. So, as Jason was saying, we really just want to all work together and be a full-service partnership for each of the companies. So, um, to start off with, I guess, the benefit world and kind of explain benefits from our perspective. And benefits go back a long way. They go back— if people want history on it, go back as far as the railroads when, um, probably not the best work environment, and they were having trouble keeping people working at their railroad Sorry, railroad jobs. They were offering them a salary, obviously a significant part of people's compensation, but wanted to offer something more. So they started offering health insurance, and that's where employee benefits began. And so they've always been there as a way to attract and retain employees. And so now, if you fast forward to 2020, Benefits are obviously a huge part of people's compensation or ultimately become a big part of people's compensation. And now a little bit less than half of all employees say that they would rather work for a company, an equal-type company, even if the overall salary was a little bit lower, if the overall benefit package was richer. And 17% of employees said that they've either left a company because the benefit package wasn't strong enough, or they've turned down job offers because the benefit package wasn't strong enough. So in the way that we see it, there's— I don't know if a disconnect is the right way of looking at it, but the priorities of employees and the priorities of employers sometimes is different. And I think especially for newer companies that are just starting up, from the company's perspective, they're really focused on getting the company launched and off the ground. And as I said, for a lot, benefits isn't really the forte. A lot of small startup companies we find don't even have a real designated HR director. It just isn't the main focus, but for the employee side of it, Who is— who Dave and I are mostly dealing directly one-on-one face-to-face with employees. Employees view it differently. They work for the company, they like the company, they like the company's mission and so forth, but they're still ultimately there for the compensation. They're there for the paycheck and they're there for the benefits. And so that's what we can provide a lot of insight to. And to break down employee benefits, They start— primarily they start with health insurance. So when a company starts, the first benefit that they're offering to their employees is going to be health insurance. And health insurance isn't cheap. So for a lot of companies, depending on what their budget is, health insurance may be the only benefit that they can provide for employees. But for employees as well, the main thing that they're looking for, they want to know what the bottom line is, how much are they going to get paid, but also what are the benefits. And their starting point, too, is going to be with health insurance. So, health insurance, we can certainly consult with people on the health insurance. It's not a primary function of what APPLAC does. It's actually not a function of what we do at all. We do not do health insurance. But Ryan can help out with that as well, and we can certainly consult on the health insurance piece. Beyond health insurance and what we consider to be traditional core benefits that employers offer to their employees. There are a range of different traditional core benefits that employers offer. And also, there's an idea from employees of what they expect an employer to offer for traditional core benefits. So—
Excuse me.
On the traditional core benefits side of it, employees are looking Things like paid vacation leave. They want to know what their time-off leave is going to look like. They also want to think about retirement plans. They usually hope that the company offers a retirement package. They want dental. They want vision. They want life insurance. They want disability coverage. And so those really— that cluster really what traditional core benefits are. And I'll talk a little bit more to that. But beyond that, there's a whole bunch of other benefits that can be offered to a group, a lot that AFLAC does, and we can talk a little bit more about that. From our perspective, we really think as a starting point, beyond the health insurance, probably the most important benefit that can be offered to an employee is disability coverage, because disability is specifically designed to ensure people's income. And although nobody plans to get sick or injured or go through a medical event that's going to keep people from physically going to work and earning a paycheck, unfortunately that happens. And most employees, regardless of how well they're compensated financially, statistically in America, most employees can't go more than 1 or 2 paychecks without— before they start to run into financial hardship. For most people, it's one. And so disability coverage is designed to ensure an employee's paycheck if they're unable to go to work. Dental is certainly a popular benefit. It's requested a lot by employees. It's a very difficult benefit to offer for small companies.
Mm-hmm.
Usually— excuse me— there are minimum participation requirements or there's a percentage participation requirement that a company needs to meet. For smaller companies, all of these employee benefits are difficult to offer. As Jason was saying earlier, large companies have better access to good benefits. Small companies typically don't. Good news is all the things that we're going to talk about today, we can offer to any size company. Well, any size from 3 employees up to 2 million or so. So, So we can offer the same great benefits to small companies as we can with large, but disability, dental, life insurance— unfortunately for most Americans, their only life insurance that they have, if any, comes through their employer. It's a benefit that most people have some need for, but they, they don't shop the market directly and require their employer to provide it. So I think we lost Daley. It's just us?
Keep going? Sure.
Yeah? Okay. So, so, so all these benefits employees are looking for, and it can be hard for a new employer to try and figure out how to put these benefits together. So Beyond these core benefits, for the groups out there that already have these traditional core benefits, as good as they are, there's still gaps in coverage. Traditional core benefits are great, but they don't cover everything for their employees. There are gaps with copays. There are gaps with deductibles. Disability doesn't pay people 100% of what they're used to earning. And so there's also a voluntary benefit market, which is what Aflac is the leader in. And so we additionally, we offer these traditional core benefits, but we also offer a suite of indemnity products which are designed to sit on top of a good traditional core benefit package, which really round them out and provide a lot of financial safety for employees. And so real simply put, without getting into depth with what our products at Aflac are designed to do, But our products give people cash if they go through a medical event directly to the employee, to the policyholder, to help them fill out gaps with their copays, deductibles, lost income, money they can use to pay their rent, their mortgage, their car payment with. So when it comes to funding employee benefits, which probably is an important thing to talk about on this meeting, there are a lot of options on how to Employee benefits. And so they can be funded by the employer, they can be 100% funded by the employer, or they can be 100% funded by the employee, or they can be funded in some combination of the two. So with Aflac, we're able to offer a lot of traditional core benefits, which are typically employer-funded benefits, but we're able to offer our benefits to to the employees without there being any cost to the employer. And in our experience with a lot of small startup companies where revenue stream is important, maybe companies don't come with a huge budget for benefits. Being able to offer employee-funded benefits is a real good benefit to the employees because it's still giving the employees access to the coverage. without the employer having to pay for it. And so even if we're offering traditional core benefits, which could be covered by the employer, like disability or dental or vision or life, employees are still happy to have access to that coverage even if they have to pay all of the cost of the premiums for it. So— So that's my little spiel on employee benefits. And as I said, we'd really like to make ourselves available just to help out, answer any questions that new employers, existing employers might have. One question that we have when we meet with groups a lot of time is, what are other companies in our industry offering to their employees? Because it's something you may just not know. I met with an engineering company recently, and they wanted to know. We think we pay a pretty good salary to the employees, but what are other engineering companies offering? So we can help companies get more marketable on their benefit package and answer any other questions that people may have.
Yeah.
And so one—
oh yeah, I was just going to ask. Yeah, I know we've talked about this too, but like a lot of companies are You know, startups, um, basically we've talked about, you know, when you're talking about the disability coverage and other benefits you guys offer, um, sometimes startups might not think like it applies to their industry or, you know, it's important for them. But are you still seeing, um, Yeah. like a strong need and employee, um, excitement around these other, these other programs and packages that you know, companies might not, you know, would think are for more labor-intensive jobs and things like that.
Yeah, it's a very good point, right? So if we're dealing with a lot of biotech companies, and, um, as an example, you know, a lot of times, as I said, disability is an event where people don't think they're going to get sick or injured. And a lot of people, um, probably a lot of people on this call probably do a lot of work from their computer. And nowadays more than ever, they're probably doing it from home too. So they're probably thinking, why do we need this stuff? You know, maybe I don't need it, or I'm not gonna get sick or injured. Even if I, I do, I can still work. I can work from my living room, work on my couch, my computer. The answer to the question though, Jason, is yes, because there's a lot of cases that people go through an event and regardless of what they do for work, they still can't work. One of the products that we offer, and obviously not the most uplifting subject matter, but at Aflac we offer cancer plans, which is also covered by our disability coverage, and we have a hospital plan as well which covers it. But there's a real event where people may physically be able to function and get on a computer but might not be well enough or feel well enough or mentally well enough to Yes. To actually work as they're going through treatment. So we do. And I think the important thing to note is that a lot of times the employees may not— they may not be thinking about the need that they have for these coverages. And a lot of employees don't really understand employee benefits. They know some of the basic ones. They know health insurance. They know vacation time or PTO. They know dental coverage because everybody knows a little bit about dental coverage. But they don't really understand disability, what it does or how Life insurance is something— some people, maybe their parents taught them about life insurance and the importance of having life insurance. A lot of people don't know anything about life insurance. They may know that they should have it, but they don't know about how it works or what it could do or who it's there to protect. So, we see— and that's still just on the traditional core benefits, which more people are familiar with. They are definitely in demand by employers. They're definitely in demand by employees. And when you look at all the additional benefits that we can make available, we know in our experience nobody knows about them. We talked about Aflac, and although most people are familiar with the brand and they know the duck, nobody knows what we do. They think we're car insurance. They think we're homeowners insurance, neither of which we do.
Right.
So, so there's a real educational component, I guess, to really get back to your question on everything that we do and what Ryan's going to talk about. But there's a real educational component when it comes to employee benefits, both on the employer side and on the employee side. People know that they should have benefits. They want to have good benefits. They don't really know what that means. So, so that's what we're good at. We go out and explain it to people, and it's really amazing to see employees when we go out and talk to employees ultimately about the coverage, or even the HR director or the owner of the company. Once we start explaining some of these things to people, it starts to make sense pretty quickly for people. But ultimately, the benefits are important because most bankruptcy filings each year in the US, 65% of all bankruptcy filings, are because of medical events that people go through. And there's just a lot of financial burden for people going through a medical event. And from employees, it's one of the main concerns for most employees each day is what would happen if I get sick or injured? How are— how are me, how is my family gonna deal with the financial side of going through a medical event? So overall, good benefits are also good. They're good for morale, but they're also good for overall productivity.
People—
That feel comfortable. They've got a bit of peace of mind than not having to worry.
Absolutely.
Yeah, they don't have to worry about losing that next paycheck. They know that their retirement plan is going to be in good shape and all these other things, and then they can just focus on the work at hand. And ultimately, that's what we're trying to achieve.
Sounds great. Yeah, no, thanks. Yeah, and that's why Yeah, that's why we have you guys as, uh, as resources here too. Like, a lot of companies, like you mentioned, aren't as familiar with some of the other benefits besides, you know, healthcare and dental. And, um, yeah, if we can help— Just the basics. Yeah, I hope you get— or yeah, if you guys can help them figure out like what makes sense for their company and, um, sort of point them in the right direction. Yeah, it's great to start that early on.
Awesome. We'd be happy to help out. And even if you don't need our services, we're happy to direct you to where you might— what you might actually need. Sounds good.
Yeah, and I guess, yeah, Ryan, do you want to share what Tower Hill is up to? And then, yeah, we can Go with a couple more questions from there. Yeah, that all you guys might be able to answer.
Sure.
Yeah. Yeah. So to Evan's point, you know, we complement this relationship not only to, you know, businesses, but also to individuals outside of benefits and what have you. And, you know, kind of financial planning is one of those words that are you know, fully loaded with a bunch of different scopes and definitions of how people view it. Sometimes people are scared of that and what does that actually mean? So how we complement Aflac and what they, you know, can do at an employee level, at a corporate level, at a business level is, you know, we can do a lot of the same things, which is why I think, you know, the partnership is at the strength of what it is, but also, you know, answering different tax implications for the owner of the business. Um, simple things like, you know, Evan mentioned disability. Okay, that, that protects the income. That's an asset. So, you know, how are we doing in the savings category? You know, people don't know what they don't know. So what's the proper savings amount? Um, you know, what happens if something like we're going through right now in this pandemic— like, we've been able to maintain businesses and, you know, jobs and etc. for different households and owners because they've done the planning that we've recommended for them, which at the end of the day is, is just simple life things, you know, such as saving per month, per paycheck, you know, etc., giving information that people want to know but don't know that they want to know. But also on the benefit side is complementing what you know, Aflac could implement, but also separate, you know, work and personal stuff as well. So there are, you know, as Evan mentioned, outside benefits such as disability and life on the personal side. Or as a business owner, there's different things to set up from the executive side. Or, you know, in the startup space, I know Evan mentioned some of the biotech companies. Some of these companies get different sorts of funding where there's equity within the company. So the employees want to know, when am I vested? How am I vested? What do I do with these stock options down the line? Um, and what if, you know, some other new and up-and-coming thing comes around and there's another company that I want to go join and they have a better offer for me? What can I do? How do I transition? So from that level, you know, we've helped a lot. Just in that startup space. But then, you know, to get or to separate from just the benefit side and more of the insurances, there's also the investment side as well, where we can, you know, provide proper recommendations for the type of business, how it's set up, whether it's a DBA, LLC, C-Corp, S-Corp, the tax implications of that. You know, how do we prepare for taxes year over year, you know, and help with the bookkeeping, cash flow analysis, the budget, et cetera. Um, but also, you know, offer benefits to the employees on that side where, you know, we can provide or carve off a portion of the business to give employees, you know, a match to their 401, 403, you know, SEP IRA, however the business were to set it up. based off how they file. But, you know, what that also provides is, you know, one of the biggest things that we see is employee retention. You know, you want different employees to feel special in a way. So, you know, is there a way that, you know, 10 or 20 important employees can, you know, have this benefit through ASLAC where it's a life insurance policy but has You know, cash value within the business that pays for healthcare for these 10, you know, super important employees. Like, there's different ways to get crafty with it, not to get down a rabbit hole or anything, but what we see is a lot of business owners want basic information, and setting that up from a foundational standpoint is good. And that's what, you know, myself, Dave, and Evan can— and our team can help with, but to get crafty with it because, you know, a lot of these businesses are going to be businesses that are successful for 10, 20, 30 years ideally. So how do we, you know, deal with, you know, tax laws, economic changes, different events that are going to happen that we have no control over and just reposition accordingly? And, you know, it's no sweat off their back. So ultimately the way You know, long— I guess long story short of how we complement Aflac is, you know, we're a full-service planning firm, um, that can help on the benefits side. We can also do anything that I would say Aflac doesn't specialize in. I know Evan mentioned some health insurance. Um, we, we have different carriers that we can provide for that employee counts, how the, you know, owner of the business wants to do it, or board or executives want to set it up for their employees. And then kind of take it that next step further where we've done a lot of different educational meetings or seminars with employees where, you know, not the HR type of setting, but, you know, let's set up a half hour and go through some of the stuff that we've put in place. And then let's, you know, take away from that and what we can do on the personal side of things as well. Because at the end of the day, we want that circle to be fully complete.
Yeah, no, I think that all sounds— yeah, that's all really valuable for all the companies there. And even a lot of the startups we work with are in the tech space. And as you mentioned, they might have some key employees that are, for instance, You know, trying to incentivize people not to go to the Facebooks and Googles of the world to come work for their smaller startup. And, you know, if you can couple in the, you know, salary and stock options with some other benefits here, yeah, you know, it's a great place to get help figuring out like what can you What can you guys offer to keep people interested in working for the techs?
Yeah. And I think that if, you know, someone did come from one of the larger companies and joined, you know, a startup or what have you, which we've seen time and time again, sometimes they don't know, like, what do I do with that old investment account that's, you know, at Facebook or at Google? Or can I roll those stock options into, you know, a new qualified plan? What are those tax implications? How do I reset up benefits? You know, does any of the healthcare or group benefits that I had over there carry over? So yeah, I like Evan's point. That's when we get introduced to employees or the owners of the business, we can answer those questions kind of as a, you know, a high-level overview to help. I mean, ultimately, you know, people just want a smooth transition. And they just want, you know, they want to kind of keep doing what they're doing, stay in their lane and do what they're good at. And then we can kind of clean up the mess behind closed doors and figure out all, you know, what needs to happen. So, you know, we've seen that time and time again, just because, you know, people are like, I have this old account. I think it's still at my old employer, but I don't know how to Or what to do with it, and it's in some, you know, fund, or we hear it all the time. So it's just people just kind of stay, um, I'd say comfortable in what they, they know, but they don't know there's another option out there that they can maybe, um, you know, do something different with it. Right.
Yeah. So, um, and I guess this could be a question for both sides. Um, do you Do you mostly work with the employers and the CEOs, or, you know, every employee that comes through that's part of the benefit package? Do you have relationships with them directly as well?
I don't mind answering that, Evan. I mean, I think— and then I can let you go. I don't want to speak for Evan and Dave, but I think the one great thing about, you know, the space that all 3 of us are in is the scope of it and the bandwidth of it is relatively wide. So we can work with, you know, a business that has 3 or 4 or 10 employees, and we can work with a business that has 2,500 employees. In that business, who we work with, whether it's the executives or CEO, the president, And the employees as well. All depends on the nature of the relationships and, you know, why we're working with them at the end of the day. But I mean, we're like, you know, from the scope standpoint, we can work with a single-person DBA and set them up from business planning and personal planning to all the way to, like I said, that 2,500-employee corporation that, you know, has people.
Right.
In different areas, income classes, parts of life, ages, you know, locations. All that comes into play. So there's, you know, there's— and that kind of goes into like some of the seminars that we've done. You know, a 25 to 30-year-old person is not going to come to a long-term care planning seminar, but it's just because it's not going to matter to them. But someone who's in their 40s or 50s that might have had a life event. Or has had a friend or someone that knows someone. We all know someone that's done or dealt with, you know, a long-term care event. I'm just using this as an example, but that might resonate for someone in that capacity. And you could have, you know, the COO, and you could have someone who's just entry-level. Just doesn't— you know, that's, that's why I like the bandwidth and the scope of how I say how broad we can work with people.
On our side of it, we're initially starting our conversations with the owner, the CEO, the CFO, HR director. We're really looking to consult with the company on figuring out what their pain points are and where they want to go on the benefits side. But ultimately, we're then transitioning over and individually working with the to consult with them to figure out what choices they each want to make. So we try to become an integral partner with each group, so with everybody. Sounds good.
Yeah, and then so are— and when you guys work with companies, obviously, you know, it might differ a little bit at the 4-person businesses versus, you know, 100-person business. But, um, are companies generally offering the same benefits throughout all of their departments or, um, customizing them, you know, to people's needs?
Yeah, on our side of it, they're offering the same benefit package throughout the whole company. So Whether it's a four-person group or it's a 150-person group, and it's it's you know our type of products we really think everybody has a need for. Most people need access to these type of coverages, so it doesn't matter necessarily what their income level is. They could be making a couple hundred thousand dollars a year. They could be making twenty-five thousand dollars a year. They're still going to have. financial needs. It might be in different places, it might be different amounts, but they're still going to need to fill in the same gaps. So we're offering it to everybody and talking to everybody.
Sounds great.
Yeah, I mean, I mean, to that point, a lot of like the group stuff that would be implemented is going to be the same, but carving off like a profit-sharing plan or different types of ways to get, you know, healthcare coverage or what have you for like an executive or a board of directors, or implementing like a what's called multi-life DI or life insurance as part of, you know, an extra benefit. There's different things that can happen, but generally the baseline of whatever is offered through the company is flatlined across the board and the income levels don't matter. But from the owner and executive side, there's different things that can be put in place if, you know, it comes to that.
Right.
Okay. And then, yeah, so what do you recommend, you know, say there's startups that are watching this or watching the recording that haven't started on their benefits packages at all? where's the best place to start, or what should they be focused on thinking about, you know, asking their team and sort of, you know, yeah, what should the first step be in putting something together?
I think a good starting point would just be to let's have a conversation, let's have a quick call. We can do a Zoom or even in person if it's appropriate, but Have a quick conversation. For us, it's not hard to figure out, you know, what next steps should be. So if we can get a feel for your company, where you're at, what you're offering or not offering, pretty easy for us to start to put some plans together and give you some ideas of where we think you might want to head. So a quick conversation would be a great starting point. Sure.
Yeah, I mean, I, I, uh, no, I, I agree with, with Evan. I mean, it's, it's 15 to 30 minute phone call, we can figure everything out. And it's not, you know, even if they haven't set anything up yet, it's not necessarily a bad thing. You know, they're, they're focusing on growing the business, so it's just figuring out where they're at, where they want to go. And how do we get there? So I think a conversation, you know, Zoom or something like this, if they don't use Zoom, or just, you know, a phone call or in person, all complements really well.
Sounds good. Yeah, so I'll share this recording with some of our startups we work with as well. And I guess the best, Alvin, anybody that's watching this can reach out to me to get connected with you guys. But also, like, how should, you know, how else can they get in? What's the best way to connect with you guys?
Yeah, phone's easy for us. If you wanna reach me, it's Evan Cross. You can see right there and my phone number is 508- 508-523-3047. Again, 508-523-3047. Certainly Jason can get you in touch with me as well. And my email is very easy. It's evan_cross@us.aflac.com. Sounds good.
Yeah, I would say phone or email work as well. Just because, you know, there's, there's a lot that can be discussed through the phone or email, but it's, it's easier probably on the phone just to answer quick questions. So my phone number is 978-914-0774. That's me directly. 978-914-0774. My email is super simple too. ryan@towerhillfinancial.com, and that goes, you know, right to me. We eliminated the spam and stuff, so any email should come right through. And then there's a link to schedule a meeting with me on my email, so that's simple for people as well.
All right, yeah, that sounds great. No, I appreciate you guys coming on. Yeah, just, you know, helping everybody with figuring out the whole benefits space and where they should start here. So yeah, excited to make some more introductions to you guys and have you guys be yours to all the companies we work with here at Prepare for VC.
We look forward to it. Appreciate the opportunity, Jason. Look forward to hearing from people. Have a great rest of the day.
