Josh Jeffries,principal, Arkin Youngentob

Josh Jeffries is a principal at ArkinYoungentob, which has been in business for more than half acentury. The firm's services range from consulting on design,funding, underwriting and implementation of strategies to ongoingadministration and communication.

Paul Wilson: How did you get your start inthe benefits industry?

Straight out of college, I was with Northwestern Mutual andthere was one guy in the office who always seemed less stressed than everyone else. I talked tohim and he was in employee benefits. He explained that side of thebusiness, and I decided that's where I belonged, because you'reteaching people to spend their money more wisely.

I left and moved to D.C., where I started at a small practice. Ikind of learned trial by fire—they basically gave me a phone and said “good luck.” I figuredout that nonprofits value benefits over salary and that governmentcontractors grow really quickly but often aren't prepared for thegrowth, so I focused on those two industries. After about fiveyears, I was doing pretty well, and they offered me a partnership.I couldn't see a long-term path for myself there, so I decided toleave and start my own practice.

Related: Up-and-coming brokers and carriers: Where's theconnection?

I was lucky because right across from our office wasUnitedHealthcare's Mid-Atlantic office. They had a sales guy, DaveNotari, who later became the CEO for Innovation Health, the largestACO in the country. He took me under his wing, and that was a bigimpetus for me to start my own practice.

So at 27, I started my first company, focusing on HRIS, HRconsulting and self-funded health plans. I ran that for three yearsand in 2009, I met my current business partner, Stuart, through amutual friend. They had a life insurance business that he took overfrom his father, but they also had a small benefits practice. He'sa lawyer, MBA, CPA, so he knew that any legislative change meansopportunity, and he was planning to double down in the benefitsspace. We decided to merge our practices in 2010. I started an MBAprogram at the exact same time, and when health care reform passed,I used it as the basis for my MBA.

We restructured in 2011 to become a fee-based, transparent,self-funded practice. Seven years later, benefits is 80 percent ofour revenue.

PW: In what ways has your career pathshaped your mindset as a broker?

Because I really had to grind from day one, that has instilled awork ethic in me that I'll carry through my entire life. Andbecause I worked in a pretty traditional agency near the beginningof my career, it gave me a line of sight outside of that model. Itshowed me there's a different way.

I was lucky because I was exposed to self-funding way earlier inmy career than most people. And meeting Stuart expanded myperception of the industry even further. He has a background notonly as an insurance salesman but as an advisor; he was thequarterback who goes into a wealthy family and gets everyone on thesame page to build a strategic plan. A lot of those core values areintegrated into what we do today. We meet with prospects who say,“Let's talk insurance.” We tell them, “That's the last thing we'lltalk about.” We're there to consult and be a trusted advisor.They're buying our intellectual capital, not ourproducts.

PW: What does the word “disruption” mean toyou?

Unrest. It makes me think that people are really starting tofeel the pain of escalating costs in the industry and are searchingfor disruption. Health care/pharmacy and insurance are two of thetop lobbies in America. To disrupt that industry is going to take aHerculean effort, but I think it's going to happen.

A lot of the technology that's out there today holds promise;that's why we're seeing a rush to vertical integration at somecarriers, and consolidation efforts like those of Aetna and CVS,trying to localize their service model in communities. And Amazon,Berkshire and JP Morgan makes perfect sense to me.

Five years in the future, when half the workforce are gigemployees, they won't be getting their insurance through theiremployer. I think large employers will always provide health care,but for companies under 200 employees, health care steals theirfocus, affects their profits and creates administrative burden. Iknow this is an unpopular belief from an advisor perspective, but Ibelieve that small employers would be better served with a portablebenefit platform that qualified workers can take with them from oneemployer to the next.

PW: How much attention do you pay to healthreform and the ongoing single-payer debate?

I'm in D.C., so I pay close attention to it. I think a lot ofpeople hear “single-payer” and they immediately jump left or right.To me, single-payer is a safety net, but the private market willstill exist. In some ways, I think those platforms create a furtherdivide between the haves and the have-nots, because the individualswho have higher incomes are going to buy better insurance, and thepublic plan will be left with everyone else.

You look at Canada, with 40 million people, and there are waitsthere for services. We have 350 million people, and not a lot ofpeople want to be doctors these days. So I think there's a lot ofsystemic issues that need to be solved before people jump to theideological arguments.

PW: Do you think anything will happen soon,or will it get kicked down the road?

I think the party lines will continue to divide to the extentwhere they won't be able to get anything moving forward on it.There's already a massive amount of investment going into thehealth care space and you're going to see American ingenuity andinnovation disrupt the marketplace.

Direct primary care and similar trends focusing on there-localization of health care will play a huge role. I mean, weall pay for these national networks, but the reality is that 95percent of people go to care within 50 miles of their home. We'reall paying for an infrastructure that we're starting to realize isnot necessarily working that well.

PW: What are your favorite things aboutyour job?

I would say the top thing is diversity. We have 165 clients inevery industry known to man. We know their strategy, we know howthey run their business, we know the structure of their business.One of the first questions I ask is “What's the structure of yourbusiness? C corp, S corp or LLC?” That information really ties usinto the strategy of the business. I find it very energizing totake strategies from one industry and open them up to an employerin another where it could really help their business.

The other thing is improving people's lives. We meet withclients all the time whose advisor has moved them intohigh-deductible plans, shifted costs to employees, made the networknarrow, reduced the formulary and put in more medical management.It's counterintuitive, but when we make the benefits better, peopleget better care. They don't avoid things and end up in high-costsituations.

PW: How can the industry do a better job ofattracting young and innovative consultants?

If we can position ourselves as trusted advisors who are hiredfor our intellectual capital—no different than a doctor or alawyer—then we will attract higher-caliber, younger people into theindustry.

PW: Why is it a good career path for ayoung candidate?

There is no other industry where you have the same exposure tothe business fabric of America. There are very few careers whereyou can have this level of impact, especially at a very young age.And the industry is changing so dramatically right now. You nolonger start a prospecting meeting with “I've been in the industryfor 30 years,” because that's not as meaningful today. There's ahuge opportunity for talented, motivated people to leave afootprint on the industry.

PW: What are your sources of inspirationand innovation?

At the end of the day, my driving vision is securing the middleclass in America. For some reason, we as a country accept the factthat carriers own every aspect of the care paradigm. They pool themoney into the health plan and don't disclose any fees to theconsumer. It's amazing to me. My overarching inspiration over thenext 30 years will be to correct that issue. There's no reasonthat, as American consumers, 25 percent of our income is going tohealth care and we don't know the cost of that care when we receiveit.

PW: Finish this sentence: The key tosuccess in this industry going forward is…

Curiosity and innovation.