Your Health Coverage Ends With Your Job. His Doesn’t.

Kind: captions Language: en Excellent. Well, uh, today on the Insure Techch Leadership podcast, I'm pleased to be joined by Felix Ortiz. He is the founder and CEO of Smirk Health. Smirk builds portable health benefits for the more than 90 million Americans who work outside a traditional employer plan with coverage underwritten by CHUB.

This conversation matters right now because the benefit system was designed in 1929 for full-time employees and the way people work has moved on without it. Felix is a repeat founder and an army veteran who learned insurance from the outside. So, we'll get into what the legacy system gets wrong, how you get a global carrier to underwrite a brand new model, and where AI actually helps a person manage their own care. Welcome, Felix.

Thank you for having me, Joshua. Good morning. >> Yeah. Uh good morning.

And uh anything else you'd like to just add at the beginning on the heels of that? >> No, I mean I I I think uh as as the evolution of AI is taking shape within the workforce, you're having a shift into a micro shift economy of workers. uh therefore uh resulting in the system uh getting um uh basically outpaced on what is actually needed in today's workforce. Uh so I think that uh it's exciting times to be within the world of of health, insurance and financial services and that entire intersection because you could truly transform the lives of many uh many employees but also many Americans that today are uninsured or uninsured.

>> So before we get into the meat of it, uh one quick question. And so you've finished five of the seven world marathon majors. Uh guessing in order to do that, unless you're superhuman, that requires a lot of uh discipline and training, etc. Any lessons learned from that that uh you know, you've brought into building the company?

>> You know, it's it's a great question. the uh I remember I uh my first uh major was the Boston Marathon and uh three months before that or four months before that my grandfather passed away. Uh so it kind of uh threw me off a little bit as part of my training but I remember everybody telling me that I'm going to hit the wall around mile 20 or 22 and I was like yeah it's not going to happen because I'm in like great shape and I can run but it's very accurate. And so, uh, so at that point, I just looked up into the sky and I think I had my grandpa pushing me all the way.

Uh, but look, the discipline of running a marathon, uh, aligns to business very well because it's a marathon. Business is a marathon. You're going to have a good mile, a bad mile. You may have an ache here or there, but it's really the mental fortitude that pushes you through.

uh the wanting to cross the finish line uh and and achieve the um you know in the case of a marathon achieve the success of receiving a medal and that meta goal, right? Not think 1% of uh the world actually runs a marathon. Uh it's no easy feat, but when you put your mind to it, uh there's nothing that you cannot accomplish. >> Yeah, that's great.

So, um, Smirk is not your kind of first rodeo, and I know you're in Austin, so hope the metaphor is okay. Uh, but, um, you've had prior exits in HR, tech, fintech, insurance, but, you know, what did you see here that convinced you it was worth, uh, you know, starting something new again? >> You know, it goes back to when I was in the military. Um I I saw a pattern where as a soldier you have your military occupation skills uh and how that does not correlate to industry skills at that time.

Now they've done a little bit better job at that. But if you think of of of health and access to care, uh even when you transition from the military as a young veteran, uh you know, unless you had some uh disability, uh you're given the option to maybe continue veterans uh uh healthc care, you know, usage, but really if you don't, you're you're left on your own, right? and navigating that was interesting for me uh in a sense that you know understanding why should I do an you know what's the difference between HMO or until I get employed and realizing at that point in time that I really couldn't get insurance unless I was uh within a company and that you know struck a chord with me and something that always kept in the back of my mind and then also the experience with my own little brother having to navigate um his heart condition from the age of five with my parents where he had to get a pacemaker and how the insurance company was deciding what doctor or not or what surgery can have for a 5-year-old kid uh that was one of the youngest recipients of a pacemaker.

So that uh led me to start creating these companies that really were a building block off each other whether it was the education technology company where where I consider it more of an MBA you know to total failure I learned what to do not to do uh but took those learnings and applied it to the second company um where we really unlocked the category of talent intelligence and we got very lucky to work with uh you know Fortune 10 companies and Fortune 500 companies uh and that scaled very quickly and there I got the insight understanding to to un the psychology of HR you know how these CHRO leaders and uh you know talent acquisition leaders are viewing um their competitive advantage which is ultimately retention uh and being able to hire the best-in-class and then moving into the third company I started to see it from the other lens which is the employee lens and how they really just couldn't navigate an understanding of what is going to be covered at the doctor's 's office, what it costs, how they can get an appointment.

You know, there are people even today that literally their doctor is going to a lab core or Quest Diagnostic and getting annual blood work and that's it. But there's no doctor, you know, checking, uh, other things, right? And so uh so so that blended together led me to the creation of Smirk where we see a world that um really uh if you think about the workforce today group plans have been focused on the eligible workers but those that are not eligible uh don't have access uh or that do not meet the criteria set.

And so that's where you know Smirk was born and and and you know the evolution of smirk started. Got it. And so are there certain things that you've learned in terms of what the industry keeps getting wrong about non-traditional workers? Um, you know, they can't afford coverage or is it more that just nobody has really built coverage for how they work?

>> I think it's a combination of all. you know, to really understand this consumer, you would have had to experience what it's like to be that consumer, right? I mean, you think about Silicon Valley, they keep funding these apps and, you know, uh that that are more like uh for social or or or other things that really do not go downward into the mid-range and and and lower income sphere. And that's because one, you know, they may believe that they may not make money in that arena or that people aren't uh there's persistency gaps or whatever it might be or higher risk, but the fact is until you provide a product that actually is intuitive and designed for this segment, you actually don't know.

And so, uh, you know, the the industry, uh, I think number one, it it's it's a mindset shift, uh, that that that needs to be taking place. you know actual models were built on a group structure and uh within that you know they have their typical ratios and they just haven't designed product for this segment. Uh the second is that you know there is a uh a view that this segment uh you know if you're thinking about it from the capitalist side that they may not be able to make money uh because uh you know can they afford it right and and my view is that look you have credit card products you have cars uh that have different you know ranges um uh and they can service different uh segments and and not every car will be aligned to, you know, somebody will have a a Toyota, somebody else will have a Mercedes-Benz, you know, so on so forth, but ultimately they still have access to a car and when it comes to health, they don't.

Uh, and that's the big pain point. Got >> it. And so, is this solution specifically designed for gig workers or what people would traditionally think of as 1099 workers or who are you targeting? Yeah, our our our target audience is really focused on those that are outside the traditional employment uh uh plan.

So, think of your 1099. That could be from a, you know, contractor all the way, you know, at a at a boutique firm all the way through a a gig worker. Uh in addition to that, a part-time, hourly, and seasonal worker. essentially, you know, folks that are um not meeting the eligibility criteria or may be priced out of the existing offerings.

>> Got it. And so what exactly does the product offer? So, so what what we've done is we've reinvented um a a product chassis uh that essentially allows it to be modular, meaning that uh a user can you have multiple foundational models of the these plan designs that is then tailored and personalized to each user. So within that uh what that basically means in short is that a user can start anywhere as little as $19 and go up to as high as $350 as an example, right?

But the modularity and the ability to essentially have our AI infrastructure design that for you and you have the power to choose or add or or extract what you do not want really gives a lot of power while also providing visibility in a transparent way of what's covered and what's not because even today most uh a lot of folks uh that are fairly astute unless they're actuaries do not even know what's covered uh within their plan and how much it's going to cost to get to the doctor.

Um, so so this plan design that we did is pretty bespoke uh in enabling that modularity, personalization, transparency and leveraging AI to benefit uh the user in a very efficient manner. So is it fundamentally a different plan construction or is it sort of the same types of plans that everyone gets but you're you're kind of repackaging it and making it easy to understand and make choices through a different user interface. >> No. Um, so we've taken what may you may know as a supplemental health equivalent type product that unfortunately has had a bad reputation in the past because of bad actors.

Um, and we've gutted the whole thing and re-engineered it to be a fully insured medical plan, resulting in us being able to actually provide true insurance um that is modular and designed to the consumer in a way that they fully understand what they're getting and what's covered and what's not, what their out, you know, payout will be and so on so forth. So uh and it's all intersected with our AI agent and she enables in a very simplistic way uh the entire navigation for the user.

Uh so that's that's that's how that's the big um you know uh evolution is that we've gutted it, we've re-engineered it and then we stack it on our agentic layer. >> Got it. And so how does distribution work in this model? Is it going through employers?

Is it going through direct? Is it going through some other channel? >> I mean, we um we we we work with employers uh uh we're we're focused on, you know, large uh Fortune 500 organizations as well as um unions too. Um you know, we we we have tested as part of enhancing our funnel optimization and AI on the direct to consumer just to optimize and enhance, but you know, our distribution model is a B2B TOC approach.

Got it. And on the other end of it, like how does the, you know, portability work? I mean, at the end of the day, it's the individual's plan and wherever they move around, they get to keep it with them. >> Yeah.

So, so, uh, as part of this bespoke solution that we created, you know, Jackie can work at company A and let's say that she leaves company A and no longer wants to work there. Uh, and she goes to company B, she maintains the entire product suite. It does not change. It doesn't get reduced.

Um there's no price increase. It's it's all the same. Now, if the company was providing a subsidy, of course, the variance will now be covered by Jackie. Uh but she maintains access to the plan without issue.

>> Got it. So, so some employers are are providing subsidies um to their gig workers or their 1099 workers >> to to their uh you know for the 1099s and uh and and well more the gig workers around mclassification you know there there's a certain way to do that that does not trigger that but in terms of the W2s that are part-time hourly and seasonal yes those folks would would sort of >> subs okay and what percentage of your um I guess plan members fall into those different buckets.

>> You know, it's a hybrid. I mean, uh we're we're still early. We're we're growing pretty quickly, but I would say that, you know, it's probably around uh uh 55% on the part-time hourly seasonal uh worker uh and 45 on the gig1099 worker. >> Got it.

And so how do you measure success uh with Smirk? >> You know, success to us is making sure that everybody uh that becomes aware of Smirk and utilize Smirk now has access to care that sticks with them throughout uh their journey of life, right? Uh I think of Smirk as the uh as sticking with the user throughout their life experience and and journey and adapting and personalizing uh to what your needs are at that point. Maybe when I started I didn't have you know a family now I do and you know I want to add my family or different things you know associated with it.

So, uh, it it's it's really, um, uh, an evolution, uh, throughout the journey, uh, that we're looking at as it relates to Smirk, um, and and not just be a one-off type of situation. Uh, and so that's that's how we think of it. >> Are there specific metrics though, like, you know, retention, use of the coverage, claims paid, other things like that that you're tracking or that? >> Yeah.

Yeah. Um yeah look I mean we track retention uh uh of course you know uh as well as churn uh as well as um uh utilization uh and claims. So we we those are our core four uh KPIs that we track. Of course if when we work with the companies uh there may be additional KPIs uh that we'll be measuring as well uh on their behalf from an ROI standpoint.

uh but but at the baseline those are the four pillars uh that we you know use from a KPI measurement. >> And how did you get an organization with kind of the you know scale and credibility of a chub to um provide the coverage for this? >> Yeah, I I've been lucky enough to uh to know Chub for a bit uh and their executive team. Uh they're great uh very innovative uh carrier.

It comes down to the leader of the division uh that that you work with within any organization and they're wanting to be innovative, create value and also grow their organization. And so it it happened to be um uh a mixture of you know having keen interests in this market uh the ability to grow it but also having an innovative um partner uh that as a underwriter and reinsurance partner that uh understands you know where we want to go and also see the vision and so uh you know we're lucky to be partnered uh with with Chuck >> and what was that sort of co-development process like?

um any any lessons learned or insights you can share for others who may be looking to do something similar? >> You know, I I I would say that um we we we work very we view them as partners. Uh right, we we we work very closely and understand their position on how they view uh underwriting. uh what success looks like for them in terms of their metrics and KPIs, what are they trying to achieve over the coming quarters and always ensuring that it's a fully transparent u you know relationship right because there may be days that that you have you know good days bad days and you there's nothing wrong with you know sharing that information um and so uh I would say for any founder that's trying to approach a large carrier it's it's number one making sure you're going in through the right executive uh that and then making sure that executive is very innovative and understand and wants to solve that problem or or is looking to solve that problem because then that gives you you know uh problem uh alignment uh to solution.

Uh and then once you're in there it's continuously developing that relationship and and building that trust. uh because sometime most times they'll start small uh in a sense that you know they'll want to use uh off-the-shelf products and then eventually they may want to design something um and then also understanding uh that you can build uh a big business uh around this right uh that that they understand that there's a positive outcome. So those are those are some of the areas that I would focus on if I were starting from scratch again.

>> Yeah. And specific to the the Smirk wallet and the AI concierge that you spoke to, like does that sort of create a different you know user experience and are there certain things that you're trying to get people through in terms of um you know registration and and and and you know really getting themselves set up properly in the first you know couple of weeks or first month. >> You know, uh I it's interesting when we first started, we started pilot testing on dental because we wanted to understand the psychology and behavior of the consumer uh with the bespoke product uh and and so on.

And uh what we learned was that uh we we our AI agent her name is Ailen um we had her on the back end so post enrollment but really users wanted to fully understand uh more and so we brought her forward and since then everything's been moving fairly quickly. So Ailen plays a critical role in guiding that user not only around what plan design structure looks like but also really giving them that comfort uh that they're going to get that doctor visit because she books appointments to uh provides the pricing you know and continues followup and so on so forth.

So they remove that stress from the from the from the individual that that is unfortunate but causes a lot of pain uh within an individual in a daily life and you know when you're busy uh it creates more impact. So it's good to have that automated while also knowing what you're going to be getting at the same time what you're going to be paying and what the outcome uh will be associated to that. So that that that experience um has allowed users to enroll fairly quickly. We then uh focus on getting them activated to get their first appointment within the first 30 days uh and then continue their ongoing care management throughout.

>> Got it. Um, so I think a lot of people have rolled out different types of, you know, chat bots or other types of user interfaces where you can have a dialogue with someone like a an EENE. But, you know, you talk about an AI infrastructure layer. So, you know, are those two things connected?

Are they two different things? Like, what's the the distinction? Yeah, you know, most people will have a chatbot or or or an agent, but the agent's getting an input and output and they're probably using some LLM model associated to that. You know, with Smirk, as we have designed the plan, that plan is tied into our entire infrastructure.

There is no input or output that uh the infrastructure would not know which then you know obviously Ailen now knows. So, we've trained it so that she knows everything. And so as a result of that, it isn't like I'm walking into um a chatbot and I say my back hurts and she may say, "Okay, you know, it could be this, that, or the other." And it stops there, right?

Uh you know, I mean, in our case, it goes all the way through end to end to service user to eventually getting them uh the appointment and also understanding what they're uh what's covered, what's not, and and making sure that they're okay. And so it's the real personalization uh layer uh that ties in that is not just a one-off uh input. And you know I'm sure there's a trust issue that you know you've trying to navigate and you have to make sure that the answers people are getting are correct.

So which is the bigger challenge kind of making sure the answers are correct or making sure that people are comfortable you know communicating with an an AI interface >> one one is make number one priority is making sure that the answers are always as correct as possible. We we we don't want to create an issue or a situation where uh the agent may misinform somebody because that that would not be good. Um uh the trust piece because there's so much AI going on where individuals are interacting with Gemini Grock uh you know Claude and you know Chad GBT and so on.

What most people I view it a little bit differently. What most people aren't realizing is that you actually are starting to get a divide in AI infrastructure. And what does that mean? If you start to ask the the modern American or the modest American, are you using Grock or are you using uh Chacht or are you using you know Claude or whatever?

What we've learned is that there's a split. Some major most of them may be using Grock and Gemini versus uh the ones that you would have to pay for similar to like a broadband divide, right? And so to me it's more around uh yes we want to make sure people can trust alien and we'll work very hard at that but also is ensuring that there is no divide uh in value uh to the end user and and that's how we think uh of alien and by the way that's a topic that no one talks about it's this like AI uh divide uh that is occurring um on tech uh infrastructure ructure value to the end user >> and so is that something you're trying to you know you view yourself at a leading edge of bridging.

>> Yeah, I mean we view ourselves as leading edge bridging that you're going to get the same high level quality value with our infrastructure uh utilizing smart that you would get you utilizing a AI infrastructure that you would be paying for uh at a premium level. So, so that's that's how we think about it. It's it's about making sure everybody's treated equal and that they have the same value. Uh because that builds trust and you start to build community and and when it comes to people's health, there's no reason to devalue or or or or tear that around.

>> Does it need to be a mobile first experience either for this population or just in general? >> Uh uh obviously we're mobile first, but no, it's also web. uh users can utilize it on the web. Uh we have found that consumers like to use the web as well uh not just have everything not have another app on their phone.

Um especially when it comes to health, it's it's something that's very delicate. And so they, you know, they basically view the web as well. So I I would say probably on the percentage basis, you're looking at like 60 40 60 that would be, you know, uh mobile, 40 that would be web. So you want to make sure that it has that web consistency.

>> Has your leadership approach evolved at all across the different companies you founded? >> Uh yeah, I mean I would say if you were to tell me when I first started my first company, I thought I knew everything. So I was like hard-headed young founder. Uh I think as most of you know ego got in the way.

Uh but you quickly learn that uh it's hard. you can't do everything on your own. And so I'm very grateful uh for the learnings that I got through the various companies and because it really shaped uh my leadership skills uh to grow a company that we want to eventually take all the way, right? Uh and and so that's that's really surrounding yourself with the best of the best people and getting out of their way and really focusing uh on the core decisions that are critical to the business uh but not uh micromanaging them or or or telling them how they should do it because ultimately the reason that they're with you is because they're going to tell you what their recommendation is and then it's you know and if it's a decision they made then obviously you would be responsible for that but but yeah I mean it's it's it's a lot of lessons lesons um that I took in from various companies.

>> Do you think there's a particular leadership skill or leadership dynamic that is needed today that either always was needed or or or maybe has evolved just given the rapid pace of change and the evolution of AI into every aspect of life and business? you know, I I I I think one is um understanding and managing pressure uh and and being able to distill that so that you control that so that doesn't feed back into your team because if if you come into your team um pressurized and uh and they sense that energy, it's going to have a downstream effect.

And so, uh, to me, that's the biggest, uh, leadership value that you can have is a sense of calmness for the team because there's going to be things that will be, you know, rockets flying in, everything that that can happen. But if you don't have that calming presence, taking a step back, you know, a breath and then moving forward so that you can celebrate the small wins, but also understand that there will be big wins because every small win creates a a step towards the top where you want to end up at.

And that's that that's that's really the the main >> uh you know area that I've zeroed in uh to to learning and also making sure that I continue to excel at. >> Got it. So, one last question and I really appreciate you coming on uh the podcast. Three years out, you know, is Smirk a coverage company, an infrastructure layer others build on or something else?

>> Yeah, it's interesting. uh three years out we want uh smirk to be uh you know and it will be the infrastructure uh stack uh for uh AI uh within the health and financial intersection right because it's like knowing what's covered and you adjudicate and so on so forth a a as well as continuously designing plans now does that mean that we'll continuously want to we'll continuously design ongoing plans I see a world where we can partner with carriers uh to design so that they can embed their plans as part of that uh and use our tech stack.

Uh so so so we we view ourselves as the end to end uh infrastructure layer. Of course we started with our own plan and we'll continue to design but we do see a world where carriers can utilize the infrastructure as well. >> Got it. Well, Felix, anything that we haven't covered that you'd like to touch on before we wrap up today?

>> No, no. I think it's been uh an honor to be on the show with you and I appreciate your time. >> All right, great. Well, Felix Ortiz, founder and CEO of Smirk Health, thanks so much for joining me on the Insure Techch Leadership Podcast.

>> All right, thanks Joshua. All right.