Welcome to the Use Case Podcast, episode 237. Today we’ll be talking to Akash from Nayya about the use case or business case for why his customers choose Nayya.
Nayya transforms the open enrollment experience by offering step-by-step decision support that’s powered by census and individual data to provide a personalized recommendation.
Give the show a listen and please let me know what you think. Thanks, William
Show length: 26 minutes
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Magoon did stints at Amazon Web Services and data consultancy Enigma before cofounding Nayya in 2019. The insurtech startup helps consumers pick the most cost-effective health insurance plan, find lower-cost pharmacies and use tax-efficient healthcare savings accounts more often. It has 400 customers, including Guardian Life Insurance, one of the largest life insurers in America. Nayya is on track to reach $7 million in revenue in 2021 and is valued at $230 million.Follow
Music: 00:02 Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better, as we speak with the brightest minds in recruitment and HR tech. That’s what we do. Here’s your host, William Tincup.
William Tincup: 00:25 Ladies and gentlemen. This is William Tincup, and you are listening to the Use Case Podcast. Today, we have Akash on from Nayya, and we’ll be learning about the business case or the use case for why customers and prospects purchase Nayya. So let’s just jump right into it. Akash, would you do us a favor and introduce both yourself and Nayya?
Akash Magoon: 00:44 Sure. First off, William, thanks for having me on the show. I’m a big fan of the community and really excited to share more of our story. So my name’s Akash Magoon. I’m one of the co-founders and also the CTO of Nayya. Nayya is a company based in New York city. And we build software to personalize the way that Americans and employers choose and use their employee benefits. And we do that through leveraging the world’s data and machine learning and data science to really help consumers during open enrollment, understand the various options they have between medical plans, dental plans, and voluntary benefits. And also retirement benefits as well, using data about them and their families to make sure we can guide them to the right decisions. We’ve been around as a company for three years, and in those three years, we’ve raised over a 100 million dollars to date. And most recently in March of 2022, announced our series C.
William Tincup: 01:49 Well, congratulations. Raising money is never easy, no matter what people tell you. But I’ve wanted to talk to you all for a long time, because you’ve been on my radar. Because this has always been a pain point, benefits enrollment, benefits communication has always been a pain, the way that we’ve historically gotten people around it. Open enrollment is more marketing communications and employee communications, which is great, but not technology. Not necessarily technology, not necessarily data driven. And I love the way that you all solve for hyper personalization, your company, your family, what you’ve got going on. Here’s what’s available, a recommendation engine, based on consumption, based on utilization, et cetera. So I absolutely love what you do. So let’s take the audience into it, because I’ve studied you all for a long time so I’m glad to be here. But let’s bring the audience up to date with, why you exist because there was a real need three, probably four, five years ago when you first started this. To bring data and bring AI, machine learning, et cetera, into this particular juncture in HR.
Akash Magoon: 03:13 Sure. My co-founder and I actually got our start, working with large insurance companies and in particular, helping those insurance companies understand the different segments of employees within large employer populations. And for a second, Will, imagine that you were head of HR at Coca-Cola and you have 80,000 employees in the US. Your workforce is really, really diverse. On one end of the spectrum, you might have your average warehouse worker that’s 48 years old on average, usually married, two and a half kids, significant debt, because they have mortgages on their homes and they’re saving up for retirement. And on the flip side, you might have your average software engineer at Coca-Cola that lives in cities like New York and San Francisco, 29 years old on average, usually single, very little debt. If they have debt, it’s student debt. And they’re also optimizing for different things compared to the former example.
And so as head of HR Will, you’re going to reach out to all the insurers like United Healthcare and Blue Cross and Aetna. And then for retirement, you might reach out to BlackRock and Vanguard and the others. And you have a pretty difficult decision to make, which is how do you offer a curated set of plans for all the different segments in your workforce? And we were helping the underwriters at these insurers at the time in our past lives, understand the different breakdown of employees within your company and what their needs might be. And we realized that the whole industry that’s meant for the end consumer, isn’t really focusing on the consumer and we wanted to bring a different lens to that. At the same time, Will, we got a lot of inspiration from the internet companies where when you go to amazon.com and you go to the homepage, you’re getting a set of recommendations.
They’re recommending you this baseball cap because they know what you’ve bought in the past. They know what other people like you also purchased. They know what you might have bought or watched on Netflix via cookies they share with them or where you traveled from Expedia cookies they may partner with. And so given all this, they use all this curated data to make you a recommendation. Where is that in the benefits experience? Benefits is largely the biggest expense that Americans American families make in a given year, perhaps outside of a house if they bought a house that year. But benefits, particularly health insurance is probably the biggest single line item in the family’s checkbooks in a given year. And so, where is that personalized experience like we’ve seen in eCommerce in the benefits world? And so that was really the inspiration.
And how it manifests into our product today, Will, is we partnered with employers, whereby journey, open enrollment, the employee comes Nayya and in an eight to 10 minute journey like TurboTax, they go through a small questionnaire where we learn about you, your family, your medical background, your financial footprint, things that might be unique to your situation, like are you planning to have a kid? Things about where you stay and how much money you might want to leave back, should there be something catastrophic. And using all this, we go in and make a recommendation that isn’t only sounded to you, but also is one that you can afford.
William Tincup: 06:27 So a few things, because you mentioned health benefits, which I totally get. But I think you touched on financial benefits as well. So, did I get that right? Do you do both?
Akash Magoon: 06:43 We do both. And we didn’t start with both. We actually started on the health side, but one of the things that became very, very clear to us is people’s health and their wealth are inextricably linked. And so, if we’re educating somebody on a consumer driven health plan and also on the benefits of an HSA, and we’re recommending them to put money into an HSA, well, it also makes sense for us to have purview and a voice on 401k as well. And sometimes for particular people, a 401k might make more sense than a HSA, and sometimes vice versa could make sense as well or perhaps a balance. And so having that view into retirement and us being able to navigate individuals to the right decisions from that perspective were the reasons that we wanted to pair it on with medical enrollment, which is the more traditional concept of open enrollment, as you know.
William Tincup: 07:35 Do you foresee a future where wellness is also other benefits, if you will. So if we think of financial and health, obviously you can start cutting that a lot of different ways. Do you see wellness in there in the future?
Akash Magoon: 07:54 We do. And it’s a growing part of our product offering. I think over the last few years, given the changes to the macro economic and health climate, mental health is a big thing that a lot of employers are focused on. Prenatal care is things that employers are focusing on, and wellness as well. And so, one of the things that we do is understanding an employee and their unique situation. How can we nudge them to take action on other benefits they may have as well? So a lot of employers are offering what we call mental health, digital solution offerings, like a Ginger Health or a Talkspace, for example. And being able to navigate employees to these third party offerings that their employers are investing a lot of time and money and effort in is something that we truly do. And we’ve seen that become a big focus area of a lot of our customers.
William Tincup: 08:49 I love this. On the corporate side, I don’t want to assume that you work on the corporate side in terms of like the people that work in total rewards and specifically in benefits and benefits management. But if you do, how do you work with them with the data that you see? Because I know that in picking benefits in the past, it’s always been a struggle to know, well, what should we offer? What’s going to actually get consumed and utilized versus what’s not? Because at least it’s been a part of voodoo and mysticism in the past, and you’re sitting on a bunch of data that isn’t voodoo and mysticism. So how do you interact with the benefits managers?
Akash Magoon: 09:37 That’s a really great question. As you know, we’ve been focusing on empowering the end employee to make the strongest decisions. But then how do we year over year, take all the learnings and all the data that consumers give us with confidence? How do we use that to inform the employer or even the consultant and brokers that we partner with as well, the right data? And you’d be surprised. We actually meet with many of our customers on a frequent cadence where we’ll take aggregated and anonymized learnings from our platform and share that with them. One example is, one of our earliest customers, we learned that there was a huge uptick in employees that shared that they’re looking to have a kid within the next two years. And that’s something that when we met with the employer and we shared with them, they actually had no insight into.
And with that insight, they were able to offer a new maternal benefit. They were able to offer additional benefits as far as getting second opinions when having a baby. On the flip side, we’ve had employers that going back to the previous example, wanted to double click into mental health benefits because at the onset of the pandemic, they were finding much of their workforce looking for access to that type of care. And so we shared that insight with them and they were able to take particular action. And so very spot on, Will. I think as workforces continue to change as well, especially in a lot of our core employer customers that have a lot of retention and overturn, their workforce changes every single year in different ways. And how can we be at the forefront of bringing them up to speed and helping them curate better plans to offer to their workforce in the first place?
William Tincup: 11:28 Yeah. I think first of all, you’re empowering the consumer, the end user with knowledge about what they should be looking at and how they should be evaluating the package that’s in front of them. And the other side of that is just as important over time is, they’re in the dark. So they’re being pitched on things, and because I know that space rather well, they don’t know their population’s needs. So it is a bit of a, like you used the Coca-Cola reference, the example earlier, it’s a shot in the dark. For a lot of benefits leaders, it’s best guess if you will. But again, some of it is driven by the squeakiest wheel.
Somebody that’s just interested in fertility benefits, which would be fantastic, but it only represents 1% of the population. But if they’re the squeakiest wheel, then that benefits manager feels compelled to do something there, but it only gets consumed by a very small percentage of the population. And therefore, it’s not a benefit. That’s the thing about the word, benefits. It’s not actually a benefit if people don’t use it. So it’s only actually a benefit if you use the benefit, so I guess consumption is really interesting. Let me get your take on some of the trends that you’re seeing. Because you get to sit on so much data and with the end user, in particular, what are you seeing that they want more of from companies?
Akash Magoon: 13:23 From their employers?
William Tincup: 13:24 From their employer, yeah.
Akash Magoon: 13:26 I think you hit it on the head in a comment you made earlier, which is, more and more spend is being allocated towards the benefits at the employer level, given that employers are realizing as the years go on that benefits is a area that they need to continue investing in to retain and attract talent, but also make sure their workforce is healthy. But on the flip side, as the number of benefit offerings increases sometimes twofold every few years, the ability to understand when particular benefits are applicable and really elevating the literacy of those benefits for the workforce is something that I think employers don’t have the resources for. Especially employers that have smaller HR teams or perhaps a broker they might be working with.
And so that’s one of the biggest areas of focus for Nayya, is how do we continue making sure that not only during open enrollment, how can we make sure an employee is navigating to the right set of plans and offerings, but then how do we bring that back to the top of their mind when it’s most relevant to them. And via nudges and via education, and via events that we can hold with our employer partners, we are really on a track to continue making sure employees are smarter around their benefits, are using them the right way. And sometimes when particular benefits might not be relevant to them, how do we help them change to a different set of be benefits or change plans around to make sure they continue to be as curated as possible to your particular situation?
William Tincup: 15:08 I like that. Because I get this question occasionally on the diminished return. The array of benefits that we offer, it’s expanding, but the consumption isn’t expanding its same way. And so, some of it, there’s a [inaudible 00:15:23] exercise like, okay, people aren’t using the pet insurance benefit that we have. We thought it was cool, and it was cool and it was consumed for a while, but no one’s using it now. So, this becomes an exercise on what to add and what to prune or what to take away based on consumption, based on real need and consumption and also desire. So you help people navigate that part as well.
Akash Magoon: 15:53 Yeah. And I love the example you gave around pet insurance. There’s a handful of different voluntary benefits that more and more employers are offering. And we find that with many of our customers, they’ve been offering these voluntary benefits like accident insurance, critical illness insurance, hospital indemnity, insurance, disability. They’ve been offering these plans for years, but the engagement rates aren’t particularly high. I can share an example of a customer we actually just paired together on a case study on. Their name’s Pegasus Senior Living, and they’re a senior living management facility that runs communities across the United States. They have over 3,000 employees and this was the one challenge they came to us with, which was on the medical side, everyone’s electing the more expensive plan, but on the voluntary benefit side, nobody actually knows what any of this is.
And so we had two challenges. One was, how do we teach employees the benefits of consumer driven health plans? And the reality is, most Americans shop for benefits the way they shop for fine wine, which is the more money you spend on something, the better you’re going to get. And so, within Pegasus, and anybody can look at the case study we recently posted on our website, but we were able to help one fourth of their employee base navigate the consumer driven health plan. And the consumer driven health plan is typically just a plan that has a slightly elevated deductible.
And it makes sense for people that want to use an HSA or people that don’t have as much out of pocket spend traditionally in a given year. And then we also saw over a 40% increase in critical illness land and a 30% increase in accident insurance plans. And in our view, the only thing that we attributed to this increase in engagement was education. For something like a critical illness plan, insurance companies that are paying a huge check to individuals that might have anomalous events that happen and the same for accident insurance. And so, with pet to your example, my bet there, Will, is a lot of your employees may not understand the benefit of pet insurance and when it kicks in and why it makes sense for them. And so that’s something that Nayya’s really focused on.
William Tincup: 18:14 I love that. This happens with EAPs too. There’s tons of EAP services that are out there, that the employees don’t consume because they either don’t know what’s available to them, or there’s a stigma to it or whatever. Or they think there’s a cost or a hidden cost to it. And so they don’t end up, because they’re not educated and it’s not communicated. And it’s stuff we offer every year because we’ve always offered it. So we always have it. And I know it drives benefits managers, crazy, because they’re like, “We have this. Literally, we’ve had this for 20 years.” It’s like, yeah, but you haven’t communicated that you have it and you haven’t told stories around it. And so, not shocking that it’s not as consumed.
Akash Magoon: 19:07 And if I could double click on that, Will?
William Tincup: 19:09 Sure.
Akash Magoon: 19:10 I think one of the big challenges around offering new benefits into enrollment cycles is actually, in addition to the education, which is something we touched on is the enrollment experience, right? I think enrollment experiences for your traditional medical dental vision are somewhat streamlined across whatever software you might use. But for the other benefits, it ends up being a really, really long and cumbersome process during enrollment. And as more and more employers use HR tech software to power, this, one of the strategies that we’ve taken is partnering with these platforms to bring Nayya to their customers. And so one example is earlier this year, we announced the large partnership that we have with ADP Workforce now.
ADP runs payroll and benefits for several thousand businesses. And joined together with ADP, Nayya can improve the enrollment experience, but also the benefits literacy, but right inside the platform. And so during enrollment, instead of employees coming to a third party system, they would go right to ADP, for example, or others that we partner with. And I think being able to tighten up the enrollment experience and make enrolling in benefits, as fun as going to Amazon and doing a one click buy. Why is benefits not as fun as shopping online for a new t-shirt? It should be, and that’s something that I think with good software, with good user experience and the right data about the individual, that can become a reality.
William Tincup: 20:46 Oh, I love that. I’m glad you double clicked on that. Health savings account. Could you explain that in layman’s terms for folks? Because I still think that most people don’t understand what an HSA is.
Akash Magoon: 21:01 Sure. I think most people understand how a 401k works. And how a 401k works, for those that don’t is actually very similar to an HSA where you can contribute money into a 401k up to a certain limit every year in a tax free way where pre-tax being cut from your paycheck. You can put money into the 401k and your employer similarly can match amounts in a tax free way as well. And the one caveat with the 401k is, you cannot withdraw money from your 401k until post retirement. Otherwise you pay a penalty and you also need to pay tax on it, because you didn’t put tax on the way in. With the HSA, it’s very, very similar. You can put money into your health savings account every single month from a small withdrawal of your paycheck up to a certain amount, which is between three to $7,000, depending on the size of your family.
But the caveat there, and the difference between the 401k is you can start using that HSA to pay for things like co-pays, pay for things like drug spend or when you’re at the doctor and you want to pay for an out of pocket cost. You can use that HSA in a tax free way immediately, or if you don’t use it in a given year, it rolls over and rolls over and rolls over. And so that’s the one difference. And so, if you know that in the past few years, you’ve had two or $3,000 out of pocket spend on medical expenses between you and your family, and if you have a 30% tax bracket, then it makes so much sense to put money into an HSA. However, the one thing I will say is, the lot of folks that are passionate about HSA will say that you shouldn’t use it for day to day expenses.
You should use your HSA as a vehicle to pay for post retirement medical expenses. And so people have different schools of thought on how you should use it. Ultimately in my view and the view that you’ll see, and even in our software through recommendations is, it really depends what your financial situation is. And, given how much money you make and what your debt levels are and your family size and your adjusted cost of living, we may recommend you to use it for year over year expenses. And if you’re in a different financial situation, maybe it makes sense to wait for post retirement. So it really, really depends, Will. But that’s at a high level, is how I view the HSA.
William Tincup: 23:23 Oh, thank you. I needed that, and I know the audience needed that. Because again, it’s one of those things. We should know these things by now, because it’s been around long enough, but again, it’s confusing, I think to the average person. Last question for me is, where do you see Nayya in the next 6, 9, 12 months. Let’s not go too out there, flying cars or anything like that, but just where do you see the emphasis for you all, from a software perspective and customer perspective?
Akash Magoon: 23:57 Sure. So as we enter year, three, year four of the business and have had many of our customers continue on to year two, year three, year four of enrolling in their benefits and decision support through Nayya, our software becomes stronger and stronger every single week via everything that we’re building. And so as we continue to dive deeper into partnering with mid-market employers and larger employers, but also continue to expand on partnerships that we have with HR tech platforms and brokers, like the ADP example I gave, the goal has always been, how do we partner with a workforce and then optimize for a few things? One is improving benefits literacy, two is helping the employer save money on plan spend, but also claim spend. And then, how do we decrease the admin burden for employers, but also make sure that the peace and confidence of employees are elevated as well?
And so as we enter open enrollment here again this year in the next couple of months, that is going to be the short term focus. And then into next year, it’s highlighting on many of the things we discussed around, how do you throughout the year give the right level of education to make sure that our employees are happy with all this money the employer is spending on their care. And so, as we continue improving and partnering and focusing on expanding our customer set to a broader group of employers, it’s going to be very, very exciting to partner with them on making sure this is a reality.
William Tincup: 25:45 Love it. I love it. Thank you so much for carving out time for us, Akash.
Akash Magoon: 25:50 Well, it’s been a true pleasure. Thanks for having me on the show and looking forward to staying in touch.
William Tincup: 25:55 Absolutely. And thanks for everyone listening to the Use Case Podcast. Until next time.
Music: 26:00 You’ve been listening to RecruitingDaily’s Use Case Podcast. Be sure to subscribe on your favorite platform and hit us up at recruitingdaily.com.
William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.