By Scott Wooldridge // Photography by Kevin Garrett
Josh Butler’s earliest ambition was to own a hunting ranch in rural Texas. “I grew up on a large farm and ranch in north Texas,” he says. “Hunting and fishing were two of my passions in life.”
Instead, life took him in another direction after college—first as a manager in an entertainment chain and then into insurance. Now, as the owner of a brokerage in Amarillo, Texas (Butler calls it “the biggest small town in America”), he is pioneering cutting-edge reforms in the benefits community and championing ideas such as direct-contracting and full disclosure of compensation by benefits brokers and consultants.
Butler’s story encompasses two seemingly different concepts—his background is traditional and conservative, yet his approach to business leans heavily on innovation and the reform of longstanding practices.
The challenge
Nearly a decade ago, Butler and his wife, Allison, had successful careers, but there was a dream bubbling under the surface: the desire to own their own company. Josh and Allison come from similar backgrounds: their families have a strong entrepreneurial streak, with self-owned businesses on both sides. Butler realized how strong that impulse was while at a barbeque, when family members urged him to become his own boss.
“They kept asking me, ‘Josh, when are you gonna start your own company?’ It had been weighing on my heart and mind for a long time anyway, but that night I told my wife, ‘I think this is what I want to do.’”
It wasn’t an easy decision; both were making good money, and starting up a new venture always carries risk. “She was like, ‘Are you crazy?’” But eventually, the two decided to team up on a new company—he would handle sales and she would run the office.
“We launched Butler Benefits about eight years ago, and haven’t looked back,” Butler says. “By the grace of God, we learned a lot and we also made some mistakes. We keep making mistakes and keep learning as we go.”
The change
Josh’s approach to the industry was pretty conventional for the first two years until he discovered Health Rosetta, an industry-based health benefits reform movement, and Q4i, a brokerage consulting firm.
“It’s been extremely valuable for me to build relationships with other consultants and experts ... people in this space who are working on what I feel is the cutting-edge of employee benefits and health care cost-containment strategies."
When he talks about these groups, Butler sounds like a determined reformer working toward transformation. “The one thing that is common through these groups of professionals is that they’re collaborative in nature,” Butler says. “It’s been extremely valuable for me to build relationships with other consultants and experts, not just brokers or consultants, but ERISA attorneys, direct primary care doctors, orthopedic surgeons, radiologists—people in this space who are working on what I feel is the cutting-edge of employee benefits and health care cost-containment strategies. It’s like a magnet; they’re drawn to organizations like Q4i and Health Rosetta.”
Following this path led Butler Benefits to seek out clients who had similar mindsets and goals. “We pivoted and really started to target a different type of client,” he says. “We began to offer different solutions to our clients that were more creative and innovative.”
The agency also began to focus on self-funded clients, which create more data and transparency, key elements in creating more control over their health plans.
“It rekindled my passion for what we do,” Butler says. “I’m a problem solver by nature, and working in that environment allows me to use creativity to solve complex problems. It’s about a whole lot more than just selling insurance.”
Self-funded companies often tend to be larger in size, so it was natural for a firm such as Butler’s to seek clients that were a good fit. “Most of the innovation is taking place in the self-funded space, because it allows employers to be more creative and innovative when it comes to reducing the cost of health care.”
A growing number of industry groups promote innovations such as direct-purchasing, where health care purchasers contract directly with providers to reduce costs. Working largely with self-funded clients, Butler’s company spoke with hospitals and clinics in the region and began finding partners to work with. Providers also see the affordability crisis among their patients and are eager to find new solutions.
“The number-one cause of personal bankruptcy in the U.S. is related to health care,” Butler says. “And 72% of the time, those people have insurance.”
In one conversation with a hospital CEO, Butler asked how many patients with $5,000 deductibles actually paid the deductible for a surgery. “He said, ‘I have data on that: Our collection rate when the patient deductible is around $5,000 is less than 10%.’
“I asked, ‘In the first 30 days?’ And he said, ‘No—ever.’”
Butler realized that if he could help hospitals solve that problem and reduce uncompensated care costs, they were much more likely to work with him to lower the price tag for his clients and their employees.
Other advisors have joined Butler in pushing for change. Bret Brummitt, a 2018 Broker of the Year finalist and owner of Generous Benefits, based in the Dallas-Fort Worth metro area, met Butler through Q4i, and the two began comparing notes. He describes Butler as deeply committed to helping clients.
“I’ve watched Josh work to help clients reduce, and sometimes fully erase, their medical debts,” he says. “I’ve watched Josh find much cheaper health care services for both clients and non-clients alike who need care but have financial burdens that prevented treatment prior to Josh’s intervention. And I’ve been in the car with Josh as he negotiated surgery pricing for one of his plan’s members and helped close the gaps that his plan’s vendors were not able to successfully execute upon.”
Full disclosure
Another industry reform that Butler Benefits helps champion is compensation transparency, which became a regulatory requirement with the passage of the CAA. As of January 2022, brokers and benefits consultants are required to disclose to their clients all direct and indirect forms of compensation.
Butler notes that such disclosure has been somewhat controversial among brokers, although he and other agencies have already been doing it for some time. “I know a lot of brokers don’t yet understand the significance,” of the new rules, he says.
"If you look at it from the employer’s perspective, it is important to understand how your broker gets paid, who pays them and how much they get paid."
Because whether we want to admit it or not, money is a motivator.
“I’m not begrudging anyone who makes money through bonuses, as long as it’s disclosed,” he continues. “Let’s all just be upfront and say, ‘This is how much I make.’ In my opinion, if you are providing true value to your clients, you should never be ashamed of the amount of money that you make in this business.”
Butler is also frank about some other industry practices that have developed because of the motivation of higher compensation. He began his career selling ancillary and supplemental benefits, but he knows that such products are sometimes sold by brokers and consultants who are motivated as much by bonuses as by the usefulness of the products.
“I do think that supplemental insurance is important,” he says. “I’ve seen the financial impact that certain supplemental policies have had on the lives of individual people. So, I will tell you, ‘Yes sir, they’re valuable products and they fill a need.’
“But I also know there are terms in our industry that didn’t become common just because someone made them up. ‘Churning’ is one of those terms—it got that name because it happens. ‘Product dumping’ is another term used in our industry because it happens,” he says. “We know that this stuff occurs, we know that it happens, and that’s a problem. But I don’t think supplemental policies themselves are a problem; I think they serve a very noble purpose.”
Changing with the times
Although Butler often embraces change, there is one area where he has long been a traditionalist. Until recently, he was no fan of remote work. “I used to be old school. I had a mindset of, ‘We have an office; everybody comes to the office,’ because that’s what I liked to do!”
Butler, who describes himself as a “shake hands and go have coffee” type of person, was forced to change once the pandemic started and his employees had to work remotely. “They say necessity is the mother of invention,” he says. “Now my office is wherever I open my laptop, and that creates a whole lot of flexibility in the workplace.”
Butler tells the story of an account manager at his brokerage whose husband got a job that required them to move. Butler assumed he was losing an employee, but she convinced him she could still do the job remotely. “It really changed my perspective,” he says. “We hire professionals who have a passion for what we do, so they can work from anywhere just like I can. I’m not going to work any less whether I’m in the office or out of the office, I can promise you. They’re the same way and you just have to trust them.”
He adds that after his workers started embracing remote work, Butler Benefits had its most successful year ever. “It proved to me that I’m not always right; my way is not always the best way,” he says with a chuckle. “It’s one of those areas where I’ve embraced change and said, ‘OK, I’m not afraid of that anymore.’ It’s been good for me.
“We’ve been in a technology boom for the last few years,” he adds. “The speed at which technology is improving is a little scary at times, but it’s also exciting to see the opportunities. I think it’s only going to continue to speed up.”
Butler also notes frankly that the diversity, equity, and inclusion (DEI) movement, though important, is not necessarily embraced by everyone in his region.
“Here where we live, it’s still an extremely conservative part of the county and there has been some resistance to these types of things,” he notes. “And it’s not because anybody that we work with here is opposed to principles like diversity and equity and inclusion—of course they support all these types of things.
“I think when we see resistance to these types of things in our society it’s not so much a resistance to DEI, it’s a resistance to a culture that says, ‘I’m going to mandate it on you whether you want it or not.’ But I think it’s important that we have to all agree that DEI is here, and we need to embrace it.”
More than two years into the pandemic, Butler also sees growing awareness around the importance of mental health as an outcome of the pandemic. Butler, who had a very serious bout of COVID himself, says the isolation that was imposed on him had some significant ramifications.
“What we’ve done throughout this pandemic is force people to separate, and now we’re starting to see the unintended consequence,” he says. “We’re seeing a spike in mental health issues. It’s not just about claims dollars; it’s about quality of life for people. It’s very important to me personally, and it’s very important to my clients that they are able to deliver benefits to their employees to provide help, give them assistance and resources so that they can start to heal the wounds.”
Looking ahead
As for the future, Butler expects the industry will continue to evolve as the old guard is replaced by a younger generation. “Our industry has some age on it, so I think we’ll see a lot of retirements and a whole lot more mergers and acquisitions in the next five years.”
He also thinks self-funding will continue to grow, as it offers the best opportunity to control costs. “I think we’re going to see a huge push toward self-funding, down to even smaller companies.”
And Butler Benefits will be there leading the charge. “God willing, unless the world just completely falls apart, we’ll still be here, we’ll still be independent,” he says. “We’ve had a lot of offers to sell our agency to larger firms, that we respectfully said no to. I still have lots to accomplish.”