

Ask HN: small startups, what do you use for health insurance?  - javahava

Do you use an HSA, or pay pricey premiums? I live in NYC, and (for me and my wife, who may try to start a family next year) am looking at plans of about $1.5-2K a month (assuming a child/children). As a couple only, it's about $1,300 a month. =/ What would you guys recommend in a situation like mine?
======
elangoc
This is an important question, it's the kind of thing that needs to be on an
FAQ somewhere. Here is the info that I've collected in the last couple of
months (US-centric, sorry):

relevant YC posts/articles:

<http://news.ycombinator.com/item?id=2247560>

<http://news.ycombinator.com/item?id=2851224>

links from the comments, or elsewhere:

<https://be.freelancersunion.org/benefits/> (you probably want to look this
up, since they provide discounted health insurance plans for people in and
around NYC)

<http://www.nase.org/Membership/OptionalBenefits.aspx> (smaller benefits, not
full covereage, for people across the US)

<http://www.anthem.com> (For people in California - a sufficiently high
deductible introduces risk but can drop your deductible to around $150-200 or
less; mine is $108)

If you have a pre-existing condition, then you might find a plan through your
state: [http://www.healthcare.gov/law/features/choices/pre-
existing-...](http://www.healthcare.gov/law/features/choices/pre-existing-
condition-insurance-plan/index.html) (is this an outcome of Obama's Affordable
Care Act?)

deciding whether/how to claim this on taxes (I haven't quite fully understood
this, though):

<http://www.irs.gov/newsroom/article/0,,id=220839,00.html>

<http://www.irs.gov/newsroom/article/0,,id=223666,00.html>

[http://www.usatoday.com/money/perfi/columnist/block/2011-04-...](http://www.usatoday.com/money/perfi/columnist/block/2011-04-04-tax-
breaks-for-self-employed.htm)

advice via Reuters, FWIW: [http://blogs.reuters.com/small-
business/2010/12/06/health-in...](http://blogs.reuters.com/small-
business/2010/12/06/health-insurance-advice-for-entrepreneurs/)

~~~
dashr
In CA, pre-Obama, an Insurer cannot deny an employee based on a pre-existing
condition. I believe, The Health Care Act made that standard across the U.S.
Some people with pre-existing conditions in CA used to form husband-wife
companies to employ themselves and get Insurance.

------
ryanwaggoner
For reasons unbeknownst to me, NY is one of the most expensive locations in
the US for health insurance. My wife and I are both healthy and have been able
to buy good insurance with reasonable deductions for around $250 / month total
in CA, CO, and OR. But I can't find anything in NY for less than 4x-6x that
much. I find it hard to believe that the cost of care in NY is that much
higher than in CA, so I'm assuming that some kind of moronic government
meddling designed to keep insurance affordable has once again resulted in
screwing over the people it was supposed to help.

EDIT: While not an unbiased source, this article indicates that my assumption
above is exactly right: [http://reason.com/blog/2011/06/01/new-york-states-
highly-reg...](http://reason.com/blog/2011/06/01/new-york-states-highly-
regulat)

~~~
duncanj
Unfortunately, the article doesn't answer the question of why NY had starkly
higher insurance premiums before those two rules were implemented in 2009. I
was purchasing insurance in NY in 2002-2005 and premiums were 3-4 times what
they are in other states. This was before 2009, and partially before Timothy's
law, and all that.

I think, perhaps, the fact that NY has such comprehensive support at the low
end of the income distribution, through medicaid, family health plus, healthy
NY, etc., causes all of those young, healthy but lower-income people to drop
out of the market for insurance. This leaves higher-income and older people in
the self-insured and employer-sponsored pools, driving up the base rates.

In any event, a study by the Manhattan Institute, as referenced by the
article, isn't very trustworthy. It would be very hard for them to release a
study that said anything different, which to me means that there is inherent
bias.

------
TruffleLabs
There is no cut dried answer in USA. Parameters to review: * what is your
(you/wife/family history) current health? * what is your current list of
medications and will they even be covered by an insurance plan you like? * how
much risk do you want to carry (less premium, higher deductible) vs the
insurance plan (higher premium, lower deductible )? * where you live. Certain
regions will have higher premiums. * family vs single. * how close can you
predict your health expenses into the future year?

Options to consider * alumni associations, affinity groups, clubs etc. may
offer health plans * talk with an insurance broker. Yes, a real live person,
as they will be knowledgeable about the current market and any issues with
specific carriers and plans. They usually are free to talk with and obtain
quotes from.

If you can do it, get a high deductible insurance plan with an HSA for the
years in which you are not having a baby. HSA contributions get some tax
deduction status and those unspent HSA dollars can be carried in to the
future. My CPA says HSA contusions are a good way to save for long term future
medical expenses.

For the plan year you get pregnant, aim to understand the total costs and can
an HSA / high deductible plan fit your finances. Will you be comfortable
taking on the out of pocket expenses (the high deductible part) and continue
making contributions to the HSA?

Will/can your wife work for a company that can offer health insurance?

Getting a plan in place is something that will take 2 to 6 weeks to get ini
place so don't wait too long.

Now for the bigger question: do you have disability insurance and life
insurance also in place?

Fyi, COBRA will most likely be more expensive than any plan you can get at the
family level.

Hope this helps:)

~~~
javahava
thanks! i have talked to a broker, and he pointed out several different
options - all somewhat pricey unfortunately. as i expected, he viewed HSA's as
a generally inferior option, thought that was a bit unclear why (i recall
perhaps something to do about ease of reimbursement/coverage). not sure if
that's actually true.

> If you can do it, get a high deductible insurance plan with an HSA for the
> years in which you are not having a baby.

this seems like a good strategy. why not just use an HSA exclusively? is it
due to risk of complications/cost during pregnancy? or do pregnancy costs
likely come close or exceed premiums of a traditional plan anyhow?

> Fyi, COBRA will most likely be more expensive than any plan you can get at
> the family level.

why is that? my wife is looking to quit soon, and is coming from a fairly
large organization. and it seems like the cobra, group-negotiated rates are
slightly better than the family rates i'm trying to negotiate on my own. just
my own experience.

~~~
TruffleLabs
COBRA payments for health care are what the company paid for your healthcare,
not just your portion. I worked at a large Fortune 500, my monthly premium was
(2006) about $150 a month. COBRA was $985 a month. Personally purchased Family
insurance plan was $300 month (though hard to compare these plans for their
benefits, just the dollars). Yes, if the large company did a great job in
negotiating, super, it may be lower than individual plans.

Having a baby has some uncertainty; is the baby growing fine, is the mother
doing well, how will the birth go, what about the first year, etc. That is why
I suggest looking at the total costs, the mother's health, and what
financially you are willing to take on up front with an HSA. Sorry I do not
have a clear path for making a decision.

HSA: there are two parts to this. The high deductible healthcare plan and the
HSA account admin. For a healthcare charges up to your high deductible you
would pay for it with your HSA debit card or electronic check. The amount
still gets sent in to the insurance company so they can record it.

Once your deductible is reached then healthcare costs would still be sent to
the insurance company, and based on coverage, the insurance would pay its part
and any remainder would be paid by you, with your HSA account.

Any reimbursements issues would be with the insurance plan, hopefully not with
the HSA.

------
mixmax
The Danish state.

Glad to see that I get something for my high taxrate.

~~~
itmag
I tend to think that socialized medicine is a great cost hedge for the
individual citizen (ie even in Scandinavia we do pay for health care, so it's
not 100% free like some people believe, but the cost is predictable and it
can't ever get sky-high like in the US).

I think one downside to it is that it's hard to do anything out of the
ordinary (ie some new drug or method or whatever) because health care is seen
as a standardized gov't service. For customization, you still need privatized
medicine.

Or am I wrong on this? I don't have a lot of insight into the health care
system, honestly.

~~~
itmag
_I tend to think that socialized medicine is a great cost hedge_

Of course, for this to work, there has to be a lot, possibly the majority, of
super-payers who pay more into the health care system via their taxes than
they receive back.

So, Scandi style health care can in a way be seen as a government-enforced
mandatory health insurance, except that unemployed people get it for (almost)
free.

Then again, a huge socialized health care system might have better economies
of scale (or they might be worse). Also, let's not forget that people can go
to medical school for free in Scandinavia, which is bound to have some kind of
effect.

~~~
georgemcbay
"Of course, for this to work, there has to be a lot, possibly the majority, of
super-payers who pay more into the health care system via their taxes than
they receive back."

Yes... but, this is also true for for-profit non-socialized health care
insurance.

------
thejteam
Not sure about NYC, but I have been looking at starting my own business in
Maryland and have been researching the situation. Here is what I found:

I can purchase my own high deductible plan at about 300 per month. This would
be for me, my wife, and three children. Family deductible would be 10000. We
are all healthy and I have the cash in the bank to cover a 10000 emergency. If
I wanted no deductible it would cost about 1200 per month.

When purchasing insurance yourself, you may need to purchase separate
maternity coverage, and you may need to wait several months after starting
maternity coverage to get pregnant. Otherwise prenatal care and delivery would
not be covered, although the hospital stay and baby care would be.

Not sure if New York has this, but Maryland has a special small business
insurance pool. It allows small businesses to buy employee coverage cheap. If
there are a few people involved this could be the way to go. Going this route
would require talking to an insurance broker.

Good luck. Wish you the best of luck with the new family if you go that route.
I have three children and it was the best decision ever.

------
phallstrom
$2k/mo seems expensive even for comprehensive plans imho unless you have some
conditions that bump it up. We're relatively healthy, two small boys, and
opted for catastrophic/HSA option. Then we put the savings from the premiums
into the HSA. I've found even with the routine visits for the kids and whatnot
we still pay less than we would going with comprehensive. And worse comes to
worse our total out of pocket is the same regardless. Point being, if you
don't see the doc much, HSA makes sense. One nice thing is that our provider
pays 100% of flu shots and routine health checkups which is all I use it for
anyway.

That said... if you're starting a family... pregnancy (and RX) are usually
(ever?) covered. So you might not have a choice.

As a small business, if it's just you and your wife (and your dependents) you
can deduct the premiums though...

~~~
javahava
Thanks for the info - that's helpful.

> That said... if you're starting a family... pregnancy (and RX) are usually
> (ever?) covered. So you might not have a choice.

HSA's do seem to make sense, but the pregnancy and any potential complications
were my main concern. It seemed from initial research that for this scenario,
and regular plan seemed like the best option, unless you had a different
experience? Perhaps use a typical plan initially, then switch to HSA's later
assuming health is ok?

------
pie
NYC provides a list of insurance options here:

<http://nyc.gov/hilink>

Some of the lowest-cost options are offered through Freelancers Union:

<https://be.freelancersunion.org/benefits/>

------
TruffleLabs
One last item: you will have to shop each year. Was on Anthem for several
years and then they raised their rates 30%, so shopped for a new plan. That
worked well for two years and then that insurance company ran into financial
trouble (in to receivership) so went back to Anthem at about the same price
(ironic).

------
dashr
We are in California. Over the years of our business we have gone from Blue
Cross/Anthem to now being with Kaiser- at one point we had a carve out plan
where we had both. However, it always makes sense to go through a Broker who
knows all the ins and outs each Insurer and its plan. The broker commission is
paid by the Insurer not you directly. I believe the broker receives more when
you add more employees to the plan - so they are invested in your growth. For
our Company, the Company pays the first $200 of the plans monthly premium, the
rest comes out of the employee paycheck, pre-tax. For employees 20-29, the
premium plans range from $150-400. For 30-39 and Employee+Spouse or Family
they go up to $300-1000. The employee can pick any plan that is offered (HSA,
HMO, PPO, hybrids).

~~~
dashr
The monthly contribution amount is determined by company policy. It can be a $
amount or %. It just needs to be stated in policy and applied consistently to
all employees.

------
RudySF
We're a small team of three (25, 28, 28) and the company pays for each
person's individual plan with Anthem Blue Cross rather than a group plan which
was more expensive for essentially the same coverage. It's about $200 per
person per month.

~~~
mrkurt
Be careful with that, since individual insurance can and will drop you when
things go south. A group plan protects employees from that although rates will
go way up if someone has a major health issue of some kind.

------
amorphid
I just went through this process. For my team of four, we went with an Anthem
Blue Cross PPO,.allowed us to provide health coverage for a remote worker in a
different state. My recommendation is to find a good insurance agent who can
help you choose. We went with Brad @ <http://www.allpointe-is.com> in San
Francisco. He was really helpful. In case you are wondering, using an
insurance agent does not cost any extra.

------
reagan83
Back in 2009-10 my small firm used to pay about $1300 for a family (spouses +
kids) in CA. This was for an HSA plan with United HealthCare and we did a
considerable amount of research before deciding on this plan (not the
cheapest, not the most expensive). I'm not sure if this is the same in NY, but
I would max out your HSA account before getting pregnant for an efficient tax
use of that type of account.

------
dylanhassinger
Sounds to me like this is an area ripe for disruption. Next YC semester should
include a startup that sells health insurance to its peers...

~~~
_delirium
Unless you have some way to get around the adverse-selection issue, I don't
see how opt-in insurance for small companies is a problem a startup can solve.

------
gourneau
Some friends on mine have a StartUp house. Their health plan is a cabinet
filled with multi vitamins.
[https://photos-2.dropbox.com/i/xl/n5zv5xdPSpq4KSJXVNr5YuYb0l...](https://photos-2.dropbox.com/i/xl/n5zv5xdPSpq4KSJXVNr5YuYb0lPdQRS0HnJqqqmoudk/4723630/1323644400/40831a5/IMG_20111023_001730.jpg)

