
Ask HN: How startups cover health insurance - bedros
with health insurance premium is rising, I wonder how startup who raised 500K with 3-10 employee cover health insurance; or in other words, what is the best insurance provider for a small startup
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themagician
If you're in CA, it makes sense to just pay your employees a little more cash
and let them get an individual policy. Honestly, that was always the best even
before the ACA. And that way you never have to worry about losing it if you
change jobs.

My individual policy when I first started was really cheap—$171/month (with a
reasonably high deductible, $5k I think). It's now $350—something. So yeah,
it's doubled. But it covers more things under the ACA and honestly the price
seems fair to me. Just pay employees an extra $5k a year and then they have
non-revocable, transferable insurance.

I honestly wish employer health insurance would go away. Like, make it illegal
and just have everyone get an individual policy. Yes, companies would have to
pay employees an extra $5-10k cash, but I feel like tax incentives could be
created on both sides to make this possible and beneficial for everyone.

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jochakovsky
This seems really inefficient - group plans are cheaper than individual plans,
and the premiums are tax-deductible, unlike individual plans. I suspect you're
also driving away older workers, since the ACA allows insurance companies to
charge older customers up to 3 times as much as younger ones. Maybe it would
be ideal for everyone to be on the individual market and for group plans not
to exist, but that's not the world we live in.

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gumby
In California it's very hard for a small company (under 50 at least) to get a
decent plan. It's mostly better to just let your emps get ACA coverage
(Covered California). Unfortunately the tax system doesn't allow that to be a
business reimbursement so you have to just gross it up (to cover taxes) and
run through payroll.

At about a dozen you can get insurance that doesn't completely suck, and cover
a huge percentage (like 80%) for your staff.

Don't cover 100% -- that way people whose spouses have better coverage won't
cost you anything. But it can surprise you: e.g. Stanford faculty have crummy
plans these days.

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ThrustVectoring
>Don't cover 100% -- that way people whose spouses have better coverage won't
cost you anything.

That's a surprisingly and annoyingly bad incentive. Like, it punishes
companies for providing excellent medical coverage by basically making a cash
transfer to companies providing shittier coverage to their employees' family
members. There's some countering incentives for very high-value employees,
where they really really care about medical coverage because their spouse is
stuck with shitty coverage, but overall it pretty well sucks.

~~~
gumby
I don't know a better way to manage this incentive (I mean on a global,
society level I mean). Any ideas?

In the case of smaller companies, there really isn't any choice: we don't get
the good group plans. If it were free of course everyone would sign up, and
then the company would be paying a large premium to the ins co for something
the emp wouldn't use -- and for the emp, if they filed a claim they'd have a
real problem because each insurance company would claim the _other_ should
cover the expense (I know this from experience).

The trick is to make a bigger group. Someone like YC could probably get all
their portfolio companies into a single group. Individuals can join IEEE which
makes a group, but you can't enroll your company in that.

~~~
ThrustVectoring
It's fairly straightforward to fix - single payer. That's not easy to, like,
actually do, since there's established interests in the current system. But it
is simple to describe.

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AznHisoka
We let our employees choose any health plan they want through the marketplace,
or whereever, and reimburse them for it.

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Mz
I used to process accident claims. I have a certificate from a technical
college that entitled me to the spiffy title of "Certified life and health
insurance specialist."

If you can find a local Direct Primary Care provider, that is a "legal" option
under the ACA when combined with a high deductible plan (or possible a health
savings account). I have some info here:

[http://micheleincalifornia.blogspot.com/2015/12/how-to-
fix-a...](http://micheleincalifornia.blogspot.com/2015/12/how-to-fix-americas-
financial.html)

From what I have read, DPC reduces costs while improving care. Part of how it
brings down costs is a) better maintainance care so health issues don't spiral
out of control and b) cutting out the middle man of insurance. Costs are lower
in part because you pay the clinic directly.

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bedros
I'm in California, thanks for the great answers, but should I expect 5-6K per
employee per year to cover insurance?

in case I let the employee get their own insurance, how about the mandated law
that forces each small business to give coverage to all employee? I get a
waiver letter from the employee in that case?

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toomuchtodo
> but should I expect 5-6K per employee per year to cover insurance?

That's about right. I've seen startups cover anywhere between $250-500/month
in health insurance premiums, with the rest on the employee.

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tyingq
If you have solely single employees that might work.

The total cost for "gold" plan for an employee with a family can be easily
$1500-$2000+ a _month_.

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toomuchtodo
I have never seen a startup offer gold plans or contribute towards family
premiums (just individual). Large enterprises/Fortune 500|50s, but never a
startup.

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koolba
> I have never seen a startup offer gold plans or contribute towards family
> premiums (just individual). Large enterprises/Fortune 500|50s, but never a
> startup.

Wouldn't that rule out employing anybody that isn't single?

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lojack
Probably depends on the state you're in, but here in Ohio we have COSE that
provides a number of benefits for small businesses, one of which is programs
for insurance.

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bennybriceno
Say hi to my friends over at limelighthealth.com

They are a startup built and started by health insurance brokers. If you are a
startup with under 50 employees, go to the founders there. They all still hold
their brokerages, and they are startup founders themselves. I can't speak for
them, but I am sure they'll know how to help you make the best decisions for
insuring your employees.

After-all, they get it.

~~~
bennybriceno
I use to work there before I started my tech company.

