
Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance - kevc
Hi HN, we are Suril and Kevin, and we are launching Savvy (<a href="https:&#x2F;&#x2F;www.gosavvy.com" rel="nofollow">https:&#x2F;&#x2F;www.gosavvy.com</a>) — a new way to offer health benefits for U.S. startups and small businesses. With Savvy, you give employees tax-free funds, and let them buy any insurance they want. This has recently become possible because of a new federal regulation, which has the potential to significantly improve the healthcare situation for employees, saving them money and giving them more control.<p>For example, employers could give employees $500 a month for health benefits, and an employee could opt for a $600 health insurance plan. Both the $500 employer contribution and the $100 employee contribution would be fully tax-free.<p>We (Suril and Kevin) both worked at our own families&#x27; small businesses and know first-hand the pain of figuring out health benefits for employees. Today, small employers in the U.S. that can afford to offer health insurance (most cannot) must work with a broker to pre-select 1 or 2 &quot;one-size-fits-all&quot; health plans for their employees. These are called small group health plans, and they come with some downsides.<p>Employers are in the difficult position of prying into their employees&#x27; (or co-founders&#x27;) medical histories if they want to do a good job, and they take on an HR&#x2F;benefits role that they may not want or have time for. Additionally, small group health plans come with restrictions — over 75% of employees must participate in the plan, employers must pay at least 50% of the premiums, and the company may need to be above a certain size (typically 2-5 employees).<p>These downsides, along with the cost of health insurance (more on that in a bit), mean that many small businesses simply don&#x27;t offer health benefits to their employees. This is bad for employees because they then must pay for health insurance themselves with after-tax income. This effectively means their health insurance, which is already a substantial expense, is 25 - 40% more expensive. This also makes it harder for small employers to attract good employees.<p>We are only able to launch Savvy because of new regulation that went into effect this year (on Jan 1, 2020). The vehicle we are using to offer this kind of health benefit is called the Individual Coverage Health Reimbursement Arrangement (ICHRA). Outside of the industry, this new regulation has hardly received any attention, but we think it will be big.<p>Our backgrounds are in HR tech and fintech. While working on a different healthcare product a year ago, we saw the ICHRA regulation get finalized and felt that there was an opportunity to package this new benefits option into a full product that simplified health benefits for small employers.<p>The U.S. system of employer-provided healthcare, which started when wage freezes were put in place during WW2, is an anomaly among western countries. One of the biggest issues is that the buyer of health insurance (the employer) is not the consumer (the employee). This fundamentally misaligns incentives. Many small employers we speak with don&#x27;t believe employers should be making this very personal decision for their employees. We agree.<p>We guide employers through picking a contribution amount (we show them how their contribution compares to health plan prices in their area) and manage the corresponding paperwork, compliance, and payroll adjustments. For employees, we provide an in-app marketplace with access to every individual health plan, as well as vision and dental options. Employees can speak with licensed brokers every step of the way. Because employees control how they allocate their funds, they can even use the money to pay for existing insurance plans, including COBRA from a previous employer.<p>Most of our revenue comes from flat per-head administrative fees. We make a small amount of money when employees buy insurance through our in-app store, but this hasn&#x27;t been a focus for us so far since broker commissions are significantly lower for non-group plans. We think this is a good thing because it better aligns incentives for us and our customers, and we are not encouraged to favor one health plan over another based on broker commissions.<p>Most of our customers fall into four categories (#3 was an unexpected surprise for us).<p>1) Startups who want to get the tax-savings of employer provided benefits for their co-founders. Sometimes a founder will even want to keep a COBRA plan but pay for it with company funds (remember the 25-40% savings we discussed earlier). 2) Companies getting ready to make their first hire and want to offer health benefits in a fast and easy way. 3) Distributed teams who have difficulty buying a company health plan for employees spread across the country. We were surprised when a European-based company approached us, looking to offer health benefits for their U.S.-based salespeople scattered across a few different states. 4) Small businesses who have deferred the health benefits decision, and have employees who are currently paying for their own health insurance with post-tax income.<p>We&#x27;re seeing a surprising increase in signups due to coronavirus. Many startups and small businesses are scrambling to find a quick way to get their employees health coverage, and with us, their employees can get coverage even if they missed open enrollment at the beginning of the year.<p>Making it easier for employers to offer health benefits is a good start but, in the future, we want to help them get lower prices as well. We are looking into aggregating our users into buying groups to get big-company rates on insurance. Large employers receive discounts because they buy in volume. Buying groups are a very active legal topic right now — we&#x27;re following along closely.<p>If you have experience managing health benefits at your own workplace or just have thoughts on how we can make the experience better for employers or employees, please reach out! We&#x27;re keen to get the community&#x27;s input, in the comments below or at hn@gosavvy.com.
======
jcrben
As someone with a chronic illness, thank you for this. I don't want my
employer to be responsible for my insurance. I want portability and privacy. I
want more than just the options my employer decided to pick.

If this becomes a trend, we could see the individual ACA marketplace
strengthened. Right now part of the problem is that they are missing a lot of
the healthy people in the group market, which is partly why the big insurers
have left the market - for example, the California exchange is missing
UnitedHealthcare, Aetna, and so on.

~~~
kevc
Thanks! We appreciate it. We believe Savvy and the new regulations will
strengthen the individual market.

~~~
jcrben
I spent a few years as an insurance regulator (albeit on the P&C side) and I
was following these regulations. I'm glad that you are out there evangelizing
this, but I think in the long-run you may have to figure out how to provide
additional value or you may be disintermediated. We are already at the point
where we need to wring every little bit of unnecessary cost out of healthcare.

------
apinstein
This is great! As a founder, I have long felt employee-sponsored health care
is awful. A company should not be required to be intertwined in the medical
concerns of their employees. It is a very weird conflict of interest. I am
solidly behind the complete unwinding of employer-sponsored health care plans.

Also insurers are very predatory towards small groups. There shouldn’t be
small Or large groups! It’s a bogus way for insurers to price discriminate and
cherry pick.

The other really weird thing is that monetarily employees do not fully value
the employer health care contributions. And it’s even stranger when picking
coverage for families. So the idea of being able to have a flat monthly
“contribution benefit” really helps both sides have more transparency around
the financial benefit of health care.

If market-based health care can ever work, it has to be in an efficient market
something like this. This is great news and I agree it could be huge! Good
luck with the launch.

~~~
apinstein
I should add that at my last company we switched to a PEO mainly due to the
advantages in health insurance prices and administration. JustWorks has been
amazing. You might look at how they do the onboarding and maintenance of plans
as a low-friction way to handle this. If you could partner w payroll companies
you could integrate your solution completely into the hr onboarding process
and get access to a huge distribution channel.

~~~
kevc
Appreciate the tip! Will definitely check out the Justworks onboard flow. I
think partnering with payroll vendors would be a great idea.

------
tyingq
The health plan rates available to individuals cost quite a bit more than ones
negotiated by a big company or consortium of smaller companies.

When I last had to do my own insurance, it was $2200/month for a high end,
lowish deductible plan that covered my family. Choice is nice, but the costs
are so high now that I'd rather have the lower negotiated rates with less
choices.

~~~
SkyPuncher
My experience has been the rates are within 20% of each other.

What does that $2.2k number compare to?

~~~
tyingq
My employer subsidized is $650/month for a similar plan, but I don't have a
view into what their share is. I'm sure the total is lower though. They have a
lot more leverage.

10 years ago, I was paying $900/month for the same plan on my own.

~~~
lotsofpulp
You can find that information in box 12 code DD of your W-2.

[https://www.irs.gov/affordable-care-
act/form-w-2-reporting-o...](https://www.irs.gov/affordable-care-
act/form-w-2-reporting-of-employer-sponsored-health-coverage)

------
unlinked_dll
> For employees, we provide an in-app marketplace with access to every
> individual health plan, as well as vision and dental options. Employees can
> speak with licensed brokers every step of the way.

I really want to like you for taking a stab at solving this problem because
it's a serious one for startups and small businesses, but I can't as long as
you keep this approach. Shopping for insurance (even through a broker) is an
extra layer of friction to the hiring/onboarding process and this needs to be
removed.

In my experience, startups are bottlenecked by hiring more than anything
today, and part of that is compensation/benefits. If you make it more
difficult or more complex for startups to get people compensated and set up
with benefits, they will decide to work somewhere else.

~~~
kevc
What do you envision is the best way to do this? Our approach is to present
employees with a few options upfront that, behind the scenes, have been
recommended by a broker for them. They can speak with their broker if want
help understanding and selecting one of the recommended plans, or look at the
wider market if nothing suits them.

We try to streamline the experience as much as possible, and put in a lot of
work building an interface that explains the plan details in-app.

And you always have the option to tell one of our brokers "None of these work
for me, I want to make sure Dr. Smith is in my network, show me more options".

~~~
dv_dt
Having been a small business owner who has had to shop, I would have loved the
"CostCo" quality model applied. I know that would be really difficult for a
startup with the state of our healthcare, but to me it would mean getting in
the largest insurance pool possible with above average customer friendly
choices making it easy to say yes. That also implies a very few options to
chose from, and maybe ideally one (that gets you to the larger pool).

BTW costco quality also doesn't mean the absolute highest quality, just above
average solid options plus using the volume to drive the affordability.

~~~
tyre
Are you describing HMOs? You have fewer available plans in exchange for cost
savings with a large pool.

~~~
dv_dt
Not specifically. HMOs are more bringing in the services together with the
insurance function - larger pools than many small business plans may be a side
effect. But "regular" insurance should also be able to create larger pools -
indeed some states specifically form small business health insurance pools to
help make that community get better healthcare plans.

------
jbkiv
Congrats! How do you handle discrimination in your case? I'll give you an
example: 50% of your employees are young and healthy and they opt out of the
health plan offered and go with Savvy. How do you handle the remaining 50%,
assuming that some of them are older, have cancer, or have kids with
disabilities, diabetics or whatever. Would ANY health plan accept to cover
only the sick and old? This is based a concept called mutualization. I'll be
interested by your point of view, or if any of your clients came across cases
like that?

~~~
snarf21
You really can't stop it without more regulation. It is also why Obamacare
didn't work for a lot of people, payors simply pulled out of states or
_raised_ rates on existing customers.

Although ICHRA is a baby step forward, it is optional. Employers can offer
this but they aren't forced, it isn't illegal. We need healthcare to be
completely detached from employment. Employers should still be able to
contribute to the HSA (no need for separate HRA) just like they do to a
SIMPLE/401K and employees can spend it on any medical expenses they want. The
HSA is portable and gives people choice.

We also need to move to reference based pricing (1.2 * Medicare) instead of
the payors negotiating with each health system. This also gets rid of "out-of-
network" as that just doesn't matter. This also removes all the brokers and
other rent seekers from the system.

The last thing we need is to stop treating healthcare like insurance.
Insurance products are for unlikely catastrophic events. You are going to need
a checkup each year and a flu shot and you'll get a sinus infection. These are
known and expected events. Being able to pay for these out of HSA gives good
savings and insurance can be used to treat things like cancer and
hospitalization and knee replacements. Medicare could also be expanded
slightly to automatically cover an annual physical and age based cancer
screenings. Then health insurance is mostly a risk management construct and
since you are likely to stay with your carrier, they are incentivized to get
you healthy and lose weight. Today, payors don't want to push on wellness
since your employer will switch carriers each year looking for savings and the
new payor benefits.

~~~
AnthonyMouse
> Medicare could also be expanded slightly to automatically cover an annual
> physical and age based cancer screenings.

It doesn't even have to be Medicare. Just give everyone a $100 voucher for a
physical every year and let them take it to any licensed physician. Then there
will be some who do it for the $100, others who charge $120 but maybe it's
worth the extra $20 from your HSA because it's 3 miles out of your way instead
of 30 (and has to charge more because real estate costs more there).

The way Medicare "negotiates" prices involves a lot of wrangling and
distortion and politics. Vouchers solve the same problem while still allowing
people to choose to pay a little more for something they find to be worth a
little more.

~~~
skrtskrt
How about we add everyone to Medicare, adjust what it covers to be more
relevant to the average person, and use the massively diversified risk pool
plus minuscule administrative costs (compared to private insurance) plus price
negotiation power to save trillions of dollars and keep everyone healthy, for
the larger benefit of society?

~~~
mbonca
I've always wondered why no Democrat running for president hasn't come up with
an idea like this. Why not make Medicare for All cover everything coded as
Preventive Care and your private insurance covers everything else. We already
have the coding guidelines in place since private insurance doesn't charge a
copay for Preventive Care items. Uninsured get something and private insurance
only has to worry about the true catastrophe costs.

------
rebelidealist
This is nice for remote companies. We went to the pain of trying to get a good
price Kaiser group plan but found out that Kaiser doesn't operate in other
states that we have employees in.

~~~
kevc
Thanks! We have definitely found we are a good fit for remote companies with
employees in multiple states. If you don't mind me asking, what did you end up
doing for your health insurance?

------
choward
So we're adding another middleman to the healthcare system? It seems like we
should be working toward the exact opposite of this. I view any service like
this that makes money from the healthcare industry but doesn't actually
provide healthcare as a huge inefficiency that will further increase the price
of healthcare. What's next? A startup that helps you choose between these
middlemen companies?

This insanity has to stop. I want to be able to get healthcare and pay the
people providing it directly and know my costs up front. It's as simple as
that when it comes to healthcare. As for "insurance", I don't want to go
bankrupt if I get cancer. These are two separate issues. Insurance should not
be required for healthcare.

~~~
kevc
We agree that less distance between the buyer and the end user is better. In
our case, the middleman we are removing is the employer. With us, employers
are no longer picking specific health insurance policies on behalf of their
employees. Instead employees are purchasing them directly through our app, but
still reaping the significant tax savings of employer-provided health
benefits.

~~~
rabidrat
One of the key benefits of employer-sponsored health insurance for me is that
I don't have to shop for health insurance. Talking with my self-employed
friends and the ridiculous number of options (which are all designed to screw
you anyway when you get really sick) makes me want to never have to go through
that process.

~~~
kevc
As you say, the sheer number of choices can be overwhelming. This is why we
have our brokers, who are experts on the nuances of health plans, recommend a
few plans for each employee - we do the shopping for most employees, and the
power users can pick for themselves if they like. Employees can always chat
with us in-app as well.

If you work for a large employer, you have benefits professionals who spend
all year thinking about this - we work with small employers who don't have
these kinds of resources and are happy to offload it onto us.

~~~
lotsofpulp
It’s a great idea to help small employers! I know small employers that want to
offer health insurance benefits to be able to compete with bigger employers,
but don’t have the HR hours or budget to deal with COBRA and enrollment and
non discrimination testing.

~~~
kevc
Thanks! If they are still looking to offer health benefits, we would love to
speak with them.

------
mNovak
Having recently been through this, I appreciate the push to support small
business in what is a confusing and stressful area of administration. Inherent
support for distributed teams is also a nice perk.

As others have mentioned, the high cost of individual (e.g. Marketplace)
insurance is one obvious drawback that remains. Even with 1 non-owner employee
you can get better rates through e.g. simplyinsured.com

However, the monthly recurring cost strikes me as high. The major emphasis
seems to be on setting up and picking a plan; to be slightly cynical, is this
just the SaaS-ifaction of what would otherwise be a one-time setup fee?

~~~
acesohc
Suril here. We think of our service as an outsourced benefits team member. We
handle ongoing payments and issues with carriers (which are surprisingly
common), payroll adjustments, tax support at year end, and all employee
questions.

Would you prefer to pay a fixed, upfront fee?

~~~
mNovak
Personally yes, I think that'd be fair. Similar to how I don't pay my patent
lawyer or even accountant monthly. Presumably many things change as a business
grows, but this is a (very) small business perspective.

Related, what happens if I decide to drop Savvy?

------
kelnos
One concern I have is that you're targeting startups and small businesses, but
what happens when the company grows? I imagine they'd be able to get much
better pricing if they switch to a more traditional arrangement, but then
employees would likely be upset that most of them will have to change plans.

------
chuniverse
One side effect just to think about, i wouldn’t take employer coverage because
I’m covered by the VA, so any amount of premiums is simply an added cost, plus
the large deductibles that often come with most health plans now.

However this type of system I would probably be incentivized to get
_something_ for my $500 per month. So I would probably elect to get some
additional coverage even just the bare minimum without going over. This has
good and bad side effects, one is that now I cost the employer $500 per month
while before I was 0, but at the same time it’s better for the health plan as
an under-utilizer to keep the overall costs of the plan low.

Would ancillary plans be eligible such as dental or vision or is it limited to
a Health plan?

~~~
kevc
As long as you are enrolled in health coverage (whether yourself, or on a
spouse's plan) you can spend your employer's health funds on dental and
vision.

------
koolba
So what is this providing over simply cutting a QSEHRA check to your
employees?

Seems like it’s complicating something that requires nearly zero paperwork
already. Just cut a check and make sure it’s uniformly calculated across your
workforce.

~~~
unlinked_dll
As an employee whose has been on the receiving end of this, I won't work
anyplace that does it. I'm sure I'm not the only one.

~~~
danShumway
Honest question as someone who's never worked at a place that does this --
what left you feeling negative about it?

Are the marketplace plans substantially worse than the employee plans, or are
there extra caveats that come along with QSEHRA, or was it something else?

~~~
koolba
They’re substantially worse. ACA plans have worse networks, higher
deductibles, and higher max out of pockets.

Imagine if they didn’t? No employer under 50 employees would bother getting
group coverage as they could get better coverage for less via the QSEHRA
route.

~~~
tptacek
I had ACA coverage before we offered group health insurance to our employees
and did not find these things to be true: the network for my ACA silver plan
was the same (fine) network as we get now, the deductible options are the same
(but I was opting for higher deductibles to go with an HSA on the ACA plan,
which is what I think most startup employees should do), and the out-of-pocket
costs were the same.

I suspect that a lot of people alarmed by ACA costs are really just observing
that their employers were subsidizing a lot of stuff for them. That's true!
Employers who give you group coverage directly are usually giving you a shadow
pay raise in the background to make the numbers look better!

But for startups, the difference between the individual market and the small
group market probably aren't usually that big --- as you'd expect, since a
small startup isn't really aggregating much risk.

~~~
simmons
As a sibling comment points out, the value of ACA plans may vary quite a bit
from state to state. I don't know how it is elsewhere, but here in Colorado
the major insurance companies only provide a special, lousy version of their
product on the marketplace. It's not uncommon to find health providers that
claim to take Anthem or Cigna insurance, for example, only to show up and be
told that "Anthem Pathway" and "Cigna Connect" don't count. Astonishingly,
they don't seem to be willing to sell regular plans to individuals for any
amount of money. (Source: self-employed.)

~~~
tptacek
That's common in the small-group market too: the insurers have a network they
advertise, and then smaller subset networks they offer for a lower price. So,
I know it's true that you have to be careful not to accidentally subscribe for
the small-network version. It's definitely not the case in Illinois that the
large-network plans aren't available on the exchange; they are. Couldn't tell
you about California or New York, though.

------
jedberg
I can't tell from the website, but can I offer different amounts to different
employees?

For example, can I offer $2000/mo to someone with three dependents and $500/mo
to a single person?

ie, $500 per family member.

~~~
kevc
Yes, you can do exactly as you describe. I'll make that more clear on our
website.

~~~
jedberg
Ok cool! So I went through the signup flow and got to the last step that
creates the docs and charges me a $100 setup fee, but I'm still not clear on
how the program works.

Will this be deducted from their paycheck or from my account? Where will that
money come from if I deduct from their check? Do you integrate with Gusto?

I'm just not at all clear on the logistics of how the money moves from my
company to their health insurance company and what the steps in between are,
especially since they already have post-tax personal health plans.

~~~
kevc
Apologies - We usually walk customers through the setup over the phone,
definitely needs some work to be fully self-serve. We appreciate the feedback.

To answer your question: The premiums will be deducted from your account, and
any extra employee contribution would be deducted, tax-free, from the
employees paycheck. We integrate with Gusto to set this up for you.

I am happy to walk you through the specifics: kev@gosavvy.com

~~~
jedberg
No worries, I understand. I think I'm all good now. Maybe just some text on
that final page with these details would be great.

------
exabrial
If we could see the return of individual HSA plans to the marketplace, this
would be truly incredible!

~~~
HarryHirsch
It's likely that you do not have family members with chronic conditions.

~~~
exabrial
I would much rather pay $5k/year guaranteed maximum then 50% cois if I had a
chronic illness.

------
Jommi
How does this compare in cost to startups using justworks that has better
negotiating power for cost savings in the insurance even with low amount of
employees?

~~~
sn
justworks is a PEO and their PEO certification is currently suspended.
[https://www.irs.gov/tax-professionals/cpeo-public-
listings](https://www.irs.gov/tax-professionals/cpeo-public-listings)
[https://www.irs.gov/pub/irs-utl/suspended-
cpeos.pdf](https://www.irs.gov/pub/irs-utl/suspended-cpeos.pdf)

~~~
Jommi
AFAIK this sentence is a bit dishonest. Justworks is still a PEO, they are
just not a CPEO. CPEO is a PEO that is certified by IRS to be in excellent
standing, it's not a requirement.

------
anovikov
I believe any efforts directed on pushing more and more money into the already
heavily overfunded, corrupt healthcare industry, are counterproductive and not
going to fix anything. Give them more money and they just increase the prices,
they are at the controls anyway.

------
sn
[https://www.takecommandhealth.com/](https://www.takecommandhealth.com/) is an
existing option for an ICHRA or QSEHRA. I am not clear what savvy is offering
that isn't offered by them.

A professional employment organization (PEO) is required to get group rates
for health insurance as a small business. PEO's handle more than just health
insurance; they can also handle 401k's, disability insurance and remove the
need to register as a foreign corporation in each state that your employees
live in. If anyone has recommendations here I would love to hear them.

~~~
kevc
Association health plans are a way to group small businesses together for
large group pricing, without using a PEO.

[https://www.dol.gov/general/topic/association-health-
plans](https://www.dol.gov/general/topic/association-health-plans)

We think other companies offering ICHRA services are a good thing. It's a new
option that can help a lot of people, and more vendors will spread the word
faster. Savvy works a little differently than the existing solutions.

Instead of a reimbursement-based approach, where employees pay insurance
premiums themselves and submit them for reimbursement (like a business
expense), we manage the payments for employees. This means the insurance bill
is paid by the employer and any extra employee contribution is deducted from
payroll. We do it this way so that the employee contribution is also tax-free.

We are also investing heavily in helping employees find the right plan. Behind
the scenes our brokers are recommending plans for every employee, and we are
building out tools that help employees do things like find a plan with a
specific doctor or hospital in network.

~~~
sn
I saw that it's legally possible to form an association health plan. I don't
think there are very many of them, or if there are, they are not public
organizations.

~~~
kevc
You are right, some of the regulations around association plans were only
recently decided, so they are not widespread. We are very interested and
working with some experts in the space to better understand how we can
leverage them.

------
atsmyles
Does Savvy provide plans with Health Savings Accounts?

~~~
kevc
Yes, we give access to any ACA-compliant plan on the market - many of which
can be paired with HSAs.

------
pashabitz
Mad respect. Keep at it!

------
thedance
As someone who has had to shop for health insurance before, how am I supposed
to just "buy any insurance I want"? On the private market? That doesn't work
for a lot of people. For example, a person who is already pregnant will not be
able to simply buy health insurance, because nobody sells it.

~~~
kevc
We have an in-app insurance market that offers every ACA-compliant individual
health insurance plan in the country, and you can speak 1-1 with a broker to
help guide your decision. In the case of someone who is already pregnant, ACA-
compliant plans cannot deny you coverage.

~~~
thedance
That's true but it's also true that the plans need not cover maternity. There
are tons of ACA plans that don't. And in "markets" with one player they can
just name their price. None of this is your fault of course.

~~~
jonas21
Are you sure about that? healthcare.gov seems to suggest otherwise [1]

> _Maternity care and childbirth — services provided before and after your
> child is born — are essential health benefits. This means all qualified
> health plans inside and outside the Marketplace must cover them._

[1] [https://www.healthcare.gov/what-if-im-pregnant-or-plan-to-
ge...](https://www.healthcare.gov/what-if-im-pregnant-or-plan-to-get-
pregnant/)

~~~
thedance
There are plans that are exempt from ACA's "requirements" because of course
there are, and the current administration has used its rules-making powers to
expand such exemptions. These are not limited to backwater states with evil
administrations. At this very moment there are plans on California's ACA
market that are exempt and do not cover maternity.

~~~
tptacek
It seems like all you have to say here is that there exist ACA-noncompliant
plans. Yes, that was always the case. Why would you buy one of them? The major
reason people end up in exempt plans is that they somehow miss enrollment (or
have a payment snafu that gets them bounced from their compliant plan --- ask
me how I know that). But this product appears to generate a new enrollment
window; you can just buy ACA-compliant marketplace plans with it.

~~~
kevc
You would be surprised how common missed payment issues are. Many carriers
will only notify you via paper mail, so it's easy to miss. We manage the
carrier payments for all enrolled employees to make sure that this doesn't
happen.

~~~
tptacek
It happened to me. :)

I managed to avoid an exempt plan when BCBS screwed up my auto-pay.
Ironically, I did that by leveraging a mistake I made when I first signed up
for an ACA plan: I'd mis-entered my kids information, which screwed up the
registration, and when I called for support to fix the problem the Marketplace
team just created a new registration for me. After BCBS screwed up, we were
able to use the original stale registration to enroll in a new plan. I got
pretty lucky: the exempt plans retain the ability to DQ applicants for
preexisting conditions, and while my family is healthy, my daughter had an
unexplained seizure when she was 4 and is, for all intents and purposes,
excluded from exempt plans.

The thing I think people don't know and really need to understand is that if
you let your health insurance lapse, you can't simply pay up to reinstate it;
you can only alter your insurance during qualifying events. That's because if
you _could_ lapse and then pay up later, lots of people would exploit that to
avoid paying for insurance until they needed it, which defeats the purpose of
insurance.

None of this has anything to do with your startup, of course.

------
1123581321
Does this also work for insurance alternatives that qualify as having
insurance on an 8965?

~~~
kevc
Are you referring to a health share program? In order to spend your health
stipend tax-free, you must be enrolled in a plan that has Minimum Essential
Coverage. Paired with an MEC plan, you could pay for medical expenses tax-free
as part of a health share.

[https://www.healthcare.gov/glossary/minimum-essential-
covera...](https://www.healthcare.gov/glossary/minimum-essential-coverage/)

~~~
1123581321
Makes sense. Thanks!

------
yurylifshits
I use TakeCommandHealth
([https://www.takecommandhealth.com/](https://www.takecommandhealth.com/)) for
this. How would you compare Savvy to their service?

~~~
kevc
We also leveraging the ICHRA, but Savvy works a little differently.

Instead of a reimbursement-based approach, where employees pay insurance
premiums themselves and submit them for reimbursement (like a business
expense), we manage the payments for employees. This means the insurance bill
is paid by the employer and any extra employee contribution is deducted from
payroll. We do it this way so that the employee contribution is also tax-free.

We are also investing heavily in helping employees find the right plan. Behind
the scenes our brokers are recommending plans for every employee, and we are
building out tools that help employees do things like find a plan with a
specific doctor or hospital in network.

------
gregwebs
Trinet is a great existing option for smaller companies, particularly if you
need other benefits as well

------
elif
What's to stop me from receiving a $500 benefit tax-free and buying a $250
plan?

~~~
phantom784
I'd think you should be able to do that and put whatever is leftover in an
HSA.

~~~
kevc
Correct, employers can pair their insurance reimbursements with HSA
contributions if they wish.

------
PunksATawnyFill
Health insurance should have nothing to do with your job.

THAT is the problem the USA needs to solve.

------
eganist
How does this reconcile with the current system for more established firms
where employers typically contribute a substantial amount towards subsidizing
employee healthcare plans?

Not to be a downer, but this feels like an offramp from our current system
down to an even worse one, one where employers can now substantially cut back
on employer contributions towards health insurance. It may be great for your
success, but it just feels like it may prove to be a net-negative on US
healthcare coverage generally because of the loss of collective bargaining by
employers on behalf of employees, assuming the model takes off.

~~~
kevc
We are really focused on providing this as an "on-ramp" for small employers.
Providing large employers an "off-ramp" isn't a use case we have seen much
interest in. However, there is an interesting historical precedent with
retirement plans, which suggests that there can be systemic benefits that come
when employees have more control. Pre 1978, employers offered pensions as a
retirement benefit, and like health insurance today, they were selected and
managed by an employer — and all kinds of bad behavior resulted in this
misalignment of the buyer and the beneficiary. 401(k)s were the consumer-
driven answer to this, allowing companies to offer tax-free funds that the
employee could manage themselves. Since 401(k)s were easier for employers, the
number of businesses offering retirement benefits grew significantly, and the
number of employees reaping the tax benefits grew as well.

~~~
eganist
I see your point, but to highlight a critical point of comparison: that's
emblematic of the risk to healthcare.

Pensions were an actual benefit to employees, largely subsidized by employers
and taking into account various employment factors e.g. length of employment,
salary, etc. With the advent of 401k, that expense was shifted almost entirely
to the employee save for a remaining "match" benefit that the employer still
covered.

Retirement and healthcare are two areas where people are generally unable to
operate with sufficient foresight, opting for plans and financial decisions
that make less long-term sense.

Hopefully you see my concern. It's not in your investors' best interest for
you to cap out the size of businesses that can buy into your service, but (and
this is me dreaming) if you re-charter as a public benefit corporation toward
this end, you may successfully build a supportive grassroots coalition to
drive you forward within your target market (small businesses).

\---

Beyond that, there might be value in your team offering collective-bargaining-
aaS on behalf of your growing small business clients. That way you're
extracting value not from employers/employees but from the insurance industry
instead.

~~~
kevc
We are extremely interested in engaging in group bargaining for lower rates
and are actively working with experts who have experience doing this. A recent
federal ruling has opened the door to doing this across state lines, which
could be very powerful.

~~~
eganist
> We are extremely interested in engaging in group bargaining for lower rates
> and are actively working with experts who have experience doing this. A
> recent federal ruling has opened the door to doing this across state lines,
> which could be very powerful.

This is nice. Infinite power to you if you find success with this angle; I'd
support it.

------
nathan_compton
Brave to do a startup when many are agitating to completely get rid of for
profit health insurance in the US.

~~~
Keverw
I was thinking the same.

Especially when working in a very regulated field. Who knows if ICHRA will
last, maybe the next administration will scrap it. Kinda like how under Obama
they had the individual mandate but Trump ended it. However some states have
added an individual mandate for state residents since the federal one was
eliminated, like MA, NJ, VT, CA, RI and DC. But there's still going through
the courts as this whole individual mandate thing might have been
unconstitutional in the first place, so those states might end up dropping
them at some point again.

Plus I know there's SaaS apps to handle payroll and some of them integrate
health care options. Seems like people don't like messing with this sort of
stuff, will buy an option they think is safe and easy to handle and move on to
their actual product unless they hired HR people with experience in this area
who can be dedicated to managing this stuff. Seems like when it comes to some
of these tasks of running a startup, you need some adult supervision. Might be
a good programmer but all the ins and outs this and related stuff can be a
huge distraction.

I guess since they had a background in HR and stuff doing a startup like this
would be a bit easier than say me trying to do this...

Then another big thing even if you have insurance, who knows if you end up
actually using it for anything if something won't be covered and then you get
a big surprised bill. I feel like the whole in-network and out of network
thing is the biggest scams. Say you looked on Google for the best Doctor,
Dentist, specialist, etc and found one you liked you got to check the book
they send you to see who's covered. Then another thing is a hospital can be in
network, but someone like the anesthesiologist is out of network. Then
remember seeing someone got charged $10 for an individually wrapped cough
drop, when you could of just bought an entire bag at the local pharmacy.

So seem's like picking a plan out of some options sounds better though.

Also wonder since the advice with employees if someone quits, they say disable
all accounts. Wonder if companies still have like a separate account for HR
since don't some companies offer a web portal for insurance, probably also
COBRA would be in that portal. However some companies this is all pen and
paper but digitizing things something to think about... Like someone I know
that worked at a factory, all this stuff was a packet you'd fill out with pen
and paper and turn it in to someone in the office area. But I'd imagine tech
companies would want to digitize a lot of this, and for remote teams that
makes even more sense.

~~~
kevc
Agreed healthcare is changing. I will say, however, that the ICHRA was one of
the few healthcare related initiatives with pretty strong bipartisan support.
The SBA (Small Business Administration) lobbied for it.

To your point on employees quitting - one of the benefits of Savvy is that if
you change jobs, your insurance can stay with you as it is no longer tied to
your employer.

~~~
Keverw
Interesting, so sounds like that regulation will stay unless some radial major
change like some candidates are promising but who knows, plus the whole
socialized medicine thing is a huge debate anyways. Some people say they love
there's in Europe and Canada, yet there's some horror stories too like long
waiting lists. I kinda feel either our system and the other systems none are
perfect unfortunately.

Sounds like other businesses are built around specific regulations too, like
tax software so I guess it's probably common and adds value since not everyone
reads or understands everything, and a ton of this sort of stuff is probably
easy to screw up if you try and do it on your own without the right tools or
people helping. So sounds like when things change they got to follow the news
of new stuff, catch up and implement things.

However I'd think some of those software providers are used to changing things
year to year. But also wouldn't surprise me if they have some sort of
framework in place to make changes without rewriting code all the time. Sounds
like a similar story with some of the big ERPs, seen a post on HN recently
talking about how those can get messy too.

I guess similarly to if you build on top of Facebook or Apple though, things
change when you don't own the platform but they seem to have much better APIs
since (It seems a lot of gov stuff is still pen and paper), examples and
documentation. Plus if you mess up your iPhone app, chances are they won't
publish it and get delayed so less draconian.

------
RIMR
Oh wonderful - more for-profit exploitation of people's need for healthcare.
This business model is only possible because of deregulation by our current
Federal Government.

I hate to sound mean, but I really hope that this business fails. I know
people worked hard on this with an expectation of a financial return, but
68,000 people die every year because of this illusion of choice being
exploited here, and if we can fix the system and eliminate the health
insurance industry altogether we're all be better off.

The problem with ventures like this is that they claim to be healthcare
companies, but their entire model is based around minimizing expenses and
maximizing profits. Absolutely no emphasis is put on ensuring that human
beings get the healthcare they need without going bankrupt - just that
employers can pay as little as possible and insurance companies can get as
many members as possible.

~~~
eganist
> I hate to sound mean, but I really hope that this business fails.

I feel bad saying this, but I'm inclined to agree. Part of the value prop with
mid-large businesses subsidizing healthcare is the ability to bargain
collectively. Individuals can't do this, and just paying that employer
contribution to individual subscribers for them to find their own healthcare
plan will result in net-negative benefits year over year.

The more I think about this, the more this startup concerns me.

~~~
dang
You guys keep saying you hate saying this and feel bad saying this, yet you've
each posted repeatedly and your comments already make up a third of the thread
as I write this. That's because reflexive comments on divisive topics (like
healthcare) are the easiest to write and tend to fill up the threads early on.

Let's not have yet another predictable flamewar about U.S. healthcare. It will
just turn into the same flamewar as the other flamewars, which is something we
try in general to avoid on this site. Meanwhile there's something specific to
discuss about this startup's particular model, regardless of where one stands
on the brokenness of the overall system.

[https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...](https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20generic%20predictable&sort=byDate&type=comment)

~~~
eganist
An argument can be made that the model shouldn't exist in the first place, and
part of our comments here are to see if we can steer the founding team towards
an alternative that extracts value from a different target, in this case the
insurance companies rather than individuals or SBs. In a perfect world, YC
wouldn't be hedging in favor of a deteriorating healthcare system in the US by
betting on this concept, but that's spilled milk under the bridge, so the goal
now is to help point the venture a bit differently.

Regrets if you view it as non-productive, but the comments are certainly
intended to be (especially my latest one prior to this comment I'm posting
now)

~~~
dang
If you mean the subthread at
[https://news.ycombinator.com/item?id=22527801](https://news.ycombinator.com/item?id=22527801),
that's indeed much better.

~~~
eganist
Appreciate you.

