

Suggestion: YC should provide its founders with W2 benefits for one year. Healthcare, Life insurance... - juwo

(Almost certainly, I am not applying but thought this would help those who are).<p>There is sometimes a perception that YC is perhaps exploiting founders. This is because it is founded on the VC model. This can be removed if it is more like a "temporary job to work at your own startup".<p>More like IBM or Microsoft provide elite employees, the freedom to work at their own R&#38;D projects aka skunkworks - but in this case, making them into successful businesses.<p>suggestion: YC should provide its founders with W2 benefits for one year. Healthcare, Life insurance, etc. 
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SwellJoe
While I don't think this is a particularly good idea--as pg pointed out, you
have to be an employer of people to insure them in any reasonable scalable
way, because that's just the way the world of insurance works right now--I do
think that this (not just insurance, but all of the boring crap like that) is
perhaps the biggest single pain point of building a business. In the first
months or year or whatever it takes, you don't have enough to pay for the
problem to go away, but you can't ignore payroll, insurance, income taxes,
franchise taxes for the corporation, basic bookkeeping and accounting.

I'm not even sure what kind of person to hire for some of these tasks.
Obviously an accountant is expensive overkill for payroll and bookkeeping, and
the accountants I have known outsource it. Administaff doesn't seem to like
very small companies (or at least they charge as though they don't like them).
The online services I've used for payroll have ended up with me doing most of
the hard work by hand (they're glorified calculators with all the percentages
already punched in, but they don't handle actually paying people or getting
the taxes paid).

And, of course, no one should ever be without health insurance for any period
of time. It's just too much risk. But I haven't found health insurance to be
the hardest part to deal with: just call up Unicare. They provide individuals
with reasonable health care plans for reasonable price. I pay $84/month for a
crappy plan (but I'm in good health, with no bad or dangerous habits, so I
just want to know that if I go to the hospital it won't bankrupt me).

Also, as for aston's point, you might be surprised. Group health insurance is
much more expensive than individual plans for young healthy people (most of
what YC funds). I looked into it and group insurance for me would cost about
$280/month, vs. the $84 I'm paying now. The insurance a company buys for you
has to deal with pre-existing conditions, dependents, all ages, etc. and
generally doesn't even discriminate based on smoker/non-smoker status. Of
course, the group rates I was looking at were for a 2-10 person company, while
YC would be covering 50 or so people, so the rates might be considerably lower
at that scale.

Anyway, it's not a bad idea for YC to do something about all of these stupid
but necessary aspects of business. The days I'm doing bookkeeping or payroll
or taxes are days that are really painful...I can't think of anything in my
day to day life that I hate more. I'm now in a position to pay someone for
them to go away, but I'd have to find that someone or someones...

But that's just me complaining. ;-)

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pg
We've thought of it. Unfortunately insurance cos don't have any provision for
investors wanting to do this. They'd only talk to us if we made all the
founders YC employees, which would mess up things for future investors,
acquirers, etc.

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sethg
My employer offers health insurance and other benefits through Administaff, a
company that specializes in HR outsourcing. Perhaps if YC arranged for
Administaff to handle all of the companies it invested in, it could get some
kind of volume discount.

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zach
I've worked for a company that used Administaff too, and it would work out
well for a company that needs HR outsourcing. But how many YC startups need
HR, much less need to outsource it? We're talking about companies with
essentially no payroll, which is the first function of HR that you outsource.

And YC contracting to have Administaff carry founders as W-2 workers has many
of the same problems as making the founders straight-up YC employees.

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juwo
It is a benefit that YC being a fairly large entity, can provide to their
founders to reduce some of the stress and worry.

What about employees who own their business - would that still mess things up
for them vis-a-vis VCs?

YC would be a loose umbrella of organizations.

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uuilly
Almost everyone here is a young healthy male. Pretty much the only thing we
really need health insurance for is car accidents. If you ramp up your
deductable > $1000 health insurance will cost less than your cell phone bill.
Your company could give everyone high deductable insurance and agree to pay
their entire deductable if they get in an accident. Barring a freakish number
of accidents you'll probably save a bundle of money. Of course this doesn't
account for people with chronic health problems. But they're not likely
candidates for startups anyways.

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timr
Until you get a cavity ($350 and up for a filling, these days), or need new
glasses (ditto), or have get some minor infection, and have to visit the
doctor for a course of antibiotics (easily $200, not counting the cost of the
prescription).

I'm not saying that it's impossible to survive without health insurance --
just don't underestimate the costs of seemingly minor medical services.

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portLAN
Just add it to your monthly expenses -- apply to eHealthInsurance.com and get
either short-term insurance (cheaper, doesn't cover normal visits) or one of
the PPOs.

The only trick is you don't know exactly where you'll be living at first, so
if you could use YC's address to get the process started then you could apply
and get accepted _before_ you move so you don't have a gap in coverage.

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far33d
This is one of the few benefits of a single-payer system.. It might actually
encourage entrepreneurship, since healthcare is so prohibitively expensive.

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yaacovtp
Anyone who can't spare $100 and change a month for a bare minimum plan
shouldn't be going into business. Many full time jobs these days don't even
come with health benefits during the first 1-12 months.

I second going the ehealhinsurance path.

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juwo
the $100/month individual plan doesnt get you anything. However a group plan
gets you much cheaper coverage and much wider benefits.

I know it too well - been on both sides of the fence with the same provider
(Blue Cross Blue Shield).

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aston
Healthcare might actually be a pretty interesting option. It's cost-
prohibitive for small companies, but reasonable for a program as large as YC.

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ph0rque
Isn't CA thinking of doing universal healthcare anyway?

