> The CEO capped the full time headcount at 49 people so he wouldn’t be subject to California law requiring him to provide his employees with a health plan.
Can you imagine being this stingy and short sighted? The employees are largely PhDs and he is willing to cripple his company to avoid paying benefits.
I'm not sure that part of Scott's article was accurate.
I worked remotely, and I'm pretty sure that I was offered benefits. I declined them, and used my wife's benefits because they were less expensive, and meshed better with local health care providers.
Downvotes are fickle things. Unrelated, why turn down the health care? With double health care you can tell you're health provider you've got double coverage and they will bill the primary first, and then the secondary for what is left (and if the secondary is designed to be a primary program it will cover all that is left so you end up with zero out of pocket, even for co-payments).
Because it was CA focused, and I was remote. So most local providers were out of network. And it was not free ... Its been almost a decade, but I seem to recall that it was cheaper to add me to my (then) wife's coverage.
You’re wrong. It is perfectly common to have double coverage. I had it on multiple occasion. You can read about it if you google “coordination of benefits”.
You’re right. I don’t know if this varies by state, but for sure I’ve had to sign contacts stating I didn’t have any other insurance in order to start various plans. So I don’t think this is universally ok but clearly there are situations that allow it, seemingly most common in conjunction with Medicare.
This is funny, because basically every insurance here in Sweden states that if you are covered by another insurance, then this one is invalid. In practice though what Iv'e heard is that the companies will always just be kind and sort of split the responsibility between them instead when something happens.
Generally different jurisdictions have different rules, but in California it is the case. And to another point made here, if you're employer is going to deduct some of your paycheck to pay premiums month to month then it can be a net loss if you won't use it enough to offset what you would have been paid.
There’s a reason guidelines ask you not to discuss downvotes, which always fluctuate. You were adding pure noise to the thread, and you tripled down on that.
Why 50? Isn’t that arbitrary? Why not just force benefits for all employees? At least target revenue, if a company makes X revenue it has to provide Y benefits per employee. CEOs definitely won’t be able to easily make the decision to take in less money, as that will piss off share holders.
It is arbitrary, but we have to draw the line somewhere.
It is not about money, tax is about money. This is about the extra work needed to accommodate for said obligations, it can involve several full time jobs, and the state considers that it is too much for a company of less than 50 employees.
Really, it is a lot of paperwork, and the more a company spends on paperwork, the less there is to pay employees.
Could this be improved by a government agency where they do this paperwork for you at a per-employee cost if your company is under X employees (say 3x the limit at which the paperwork kicks in)?
The easiest improvement would be to remove the employer from the equation and just provide taxpayer-funded benefits to all. The main reasons employers are still involved are inertia followed by a concern that employees won't feel as obligated to stay in shit jobs.
I think there are arguments to be made in favor of a more free market approach (or a less free market one.) At this moment we seem to have the worst of both worlds.
Public perception. Small business owners occupy a different perceptual space than large businesses. Lawmakers don't want to be perceived as hurting small businesses and craft laws to avoid it. It's more about maintaining political power as much as anything else.
I thought of this too, and it’s actually good system. Those small businesses should be exempt I think. It’s only the large corporations that should be forced to pay (I wouldn’t even be opposed to subsidizing health care for those businesses by taxing larger ones more.)
I think a system where we go by revenue is a lot of logical than going by number of employees. If a business makes 1Bpy but only has two employees, would it not be exempt from the current regulations?
Not really? I’ve mentioned in both comments that we should arbitrate based on revenue, not number of employees. I also said I’m the comment you replied to we could potentially subsidize the benefits at smaller businesses with a tax on the largest. Not saying this would work, or even that the math is sound, but I have definitely addressed your point twice.
Revenue isn't always a great way to measure the size of a business, because different businesses add different amount of value. And you can't use profit, because that's easy to game. For something like people benefits, predicating the requirement on the number of people employed makes a lot of sense. It's about as much work to setup a health plan for a two person firm as a 50 person firm, but many fewer people benefit.
I don’t disagree, I just think that using number of employees seems like one of the worst possible ways to handle company reaching X size. I came up with that off the top of my head there are surely better solutions.
When you create a sharp discontinuity in the marginal cost of hiring someone, expect companies to act accordingly. It would be irrational not to. Blame the system of shitty incentives
How much revenue are those people generating? Don't you think being able to hire and retain more highly-skilled people might be worth more than the $5/hour “saved”? (For example, how much does it cost to hire someone — most places spend many thousands doing that)
IDK, I'm just show a concrete value. The person I replied to said it was "not hard". S I mentioned a minimum dollar amount that I've observed at many places seemed reasonable (it can be much much more, like if you cover 100% health for employees and family)
My point was just that this seems more like an issue for a business with low profit margins and low wage employees — not engineers, especially for a profitable company (i.e. not some early-stage startup relying mostly on equity). In this case, if they were making $20M/year with on the order of 50 employees it seems very short-sighted.
That's all true; I also think it's a wise choice to invest in your team for long term.
My point was to simply define a quantitative-value that folk who are not familiar with these costs could see as a minimum. Because "not hard" and $10k mean very different things.
Hoping to help those HN readers who aren't familiar and/or are planning on starting a company.
I can totally imagine not wanting the hassle of my company having to be a health insurance broker in addition to its actual purpose. What's wrong with paying employees a good salary and having them be responsible for their own insurance, any more than having them buy their own food, housing, and transportation?
I would be fine with this, but the job would have to pay at least the consumer market cost of healthcare plus plenty of headroom for increases more than the next best offer for me to consider it.
After the ACA passed, I remember my ex getting 29 hours at the places she worked because 30 hours demanded they be given benefits like health insurance. I really think regulations with a set number like this are the result of corruption or something. No way anyone doesn’t foresee companies playing them this way.
Can you imagine being this stingy and short sighted? The employees are largely PhDs and he is willing to cripple his company to avoid paying benefits.