Ask HN: How startups cover health insurance
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
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.
Preexisting conditions?
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.
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.
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.
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...
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.
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?
That's about right. I've seen startups cover anywhere between $250-500/month in health insurance premiums, with the rest on the employee.
The total cost for "gold" plan for an employee with a family can be easily $1500-$2000+ a month.
Wouldn't that rule out employing anybody that isn't single?
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.