Suggestion: YC should provide its founders with W2 benefits for one year. Healthcare, Life insurance... | Hacker News Reader

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

18 pointsjuwo14 comments

(Almost certainly, I am not applying but thought this would help those who are).

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".

More like IBM or Microsoft provide elite employees, the freedom to work at their own R&D projects aka skunkworks - but in this case, making them into successful businesses.

suggestion: YC should provide its founders with W2 benefits for one year. Healthcare, Life insurance, etc.

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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. ;-)

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.

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.

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.

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.

Will the Massachusetts health-insurance mandate have an impact on SFP '08 founders? If they're considered MA residents, as individuals they're going to have to get health insurance or pay a monthly fine. That maybe wouldn't a big deal financially, but it'd be yet another procedural pain to deal with.

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.

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.

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.

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

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.

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).

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

Isn't CA thinking of doing universal healthcare anyway?

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