The one HR benefit every startup should add
42floors.com
42floors.com
Just give me the money in my paycheck and let me do with it as I see fit. The money I would spend on insurance I put into a personal savings account. I insure myself.
I spent $1200 total on health care costs in the last 3 years. Now that Obamacare requires I buy insurance or else get hit with a penalty, I'm going to be spending a lot more than that every year.
Why should it be cheaper to have group policies through employers? The entire freaking point of the insurance company is that they are pooling money from a bunch of people over time in the form of premiums to be able to distribute to a minority who need it in emergencies. It's already a paramutual arrangement, why do we have to obfuscate it with employer group policies?
Insurance, at least as it is done in the US, is a scam. It is an oligarchy designed to keep medical services prices high so they can justify outlandish premiums as merely just a small percentage margin.
It is unlikely that more than 1 or 2 people in a small company will have any major health issues, so if you are signing up 20 people your overall risk is lower (in your example a $10,000 per person cost).
Combined with different feelings toward risk, usually health insurance is a win win. The annoying thing about the recent "reforms" is it mandates preventative care be covered, eliminating the ability to get pure "oh crap" coverage.
This is only annoying until you realize how many people have incurred significant costs by avoiding preventative care. Why do you think insurance companies are so quick to run campaigns for healthy-living, vaccination, regular physicals, etc.? They'd much prefer to pay a few hundred dollars a year for you on a known schedule than deal with open-ended late-stage problems.
Regardless, this is all covered under pre-existing condition clauses and contract law: i.e. they most definitely WON'T be out the $200k from your hypothetical.
PS: Heath insurance company's are vary rational, if the risks where equivalent they would charge close to the same rates due to market forces. Instead identical group plans even for small groups can be significantly cheaper.
Bob takes out a policy because it seems like a good idea, and subsequently is diagnosed with Expensive Heart Disease. He holds onto his policy with dear life, prioritizing the premium payments over things like dinner if he has to.
Joe takes out a policy because it, too, seems like a good idea. Nothing happens to him, and six months later he has a change of heart when he thinks about how many shots of tequila he could be buying with the premiums instead, so he cancels his policy.
Thus sick people become ever more concentrated in the pool of individual insurance customers.
Of course, the hospital would still treat you, and the rest of us end up paying for your care through slightly higher insurance premiums.
In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
You wonder why individual plans are so much more expensive than group plans. It's because of people like you! Group plans include every employee, healthy or not, while millions of healthy individuals forego buying individual coverage because they think they don't need it. This gives the individual market a much riskier pool of customers.
I agree with the basic idea that the US health insurance market is completely messed up, but you're really doing it wrong, here.
Once again, that's the entire point of the insurance company. They balance impact and likelihood.
Even if I had the insurance to cover me, you're still going to get slightly higher insurance premiums. You're actually more likely to receive a higher delta because I was covered than I wasn't, as the hospital will recoup its losses across all insurance providers, while the insurance company will recoup across only their own constituents.
The health insurance system is an oligopoly that allows insurance companies and health care providers to collude to set artificially high prices. Drug companies, hospitals, surgeons, medical schools--they all get their payday and the insurance company gets to make a "small" percentage margin on top of it. Which just so conveniently means that they're some of the most profitable companies in the world. Just look at the bottom dollar. If they weren't making out like bandits, they wouldn't be making out like bandits.
It's specifically because of ubiquitous health insurance that health services prices are so high. If more people covered themselves, the price of services wouldn't be high, insurance payouts wouldn't be so high, and thus insurance premiums wouldn't be so high. I'm actually doing you a favor by sticking to my principles.
EDIT: and regardless of all of that, nobody has the right to mandate what others do with their lives. I could have chosen to be a burger flipper for the rest of my life and your argument would of social impact would still hold, even be worse because society would be out my higher tax revenue.
If insurance weren't ubiquitous, service would be cheaper, sure. And people would die or be bankrupted by treatable medical conditions like crazy. This is why insurance is so common. People don't like that kind of thing.
Given the system that we're in, you're doing me no favors at all by refraining from obtaining health insurance as a healthy person. You've decided that the risk of bankruptcy is acceptable while externalizing a lot of that risk.
Which is why you will now pay a tax penalty if you don't pay for health insurance coverage. What contributions you make to society is part of a contract, not a unilateral choice.
If, when the care required to save your life cost above, say, $10k in one year, you agreed to die -- then I would consider you to be taking the notion of individual responsibility seriously. As it stands, you are proudly forcing the rest of us to bear your risks.
Personally, my choice is dictated by an attempt to understand my body and live a fuller life and some of those attempts suggest to me that insurance is overrated in light of Bayesian reasoning. -- not to suggest i actually sat down and calculated, just a guess.
That said the insurance system in the US is too broken and needs to be scraped.
For example, consider what happens if, as is very likely, you change your mind. The doctor says, "It's cancer, but it's treatable." You say, "Oh, I didn't think this through, please save me."
Very few doctors could say, "Tough, here's some aspirin, GTFO." If they could, they wouldn't have chosen to become doctors.
Or consider the case where you're unconscious and dying. Do they save you, or not? They can't really know what it will ultimately cost, and the certainly can't know how much money you could raise.
Then there are things like contagious diseases; you would have to spend money enforcing some kind of quarantine in order to cater to the "opt-outs".
For all other cases, like most types of cancer -- you can opt out -- only you'll have to commit suicide (I don't advocate this either).
It would also be cheaper if it were truly ubiquitous and single-payer. The prices European hospitals (even the private ones) charge to the various national health systems are a fraction of the list price for the same procedure at the average American hospital. It's only the current insurance system in America that creates perverse incentives to inflate list prices to the ridiculous levels we're accustomed with.
This is unacceptable. There must be some sort of accountability in the system. Unless, there is a secret pact between the hospital and the insurance company to show a larger bill to make the patient think he is getting his money's worth in which case I have nothing to say.
If we can't control the price, can I write a will saying my estate will actively refuse care for anything that costs more than 5k out of pocket per day and 15k annually? In the event I do need care that costs beyond that point, please give me a quick and (hopefully) painless death instead.
Because hospitals are mandated to perform life-saving treatment regardless of willingness to pay, they have to foist the cost of that treatment onto their other customers. However, insurance companies hate paying much above cost, and they have a huge stick in the form of "we will remove your hospital from our network of approved providers" to get the hospital not to charge too much. Hospitals can't recoup those extra costs from insured people too well, so it tends to fall mostly on uninsured people with money. But the way it works is everyone gets the same bill, and then when the insurance company steps in to pay it, they activate their secret pact with the hospital to pay a small amount above cost instead of the nominal $8k figure.
Yeah, it's insane.
This is absolutely nonnegotiable. Here I am, broken, talking about end-of-life to avoid my family from getting a big fat debt and we don't even know how much a hospital actually charges for a procedure?
Require all hospitals to publish their rates and shut down anyone who negotiates any kind of discount. We have to contain health care costs and these shenanigans have got to go.
I'd really like to know how the system works in single-payer systems. How does Canada government pay for health care?
I am sorry for the over the top comments but these secret pacts, if they are real, make me livid. OK, what can we practically do so we see the real cost of healthcare in our invoice regardless of insurance company we select? Is it even practical to expect to see costs up front?
It's all but impossible to see costs up front in the US. Hospitals insist on determining the charge at the point of billing.
Can I start a restaurant and make people pay at the point of billing? Like an upscale restaurant with no prices on the menu and then charge people differently based on what they clothes are wearing...
"Surprise! Your burger was $800 but we will work with you on a payment plan."
Someone behind you in the billing line says, "Oh, you should have signed up for Acme's Burger Protection Racket and paid $150 a month and that way you would only have to pay $1k deductible and then you'd only have to pay 20% co-insurance for most means at this Fatso's joint there after."
I don't know how I feel about this whole thing. I certainly don't have all the answers and things we do to make healthcare better could actually end up making it worse. :(
The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost, which has to be made up elsewhere. After that you're stuck with different people paying different amounts for the same operation.
This is actually the reverse: the reason why Medicare is so much more cost-effective is that they're more consistent about paying only the true cost and have the marketshare to negotiate that up front rather than haggling over every claim. The hospitals favor private insurance because the margins are higher and they don't face the penalties for over-charging the US government if they get caught inflating prices.
http://www.nytimes.com/2013/05/08/business/hospital-billing-...
If someone has no insurance but does have enough assets to cover the lofty bill, I'd expect the hospital to seek to seize assets for the full amount. It's a safe bet there's a fair number of people who've ended up losing their house to pay for a few hours of tests, after the hospital refused to negotiate. Lesson: If you have assets, have health insurance to lower the risk of losing it all when you get scratched by a cat.
BTW, if you are uninsured you should negotiate before receiving service, apparently you can get a big discount simply by agreeing to pay ahead of time. Of course that's not really feasible in true emergencies, but you can still negotiate a payment plan.
What makes healthcare dramatically different is that, as a layperson, you cannot accurately assess the likelihood variable. You may have some very rough ideas - for example, a professional snowboarder is more likely to get a sports-related injury - but stuff that tends to be extremely expensive is also stuff that can happen to anyone at any time.
This differs from, say, car insurance, where a lot of the factors such as the value of your car, the frequency of driving, your driving habits, etc. are known. As such, you can optimize it much more effectively.
But in any case, a high-deductible policy with an HSA is a great option for people who don't have ongoing medical costs (diabetes, young children, etc). Not only are the premiums lower, but unlike a FSA, you can roll the money over at the end of the year and build up a balance.
If you do have ongoing medical costs, then yeah, traditional insurance (and maybe an FSA) would be the best choice.
It doesn't make much sense to me that hitting the limits would be so rare. Why have the limits in the first place if that's the case? If they didn't make a difference, then they'd just be bad propaganda for the insurer.
This random web page I looked up indicates that about 20,000 people are impacted by lifetime limits:
http://www.pwc.com/us/en/healthcare/publications/lifetime-li...
This is not a huge number, but it's not completely irrelevant either. The pool it draws from will exclude the elderly, the study only looks at the people with employer-provided health insurance, and the 20,000 is from the 55% of those who have lifetime limits.
The Census Bureau says that about 170 million people have employer-provided health insurance: http://www.census.gov/prod/2011pubs/p60-239.pdf
So we get about 93.5 million with employer-provided insurance with lifetime caps, and that in turn gives about a 0.02% chance of hitting a cap.
Whether that qualifies as "exceedingly rare", I'm not sure.
In any case, "$100,000 hospital bill" is probably a decent substitute for most people, although the odds of being bankrupted by that are probably considerably lower among the HN readership, at least.
Smooching off society is a good thing. In fact, everyone should do it. It's called universal health care.
That's at least in part due to the fucked up nature of the medical industries strange relationships with the medical insurance industry in the US. In many other countries that "couple of million dollar" hospital bill would probably not cost as much as a couple of hundred grand for exactly the same time/care/procedures/drugs/expertise.
The hospital has not actually incurred a couple of million in costs – did you see yesterday's NYTimes (I think) article about the ~$1 saline solution getting marked up to $500+, while the patient was also invoiced a couple of hundred dollars for using the emergency room and another several hundred for the staff who administered the IV drip? Saying that someone is "mooching off society" for risking defaulting on payments for things artificially marked up over 50,000% seems a little harsh.
(Having said that, I'm fully aware that those of us in "the rest of the world" piggyback freely on a lot of medical/health research that the "unusual" US health system funds…)
Just go to another country, if you need quality no-hassle healthcare.
pg says in one his essays, that he found after cashing in on Viaweb that he couldn't just walk into a hospital and swipe his card. It just doesn't work like that in America. You need insurance, even if you have 50 mil in your bank.
To top it off, individual health care is very expensive and designed to screw you (and since you're not a big company with hundreds of people signed up, you can't threaten to switch or do any other such sort of thing if they deny you care.) I know someone who needed a very expensive procedure, and his boss basically told the insurance company that if they didn't assent to the procedure, his company would switch to some other provider. As a lone individual, you have less of this kind of leverage.
Now, most other countries (I said most) don't work like that. You can go to any hospital, not have to worry about denials and pay in proportion to the service they render to you. And their fees come nowhere close to what the most U.S. hospitals charge.
As for options, based on my personal experience:
- If you want to go really cheap, choose India. India has a great medical system, but the generally unsanitary state of the country gives me doubts about the hygiene even in hospitals.
- If you are not seriously cash-strapped, try the UAE. They have a lot of really good hospitals, latest technology, and everything just gleams and shines there. For an example of pricing: laparoscopic surgery at premier specialty hospital in the UAE costs about $10k. I assume it'd be in the $50k (or more) in the US. (Au contraire, in India it's probably $1-$2k range.)
This is the part which scares me in these discussions: I can do that if I have time to plan in advance. If some accident occurs, I have no choice but to deal with the US system – and even if with good insurance coverage I'd have to deal with the kind of routine over-billing and obstructionism you mentioned. It's like we're trying to encourage all but the most risk-averse to emigrate to a country with a more humane system.
Good question. The answer is that the insurance companies know that people are self-selecting if they buy insurance on their own, while (to a good approximation) they do not select jobs on the basis of the insurance that they will get from it. So insurance offered through an employer comes from a pool of typical people with a certain age and wealth distribution, while insurance sold directly to consumers comes from a pool of people who think that they need that particular kind of insurance. Needless to say, the risk is MUCH higher with the individual policies, and it is priced accordingly.
Most people don't spend more than that on a car. The average price of a used car (what most people buy) is $14,375 [1].
The average savings rate in the USA is below 5% [2]. With a median household income of approx $50k [3], then we assume that approx. $2.5k is the average amount an average USA household can afford each year. With average savings of around $6k [3], that's over 5 1/2 years to "get out from under", not including loss of earning, no savings cushion, and not including interest payments.
[1] http://www.forbes.com/sites/jimgorzelany/2013/02/14/used-car... [2] http://money.stackexchange.com/questions/23113/how-many-week... [3] http://en.wikipedia.org/wiki/Household_income_in_the_United_...
Try living somewhere outside of the upper middle class. There is almost nobody I know who can get out of that kind of unexpected debt. "Most people" budget for a car, and don't buy a new one at 20. How about those people who take the bus?
http://well.blogs.nytimes.com/2009/06/04/medical-bills-cause...
Nearly two out of three bankruptcies stem from medical bills, and even people with health insurance face financial disaster if they experience a serious illness, a new study shows.
Among families who were bankrupted by illness, those with private insurance reported average medical bills of $17,749 compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance but lost it in the course of their illness reported average medical bills of $22,568.
Here's the problem with the arguments of "all for one and one for all": Most people are not going to have hundreds of thousands of dollars in medical bills (millions is ridiculous. I have never heard of such a thing, and regardless, the prices are over reported to make the argument that high premiums are necessary). All most people are going to need is yearly checkups, a cost they could easily take on themselves if they pay out of pocket. But instead they put it on their insurance, like it's some kind of free money.
Every time someone goes to a general practitioner for a basic rhinovirus and only pays their $10 co-pay, they're making the rest of us (yes, me included, because you generous folk figured out a way to force me to buy minimum insurance) pay for the rest of the over-inflated price of their unnecessary visit. Take a cough suppressant, drink lots of water, and stay home, you'll be better in 3 days. You don't need a doctor to tell you that. I haven't needed a doctor to tell me that since I was a teenager. Stop going to work when you're sick.
But the average person is meant to lose out on their premium, otherwise the system wouldn't work. But rather than treating it as the sunk cost that it is, money they're most likely to never get back, the average person goes the doctor for every sniffle and ache.
That's a pretty privileged statement to make.
The medical evidence for taking cough suppressants is poor.
Unfortunately, the way the system is set up, the money an employer spends on health insurance cannot be used effectively in the health care market. It is not a free market.
For my single employees, I pay $406.53 per month for health insurance on a very comprehensive plan. If I were to just put that in their paycheck and tell them to fend for themselves, first they would have to pay income tax on that money and second they would not be able to buy health care services at the rates negotiated by the insurance companies.
This doesn't even factor in the situations where an employer and the coworkers have to decide how much to help an employee with his medical bills when something happens.
Disability insurance is all about the definition of disability. Only a few people have a truly comprehensive disability policy through their employer. This is because the definition of disability for group policies usually requires that, when making a disability claim, you cannot work in your job "or any other job" (or something to that effect). As as a result, you usually must be completely and totally disabled on a permanent basis to collect long term disability from your employer.
http://www.bogleheads.org/wiki/Disability_insurance
Often, they don't kick in for 6 months and then because you're still able to sell pencils for 50 cents on the street corner they will not cover you.
The reason why individual policies are typically much more expensive is because their definition of disability is different. Many individual policies are "true own occupation" which means that if you're now a neurosurgeon they can't force you to work at a McDonald's drive through.
It provides me benefits from 6 months after my disability (I decided not to pay for short term which starts at 2 weeks until 6), and will keep going until I am ~65 years old.
Still, considering I'm paying less than a coffee per month for LTD, and personally knowing someone who was once working as a top tier developer and got into a serious biking accident that left him with brain injuries, I'm going to buy into it. Next year I'm going to push HR about that 24 month clause.
Reasonable occupation is pretty vague and I think this kind of word-play is what helps insurance companies find reasons or even solid justifications to not pay up in the end.
As your parent comment implied, the insurance company can just argue selling lemonade or pencils is a 'reasonable occupation' and can even prove there are people surviving daily on such a business. And all that can become a base reason to just not pay up.
It's insured turtles all the way down.
In my own circumstances I've found many insurance contracts to be worthless in practice.
The tone of the article seemed to be about doing something for your employees that, whether appreciated or not, is good for them and your own piece of mind. Taking care of them. Obviously it depends on size etc, but it seems like a good fit.
This is surprising to me. I'm Canadian and I've worked my whole life here so maybe this is one of those Canadian vs US things, but I've never had a job that didn't have long term disability as part of its offering.
Most pay the standard 60% of your pay for the rest of your life if you are unable to work at that job any more.
As someone with a family, I'd say its probably the most important form of insurance to have, if you have someone else to take care of your kids in the event of both parents dieing.
60% of your income, even if it is tax-free may not be enough to cover everything, the best solution is to take the employer sponsored, which is dollars (i.e. <$10) a month and adding a small one on top.
1. You are covered if you can't do your current job. 2. You are covered if you can't do any job.
Every employer who has ever offered me this benefit offered the second version, which is great, but it certainly won't help replace my current income if I can't perform the job I have now.
A policy that covers your exact occupation is the best. It's easier to get when it's an occupation underwriters really understand. For instance a surgeon can easily get an occupation-specific policy because it would be easy to determine that damage to her hands would cause her to lose her income producing work.
It's harder to get a similar policy for say, an entrepreneur. What part of our body allows us to do what we do?
Thus, most startups that get a policy have to get the 2nd type--if you can work elsewhere after an injury, you don't qualify. There's one addendum, however, that is still crucial. You can get a policy that requires the new job have a similar income level. Thus, if you were only able to do work at a 70% decrease in salary, the policy would be triggered and you'd receive your benefit.
This is NOT an argument against providing benefits, of course. But it does create a weird dynamic.
I am covered, during my time I am diagnosed with cancer. I get treatment, and am declared "free" of cancer. I remain that way for 5 years, and claim no more benefits. I am still covered.
I leave, and join a new company. To enter their health insurance, I have to declare any "pre-existing" conditions. They see that I am in remission from cancer, and offer my employer two choices: pay hugely inflated premiums, or get no cover. My new employer never expected to need to cover premiums 20 times that of their existing employees, and consequently I am now screwed.
Group plans are limited in how long they can exclude someone for pre-existing conditions, and guarantees no waiting period if they already had qualifying insurance.
The private market doesn't have the same protections, for reasons both good and bad.
Usually the income-parity clause costs extra.
A new desk-bound sales guy started and had a stroke before lunch time on his first day and was going to be out of action for a good long while - perhaps forever. A serious stroke is bad news, but he was sure lucky that it didn't happen a few hours earlier.
"The one weird HR benefit every startup should add"
Which, you know, is no problem at all if you're actually so injured you can't work.
I wanted to be truthful and didn't know off the top of my head what, say, the median time for a claim to be accepted was.
I remember it being something like 2-5 months to get a response, so multiply that by the number of appeals (up to 4, I think) and my ballpark estimate is that the median time-to-acceptance for all eventually-accepted claims is around 6-18 months.
So, I figured saying "could take months" was a more honest thing than saying "could take years." If the median time were greater than a year, after all, "it could take months" is still true, but the converse isn't true! If I had said "years" instead of "months" and was wrong, someone could easily have replied, saying, "You're exaggerating. The median time to acceptance is 9 months, not years. The claims that take years are exceptional cases."
In any case, I didn't know, so I wanted to err on the side of intellectual honesty. That'll teach me. :P
Also, I don't know if you (and the other person who replied with the same comment) have ever heard of Wiio's Laws: http://www.cs.tut.fi/~jkorpela/wiio.html
One corollary of those laws is this: "If nobody barks at you, your message did not get through." :)
I don't disagree with your general point, but the truth is, there are a lot of adaptations and assistive input devices people use for computer input all the time. There are lots of ways a techie with a functional brain can continue to work even after quite severe injuries.
I don't even disagree with you, but have a tangent to share:
Have you seen modern robotic prosthetics? I don't want to make light of anyone's situation, but I honestly think we are mere decades away from replacements that are better.
Maybe mine is the minority view, but I found it a horrendous waste. When I left the employer it offered to have my portion of the policy transferred to me personally so that I could "continue to enjoy the benefits". I didn't even bother responding (despite leaving on otherwise very good terms).
While I work, I expect to be remunerated. But I don't allow myself the hubris to expect that remuneration should continue in perpetuity. If I decide not to work, or am unable to work, I would prefer to adjust my circumstances to accommodate that fact, rather than continue to pretend otherwise.
I've found that founders that are married/have kids are much more concerned about HR policies that protect an employee's family, while startups with younger/single founders usually don't put as much thought into it.
I know from my own experience as a founder in my 20s and now in my 30s that this shift occurs.
The issue with long term disability is that the startup can make a statement to its employees that it will provide for that individual as well as that individual's family--through maternity/paternity policies, vacation time, health and life insurance, and long term disability.
Employees with dependents need this type of security and actively search out the companies that provide it. It's one of the reasons the startup community loses so many great engineers to larger companies, even though those engineers would prefer a startup. Not enough thought put into family security.
Screw adjusting to circumstances, if there's a fair, legal way to keep my kids from being homeless, why shouldn't I take it?
Congratulations! Your partner not only has to care for you for the rest of your life -- he/she also has to go to work full-time so your kids don't starve.
And why is that so bad? The other parent already worked full-time before accident.
It's not "hubris", it's simple economics. If you don't like it, you don't have to take it, of course. You're allowed to take the option of being forced to live on the streets if you suffer an injury that makes you unable to work for a living. But don't think that other people are somehow deranged for disagreeing.
Unless you live in a country that funds such programs via taxation, which is most (all?) Western democracies.
The conversation is about commercial, private insurance plans, not about government social security systems. That is what the "it" refers to. You are talking about something completely different.
However the submission implicitly assumes that this option is right for everyone ("The one HR benefit that every startup should add"). I recognise that some people see it as valuable. Hopefully those people can also recognise that other people don't!
I also think the strawman of "Take disability insurance or live on the streets" is rather hyperbolic. The actual alternative is relying on social security disability payments and my existing savings vs an insurance-funded pension. Maybe I'll have to let my chauffeur go, but I'm hardly going to be sleeping in gutters if I take the former option.
My country doesn't seem to have implemented the blanket-denial first stage of the process yet, however luckily I have savings which could tide me over until the payments get backdated in that eventuality.
On the other hand, I would be very surpised if someone offered 100% salary long-term disability -- the potential for claims at the margin and actual fraud increases dramatically.
Life insurance is essentially the same thing, as far as I'm concerned: I'm paying now so that if / when something in the future happens, there is a financial aspect that helps me / my family.
So out of curiosity, do you consider life insurance the same way?
I cancelled the life insurance policy which was automatically included in my retirement savings several years ago. I don't have any debt (even my mobile phone is pre-paid) so life insurance is basically a massive bet on me dying with no real upside.
Again, YMMV and some people consider it a worthwhile investment. Just trying to contribute my point of view to the discussion.
For me, at least, the upside is that when I die my wife and kids are going to be well and truly debt free.
On the other hand, if we were already debt free, or I didn't have those dependents, then that would probably change my outlook on the policy, for sure.
Do you want to haphazardly compensate your employees like that, without it even being bargained for during the hiring process? Wouldn't it be better to negotiate a total compensation number instead? You could potentially be looking at a whole different class of employees for the same total money.
Though maybe the (irrational) bad will generated would wipe out the gains.
From my understanding the larger you are, the cheaper the rates. Since the article /comments asked for typical rates, here is where we are at to compare. Not sure how many employees 42floors.com has, but $2,500 per year would probably be around 5 to 10 employees if they were all male.
STD/LTD Group Policies - Our rates are typically $21 to $60 per male employee and $71 to $150 per female employee per month. So it could add about $250 to $1,800 per employee depending on their salary and gender.
Maternity Leave - The good news is that this covers maternity leave of 3 months for our lady employees. This is a nice benefit to offer. It also explains the higher rates based on gender.
Health Care Coverage - Most group health insurance policies are super high in monthly premiums ($200 to $600 per month for individuals and $1,000 to $1,500 for family coverage). We cover this in full right now for individuals. But it is a huge ongoing cost, especially as everyone gets older and starts families. STD/LTD policies are very cheap by comparison (obviously geared towards a different life event).
Other options - It would probably be cheaper if you just bought long-term, if the concern is catastrophic coverage. But we cover short term too and that increases the rates.
Our rates are typically $21 to $60 per male employee and
$71 to $150 per female employee per month.
I thought (from car insurance prices etc) that men are more likely to get into accidents? I was under the impression female-only things like childbirth were fairly safe these days.
Maternity Leave - The good news is that this covers maternity leave of 3 months
for our lady employees. This is a nice benefit to offer.
It also explains the higher rates based on gender.
If the company pays for your disability with pre-tax dollars, your disability payments are taxed as income.
If you pay for your disability with after-tax dollars, you are not taxed on the income.
Keep this in mind when designing the plan. If taxing the employees on their disability benefits makes the benefits tax-free, you should give your employees that option.
I can go in and out of hospitals/any doctor for almost free, ambulance ride included if necessary. For ~30€ monthly above the basic care (paid by employers). I don't recall ever worrying about money when it comes to health. What you have in the US is archaic.
According to my current employeer they wont be able to purchase 100% coverage using the health exchange. So personally this is going to start costing me significantly more...
Edit:Apparently - our benefits consultant commented that it would be cheaper for individuals to purchase their own health insurance. I guess I will deal with that when the time comes.
I've worked for companies that offer short-term disability insurance -- which will cover the gap -- but this is less common than LTD.
This is why it's important to have an emergency fund to cover your living expenses for at least the waiting period. Otherwise you could be looking at eviction before the money from your disability insurance comes in.
It's made a big difference to our general peace-of-mind, and there are a bunch of other things that go along with it to encourage fitness. We're all a lot fitter than we were before, and since the team is more family-oriented than we were when the company started, death-in-service coverage is very welcome.
But that's not the reality we live in (yet, hopefully). So if these sorts of opportunities exist, presumably we should consider them.
Few questions though on these types of policy:
1) What limitations are needed to be observed - must a company have a defined standard of health and safty and as such a defined quantifiable level of risk.
2) Are such policys only limited to accidents or directly measurable incidents that casue a disability in an employee or are outside area's like a bad skiing accident also covered. The whole area of say parkinsons and somebody who has a family history of it would that also be covered as that would be a disability reducing career situation.
3) The employers impact - loosing an employee is very costly and some more than others but whoever you lose will be a impact that is fiscaly measurable from cost of finding replacement and training time invested, down to extra overtime upon the others to pick up the slack until somebody else is upto speed. This is factoring in every thing is documented to the if I fall under a bus will my colleges be able to pick up the slack. So with that a little bit extra on the insurance policy to cover the Employer impact is also worth investing in if not already coevred. Especialy given the rates based on policy costs too me appearing cheap and rasing flags given the odd's of somebody getting cancer or a road accident that could very well limit there ability to work.
4) Quality of work, if somebody who was able to be very productive has an injury that whilst not preventing them from working, yet reduces there productivity in a measurable way - then how i that covered? This is probably a situation when you have a employee contract and that employee is so good he does other area's of work that everybody accepts without his contract being updated. I know many people in IT who have a contract saying that they are say a DBA and yet they do sys admin, backups and other tasks that build up that if they just worked to contract and did database work then other area's would fall apart. Though is very much a area of managment limits and avoiding giving people pay rises that just seems to happen. But in IT you would find your contract being very open in definition of your role or be updating that contract weekly (can you halp me move this printer - sure let me get that added to my contract so I'm allowed to move heavy objects) and could get silly. But from an impact perspective, if they can do a 2 week holiday without them being missed beyond there defined role then your probably safe, though if you end up calling them during that period then in short your being unfair to that employee (or allowing him to be unfair to his or her self, more the case); Which could have a noticable impact - not just in situations of them unable to do there job, but if they leave (which is how most communicate that they feel undervalued instead of talking with you about it, least with many IT types who are good at the job).