How to Offer Google's Health Benefits on a Small Business Budget | Hacker News Reader

How to Offer Google's Health Benefits on a Small Business Budget

blog.simplyinsured.com

21 pointsxiaosun26 comments

I'm a little dubious.

A significant fraction of our candidates demand a discussion of health benefits before accepting offers. They compare plans and copays with other jobs. They care about the level of benefits we provide, meaning that this pitch involves us (the employer) selling our candidates on the value of reduced health insurance benefits.

As I understand it, the full package of HSA benefits only kicks in if you're also on a high-deductible insurance plan. Meaning, to pitch a candidate on the idea of us funding an HSA, we also need to sell them on high-deductible insurance.

I have no doubt that most employees are better served by high-deductible + HSA. But that might not be a winning pitch for a candidate with a family; even if it's rationally the right move for those employees, it's still a complicated proposal.

Meanwhile, I'm very much not in love with compensation packages tailored for 23-year-olds.

Where am I going wrong here?

You aren't going wrong. I have been had chronic sleep issues, allergies, and similar problems for the last few years, and I am in my twenties. Being provided with a GOOD health plan has been a saving grace, and allowed me to continue concentrating (and producing) great work. If I was given a lower quality plan, I would either be paying thousands out of pocket for specialists and visits, or deciding not to go at all, and likely falling into a cycle of worry and depression about what could be causing the problems.

I'm actually in the middle of a job search right now (in Chicago). Employers ask what my current medical is (100% covered, myself and my wife, BCBS PPO). If potential employers don't offer a comparable plan, I ask them to make up the difference with cash (and, of course, cash costs the employer more vs something you can expense like health insurance).

The problem is that the game is rigged until health insurance can be completely decoupled from employment.

EDIT: Keep in mind, I can still want excellent healthcare but not be a wasteful healthcare consumer. I needed a non-controlled substance prescription that was very expensive in the US, even with insurance, but its offered inexpensively over the counter in Canada, Mexico, etc. Guess where I bought it from.

"The problem is that the game is rigged until health insurance can be completely decoupled from employment."

This is the biggest problem in the US.

> cash costs the employer more vs something you can expense like health insurance

I don't think that's how it would work. The company would include the extra cash payment in the employee-compensation category of its profit-and-loss statements. The extra cash payment would likewise be tax-deductible for the company (that is unless your salary is over $1 million).

Cash costs both the employer and employee more than premiums or HSA contribution. Since cash is considered to be income for employees:

- Employers have to pay payroll taxes on the cash (~10-12% in taxes) - Employees have to pay income taxes on the cash (~25%+ in taxes)

So an employer would effectively need to give $1.50 in cash to equal the same spending power as $1.00 in HSA contributions.

Ah -- good point; I forgot about the employer's payroll tax liability (Social Security and Medicare), and also about the fact that the employer's liability is effectively the employee's liability (because otherwise the employee would get all the cash including the employer's tax payment). Thanks for the correction.

If your candidate want's to talk about health benefits, and want to compare with other companies, then they're likely going to be comparing several factors: out-of-pocket per pay period, copays, deductibles, HSA matching, worst case exposure (limited or unlimited liability), etc.

It takes some time to work up the spreadsheet, but they'll come to find that the high deductible+ HSA (with matching) is better for them in the long term then the PPO with lower per pay-period premiums.

But yes, if they are inclined to delve that deeply pre-employment, then it probably makes sense to have a conversation with them about why you chose what you provide as a benefit over the other options that were available.

The high cost of health care and the high follow-on cost of insurance make this a very real thing. I know I take it seriously and often get eye-rolls form across the table when I ask about it pre-acceptance.

This is a good point - but the benefits aren't "reduced", only offered in a different way that creates more tangible value for most employees.

Health insurance isn't a "one plan fits all" benefit. For many employees, a high deductible + HSA plan is the best value. For others, an expensive plan with low copays and deductible is the best value.

I don't know the ins and outs, but my employer offers two health plans, both have the option to fund and HSA with pre-tax dollars, including the lower-deductible plan.

We do the same thing; the problem is that it can be tricky to come up with a benefits plan that works at scale across the team, with a goal of reducing the overall cost of benefits to the employer, without disadvantaging the people who can't easily/risklessly take advantage of high-deductible+HSA.

Simply offering an HSA option doesn't seem fraught, but creating a benefits package that pushes employees (through incentives or whatever) to HSAs is a bit more worrying.

My concern is mostly about companies tailoring their benefits plans to further lock in a culture of 23 year old male developers.

My understanding is that "offering an HSA option" without employer contributions is unattractive to the employee because it requires a high-deductible plan, and the savings from the associated lower premiums are realized mostly (or entirely) by the employer. Google solves this misalignment of incentives by funneling (some of?) the premium savings into the employees' HSAs. I don't see what is worrying about that.

"Want to discourage people who aren't healthy and 21 years old from joining your small business? Pick 'budget' health insurance!"

The difference in premium vs out of pocket expenses makes sense in aggregate. It wouldn't think it would be convincing to an individual who has the slightest current health complication, who has a family history of complications, or who has a family or is thinking about starting a family.

Of course if you allow employees to choose which health plan (and thus which premium) is appropriate for them, that is different.

We do analyze the options from the perspective of individuals as well.

The most basic insurance plan available caps out of pocket expenses at $6350, which while is still significant but likely won't cause medical bankruptcy. Even the most "premium" plan only caps out of pocket expenses at ~$3000, yet would cost $3000-5000 more in premiums.

A premium plan would provide a nice sense of security, but might be the best option to minimize expenses for an employee.

> The most basic insurance plan available caps out of pocket expenses at $6350, which while is still significant but likely won't cause medical bankruptcy. Even the most "premium" plan only caps out of pocket expenses at ~$3000, yet would cost $3000-5000 more in premiums.

are those caps per year ? per incident ?

even if they are per year, that doesn't make sense. you're asking me to believe that people have been paying $3000 more to cap their risk for the year at a number $3000 lower. It can't be that simple, or else people have been leaving money on the table.

It's not quite this simple, but I can tell you that people have been leaving money on the table. This year I finally sat down and worked out the spreadsheets and last year my family paid nearly $12k in premiums + out of pocket and yet we had only $6k in actual costs. We are now on an HDHP that costs $1500/year and pays for hardly anything initially, but caps our annual out-of-pocket at around $12k. The upshot is that we save $5-6k in a typical/easy year and in a worst case year we pay an additional thousand or two. Seems like a pretty good trade-off to me.

The part I don't like about it is I've been raised in a world where you DO NOT ask the cost of a service when your health is on the line -- you just do what the doc says -- but now it's sensible for me to concern myself with the cost since they are coming out of my pocket directly (until I hit the cap). Doctors in the US are not typically prepared to discuss specific costs with you. This patient attitude and doctor attitude are each partially responsible for our health costs bring so out of control, in my opinion, and it is going to be a while before I can ask, "how much is this procedure for my child going to cost, and just how necessary is it?" without getting a dumbfounded stare in response and feeling like a crazy penny pincher.

I completely agree: it's the rare events that can bankrupt you, so it makes no sense to look at the average from the individual POV.

In case anyone is wondering, Google uses Blueshield of CA to process their insurance claims but internally pay with their own funds. Google ultimately has the final say on how claims will be paid (although they rarely deviate from Blueshield's plan configurations). A rare hybrid approach...

Using the coveredca/ACA terminology the Google's healthcare would be classified as "platinum" - covers 90%+ of the costs.

It's really great coverage, and good for people with, or planning on starting families. Despite what people rumor mill about, Google has plenty of non-23 employees and employees with children. Especially in farther-away offices like Seattle/Kirkland.

In fact, the Google healthplan is not fully competitive in Kirkland - the MSFT health plan has 0 monthly contributions and 0 co-pay. For those microsofters with children, copays add up really quick.

Also this article is spam bait of the worst kind.

Microsoft's health plan changed for the worse:

http://digitaljournal.com/blog/19881

Self-funded health insurance plans are very common with employers. Third-party administrators (TPAs) that provide the claim processing are big business.

SafeWayHealth is one of those. They sell the, cash, price of healthcare procedures to large employers that self insure. This DRASTICALLY reduces the cost of healthcare (e.g. a company pays $800 cash for a colonoscopy, vs. $7,000 via insurance). The problem is they only sell this info to companies with 10,000+ employees.

This service needs to exist for everybody.

http://safewayhealth.com/

Source: http://www.quora.com/Medicine-and-Healthcare/What-are-some-o...

> Third-party administrators (TPAs) that provide the claim processing are big business.

Big enough that a certain big data company might want to make a business out of it? I mean, if they're already using them and know how it operates...

This is an ad.

It's only vaguely disguised as a how to, even if it is something many HN'ers are dealing with.

How much does google/apple/top tier corps pay their top engineers? I have some data points but I want to hear others.

Spam Spam Spam

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