5 ms·

Actually, has anyone tried banding a group of startups together until they have several thousand employees, then buy insurance as a bloc? Another idea I've kic

by wtracy 16y ago

Actually, has anyone tried banding a group of startups together until they have several thousand employees, then buy insurance as a bloc? Another idea I've kicked around: Create a sort-of incubator where, on paper, all of the startup founders and employees are employees of the incubator group. Then the incubator can handle the whole mess of both insurance and income taxes. (Bonus: Since the "incubator" now has a ton of developers on tap, it could double as a consulting agency.)

hoprocker 16y ago
Haven't much looked into this (being as it now pertains to me, maybe I should!), but the Freelancers Union was making a bit of news last year[1]. Also, there are HR-outsourcing companies like TriNet that negotiate as a group for smaller/startup companies[2]. 1. http://www.freelancersunion.org/ http://www.freelancersunion.org/ 2. http://www.trinet.com/about_us/default.htm http://www.trinet.com/about_us/default.htm
- noisebleed 16y ago
  I've been using Freelancers for about a year, paying ~350/month for a decent PPO and dental. Not incredible, but it's the best option I could find apart from high deductible plans. NY only unfortunately, and I'm not aware of any similar things elsewhere.
rubeng 16y ago
I work for a PEO -- Professional Employer Organization -- and that's essentially what we do. Clients that come onboard with a co-employment contract for their employees. We pay their employees, our clients pay us and we become the employer (in most states though laws are always changing). This means we have 90k employees that help us negotiate some pretty good rates for Benefit plans. It's actually a pretty decent way for a smaller company to offer benefits to their employees that are competitive to larger companies. We do try to take on companies of a minimum size (10+ employees) but sometimes end up taking on companies with 2 or 3 employees because the owner forecasts explosive growth -- which never happens. All that said, it's a freaking battle with the carriers every year to try to keep the increases at a lower rate. Also, we have "rate buckets" where we place clients according to risk and past medical history of its employees. It still tends to work out better than if they would attempt to get insurance on their own.
- prodigal_erik 16y ago
  > place clients according to risk and past medical history of its employees shudder This is the part where a small employer can basically be forced to find an excuse to dismiss anyone with a serious illness, who is then doubly screwed. A public option would have been so much more humane. http://www.dailykos.com/story/2009/7/7/751100/-How-I-lost-my-health-insurance-at-the-hairstylists http://www.dailykos.com/story/2009/7/7/751100/-How-I-lost-my...
underwater 16y ago
Sounds like an umbrella company (http://en.wikipedia.org/wiki/Umbrella_company http://en.wikipedia.org/wiki/Umbrella_company). Almost all contracting in the UK is through umbrella companies or a single member LLC's rather than directly between the employee and employer.
rdl 16y ago
Just employ the employees in your 1-N person startup through TriNet and be done with it.
nostrademons 16y ago
I'm kinda wondering if YCombinator or one of the other incubators could do something like that. For me, a major reason why I'm not doing a startup now is that I'm not sure I could get health insurance. My last startup was done in Massachusetts when I was 25, so it was no problem to get an individual high-deductible policy. I'm not sure I could do the same thing in California, now that I'm pushing 30.
- deleted 16y ago
  [deleted]
- hparra 16y ago
  I'm in the same exact boat at 29. As a result, I'm currently looking for partners who are under 26 and still covered by their parent's health insurance. The last thing I need my precious capital going towards is a booboo. It means I have one less thing to worry about. I've set aside monies just to cover my own.
andrewlchen 16y ago
I've spent some time thinking about different startup ideas / permutations to address exactly this solution. In my research, I've found attempts at both methods you describe above, in various forms and various states, with widely varying degrees of success, but most have ended in failure. The "successes" tend to offer some limited choice in plans, but the rates certainly aren't great and the deductibles are still pretty high -- mostly it's a fallback safety net for serious emergencies. I think a startup that can help tackle this issue would create tremendous value in the payor / consumer market, but the field is extraordinarly complicated and requires a very rare multi-disciplinary background in individual state law (CA's system alone is very different from, say, MA's bc CA is HMO-based and MA has a public option), behavioral economics, gov't regulation, insurance underwriting methods, insurance administrative practices. Oh, and if it's a tech startup, the team would obviously need web dev / product skills as well. The problem is, developing a basic mastery of all these subjects takes a lot of time -- reading, thinking, and experiencing to understand the pain points deeply. That tends to cut against the stereotypical startup team of two young twenty-somethings hacking away and living on ramen, who have never studied the insurance industry or directly experienced the pain of searching for or relying heavily on health insurance (bc young 20 somethings tend not to have major health problems). I think that's a key reason why startups haven't done much innovation in the insurance payer market. My latest line of thinking is about whether there are hacks around the problem that can incrementally chip away at and disintermediate insurance payers as the sole gateway to affordable healthcare.

by wtracy 16y ago

hoprocker 16y ago

Haven't much looked into this (being as it now pertains to me, maybe I should!), but the Freelancers Union was making a bit of news last year[1]. Also, there are HR-outsourcing companies like TriNet that negotiate as a group for smaller/startup companies[2]. 1. http://www.freelancersunion.org/ http://www.freelancersunion.org/ 2. http://www.trinet.com/about_us/default.htm http://www.trinet.com/about_us/default.htm

noisebleed 16y ago
I've been using Freelancers for about a year, paying ~350/month for a decent PPO and dental. Not incredible, but it's the best option I could find apart from high deductible plans. NY only unfortunately, and I'm not aware of any similar things elsewhere.

rubeng 16y ago

I work for a PEO -- Professional Employer Organization -- and that's essentially what we do. Clients that come onboard with a co-employment contract for their employees. We pay their employees, our clients pay us and we become the employer (in most states though laws are always changing). This means we have 90k employees that help us negotiate some pretty good rates for Benefit plans. It's actually a pretty decent way for a smaller company to offer benefits to their employees that are competitive to larger companies. We do try to take on companies of a minimum size (10+ employees) but sometimes end up taking on companies with 2 or 3 employees because the owner forecasts explosive growth -- which never happens. All that said, it's a freaking battle with the carriers every year to try to keep the increases at a lower rate. Also, we have "rate buckets" where we place clients according to risk and past medical history of its employees. It still tends to work out better than if they would attempt to get insurance on their own.

prodigal_erik 16y ago
> place clients according to risk and past medical history of its employees shudder This is the part where a small employer can basically be forced to find an excuse to dismiss anyone with a serious illness, who is then doubly screwed. A public option would have been so much more humane. http://www.dailykos.com/story/2009/7/7/751100/-How-I-lost-my-health-insurance-at-the-hairstylists http://www.dailykos.com/story/2009/7/7/751100/-How-I-lost-my...

underwater 16y ago

Sounds like an umbrella company (http://en.wikipedia.org/wiki/Umbrella_company http://en.wikipedia.org/wiki/Umbrella_company). Almost all contracting in the UK is through umbrella companies or a single member LLC's rather than directly between the employee and employer.

rdl 16y ago

Just employ the employees in your 1-N person startup through TriNet and be done with it.

nostrademons 16y ago

I'm kinda wondering if YCombinator or one of the other incubators could do something like that. For me, a major reason why I'm not doing a startup now is that I'm not sure I could get health insurance. My last startup was done in Massachusetts when I was 25, so it was no problem to get an individual high-deductible policy. I'm not sure I could do the same thing in California, now that I'm pushing 30.

deleted 16y ago
[deleted]
hparra 16y ago
I'm in the same exact boat at 29. As a result, I'm currently looking for partners who are under 26 and still covered by their parent's health insurance. The last thing I need my precious capital going towards is a booboo. It means I have one less thing to worry about. I've set aside monies just to cover my own.

andrewlchen 16y ago

I've spent some time thinking about different startup ideas / permutations to address exactly this solution. In my research, I've found attempts at both methods you describe above, in various forms and various states, with widely varying degrees of success, but most have ended in failure. The "successes" tend to offer some limited choice in plans, but the rates certainly aren't great and the deductibles are still pretty high -- mostly it's a fallback safety net for serious emergencies. I think a startup that can help tackle this issue would create tremendous value in the payor / consumer market, but the field is extraordinarly complicated and requires a very rare multi-disciplinary background in individual state law (CA's system alone is very different from, say, MA's bc CA is HMO-based and MA has a public option), behavioral economics, gov't regulation, insurance underwriting methods, insurance administrative practices. Oh, and if it's a tech startup, the team would obviously need web dev / product skills as well. The problem is, developing a basic mastery of all these subjects takes a lot of time -- reading, thinking, and experiencing to understand the pain points deeply. That tends to cut against the stereotypical startup team of two young twenty-somethings hacking away and living on ramen, who have never studied the insurance industry or directly experienced the pain of searching for or relying heavily on health insurance (bc young 20 somethings tend not to have major health problems). I think that's a key reason why startups haven't done much innovation in the insurance payer market. My latest line of thinking is about whether there are hacks around the problem that can incrementally chip away at and disintermediate insurance payers as the sole gateway to affordable healthcare.