4 ms·

Because it is super expensive to manage on your own, the point of insurance is to spread the cost over the society and reducing this type of financial risk to a

by bwb 6y ago

Because it is super expensive to manage on your own, the point of insurance is to spread the cost over the society and reducing this type of financial risk to any one company. Basically a private version of what every other country does (we are just stuck in the dark ages). Maternity/Paternity is extremely rare. Coverage is only 6 months out of a person's entire working career (multiple kids is still low).

giantg2 6y ago
Why is it super expensive? How does insurance make it any less so? The insurance companies are there to make money, so it will be more expensive. Especially when you consider that you can use your existing HR department for the same work. Sure, you want to spread it out over the population, but you aren't really going to see many benefits in terms of cost reduction. The scenario that insurance is useful for is low occurrence, high risk situations - like a house burning down.
- bwb 6y ago
  Super Expensive = Holding all the risk of one time events hurting your financials. Less Expensive = Building that into your monthly cost of doing business and spreading it out over a long period. If you are a small company with young people you will see a cost reduction, if you are a big company with mostly older people you might see a cost increase. But, both companies would lower their financial risk, keep their female employees (stats on how many stay out of workforce post birth is huge - check the google study), and pffer a perk that attracts the young talented workforce they need. Sure insurance is good for high risk situations, but it also perfect for when you need to spread risk over an entire population so that the financial impact of an individual event is lessened on the individual and company involved. Health care is a perfect example, everyone pays in as a member of society, and if you get sick you are covered. Of course this is totally broken in the USA, as here health care is just a discount card. But elsewhere that isn't the case. You spread the risk over the entire population so that if someone gets sick they can just focus on getting better so they can start paying taxes again. Where as in the USA we do our best to destroy their finances, their family, their mental health, and so on. Maternity/Paternity could be run privately in the USA until the government takes it over using the same method. You reduce the impact on individuals and individual companies by spreading the cost over the entire workforce taking part in the pool. Would that reduce the costs for the company? Yes, and maybe more importantly it takes the risk out of the equation and smooths out your risk. For example: If you have a company with 25 people and 2 people are out on paternity/maternity, that is a big financial impact to cover yourself. If instead you have paid into paternity/maternity insurance, that could help you by covering 50% of their salary, or even 200% depending on the plan which allows you to hire consultants over that period to cover their work if need be. Insurance can also be about smoothing out your risk profile and lessening any flook one time financial hits. Maternity/Paternity Insurance can be run as a public collective, especially in something like this where you keep back office efficient (given the low threshold for fraud with how you could legally protect yourself and only deal with companies) and you have a capped profit margin of say 5% on premiums collected each year.
  - giantg2 6y ago
    That's still 5% lost, plus the lost opportunity cost if you were saving and investing the premiums in your own company.
    - bwb 6y ago
      Not really, but if you want read my post again and look at the examples to understand why.
      - giantg2 6y ago
        All you're saying is that you can spread the cost out over time. You also seem to think that companies with younger people will see a cost savings. What you're not accounting for with that is how insurance companies adjust individual premiums for risk - they will charge companies with younger workers more than companies older workers.
        bwb 6y ago
        Yes that is what I am saying. You are thinking about this incorrectly. You are thinking about this like America's broken health care system. Our healthcare system should be charging a flat rate per employee to cover the entire system. IE, no matter if you are 20, 25, 55, or 95 you should be paying the same thing into the system. This paternity/maternity insurance would charge a flat rate per employee, so that everyone is covered, since all of society benefits (same as how health insurance should operate and does in most other countries).
        giantg2 6y ago
        But that's not how insurance generally works. Maybe I'm not thinking about it incorrectly. Could it be that you're just using incorrect terminology. Insurance companies use risk/payout metrics to assign a premium and coverage conditions. You're going to pay more for insurance on a sports car than an average car. You'll pay even more if you live in a high claim or high theft area. "same as how health insurance should operate and does in most other countries" No, not even close. What you are mentioning with ex-US countries is not insurance. Those are government programs that have a substantially different structure and are funded through taxes.

by bwb 6y ago

giantg2 6y ago

Why is it super expensive? How does insurance make it any less so? The insurance companies are there to make money, so it will be more expensive. Especially when you consider that you can use your existing HR department for the same work. Sure, you want to spread it out over the population, but you aren't really going to see many benefits in terms of cost reduction. The scenario that insurance is useful for is low occurrence, high risk situations - like a house burning down.

bwb 6y ago
Super Expensive = Holding all the risk of one time events hurting your financials. Less Expensive = Building that into your monthly cost of doing business and spreading it out over a long period. If you are a small company with young people you will see a cost reduction, if you are a big company with mostly older people you might see a cost increase. But, both companies would lower their financial risk, keep their female employees (stats on how many stay out of workforce post birth is huge - check the google study), and pffer a perk that attracts the young talented workforce they need. Sure insurance is good for high risk situations, but it also perfect for when you need to spread risk over an entire population so that the financial impact of an individual event is lessened on the individual and company involved. Health care is a perfect example, everyone pays in as a member of society, and if you get sick you are covered. Of course this is totally broken in the USA, as here health care is just a discount card. But elsewhere that isn't the case. You spread the risk over the entire population so that if someone gets sick they can just focus on getting better so they can start paying taxes again. Where as in the USA we do our best to destroy their finances, their family, their mental health, and so on. Maternity/Paternity could be run privately in the USA until the government takes it over using the same method. You reduce the impact on individuals and individual companies by spreading the cost over the entire workforce taking part in the pool. Would that reduce the costs for the company? Yes, and maybe more importantly it takes the risk out of the equation and smooths out your risk. For example: If you have a company with 25 people and 2 people are out on paternity/maternity, that is a big financial impact to cover yourself. If instead you have paid into paternity/maternity insurance, that could help you by covering 50% of their salary, or even 200% depending on the plan which allows you to hire consultants over that period to cover their work if need be. Insurance can also be about smoothing out your risk profile and lessening any flook one time financial hits. Maternity/Paternity Insurance can be run as a public collective, especially in something like this where you keep back office efficient (given the low threshold for fraud with how you could legally protect yourself and only deal with companies) and you have a capped profit margin of say 5% on premiums collected each year.
- giantg2 6y ago
  That's still 5% lost, plus the lost opportunity cost if you were saving and investing the premiums in your own company.
  - bwb 6y ago
    Not really, but if you want read my post again and look at the examples to understand why.
    - giantg2 6y ago
      All you're saying is that you can spread the cost out over time. You also seem to think that companies with younger people will see a cost savings. What you're not accounting for with that is how insurance companies adjust individual premiums for risk - they will charge companies with younger workers more than companies older workers.
      - bwb 6y ago
        Yes that is what I am saying. You are thinking about this incorrectly. You are thinking about this like America's broken health care system. Our healthcare system should be charging a flat rate per employee to cover the entire system. IE, no matter if you are 20, 25, 55, or 95 you should be paying the same thing into the system. This paternity/maternity insurance would charge a flat rate per employee, so that everyone is covered, since all of society benefits (same as how health insurance should operate and does in most other countries).
        giantg2 6y ago
        But that's not how insurance generally works. Maybe I'm not thinking about it incorrectly. Could it be that you're just using incorrect terminology. Insurance companies use risk/payout metrics to assign a premium and coverage conditions. You're going to pay more for insurance on a sports car than an average car. You'll pay even more if you live in a high claim or high theft area. "same as how health insurance should operate and does in most other countries" No, not even close. What you are mentioning with ex-US countries is not insurance. Those are government programs that have a substantially different structure and are funded through taxes.