12 ms·

The one HR benefit every startup should add

• goofygrin 13y ago
  We actually put Ltd in place this year. For our company (11 employees, almost everyone in their 30s) it added like $10 a month to our policy. We also pay 100 percent of the health care and it's our #1 expense after labor.
  • jaf12duke 13y ago
    OP here. I'm not an expert, but $10 per month sounds too low. Check the policy and make sure it covers your employees against disabilities that still allow them to work minimum-wage jobs. Usually the income-parity clause costs extra.
    • goofygrin 13y ago
      I don't remember the actual number, but it's laughably low (maybe $10-20/employee, frankly it was a number of months ago).
• aaronchriscohen 13y ago
  Dental coverage is a scam. I priced dental insurance for my startups for three years. The only plans available to companies with less than 50 employees have benefit caps that were less than the cost of the yearly premiums! You get "free" cleanings and x-rays but it still makes much, much, much more sense to take the cost of the premium and put it in a health savings account for your employee to spend on dental care (or any other qualified medical expense).
  • rbritton 13y ago
    Even medium to large company dental plans tend to have around a $1500 coverage cap (at least in Washington state). I priced out a couple of these as an individual to see if it made sense for me, and it ended up being something like $600 per year for $1000 max coverage that only covered 80% of the actual cost incurred.
  • silverlake 13y ago
    At least in my area (NYC) the value of dental insurance is also they negotiate very low prices with their providers. For a root canal the difference was 50%.
    • pmahoney 13y ago
      I don't have numbers, but back when I had no dental insurance, my dentist reduced the price without any prodding. I'd be surprised if this wasn't common.
  • acdha 13y ago
    Depends on where you live: around DC, the rates for dental coverage are about equal to the cost of your yearly premiums but the companies have negotiated pricing maximums which are significantly cheaper than what you'd pay out of pocket unless you love haggling.
• jt2190 13y ago
  AFAIK there are two common types of long-term disability policy: 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.
  • jaf12duke 13y ago
    You're right. This is an important consideration. 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.
  • brucehart 13y ago
    I'm not sure how you prove that you are partially disabled for any job that is primarily mental rather than physical. For example I once worked with a guy that was a lead software engineer. Shortly after he was hired, he got into a car accident and sustained a serious concussion. He claimed that after the concussion he could write basic code, but he didn't have the ability to concentrate enough to solve difficult problems or architect complex systems. How is an insurance company supposed to determine his level of disability? They don't really have a baseline to determine how strong of an engineer he was before the accident. Are they obligated to pay the difference between the salary of a junior and senior level engineer if he gets fired?
    • dkrich 13y ago
      I'm not a WC attorney but my brother is so take this with a grain of salt, but my understanding is that adjusters will work to evaluate you to determine the legitimacy of your claim. This goes for just about any kind of claim, but you can bet that if you are making a claim that can add up to hundreds of thousands to millions of dollars over your lifetime, they are going to expend some effort to make that determination. This would involve experts in the field evaluating you through tests and interviews.
• lesinski 13y ago
  It baffles me how few people have disability insurance. What would you do if injured your hands and could never type again? What would your family do? Everyone should have disability insurance -- it should be a fundamental part of your financial life.
  • utnick 13y ago
    Isnt this what social security disability is supposed to cover? Obviously it won't give you as much money as a private plan, but it wouldnt be a total disaster.
    • jfarmer 13y ago
      Getting social security disability is a small nightmare and can take months. The majority of initial claims (60%+) are rejected and you'll have to appeal. Which, you know, is no problem at all if you're actually so injured you can't work.
      • ceejayoz 13y ago
        Months/years and a lawyer.
      • aestra 13y ago
        Months? Try years.
        • jfarmer 13y ago
          Heh. 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 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." :)
• westicle 13y ago
  I just left an employer who had 100% salary continuance insurance in place. 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.
  • jaf12duke 13y ago
    I'll resist speaking ad hominem and try to generalize here. 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.
  • ceejayoz 13y ago
    Hubris? You're paying what you and the insurance company deems a fair price to ensure that you and your family aren't screwed if you become disabled. Screw adjusting to circumstances, if there's a fair, legal way to keep my kids from being homeless, why shouldn't I take it?
  • packetslave 13y ago
    You're married with two young children. While commuting to the office one day, you're severely injured in a car accident. This injury is so severe that you're unable to return to work, but not severe enough to kill you. 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.
• nemesisj 13y ago
  Man, this really brings back bad memories of wrestling with health insurance, dental insurance, and the like in my previous USA startup. Now I'm in the UK and we don't have to worry about it!
  • joosters 13y ago
    Long-term disability benefit is still important even if you have free healthcare. It's fantastic that state healthcare will keep you alive should something terrible happen to you. But that's not going to fully help any of your dependents.
    • goatforce5 13y ago
      One of my UK employers was quite large and had particularly good disability benefits because a small number of staff worked in physically dangerous jobs, the union wanted those staff treated really well if something bad happened and so everyone in the entirely company was covered for 80-90% of their wage. 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.
• chollida1 13y ago
  > And one of the things my dad brought up with me is just how important it is to have a good long term disability insurance plan in place. I had never actually heard about it. Long term disability is a policy that can pay out 60% of your salary for the rest of your life if you have an occupation-ending injury. 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.
  • nknighthb 13y ago
    It's not atypical in US tech to be offered long-term disability coverage, startups just tend not to think about it until somebody brings it up. Incubators like YC should probably be raising the point with their alumni.
  • chrisgd 13y ago
    I believe most large employers in the US do offer it, but much like the 401k it is opt-in, not opt-out, so I assume most people don't have it or if there employer offers it as opt-out, they may not be aware of it. 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.
  • carlob 13y ago
    Isn't this provided by the national health coverage in countries with a welfare state? AFAIK there are a lot of people on disability checks in the US as well, I'm not sure it pays well though.
    • GFischer 13y ago
      In my country it's mandatory, but it's an extra paid for by the employer (much like mandatory social security, etc..).
• peteboyd 13y ago
  This is one area where health care insurance costs are pretty affordable. We are a web design company in the sunny state of Florida, so these are our rates based on 10 to 20 employees. 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.
  • michaelt 13y ago
    Our rates are typically $21 to $60 per male employee and $71 to $150 per female employee per month. Did they mention why female employees cost so much more? 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.
    • dustcoin 13y ago
      From the GP: 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. Maternity leave is much more likely to be utilized than long term disability insurance.
    • deleted 13y ago
      [deleted]
• ataggart 13y ago
  I'm not clear on what the argument is here other than "X is good, therefore X should be provided by one's employer."
  • knowtheory 13y ago
    No, the argument is, X is good, but incredibly expensive for individuals. X (interestingly) is cheap for employers. Therefore employers can provide this substantial benefit X to employees in a manner they would not be able to alone.
    • mikeash 13y ago
      Additionally, without X, employer faces a decent chance of being forced to choose between firing a newly-disabled employee, or continuing to pay their salary even though they can't produce enough value to justify it. With X, you avoid being forced to choose between two bad outcomes.
    • baddox 13y ago
      Also, if the event X covers occurs, it would put the employer in an awful ethical position.
    • ataggart 13y ago
      I bring it up because there are downsides to coupling essential services to whoever happens to be your employer at the time. The upsides are mostly a consequence of the market adapting to decades-long tax policy. There's nothing special about employers, but I guess sometimes it's easier to reinforce a problem than to fix it.
      • knowtheory 13y ago
        Yes, I absolutely agree. I wish the US had a single payer healthcare system. But that's not the reality we live in (yet, hopefully). So if these sorts of opportunities exist, presumably we should consider them.
  • scep12 13y ago
• moron4hire 13y ago
  I actually really rather prefer buying my own insurance, and by that I mean I buy only the minimum required by law. Insurance companies design their policies to get more out of you then you get out of them, and they've gotten very good at figuring out ways to deny benefits to people. 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 $1200 total on health care costs in the last 3 years. Now that Obamacare requires I buy insurance or else get hit with a penalty, I'm going to be spending a lot more than that every year. Why should it be cheaper to have group policies through employers? The entire freaking point of the insurance company is that they are pooling money from a bunch of people over time in the form of premiums to be able to distribute to a minority who need it in emergencies. It's already a paramutual arrangement, why do we have to obfuscate it with employer group policies? Insurance, at least as it is done in the US, is a scam. It is an oligarchy designed to keep medical services prices high so they can justify outlandish premiums as merely just a small percentage margin.
  • Retric 13y ago
    It's cheaper because of information disparity. Basicly, individual learns he has condition X tells no one and buys insurance and suddenly the inshurance company is out 200,000+$ or worse (AIDS can easily run 1,000,000+$). However if a company is buying insurance then presumably the insurance company knows more about the risks than the HR person setting up insurance.
    • Guvante 13y ago
      Actually the major thing with group insurance is the number of people. 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.
      • 13y ago
• enraged_camel 13y ago
  It just occurred to me that the more benefits jobs provide, the more dependent on those jobs people become, and the harder they fall when they lose those jobs. This is NOT an argument against providing benefits, of course. But it does create a weird dynamic.
  • danielweber 13y ago
    People might be unable to leave because they need their current employer's health insurance, but not leaving because of losing disability? That's a new one.
    • enraged_camel 13y ago
      I didn't say that. Reading comprehension is your friend.
    • bcoates 13y ago
      COBRA should fix the former, but it doesn't appear to cover the latter.
    • tomjen3 13y ago
      Potentially stupid question, but wouldn't they be covered under their new employers insurance?
      • Swannie 13y ago
        Not a stupid question. 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.
        • 13y ago
• donpdonp 13y ago
  Too Link-Baity; Didnt Read "The one weird HR benefit every startup should add"
• bstpierre 13y ago
  One thing not mentioned here is the waiting period. I.e. after you are injured and stop working, you are typically required to use up all of your sick/vacation time, and/or wait for 180 days until you can receive benefits. 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.
• pg 13y ago
  We didn't have this type of insurance at YC but now we're going to get it. So thanks for the tip Jason.
  • 300bps 13y ago
    Group disability insurance is very often worthless and not worth even the paltry sum an employer pays for it. 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 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.
    • tcas 13y ago
      My LTD is 60% of my income, tax free (very important, always pay for any disability post-tax, if you don't your income from it is taxable), until I am able to make over 80% of my pre disability income. 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.
      • 300bps 13y ago
        Is it an "own occupation" policy? If not you have to be a vegetable before you can collect the 60% you signed up for.
        • tcas 13y ago
• contingencies 13y ago
  Very, a merry, centric.
• danielweber 13y ago
  Important note: 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.
  • paul_f 13y ago
    This is why many plans pay 60% of your salary in benefits. Since it is tax free.
• grumps 13y ago
  I'm not completely following this whole healthcare reform. I do know that it's more cost effective for employeers of small businesses to use a SHOP exchange: https://www.healthcare.gov/what-is-the-shop-marketplace/ https://www.healthcare.gov/what-is-the-shop-marketplace/ 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.
• skittles 13y ago
  Seems like many otherwise smart people think in terms of "how likely am I to need this?". Insurance should be thought of in terms of "how screwed would I or my family be if...?". If somebody depends upon your income, get life insurance and long term disability. If you depend on your income, get long term disability. Everyone except for billionaires needs major medical insurance (USA). And stop insuring things that you can afford to replace (warranties generally).
• bradleyjg 13y ago
  The difference in cost of benefits such as health, eye, dental, life and disability insurance, particularly if dependents are included can easily cost tens of thousands of dollars a year more for one employee than for another. 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.
• crooy 13y ago
  OR... you go and live in a country that makes sure everybody can go to a dentist for little money
• Zenst 13y ago
  Given the cost and the impact upon what would be a very bad disaster, this indeed makes so much sense and also seems cheap in comparision to other benifits a company pays out for. 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). But for an employee, this type of cost for the return is frankly a no brainer given the example costs and with that I still can't help feel that the prices are perhaps too cheap and some actuary has messed up. I hope that ain't so, and my be that every other type of insurance is so over priced that I'm conditioned that way. But having worked in reinsurance, I do feel the risk and as such the cost of claim do seem somewhat out of sync and could be an insurance industries asbestos waiting to happen. But were all IT geeks and we now know how contracts and courts work so again this type of insurance for the cost is really just a no brainer that it can actualy save you and your family money to the extent that it is cheaper to insure the whole company instead of just yourself for family peace of mind - crazy and yet that is the case. But do check all the contract clauses as it does seem too cheap.
• rkaplan 13y ago
  My aunt used to work at a school that did not have this policy in place. The principle had a debilitating head injury that put her in a coma; she is now unfit to work for the rest of her life. It was tremendously sad for everyone involved, but it has also severely strained the school financially. Under Massachusetts law, the school is required to pay a large percentage of her original salary now that she is disabled. Had they taken out an LTD insurance policy this wouldn't have been a problem.
• kalleboo 13y ago
  Happy to have a nanny state take care of this bother for me
• fudyy 13y ago
  Currently working for a company that doesn't offer LTD, and it scares me whenever I think about not having it, but not enough to buy it on my own. It's definitely a major plus.
• tlrobinson 13y ago
  The obvious question is how is "occupation-ending" defined, in particular for knowledge workers who could quite possibly continue working with even severe physical disabilities?
• mnml_ 13y ago
  It doesn't make sense, just put those 2.5K to upgrade your retirement plan.
• FatalBaboon 13y ago
  Comparing this with my French life is astonishing. 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.
• basicallydan 13y ago
  At Huddle, in the UK, we don't even need this (NHS. No, I don't want to argue about this.) but we have both health insurance and death-in-service coverage for families. 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.