6 ms·

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

21 points by xiaosun 13y ago

philsnow 13y ago
"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.
- carlob 13y ago
  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.
- xiaosun 13y ago
  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.
  - philsnow 13y ago
    > 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.
    - hamburglar 13y ago
      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.
r0m4n0 13y ago
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...
- dkoch 13y ago
  Self-funded health insurance plans are very common with employers. Third-party administrators (TPAs) that provide the claim processing are big business.
  - toomuchtodo 13y ago
    > 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...
  - carlosrt 13y ago
    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/ http://safewayhealth.com/ Source: http://www.quora.com/Medicine-and-Healthcare/What-are-some-of-the-most-mind-blowing-facts-about-US-healthcare/answer/Carlos-Tobin http://www.quora.com/Medicine-and-Healthcare/What-are-some-o...
- ryanobjc 13y ago
  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.
walshemj 13y ago
Spam Spam Spam
puppetmaster3 13y ago
How much does google/apple/top tier corps pay their top engineers? I have some data points but I want to hear others.
tptacek 13y ago
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?
- chrisgd 13y ago
  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.
  - tptacek 13y ago
    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.
    - hundt 13y ago
      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.
run4_too 13y ago
This is an ad. It's only vaguely disguised as a how to, even if it is something many HN'ers are dealing with.

21 points by xiaosun 13y ago

"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.

carlob 13y ago
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.
xiaosun 13y ago
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.
- philsnow 13y ago
  > 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.
  - hamburglar 13y ago
    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.

r0m4n0 13y ago

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...

dkoch 13y ago
Self-funded health insurance plans are very common with employers. Third-party administrators (TPAs) that provide the claim processing are big business.
- toomuchtodo 13y ago
  > 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...
- carlosrt 13y ago
  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/ http://safewayhealth.com/ Source: http://www.quora.com/Medicine-and-Healthcare/What-are-some-of-the-most-mind-blowing-facts-about-US-healthcare/answer/Carlos-Tobin http://www.quora.com/Medicine-and-Healthcare/What-are-some-o...
ryanobjc 13y ago
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.

walshemj 13y ago

Spam Spam Spam

puppetmaster3 13y ago

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

tptacek 13y ago

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?

chrisgd 13y ago
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.
- tptacek 13y ago
  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.
  - hundt 13y ago
    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.

run4_too 13y ago

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