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Paul Carr’s recent post about startups and health-care sparked a huge debate in our comments section and on social media. So we wanted to continue the conversation by asking our readers to weigh in with their health-care experiences at startups, both from an entrepreneur’s perspective and from an employee’s perspective.

Here are some of the responses, and thank you to everyone who participated:

Entrepreneurs: do you offer your employees health insurance?

For most entrepreneurs, there wasn’t a simple “yes” or “no” answer.

Erik Klein, CTO at Endorse.com, says employers can avoid some of the complications and paperwork of offering health insurance by simply reimbursing an employee’s individually-purchased health-care:

One of the easier things a very small startup ( < 10 people) can do for health care is to offer to reimburse the employee’s individually purchased health care.  You get a decent spread of cost there between 200 and 1k per month for that health care, but it’s worth it when hiring top talent to ease their mind, and it lets them know that eventually when the cost of company supplied health care drops down with employee count that you’ll be legit.

Patrick Ambron, CEO at BrandYourself, says there are ways to take care of your employees while also saving costs:

When BrandYourself raised it’s $1.2 M round, much of it went to hiring a larger development team. After a lot of thought and research I ultimately decided to offer our employees health insurance, for two main reasons

1) It’s the right thing to do: Many of my employees have families. Others are young and don’t have much saved. I expect my employees to make my company a big part of their lives. I don’t think it would be fair or reasonable to expect them to do that if we aren’t willing to invest in their basic well being.

2) It helps with recruiting: Startups compete with bigger tech companies for the best talent. Since you can’t offer them the same salary, it’s a big gesture to show you’re serious about their work. Put it this way, it’s a lot harder for a 32 yr old designer with a kid on the way to justify a riskier, lower-salary job with a startup, if he also has to put more towards health insurance.

All that said, you still need to be smart about your costs and it may not be as expensive as you think.

1) Don’t pay for the entire package. Put a certain amount (75%) towards the plans, but have the employee pay the rest. This way you can avoid people taking plans just because they’re free, when they may not need them (maybe a spouse has a slightly better plan from a bigger employer).

2) Offer different packages. For example we offer a high deductible (catastrophic) plan and lower one. We realize most of our younger employees don’t need/want to spend as much on insurance as older employees with families. By offering packages based on people’s needs you end up saving money

That said, if you don’t have funding, it’s going to be hard to pay the health bills, says Alex Griffiths, CTO at CareSquared:

Nope. We have limited funding and few employees. If we are funded we will offer health care.

Have you ever worked for a company that didn’t offer health insurance? And if so, did that cause any hardship for you?

Notably, most of our respondents had never worked jobs that didn’t offer health insurance (unless you include the startups they’ve funded themselves that don’t offer it). Jerry Jones, co-founder of Spaceman Labs is an exception, but says not having health insurance is a young man’s game. And even then, he wouldn’t recommend it:

I have worked for companies that didn’t offer health insurance. I was young, and fortunate enough not to have any medical issues at that time. It did however cause a hell of a lot of anxiety.

Meanwhile, Tiffany at Audioair has always had insurance, but it wasn’t always worth it:

No, but my last employer offered health insurance that was too much for most people working there to afford, even for just the employee to be on the plan. It made it very difficult for the employees there when medical issues did arise, and most left to find a different job with better benefits.

When should a startup offer health insurance? Always? Only when they reach a certain size or funding milestone?

The milestones our respondents selected varied widely from seed funding to Series A funding to profitability (If startups only offered health insurance when they were profitable, we’d have a whole lot of sick, stressed people in the Valley). But the most commonly-cited milestone was pretty cut-and-dry: You need to offer health-care once you expand your team beyond the founders (who receive significant equity anyway):

Grace Mastalli, Corporate Secretary at Starfish Enterprise:

A startup should offer health benefits as soon as they hire their first w-2 employee. Affordable options with concomitant tax benefits to the employer do exist and will grow.

Patrick Ambron:

If you can’t afford to hire someone with benefits, then you can’t afford to hire someone. It’s like going to a restaurant. If you can’t afford the tip, cook yourself.

Tiffany at Audioair:

Raising significant funding, and not having a business plan that assumes health insurance seems wrong. You assume insurance, payroll taxes, vacation, holidays and other overhead factors – health insurance should be a must-do at that point.

And finally, do you think health-care reforms like the ones proposed in the Affordable Care Act (aka Obamacare) will have a positive effect on entrepreneurship?

None of the respondents had a wholly negative reaction toward the Affordable Care Act, as the responses here ranged from neutral to enthused:

Tessa Petrich:

We can argue about the mandates to insure and the health exchanges and the blah blah blahs but, fundamentally, the ability for EVERYONE to now access good health insurance will lead to an exodus from crappy jobs, a willingness to take bigger risks, and a growth in the entrepreneurial scene that many did not expect.

Tiffany at Audioair:

It won’t matter one way or the other. Be it minimum wage, health insurance or regulation or factors like energy costs, companies and markets adjust. Any doom and gloom about the impact of implementing ACA is a lot more about views on ACA than actual facts about what will happen.

Grace Mastalli:

Yes, but major further reforms to contain health care costs are badly needed and largely lacking from the Affordable Care Act. The needs of small business and entrepeneurs were drowned out by big business and big pHarma.