Finding Health Insurance for Your Startup

One of the most pressing issues for startups and small businesses is selecting the appropriate health care provider and package for entrepreneurs and their employees. Our guest blogger today is Liz Jones-Dilworth, who runs finance and operations for the new Austin-based PR firm, Jones-Dilworth. Having recently undertaken the task of finding healthcare for the company, she relates her experience and advice to startups beginning to delve into the complicated process.

When I first started thinking about health insurance, our company was about to make its first hire. I only had one question: how many people do we need to get a group plan? I was surprised and delighted to learn that two full-time people constitute a group in the state of Texas.

To help us find a plan, we called insurance consultant Melissa Perryman. The insurance companies pay her to bring them business, which means that she doesn’t charge the entrepreneur for her services. As Perryman explained, she considers us clients for as long as we have the policy. She helps decipher insurance forms, gives benefit orientations to employees, and even assists in filing claims. (If your company is just you, Perryman also works with individuals.)

Human resources companies such as Caroline Valentine’s Valentine and Associates can also be very useful to the entrepreneur. Like Perryman, Valentine’s company can orient new employees or help them through status changes such as marriage or childbirth. For a newly funded company that needs to make hires quickly, Valentine can also help executives choose benefit plans designed to help companies recruit employees. Valentine likens her colleagues to accountants or lawyers (paid hourly or on retainer): once a relationship has been established, clients can call upon them as frequently or infrequently as their business demands.

For a small company who doesn’t have a full-time HR director, relying on consultants like Perryman or Valentine can save valuable time. Deciphering insurance forms is no small thing: Perryman sat at our kitchen table for four hours helping us get everything filed. Since we were such a new business, we didn’t have a lot of the specific paperwork the insurance companies requested, and Perryman helped us figure out alternatives. Furthermore, she could get knowledgeable people at the insurance companies on the phone instantly.

Our first hire was someone we had known for a long time, so I didn’t think too much about privacy until I found myself breezily saying, “You don’t have any health issues, right?” But if he has/develops a health problem that he doesn’t want to share with us, he can talk to Perryman about his insurance instead of me. Valentine will offer annual, anonymous surveys about benefits to help employers make changes to policies that benefit their team.

No matter how new or small your company is, you can get health insurance. And, it might not be as expensive as you think. The benefits package we chose was comparable to what we had at our corporate / UT jobs, but it was substantially cheaper. We actually chose one of the more expensive options because we were so pleased with the price. Still, for companies who need to save every penny, there’s a range of high-deductible plans out there that will at least cover health emergencies.

Finding Health Insurance for Your Startup

5 thoughts on “Finding Health Insurance for Your Startup

  1. sfrancis says:

    For small firms, with good health history, I recommend looking into an HDHP plan with an HSA attached. Compare this to the pricing of traditional copay plans, and take the savings and put that into employees' HSA plans every month – everyone will be better off financially. Also, try to get a plan that does not have coinsurance (an additional 10-20% cost tacked on to the patient even after deductibles are met). We've been pleasantly surprised how affordable our plan was – and yet, it is still about 2x what that kind of plan would have cost a decade ago… kind of scary looking forward.

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