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Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

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Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#21
post #13
post #3

How does this reconcile with the current system for more established firms where employers typically contribute a substantial amount towards subsidizing employee healthcare plans? Not to be a downer, but this feels like an offramp from our current system down to an even worse one, one where employers can now substantially cut back on employer contributions towards health insurance. It may be great for your success, b…

We are really focused on providing this as an "on-ramp" for small employers. Providing large employers an "off-ramp" isn't a use case we have seen much interest in. However, there is an interesting historical precedent with retirement plans, which suggests that there can be systemic benefits that come when employees have more control. Pre 1978, employers offered pensions as a retirement benefit, and like health insur…

I see your point, but to highlight a critical point of comparison: that's emblematic of the risk to healthcare.

Pensions were an actual benefit to employees, largely subsidized by employers and taking into account various employment factors e.g. length of employment, salary, etc. With the advent of 401k, that expense was shifted almost entirely to the employee save for a remaining "match" benefit that the employer still covered.

Retirement and healthcare are two areas where people are generally unable to operate with sufficient foresight, opting for plans and financial decisions that make less long-term sense.

Hopefully you see my concern. It's not in your investors' best interest for you to cap out the size of businesses that can buy into your service, but (and this is me dreaming) if you re-charter as a public benefit corporation toward this end, you may successfully build a supportive grassroots coalition to drive you forward within your target market (small businesses).

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Beyond that, there might be value in your team offering collective-bargaining-aaS on behalf of your growing small business clients. That way you're extracting value not from employers/employees but from the insurance industry instead.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#22
post #19

So what is this providing over simply cutting a QSEHRA check to your employees? Seems like it’s complicating something that requires nearly zero paperwork already. Just cut a check and make sure it’s uniformly calculated across your workforce.

The QSEHRA was kind of like the beta version of the new ICHRA. Many of its limitations have been lifted with the new regulation. QSEHRAs are restricted to under 50 employees, and have caps on how much employers can contribute (~$420 / single employee). We don't have those restrictions. Also, any extra employee contributions would still be taxable if you were to just cut QSEHRA checks as an employer.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#23
post #18
post #6

Earlier quoted context omitted.

> I hate to sound mean, but I really hope that this business fails. I feel bad saying this, but I'm inclined to agree. Part of the value prop with mid-large businesses subsidizing healthcare is the ability to bargain collectively. Individuals can't do this, and just paying that employer contribution to individual subscribers for them to find their own healthcare plan will result in net-negative benefits year over yea…

You guys keep saying you hate saying this and feel bad saying this, yet you've each posted repeatedly and your comments already make up a third of the thread as I write this. That's because reflexive comments on divisive topics (like healthcare) are the easiest to write and tend to fill up the threads early on. Let's not have yet another predictable flamewar about U.S. healthcare. It will just turn into the same flam…

An argument can be made that the model shouldn't exist in the first place, and part of our comments here are to see if we can steer the founding team towards an alternative that extracts value from a different target, in this case the insurance companies rather than individuals or SBs. In a perfect world, YC wouldn't be hedging in favor of a deteriorating healthcare system in the US by betting on this concept, but that's spilled milk under the bridge, so the goal now is to help point the venture a bit differently.

Regrets if you view it as non-productive, but the comments are certainly intended to be (especially my latest one prior to this comment I'm posting now)

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#24
post #6
post #5

Oh wonderful - more for-profit exploitation of people's need for healthcare. This business model is only possible because of deregulation by our current Federal Government. I hate to sound mean, but I really hope that this business fails. I know people worked hard on this with an expectation of a financial return, but 68,000 people die every year because of this illusion of choice being exploited here, and if we can…

> I hate to sound mean, but I really hope that this business fails. I feel bad saying this, but I'm inclined to agree. Part of the value prop with mid-large businesses subsidizing healthcare is the ability to bargain collectively. Individuals can't do this, and just paying that employer contribution to individual subscribers for them to find their own healthcare plan will result in net-negative benefits year over yea…

Small and medium businesses have very, very little leverage in negotiating health insurance costs. At best, they just switch to a new insurer every year as prices change.

In most cases, an option like this is better than nothing, which the founder has already pointed out is a lot of their current base.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#25
post #14

Brave to do a startup when many are agitating to completely get rid of for profit health insurance in the US.

Healthcare is a human right. For-profit health insurance shouldn't exist. This startup feels like a grift.

Imagine being excited to "go to market" to buy health insurance.

In the same way that I don't want to have to shop around for fire insurance in case my house is burning down, or look up water suppliers when I buy a home: I simply want the state apparatus to handle these sorts of details.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#26
post #6

Earlier quoted context omitted.

> I hate to sound mean, but I really hope that this business fails. I feel bad saying this, but I'm inclined to agree. Part of the value prop with mid-large businesses subsidizing healthcare is the ability to bargain collectively. Individuals can't do this, and just paying that employer contribution to individual subscribers for them to find their own healthcare plan will result in net-negative benefits year over yea…

Small and medium businesses have very, very little leverage in negotiating health insurance costs. At best, they just switch to a new insurer every year as prices change. In most cases, an option like this is better than nothing, which the founder has already pointed out is a lot of their current base.

> Small and medium businesses have very, very little leverage in negotiating health insurance costs. At best, they just switch to a new insurer every year as prices change.

Right. And that's why I wish a startup like this would instead be focused on helping s-m businesses bargain for more rather than extract from less.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#27
post #21
post #13

Earlier quoted context omitted.

We are really focused on providing this as an "on-ramp" for small employers. Providing large employers an "off-ramp" isn't a use case we have seen much interest in. However, there is an interesting historical precedent with retirement plans, which suggests that there can be systemic benefits that come when employees have more control. Pre 1978, employers offered pensions as a retirement benefit, and like health insur…

I see your point, but to highlight a critical point of comparison: that's emblematic of the risk to healthcare. Pensions were an actual benefit to employees, largely subsidized by employers and taking into account various employment factors e.g. length of employment, salary, etc. With the advent of 401k, that expense was shifted almost entirely to the employee save for a remaining "match" benefit that the employer st…

We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#28
post #7
post #4

As someone who has had to shop for health insurance before, how am I supposed to just "buy any insurance I want"? On the private market? That doesn't work for a lot of people. For example, a person who is already pregnant will not be able to simply buy health insurance, because nobody sells it.

We have an in-app insurance market that offers every ACA-compliant individual health insurance plan in the country, and you can speak 1-1 with a broker to help guide your decision. In the case of someone who is already pregnant, ACA-compliant plans cannot deny you coverage.

That's true but it's also true that the plans need not cover maternity. There are tons of ACA plans that don't. And in "markets" with one player they can just name their price. None of this is your fault of course.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#29
post #27
post #21

Earlier quoted context omitted.

I see your point, but to highlight a critical point of comparison: that's emblematic of the risk to healthcare. Pensions were an actual benefit to employees, largely subsidized by employers and taking into account various employment factors e.g. length of employment, salary, etc. With the advent of 401k, that expense was shifted almost entirely to the employee save for a remaining "match" benefit that the employer st…

We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful.

> We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful.

This is nice. Infinite power to you if you find success with this angle; I'd support it.

Re: Launch HN: Savvy (YC W20) – Give employees tax-free cash for health insurance

#30
post #15

Does this also work for insurance alternatives that qualify as having insurance on an 8965?

Are you referring to a health share program? In order to spend your health stipend tax-free, you must be enrolled in a plan that has Minimum Essential Coverage. Paired with an MEC plan, you could pay for medical expenses tax-free as part of a health share. https://www.healthcare.gov/glossary/minimum-essential-covera...

Makes sense. Thanks!
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