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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

#101

Post by lotsofpulp »

koolba wrote: post #58
danShumway wrote: post #48

Earlier quoted context omitted.

Honest question as someone who's never worked at a place that does this -- what left you feeling negative about it? Are the marketplace plans substantially worse than the employee plans, or are there extra caveats that come along with QSEHRA, or was it something else?

They’re substantially worse. ACA plans have worse networks, higher deductibles, and higher max out of pockets. Imagine if they didn’t? No employer under 50 employees would bother getting group coverage as they could get better coverage for less via the QSEHRA route.

My healthcare.gov options were easily better than employer offered options. Especially if an employer doesn’t offer an HSA plan, that’s tens of thousands of dollars out of my pocket.

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

#103

Post by kevc »

rabidrat wrote: post #98
kevc wrote: post #79

Earlier quoted context omitted.

We agree that less distance between the buyer and the end user is better. In our case, the middleman we are removing is the employer. With us, employers are no longer picking specific health insurance policies on behalf of their employees. Instead employees are purchasing them directly through our app, but still reaping the significant tax savings of employer-provided health benefits.

One of the key benefits of employer-sponsored health insurance for me is that I don't have to shop for health insurance. Talking with my self-employed friends and the ridiculous number of options (which are all designed to screw you anyway when you get really sick) makes me want to never have to go through that process.

As you say, the sheer number of choices can be overwhelming. This is why we have our brokers, who are experts on the nuances of health plans, recommend a few plans for each employee - we do the shopping for most employees, and the power users can pick for themselves if they like. Employees can always chat with us in-app as well.

If you work for a large employer, you have benefits professionals who spend all year thinking about this - we work with small employers who don't have these kinds of resources and are happy to offload it onto us.

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

#104

Post by lotsofpulp »

HarryHirsch wrote: post #57
thehappypm wrote: post #49

Earlier quoted context omitted.

Pensions are fantastically unsustainable. 401(k)s are much more responsible -- it's your money, you don't have to depend on a new crop of people funding your pension.

Pensions are fantastically unsustainable How so? Annuities are the best-understood financial instrument of all. Of course financial projections fail if the participant pool is too small (vide Philadelphia with the rotten industries at the core and office parks at the periphery), but that is a political decision and could be fixed.

Financial projections fail because no one knows the future of the economy and mortality rate decades into the future.

Which is why they failed and almost every state and city government is in unstated debt via their underfunded defined benefit pensions.

It’s also easy to steal from pensions under the guise of plausible deniability so the mechanism itself is broken, the people 30 years into the future have no way of keeping the people 30 years in the past in check.

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

#105

Post by lotsofpulp »

eganist wrote: post #21
kevc wrote: 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…

> 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.

This applies to large organizations also, because they are made up of people. See the underfunded pension debt of basically all city and state governments in the US. And the countries cutting pension benefits and raising retirement ages.

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

#106

Post by lotsofpulp »

eganist wrote: 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…

> 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.

Keeping the benefit costs opaque by tying it with employers is what allows these shenanigans to happen. I can tell my insurance company to reduce covered providers, adjust deductible and oop max and copays if I want to reduce their compensation. But the employee doesn’t know the numbers so they can’t figure out if I cut their pay or not.

By decoupling this and making all pay straight cash, it would give the employees a better position at the bargaining table. Price transparency is always good for the little guy.

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

#107

Post by lotsofpulp »

kevc wrote: post #103
rabidrat wrote: post #98

Earlier quoted context omitted.

One of the key benefits of employer-sponsored health insurance for me is that I don't have to shop for health insurance. Talking with my self-employed friends and the ridiculous number of options (which are all designed to screw you anyway when you get really sick) makes me want to never have to go through that process.

As you say, the sheer number of choices can be overwhelming. This is why we have our brokers, who are experts on the nuances of health plans, recommend a few plans for each employee - we do the shopping for most employees, and the power users can pick for themselves if they like. Employees can always chat with us in-app as well. If you work for a large employer, you have benefits professionals who spend all year thin…

It’s a great idea to help small employers! I know small employers that want to offer health insurance benefits to be able to compete with bigger employers, but don’t have the HR hours or budget to deal with COBRA and enrollment and non discrimination testing.

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

#108

Post by kevc »

wolco wrote: post #99
jedberg wrote: post #90

Earlier quoted context omitted.

Ok cool! So I went through the signup flow and got to the last step that creates the docs and charges me a $100 setup fee, but I'm still not clear on how the program works. Will this be deducted from their paycheck or from my account? Where will that money come from if I deduct from their check? Do you integrate with Gusto? I'm just not at all clear on the logistics of how the money moves from my company to their hea…

Setup fee? Why not offer a free month. The lockin is automatic once they go through the process of setting things up.

This is a good point - we can do a better job demoing how the product works before you buy. Although it looks immediate on the site, we don't currently charge the setup fee until we check in with our customers and make sure they are happily set up.

The reason right now is that we work with outside experts to draft and review the legal plan documents for every customer that signs up. Because this is such a new thing we think it's worth spending extra to be sure we are buttoned up from a compliance standpoint. This has an upfront cost we need to cover. Once we bring this in-house we can think about the pricing differently.

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

#109

Post by lazyasciiart »

rabidrat wrote: post #98
kevc wrote: post #79

Earlier quoted context omitted.

We agree that less distance between the buyer and the end user is better. In our case, the middleman we are removing is the employer. With us, employers are no longer picking specific health insurance policies on behalf of their employees. Instead employees are purchasing them directly through our app, but still reaping the significant tax savings of employer-provided health benefits.

One of the key benefits of employer-sponsored health insurance for me is that I don't have to shop for health insurance. Talking with my self-employed friends and the ridiculous number of options (which are all designed to screw you anyway when you get really sick) makes me want to never have to go through that process.

One of the key disadvantages is that you don't get to shop for health insurance, too. This becomes obvious when you change jobs/get bought out and suddenly your dentist or pediatrician isn't covered.

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

#110

Post by tyingq »

SkyPuncher wrote: post #87
tyingq wrote: post #67

The health plan rates available to individuals cost quite a bit more than ones negotiated by a big company or consortium of smaller companies. When I last had to do my own insurance, it was $2200/month for a high end, lowish deductible plan that covered my family. Choice is nice, but the costs are so high now that I'd rather have the lower negotiated rates with less choices.

My experience has been the rates are within 20% of each other. What does that $2.2k number compare to?

My employer subsidized is $650/month for a similar plan, but I don't have a view into what their share is. I'm sure the total is lower though. They have a lot more leverage.

10 years ago, I was paying $900/month for the same plan on my own.

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