Meet the Expert: How to Choose the Right Healthcare Benefits for Your Startup

As a startup founder, you may wonder how to secure healthcare insurance coverage for yourself, your co-founder, and potentially your first few hires. Maybe your last large employer provided your healthcare insurance coverage, and you didn’t think twice about it.

However, it’s important to note that in the United States, employers (that’s you now!) are responsible for providing healthcare insurance coverage for their employees. This becomes a federal law when your startup has 50 employees. But even before you hit that employee milestone, you’re still going to need to organize some kind of health insurance for you, your co-founder, and potentially any new hires. 

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And you don’t want to skip health insurance. If you fall ill or get in an accident and have to stay in the hospital or undergo surgery, it could cost anywhere from $ 4,000 to $200,000 without insurance, according to the 2023 Milliman Health Cost Guidelines. You and your new employees don’t want to take this risk. Moreover, offering healthcare benefits as part of your overall compensation package is key to attracting and retaining the right talent for your startup. 

That’s why here at Every–an all-in-one platform that includes HR, Payroll, Compliance, and Benefits–we make it easy for founders and do all the heavy lifting to help you navigate the HR benefits landscape and find the right healthcare benefit for your startup.

In fact, Terence Looi, Product Strategy and Operations at Every, is your personal advisor for everything HR benefits. In this blog, we ask Terence to break down what he does behind the scenes at Every to help founders navigate healthcare benefits.

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Q: Terence, can you explain your role at Every and how you help support our founders?

Terence: At Every, I help our startup customers select the right healthcare benefits for their budget and unique situation. 

I meet with our founders at the beginning to determine their needs, explain how healthcare benefits work for startups, and set expectations. Many founders may be used to working for large employers that cover their healthcare benefits. But shopping for small group health insurance is a different experience. Small-group health insurance in the US is a highly regulated industry, with premiums set at the state level.

At Every, I guide our founders through the process step by step, cutting through the noise and surfacing health plans that are just right for your startup and workforce demographics. For example, you might be a young founder trying to save money while also leveraging benefits as part of your talent-attraction strategy, or you might be a startup with employees across multiple states. 

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Q: Can you tell us a little bit about your background? 

Terence: My background uniquely combines both the startup experience with deep knowledge of the People and HR business.  At my previous B2B startups, Reflektive and Culture Amp, I helped build and sell successful People and HR products. 

At Every, I led the development of our HR benefits product from conception to launch. I made sure Every was licensed in all the different states to sell healthcare insurance to startups. I also obtained certification as a benefits broker myself, enabling me to advise startups on designing their employee benefits packages and negotiate with insurance carriers to secure the best coverage and pricing for our startup customers. 

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Q: What advice do you have to startup founders who are looking to find healthcare benefits for themselves and their first few hires?

‍If you have the resources and the runway, founders should always think long-term about their healthcare benefits strategy. As you begin hiring, benefits are often key recruiting tools for attracting talent. So, you’ll need to develop a range of benefit options that cater to your current and future needs. At the same time, if you have limited resources, it’s okay to offer basic medical coverage and scale as you grow.

You’ll also want to consider whether you are a remote-first company and plan to hire across state lines or even internationally. Moreover, your HQ location matters, as that’s where your healthcare carrier will underwrite your plan and set your premiums. And some states, like New York, are more expensive than others. 

Healthcare insurance carriers have specific eligibility requirements that determine which companies qualify for coverage and which do not. At Every, I help startup founders identify the right insurance carriers based on group eligibility requirements and their startup’s long-term strategy.

For example, suppose founders are weighing HMO versus PPO networks but plan to scale as a remote-first company down the road. In that case, I’ll recommend a PPO option from a carrier that offers strong coverage across multiple states. 

For more advice, you can also read our mini-guide Startup Healthcare Benefits Explained: Deep Dive here. 

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Q: What do you feel are some of the biggest challenges for founders when choosing healthcare benefits for their startup?

Terence: The biggest challenge is navigating the complex eligibility rules of insurance carriers for small groups like startups. For example, some carriers require newly established companies to be in business for at least six weeks and demonstrate at least two weeks of payroll. And most insurance carriers require either 1) founders plus at least one W-2 employee or 2) two or more owners on payroll.  

Some carriers won’t underwrite your startup if employees are too dispersed. For example, if you don’t have 51% employees in one state, or your two founders are in different states. But don’t worry, it’s my job at Every to guide our founders through this eligibility process and find the right carrier for them.

However, it’s important to note that most carriers don’t cover solo founders with zero employees or founders and employees who aren’t on payroll. This is because they don’t meet the minimum group size requirements for a small group health insurance plan.

In this case, we recommend an Individual Coverage Health Reimbursement Arrangement (ICHRA). This is an excellent option if you’re at the very early pre-seed stage of your startup. At Every, we offer ICHRA for our customers through our partner, Thatch.ai.

Q: In addition to advising Every’s startup customers on the right healthcare insurance plan for them, how else do you do the heavy lifting for them?

Terence: After you submit your healthcare insurance application to the carriers, they’ll likely ask for more information or further explanation. At Every, I help quarterback the paperwork and carrier communication to save founders weeks of back-and-forth and ensure you don’t miss deadlines. 

Because we handle most of the legwork for our startup customers and ensure the process runs smoothly, it typically takes only a few hours of founder time to set up their startup’s healthcare benefits with Every.

Partner with Every, and we’ll help you navigate the small group insurance landscape to identify the best healthcare benefits for your startup. Request a demo.