Benefits: Michael Tannenbaum
The way I think through that is, look, in the competitive environment and war for talent that we're in today, there's sort of an expectation, at least within tech, that 100% of premiums are covered - that employees aren't paying anything out of cost. I think you could probably get away with covering 80%. But it's definitely something that people care about. A lot of people in the recruiting process will ask about benefits. I don't know why people, I mean, look, some people get sick. But a lot of times, the people end up probably spending more time caring about it than they actually using it.
I tend to be in favor of offering 100%, though I tend to be in favor of not necessarily offering 100% for a dependent. Which means if someone has a spouse, or a domestic partner, or a child, I don't think it's necessarily market or required that you offer 100% there. Keep in mind for people working at big non tech companies, like I worked at JP Morgan out of college, those companies do not pay 100% of premium. So that's a little bit less than the tech concept of 100%. So depends on where you're pulling people from. If you're pulling people from Google and Facebook, their expectation is hundred percent, if you're pulling people from kind of broad, big corporate companies, they may not expect that. And what would they expect? Also around 80%, so a modest out of pocket.
There's definitely some people who are of the mind that you should make people pay a little bit, so they care. What you get for nothing is worth nothing is sort of a phrase that your parents might say - sort of true. And so I can understand trying to get people to pay a little bit, you just might get pushback.
I would also pick one plan, or two plans, but no more - giving people lots of more options is worse, overwhelming. It's just, they're all kind of the same if you're in a major metropolitan area, they're all kind of the same. Pick something that seems reasonable and move on, don't make it a big thing. There's always going to be some annoying person in the organization that's trying to make a thing out of it. Ignore that person, simplify.
As you get bigger, you can do what's called self insured, and basically set up your own risk pool you have. But yes, the way insurance is, it's just one of those things that you cannot buy direct, like you cannot go to anthem.com and buy it — probably they might refer you to a broker — but you cannot buy directly from them, the way you can buy insurance directly from the government site on a consumer basis. If you're unemployed or self employed, or you don't work at a company that offers health insurance — and that was part of the the Affordable Care Act in creating these — I forget what they call them
I think the other topic that comes up in benefits is sort of the, you could call them the additional coverages. So I would say dental and vision are sort of considered standard. So if you don't offer dental and vision, people will ask questions. Dental, you know, you typically two cleanings a year covered and some procedures are covered. Vision, they're giving you some coverage for an annual eye exam, plus some credit to glasses or contacts. So those tend to be really cheap. What costs a lot of money is the health plan. Then there's all these things that are like supplemental or additive things like long term care, disability, accidental disability and dismemberment or something, ADD it's called. You have those called voluntary benefits. They include life insurance, they include Critical Care Insurance, like if you get cancer. I think those are nice to haves, but I wouldn't focus on them early, especially if you have a younger employee base. I think that you're more likely to get like employees engaged by offering something like commuter benefits, which is sort of like pre tax contributions to their transportation, or for offering food in the office or offering even something around a gym membership or student loan assistance, all those things are going to resonate with an a younger employee base more than critical care and sort of these things that tend to factor in older employee base. That's what I would say if your employee base is older, you know, student loans, maybe less relevant. Gym, maybe less relevant? Well, I mean, not that older people don't go to the gym, they do, but it just depends on what's going to be the most added value benefit.
But with the broker, I guess I didn't really answer your question with the broker. What the broker is doing is they're consulting and advising you on what plans to pick - they're bidding out your company. They'll ask for an employee census, they'll say, okay, based on your company's demographics, this is what your pricing is in what's called the small group market. So that's under 50 employees. They are going to help you coordinate between those plans and decide. And then they're also that consultative service. If anything goes wrong, you can call and ask them questions. So they don't do that much. They do some work around the renewal and then they're someone you can call if you have questions.
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