Benefits are an important part of your employees’ compensation package, and healthcare is one of the top benefits you can offer. Employers often have to seriously consider whether healthcare is a benefit they should provide. Even if the answer is yes, it is difficult and costly to implement depending on where your startup and employees are based right now.
For example – it is common knowledge that the U.S. healthcare system is prohibitively expensive and convoluted. Even with overpriced insurance, an estimated 1 in 3 Americans have difficulty paying their medical bills and find themselves racked with medical debt due to high premiums, coverage limits, and other charges. In fact, according to NerdWallet, medical bankruptcy currently accounts for the majority of personal bankruptcies.
On this map you can see the countries marked in green that provide universal healthcare – the U.S isn’t one of them. Considering the expensive and difficult system, it probably comes as no surprise that the U.S. healthcare system is consistently poorly rated when compared to healthcare systems in other developed countries.
Larger companies in the U.S. are mandated to provide health insurance by law – the requirement applies to firms that employ 50 or more full-time employees. These costs, which can vary, are estimated to be around $200-300 per month per employee, depending on how much the employer wishes to subsidize. Because healthcare expenditures are increasing by around 15-20% year over year, many larger companies are choosing to cut down on the amount of coverage they are subsidizing.
Back to the original question: should your startup be making sure that your employees have health insurance? We believe so – Teleport strongly supports the idea that everyone should have access to solid baseline healthcare, and taking care of that issue is a good way to show your employees they’re appreciated. There are also several potential benefits for the employer – there’s plenty of research on health coverage helping employers recruit and retain high-quality workers and contributing to productivity by reducing the costs of absenteeism and turnover.
Also, even though smaller startups (those with fewer than 50 full time-employees) are technically exempt from the aforementioned U.S. employer mandate of having to provide insurance, they have the disadvantage of having to constantly compete for and win over talent against the bigger players, so many startups really cannot and should not afford to skimp on this particular “perk”. Forbes estimates that 65% of all startups with 16-50 employees provide healthcare insurance.
So, you’ve decided to provide healthcare benefits to your startup employees. What can you do to make it as painless as possible? One solution to this expensive problem would be to “diversify” your startup locations, and spend less time in countries where the healthcare system is broken. In countries where the system is not broken, the national government provides complete coverage, and the company is not involved at all. Most of these countries do this through compulsory but government-subsidized public insurance plans, such as the UK’s National Health Service.
Another solution would be to provide some sort of international insurance, for example Cigna, Integra Global or Bupa – these plans have various different conditions so make sure you know for sure that the international health plan you end up choosing really suits your needs as well as your employees’. Lastly, you can simply choose to relocate your startup altogether, and move it to a country with lower healthcare costs.
As we’re building out Teleport’s data coverage for startup hubs around the world, we are including information on both the cost and the quality of healthcare to ensure that you are always able to make informed decisions about these issues with ease.
We’ll be launching a global search product specifically for startups very soon – you can get all the important updates and latest news before anyone else by signing up to the Teleport newsletter here.