How Do Full-time Startup Founders Handle Health Insurance Coverage in the Early Stage of their Company?

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One of the biggest illegal mistakes a startup founder will make is failing to provide health insurance coverage for their employees.

If an employer has 50 or more full-time employees, they must carry health insurance or be penalized by the government. This is mandated through the Affordable Care Act.

What is the Affordable Care Act (ACA)?

Health insurance coverage for startup founders

The Affordable Care Act (ACA) is the comprehensive healthcare reform signed into law by President Barack Obama in March 2010. It was formerly called, Patient Protection and Affordable Care Act, and often just called Obamacare.

There are basically 3 important things you need to know about the Affordable Care Act:

  • It prohibits health insurance companies from denying anyone coverage or charging more due to pre-existing health conditions.
  • It allows children to remain in their parent’s health insurance plan until the age of 26
  • It’s the only avenue through which health insurance coverage is extended to millions of uninsured Americans.

While it’s okay to say that most insurance companies do not understand exactly how to evaluate startups so as to provide them an affordable insurance policy, there are still digital insurance firms using key data instead of strenuous questionnaires and interviews to evaluate them.


If you are considering getting health insurance in the early stage of your company as a startup founder, it is ideal to work with only digital insurance companies that truly understand your needs.

This should also extend to when you are getting general liability and professional liability insurance coverage.

How to Compete Better as a Startup Founder Using a Robust Health Insurance Plan for Your Employees

To take the lead in your business as a startup founder, you must go beyond giving free food and salary raises to ensuring that your employees are healthy and that they receive the best medical care.

Big tech companies are doing everything to retain talented engineers by making sure that they have a healthy working environment. This will to a large extent lower health costs and increase productivity.

If you can afford to get all your employees health-tracking bracelets, do it. When deteriorating health issues are detected on time and treated, you will not need to pay too much on your health insurance premiums.

Brilliant engineers will always prefer to work with a company that has robust health insurance coverage knowing that they will no longer be covered by their parent’s health insurance policy once they turn 26.

Computer science major, James Mishra, who graduated from the University of Minnesota said he considered health benefits to be a “deciding factor” on the exact tech company he will ever work for.

How big tech companies lure the best talents to their firm using robust health insurance coverage


Is They an Affordable Health Insurance Coverage Startup Founders Can Get for their Employees at the Early Stage of their Company?

The high-level answer is that for most startups, chock full of healthy young people, you should probably pick a Bronze HDHP (high deductible health plan), with an HRA (health reimbursement arrangement), from a reliable insurance provider that’s already in connection with most of your employees’ doctors.

Having 3 or slightly more employees is not an excuse not to get a health insurance plan for them. You may not know this but you are actually doing your company a favour by lowering health costs.

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