Oct 2nd 2013, 07:30, by Rip Empson
Amid partisan shenanigans, a government shutdown and much squabbling, The White House launched a new website today that will eventually allow Americans to compare the price of health insurance plans — which is now mandatory under the Affordable Care Act, a.k.a. Obamacare. While the exchange, or the Insurance Marketplace as it’s being called, did in fact go live this morning, it’s been having a rough day, thanks to technical issues and an onslaught of heavy traffic.
Today has been a showcase of how challenging it will be to bring coverage to millions of uninsured Americans, reiterating many of the concerns that entrepreneurs, startups and small businesses across the country have had in anticipation of Obamacare going into effect in January. In response, one organization is taking steps to help startups navigate these new premiums, exchanges, compliance issues — and the change health insurance landscape as a whole — with the launch of StartupInsurance, a portal where startups can go to buy health insurance and other policies.
The new resource is a product of The Young Entrepreneur Council (YEC), an invite-only and non-profit organization of entrepreneurs that aims to provide small businesses with the resources, mentorship and tools they need to thrive — and counts executives or co-founders of startups like ReTargeter, Yodle, Disqus, Klout, Hipmunk, Rent The Runway, Hootsuite and Indiegogo, to name a few, as members.
The organization has been developing its new portal over the last year in the hopes of providing a resource and “insurance destination,” says YEC founder Scott Gerber, which will contain a curated collective of providers and affordable insurance plans from around the country. The goal, he explains, is to provide startups, business owners and all those likely to transition into self-employment as a result of being able to purchase health insurance, with direct access to affordable plans that are compliant with Obamacare. Minus the confusion and time sink, of course.
Thanks to the direct carrier partnerships the YEC has been able to strike, StartupInsurance will give entrepreneurs access to “one of the largest medical footprints in the U.S.,” with insurance options available in nearly every state.
“In speaking to thousands of entrepreneurs, freelancers and small business owners over the years, we have learned what is important to them, what’s working for them–and most importantly, what isn’t,” Gerber says. “And this direct feedback has guided our thinking in creating StartupInsurance — it’s meant to be a destination created by the people it aims to serve.”
The idea, according to Gerber, is that the YEC has done the homework for startups so that they don’t have to worry about spending the time, energy and resources it usually takes to assemble these packages and navigate the new exchanges.
When asked what the plans will cost when the portal officially goes live with Obamacare in January, what kind of coverage will be offered and so on, Gerber said that he isn’t able to discuss the details yet for legal reasons — in other words, because he is not a broker himself. However, we do know that, like Kayak and other metasearch engines have done for years in travel, The YEC will be paid referral fees every time it sends a customer to one of its insurance partners and, while other carriers will no doubt enter the fold over time, as of now, the portal’s chief insurance carrier is Assurant Health.
In conversation with the New York Times, however, a spokeswoman for Assurant said that the plans “were the same plans Assurant already offered,” which is certainly a good deal for the insurance carrier, but doesn’t necessarily seem like it will guarantee startups access to the most affordable plan.
Other questions remain as well, particularly around what will differentiate StartupInsurance.com from the two additional portals YEC is launching, SmallBusinessInsurance.com andFreelancerHealthcare.com, other than the fact that they will be serving their own particular verticals. However, the YEC founder did point out that the freelancer portal will not be offering group coverage and that differences between the three will be come clearer overtime, as the organization incorporates feedback from startups and entrepreneurs and preps for January.
While some of the plans that the portals will be offering will not, in fact, comply with Obamacare’s provisions for minimum value — meaning that they’d have to pay the penalty of the individual mandate — Gerber said that, after speaking to thousands of business owners, the YEC found that a portion of entrepreneurs would be willing to pay a tax penalty in order to receive more affordable coverage. The portal, he continues, will offer an array of Obamacare-compliant plans, but that a one-size-fits-all approach doesn’t work for startups. Instead, some will prefer to incur the tax penalty in exchange for accessing its lower premiums — as well as a destination that could be decidedly less noisy.
The YEC founder rightly points out that, today, many insurance providers are moving away from offering individual or small group coverage, because, put simply, the new regulations will make it difficult for brokers to make money off of these types of customers — and plans. It’s a fact that has led companies like Zenefits — which helps startups set up and manage group health coverage, payroll and other benefits by automating the process in the cloud — to believe that there’s opportunity in this space. Or, said another way, there’s a gulf that’s growing as insurance brokers move away from small group coverage, and someone has to meet the demand.
It’s likely that, rather than compete, the two will likely be able to help each other meet the growing demand among small businesses that are looking to comply with Obamacare and get their employees covered. The YEC’s portals still have some time before Obamacare goes into effect in January, and it will need to be able to distinguish its three portals from each other, and make clear the benefits of each.
Startups and entrepreneurs themselves will need to decide whether the inexpensive, affordable option is what they want, or whether costlier, fuller coverage is a better way to go in the long run. But, either way, for startups, the more options and the less headache they have to wade through, the better.
After all, as Gerber says, “we want to stay away from all this partisan nonsense … in the end, healthcare is a personal decision, and one startups and entrepreneurs need to make for themselves.”
Readers can find more of our coverage on the launch of the White House’s health insurance exchanges here or find StartupInsurance at home here.