Health Insurance · Insurance

Health Insurance for startups

Matthew Cordasco Co-founder and Head of Product

April 9th, 2013

Does anyone have creative ideas or resources in terms of getting health insurance if we are the founders of a pre-funding, pre-salary company?  

Several of us are currently under our spouses but that will not always be an option.  We looked into COBRA but that is prohibitively expensive.  Most PSO's want at least 3-5 salaried employees before they will accept us.  

This leaves a dangerous gap between starting a company and getting to decent funding before picking up health insurance.  

Thoughts or advice?

Jonathan Murray Co-Founder / CEO of

April 9th, 2013

We went in both of my startups to get benefits before we were large enough to have group benefits.  We went with something with a higher deductible to keep the costs down.  It's cheaper than Cobra, but health insurance is very expensive no matter how you look at it.  When we got funding in my first startup, we actually stuck with this option and just gave people a monthly health stipend, but told them it would go away when we got benefits.

When you're ready, fyi we use Bay Benefits for my current startup and I love them.

You might also want to check out and see if they can do anything for you.  They're a new YC company tackling the problem of affordable benefits for startups.  

Michael Green Partner Technology Manager at Google

April 9th, 2013

If you are in decent health, a good option would be:

1:   Search for individual high deductible insurance via a site like or others mentioned above.  I was able to cover a family of four for around $400 per month.  Keep in mind that these plans are essentially coverage for a disaster.  You will (hopefully) never get a penny of benefit.

2.  If you go the high deductible route, definitely set up an Health Savings Account, that could allow you to use tax free dollars to cover medical expenses.  You are allowed to even make a one time transfer of 5k? from an IRA without penalty.  If you are technically unemployed, you may be eligible to pay your health care premiums from this.  Note:  I'm not a CPA so please verify all of this with a professional.

3.   (before you get the flu) Find a doctor at a small or individual practice who doesn't take insurance (or isn't signed up as a provider with your insurance company).  Many would be happy to give you a clear discount price for an appointment  as a patient paying with cash.   Google "Ideal medical practice" to find some great docs who are likely solo practitioners (and entrepreneurs in their own right).

4.  Wait patiently until the Obamacare medical exchanges are established to see if you can get better coverage through that channel.

Craig Green

April 9th, 2013

We just bought person insurance for my wife and I thought Assurant -- a company that is affiliated with USAA. The premium is running $520/month, which is $800 cheaper than the COBRA offer I had. It's not bells and whistles, but it covers disasters nicely. C

AJAY BAM Ceo and Co-founder at Vyrill Inc

April 9th, 2013


I am in a similar position as yours and I leverage Healthy San Francisco. It covers medical costs as long as you are in the San Francisco city area.  Its $450 for 3 months.  No dental/eye though which is fine with me. I buy separate health travel insurance as needed for international/domestic travel.

This is better than nothing at all.  I have been with the program for a year now.  I am in the healthy age group and fit and thus this is good enough for me.

Matthew Moore Product / Engineering Co-Founder

April 9th, 2013

You can always get personal health insurance directly from blue shield and blue cross. Def not cheap, but better than none Best, Matt -- Matthew Moore Co-Founder & CTO, CrowdMob Inc. Mobile: (650) 888-5962 Sent from my iPhone

Brian McConnell

April 9th, 2013

Starting in October, the health care exchange will be up and running in California. If your income is limited, you should qualify for subsidies on personal health insurance. If you're in San Francisco proper, there is also Healthy San Francisco. Healthy SF will at least give you "run over by a bus" insurance in the meantime.

Joel Magalnick Storyteller. Innovator. Leader.

April 9th, 2013

I haven't looked into it for a while, but Costco executive memberships used to have health plans available. Or, if there's a trade organization in your area that represents whatever kind of business you have, they may have a group plan you could join.

Craig Green

April 9th, 2013

We looked at the NASE, And it was not as good a deal. Craig Green 703-864-3502

Kym McNicholas TV Host, Tech Jounalist, Director of Extreme Tech Challenge, Host of KDOW Radio's NewFocus On Innovation

April 9th, 2013

HealthNet was not worth it!!! I'm now I would go with a Kaiser personal plan.

Chetan Nadgouda Lead/Tech Lead, Ex MSFT, Ex AMZN, Ex Expedia, Ex Multiple Startups.

April 9th, 2013

I looked into small business insurance through Costco. It is kind of expensive and hence we did not end up buying it. However, that’s an option.