I actually really rather prefer buying my own insurance, and by that I mean I buy only the minimum required by law. Insurance companies design their policies to get more out of you then you get out of them, and they've gotten very good at figuring out ways to deny benefits to people.
Just give me the money in my paycheck and let me do with it as I see fit. The money I would spend on insurance I put into a personal savings account. I insure myself.
I spent $1200 total on health care costs in the last 3 years. Now that Obamacare requires I buy insurance or else get hit with a penalty, I'm going to be spending a lot more than that every year.
Why should it be cheaper to have group policies through employers? The entire freaking point of the insurance company is that they are pooling money from a bunch of people over time in the form of premiums to be able to distribute to a minority who need it in emergencies. It's already a paramutual arrangement, why do we have to obfuscate it with employer group policies?
Insurance, at least as it is done in the US, is a scam. It is an oligarchy designed to keep medical services prices high so they can justify outlandish premiums as merely just a small percentage margin.
Your story of spending $1200 on health care in three years could very well have been one of being completely bankrupted because you suffered a serious but not life-threatening injury. Unless you're a millionaire, you cannot self-insure when it comes to health care. It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky, and you'd probably never be able to pay that back.
Of course, the hospital would still treat you, and the rest of us end up paying for your care through slightly higher insurance premiums.
In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
You wonder why individual plans are so much more expensive than group plans. It's because of people like you! Group plans include every employee, healthy or not, while millions of healthy individuals forego buying individual coverage because they think they don't need it. This gives the individual market a much riskier pool of customers.
I agree with the basic idea that the US health insurance market is completely messed up, but you're really doing it wrong, here.
" It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky,"
That's at least in part due to the fucked up nature of the medical industries strange relationships with the medical insurance industry in the US. In many other countries that "couple of million dollar" hospital bill would probably not cost as much as a couple of hundred grand for exactly the same time/care/procedures/drugs/expertise.
The hospital has not actually incurred a couple of million in costs – did you see yesterday's NYTimes (I think) article about the ~$1 saline solution getting marked up to $500+, while the patient was also invoiced a couple of hundred dollars for using the emergency room and another several hundred for the staff who administered the IV drip? Saying that someone is "mooching off society" for risking defaulting on payments for things artificially marked up over 50,000% seems a little harsh.
(Having said that, I'm fully aware that those of us in "the rest of the world" piggyback freely on a lot of medical/health research that the "unusual" US health system funds…)
In any risk assessment, you have to balance impact with likelihood. Yes, it could have happened, but the likelihood is so rare that it's not worth the premium.
Once again, that's the entire point of the insurance company. They balance impact and likelihood.
Even if I had the insurance to cover me, you're still going to get slightly higher insurance premiums. You're actually more likely to receive a higher delta because I was covered than I wasn't, as the hospital will recoup its losses across all insurance providers, while the insurance company will recoup across only their own constituents.
The health insurance system is an oligopoly that allows insurance companies and health care providers to collude to set artificially high prices. Drug companies, hospitals, surgeons, medical schools--they all get their payday and the insurance company gets to make a "small" percentage margin on top of it. Which just so conveniently means that they're some of the most profitable companies in the world. Just look at the bottom dollar. If they weren't making out like bandits, they wouldn't be making out like bandits.
It's specifically because of ubiquitous health insurance that health services prices are so high. If more people covered themselves, the price of services wouldn't be high, insurance payouts wouldn't be so high, and thus insurance premiums wouldn't be so high. I'm actually doing you a favor by sticking to my principles.
EDIT: and regardless of all of that, nobody has the right to mandate what others do with their lives. I could have chosen to be a burger flipper for the rest of my life and your argument would of social impact would still hold, even be worse because society would be out my higher tax revenue.
Yes, I'd be paying for your care either way. The difference is, the way you're doing it now, you contribute nothing while I still pay for your care. If I get a million-dollar hospital bill, you don't pay more, but the reverse is true.
If insurance weren't ubiquitous, service would be cheaper, sure. And people would die or be bankrupted by treatable medical conditions like crazy. This is why insurance is so common. People don't like that kind of thing.
Given the system that we're in, you're doing me no favors at all by refraining from obtaining health insurance as a healthy person. You've decided that the risk of bankruptcy is acceptable while externalizing a lot of that risk.
> If insurance weren't ubiquitous, service would be cheaper, sure.
It would also be cheaper if it were truly ubiquitous and single-payer. The prices European hospitals (even the private ones) charge to the various national health systems are a fraction of the list price for the same procedure at the average American hospital. It's only the current insurance system in America that creates perverse incentives to inflate list prices to the ridiculous levels we're accustomed with.
Your notions of my responsibilities for how and when to protect your financial security are of no concern to me. I will make my own contributions to society as I see fit.
> I will make my own contributions to society as I see fit.
Which is why you will now pay a tax penalty if you don't pay for health insurance coverage. What contributions you make to society is part of a contract, not a unilateral choice.
Your demands to be left alone would be much more convincing if you would sign a forfeiture of your right to participate in the US medical care system above a certain price point, per year. (Assuming we could enforce it)
If, when the care required to save your life cost above, say, $10k in one year, you agreed to die -- then I would consider you to be taking the notion of individual responsibility seriously. As it stands, you are proudly forcing the rest of us to bear your risks.
I'm pretty right-wing generally, but I don't see any alternative between forcing everyone to pay for healthcare somehow, or having hospitals literally throw people out as soon as they are unable to pay. Nobody is willing to vote for throwing injured broke people onto the streets, so we're all going to be paying for it somehow, whether it's through mandatory insurance or taxes.
Hey, none of us like the fact that insurance is so profitable for Aetna et al. We just recognize the cost-benefit tradeoff of paying premiums, and the merit of making urgent medical care undeniable -- i.e. we can't force a hospital not to treat you if you are in dire medical need. So the hypothetical I mentioned above is not, in fact, possible.
That's fine, a highly common and very human attitude. Just don't pretend like you're being somehow noble, or that the rest of us are somehow screwing you over when we try to make you stop pushing risks onto us without contributing.
If I had never gone to college and decided to just work as a burger flipper the rest of my life and spend all my money on cigarettes and sky-diving (see, I can make up low-likelihood hypotheticals, too), then I'd be contributing even less. Are we going to start mandating that people actualize their full economic potential, as well?
The problem is that you (and the otherwise healthy (under|un)insured) probably wouldn't think twice about getting that cancer treatment, or heart transplant, even if it meant that others in your community would have to pay for you. Therein lies the reasoning why we need something other than optional health insurance.
Except you are implicitly assuming that if you get into a severe car accident and are unconscious and can't prove you can afford surgery, you will still get treatment. This only happens because we mandate treatment and the rest of us bear the costs of it. Congrats on 'contributing "
Disclaimer: Am Indian, and have no detailed knowledge of US policies.
From a summary of the replies to this one:
I personally, would be willing to sign a forfeiture to the effect, if i am medically in a bad state and can't afford treatment, would be allowed to die. So it seems, there might be room for allowing people who don't want insurance, and neither penalty to sign a forfeiture.
Personally, my choice is dictated by an attempt to understand my body and live a fuller life and some of those attempts suggest to me that insurance is overrated in light of Bayesian reasoning.
-- not to suggest i actually sat down and calculated, just a guess.
For example, consider what happens if, as is very likely, you change your mind. The doctor says, "It's cancer, but it's treatable." You say, "Oh, I didn't think this through, please save me."
Very few doctors could say, "Tough, here's some aspirin, GTFO." If they could, they wouldn't have chosen to become doctors.
Or consider the case where you're unconscious and dying. Do they save you, or not? They can't really know what it will ultimately cost, and the certainly can't know how much money you could raise.
I don't think "opt-out" is a good (or sound) idea -- but even if it was -- it'd be pretty hard to enforce: take an auto-accident. You shouldn't be delaying emergency help, just on the off-chance than one of the many victims might be an "opt-out". It would complicate triage for no really good reason.
Then there are things like contagious diseases; you would have to spend money enforcing some kind of quarantine in order to cater to the "opt-outs".
For all other cases, like most types of cancer -- you can opt out -- only you'll have to commit suicide (I don't advocate this either).
The issue with insurance is simple. It is better to have a small, but guaranteed loss that you can survive than a huge, but unlikely loss that you cannot, even if the total cost of the smaller losses are more than the relative cost of the large loss.
That said the insurance system in the US is too broken and needs to be scraped.
>>In any risk assessment, you have to balance impact with likelihood. Yes, it could have happened, but the likelihood is so rare that it's not worth the premium.
What makes healthcare dramatically different is that, as a layperson, you cannot accurately assess the likelihood variable. You may have some very rough ideas - for example, a professional snowboarder is more likely to get a sports-related injury - but stuff that tends to be extremely expensive is also stuff that can happen to anyone at any time.
This differs from, say, car insurance, where a lot of the factors such as the value of your car, the frequency of driving, your driving habits, etc. are known. As such, you can optimize it much more effectively.
I'm not really sure what you're getting at, as this is just one company. Companies are also pretty good at cooking their books, too, and I haven't seen too much in the last 5 years to make me trust that the SEC is doing their job.
I like how you downvoted me for factual information. Please look up their competitors, as well as their tinier ones. The margins in the sector are similar across the board. The financial statements are audited by third party accountants. Studies from healthcare researchers use those margins. I didn't know I was responding to a conspiracy theorist, which I hope you're not.
I am not trying to support your parent comment. However, the current trend in healthcare cost is unsustainable. My roommate (stupidly, in hindsight) went to get an ER after being scratched by a small cat in our parking lot. The total bill was over $8k for about an hour of care and two shots.
This is unacceptable. There must be some sort of accountability in the system. Unless, there is a secret pact between the hospital and the insurance company to show a larger bill to make the patient think he is getting his money's worth in which case I have nothing to say.
If we can't control the price, can I write a will saying my estate will actively refuse care for anything that costs more than 5k out of pocket per day and 15k annually? In the event I do need care that costs beyond that point, please give me a quick and (hopefully) painless death instead.
There essentially is such a secret pact. The official hospital bill is a worst case that roughly nobody actually pays. It exists for leverage, both with insurance companies and with people paying out of pocket. It also exists because some people will actually pay it, and that's profit for the hospital.
Because hospitals are mandated to perform life-saving treatment regardless of willingness to pay, they have to foist the cost of that treatment onto their other customers. However, insurance companies hate paying much above cost, and they have a huge stick in the form of "we will remove your hospital from our network of approved providers" to get the hospital not to charge too much. Hospitals can't recoup those extra costs from insured people too well, so it tends to fall mostly on uninsured people with money. But the way it works is everyone gets the same bill, and then when the insurance company steps in to pay it, they activate their secret pact with the hospital to pay a small amount above cost instead of the nominal $8k figure.
Wow, this is insane. I for one believe that prices should be transparent and secret pacts like these should be broken with (I am not normally fond of this phrase but I will use it here) zero tolerance. If there is a pact, the hospital and the insurance company both get shut down and both management teams get a speedy trial and get sentenced for life without parole.
This is absolutely nonnegotiable. Here I am, broken, talking about end-of-life to avoid my family from getting a big fat debt and we don't even know how much a hospital actually charges for a procedure?
Require all hospitals to publish their rates and shut down anyone who negotiates any kind of discount. We have to contain health care costs and these shenanigans have got to go.
I'd really like to know how the system works in single-payer systems. How does Canada government pay for health care?
I am sorry for the over the top comments but these secret pacts, if they are real, make me livid. OK, what can we practically do so we see the real cost of healthcare in our invoice regardless of insurance company we select? Is it even practical to expect to see costs up front?
It's not illegal price fixing or anything like that. The hospital charges $10K for simple procedure, and then the insurance company reduces it (per contract between them and the hospital) to the "reasonable and customary" $200. Presumably Canada does the same thing, and presumably in Canada there's no point to the hospital charging $10K when they know there's only one payer possible at $200.
It's all but impossible to see costs up front in the US. Hospitals insist on determining the charge at the point of billing.
>Hospitals insist on determining the charge at the point of billing.
Can I start a restaurant and make people pay at the point of billing? Like an upscale restaurant with no prices on the menu and then charge people differently based on what they clothes are wearing...
"Surprise! Your burger was $800 but we will work with you on a payment plan."
Someone behind you in the billing line says, "Oh, you should have signed up for Acme's Burger Protection Racket and paid $150 a month and that way you would only have to pay $1k deductible and then you'd only have to pay 20% co-insurance for most means at this Fatso's joint there after."
I don't know how I feel about this whole thing. I certainly don't have all the answers and things we do to make healthcare better could actually end up making it worse. :(
That's largely the problem. Hospitals can't charge (or even quote prices) until after providing the care in most cases - because it is time sensitive (and the "customer" may not even be conscious). I agree that it's a crazy situation, but the burger joint model is not a valid alternative.
You could have a restaurant like that if you could get the customers to agree up front to pay whatever you decide to charge after service is rendered, as hospitals do. It would probably work if there were only a few other food sources in the area, all doing the same shakedown of their customers.
The other critical element is you'd need to have a situation where a burger was something that really isn't optional, and going without it means you or your children are in pain. This definitely affects the calculus of the decision.
The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost, which has to be made up elsewhere. After that you're stuck with different people paying different amounts for the same operation.
> The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost
This is actually the reverse: the reason why Medicare is so much more cost-effective is that they're more consistent about paying only the true cost and have the marketshare to negotiate that up front rather than haggling over every claim. The hospitals favor private insurance because the margins are higher and they don't face the penalties for over-charging the US government if they get caught inflating prices.
How do you know that it is true cost? Given the number of inner city hospitals with serious financial trouble, I strongly suspect that they've gone below true cost!
> The official hospital bill is a worst case that roughly nobody actually pays.
If someone has no insurance but does have enough assets to cover the lofty bill, I'd expect the hospital to seek to seize assets for the full amount. It's a safe bet there's a fair number of people who've ended up losing their house to pay for a few hours of tests, after the hospital refused to negotiate. Lesson: If you have assets, have health insurance to lower the risk of losing it all when you get scratched by a cat.
That's exactly what's happening. The insurance company doesn't pay anywhere close to that price. Neither do uninsured people, typically - they just go bankrupt. There's a collusion between hospitals and insurers to help cook each other's books, and to inflate the customer's perception of value.
BTW, if you are uninsured you should negotiate before receiving service, apparently you can get a big discount simply by agreeing to pay ahead of time. Of course that's not really feasible in true emergencies, but you can still negotiate a payment plan.
> It's not hard at all to rack up a couple of million dollars in hospital bills if you get unlucky, and you'd probably never be able to pay that back.
Just go to another country, if you need quality no-hassle healthcare.
pg says in one his essays, that he found after cashing in on Viaweb that he couldn't just walk into a hospital and swipe his card. It just doesn't work like that in America. You need insurance, even if you have 50 mil in your bank.
To top it off, individual health care is very expensive and designed to screw you (and since you're not a big company with hundreds of people signed up, you can't threaten to switch or do any other such sort of thing if they deny you care.) I know someone who needed a very expensive procedure, and his boss basically told the insurance company that if they didn't assent to the procedure, his company would switch to some other provider. As a lone individual, you have less of this kind of leverage.
Now, most other countries (I said most) don't work like that. You can go to any hospital, not have to worry about denials and pay in proportion to the service they render to you. And their fees come nowhere close to what the most U.S. hospitals charge.
As for options, based on my personal experience:
- If you want to go really cheap, choose India. India has a great medical system, but the generally unsanitary state of the country gives me doubts about the hygiene even in hospitals.
- If you are not seriously cash-strapped, try the UAE. They have a lot of really good hospitals, latest technology, and everything just gleams and shines there. For an example of pricing: laparoscopic surgery at premier specialty hospital in the UAE costs about $10k. I assume it'd be in the $50k (or more) in the US. (Au contraire, in India it's probably $1-$2k range.)
> Just go to another country, if you need quality no-hassle healthcare.
This is the part which scares me in these discussions: I can do that if I have time to plan in advance. If some accident occurs, I have no choice but to deal with the US system – and even if with good insurance coverage I'd have to deal with the kind of routine over-billing and obstructionism you mentioned. It's like we're trying to encourage all but the most risk-averse to emigrate to a country with a more humane system.
It's not clear if that $1200 was spent on care, or on premiums.
But in any case, a high-deductible policy with an HSA is a great option for people who don't have ongoing medical costs (diabetes, young children, etc). Not only are the premiums lower, but unlike a FSA, you can roll the money over at the end of the year and build up a balance.
If you do have ongoing medical costs, then yeah, traditional insurance (and maybe an FSA) would be the best choice.
While I do agree with you, we need to back away from taling about the million dollar hospital bill. We used to have a $1M lifetime cap on our life insurance. I asked HR how often that happened. Apparently not once, by anyone in the entire history of the University System of Georgia. Sure, it MIGHT happen, but it seems it is exceedingly rare. Am hoping others with more facts than I could comment.
I assume you meant health insurance, not life insurance.
It doesn't make much sense to me that hitting the limits would be so rare. Why have the limits in the first place if that's the case? If they didn't make a difference, then they'd just be bad propaganda for the insurer.
This random web page I looked up indicates that about 20,000 people are impacted by lifetime limits:
This is not a huge number, but it's not completely irrelevant either. The pool it draws from will exclude the elderly, the study only looks at the people with employer-provided health insurance, and the 20,000 is from the 55% of those who have lifetime limits.
So we get about 93.5 million with employer-provided insurance with lifetime caps, and that in turn gives about a 0.02% chance of hitting a cap.
Whether that qualifies as "exceedingly rare", I'm not sure.
In any case, "$100,000 hospital bill" is probably a decent substitute for most people, although the odds of being bankrupted by that are probably considerably lower among the HN readership, at least.
>In short, you're implicitly mooching off society, and apparently proud of it. You managed to get away without actually triggering it, so far, but you were pushing a lot of financial risk onto other people. (Ignore this if you are, in fact, a millionaire.)
Smooching off society is a good thing. In fact, everyone should do it. It's called universal health care.
UHC is not the same as 'mooching off society'. The money required to keep UHC working doesn't appear by magic - it's done through the contributions of everyone via taxes. In short, everyone contributes towards it, and everyone gets to use it when needed. That isn't mooching - it's spreading costs across society.
> Why should it be cheaper to have group policies through employers? The entire freaking point of the insurance company is that they are pooling money from a bunch of people over time in the form of premiums to be able to distribute to a minority who need it in emergencies.
Good question. The answer is that the insurance companies know that people are self-selecting if they buy insurance on their own, while (to a good approximation) they do not select jobs on the basis of the insurance that they will get from it. So insurance offered through an employer comes from a pool of typical people with a certain age and wealth distribution, while insurance sold directly to consumers comes from a pool of people who think that they need that particular kind of insurance. Needless to say, the risk is MUCH higher with the individual policies, and it is priced accordingly.
It's cheaper because of information disparity. Basicly, individual learns he has condition X tells no one and buys insurance and suddenly the inshurance company is out 200,000+$ or worse (AIDS can easily run 1,000,000+$). However if a company is buying insurance then presumably the insurance company knows more about the risks than the HR person setting up insurance.
That changes nothing. The aggregate probability should be the same. Even if we assume that the insurance company will modify premiums based on the type of work the company does, they'd do that to the individual as well, as they ask your occupation. The chance that the insurance company could get scammed by a covered person lying to indirectly through their employer is is the same as the insurance company getting scammed by a covered person lying directly to the insurance company.
Regardless, this is all covered under pre-existing condition clauses and contract law: i.e. they most definitely WON'T be out the $200k from your hypothetical.
The aggregate probability of a heathy 25 year old deciding to pay full market price for Heath insurance is lower than a sick 25 year old. However, you also get people who discover there at an increased risk for a disease and decide to get coverage etc.
PS: Heath insurance company's are vary rational, if the risks where equivalent they would charge close to the same rates due to market forces. Instead identical group plans even for small groups can be significantly cheaper.
Actually the major thing with group insurance is the number of people.
It is unlikely that more than 1 or 2 people in a small company will have any major health issues, so if you are signing up 20 people your overall risk is lower (in your example a $10,000 per person cost).
Combined with different feelings toward risk, usually health insurance is a win win. The annoying thing about the recent "reforms" is it mandates preventative care be covered, eliminating the ability to get pure "oh crap" coverage.
Number of people is actually not as big a factor as it is made out to be. For major medical and certain supplemental health like dental, there is a load for small groups, but it isn't very much. The risk is certainly higher, but one large claim can make a group's loss ratio beyond what can be recovered, so the additional premium has to be spread across the small group category. The biggest factor which is often overlooked is that the insured is "actively at work" which lowers the potential risk, because working people are healthier and the insurance company can add underwriting factors for certain industries. Another thing to note is even if you are allowed to select a voluntary product like dental or health indemnity product, there is little or no choice on the specific riders or benefit amounts which lowers the "anti-selection" for riders. Products that are partially employer-paid like major med and/or a group's participation percentage being high also limits the potential anti-selection.
Disclaimer: work in Actuarial
That makes sense to an extent. It goes out the door with family plans (to me). Is a spouse more likely to be healthier because their partner works? Child because parent?
> The annoying thing about the recent "reforms" is it mandates preventative care be covered, eliminating the ability to get pure "oh crap" coverage.
This is only annoying until you realize how many people have incurred significant costs by avoiding preventative care. Why do you think insurance companies are so quick to run campaigns for healthy-living, vaccination, regular physicals, etc.? They'd much prefer to pay a few hundred dollars a year for you on a known schedule than deal with open-ended late-stage problems.
Actually, the insurance company would probably do some checking and, finding the proof that you were diagnosed before taking out the policy, would invalidate your policy based on your "fraudulently" filling out the application - and pay out nothing.
The example still works even if the guy is diagnosed after taking out the policy.
Bob takes out a policy because it seems like a good idea, and subsequently is diagnosed with Expensive Heart Disease. He holds onto his policy with dear life, prioritizing the premium payments over things like dinner if he has to.
Joe takes out a policy because it, too, seems like a good idea. Nothing happens to him, and six months later he has a change of heart when he thinks about how many shots of tequila he could be buying with the premiums instead, so he cancels his policy.
Thus sick people become ever more concentrated in the pool of individual insurance customers.
I'll see your anecdote and raise it one: when I was around 20, and in very, very good shape from lots of cycling, out of nowhere (no crash, no impacts, nothing I can think of), I had a collapsed lung, which I think came to around $20,000 in hospital/surgery bills. Luckily, I was insured at the time: I had not yet started my programming career, and had nothing like that amount of money available.
Try living somewhere outside of the upper middle class. There is almost nobody I know who can get out of that kind of unexpected debt. "Most people" budget for a car, and don't buy a new one at 20. How about those people who take the bus?
Nearly two out of three bankruptcies stem from medical bills, and even people with health insurance face financial disaster if they experience a serious illness, a new study shows.
Among families who were bankrupted by illness, those with private insurance reported average medical bills of $17,749 compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance but lost it in the course of their illness reported average medical bills of $22,568.
Most people don't spend more than that on a car. The average price of a used car (what most people buy) is $14,375 [1].
The average savings rate in the USA is below 5% [2]. With a median household income of approx $50k [3], then we assume that approx. $2.5k is the average amount an average USA household can afford each year. With average savings of around $6k [3], that's over 5 1/2 years to "get out from under", not including loss of earning, no savings cushion, and not including interest payments.
> Just give me the money in my paycheck and let me do with it as I see fit.
Unfortunately, the way the system is set up, the money an employer spends on health insurance cannot be used effectively in the health care market. It is not a free market.
For my single employees, I pay $406.53 per month for health insurance on a very comprehensive plan. If I were to just put that in their paycheck and tell them to fend for themselves, first they would have to pay income tax on that money and second they would not be able to buy health care services at the rates negotiated by the insurance companies.
This doesn't even factor in the situations where an employer and the coworkers have to decide how much to help an employee with his medical bills when something happens.
Is it my fault that insurance premiums would increase by my non-participation in the insurance company's ponzi scheme, or is it the scared masses fault that medical services are so high because they relentlessly pursue getting everyone to join in for their own security?
Here's the problem with the arguments of "all for one and one for all": Most people are not going to have hundreds of thousands of dollars in medical bills (millions is ridiculous. I have never heard of such a thing, and regardless, the prices are over reported to make the argument that high premiums are necessary). All most people are going to need is yearly checkups, a cost they could easily take on themselves if they pay out of pocket. But instead they put it on their insurance, like it's some kind of free money.
Every time someone goes to a general practitioner for a basic rhinovirus and only pays their $10 co-pay, they're making the rest of us (yes, me included, because you generous folk figured out a way to force me to buy minimum insurance) pay for the rest of the over-inflated price of their unnecessary visit. Take a cough suppressant, drink lots of water, and stay home, you'll be better in 3 days. You don't need a doctor to tell you that. I haven't needed a doctor to tell me that since I was a teenager. Stop going to work when you're sick.
But the average person is meant to lose out on their premium, otherwise the system wouldn't work. But rather than treating it as the sunk cost that it is, money they're most likely to never get back, the average person goes the doctor for every sniffle and ache.
In the original post though, the company is paying 100% of the premiums - and would presumably do the same for the disability insurancee. So you would pay nothing out of pocket. You could view it as 2500/x not going into your check - but it's probably 2500/x that would have gone elsewhere.
Group disability insurance is very often worthless and not worth even the paltry sum an employer pays for it.
Disability insurance is all about the definition of disability. Only a few people have a truly comprehensive disability policy through their employer. This is because the definition of disability for group policies usually requires that, when making a disability claim, you cannot work in your job "or any other job" (or something to that effect). As as a result, you usually must be completely and totally disabled on a permanent basis to collect long term disability from your employer.
Often, they don't kick in for 6 months and then because you're still able to sell pencils for 50 cents on the street corner they will not cover you.
The reason why individual policies are typically much more expensive is because their definition of disability is different. Many individual policies are "true own occupation" which means that if you're now a neurosurgeon they can't force you to work at a McDonald's drive through.
My LTD is 60% of my income, tax free (very important, always pay for any disability post-tax, if you don't your income from it is taxable), until I am able to make over 80% of my pre disability income.
It provides me benefits from 6 months after my disability (I decided not to pay for short term which starts at 2 weeks until 6), and will keep going until I am ~65 years old.
Just double checked. It's own occupation for 24 months, then it becomes reasonable occupation. I have a feeling that that term is something that when 24 months approach, you want a good lawyer for.
Still, considering I'm paying less than a coffee per month for LTD, and personally knowing someone who was once working as a top tier developer and got into a serious biking accident that left him with brain injuries, I'm going to buy into it. Next year I'm going to push HR about that 24 month clause.
>>It's own occupation for 24 months, then it becomes reasonable occupation.
Reasonable occupation is pretty vague and I think this kind of word-play is what helps insurance companies find reasons or even solid justifications to not pay up in the end.
As your parent comment implied, the insurance company can just argue selling lemonade or pencils is a 'reasonable occupation' and can even prove there are people surviving daily on such a business. And all that can become a base reason to just not pay up.
Yes. Read every clause of any insurance contract, and realise that the other party will fight to the word level to defend their default position of not paying out. Those clauses are very well thought out, and not by the buyer.
In my own circumstances I've found many insurance contracts to be worthless in practice.
That's what I came to the comments section to check out - it seemed like a diamonds to doughnuts bet that unless the insurance provider has an exceedingly good reputation, one should assume that the secret to their policy is that they never really pay out.
I don't have it in front of me, but I recall the fine print on my policy stating that if they cover you, they will only bring your income up to 60% of your salary. If you are receiving other benefits, like social security disability, they subtract that from the payout.
So? For 60 odd bucks a year per employee you can know that should something happen to one of your employees - you will have done something to ease the situation.
The tone of the article seemed to be about doing something for your employees that, whether appreciated or not, is good for them and your own piece of mind. Taking care of them. Obviously it depends on size etc, but it seems like a good fit.
Old people generally don't need life insurance. Neither do singles with no dependents. Young married people with kids and a mortgage do, and it's pretty cheap because they're very unlikely to die during the policy term.
What if they have a second marriage later in life I recall a case where I worked where a guy in his fifties died of a heart attack a few months after remarrying.
Employer provided policies are governed by Federal regulation (ERISA) which is much less policy-holder friendly than state regulated insurance. (At least in "Blue" states, probably a different story in Alabama.)
> And one of the things my dad brought up with me is just how important it is to have a good long term disability insurance plan in place. I had never actually heard about it. Long term disability is a policy that can pay out 60% of your salary for the rest of your life if you have an occupation-ending injury.
This is surprising to me. I'm Canadian and I've worked my whole life here so maybe this is one of those Canadian vs US things, but I've never had a job that didn't have long term disability as part of its offering.
Most pay the standard 60% of your pay for the rest of your life if you are unable to work at that job any more.
As someone with a family, I'd say its probably the most important form of insurance to have, if you have someone else to take care of your kids in the event of both parents dieing.
It's not atypical in US tech to be offered long-term disability coverage, startups just tend not to think about it until somebody brings it up. Incubators like YC should probably be raising the point with their alumni.
I believe most large employers in the US do offer it, but much like the 401k it is opt-in, not opt-out, so I assume most people don't have it or if there employer offers it as opt-out, they may not be aware of it.
60% of your income, even if it is tax-free may not be enough to cover everything, the best solution is to take the employer sponsored, which is dollars (i.e. <$10) a month and adding a small one on top.
Isn't this provided by the national health coverage in countries with a welfare state? AFAIK there are a lot of people on disability checks in the US as well, I'm not sure it pays well though.
In Quebec, there is a maximum insured by the state and it start 180 days after the event. So if you hand up breaking your ribs/hands and stop working for 4 months, you never get this. My private insurances cover from 60 days up to the 180 days at 80% and then goes down to 60%. The effect of the state insurances is to lower the cost of the private insurances.
Yes this is what happens in Italy. You pay almost 30% of what you make in a compulsory fund for retirement and disability pension and when you need it, the state pays you.
AFAIK there are two common types of long-term disability policy:
1. You are covered if you can't do your current job.
2. You are covered if you can't do any job.
Every employer who has ever offered me this benefit offered the second version, which is great, but it certainly won't help replace my current income if I can't perform the job I have now.
A policy that covers your exact occupation is the best. It's easier to get when it's an occupation underwriters really understand. For instance a surgeon can easily get an occupation-specific policy because it would be easy to determine that damage to her hands would cause her to lose her income producing work.
It's harder to get a similar policy for say, an entrepreneur. What part of our body allows us to do what we do?
Thus, most startups that get a policy have to get the 2nd type--if you can work elsewhere after an injury, you don't qualify. There's one addendum, however, that is still crucial. You can get a policy that requires the new job have a similar income level. Thus, if you were only able to do work at a 70% decrease in salary, the policy would be triggered and you'd receive your benefit.
I'm not sure how you prove that you are partially disabled for any job that is primarily mental rather than physical. For example I once worked with a guy that was a lead software engineer. Shortly after he was hired, he got into a car accident and sustained a serious concussion. He claimed that after the concussion he could write basic code, but he didn't have the ability to concentrate enough to solve difficult problems or architect complex systems. How is an insurance company supposed to determine his level of disability? They don't really have a baseline to determine how strong of an engineer he was before the accident. Are they obligated to pay the difference between the salary of a junior and senior level engineer if he gets fired?
I'm not a WC attorney but my brother is so take this with a grain of salt, but my understanding is that adjusters will work to evaluate you to determine the legitimacy of your claim. This goes for just about any kind of claim, but you can bet that if you are making a claim that can add up to hundreds of thousands to millions of dollars over your lifetime, they are going to expend some effort to make that determination. This would involve experts in the field evaluating you through tests and interviews.
Dental coverage is a scam. I priced dental insurance for my startups for three years. The only plans available to companies with less than 50 employees have benefit caps that were less than the cost of the yearly premiums! You get "free" cleanings and x-rays but it still makes much, much, much more sense to take the cost of the premium and put it in a health savings account for your employee to spend on dental care (or any other qualified medical expense).
At least in my area (NYC) the value of dental insurance is also they negotiate very low prices with their providers. For a root canal the difference was 50%.
I don't have numbers, but back when I had no dental insurance, my dentist reduced the price without any prodding. I'd be surprised if this wasn't common.
Even medium to large company dental plans tend to have around a $1500 coverage cap (at least in Washington state). I priced out a couple of these as an individual to see if it made sense for me, and it ended up being something like $600 per year for $1000 max coverage that only covered 80% of the actual cost incurred.
Depends on where you live: around DC, the rates for dental coverage are about equal to the cost of your yearly premiums but the companies have negotiated pricing maximums which are significantly cheaper than what you'd pay out of pocket unless you love haggling.
It just occurred to me that the more benefits jobs provide, the more dependent on those jobs people become, and the harder they fall when they lose those jobs.
This is NOT an argument against providing benefits, of course. But it does create a weird dynamic.
People might be unable to leave because they need their current employer's health insurance, but not leaving because of losing disability? That's a new one.
I am covered, during my time I am diagnosed with cancer. I get treatment, and am declared "free" of cancer. I remain that way for 5 years, and claim no more benefits. I am still covered.
I leave, and join a new company. To enter their health insurance, I have to declare any "pre-existing" conditions. They see that I am in remission from cancer, and offer my employer two choices: pay hugely inflated premiums, or get no cover. My new employer never expected to need to cover premiums 20 times that of their existing employees, and consequently I am now screwed.
Group plans are limited in how long they can exclude someone for pre-existing conditions, and guarantees no waiting period if they already had qualifying insurance.
The private market doesn't have the same protections, for reasons both good and bad.
This argument comes up frequently when people discuss startups: once it involves losing health coverage, a significant number of people lose interest in participating. The current system heavily encourages anyone with less than perfect health / dependents to work for a mid-to-large-sized company, to our relative disadvantage when compared with the rest of the first world.
We actually put Ltd in place this year. For our company (11 employees, almost everyone in their 30s) it added like $10 a month to our policy. We also pay 100 percent of the health care and it's our #1 expense after labor.
OP here. I'm not an expert, but $10 per month sounds too low. Check the policy and make sure it covers your employees against disabilities that still allow them to work minimum-wage jobs.
Man, this really brings back bad memories of wrestling with health insurance, dental insurance, and the like in my previous USA startup. Now I'm in the UK and we don't have to worry about it!
Long-term disability benefit is still important even if you have free healthcare. It's fantastic that state healthcare will keep you alive should something terrible happen to you. But that's not going to fully help any of your dependents.
One of my UK employers was quite large and had particularly good disability benefits because a small number of staff worked in physically dangerous jobs, the union wanted those staff treated really well if something bad happened and so everyone in the entirely company was covered for 80-90% of their wage.
A new desk-bound sales guy started and had a stroke before lunch time on his first day and was going to be out of action for a good long while - perhaps forever. A serious stroke is bad news, but he was sure lucky that it didn't happen a few hours earlier.
Seems like many otherwise smart people think in terms of "how likely am I to need this?". Insurance should be thought of in terms of "how screwed would I or my family be if...?". If somebody depends upon your income, get life insurance and long term disability. If you depend on your income, get long term disability. Everyone except for billionaires needs major medical insurance (USA). And stop insuring things that you can afford to replace (warranties generally).
It baffles me how few people have disability insurance. What would you do if injured your hands and could never type again? What would your family do? Everyone should have disability insurance -- it should be a fundamental part of your financial life.
> What would you do if injured your hands and could never type again?
I don't disagree with your general point, but the truth is, there are a lot of adaptations and assistive input devices people use for computer input all the time. There are lots of ways a techie with a functional brain can continue to work even after quite severe injuries.
Isnt this what social security disability is supposed to cover? Obviously it won't give you as much money as a private plan, but it wouldnt be a total disaster.
Getting social security disability is a small nightmare and can take months. The majority of initial claims (60%+) are rejected and you'll have to appeal.
Which, you know, is no problem at all if you're actually so injured you can't work.
I wanted to be truthful and didn't know off the top of my head what, say, the median time for a claim to be accepted was.
I remember it being something like 2-5 months to get a response, so multiply that by the number of appeals (up to 4, I think) and my ballpark estimate is that the median time-to-acceptance for all eventually-accepted claims is around 6-18 months.
So, I figured saying "could take months" was a more honest thing than saying "could take years." If the median time were greater than a year, after all, "it could take months" is still true, but the converse isn't true! If I had said "years" instead of "months" and was wrong, someone could easily have replied, saying, "You're exaggerating. The median time to acceptance is 9 months, not years. The claims that take years are exceptional cases."
In any case, I didn't know, so I wanted to err on the side of intellectual honesty. That'll teach me. :P
Heh, sorry about my reply. I was just speaking from being on the end of having a parent who went through the process. I seem to remember it taking on the order of more than a year. Good news is it is retroactive from when you apply though. This was over 20 years ago, things might have changed since.
This is in the UK, but is vaguely applicaple to the situation you describe, so take with a pinch of salt. A friend of mine had an accident about two months back and is unable to work. Despite having been certified as such by at least two psychiatrists and a whole host of other NHS staff, disability benefits don't kick in for six months due to the nature of his new found disability. I guess you're up shit creek if you don't have six months worth of savings in place.
I am also flummoxed. Private short term disability insurance seems very common, but I'm not sure I've ever heard of private long term disability insurance.
> What would you do if injured your hands and could never type again?
I don't even disagree with you, but have a tangent to share:
Have you seen modern robotic prosthetics? I don't want to make light of anyone's situation, but I honestly think we are mere decades away from replacements that are better.
I just left an employer who had 100% salary continuance insurance in place.
Maybe mine is the minority view, but I found it a horrendous waste. When I left the employer it offered to have my portion of the policy transferred to me personally so that I could "continue to enjoy the benefits". I didn't even bother responding (despite leaving on otherwise very good terms).
While I work, I expect to be remunerated. But I don't allow myself the hubris to expect that remuneration should continue in perpetuity. If I decide not to work, or am unable to work, I would prefer to adjust my circumstances to accommodate that fact, rather than continue to pretend otherwise.
I'll resist speaking ad hominem and try to generalize here.
I've found that founders that are married/have kids are much more concerned about HR policies that protect an employee's family, while startups with younger/single founders usually don't put as much thought into it.
I know from my own experience as a founder in my 20s and now in my 30s that this shift occurs.
The issue with long term disability is that the startup can make a statement to its employees that it will provide for that individual as well as that individual's family--through maternity/paternity policies, vacation time, health and life insurance, and long term disability.
Employees with dependents need this type of security and actively search out the companies that provide it. It's one of the reasons the startup community loses so many great engineers to larger companies, even though those engineers would prefer a startup. Not enough thought put into family security.
You're married with two young children. While commuting to the office one day, you're severely injured in a car accident. This injury is so severe that you're unable to return to work, but not severe enough to kill you.
Congratulations! Your partner not only has to care for you for the rest of your life -- he/she also has to go to work full-time so your kids don't starve.
Insurance is about distributing risk. Instead of e.g. 2% of people taking a 100% loss, 100% of people take a 2% loss. Since a guaranteed 2% loss is way more palatable to many people than a chance of a 100% loss, this works out well for many people.
It's not "hubris", it's simple economics. If you don't like it, you don't have to take it, of course. You're allowed to take the option of being forced to live on the streets if you suffer an injury that makes you unable to work for a living. But don't think that other people are somehow deranged for disagreeing.
I never said that I consider my view objectively correct or superior... and never intended to imply that a contrary view would be deranged! Far from it; I explicitly recognised that mine was probably a minority view.
However the submission implicitly assumes that this option is right for everyone ("The one HR benefit that every startup should add"). I recognise that some people see it as valuable. Hopefully those people can also recognise that other people don't!
I also think the strawman of "Take disability insurance or live on the streets" is rather hyperbolic. The actual alternative is relying on social security disability payments and my existing savings vs an insurance-funded pension. Maybe I'll have to let my chauffeur go, but I'm hardly going to be sleeping in gutters if I take the former option.
My wife's working through the social security disability process, and it's not something you can rely on for months if not years (assuming your appeal of the nearly guaranteed initial denial even works!). If she had been our family's single income we'd be destitute.
My country doesn't seem to have implemented the blanket-denial first stage of the process yet, however luckily I have savings which could tide me over until the payments get backdated in that eventuality.
Sigh, I should have known I'd get a reply like this.
The conversation is about commercial, private insurance plans, not about government social security systems. That is what the "it" refers to. You are talking about something completely different.
If you bought an annuity, you would expect it pay for the rest of your life -- that's how annuities work. If you baought a special discounted annuity that only paid in case you were injured it should. That's not hubris, that's a contract.
On the other hand, I would be very surpised if someone offered 100% salary long-term disability -- the potential for claims at the margin and actual fraud increases dramatically.
I don't see it as 'expecting remuneration to continue', so much as I see it as simply paying for insurance of income.
Life insurance is essentially the same thing, as far as I'm concerned: I'm paying now so that if / when something in the future happens, there is a financial aspect that helps me / my family.
So out of curiosity, do you consider life insurance the same way?
I cancelled the life insurance policy which was automatically included in my retirement savings several years ago. I don't have any debt (even my mobile phone is pre-paid) so life insurance is basically a massive bet on me dying with no real upside.
Again, YMMV and some people consider it a worthwhile investment. Just trying to contribute my point of view to the discussion.
Out of curiosity, and this may be a little too personal, but do you have any dependents at all?
For me, at least, the upside is that when I die my wife and kids are going to be well and truly debt free.
On the other hand, if we were already debt free, or I didn't have those dependents, then that would probably change my outlook on the policy, for sure.
The difference in cost of benefits such as health, eye, dental, life and disability insurance, particularly if dependents are included can easily cost tens of thousands of dollars a year more for one employee than for another.
Do you want to haphazardly compensate your employees like that, without it even being bargained for during the hiring process? Wouldn't it be better to negotiate a total compensation number instead? You could potentially be looking at a whole different class of employees for the same total money.
Though maybe the (irrational) bad will generated would wipe out the gains.
This is one area where health care insurance costs are pretty affordable. We are a web design company in the sunny state of Florida, so these are our rates based on 10 to 20 employees.
From my understanding the larger you are, the cheaper the rates. Since the article /comments asked for typical rates, here is where we are at to compare. Not sure how many employees 42floors.com has, but $2,500 per year would probably be around 5 to 10 employees if they were all male.
STD/LTD Group Policies - Our rates are typically $21 to $60 per male employee and $71 to $150 per female employee per month. So it could add about $250 to $1,800 per employee depending on their salary and gender.
Maternity Leave - The good news is that this covers maternity leave of 3 months for our lady employees. This is a nice benefit to offer. It also explains the higher rates based on gender.
Health Care Coverage - Most group health insurance policies are super high in monthly premiums ($200 to $600 per month for individuals and $1,000 to $1,500 for family coverage). We cover this in full right now for individuals. But it is a huge ongoing cost, especially as everyone gets older and starts families. STD/LTD policies are very cheap by comparison (obviously geared towards a different life event).
Other options - It would probably be cheaper if you just bought long-term, if the concern is catastrophic coverage. But we cover short term too and that increases the rates.
Our rates are typically $21 to $60 per male employee and
$71 to $150 per female employee per month.
Did they mention why female employees cost so much more?
I thought (from car insurance prices etc) that men are more likely to get into accidents? I was under the impression female-only things like childbirth were fairly safe these days.
Maternity Leave - The good news is that this covers maternity leave of 3 months
for our lady employees. This is a nice benefit to offer.
It also explains the higher rates based on gender.
Maternity leave is much more likely to be utilized than long term disability insurance.
My aunt used to work at a school that did not have this policy in place. The principle had a debilitating head injury that put her in a coma; she is now unfit to work for the rest of her life. It was tremendously sad for everyone involved, but it has also severely strained the school financially. Under Massachusetts law, the school is required to pay a large percentage of her original salary now that she is disabled. Had they taken out an LTD insurance policy this wouldn't have been a problem.
If the company pays for your disability with pre-tax dollars, your disability payments are taxed as income.
If you pay for your disability with after-tax dollars, you are not taxed on the income.
Keep this in mind when designing the plan. If taxing the employees on their disability benefits makes the benefits tax-free, you should give your employees that option.
Comparing this with my French life is astonishing.
I can go in and out of hospitals/any doctor for almost free, ambulance ride included if necessary. For ~30€ monthly above the basic care (paid by employers).
I don't recall ever worrying about money when it comes to health. What you have in the US is archaic.
According to my current employeer they wont be able to purchase 100% coverage using the health exchange. So personally this is going to start costing me significantly more...
Edit:Apparently - our benefits consultant commented that it would be cheaper for individuals to purchase their own health insurance. I guess I will deal with that when the time comes.
One thing not mentioned here is the waiting period. I.e. after you are injured and stop working, you are typically required to use up all of your sick/vacation time, and/or wait for 180 days until you can receive benefits.
I've worked for companies that offer short-term disability insurance -- which will cover the gap -- but this is less common than LTD.
This is why it's important to have an emergency fund to cover your living expenses for at least the waiting period. Otherwise you could be looking at eviction before the money from your disability insurance comes in.
At Huddle, in the UK, we don't even need this (NHS. No, I don't want to argue about this.) but we have both health insurance and death-in-service coverage for families.
It's made a big difference to our general peace-of-mind, and there are a bunch of other things that go along with it to encourage fitness. We're all a lot fitter than we were before, and since the team is more family-oriented than we were when the company started, death-in-service coverage is very welcome.
The obvious question is how is "occupation-ending" defined, in particular for knowledge workers who could quite possibly continue working with even severe physical disabilities?
No, the argument is, X is good, but incredibly expensive for individuals. X (interestingly) is cheap for employers. Therefore employers can provide this substantial benefit X to employees in a manner they would not be able to alone.
Additionally, without X, employer faces a decent chance of being forced to choose between firing a newly-disabled employee, or continuing to pay their salary even though they can't produce enough value to justify it. With X, you avoid being forced to choose between two bad outcomes.
I bring it up because there are downsides to coupling essential services to whoever happens to be your employer at the time. The upsides are mostly a consequence of the market adapting to decades-long tax policy. There's nothing special about employers, but I guess sometimes it's easier to reinforce a problem than to fix it.
You can provide the illusion of invalidating any argument if you distill it down far enough. That said, there's no argument in this piece. He suggests that the affordability of X is not well-known, and given its low cost and terrific upside, it's a feasible and responsible addition to any company's benefits. What are you not clear about?
The twist is that Everyone needs - or at least should have - it, but it's so expensive on an individual basis that most individuals forego it. The first few organizations I worked for did not provide it. I priced it and decided against it because it was so expensive and I was young and invincible. I would have been up a creek if I'd become disabled. Would that have been my employer's fault or responsibility? Nope. . .but it's an excellent benefit.
Given the cost and the impact upon what would be a very bad disaster, this indeed makes so much sense and also seems cheap in comparision to other benifits a company pays out for.
Few questions though on these types of policy:
1) What limitations are needed to be observed - must a company have a defined standard of health and safty and as such a defined quantifiable level of risk.
2) Are such policys only limited to accidents or directly measurable incidents that casue a disability in an employee or are outside area's like a bad skiing accident also covered. The whole area of say parkinsons and somebody who has a family history of it would that also be covered as that would be a disability reducing career situation.
3) The employers impact - loosing an employee is very costly and some more than others but whoever you lose will be a impact that is fiscaly measurable from cost of finding replacement and training time invested, down to extra overtime upon the others to pick up the slack until somebody else is upto speed. This is factoring in every thing is documented to the if I fall under a bus will my colleges be able to pick up the slack. So with that a little bit extra on the insurance policy to cover the Employer impact is also worth investing in if not already coevred. Especialy given the rates based on policy costs too me appearing cheap and rasing flags given the odd's of somebody getting cancer or a road accident that could very well limit there ability to work.
4) Quality of work, if somebody who was able to be very productive has an injury that whilst not preventing them from working, yet reduces there productivity in a measurable way - then how i that covered? This is probably a situation when you have a employee contract and that employee is so good he does other area's of work that everybody accepts without his contract being updated. I know many people in IT who have a contract saying that they are say a DBA and yet they do sys admin, backups and other tasks that build up that if they just worked to contract and did database work then other area's would fall apart. Though is very much a area of managment limits and avoiding giving people pay rises that just seems to happen. But in IT you would find your contract being very open in definition of your role or be updating that contract weekly (can you halp me move this printer - sure let me get that added to my contract so I'm allowed to move heavy objects) and could get silly. But from an impact perspective, if they can do a 2 week holiday without them being missed beyond there defined role then your probably safe, though if you end up calling them during that period then in short your being unfair to that employee (or allowing him to be unfair to his or her self, more the case); Which could have a noticable impact - not just in situations of them unable to do there job, but if they leave (which is how most communicate that they feel undervalued instead of talking with you about it, least with many IT types who are good at the job).
But for an employee, this type of cost for the return is frankly a no brainer given the example costs and with that I still can't help feel that the prices are perhaps too cheap and some actuary has messed up. I hope that ain't so, and my be that every other type of insurance is so over priced that I'm conditioned that way. But having worked in reinsurance, I do feel the risk and as such the cost of claim do seem somewhat out of sync and could be an insurance industries asbestos waiting to happen. But were all IT geeks and we now know how contracts and courts work so again this type of insurance for the cost is really just a no brainer that it can actualy save you and your family money to the extent that it is cheaper to insure the whole company instead of just yourself for family peace of mind - crazy and yet that is the case. But do check all the contract clauses as it does seem too cheap.
Currently working for a company that doesn't offer LTD, and it scares me whenever I think about not having it, but not enough to buy it on my own. It's definitely a major plus.
Just give me the money in my paycheck and let me do with it as I see fit. The money I would spend on insurance I put into a personal savings account. I insure myself.
I spent $1200 total on health care costs in the last 3 years. Now that Obamacare requires I buy insurance or else get hit with a penalty, I'm going to be spending a lot more than that every year.
Why should it be cheaper to have group policies through employers? The entire freaking point of the insurance company is that they are pooling money from a bunch of people over time in the form of premiums to be able to distribute to a minority who need it in emergencies. It's already a paramutual arrangement, why do we have to obfuscate it with employer group policies?
Insurance, at least as it is done in the US, is a scam. It is an oligarchy designed to keep medical services prices high so they can justify outlandish premiums as merely just a small percentage margin.