Why I made healthcare a priority for my startup.
It’s been over 4 years since I started DBC. A year into the organization, I hired my first part-time employee. 18 months into the journey, that employee went to full time hours. Benefits were discussed, but (luckily for me) the employee was still on the insurance of her parents. We could keep costs down while growing.
You see, it’s always been a priority for me to make sure my employees have health insurance. I had the greatest insurance and other benefits during my time at Bain & Company (the stories are true, it is a truly great place to work) and I wanted to make sure my employees enjoyed the same stability. This isn’t common amongst startups or large businesses. In fact, as of 2016 only 56% of companies offer health insurance to their employees [Kaiser Family Foundation]. The lionshare of companies that don’t are under 50 employees, as companies larger than 50 are required to by law (and 90% of them do!). I wanted to ensure that we were different. I’m proud to say that in year 4, we met that goal.
DBC covers 100% of our employee’s Health Insurance Premiums.
Here’s why
It’s better for productivity.
Healthy employees get more done. Sure, having a young workforce as startups do is a plus, but what happens when an employee is paying for insurance premiums, only to turn around and pay a copay? They will typically delay seeking treatment. Sick, in pain, or uncomfortable employees are not productive ones. A 2012 paper from Truven Healthcare’s Teresa Gibson, Harvard’s Michael Chernew and the University of Michigan’s A. Mark Fendrick found that as co-payments went up, productivity fell.
It was extra important for me to find usable healthcare coverage. Extras like a waived copay/deductible for routine physicals encourage our employees to seek preventative care. We found a plan with a decent deductible, low co-pays and a decently-sized regional network. Ideally, we eventually want to expand the network nationwide, but this plan is a great value. (We used a broker to shop the market. You should, too).
There’s a business case for quality health insurance for smaller organizations. As much as I want our employees to be healthy, I need them to be present. Many small teams are reliant on each individual, and an extended absence isn’t buoyed by the redundancy found in larger organizations.
Healthy employees have 25% better job performance than less healthy coworkers. And they take 40% fewer sick days.
It helps attract and retain talent.
Before the ACA, it was especially difficult for creatives to obtain health insurance. When searching for my first full-time design job, I filtered out the “contract” positions and the results of positions went down drastically. The Freelancers Union plays an amazing role in supplementing this deficiency in the market. However, in seeing this, I knew the top talent could be enticed by offering what no one else seems to.
These days, we’re not seeking 1099 contractors, but long-term W2 employees that will help our clients realize the full potential of their brands. If we had a revolving door of designers, there would be no continuity of growth in the longer term projects we take on.
This is a concern that goes beyond the creative industry. When surveyed about the challenges in recruiting employees, small business owners identified:
A lack of qualified candidates (59%)
Trouble meeting salary expectations (45%)
Competing with larger brands (29%)
Not offering the right benefits (26%)
DBC currently has 100% participation in our health insurance plan (admittedly easy to do, with 3 full-time employees) but in conversations with candidates, I learned that this is a very attractive offering and I sought to make it a reality for everyone.
Because it’s attainable.
In the past, many small business owners faced monumental hurdles when providing health insurance to their employees. Small businesses employing women faced higher premiums in most states, not to mention if any of their employees had chronic illnesses, or pre-existing conditions. While large organizations are able to spread these costs around, fewer employees to spread risk resulted in fluctuating premiums year after year.
The Affordable Care Act addressed these issues. Being able to plan and budget for our health care costs have been essential to our plan for growth. Other small firms have benefited as well, lowering the number of workers without health insurance coverage.
[We sourced this data from testimony to the Committee on Small Business and Entrepreneurship by Richard Frank, former Assistant Secretary for Planning and Evaluation. It has since been removed from HHS.gov]
In addition, there are tax credits available to small businesses that provide these benefits to employees. According to Bloomberg BNA “Entrepreneurs and Small Business owners are heavy users of the marketplace exchanges created by the ACA.”
Attainability is a reason I was able to build DBC in the first place. Before and since leaving Bain, I’ve sat with a few insurance brokers (Alix Bien-Aime is an amazing one) and it wasn’t all doom and gloom. They made it very clear that I wasn’t going to have the amazing insurance I had at a price point that was in any way reasonable, but as a young person that doesn’t need to go the doctor regularly, I would be more than fine. The availability of health insurance encourages entrepreneurship. If there was no way to get health insurance as an individual, a lot of people would be beholden to their current positions.
It’s the right thing to do.
I’m fortunate enough that I can define the values I want my company to have. It’s the best part of being an entrepreneur. It is one of my personal core beliefs that access to affordable and effective healthcare is a fundamental human right. You may not agree and heck, my current and future employees may not agree, but they benefit nonetheless.
I look for DBC to attract the most talented, real world designers. And then a lot is demanded of them. The last thing they should have to worry about is if they can afford their healthcare. Many Americans face this challenge today. As a responsible business owner, I seek to alleviate these unnecessary burdens where I can and focus on what we’re really good at: Building Effective Brands for Growth Organizations. Our employees, clients, and community benefit, and for DBC, that’s worth the cost.
Would you like to learn more about DBC, our total approach to branding, and how we help organizations grow? Feel free to reach out to me, or visit https://studiodbc.com/about/ and let’s chat about brands. I’m also happy to speak about our health insurance journey, and pass along anything I’ve learned along the way.
Carlos Williams is the founder of DBC and an expert in brand design and implementation. Carlos leads the creative development of the visual identities DBC crafts. Carlos is the point of contact for most DBC clients, from large corporations to non-profits.
