# Startup deals for health insurance

Source: https://www.getprescience.com/guides/startup-health-insurance-deals
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-11
Updated: 2026-10-11

There's no coupon code for health insurance, but startups leave real money on the table. The best "deals" are investor perks, tax rules most founders don't use and avoiding the teaser rates that turn into 40% renewals. Here's what I'd tell a founder friend.

- **Investor perks:** Check your fund's perks page
- **Small business tax credit:** Up to 50% of premiums
- **Prescience admin fees:** $0
- **Minimum group size:** 2 employees

## 1. Check your investor's perks page

Many venture firms negotiate benefits offers for their portfolio companies. Check your investor's perks page or ask your platform team before you buy, and tell any provider you talk to who backs you.

## 2. Don't fall for teaser rates

The most expensive "deal" in startup benefits is the cheap first year. PEO medical rates around $550–600 per employee per month are common in year-one quotes founders show us; two or three years later many of the same teams pay $1,000–1,200. Before you sign, ask how renewals are priced and what happened to similar companies at year two.

## 3. The Small Business Health Care Tax Credit

If you have fewer than 25 full-time equivalent employees with average wages below an IRS limit that's adjusted each year, pay at least half of employee-only premiums and buy a plan through the SHOP marketplace, you may get a tax credit of up to 50% of what you pay in premiums (35% for tax-exempt employers), for two consecutive years. Most venture-backed startups pay too much in wages to qualify, but early teams and lower-wage businesses should check.

## 4. Use the tax rules you already have

- **Employer contributions are deductible** and tax-free to employees.
- **Section 125 plans** let employees pay their share of premiums pre-tax.
- **HSAs** let employer money for medical costs go in tax-free and stay with the employee. For 2026 the limits are $4,400 self-only and $8,750 family. See [What is an HSA?](https://www.getprescience.com/guides/what-is-an-hsa)

## 5. Stop paying admin fees

PEO fees of $50–125 per employee per month are common in the bills founders show us, and ICHRA platforms charge per enrollee too. Prescience charges no admin fees.

At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

- **An effective $0 deductible,** so the plan helps from the first visit.
- **Simple copays** shown before a visit, capped by a low out-of-pocket maximum.
- **A broad national PPO network,** plus providers we contract with directly.
- **24/7 physician-led care navigation:** a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.

## Frequently asked questions

**Are there health insurance discounts for startups?**

Not coupon-style discounts, but there are real savings: investor perks, the Small Business Health Care Tax Credit for qualifying small employers, pre-tax premium and HSA rules, and avoiding admin fees.

**Who qualifies for the Small Business Health Care Tax Credit?**

Employers with fewer than 25 full-time equivalent employees, average wages under the IRS limit for the year, at least 50% of employee-only premiums paid by the employer and a plan bought through SHOP. The credit is up to 50% of premiums for two consecutive years.

**What is the cheapest health insurance for a startup?**

The cheapest premium isn't always the cheapest plan once fees and renewals are included. Compare total annual cost over two years. Prescience quotes are usually 10–20% below comparable fully insured coverage with no admin fees.

## Sources

- [HealthCare.gov, The Small Business Health Care Tax Credit](https://www.healthcare.gov/small-businesses/provide-shop-coverage/small-business-tax-credits/)
- [IRS Revenue Procedure 2025-19 (2026 HSA and HDHP limits)](https://www.irs.gov/pub/irs-drop/rp-25-19.pdf)
- [U.S. Chamber of Commerce, PEOs vs. insurance brokers](https://www.uschamber.com/co/run/human-resources/peos-vs-insurance-brokers)