Case Study: Hourly Inc.

Hourly Inc
Industry Software/Technology
Location California
Website hourly.io
Full-time U.S. employees  33

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Ever since Tom Sagi co-founded Hourly with his business partner, they provided group health insurance to their employees. However, because of healthcare cost spikes and Hourly’s rapid company growth, the company wanted to find a way to reduce their insurance costs while still supporting their employees’ health and well-being.

Tom initially researched self-insurance options, but after learning about PeopleKeep through an online search, he knew a group coverage health reimbursement arrangement, or GCHRA, was the solution. PeopleKeep’s benefits advisors discussed how this integrated HRA could integrate with Hourly’s group health insurance to lower their overall health benefit costs and save their employees more money. Won over by these factors, Hourly signed up with PeopleKeep.

Employees have responded positively to their GCHRA benefit and the reimbursement process and the company’s growth has soared. Additionally, Tom and his HR manager are saving significant time on benefits administration and the company is saving up to $100,000 a year to put towards more employee benefits and perks.

“By paying extra for a GCHRA to supplement our group health insurance plan, we ended up with a much better benefits package.”

Tom Sagi

Co-founder and CEO

5

minutes per month

$100,000

in annual savings

Enhanced

benefit supports retention and hiring

“Our number one problem with group health insurance was the cost. We wanted to provide great benefits, but great and affordable benefits were almost impossible to find.”

The company

Hourly is a Silicon Valley technology company with a single mission—help hourly employers and employees achieve their goals better and faster. To make that happen, they have built the world’s best digital platform to manage, pay, and insure the hourly workforce. Hourly brings enterprise-level technology solutions to simplify workers’ compensation insurance, payroll, and real-time tracking for small business owners.

The challenge

When co-founder and CEO of Hourly, Tom Sagi, started his business, he made offering group health insurance to his ten initial employees a priority. He wanted good health coverage in place, especially because he had a few older employees in his workforce that had more significant healthcare needs.

During the past year, Hourly began searching for new options. They wanted to keep group health insurance and better support their employees’ health, but they also wanted to decrease the rising price of health insurance. Their best bet was switching to a high-deductible health plan, but on its own, the plan would place a heavier burden on employees to pay more upfront before their insurance would contribute. 

Intent on finding the right solution, Tom was determined to do right by his employees by supplementing their group health insurance plan with a benefit that would mitigate their high out-of-pocket costs.

The solution

In Tom’s initial research, he thought self-insurance would work. But after some thought, he felt his company was too small for it to be a true benefit. After finding PeopleKeep’s website and reading the positive reviews, Tom scheduled a call with their benefit advisors. During the call, Tom discovered that an HRA provided a way for small businesses to provide healthcare benefits, and that an integrated HRA would work with group health insurance.

“We looked into self-insurance but it didn’t make sense to us because we are a small business. That’s when we found out a GCHRA was our best option.”

Tom learned that PeopleKeep offered an integrated HRA called a GCHRA. This type of supplemental health benefit could be layered alongside Hourly’s group health coverage. Employees would get a set allowance of tax-free money to supplement their group health insurance plan, allowing them to be reimbursed for out-of-pocket expenses and gain greater control over their health benefits. Tom immediately liked the product and its flexibility, so Hourly signed on with PeopleKeep. 

Hourly offers three group health insurance plans for employees to pick from, so they set up the GCHRA to work with each plan. Generous allowances were selected according to the maximum out-of-pocket amounts for each of their plans. 

In addition to covering their employees’ out-of-pocket costs and providing employees with greater autonomy over their health benefits, with the GCHRA, Hourly could also save money on their benefits package.

The results

Since enrolling in the GCHRA, Hourly saves nearly $100,000 per year on benefits, which allows management to put those savings toward other employee benefits and perks. Employees have responded positively to the GCHRA, particularly its many reimbursement options, structure, and its ability to help them cover costly medical expenses. The company has even added about 20 eligible employees to the GCHRA benefit since the benefit launched.

Tom was the benefits administrator when Hourly initially onboarded the GCHRA last year. Administrator duties were quick and easy. PeopleKeep’s documentation review team evaluates and verifies employee expenses and sends an email when reimbursements need to be paid. Tom would be able to schedule these reimbursements within five minutes once a month. With the company’s rapid growth, his new HR manager has taken over these tasks, leaving Tom with more time to run his business.

“If you really understand the benefit, you can see how it’s a good idea. For me, a GCHRA makes a lot of sense for my business.”

Tom believes it can be tricky for small businesses to offer quality health insurance. Employees are often used to traditional group insurance, but they may not always realize how expensive it is for employers. Tom likes that employers can use a GCHRA to save money and give employees an allowance for out-of-pocket costs at the same time. 

With PeopleKeep’s help, the GCHRA benefit has been successful for Hourly, and they are confident the benefit will continue to positively impact their business well into the future.

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