I work for Insperity in our Silicon Valley office. We partner with growing companies to provide all the tactical components of HR. I would agree with Gerrit in saying that this is not something most companies look at in terms of 'year 1' or 'year 2' but rather as something they need to put in place as soon as their level of funding justifies it. HR service and healthcare benefits are a significant investment for an early stage company. However, in Silicon Valley most employers know that employee benefits are a key factor in attracting and retaining top talent because startups compete in the same labor pool with companies like Google, Apple, & Intel that offer impressive packages. We help early stage companies offer their employees Fortune 500 level benefits and help them gain the competitive edge they need.
I have relationships that do a fantastic job at benefits for startups. That being said- not many. The ones that do not receive funding I've found a much smaller percentage offering healthcare, but those who receive significant investments, especially when large pieces of the investments are being put towards hiring and retaining highly capable individuals we see it more often
Depending on the growth strategy and recruitment needs, those startups seeking top talent will offer health, dental, vision, and life right off the bat and especially if there are plans for additional recruitment. Starting while you are small offers additional advantages with rates and other services too.
I think it vastly depends on the industry. For example, I have worked with and provided benefits for many start-up law firms. It is a must to offer good benefit packages to attract the best applicants.
We work as the HR Department for a ton of Start-ups - most don't during the first year, but really want to. By year two, they're generally looking into it if they haven't placed it already. Benefits, while expensive, send a really important message about how much you care about the wellbeing of your employees.
As some have said, and in relation to those that I've been around, it really depends based on what the company can afford. Most of those that I've been around have had to pay for health insurance on their own (CEO's for example). So it's really kind of a mixed bag depending most likely on the region you are in and the status of those startups.