I think you're assuming that people have enough money saved to start a small business with zero income for an extended period of time, which I highly doubt is a common case. And what about the employees you have to pay enough to cover those things for?
Not at all -- I would not expect someone without savings to work for nothing at a startup, or try to start their own startup without outside funding and a salary. But it's important to recognize that both health insurance and Federal student loans have programs in place to support people who have no income.
