Thatch raises $38 million to simplify employee health benefits
The company lets employers offer an ICHRA, so they can reimburse employees for their health expenses
Over 60% of people under age 65, or about 164.7 million, get their health insurance through their employer, which is a burden on employers, who don't want to choose employees' health plans, while also dealing with the time-consuming and complex process of managing benefits, compliance, and employee needs.
Thatch, a personalized health benefits platform, wants to make the process easier by providing a platform that makes it easy for businesses to offer personalized healthcare experience to their employees using an Individual Coverage Health Reimbursement Arrangement (ICHRA), which allows them to offer employees a monthly allowance of tax-free money, which they can use on health related expenses.
The company says its is mission to decouple health insurance from employment, and now it has fresh new funding to help make that a reality, announcing a $38 million Series A funding round on Thursday led by Index Ventures and General Catalyst, along with new investors SemperVirens and The General Partnership, with participation from existing investors including Andreessen Horowitz and Avid Ventures.
The ICHRA law, which passed in 2020, allows employers to provide tax-free dollars for employees to purchase their own health insurance plans. Thatch, launched in 2023, simplifies that process by offering an interface that includes budget setting and fund allocation for employers; personalized plan selection tools for employees; integration of tax incentives and credits; and cost savings through pooled buying power
With Thatch, instead of choosing specific benefits, employers set a budget and then allow their team members to choose the healthcare experience that's right for their needs. If employees spend less than their budgeted amount on insurance, they receive a Thatch Visa debit card they can use to pay for healthcare costs, like prescriptions, copays, therapy, and more.
Thatch also manages administration and compliance with ThatchBot, an AI-powered service available 24/7 to every employee. For example, employees can send a text to ThatchBot with photos of receipts for compliance and convenience, ask whether an expense is covered by their budget, or text to get help with anything related to their account.
So far, Thatch has helped hundreds of companies across multiple sectors, including AI startups, small businesses, nonprofits and large enterprises with thousands of employees.
The funding will be used to expand Thatch's team, continue to scale its technology platform, and accelerate customer acquisition.
"There's finally momentum towards a health insurance market that serves real people's needs," said Chris Ellis, CEO and co-founder of Thatch.
"We're seeing interest from employers, brokers, and certainly employees who all recognize the singular opportunity to get high-quality healthcare at a reasonable, transparent cost. With the support of this funding, we're ready to scale operations to meet the exploding demand."
(Image source: thatch.ai)
