Help is on the way for employers grappling with rising healthcare costs after two separate startups closed funding to tailor benefits to the needs of employees.
Thatch raised a $38M Series A to dislodge health coverage from employment by providing individual coverage health reimbursement arrangements (ICHRA) that let employees choose their own benefit plans.
- By blending fin-tech and health-tech tools, Thatch gives employers a way to “abstract away the complexity” of the ICHRA law that passed in 2020, which enabled them to provide a budget to employees for selecting health benefits based on their needs.
- The Thatch platform streamlines budget setting, plan selection, and lowers costs through pooled purchasing power. If employees spend less than their budget, they receive a Thatch debit card to use for things like prescriptions, copays, and therapy.
Sounder Benefits hatched from the Redesign Health incubator with $7.5M to take a more hands-on approach to benefit design using AI-driven insights and strategic advisory services.
- Sounder helps employers with <1k employees create a three-year benefit roadmap then guides their transition to level-funded and self-funded plans, providing HR teams with white-glove support and collecting revenue on a per member per month basis.
- Using employee health data, Sounder identifies when employers have enough of a particular health need (like cancer support), then contracts with companies to provide access to solutions (like Jasper Health).
The back-to-back boost for benefits businesses arrives as employer healthcare costs are expected to spike 9% in 2025, surpassing $16k per employee.
- Employers continue to bear the brunt of rising costs, and are looking for more ways to avoid passing expenses onto employees in a tight labor market.
The Takeaway
Most current health benefits solutions were designed for a workforce that stayed with a single company for most of their careers, and have had a tough time keeping up with today’s dynamic labor market. Thatch and Sounder Benefits are among a new pack of startups building the infrastructure for a modern benefits experience, and it seems like both employers and employees have a lot to look forward to.
