Thatch Raises $40 Million For Employee Health Coverage Offering
Health insurance startup Thatch has reportedly raised $40 million in Series B funding.
That’s according to comments by company executives Thursday (April 3) to TechCrunch. According to the report, Thatch helps employers offer their workers Individual Coverage Health Reimbursement Arrangements (ICHRA).
A typical HRA covers out of pocket expenses like therapy, braces and prescriptions, the report noted, while an ICHRA also lets employers use the funds to cover individual medical insurance.
“So imagine each employee gets $1,000 a month — one employee might buy a Kaiser HMO plan for $800 a month and spend the remaining $200 month on therapy, while another employee might spend $1,000 a month fully on a United PPO plan. Previously, HRAs could not pay for insurance,” CEO and Co-founder Chris Ellis told TechCrunch.
The Thatch marketplace lets employees pick from different health insurance options, while also offering a debit card that allows them to spend their remaining balance.
“We see about 50% of members carry a balance left over of around $250 a month on average,” Ellis said, adding that those employees can then use that balance to pay for things that health insurance doesn’t cover.
The founders say that because the ICHRA rule is just a few years old, there is room for innovation, like customizing business health benefits by grouping employees based on factors such as hours worked or geographical location. This lets businesses tailor health plan offerings to different classes.
“It makes no sense for healthcare to be dependent on your employer,” said Co-founder and President Adam Stevenson. “Rather than selecting one-size-fits-all benefits for their teams, ICHRA instead allows businesses to give their employees tax-free money to spend on healthcare in the way that works best for them.”
Research by PYMNTS Intelligence has shown the challenges Americans face when paying for healthcare, with women under particular strain.
Last year’s Women’s Wellness Index Report showed that women were disproportionately burdened by medical costs, with 15% of women living paycheck to paycheck pointing to healthcare bills as a prime reason for their financial troubles.
That’s compared to 12% of men, a disparity that showcases the gendered nature of economic vulnerability in healthcare.
“The situation is even more severe for women who struggle to meet their monthly bills, with 23% saying medical costs are a key factor in their financial difficulties, while the figure for men is notably lower at 18%,” PYMNTS wrote.
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