San Mateo, California-based Collective Health has raised $38 million in a round led by Founders Fund and NEA, with participation from Formation 8, Redpoint Ventures, RRE Ventures, Subtraction Capital, and Rock Health.
Collective Health has developed a software as a service offering that helps companies that have 100 or more employees transition to a self funded insurance plan, which employers can customize to fit their needs.
“Recently, a lot of attention has been paid to making individuals better consumers of healthcare, and health insurance in particular," Collective Health Cofounder and CEO Ali Diab said in a statement. "However, in the United States, employers drive most health insurance purchasing decisions and cover the lion’s share of healthcare costs ... Collective Health has developed the first self-insurance SaaS platform for American employers to sponsor their employees’ healthcare on their own terms, without the need for a traditional health insurance plan.”
A company spokesperson told MobiHealthNews that self funding is something a majority of companies that have 5,000 or more employees do, but the process of transitioning into a self-funded arrangement is costly for smaller companies to consider. Some barriers to transitioning include hiring HR support and paying consulting fees, neither of which are necessary with Collective Health. Collective Health also rents access to large provider networks so employees won't have difficulty finding care in their area. When employees visit the doctor, similar to how a large payor works, they can show their Collective Health insurance card and receive coverage for health services. The company charges employers a flat fee per employee per month for the service.
Collective Health can also integrate other digital health services into their offering, including concierge doctor provider One Medical Group, physician locator service Better Doctor, and employee wellness service Jiff to offer employers other services that they can add to the plan. Employees can access their benefits information online or via a mobile device through a portal that Collective Health has created.
Earlier this week, corporate wellness platform Keas launched a new product for large self-insured employers, called Health Hub. It aims to be a comprehensive health benefits management platform that incorporates Keas’s existing employee wellness offering as well as health management and reporting, disease management programs, smoking cessation programs, gym memberships, and cost transparency tools.
Others in the self-insured employer space include Zenefits, a fast-growing company offering free software for managing benefits, and Maxwell Health, an online benefits manager which, like Keas, integrates with activity trackers like Fitbit and Jawbone.