Thatch Raises $40M to Revolutionize Employee Health Benefits

Thatch, a startup reshaping health insurance for employers and employees, has secured $40 million in Series B funding led by Index Ventures. Existing investors like Andreessen Horowitz (a16z) and General Catalyst also participated, bringing Thatch’s total equity funding to $84.5 million since its launch in 2021.

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A New Approach to Health Benefits

Thatch simplifies Individual Coverage Health Reimbursement Arrangements (ICHRA), a relatively new option that allows employers to fund employee health insurance. Unlike traditional HRAs, which only cover medical expenses, ICHRA lets employees use funds for insurance premiums as well. This flexibility empowers employees to choose their own healthcare plans, whether it’s a Kaiser HMO, United PPO, or other options, while also covering additional medical expenses.

How Thatch Stands Out

The platform provides a marketplace for employees to select health plans, along with a debit card for managing leftover funds. With many users saving an average of $250 per month, they can allocate these funds to cover costs beyond insurance. Additionally, Thatch enables employees to switch carriers if they find a better option.

To expand its reach, Thatch has partnered with QuickBooks, allowing seamless ICHRA integration for businesses. A similar partnership with ADP is in development.

Strong Growth and Future Plans

Thatch has onboarded over 1,000 companies within 18 months, with revenue growing 8x year-over-year. Notable customers include Dave’s Hot Chicken, Jersey Mike’s, and PeopleTech Partners. With a team of 72 employees, Thatch continues to innovate in the intersection of fintech and healthcare.

Industry Experts Backing Thatch

Co-founders Chris Ellis and Adam Stevenson bring expertise from MIT, Humana, and Stripe, ensuring a strong foundation in healthcare and fintech. The recent hiring of Gary Daniels, former CEO of UnitedHealthcare’s Pacific Northwest division, further strengthens Thatch’s growth strategy.

The Future of Employee Healthcare

Thatch is leading a shift in employer-sponsored healthcare by replacing outdated systems with a modern, flexible, and user-friendly approach. As partner Jahanvi Sardana of Index Ventures puts it, “Thatch isn’t just tweaking the system; they’re replacing it with something fundamentally better.”

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