This content first appeared in the St Pete Catalyst article by Bill DeYoung
Seedfunders, LLC has invested in Tampa-based Benebay, a technology startup with an innovative approach to helping small business owners reduce costs, while still maintaining essential (and affordable) healthcare services for their employees.
Benebay provides an online self-insurance portal, a technology suite with secure Cloud delivery, built-in intelligence and automation. The system utilizes advanced health insurance administration technology, including cutting-edge claims administration tools with real-time adjudication capabilities.
Seedfunders has committed to invest $375,000 in Benebay, which will allow the company to launch into the market later this year. Early discussions with potential clients have begun, said Seedfunders CEO David Chitester.
“It’s an underserved market for small businesses to have their own self-funded healthcare programs,” Chitester explained. “Companies would like to provide quality healthcare for their employees, but the costs are getting out of control. A lot of large companies already do this, but a lot of small businesses can’t afford it because there are no programs.”
Some existing self-insurance programs are utilized for large businesses, but aren’t cost-efficient for employers with a small workforce.
Benebay, Chitester said, will change the rules. “It’s a startup, so obviously we’re just getting in to it,” he added. “But all the research shows that this is a really needed program.”
According to the Self-Insurance Institute of America, the advantages of a self-insured plan are:
- The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a ‘one-size-fits-all’ insurance policy.
- The employer maintains control over the health plan reserves, enabling maximization of interest income – income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
- The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
- The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).
- The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium’s dollar value.
- The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.
Benebay co-founder Andrejs Strods will stay on as special advisor. “We’re bringing in our own CEO, and appointing a five-member board of directors,” said Chitester, who will serve on the board, along with Seedfunders partner Tommy Simon.
It’s the third investment this year for Seedfunders, which invests in pre-revenue, scalable technology startups in Florida. Earlier in 2018, the company invested in TSO Life, a technology program serving the senior care industry, and announced a partnership with the Adrenaline Venture Fund, to bridge the seed to early stage funding gap and invest in high potential technology startups in Florida.