Venteur, a startup that administers individual coverage health reimbursement arrangements, or ICHRAs, has banked a $20 million funding round to continue building its reach.
The series A round was led by Informed Ventures and American Family Ventures and also includes backing from Catalyst by Wellstar, Morgan Health and Ingeborg Investments. Stacy Edgar, CEO and co-founder of Venteur, told Fierce Healthcare that the diverse group of investors gives the young company the opportunity to learn from key leaders in addition to the cash infusion.
Venteur offers ICHRA coverage to employers via its platform, which enables employees to select the health coverage that best suits their needs. The announcement likens the process to having a 401(k) to save for retirement.
Edgar said ICHRA offerings have gained traction in the employer space as they put a focus on personalization, flexibility and individual choice.
"It's not just that you have to have a product, you have to basically think about the infrastructure created to enable that product to succeed," she said.
Venteur's platform leans on artificial intelligence to help employees select a plan that meets their needs, taking the complexities of managing coverage out of the employers' hands. ICHRAs are also more flexible around who can access insurance, as they open the door to coverage for part-time employees and allow for portability when people move to new regions or jobs.
ICHRAs also offer a promising avenue for small and midsize businesses to offer more comprehensive options to workers, as health benefits are often cost-prohibitive for these organizations. Dan Mendelson, CEO of Morgan Health, said in an interview with Fierce that the banking giant hears frequently from firms of this size about their struggles around health costs.
That's why Morgan Health saw potential in backing an organization like Venteur, he said.
"These businesses are deeply concerned about increases in cost in particular, and they're looking for quality as well, because there's no point in in adopting a low quality benefit," Mendelson said. "Employees don't like it, and, ultimately, it doesn't achieve its purpose."
The funding marks Morgan Health's ninth investment and the first in this space, as the team has largely focused to date on the large employer market. However, Mendelson said the goals of reducing costs for employers and driving innovation make sense in this arena.
Edgar said working with Morgan Health opens the door to the employer market but also to the wealth of knowledge the bank has accumulated in the financial space, which could offer lessons for the future of Venteur.
"ICHRA's often called the 401(k) of healthcare," she said. "What are the things we might unlock along that journey if we follow that?"