Zenefits Rolls Its HR Automation Services Out To All 50 States

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Back at TechCrunch Disrupt NY in April, a company called Zenefits debuted a service that aimed to automate away many of the most annoying bits involved with running a startup or small business. Hire someone? Give Zenefits the basic details, and they’ll get them insured, on payroll, etc. Fire someone? Click a button to pull them off payroll and send out the COBRA details. Life event changes? They handle it. And they do it all for free.

If your company doesn’t have group health coverage, Zenefits can fetch all the quotes you need and help you pick a plan. If your company does already have health covergae, Zenefits still works — they’ll just take over as your insurance broker.

At the time, Zenefits only operated in two states: California, and New York. Today, they’re rolling out to all 50.

There’s one catch, though: for now, they’re only rolling out to the other 48 states for companies with 20+ employees. Come January 1st of 2014, however, they’ll be in all 50 states for all companies with at least two employees.

Why draw that line? Zenefits CEO Parker Conrad tells me it all comes down to changes in the health insurance system put into play by the Affordable Care Act. Many of those changes don’t go into effect until January 1st, 2014 — but once they do, it’ll be considerably easier for them to pull insurance data and quotes for smaller teams.

As you may recall from our previous coverage, Zenefits makes its money by acting as your insurance broker. When a company buys a plan through Zenefits, Zenefits gets a commission from the insurance company. So the small business pays nothing, but Zenefits still makes money for each employee the business brings onboard. Oh, and they make that commission each month. Sweet deal, right?

In addition to the insurance and payroll services already in place, Zenefits is also introducing a new suite of compliance (read: things you have to do as your company gets bigger) tools. Here’s some of the stuff they handle now:

  • Sending out Affordable Care Act notifications to all new hires
  • Distributing employee handbooks and handling getting them signed
  • In some states, companies with 50+ employees are required to lead sexual harassment training for managers. Zenefits now handles that with a built-in training program.
  • Automatically collects Equal Employment Opportunity data as required for companies with 100+ employees and handles reporting it to the government

As of July of this year, Zenefits had raised $2.1M.