Health insurance is the second biggest cost for businesses behind payroll, but picking the best plan is a nightmare. That’s why Sherpaa just raised $1.85 million to make the decision for you, cut your costs, and keep your employees healthy. With a yearly Sherpaa plan, your employees also get 24/7 telephone access to a group of doctors that can answer medical questions and prevent needless emergency room visits.
Sherpaa is only in New York City right now, but the funding will allow it to expand to SF, DC, and Chicago, build out its product and three-person team, and save more companies up to $4,000 per employee on insurance. It’s already helping Tumblr and 9 other teams be fitter, happier, more productive.
Most of the funding comes from O’Reilly AlphaTech Ventures (making its first healthtech investment), Collaborative Fund, and one of my recent favorites First Round Capital, which is backing big shakeups of heavily regulated industries like student loans via Upstart, and venture capital via FundersClub. A few angels are in too, including the ex-president of Tumblr John Maloney, and OpenX and Jirafe founder Scott Switzer.
When you look at the stats, the need for Sherpaa is clear:
- Business pay $10,000 to $15,000 a year per employee for health insurance
- The insurance plans are incomprehensible 75 page documents that can trick buyers
- Many unwisely purchase low deductible plans that make them pay for healthcare their employees don’t use
- Premiums typically go up 15% a year, and some businesses get gouged with increases as high as 30%
- 70% of expensive emergency room visits aren’t emergencies, and 70% of primary care doctor visits didn’t require a visit at all
Sherpaa aims to solve these problems. It tries to reduce per employee costs by $1,000 to $4,000, and keep premium increases around 5% to 10% a year. The team’s insurance experts parse the available insurance plans and suggest the best one for each Sherpaa client. It typically suggests high deductible plans that most employees don’t exceed, and it recommends businesses give their teams $2000 pre-paid debit cards to make payment easy.
When employees get sick or hurt, they can call the Sherpaa doctors. They’ll suggest whether to go to the ER, primary care doctor, see a specialist, or just stay home. That gives employees peace of mind and keeps them on the job. It’s like having a doctor in the family.
Sherpaa is trying to get a little piece of a very sweet pie. Co-founder Jay Parkinson passionately explained to me “There’s a huge opportunity to disrupt the patient experience. Healthcare is a $2.5 trillion industry. You can’t just go in an disrupt [the whole thing] but you can play around the edges [and be] 100X bigger than Pinterest.”