Zenefits, the free, YC-backed “set-it-and-forget-it” service thats helps small businesses worry less about employee benefits, made a pair of announcements at Disrupt NY 2013 this morning: They’ll now be able to handle payroll duties, and they’re expanding the service to New York.
Zenefits takes pretty much all of the paperwork out of getting group health coverage. If you need a new plan, it’ll fetch a bunch of quotes for health/dental/vision services. If you hire a new employee, Zenefits handles getting them covered. If you terminate someone, you click one button and Zenefits pulls them from payroll, terminates their coverage, and helps the employee get rolling with COBRA coverage. Even if you’ve already got coverage, you can start using Zenefits — they’ll sync all of your employee coverage data, and take over as your insurance broker.
It’s all 100 percent online, no old-school faxin’ nonsense required.
Until today, Zenefits was a strictly Californian company. This is because Zenefits is, at its core, an insurance broker. When a company buys a new plan through Zenefits, Zenefits gets paid a commission by the insurance company… for each and every employee, each and every month. This allows them to be completely free to the small business, but also requires Zenefits to get approval on a state-by-state basis.
Seriously, just think about that: they’re totally free to the end user, but make a non-trivial chunk of change every month for each of them. They fix a problem (that is, that dealing with health insurance is the worst), and a huge chunk of the processes are automated. These guys are going to be friggin’ rich.
With today’s news, the company will be expanding to New York for the first time.
Simultaneously, the company has also announced plans to get into payroll services.
“Health insurance is a headache,” says Zenefits Co-Founder and CEO Parker Conrad, “but by solving that we’re really only solving half the problem. Many of the clients we’ve spoken with today want us to manage their payroll as well, instead of just syncing with it. Starting with TechCrunch Disrupt New York, we’ll actually take it over and manage it for them.”
With the new payroll services, an employer can just tell Zenefits of a new hire and provide them with the employee’s name, email address, salary, and — if applicable — the stock options they’ll receive. Zenefits will generate the offer letter (either from a template you provide, or one of theirs) and the standard intellectual property agreements, as well as reach out to the employee for the standard onboarding details — their Social Security number, their tax information, etc. The new employee will then be added to the payroll system, and the aforementioned benefits enrollment process will begin.