Sana Benefits, a manager of self-funded insurance plans for small businesses, said it has raised $20.8 million in a recent round of funding as it looks to roll up all of the latest startup health benefit providers into a convenient package for small businesses.
Self-financed insurance plans are set up by companies to pay out of pocket for their employees’ healthcare and are typically cheaper, because employers can pick and choose which services they offer.
According to Sana Health co-founder Will Young, most companies wind up spending too much because they buy off-the-shelf plans from the big insurance companies like United Healthcare, Anthem Blue Cross Blue Shield, Aetna, Cigna or Humana.
The company touts partnerships with startups like Beam Dental for dental coverage, PlushCare for telemedicine, Calm and Ginger.io for mental wellness, ClassPass for physical fitness and Maven Clinic for maternity care.
Its pitch attracted the attention of Gigafund, Trust Ventures and mark vc, which came in to back the company’s $20.8 million Series A round.
“Sana’s disruptive model for health insurance empowers small businesses to both cut costs and improve employee benefits,” said Stephen Oskoui, managing partner of Gigafund, in a statement. “We believe that only a win-win solution like Sana can make a real dent in the healthcare crisis.”
What do employees get? Sana’s plans range from health insurance offerings with a $4,000 deductible and $6,650 in out of pocket maximum payments of $6,650 to a $0 deductible plan with a $1,250 out of pocket maximum expense for individuals.
“We save our customers 20% on what they would get on a traditional plan,” according to Young. “From the perspective of our client company. Self-insured means technically the company is offering insurance and buying insurance itself.”
The company makes money by managing the health insurance plans for customers and directs and distributes the plans. It currently operates in Texas and Kentucky, with plans to bring its services to Illinois later this year.