The Series A-funded company is tackling one of startups’ greatest challenges, offering employees healthcare benefits during its important first few years.
Every, an all-in-one back-office platform for startups and small businesses, has launched Every Benefits. The platform offers a new approach to employer-sponsored health coverage designed to reduce company healthcare costs without diminishing the employee benefits experience.
The San Francisco-based company says its new benefits model combines fully insured health plans with employer-funded reimbursement arrangements. The system, which brings together insurance brokerage, benefits administration, payroll, banking, and health reimbursement arrangement administration, makes a previously complex benefits strategy accessible to smaller employers.
According to the company, Every Benefits may reduce annual health benefits spending by as much as 12% for a typical 25-employee startup. That could translate into approximately $31,000 in annual savings for a 25-person company and approximately $125,000 for a 100-person company.
The company emphasizes that employees may retain the same insurance carrier, provider network, and overall healthcare experience.
Addressing Rising Startup Health Insurance Costs
Health insurance remains one of the largest and fastest-growing expenses facing startups and small businesses.
Every cites the KFF Employer Health Benefits Survey. It indicates that health insurance premiums have increased by 24% over the past five years. The company estimates that a typical 25-person startup offering a fully insured Platinum PPO plan may spend more than $261,000 annually on employee health coverage.
Competitive health benefits are also frequently viewed as an important tool for recruiting and retaining talent, particularly in the startup and technology sectors.
Every Benefits seeks to resolve this challenge by changing when and how employers pay healthcare expenses.
Instead of paying the higher premiums associated with a Platinum-level plan, an employer could select a lower-premium Gold or Silver plan. The employer would then establish a reimbursement arrangement that covers eligible employee expenses, including deductibles and other out-of-pocket costs.
Employees continue using their health insurance normally and receive reimbursement for eligible expenses. Every says this structure can create a $0 effective deductible experience in many cases.
How the Every Benefits Model Works
Traditional health insurance premiums require employers to pay for a certain level of coverage whether employees use it or not.
Under the Every Benefits model, the company pays lower insurance premiums upfront and reimburses employees only when eligible healthcare expenses are incurred. Employer funds that are not needed for reimbursements are not spent.
As a result, Every says a Silver plan may provide employees with an experience similar to a Gold plan, while a Gold plan could function more like a Platinum plan.
For a representative 25-person company, Every estimates that annual health benefits spending could decline from approximately $261,000 to $230,000. That represents typical-year savings of about $31,000.
Actual savings will depend on employee healthcare utilization, location, plan selection, employer contributions, and other factors. The company noted that Every Benefits is currently available only in select states.
Bringing Benefits, Payroll, and Banking Together
Health reimbursement arrangements can be difficult for small businesses to administer because they typically require coordination among several vendors. A health insurance broker, a benefits administration platform, a payroll provider, an HRA administrator, and a banking or payment provider are typically involved.
Employers must ensure that reimbursements, payroll deductions, employee enrollment, funding, and compliance processes work together accurately.
Every says its integrated platform eliminates much of that operational complexity.
The company operates as a licensed insurance broker, benefits administration platform, payroll provider, and banking partner. By bringing those functions into one system, Every can manage the health plan and reimbursement process through a single vendor relationship.
“This is the kind of product you can only build if you’ve already built the rest of the back office,” said Barry Peterson, co-founder and chief technology officer of Every. “Payroll, banking, and benefits running as one system is what makes the model work.”
Every’s broader benefits platform includes health, dental, and vision insurance, along with flexible spending accounts, dependent care FSAs, and commuter benefits.
Helping Founders Avoid a Difficult Benefits Trade-Off
Rajeev Behera, co-founder and CEO of Every, said startup founders frequently express frustration with annual benefits renewals and continued premium increases.
“They know they’re paying for more coverage than their team typically uses,” Behera said. “We built Every Benefits so owners never have to make that trade again. Same carrier. Same network. You just stop paying for coverage your team isn’t using.”
The Series A company has raised $32 million in venture funding from investors including Y Combinator and Redpoint. Every positions its integrated back-office system as a way for founders to spend less time managing administrative functions and more time building, selling, and scaling their companies.
With Every Benefits, the company is extending that strategy to one of the most expensive and complicated areas of startup operations: employee healthcare.
