(Bloomberg) — Collective Health Inc., a startup that helps employers set up self-insured group health plans, raised $81 million as the firm takes its technology nationwide.
Google Ventures invested in Collective Health for the first time, and New Enterprise Associates and Founders Fund also participated in the Series C fundraising round, bringing the total amount the firm has raised to $119 million, Collective Health said in a statement. The company is partnering with Anthem Inc. (NYSE:ANTM) and other health insurers to use their hospital and doctor networks for customers across the United States.
Collective Health helps employers act as insurers for their own employees, taking care of functions like signing workers up, processing claims and answering their questions. The company doesn’t take financial risk and relies on health insurers like Anthem and Blue Shield of California for doctor networks.
Employees get insurance cards that are co-branded with Collective Health’s name and the insurer’s. Collective Health’s platform can also provide benefits like dental or vision coverage, along with wellness programs.
The challenge for the company will be to show that its offering, which costs an average of about $50 per worker per month, is better than what large health insurers and benefits managers already provide. About 94 percent of workers at the biggest companies are already in plans that are fully or partly self-funded, according to the Kaiser Family Foundation — an opportunity for Collective Health if it can find customers that want to change the design of their insurance benefits.