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Sidecar Health Raises $125M for Indemnity Plan Reboot: Deals

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Sidecar Health now has more cash it can use to offer a new, high-tech form of fixed indemnity health insurance.

The Los Angeles-based company has raised $125 million from investment companies through a new round of funding.

The company has raised a total of $175 million since it came to life, in 2018, and the latest round of funding gives the company a value of about $1 billion, the company said last week.

(Related: Integrity Marketing and Hilb Make Deals)

Drive Capital of Columbus, Ohio, was the company that invested the most cash in Sidecar Health through the latest round of funding.

Sidecar Health has started out by issuing policies that pay the insureds a fixed amount of cash when the insureds use one of about 170,000 covered medical services or prescription drugs.

Before the 1970s, most U.S. health insurance policies were indemnity health insurance policies.

Managed care plans, or plans that helped enrollees get discounts on care from doctors and hospitals in a plan provider network, began to crowd out indemnity plans in the 1970s, and they dominated the market from the 1980s through the 2010s.

Indemnity policies have been starting to make a comeback since 2014, because the Affordable Care Act exempts indemnity health insurance policies from the ACA underwriting, benefits and pricing rules that apply to major medical insurance coverage.

Sidecar Health has designed its policies in response to how federal regulators have interpreted the ACA indemnity health insurance rules exemption.

Sidecar Health has told consumers that one of the seemingly old-fashioned characteristics of indemnity health insurance, the lack of a provider network, may seem like a strength to some insureds, because of the lack of any pressure on insureds to see in-network providers.

Sidecar Health has used a mobile app to make the lack of network-contract-based care pricing more palatable, by helping enrollees see what’s covered, what the indemnity payment will be for a given service, and what other Sidecar Health insureds have paid for a given service from a specific provider.

Sidecar Health enrollees can use a Sidecar Health Visa card to pull cash for payments directly from their claim accounts. In some cases, that feature can help enrollees qualify for doctors’ “self-pay” rates.

The company has a broker information form on its website.

Sidecar Health is now operating in 16 states.

The company said it will use the new cash it has raised to do business in more markets, and to develop a health insurance policy that will comply with the ACA standards for individual major medical insurance policies. Sidecar Health hopes to sell individual major medical coverage, for 2022, through the ACA public exchange system starting in the fall.

After Sidecar Health enters the individual major medical market, it will develop a product aimed at self-funded employer health plans, the company said.

In other insurance deal news:

Plume Inc., Denver, has raised $14 million to expand a care coordination and health care services program for the transgender community.

The company gives members access to the services, including home delivery of hormone medications, through providers who can be seen through a mobile app.

The current charge for the service is $99 per month.

Craft Ventures invested the most cash through the current round of funding.

Plume executives said they plan to use the money to expand into new markets and hire top trans health specialists.

Anthem Inc., Indianapolis, has agreed to acquire MMM Holdings LLC — one of the largest health coverage providers in Puerto Rico — from InnovaCare Health L.P., White Plains, New York.

Anthem is a health insurance giant that provides or administers health coverage for about 43 million people.

InnovaCare runs Medicare plans and Medicaid plans, and it owns health care delivery companies.

InnovaCare’s MMM Holdings unit is the parent of MMM Healthcare LLC. MMM Healthcare runs a Medicare Advantage plan in Puerto Rico that has about 267,000 enrollees.

MMM Holdings also controls other, related companies, and it runs a managed Medicaid plan in Puerto Rico. The Medicaid plan in Puerto Rico has about 305,000 enrollees.

Anthem and InnovaCare are not describing the terms of the transaction, but they say they hope to complete the deal by June 30.

Tellus Brokerage Connections, Harrisburg, Pennsylvania, has formed what the company is calling a “strategic relationship” with Zander Insurance, a Nashville, Tennessee-based insurance brokerage organization.

Tellus is part of Crump Life Insurance Services, which is part of Truist Insurance Holdings Inc., which is part of Truist Financial Corp., Charlotte, North Carolina. Truist is the giant banking company that was formed in 2019 by the merger of BB&T and SunTrust Banks.

Tellus provides products and support services for about 55 independent life brokerage general agencies.

Zander is known for its identity theft protection products and its life insurance products, according to Tellus.

Tellus said Zander will be “joining Tellus as part of its Direct Markets group.”

Elsewhere in the relationship announcement, Jim Duff, the president of Tellus, described the relationship as an affiliation.

The affiliation will give Zander access to Tellus resources, and it will give Zander access to Tellus distribution channels, Duff said.

Integrity Market Group LLC, Dallas, has acquired Priority Life Insurance Group, an insurance marketing organization based in Boca Raton, Florida.

Integrity Marketing has relationships with about 325,000 independent agents. It expects to help insurers sell enough coverage to generate about $3.5 billion in new annual premium revenue.

Priority Life placed about $28 million in annual paid premium in 2020, through relationships with about 40,000 consumers and agents located in almost every state, according to Integrity Marketing. The company generated about $700 in annual paid premium per consumer relationship.

Integrity Marketing is not saying how much it’s paying for Priority Life Insurance Group, but it said that Nick Ayala, Priority Life’s CEO, will become an Integrity Marketing managing partner.

NFP Corp., New York, an insurance broker, has acquired Pension Solutions Inc., a Beachwood, Ohio-based retirement consultant and wealth advisory firm that’s better known as Pension Advisors.

Pension Advisors helps midsized employers run 401(k) plans and other retirement plans.

NFP is not saying how much it’s paying for the company, but it says that David Krasnow and Beth Krasnow, firm principals, will become senior vice presidents in NFP’s Central region.

Majesco, Morristown, New Jersey, has acquired ClaimVantage, an insurance claims software company based in Dublin, Ireland.

Majesco is an insurance software and services company that’s now owned by Thoma Bravo, a San Francisco-based investment company.

ClaimVantage, which has offices in Portland, Maine, as well as in Ireland, sells systems that large insurers, benefit plan administrators, and employers use to run absence and disability accommodation programs as well as disability insurance plans and other types of benefit plans.

ClaimVantage has about 35 customers “with deep loyalty,” according to Majesco.

Leo Corcoran, the CEO of ClaimVantage, said in a comment about the deal that the COVID-19 pandemic has increased employers’ interest in absence and accommodation management programs.

Verisk Analytics Inc., Jersey City, New Jersey, has acquired Jornaya, Philadelphia, a company that collects and analyzes information about how customers shop for goods and services, including life insurance and health insurance, online.

Verisk helps businesses analyze and use data.

The price of the deal was not disclosed.

— Read Oscar Closes on $140 Million in Funding: Dealson ThinkAdvisor.

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