benefitbay: How This Company Helps Brokers Model ICHRA For Employer Clients

By Amit Chowdhry ● May 15, 2023

benefitbay is a platform for brokers, employers, and employees that enables quick and simple Individual Coverage Health Reimbursement Arrangement (ICHRA) deployment for companies of all sizes. To learn more about benefitbay, Pulse 2.0 interviewed CEO Brandy Burch.

Brandy Burch’s Background

Brandy Burch

Brandy Burch’s background is in accounting with an MBA in finance. “Throughout my diverse career, I have consistently prioritized building strong teams that emphasize treating people well in order to drive organizational results. As a CFO or COO, understanding what motivates the team and fosters passion has been crucial in achieving positive outcomes for the company. People have always been my priority, which is why I am deeply passionate about enhancing benefits for individuals and minimizing out-of-pocket medical expenses for their families,” said Burch.

Formation Of benefitbay

Burch told me that the idea behind benefitbay was built on the principles of improving benefits for individuals and empowering them to make informed decisions with their employer-provided benefit dollars. And as the Affordable Care Act (ACA) emerged, the company anticipated that a defined contribution model would soon be introduced. But the adoption of this model was slower than expected with the relevant regulations only being implemented in 2020.

Favorite Memory

What has been Burch’s favorite memory working for benefitbay? “My fondest memory while working for benefitbay was obtaining our first term sheet. As a first-time CEO in a challenging economic climate, overcoming that hurdle seemed almost impossible. It was a tremendous accomplishment to conquer those doubts and fears, knowing that an investor believed in our team and was willing to take a leap with us,” Burch replied.

Challenges Faced Building benefitbay

What are some of the challenges Burch faced in building benefitbay? “Building the company has indeed presented challenges, particularly in terms of raising substantial capital in the current economic climate. Many venture capitalists have tightened their requirements and reduced valuations compared to those previously observed. As a result, we have had to employ bootstrapping strategies and make individual sacrifices to help the organization thrive in the past,” Burch acknowledged. “These difficult times have certainly affected our families, but our belief in the organization, the market, and the long-term success of benefitbay has never wavered. We were willing to demonstrate to our investors that we shared the personal risks with them during those uncertain times. Having successfully navigated that period last spring and summer, we are now hitting the ground running and gaining momentum in the market. Our customers can sense the passion and commitment from our team members, which further fuels our growth.”

Core Products

What are benefitbay’s core products? benefitbay’s core product is a Software as a Service (SaaS) platform designed for brokers to efficiently model ICHRA for employer clients. And this enables brokers to quickly determine whether ICHRA is the right fit for their clients.

“Our other primary focus is on streamlining the shopping and payment process for employees. Our goal is to ensure a positive experience during the ICHRA transition by addressing the pain points for brokers, employers, and employees. We are committed to providing exceptional service to all three components of the benefits ecosystem while enhancing the offerings for individuals and their families,” Burch noted.

Evolution Of benefitbay’s Technology

How has benefitbay’s technology evolved since launching? Initially, the company did not have a shopping tool that enabled users to compare different plans. This feature has been invaluable as it enables consumers to assess how each plan can support their health needs and determine the associated costs per payroll period.

“These insights are crucial for making informed decisions regarding healthcare coverage,” Burch pointed out.

Significant Milestones

What have been some of benefitbay’s most significant milestones? Burch provided the following highlights:

— Securing the initial SaaS contracts in 2021

— onboarding their first few employers in the fourth quarter of 2021

— Achieving $1 million in annual recurring revenue (ARR) in 2022.

“Currently, we are well-capitalized for the upcoming period of rapid growth and are working on several crucial integrations, such as direct enrollment with carriers and compatibility with the majority of payroll providers,” Burch emphasized.

Customer Success Stories

When I asked Burch about a customer success story, she cited a success story involving a nursing staffing firm that managed to save $3.3 million through benefitbay.

“They reinvested these savings into their employees’ health benefits, raising the company’s contribution rate to 97%. This led to increased adoption of their benefits program. Offering competitive benefits is crucial for retaining employees in the highly competitive nursing job market,” Burch shared.

Funding / Revenue

The company recently completed a Seed Plus funding round by raising $2.5 million. And the company’s projected contract annual recurring revenue (ARR) for the next 12 months is $4 million. Currently, the team consists of 18 members.

Total Addressable Market

What total addressable market (TAM) size is benefitbay pursuing? benefitbay is targeting a substantial total addressable market (TAM).

“With the current group market valued at $1.8 trillion in 2022, we estimate that the ICHRA’s addressable market size will exceed $80 billion by 2025. According to Business Insider, carriers such as Aetna and Cigna are planning to re-enter or expand their presence in the individual market. It is projected that over 800,000 employers and 11 million employees will participate in an ICHRA in the next few years. This new benefit is expected to strengthen the individual market and further increase carrier competition. The heightened competition will likely result in reduced premiums and more innovative plan designs, ultimately benefiting the end consumer,” Burch analyzed.

Differentiation From The Competition

What differentiates benefitbay from its competition? “benefitbay sets itself apart from its competition through several key factors. These include our broker channel strategy, our SaaS offering tailored specifically for brokers, our capability to facilitate ICHRA with Advanced Reimbursement Individual Checking Accounts for employees, and our expertise in unlocking subsidies for eligible employees. These unique features enable us to deliver a comprehensive and effective solution to our clients,” Burch answered.

Future Company Goals

What are some of benefitbay’s future company goals? “Some of benefitbay’s future goals include further developing our data ingestion capabilities to incorporate prior claims details, which will enhance plan selection processes for our clients. Additionally, we aim to continue improving competitive pricing in the Individual and Family Plan (IFP) marketplace by disrupting the traditional group insurance market and transitioning employees to individual plans that better suit their needs and preferences,” Burch concluded.