StretchDollar – a startup that enables small employers to provide pre-tax funding to employee-owned health insurance – recently announced its launch in Illinois, Pennsylvania, Delaware and Colorado. And the company’s roadmap also includes expansion plans to cover California, North Carolina, and Texas in 2023, with a nationwide presence in all fifty states by year-end 2024. This launch coincided with the successful completion of a pre-seed funding round that raised $1.6 million from Precursor Ventures, Elefund, v1vc, Kindergarten Ventures, and Westerly Ventures.
Over 60% of the 5 million U.S. small businesses with less than ten employees do not offer health benefits, a historic low. And affordability is cited as a primary reason, according to a 2023 survey released by the National Federation of Independent Business. The average cost of a family health plan last year was $22,400, a 45% increase over the last decade.
Using StretchDollar, in under 10 minutes small employers are able to set a fixed pre-tax monthly stipend of their choosing that employees apply to their health insurance premiums. And employees manage the benefit on StretchDollar’s platform and get guidance on selecting a health plan from the individual health insurance marketplace from StretchDollar’s licensed brokers.
This type of fixed benefit became possible due to 2020 federal legislation that established Individual Coverage Health Reimbursement Arrangements (ICHRAs), enabling employers to use pre-tax dollars to pay for employee healthcare expenses.
Prior to co-founding StretchDollar in March 2023, Marshall and Kaiza helped launch and grow health insurance startup called Decent. And the two also launched the lifecycle team of the small business payroll services company Gusto.
StretchDollar is based in San Francisco, California, and Philadelphia, Pennsylvania. And the company recently added an advisor Kristen Anderson, former CEO and co-founder of Catch, a startup that offers payroll and benefits for independent workers.
Enrolling in StretchDollar’s small business benefits is straightfoward:
1.) Get started here at https://www.stretchdollar.com/get-in-touch.
2.) Choose a monthly benefits budget and confirm your plan.
3.) Set up your portal and invite your team to enroll.
4.) And distribute and track your benefit via the StretchDollar portal.
KEY QUOTES:
“Traditional small group health plans require mounds of paperwork, strict minimum participation rates, and high premium costs. StretchDollar makes it easy for small businesses to take care of their people and have more control of their benefits budget.”
— Marshall Darr, StretchDollar co-founder and chief executive officer
“Smaller-sized businesses are often stuck choosing a one-size-fits-all health plan and being the go-between for employee health insurance questions. StretchDollar removes business owners from the middle by allowing employees to choose a health plan that fits their needs, while also giving owners more flexibility with their benefits budget. It’s a win-win.”
— Kaiza Molina, StretchDollar co-founder and chief operating officer
