Reap the benefits

Facing an acceleration in already rising premiums, employers are trimming benefits and reconsidering coverage architecture to manage spend. Alternative benefits models are gaining traction, offering employers new ways to fund coverage and giving employees more choice over their plans and benefits. Alternative PBMs (like Rightway Healthcare or LucyRx), which promise clearer drug pricing and greater control over pharmacy spend, are taking off too.

This month has seen fresh capital flow to digital health companies building the infrastructure behind these models. As one example, Nara Health raised $14M to further fuel its third-party administration (TPA) platform for alternative plan designs. Meanwhile, Thatch reported 7x growth in annual recurring revenue alongside its recent $108M raise, pointing to the growing uptake of CHOICE Arrangements (formerly known as Individual Coverage Health Reimbursement Arrangements, or ICHRAs), which let companies contribute a fixed amount for workers to put toward individual coverage. New insurance carriers are also emerging: Angle Health’s $200M Series C boosts its full-stack, level-funded plan for small businesses—a hybrid model that combines fixed monthly payments toward employees’ claims with insurance protection that limits employers’ exposure to large claims. As companies look for relief from rising costs, some of the models gaining ground put more decisions in workers’ hands. More choice could make benefits better suited to individual needs, but it could also introduce navigation complexity and financial risk.

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