LevelFunded Health, a provider of employee benefit programs for small businesses, has raised an undisclosed amount of venture funding. Hiscox Holdings Inc led the round with participation from other investors that included Insure.VC and CCCC Growth Fund. In addition to the funding, Ben Walter, CEO of Hiscox U.S., is joining LevelFunded Health’s board.
MIAMI (November 10, 2015) – LevelFunded Health, an innovative health insurance agency offering small business-focused benefit alternatives to the Affordable Care Act, announced today it has secured a second round of Venture Capital with Hiscox Holdings Inc. (London Stock Exchange: HSX). Hiscox, an international specialty insurer backed by Chicago-based Hiscox Insurance Company, Inc., led the private equity round and also receives a minority equity stake in LevelFunded Health through the deal.
LevelFunded Health has emerged as an alternative to ‘Obamacare’ for small businesses with concerns over rising health insurance premiums as it can potentially save 10 to 40 percent annually, plus provide an opportunity for annual refunds on their health benefit expense. Founded in 2014, LevelFunded Health is rapidly growing its national client base given its expertise and focus on these ACA alternatives.
“Hiscox boasts over 100,000 small business customers on the property and casualty side of commercial insurance, therefore, a joint-venture seemed to make great business sense given our mutual interests in serving the broader small business market segment,” said Russ Carpel, CEO of LevelFunded Health. “Not only is LevelFunded Health fortunate enough to have Hiscox as a capital partner, but Hiscox and LevelFunded Health will have a great opportunity to cross promote products and services to one another’s client base.”
As part of the deal, Ben Walter, CEO of Hiscox U.S. is receiving seat on the company’s board, which helps provide strategic guidance as the company continues to scale. In addition to Hiscox, other investors in the round include Insure.VC (a prominent insurance venture capital fund) along with CCCC Growth Fund (a California-based private equity fund) of whom the latter also participated in the company’s initial seed financing.
LevelFunded benefit programs appear like hybrids between traditional small group health plans and concepts typically reserved for large corporations, known as ‘self-insurance”. There’s a stark difference between the traditional definition of self-funding and level-funding. Small businesses with five or more employees can cover employees on their own with the added security blanket of a stop loss policy from an A-rated insurance carrier that handles the plan’s administration and excess risk above a certain limit. Businesses simply set aside the cash to cover anticipated claim expenses. The monthly premium remains the same (level) during the whole year and if claims are less than the funded amount, a rebate or credit is issued at the end of the year. If claims go over the funded amount, businesses are protected by a stop-loss policy.
“This part of the insurance market is just beginning to emerge and can really make a big difference to small businesses,” added Carpel. “For the past 18-24 months, small businesses have seen their traditional small group health insurance premiums rise by as much as 10-200 percent, and that’s a huge dent to the bottom line.”
Small businesses with fairly healthy populations with five or more employees are eligible for coverage in most states, and additional benefits include no penalties or taxation, and no more navigating state SHOP exchanges.
About Level Funded Health
LevelFunded Health Partners, LLC is an innovative, national health insurance agency with a hyper-focus on Affordable Care Act “alternative” employee benefit programs for the small employer market segment. The programs the agency specializes in are now known in the industry as “level-funded “benefit programs and annual savings are typically 10-40%; when compared to traditional small group health plans. Benefit programs are underwritten by A- rated (or better) insurance carriers and quotes are typically provided within 5 business days.
For more information, please visit LevelFunded.com.
About Hiscox Small Business Insurance
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange UK:HSX +0.22% . Hiscox is the first company in the US to offer insurance for small businesses direct, online, and in real-time. We provide professional liability, general liability and business owner’s insurance, underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox? page. Coverages are subject to underwriting and may not be available in all states. Hiscox also provides professional liability, property and specialty insurance to US businesses through US-based brokers. This communication does not constitute a solicitation of business by Hiscox’s syndicates at Lloyd’s, London.