Zane Benefits Raises $1.5M, Continues Push Towards the Future of Individual Health Insurance

Individual health insurance is the future.

Murray-based Zane Benefits has closed a $1.5 million financing round from an investor pool including Kickstart Seed Fund and Royal Street Investment and Innovation Center.

“Zane Benefits is transforming the way small businesses offer health insurance by giving employees choice, flexibility and convenience,” Dalton Wright, Partner at Kickstart Seed Fund, said in a statement. “Zane is growing fast and we are excited to share in its mission to reinvent employee benefits for small businesses.”

Health insurance is a messy subject — it’s something that everyone always seems to be arguing over, even though nobody’s quite sure what they’re arguing about. Those that have health insurance wish it was cheaper, those that don’t have it wish they did, and many a person has spent time running in circles trying to solve the riddle of affordable, effective health care (myself included).

Zane Benefits believes they have found the answer to that riddle. By concentrating on providing health insurance to individuals rather than groups, Zane’s solution is starting to make waves.

“Individual health insurance is the future,” Rick Lindquist, President of Zane Benefits, told Beehive Startups. “Every American should be able to buy their own individual policy independent of employment and be able to keep it when they switch jobs. The idea that resonates with most people is the idea of keeping health insurance when you switch jobs. Not having to get your health insurance changed by your employer, but having control over your own health insurance year after year.”

Instead of lumping all employees together under the same health insurance plan, Zane allows small businesses to offer their employees personalized health insurance plans tailor-made for each person’s specific needs. If you’re a single 26-year-old with no family, your choice for health insurance is obviously going to be different from a 45-year-old with 5 children, and Zane acts accordingly. Also, saving 20–60 percent compared to group health plans doesn’t hurt.

“There is a history around individual health insurance where people think, incorrectly, that employers offering group health insurance is actually less expensive than individual health insurance,” Lindquist said. “That’s not the case.”

Zane Benefits’ software is set up to provide small business employees with their own individual health plans. Each person can select whatever provider they prefer (SelectHealth, Blue Cross Blue Shield, Humana, Arches, etc.) and then the employer determines how much money will be allotted monthly. When the employee pays for health insurance costs, they are reimbursed through Zane’s platform for the agreed upon amount.

“There are people who are existing customers who have bought an individual plan through us, they’re very resistant at first because it’s new,” Lindquist said. “We have to address that, it’s the biggest obstacle to our platform. When they leave that company and go work for a company that offers a group health plan, they refer the company to us.”

After hitting profitability in 2009, Zane Benefits has grown to encompass 60 employees and over 3,000 customers. Getting people to embrace the allure of individual health plans isn’t the easiest of jobs, but the tides are starting to turn.

“Most likely, if you look at 30 employees, all 30 would pick a different plan because you have very different individual needs,” Lindquist said. “The idea of individual policies funded by the company is an international idea, but in terms of our solution, it’s crafted for the US…We have a national footprint and it’s growing fast.”

To learn more about Zane Benefits, read the recent article published by Forbes regarding the end of employer-provided health insurance.

Published 6/16/2015

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