- A new Manhattan-based startup called BeneStream offers a subscription service to employers that analyzes the pay of each employee and then helps enroll eligible candidates in Medicaid.
- The business capitalizes on language in the employer mandate—which goes into effect on January 1—that allows a family of four making less than $32,900 to enroll in Medicaid in lieu of private coverage. BeneStream CEO Benjamin Geyerhahn estimates that between 20% and 40% of employees at hospitality and home healthcare companies are eligible for Medicaid.
- The company charges subscribers a one-time $40 registration fee and a $200 annual maintenance fee per employee.
On January 1, the so-called "employer mandate" that requires companies with more than 50 full-time employees to provide health insurance will take effect, and a commensurate surge of insurance business is expected to follow. As a result, investors are looking to capitalize on that uptake: BeneStream announced on Tuesday that it has raised $1.58 million from angel investors; Truveris, which provides management tools to sponsors of prescription benefit plans, has raised $12.8 million in Series C funding.
BeneStream, according to board member Andy Stern, is both "good policy and good business." Companies can't force employees to enroll in Medicaid, but they can encourage them to do so by offering a plan that complies with the ACA's minimum requirements, but provides less coverage than the Medicaid option—while simultaneously providing an easy pathway to enrollment in the government plan. BeneStream's subscription plans cost employers considerably less per employee than providing a private insurance plan and ensures that they avoid the expensive fines associated with flouting the employer mandate.
BeneStream, not surprisingly, expects its client roster to grow quickly.