Thatch

Thatch: personalized health budgets for employees through ICHRA

Thatch is a financial technology and health benefits platform that aims to replace the traditional group benefits model with an individual health budget. The company presents itself as an alternative to the group insurance system, in which a single plan applies to the entire workforce. Instead, each employee receives a budget determined by their age, location, and dependents, and uses it to choose coverage and additional services.

The company operates under the ICHRA (Individual Coverage Health Reimbursement Arrangement) model, which allows employers to fund their teams' healthcare without relying on a single group plan. According to data published on its website, more than 5,000 companies use the platform.

How the health budget works

The employer sets a fixed budget per employee. From there, the worker chooses an insurance plan from the options offered by the carriers available on Thatch, filtering them by their doctors, hospitals, or prescriptions. The remaining amount of the budget can be used for copays, medications, therapy, GLP-1 medications, and other services. The company states that the model aims to offer predictable costs for the employer and choice for the employee.

The website shows examples of monthly allocations broken down into plan premium, additional services, and available balance. Among the carriers mentioned are Oscar, Anthem, and Kaiser Permanente, and among the services, Function Health Labs, Prenuvo Scan, and Grow Therapy.

Thatch Market and Thatch Card

Thatch Market is a services marketplace with exclusive pricing from more than 50 partners, covering mental health, weight loss, fertility, and other areas. Employees can pay for these services with their health budget. The company notes that Thatch Market is included for all employers at no additional cost, contracts, or extra administration.

After purchasing an insurance plan, the remaining funds from the budget are loaded onto a Thatch Card, a Visa debit card issued by Thread Bank, Member FDIC. The company states that no reimbursement forms or waiting periods are required. Deposits may be eligible for FDIC coverage of up to $3,000,000 through Thread Bank's deposit sweep program, with coverage of up to $250,000 per participating bank.

Human-first support

Thatch structures its customer service around key moments for employees and the HR team. More than 85% of employees select their benefits on their own, but the company has a team of benefits experts available year-round to help with plan selection. During open enrollment, it offers extended evening and weekend support.

The company handles inquiries by phone, text, or email, and allows connecting with a licensed advisor to guide plan selection. For larger employers, the team can provide onsite support during open enrollment. Thatch notes that employees go directly to the platform with their questions, so the HR department does not take on the role of benefits help desk.

The company publishes real-time support metrics: an average response time of 1.5 hours versus the industry average of 8 hours, a CSAT score of 86% versus the industry's 64%, and an enrollment accuracy of 99.9% versus the industry's 80%.

Comparison with the traditional model and target audiences

Thatch contrasts its model with standard group benefits in several ways: individual choice versus a single plan, a fixed budget versus premiums that rise 10% to 12% annually, provider freedom versus closed networks, and costs independent of any one employee's claims. The company argues that its approach can work as a talent attraction strategy.

The platform is aimed at startups, small and medium-sized businesses, mid-market companies, large corporations, insurance brokers, and payroll platforms. For startups, it offers benefits without the need to hire HR staff; for SMBs, stable costs at renewal; and for large companies, real choice at a predictable cost.

Corporate data

Thatch was founded in 2021 and has more than 200 employees. The company announced a Series C funding round with a valuation of $1 billion. Thatch Health, Inc. is a financial technology company, not an FDIC-insured depository institution. Banking services are provided by Bangor Savings Bank and Thread Bank, both FDIC members. Insurance services are provided by Thatch Health Insurance Services LLC.