StretchDollar, a healthcare firm, has raised $6 million in funding to assist small companies, the corporate introduced Tuesday.

San Francisco-based StretchDollar gives an ICHRA (Particular person Protection Well being Reimbursement Preparations)-focused mannequin that permits employers to offer pre-tax financing to their workers to allow them to buy particular person insurance policy. The StretchDollar platform permits small companies to fill out primary data and select a pre-tax month-to-month quantity. They will then invite their workers to affix the platform, and the pre-tax {dollars} are despatched from the corporate's checking account to the workers month-to-month.

“A conventional small group well being plan typically takes greater than 100 hours to arrange and requires a minimal worker participation of fifty% or extra, together with different strict necessities,” stated Marshall Darr, co-founder and CEO of StretchDollar, in an electronic mail . “This course of additionally signifies that a enterprise proprietor successfully decides which hospitals their workers can use, which healthcare suppliers they’ll see, and even which drugs the workers can entry. Rather a lot is requested of a small entrepreneur. We constructed a platform designed to simplify all the things whereas lastly giving workers alternative.”

The seed funding was led by Fika Ventures and Oscar Well being and included participation from Precursor Ventures and Springbank. It follows a $1.8 million pre-seed spherical final fall.

“Fika Ventures is happy to assist StretchDollar's mission to democratize healthcare entry for small companies via their revolutionary ICHRA platform that turns a painful 100+ hour course of right into a 10-minute setup,” stated Tianxiang (TX ) Zhuo, normal companion at Fika Ventures, in a press release.

With the funding, StretchDollar will develop its self-service platform, the announcement stated.

Based on Darr, there are 5 million companies within the U.S. with fewer than 10 workers. In 2010, 60% of those firms supplied well being advantages for his or her workers, however by 2023 that determine has dropped to 40%. This decline shouldn’t be as a result of small companies don't need to provide well being advantages, however as a result of managing well being advantages is sophisticated, Darr stated.

In response, the ICHRA area has picked up steam. Based on the HRA Council, ICHRA adoption elevated by 29% between 2023 and 2024. And StretchDollar isn't the one firm supporting this development: different firms serving to employers handle ICHRAs embrace Gravie and Take Command. Oscar Well being has additionally been a powerful supporter of ICHRAs.

“The ICHRA area has acquired loads of consideration just lately, largely attributable to some substantial growth we’re seeing out there,” Darr stated. “Well being insurers are withdrawing from the small group market, leaving small companies with few choices. Humana and Cigna have all eliminated their small group choices solely. Different carriers, akin to UnitedHealth and Aetna, have scaled again considerably. As a substitute, firms like Oscar and Centene are focusing available on the market and increasing their particular person medical insurance choices.”

Darr added that, trying forward, StretchDollar hopes to handle different areas of well being advantages that small companies have historically struggled to offer, akin to imaginative and prescient, dental, retirement, life and incapacity advantages.

Picture: sorbetto, Getty Photographs