Milwaukee-based payroll and employee benefits startup zizzl LLC launched a new health care benefits platform after raising $630,000 during its first round of funding.
The funding round, raised by six investors and one venture fund, will be used to launch zizzl Health, a tech-enabled health benefits solution for business with less than 100 employees, said Raymond Seaver, Jr., zizzl founder and chief executive officer.
zizzl Health is based on a new form of Health Reimbursement Arrangement (HRA) called Individual Coverage HRA or ICHRA, which became available in the health insurance marketplace in January 2020 following a presidential executive order.
ICHRA, pronounced “ick-rah,” uses a model based on reimbursing employees for insurance rather than buying it for them. Employers can design the company’s plan by establishing reimbursement limits and also define which employees are eligible.
In essence, employees purchase the individual plan they want and receive reimbursement from their employer for a portion or all of the premium, depending on the cost and how much their employer is contributing, along other valid claims they submit.
However, even though employees are purchasing an individual health plan, employers still get the pre-tax savings of a group plan – a core component of ICHRA.
zizzl is not the first startup that Seaver helped build – before starting zizzl in 2016, he worked for Chicago-based bswift, which was acquired by Aetna in 2014 for about $400 million. While at bswift, Seaver was part of the team that developed the company’s Ask Emma tool, which asks employees about their health care needs and then compares out-of-pocket costs for several plans.
Ask Emma provides the best health insurance plan based on the customer's financials and health needs, but the customer has the final say on which plan he or she feels is most appropriate, Seaver said.
“It allows businesses and employers to give their people pretax money and then we help those people find the best health insurance plan that’s available to them through an individual family plan in the state of Wisconsin,” Seaver said.
zizzl currently has 14 employees and all of its customers are located in Wisconsin. However, the company has ambitious plans to grow to a staff of 500 and generate another 4,500 jobs outside the company through collaboration and partnerships by 2027. To achieve their job creating goal, the startup has plans to scale their solutions, Seaver said.
“In order to get to 500 employees, we will have to expand the zizzl health program nationally, which we will be doing in 2022,” Seaver said.