Meeting the Moment: Opportunities In Employer Benefits & Insurance

SJF has long been active in the employer healthcare benefits and insurance ecosystem, with investments across the stack including Carrum Health, Cecelia Health, Solera Health, and Take Command Health.

The pressure on both employers and employees, however, has never been greater.

Amid an ongoing government shutdown and political uncertainty, the US’ healthcare coverage system is being tested. With roughly 54% of the U.S. population receiving health insurance through an employer, instability in public programs and marketplaces only magnifies existing burdens on employer-sponsored coverage:

• Group and individual plan premiums are at record highs, yet shifting more costs onto employees is increasingly unsustainable
• Cost drivers are becoming highly concentrated, turning catastrophic claims and high-cost claimants into material enterprise risks
• Policy-driven ambiguity and coverage losses are expected to push more burden onto employer-sponsored plans

This is particularly true for small-and-mid-sized employers, who are dramatically underserved today, despite supporting ~88% of the private sector workforce.

Employers and brokers have never been more motivated to challenge the status quo, and now is the time for disruptive technologies to truly innovate this category.

• Amidst rising costs, non traditional plans are growing mainstream, with self-funded, pooled-risk and ICHRA options becoming increasingly viable
• Innovation has extended beyond plan structure to PBMs, provider networks and more; employers are seeking outcomes across their critical cost buckets
• AI innovation and more digitized admin infrastructure has made it more economic to serve the long tail of small-to-mid-sized employers; in turn, their expectations for innovation are changing

From our experience, we believe that the winners will not be those who over-index on sleek UI, but rather those who:

• Carefully design their GTM strategy to unlock efficient scale, exploring alternative channels outside of traditional brokers (e.g., consortiums, captives, etc.)
• Demonstrate ROI on a clear timeline and tie everything they do to measurable outcomes that really matter to employers and employees
• Look beyond the buyer, aligning incentives across the ecosystem to drive multi-stakeholder adoption

We’ve outlined our perspective on the space, the pressures employers are facing, the levers they’re pulling to control costs, the areas most in need of innovation, and the strategies we see winning players adopt.

You can find the full deck here.

At SJF, we’re eager to partner with founders reimagining access and equity in health benefits, especially for the 116 million US employees working at small-and-mid-sized businesses (<1,000 employees) that are too often overlooked by today’s system.

If you’re a founder building something impactful in the health benefits & insurance space, we want to speak to you! Reach out to eroberts@sjfventures.com.