In a significant boost for healthcare innovation and employee benefits compliance, Thatch, a health insurance technology startup, has successfully raised $40 million in Series B funding to expand its platform offering Individual Coverage Health Reimbursement Arrangements (ICHRAs)—a regulatory-compliant alternative to traditional employer-sponsored health plans.
According to company executives in comments to TechCrunch, Thatch is positioning itself at the intersection of regulatory technology and healthcare access, enabling employers to offer flexible, tax-advantaged health benefits tailored to the diverse needs of modern workforces.
Regulatory Shift in Health Benefits
Unlike traditional Health Reimbursement Arrangements (HRAs), which cover out-of-pocket expenses such as prescriptions, therapy, and orthodontic care, ICHRAs allow employers to fund employees’ individual insurance premiums. This represents a compliance-forward shift in how organizations deliver benefits, aligning with regulatory change management initiatives introduced in recent years.
“Imagine each employee receiving $1,000 monthly—one might select a Kaiser HMO plan and spend the remainder on therapy, while another may fully allocate the funds to a PPO plan. Previously, HRAs couldn’t be used for insurance,” explained Chris Ellis, CEO and Co-founder of Thatch.
The company’s platform includes a digital insurance marketplace, allowing employees to customize coverage options based on personal needs. A linked debit card enables users to access unspent funds for non-covered healthcare expenses, driving financial inclusivity and personal agency in healthcare decisions.
Tailored Plans Through Regulatory Flexibility
Thatch’s approach to compliance automation and benefit personalization is enabled by recent regulatory frameworks around ICHRAs. Employers can now segment benefit offerings based on factors such as employment status, hours worked, or geographic location, which enhances compliance with workforce diversity regulations while enabling cost-effective risk management.
“It makes no sense for healthcare to be tied to employment,” said Adam Stevenson, Co-founder and President. “With ICHRAs, businesses can empower employees with tax-free healthcare allowances, promoting both compliance efficiency and employee satisfaction.”
Financial Wellness and Gender Equity in Healthcare
The development comes as financial stress linked to medical costs remains a pressing issue, particularly among women. According to the Women’s Wellness Index Report by PYMNTS Intelligence, 15% of women living paycheck to paycheck cite healthcare bills as a core financial burden—compared to 12% of men.
The gender gap becomes even more apparent among financially vulnerable individuals, with 23% of women struggling to meet monthly obligations citing medical expenses as a key driver, versus 18% of men. Thatch’s flexible, employee-first coverage model could help mitigate such disparities by enhancing access to healthcare financing options through regulatory compliance tools and smarter benefit allocation.
Looking Ahead
With regulatory frameworks evolving to support individualized health benefit solutions, Thatch’s model aligns with trends in compliance consulting, financial risk mitigation, and RegTech-enabled employee welfare. The new funding will support product innovation, regulatory scaling, and broader adoption of ICHRAs across the U.S., signaling a transformative shift in how organizations approach governance, risk, and compliance (GRC) in employee healthcare.
