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Health Benefits Platforms
Overview
Securing the right personnel has always been crucial for the success of any company, but this has become increasingly difficult in recent times. In 2023, nearly three out of four companies struggled to secure the necessary talent, with over half feeling ill-equipped to adapt due to shortages in skilled employees. Good talent doesn’t come cheap and employers can no longer just offer competitive salaries; they also need to put together attractive benefits packages to entice top-tier talent, given that nearly two-thirds of potential recruits consider benefits a top priority when looking for a job.
While salaries are relatively straightforward, benefits need to be customized. When it comes to benefits, offering more is often not good enough—it’s all about offering the right benefits. Today, health benefits have become the most sought-after perk, driving the need for health benefit platforms that help employees customize their benefit packages. Health benefits platforms are online platforms that let employees and dependents access and manage (mainly) healthcare-related services offered as part of an employer's benefits plan or an insurance plan. These portals serve as centralized hubs for healthcare benefits, making it easy for employees to access, understand, and use their perks.
Industry Updates
Market Sizing
The US Health Benefits Platforms market could reach USD 23.3 billion–33.9 billion by 2028
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Use cases
The increasing need to easily access and manage health benefits has driven demand for health benefit platforms across nearly every industry. In addition to health benefits management, organizations are using these platforms to provide primary and specialty care for employees and their dependents and to facilitate care navigation and pharmacy benefits management.
When made available, companies have seen an overwhelming majority of employees enroll and activate health benefit platforms. These have also shown results, with some companies reporting as high as triple-digit ROIs as a result of improved employee engagement and savings in health-benefit expenses.
We have identified key health benefits platforms use cases below:
Market Mapping
The health benefits platforms space comprises players that offer online platforms that let employees, and, where applicable, their dependents, access and manage healthcare-related services offered as part of an employer's benefits plan or an insurance plan. These include startups offering health and specialty care benefits platforms, pharmacy benefit platforms, and care navigation platforms. In addition, the space includes startups that provide online platforms that help employers administer and manage employee benefit plans through benefits management platforms.
Benefits management platforms accounted for the most funding as of March 2024, with over USD 2 billion raised—more than one-third of the industry’s funding. The healthcare and specialty care benefits platforms segment was ranked second, with USD 1.5 billion raised as of the same date.
Large-scale healthcare providers such as CVS Health and UnitedHealth Group and health plan providers such as Cigna are among the active incumbents in this space, with the former group providing these platforms as part of its integrated healthcare services.
Healthcare and specialty care benefits platforms
Pharmacy benefits platforms
Care navigation platforms
Benefits management platforms
The Disruptors
Disruptors in the health benefits platforms space are predominantly at the go-to market or expansion stage, with over 80% established after 2015. Most players offer standalone products that focus on managing a specific aspect of health benefits.
GoodRx is the only listed startup, while Gusto was the highest-funded privately owned disruptor in this space, securing ~USD 750 million as of March 2024. Its latest funding round was in May 2022; it raised USD 55 million, valuing the company at ~USD 10 billion.
Funding History
Competitive Analysis
Incumbents
Incumbents compete based on use cases and diversify offerings through acquisitions or in-house developments
Incumbents in this sector include major health plan providers such as United Healthcare and Cigna, and healthcare and technology players such as CVS Healthcare and TELUS. These players leverage capabilities gained from M&As and their in-house developments to penetrate the market. The majority of incumbents are active in the benefits management platform segment, as incumbents seek to differentiate and compete based on the numbers of use cases their platforms can be applied, as well as the number of benefits offered in a single product.
Several of the industry's acquisitions have been related to incumbents expanding their capabilities and reach, with multibillion-dollar acquisitions by companies such as CVS Health and Cigna—primarily aimed at expanding a core primary care or pharmacy offering—also complementing their health benefits offerings in terms of the breadth of services they can provide.
Notable Investors
