Thatch has raised $108 million in new funding at a $1 billion valuation as it expands its healthcare benefits platform, which enables employers to replace traditional group health coverage with fixed, tax-free health budgets for employees.
The company’s model centers on defined-contribution arrangements, including Individual Coverage Health Reimbursement Arrangements (ICHRAs). Rather than purchasing one group insurance policy for their workforce, participating employers establish a predetermined healthcare contribution for each employee. Workers can then use those funds to select coverage from the individual health insurance market based on factors such as preferred physicians, hospital systems and prescription formularies.
Unused portions of an employee’s health budget can be directed toward eligible out-of-pocket healthcare expenses. These can include GLP-1 medications, mental health services and dental or vision care. For employers, the model is intended to provide greater visibility into healthcare expenditure by establishing defined contribution amounts across employee tiers.
Thatch reported that its revenue has increased nearly seven-fold over the past 12 months, while more than 5,000 employers now manage health benefits through its platform.
The company has also been developing distribution through integrations with payroll and workforce platforms. Connections with ADP, Paychex, Gusto and QuickBooks are designed to allow employers to introduce individual coverage while maintaining existing payroll, tax deduction and employee onboarding processes. The approach targets small, mid-market and geographically distributed employers seeking alternatives to conventional group insurance structures.
The latest financing provides additional capital for Thatch to scale its personalized benefits model as employers consider defined-contribution approaches to healthcare coverage. The company’s growth also reflects increasing commercial activity around ICHRAs, which separate an employer’s financial contribution from the employee’s selection of an individual insurance policy.
Through this structure, Thatch is positioning its platform as infrastructure connecting employer-funded healthcare budgets, individual insurance selection and eligible healthcare spending within existing benefits and payroll workflows. Its reported growth to more than 5,000 employer customers indicates expanding adoption of the model among organizations seeking to offer employees greater choice while establishing predetermined healthcare contributions.
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