Fringe is a new company pitching employers on a service offering lifestyle benefits for their employees in addition to, or instead of, more traditional benefits packages.
“We didn’t think it made sense that employees need to be sick, disabled, dead or 65+ to benefit from their benefits,” wrote Fringe chief executive Jordan Peace, in an email.
The Richmond, Virginia-based company was founded by five college friends from Virginia Tech rounded up by Peace and Jason Murray, who serves as the company’s head of Strategy and Finance. The two men previously owned a financial planning firm called Greenhouse Money, which worked with small businesses to set up benefits packages and retirement accounts.
During that time, the two men had a revelation… employees at these small and medium-sized businesses didn’t just want retirement or healthcare benefits, they wanted perks that were more applicable to their day-to-day lives. Because Murray and Peace couldn’t find a company that offered a flexible benefits package on things like Netflix, Amazon or Hulu subscriptions, Uber rides, Grubhub orders or Instacart deliveries, they built one themselves.
As they grew their business they brought in college friends, including Isaiah Goodall as the vice president of partnerships, Chris Luhrman as the vice president of operations and Andrew Dunlap as the head of product.
Peace and Murray first launched the business in 2018 and now count over 100 delivery services, exercise apps, cleaning services and other apps of convenience among their offerings.
For their part, employers pay $5 per employee covered per month and set up a monthly stipend (that may or may not be subtracted from a total benefits package) of somewhere between $50 and $200 that employees can spend on subscription services.
It’s a pitch to employers that Peace says is especially compelling as office culture changes in the wake of massive office closures and work-from-home orders from major U.S. companies as a response to the COVID-19 epidemic.
“In-office perks and even most ‘off-site’ perks (gyms, massage spas, etc.) are all null and void,” wrote Peace. “Even post-COVID, it’s highly likely that many of these aspects of office culture will bear less significance with many CEOs vowing to allow ‘WFH forever.’ This means companies need a way to package their office culture and ship them home. Fringe is perfectly positioned for this and determined to be the first name that comes to mind to provide a solution.”
Peace sees this as the next step in the evolution of benefits offerings for employees. He traces its legacy to the development of private health insurance and 401k retirement plans. “After another 40 years lifestyle benefits are the newest breakthrough — and like its predecessors, will be almost universally adopted in the next 5 years,” Peace wrote.
In the two years since Jeff Semenchuk took the reins in the newly created position of chief innovation officer for Blue Shield of California, the nonprofit health insurer with $20 billion in revenues has stepped up its investments in startup companies.
As one of California’s largest insurance providers with more than four million members, Blue Shield plays an outsized role in technology adoption among physicians, hospital networks and patients. With that in mind, and with the acceleration of entrepreneurial activity around the multitrillion health care market, Semenchuk was brought on board after serving as chief executive of Yaro (now Virgin Plus) and CIO of Hyatt Hotels and Citi Ventures.
Semenchuk said he sees Blue Shield as working to create a new health care system: “It’s not to perpetuate the health care system we have today.” Increasingly, startups have a role to play in that revisioning of health care services in America, according to Semenchuk.
“What I would say has happened over the last two years is that we have really focused on transformational innovation,” he added.
Investing in those transformational technologies involves taking cash directly from Blue Shield’s balance sheet for investments. The company doesn’t operate a corporate venture capital fund in the traditional sense, instead making strategic investments under the auspices of Semenchuk or Chief Financial Officer Robert Kolodgy.
The COVID-19 pandemic has exposed weaknesses around the US healthcare system and resulted in a large amount of uncertainty around the healthcare and health insurance costs for the pandemic, says GlobalData, a leading data and analytics company.
As the US does not provide universal healthcare to its citizens, and with more than 30,000,000 citizens who have recently become unemployed, many have lost their employer-provided healthcare and are facing tough economic decisions about covering their healthcare costs out-of-pocket. Additionally, health insurers are facing uncertainty about the costs of the pandemic and the rates they will need to charge.
Johanna Swanson, Product Manager at GlobalData, comments: “In the US, most citizens receive health insurance through their employer, but the high levels of unemployment have resulted in significant numbers of people losing their coverage. Those unemployed can continue to receive health insurance by using coverage from the Consolidated Omnibus Budget Reconciliation Act (COBRA) or applying for Medicaid, but COBRA coverage can be costly as employers are often paying an average of nearly 82% of the cost of their employees’ health insurance.”
The US Government is considering helping employers cover the cost of COBRA, so future rounds of financial support measures could include this assistance. Also, states that did not expand Medicaid under the Affordable Care Act may reconsider due to COVID-19 in order to receive more funding for their unemployed population.
Swanson adds: “Healthcare providers and insurers face uncertainty around the costs and rates that will be caused by the pandemic. It remains unclear what the true cost of the pandemic will be for the health insurance industry. It is expected to reach billions of dollars, but estimates vary widely.
“Health insurers need to submit 2021 rates for approval in June 2020. These rates must be based on expected future costs, which has proven challenging due to the current level of uncertainty. Many insurers have indicated that they will not increase rates for 2021, but it remains to be seen how they will mitigate the high costs of COVID-19. Additionally, healthcare companies may be facing uncertainty about the rules and regulations on obtaining federal pandemic relief funds. This leaves a large amount of uncertainty around the costs for the COVID-19 pandemic.”
Compass, the real estate brokerage startup backed by roughly $1.6 billion in venture funding, has laid off 15% of its staff as a result of the shifting economic fortunes created by the global response to the novel coronavirus pandemic, according to an internal email seen by TechCrunch.
Citing economic fallout that has …
Following the news that Wuhan coronavirus
has now become a full-scale public health crisis;
Tapas Bhowmik, Insurance Analyst at
GlobalData, a leading data and analytics company, offers his view on China’s health
health insurance adoption has traditionally been very low in China due to the presence
of public insurance system, which covers almost 97% of the population. According
to GlobalData, the direct written premium of private health insurance in China
is estimated at CNY618.7bn (US$90.6bn) in 2019. This is mainly driven by retail
segment, which accounts for more than 80% of total premium.
health insurance penetration, calculated as total premium divided by GDP, in China
is very low at 0.6% in 2019, almost one-third of Switzerland. It is lower when
compared to Asian countries such as Australia and Singapore, where it is 1.24%
and 1.13%, respectively.
income levels and aging population are driving the demand for better and high
quality healthcare services in China. The public healthcare system only provides
limited cost coverage, forcing people to purchase private health insurance to
cover the additional cost involved.
“In the present context of coronavirus outbreak, the extent of insurance coverage is yet to be confirmed. This is partly due to the National Health Commission categorizing coronavirus as a Class B infectious disease. Most of the private insurers do not provide cover for Class B infectious diseases. However, some insurers suspended the restrictive clauses and are sharing part of the cost burden as goodwill and social responsibility. The current health crisis is expected to accelerate shift in consumer attitude towards private health insurance. Increased number of people is expected now to look to purchase private health insurance to complement their existing public health insurance. This presents a significant growth opportunity for private health insurers in China.”
An increasing demand from consumers to assess their health at any moment has driven the wearable industry’s massive expansion. FitBits, Garmin Forerunners and Apple Watches track personal information such as heart rate, step count and sleep, providing consumers with data in real-time.
Due to their convenience, these devices have become mainstream.
The wearable medical technology market continues to expand as consumer demand persists. More than 80 percent of consumers are willing to wear fitness technology. By the end of 2019, the global market for wearables is expected to grow by 15.3 percent more than in 2018.
The demand for wearables isn’t isolated to consumers. Rather, the technology’s transformative data usage has drawn the interest of businesses.
Companies are supplying employees with wearables to decrease healthcare costs and provide employees with personalized health information to support health consciousness.
As Technologies Advance, Fitness Trackers and Health Monitors Maintain Popularity
Smartwatches and fitness trackers have dominated the consumer wearable market and will continue to maintain a dominance despite an increasing diversification of wearable technologies.
In 2009, Fitbit debuted as the first wearable device. The earliest version of the product featured a single button that cycled through the display to analyze a consumer’s progress toward the 10,000 step goal.
Fitbit inaugurated the wristband craze in 2013. One year later, the company gained the majority of the activity-tracking marketplace.
The following year, the most popular wearable hit the market. Apple Watch debuted in 2015, eventually out-shipping the once most-popular fitness-tracking device—FitBit—in 2017.
Whereas the International Data Corporation found that wristbands will experience a negative growth rate in the coming years, smartwatches will continue to grow. By 2023, watches will account for nearly 50 percent of the entire wearables market.
Overall, the proliferation of various wearable technologies drives the market’s growth. New products and vendors—from Fossil to Louis Vuitton— are entering the market rapidly.
Wearables Appeal to Businesses by Saving Health Insurance Costs
Businesses can decrease health care costs through personalizing insurance plans by providing employees with wearables. When a plan is catered to an individual, there are fewer unnecessary costs.
Wearables are no longer just counting steps, but also monitoring users’ blood pressures.
Omron Healthcare debuted the first wearable blood pressure monitor called the HeartGuide in 2019. Designed to look like an average smartwatch, the device acts as an oscillometric blood pressure monitor.
The wearable measures a user’s blood pressure and daily activity. The device can store up to 100 readings in its memory. At that point, users can transfer the readings to the corresponding mobile application: HeartAdvisor. Users can store, track and share data for review, comparison and treatment optimization.
One of the largest North American life insurers—John Hancock—will stop selling traditional life insurance policies. Instead, the provider will offer interactive policies that track fitness and health data through wearables.
Policyholders who hit exercise targets will have access to premium discounts. Clients will also receive gift cards for workouts and healthy food purchases logged in the app. On the other hand, customers with high-risk habits such as smoking will pay higher premiums.
Wearables enable doctors to track patients remotely, reducing transport and readmission costs. Further, businesses can implement interactive healthcare policies to tailor their healthcare offerings. This can reduce the costs associated with traditional policies that provide blanket coverage.
Wearables provide new options for employee healthcare that incentivize healthy habits and reduce costs.
Healthcare Providers Leverage Wearable Medical Technology to Improve Medical Treatment
By tracking data, wearables enable businesses in the healthcare industry to apply personalized modifications to treatment plans. This allows healthcare providers to make more informed decisions and patients to receive better treatment.
Wearables provide doctors with more data regarding a user’s health. Rather than relying on patients to report symptoms, which can be incomplete or delayed, a wearable collects data indiscriminately and reports in real-time.
Unlike users, wearables don’t forget to track symptoms as a result of their biosensors. The technology provides providers with an extensive history to support more informed analysis and optimized care decisions.
Wearables can also encourage patient responsibility. Custom software solutions have grown to support patients’ adherence to a care routine. For example, a smart necklace has been proposed to detect user ingestion of a pill based on skin movement associated with swallowing.
The devices can also alert users when it’s time to take medication, track the times when it’s taken and notify doctors when a regimen isn’t followed. Medical professionals can adjust care options and predict potential health problems to prescribe cost-saving preventative measures rather than costly treatment options.
Healthcare providers can devise and execute more effective and cost-friendly care plans by implementing wearables.
Wearables Offer Opportunities for Improved, Cost-Effective Care and Healthier Choices
Wearable medical technology has made a large impact on how people can understand and track health information.
As wearables provide personalized health information, businesses can leverage their popularity among consumers to improve employees’ health and healthcare.
The greater and more accurate information wearables track offers opportunities for companies to personalize health care plans. Personalized plans are more cost-effective for consumers and businesses.