A newly launched startup is working to address the health equity gap by making health insurance plans easier for small businesses and their employees.
Waleed Bahouth, co-founder and CEO of Louisville-based Arrow Health, told me as small businesses are competing for talent, they can raise their wages, but having a health plan is what helps retain employees. As those businesses grow, a health plan can help them attract the best talent.
Bahouth and his co-founder Erik Anderson worked together at Humana Inc. (NYSE: HUM) and saw challenges businesses had in offering health insurance. Most recently, Bahouth was head of transformation management office and director of strategy and growth, according to his LinkedIn profile; and Anderson was formerly the director of benefits at Humana.
Only about 50% of small businesses offer a health plan, and that number has decreased over the past few years, Bahouth said.
Arrow Health sets up a wallet approach, which is a fixed-budget health plan, where companies can give their employees an allowance for them to purchase their own health plan.
“We're helping the employer solve this problem of ‘I need to offer a health plan in order to attract and retain people, but I can't afford group health insurance,’” Bahouth said. “This is a way to leverage the individual marketplace through these benefits wallets and get your people covered.”
The startup is targeting small businesses that have been priced out of the marketplace when it comes to offering a group health plan and those employers with a diverse workforce or large remote population. Bahouth defines small businesses as those with less than 50 employees.
Arrow Health works with an employer on setting up a budget and then it administers the health plans on the employer’s behalf. Both the employer and the employee have access to the program. It also helps employees find a health plan.
The company has 45 organizations in its pipeline, which it plans to enroll for benefits by January 2023.
Arrow Health is one of six startups selected as a Vogt Invention and Innovation Award winner this year by the Community Foundation of Louisville.
Bahouth said beyond solving the employer problem, Arrow Health is also focused on creating easier access to health care for employees to address health equity. Though about 30 million people in the U.S. don’t have health insurance, many of these individuals are working, they just work for a business which can’t offer them health care.
The full-time co-founders are Arrow Health's only employees. Over the next year, Bahouth said he anticipates adding individuals to work on the tech and customer service sides of the business.
Arrow Health, a software platform, will primarily generate revenue from platform fees it charges to set up plans for employers.
Over the next few years, Bahouth expects Arrow Health to grow as more employers look to offer health benefits. He thinks offering health plans matches the workplace trend of embracing more personalization and greater flexibility.
Arrow Health hasn’t taken any outside funding. It is bootstrapping right now, Bahouth said. But he said the plan is to start raising funds either at the end of this year or the beginning of 2023.
In the future, Bahouth anticipates Arrow Health adding options for telehealth and behavioral health services, as well as pet insurance.
