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Thatch, an employer-focused health benefits platform, is partnering with payroll, HR and tax services platform ADP to embed its Individual Coverage Health Reimbursement Arrangement (ICHRA) offering into ADP's payroll workflow.
San Francisco-based Thatch provides employers with ICHRA benefits plans to help them set a tax-free monthly allowance for employees to spend on the benefits they choose.
Employees can choose plans available in their area based on their needs, including medical, vision and dental, and employers pay a set monthly amount per employee.
Thatch will be integrated directly into RUN Powered by ADP, the company's platform for small and mid-sized businesses, to allow employers to discover and activate ICHRA plans through Thatch.
ADP touts that more than 900,000 small businesses use RUN.
Thatch also announced today that it partnered with MyOme, a genomics innovation and risk modeling company, to add genomics-based proactive health reports to its Thatch marketplace.
Thatch's marketplace, launched in April, provides employees with access to health and wellness services, including digital health companies and wellness products and experiences, that they can use with their tax-free benefits balance.
"One of the big benefits small businesses have today is the ability to be quick and flexible. Integrating Thatch into RUN gives organizations that power," Matt Farwell, ADP president of small business, retirement and insurance services, said in a statement.
"As the small business landscape continues to change every day, leaders can now offer workers, their most valuable asset, direct access to the benefits that matter most to them."
THE LARGER TREND
In April, Thatch raised $40 million in a Series B funding round, bringing its total raise to $84.5 million.
ADP participated in the Series B round as a new investor, and Index Ventures led the funding.
Existing investors Andreessen Horowitz (a16z), PeopleTech Partners, General Catalyst, The General Partnership and SemperVirens also participated.
In 2024, the company secured $38 million in Series A funding led by General Catalyst and Index Ventures, and in 2023, Thatch raised more than $6 million in funding across a pre-seed and seed round.
