Gusto adds health benefits to its small business payroll helper

Gusto wants to help business owners better manage their employee needs, so it’s extending beyond payroll into health benefits. The company today introduced a service that simplifies the way human resource managers and benefit administrators select insurance plans and coverage to offer employees.

Formerly ZenPayroll, the company has a mission to solve problems business owners face, starting off with payroll. However, the company told VentureBeat that it always had aspirations beyond that, and so it has set its sights on health care and related benefits. Lauren Fifield, a benefits operations manager at Gusto, said that “insurance for employees was emotional, deeply important, and an expensive problem for business owners everywhere.” This led to the company opting to use its technology and service to solve this.

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Right now, Gusto is focusing on life insurance, disability, medical, dental, and vision coverage, and the health benefit service will be available in the eight states in which it operates: California, Colorado, Florida, Illinois, New Jersey, New York, Ohio, and Texas. Its payroll offering is available in all 50 states.

In early research, business owners told Gusto that figuring out benefits was hard. “‘I love my team and I don’t want them to be stressed. I want them to be healthy and come to work happy,'” Fifield said a customer told her, with many comparing choosing health plans as a combination of “what was hated and this thing they thought they had to do.”

We’ve all had to review benefits every year at our job, selecting among several options. The process is even more complex for your company’s benefits administrator, who has to parse through dozens of pages, facts, plans, and more — it can be a daunting experience. “Business owners have to triangulate between the law, the needs of the employees, and navigating their own needs as a consumer of insurance and business owner,” Fifield explained.

To reduce the stress, Gusto’s platform expedites the process by offering you the best choices based on your employees and company information and helping you select benefits in a faster manner. Traditionally, brokers have provided insurance information in the form of an online PDF, making it difficult to search for specific information — naturally, business owners don’t find that helpful. That’s why Gusto not only stores the information online, but employs an algorithm that uses input from its engineering team and advice from brokers to provide customized information for its customers.

You can only sign up for the health benefits service if you’re already enrolled in Gusto’s payroll offering, but there’s no additional fee to use it. Product manager Eric Schuchman said that having these two systems together simplifies things into a single interface for administrators to manage.

Through this integration, Gusto will leverage a company’s payroll data to craft plan recommendations. Its algorithm will examine the firm’s size, location, budget, industry, and competitors to find what best fits the company’s budget. “Because we’re at the start a payroll business, we have the information about the business and team, such as salaries, where it’s located, how fast it’s growing, etc. We can create a macrosense of where the business is, the employer, and what’s good for them,” Fifield said.

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The plans that get highlighted are ones Gusto thinks are the best for the business owners, but if the client company wants one that wasn’t featured, administrators can provide that information to Gusto for inclusion within a few days. The algorithm is always learning, constantly evolving to be more accurate.

When using Gusto, benefit administrators are presented with an analysis of their company and a recommendation on plans that fit their price-per-employee needs. The idea is to provide a simple personalized broker touch that will hold your hand as you go through the process, assuring them that they’re being taken care of. Benefit administrators can select a tier that fits their company’s budget and establish the contribution level. Discount or premium plans can also be chosen to offer employees. Gusto ranks plans using its customized score that considers not only price quotes, but the quality of the carrier and cost of the service.

If an employee leaves the company, someone in human resources needs only to remove them from payroll to automatically take them off the health benefits side.

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Schuchman told VentureBeat that any company can easily move their benefits and policies over to Gusto. In fact, while the service is being unveiled today, health benefits has been around for a few months — 60 percent of Gusto’s customers switched over from a legacy broker. “The majority of folks have an error that occurred before they come to Gusto. That’s because it’s a manual process and it’s prone to errors,” Schuchman explained.

This health benefit offering competes not only against Zenefits and SimplyInsured, but also TriNet, JustWorks, and even traditional insurance brokers that come to your office armed with printouts. Gusto said its offering is optimized for the mobile web and desktop, and is HIPAA compliant.

The company currently counts more than 30,000 businesses registered on its platform.