Bringing In Technology: West Hartford-Based Emerge Connects Consumers, Insurance

Jan. 15--The founder of an online health insurance startup hopes to disrupt a segment of the industry he says relies too heavily on brokers and instead needs to reach consumers directly.

Wes Thompson, founder of Emerge, a website intended to help consumers find emergency insurance coverage, said many industries, particularly insurance, fail to provide direct access and are almost exclusively dependent on brokers.

"I thought we could take on this challenge, to bring technology into play to an industry that's resistant to change," said Thompson, a former president of Sun Life Financial U.S.

Emerge is targeting a market primarily of consumers insured by high-deductible health plans, a popular option with employers trying to hold down the cost of compensation. The number of consumers in such plans is increasing, and Thompson said they face increasing medical debt because they often do not entirely understand the risks of their plans.

The share of workers in insurance plans with deductibles of $2,000 or more for single coverage rose to 23 percent last year from 7 percent in 2009, according to the Kaiser Family Foundation.

Emerge, which is based in West Hartford and Miami, has been licensed in all 50 states. It's partnered with Rokk3r Labs, which helps "cobuild" companies, bringing together entrepreneurs with Rokk3r strategists, software engineers and others to design, build and launch organizations.

Thompson has raised $1.8 million to launch Emerge, which uses an online virtual adviser to help consumers find insurance to help cover out-of-pocket costs related to a covered illness or accident.

Emerge employs 12 people, which should rise to 20 by the end of the year, Thompson said. Eventually, he said the startup will employ 50 to 60 programmers, product developers and other workers.

Following another funding round in June, Emerge plans to move into a permanent Hartford-area site to be determined, Thompson said.

Emerge helps consumers calculate out-of-pocket costs for an emergency, offers recommendans for a policy that will fit a consumer's budget, provide a comparison of quotes and policy details and helps consumers buy a critical illness or accident policy online.

It's partnered with insurance companies, citing Assurity Life.

Critical illness protection provides coverage for cancer, heart attack, stroke and other illnesses. Thompson said he developed Emerge after hearing about a former employee's struggle to pay medical bills for his wife, who was battling cancer, though he had insurance and an option to buy complementary products.

"The average consumer has no idea what these products do for them," said Thompson. "They are buried under the complexities of health insurance plans. The industry is ripe for disruption."

Emergency insurance products complement health insurance by providing a cash benefit that may be used for out-of-pocket costs related to a covered illness or accident. The emergency insurance market, which includes accident and critical illness insurance, has been growing rapidly, with sales expected at $2.7 billion by 2020, Emerge said.

A spokeswoman for Emerge said critical illness, accident and hospital indemnity insurance products are considered limited benefit health plans, which are exempt from the Affordable Care Act. The products are not intended to replace health insurance.

Kristine Grow, a spokeswoman for America's Health Insurance Plans, which represents health insurance plans and related products, said accident and critical illness insurance are considered supplemental products purchased with life insurance or a medical policy. For that reason, she said, they are typically sold through a broker.

Consumers can get information from websites of companies selling the products, but when making a buying decision, "they're doing it as part of larger insurance needs," Grow said.

Thompson said that just as retail businesses can operate brick-and-mortar sites, while also operating an online business, emergency health insurance can sell to consumers on the internet and through brokers.

"Both should be able to coexist," he said.

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