Software Is Eating The World - Health Insurance Edition →
Zenefits is an HR software web application for small businesses. While the software is good on it’s own, it’s innovative business model of offering the software for free, and acting as a health insurance broker. They make money from helping their customers pick a health insurance plan for their employees, displacing existing health insurance brokers. Their customers are mostly small businesses who never would have purchased expensive HR software from Oracle or SAP. I look forward to seeing how this plays out, and how far up the ladder of enterprise software Zenefits climbs.
Like several other customers, he described the Zenefits software as a major inducement. “We don’t have an H.R. person,” he said. “Instead of having to have a full-time person dealing with benefits, we can have this nice, free solution that automates that work.” …
Zenefits has hit the brokerage industry with such ferocity that, in four states, brokers have complained to insurance regulators that its free-software pitch constitutes unfair competition. Zenefits denies the accusation, and regulators in Texas and Washington have closed their investigations; in Utah and Wisconsin, they are pending. …
“Since they’re based in San Francisco, they’re going to have a hard time playing golf with a client in Atlanta or Houston,” Mr. Underwood said. “Eight times out of 10, employers want to be able to look someone in the eye.”