Dive Brief:
- Another player in the small business employee benefits space, particularly health insurance, has joined the competition, according to an article at Fortune.com.
- Gusto, which had been doing business as ZenPayroll for the past four years, has entered the next phase of the company’s business plan, reports Heather Clancy. She writes that over the past few months, Gusto has quietly tested health benefits and workers’ compensation products. Now, it will offer both services to existing and new accounts, starting in California. (Workers’ comp is already available nationally.)
- What makes Gusto notable, reports Fortune, is that 20,000 companies from all 50 U.S. states are already using its payroll processing services.
Dive Insight:
That move to benefits will put the San Francisco-based Gusto in head-to-head competition with Zenefits, the powerful online health insurance broker. The rivalry becomes even more intriguing in the context of a BuzzFeed report this week suggesting that Zenefits may be preparing its own payroll services, Clancy writes.
Gusto co-founder and CEO Josh Reeves told Clancy that his 275-person company began planning its expansion beyond payroll shortly after it was founded. An early indicator emerged in late July, she writes, when the company disclosed plans to hire up to 1,000 people in Colorado. Presentations for its seed funding even included ideas for tax services, health insurance, retirement plans, and other benefits, Reeves added.
“Today, people are treated like ID numbers and transactions. They are not empowered to be treated like people. We want to put humans at the center,” Reeves told Fortune.
Clancy reports that there are also plenty of other companies seeking a piece of the action, including those hoping to empower existing insurance brokers with cloud software, such as EaseCentral and Maxwell Health.
