Employer-Backed BNPL Plan Spreads Out Healthcare Payments and Pain

When a family member received a medical bill for $8,000 — despite having medical insurance — Steven Greene, who is now co-founder and CEO at Nibble Health, saw a problem that needs solving.

“This is a story that is all too familiar to people around the U.S.,” Greene told PYMNTS in a recent interview.

Having seen the widespread ability of consumers to pay for things in installments in eCommerce and other markets, Greene also saw a potential solution. He and Phil Markunas, who is now co-founder and chief technology officer/head of product at Nibble Health, set out to find a way to allow people to pay for healthcare costs over time at no cost to them — with no interest and no fees.

“Obviously, somebody has to pay,” Greene told PYMNTS. “So, who would have a vested interest in keeping people healthy who’d want to foot the bill, and how could we create a different value proposition that actually inspires people to use this to go seek care? We very quickly focused on employers.”

Offering Healthcare Financing as a Benefit

Nibble Health started in late 2021 and has been building the product since then. On June 21, Nibble Health announced that it had raised $8.5 million in a seed round. The company aims to be fully live in late 2022 or early 2023.

The goal is building a business-to-business (B2B) healthcare payments company that enables organizations to provide zero-interest, zero-fee healthcare financing for employees’ out-of-pocket expenses as an employee benefit.

“They could use our card and swipe it at checkout or put in our card details, and we’ll pay the healthcare provider immediately for them — so they’re off the hook,” Greene said. “They can then pay us back in small installments over time with no interest and no fees. In exchange for that, the employer pays us a fee.”

With this approach, Greene said Nibble Health will be able to onboard all the company’s employees at once and will be able to equip them with the knowledge that this tool is available to them whenever they need it — so it will give them the reassurance that they can seek care when they need it.

Aiming to Provide Relief

The employer will pay a fee for employees to have this benefit, while the employees will pay Nibble Health in installments when they need financing.

Nibble Health will set credit limits based on underwriting criteria. Over time, as the company amasses a pool of capital, it aims to make more inclusive credit decisions down the line and give employees longer terms to pay it back. Starting off, the company will offer one-year terms, then offer longer installment options: Greene said the company plans to start by giving people up to a year to pay it back and then extend its installment offerings over time.

“Our goal is to not take an overly burdensome amount of money from each installment payment — and so to do that, you have to give real terms,” Greene said. “Our goal here is to provide actual relief.”

Another benefit of this business model is that employees should be more creditworthy than a traditional direct-to-consumer (DTC) offer, Greene said. The company can also change the fee that is paid by the employer based on the type of employer and the broader risk of the pool that Nibble Health is underwriting.

“We don’t want to become a collections agency — that’s not the business that we’re building — so what we’re trying to do is be really smart and thoughtful around how we can build certain protections and risk management strategies into the core of what we’re doing,” Greene said.

Empowering Patients

Throughout the process, including payments, the company aims to make it simpler for employees to get the healthcare they need. Greene said this includes allowing them to pay with a card anywhere that Visa is accepted, and having an intuitive mobile user interface on its app.

The company also sees opportunities to provide related services.

“Our goal is to be a healthcare company that really runs on FinTech rails such that we are, at a higher level, trying to use financial services to inspire better health outcomes,” Greene said. “We’re really energized by the mission that we have to empower patients through financial technology.”