Stack Health has raised a $21 million seed round to help small businesses replace traditional group health insurance with employee-owned individual plans funded through an Individual Coverage Health Reimbursement Arrangement (ICHRA).
The round was led by 8VC, with participation from A*, Heartland Ventures, The O.H.I.O. Fund and other investors. The company was founded by Alex “Fro” Frommeyer, the former founder and CEO of Beam Benefits, and will use the new capital to promote a model in which employers provide defined monthly allowances and employees choose individual coverage that fits their doctors, prescriptions and budgets. Frommeyer said in a statement, “Founding and building Beam shaped me into the person I am today. Now, it’s time to use that experience, along with our incredible team, to build a company that gives Americans choice, freedom, and personalization of their healthcare.”
Employers and employees are confronting rising costs and unpredictable renewals. WTW projects that U.S. employers could face an 11.1% increase in health-care costs in 2027 if they make no changes to their benefits programs. Aon forecasts a 9.5% increase next year, pushing average employer health-care costs above $19,000 per employee. Aon also estimates employees with employer-sponsored insurance will spend an average of $5,297 on health care in 2026, including $3,130 in paycheck premium contributions and $2,167 in out-of-pocket costs — a total $388 higher than in 2025.
How Stack Health works
Stack’s approach is built around an ICHRA, a benefits structure that allows an employer to reimburse eligible workers for individual health-insurance coverage and qualifying medical expenses. The company frames the employer’s role as a funder of individual choices rather than the buyer of a single group policy.
The model has three central pieces. First, a fixed employer contribution: employers establish a defined monthly health-benefit budget per employee rather than negotiating a new group-plan premium each year. Second, individual plan selection: workers choose their own carrier and plan, using criteria such as doctor networks, hospital systems, prescription coverage, expected care needs and household budget. Third, HSA tools: eligible members can use Stack’s health savings account tools to pay qualified medical expenses with tax advantages and invest money they do not spend.
Stack does not promise cheaper care for all workers or that individual-market plans will cost less in every case; instead, the company says the model gives businesses more control over what they spend and attaches coverage to the person rather than the job, so a worker changing employers or becoming a contractor would not necessarily start the insurance-shopping process from scratch.
Why Central Ohio comes first
Stack is launching first in Central Ohio and is currently available only to businesses with a vast majority of their workforce in that region. The company says it is limiting its initial market because health insurance is intensely local: carrier options, provider networks, plan availability, hospital affiliations and prescription coverage can vary substantially by county. Stack says it wants to become a “master of the market” before expanding, providing employees with accurate, localized information about whether a potential plan works with their preferred doctors, local hospital systems, medications and budgets.
That local focus is intended to address a key barrier in individual coverage: giving an employee a defined allowance and a marketplace login is not enough if they cannot confidently determine whether a cheaper plan excludes their doctor or creates unexpected costs when they need care. Stack plans to support these decisions with localized plan guidance and, eventually, a broader set of care-navigation tools.
From Beam to Stack
Frommeyer spent 13 years building Beam Benefits, which he has said serves roughly 25,000 employers across more than 45 states. Stack represents a more fundamental challenge to the system Beam operated within: rather than helping employers administer benefits, Stack seeks to change how small employers provide health coverage in the first place. “Fro isn’t trying to build a better insurtech, he and his team are trying to change how tens of millions of Americans choose and use their healthcare,” said Alex Moore, a partner at 8VC.
Stack now has $21 million to test whether small businesses will trade the familiarity of group coverage for more predictable costs — and whether workers, with the right guidance, will embrace health plans built around their own doctors, prescriptions and needs.
