Nara Health, a Chicago startup rebuilding how employers administer self-insured health plans, has raised $14 million across pre-seed and seed rounds led by Khosla Ventures. Long Journey Ventures, Superior Studios and a group of strategic angel investors also participated.

The company operates as an AI-native third-party administrator, or TPA, the behind-the-scenes layer that handles claims, benefits and member support for employers that fund their own health coverage.

Rebuilding the TPA

Self-insured employers typically stitch together several vendors to run a health plan: one for claims, another for navigation, another for care management. Nara Health combines benefits administration, claims processing, member navigation and care orchestration in a single platform.

The company pairs that software with alternative plan designs, including direct provider contracting, reference-based pricing, cash-pay pricing and Direct Primary Care. Agentic AI then coordinates care for members inside those plans.

"By bringing benefits administration, claims processing, care orchestration, and member support into a single intelligent platform, Nara Health helps employers lower healthcare costs while making it dramatically easier for employees to access and use their benefits," said co-founder and CEO Sidhartha Sinha.

Early Traction

Nara Health already covers more than 25,000 lives and has processed over $600 million in aggregate medical claims. The company says member support questions are answered in about five seconds and prior authorizations are handled the same day, compared with the three to five business days common across the industry.

Employers on the platform have cut year-over-year healthcare spend by 15% to 50%, according to the company. In one case study, Advanced Medical Pricing Solutions reported a 55% reduction in benefits costs.

A Founder Built for the Problem

Sinha has spent his career on the delivery side of healthcare, designing hospitals and care models and building AI products for health systems and insurers. That background shapes a pitch focused as much on access as on cost.

"Our care has been limited by our coverage — that should never be the case," Sinha said.

Why It Matters

Employer health costs keep climbing, and more mid-sized companies are moving to self-funded plans to gain control over spending. That shift has created an opening for administrators that can do more than process paperwork.

Khosla Ventures has made a series of bets on AI reshaping healthcare operations, and Nara Health fits that thesis: a back-office function that has changed little in decades, now rebuilt around automation. MedCity News also covered the raise as a bet on the third-party administration model.

For employers weighing a switch, the numbers Nara Health is putting forward, same-day authorizations and double-digit savings, are the kind that tend to get a CFO's attention.

Source

Business Wire — "Nara Health Raises $14M to Reinvent Health Insurance Through AI Benefits Administration and Alternative Health Plans"