Summary:

The health insurance industry has a popularity problem, but startup WellTok believes its health-centric social network can encourage healthy habits and brand affinity among consumers.

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photo: Gts

When it comes to popularity, the health insurance industry isn’t likely to be at the top of anyone’s list. In fact, a survey last year from market firm Temkin Group found that health insurance received the lowest customer service ratings of any industry.

But WellTok, a Denver, Colo.-based startup, believes its health-centric social network can not only encourage healthier behavior among users, but build consumer trust for their health plans. And it just raised $18.7 million more to prove it.

The company said Wednesday it had raised a Series B round from Emergence Capital Partners, InterWest Partners and New Enterprise Associates (NEA), bringing its total amount raised to $26 million. It also said that former executive chairman Jeff Margolis would serve as its new CEO.

Launched in late 2011, WellTok targets health plans with a health-related social network, called CaféWell, that uses personalized tools, fitness-tracking devices, wellness-focused content, game mechanics and community dynamics to encourage healthy steps. Users can choose to be as public or as private as they’d like to be about their behavior and, as they log healthy activities, they earn points which can translate into discounted premiums or other financial rewards, Margolis said in an interview.

In a way, it’s very similar to corporate wellness programs like Keas and ShapeUp, which similarly offer patient engagement platforms for encouraging healthy behavior. But Margolis said he believes that, by reaching consumers through their health plans, the company can generate more value for consumers and employers.

In addition to keeping patients healthy and managing chronic conditions, the company says it can also help health plans with their popularity problem.

“People tend not to have a high degree of trust for the health plans – they tend not to understand the value their health plans can bring them,” Margolis said. But by structuring CaféWell so that the health plans sponsor consumers’ access to the site (and by making sure that consumers see their health plan’s branding), he added, “it makes consumers say, ‘Hey, my health plan isn’t just there to hassle me during enrollment or deny my claims, they’re actually here to help me.’”

So far, Margolis said, CaféWell users engage with the site four times more than they engage with their health plan’s regular website (which is just about never) and that they average about 50 minutes per person per month.

Nine health plans currently use CaféWell, but Margolis said the new funding would be used to expand into new markets, accelerate product development and build new strategic partnerships.

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