By Clint Swett
Bee Staff Writer
(Published Sept. 9, 1999)

A Silicon Valley company designed to be a one-stop shop for health insurance over the Internet has opened a customer service center in Folsom that could employ up to 150 people within a year.

The company, eHealthInsurance.com, opened its call center with 17 employees last week in the Iron Point Business Park, the company's founder and chief executive officer, Vip Patel, said.

Based in Sunnyvale, eHealthInsurance.com acts as a broker for such major health insurance companies as Blue Shield/Blue Cross plans, Kaiser Permanente, Health Net and PacifiCare.

It is licensed to sell insurance in 15 states, including California, and soon will be in states encompassing 80 percent of the United States population, he said.

The company focuses on selling health insurance to individuals and small businesses, two market segments increasingly marginalized by higher rates. Patel estimates that there are about 45 million people in the United States who are not covered by health plans at work or by government insurance such as Medicare or Medicaid.

It differs from other online insurance services in that customers can not only compare quotes and coverage, but can fill out and submit applications, Patel said. Most other online operations allow customers to compare quotes, but then funnel them to the broker or insurance carrier, he said.

"We're the definition of e-commerce," Patel said. "We're on track to be the Amazon.com of health insurance."

Despite eHeathInsurance.com's grand designs, it won't be a threat to well-established insurance agencies, predicted David Dellinger, executive vice president of the California Association of Life Underwriters.

Dellinger acknowledged that the Internet in various forms will reshape the insurance industry, but he said there always will be a need for experienced agents and individual attention.

"I don't think the people who are deeply established in our business are worried at all," he said. "The better agents keep business on the books by having happy clients."

Established in 1997, Patel's company is backed by $12 million in capital from Kleiner Perkins Caufield & Byers and Weiss, Peck & Greer, two of the Bay Area's top venture capital firms.

The people employed at eHealthInsurance.com's customer service center are licensed insurance agents who can handle questions from customers and even act as their advocates in disputes with insurance carriers, Patel said.

Though the company has Silicon Valley roots, eHealthInsurance.com chose the Sacramento area for its customer-service center because of the proximity to state licensing agencies and because of the area's deep pool of trained health insurance workers.

"There seems to be an abundance of health insurance professionals located there already," Patel said.

Al Gianini, executive director of the Sacramento Area Commerce and Trade Organization, said Sacramento continues to attract more than its share of call centers, primarily because of a strong available labor pool.

Such organizations as the online brokerage E*Trade, Internet travel agency Premier Travel and Internet service provider EarthLink Networks have established or expanded customer support operations in the area in recent months.

"Every time I think the market is tightening up, another company comes in and is able to find people," Gianini said.