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