Assurant Health, which plans to exit the health insurance business in 2016 due largely to its struggles to adjust to the post-Affordable Care Act market, lost $124 million in the second quarter of 2015, the company announced.
The company notes that in the beginning of Q2, Assurant is revising its presentation of earnings results to reflect its recent decision to either sell or shut down its health insurance and employee benefits in order to focus on housing and lifestyle insurance.
Assurant posted a net operating income of $143.6 million, compared to 2014 Q2 net operating income of $121.4 million. Net income decreased to $32.8 million, whereas 2014 Q2 net income was $143.6 million.
The company notes that a less-favorable loss experience on ACA-qualified policies resulted in a net loss of $123.8 million, compared to the prior year, due to $106.7 million (after tax) of exit-related charges, including premium deficiency reserves.
Additionally, other exit-related charges totaled $27.1 million after tax in Q2, while ACA risk-mitigation estimates were revised from $346.3 million to $355.5 million--the change is based on a final notification from the Centers for Medicare & Medicaid Services.
To fully exit the health insurance market, Assurant expects the cost to range from $80 million to $95 million.
The company has been struggling to make ends meet since implementation of the Affordable Care Act. In 2010, Assurant announced plans to cut jobs in response to "significant changes in the post-reform health insurance marketplace," FierceHealthPayer reported.
What's more, because the ACA banned or restricted many risk-management practices--which Assurant capitalized on prior to the ACA--the company was hit with a series of high-profile lawsuits. For instance, that same year Assurant laid off employees, the company paid $10 million to a South Carolina customer whose coverage was cancelled when he tested positive for HIV after a lawsuit found Assurant's computer algorithm pinpointed members with HIV and looked for reasons to terminate coverage, reports Healthcare Payer News.