Assurant health cutting jobs ahead of health reform implementation

Aug 21 2010

News outlets reported on a variety of industry news related to the health overhaul.

Milwaukee-based Insurer Assurant Inc. is cutting its workforce in various locations around America ahead of health care reform implementation. The Milwaukee Journal Sentinel reports that 130 jobs in Milwaukee and Plymouth, Minn., will be cut. "The company, which sells health insurance for individuals and small employers as well as short-term policies, faces an onslaught of new federal health care reform regulations, including the requirement that it spend 80% of premiums on medical care. … The new regulations under federal health care reform are expected to remake the industry, particularly for insurance sold to individuals and families and to small employers, such as those with 100 or fewer workers" (Boulton, 8/19).

The Associated Press/Bloomberg Businessweek: Assurant "expects to complete the layoffs by mid-January. Assurant estimates it will book $5.5 million in severance and other after-tax costs related to the job cuts in the third quarter and another $1.3 million in the fourth quarter" (8/19).

The Business Journal of Milwaukee reports that the company said it is cutting jobs as part of a streamlining process. "Assurant Health ... has about 1,700 employees in the Milwaukee area, according to The Business Journal's December 2009 list of private sector employers" (8/19).

In the meantime, the new federally funded high-risk pools created by the health reform law are off to a slow start, Kaiser Health News reports. "About 3,600 people have applied and about 1,200 have been approved so far in state plans that started in the beginning of July, according to data from the states and federal government. Officials say the new plans, although a better deal than anything comparable on the private market, still may be unaffordable for many people. Eligibility requirements are another possible barrier. And states have had little time to publicize the plans. … Many states were so worried about not being able to meet the demand for coverage with limited federal funding that 22 of them deferred to the U.S. Department of Health and Human Services (HHS) to run the new plans as part of the Pre-Existing Condition Insurance Plan program. The other 28 states and the District of Columbia opted to start their own" (Galewitz, 8/19).

Finally, The Associated Press/Bloomberg Businessweek in a separate story reports that America's Health Insurance Plans, the insurer trade group, "ratcheted down its federal lobbying spending in the second quarter, which started shortly after Congress passed health care reform that aims to cover millions of people but promises many changes and restrictions for insurers. The association known as AHIP spent about $2.3 million in the three months that ended June 30, a 15-percent drop from the $2.7 million it spent in the first quarter. But the association's spending represented a 22-percent increase from the nearly $1.9 million it spent in the second quarter of 2009" (8/19).