- Parent company Assurant Inc. has said that it will sell off or shut down Milwaukee-based Assurant Health by the end of next year. Assurant Health is expected to post an operating loss of $80 million to $90 million in Q1 of this year, following a $64-million loss in 2014.
- Assurant Health, which employs 1,700 individuals, specializes in heath plans for small employers and individuals.
- The company is also considering selling its employee benefits business, which offers dental, short- and long-term disability, and life insurance.
"While it is a difficult decision, we believe they would be strong assets for new owners that are focused more exclusively on healthcare and employee benefits," said Alan Colberg, CEO of the parent company.
Steven Schwartz, an analyst with Raymond James & Associates, called Assurant Health a "casualty of the ACA." Coverage for small employers and individuals are the two markets that have been forced to adapt perhaps the most drastically under the ACA. When the legislation handicapped the company's underwriting capabilities—it "went away" Schwartz said—Assurant lost one of its best market advantages.
Add that to the fact that Assurant is not big enough in any given market to negotiate directly with providers (instead paying a monthly fee to other insurers for network access), Assurant Health is probably going to be a tough sell. The parent company has said if it can't find a buyer, it will cease selling plans in 2016 and shut down operations by the end of the year. The company said it will stand by its commitments to existent plan-holders.