PPACA Enrollment Period 2015: The curtain (really) falls

2. Rating agencies seem to be struggling to find a way to describe how the new PPACA system did, or did not, cause Assurant Inc. (NYSE:AIZ) to back away from the health insurance market.

Moody’s Investors Service affirmed the parent company’s senior debt rating at Baa2, and cut the insurance financial strength rating of Assurant Health to Baa3, from Baa2.

Assurant implied that changes in PPACA rules had hurt results.

Moody’s said of the effects of PPACA on Assurant Health only that the companies’ stand-alone credit profiles “take into account widening net losses on individual medical policies under the Affordable Care Act.”

Standard & Poor’s Ratings Service affirmed its BBB plus long-term counterparty credit rating on the parent company and its A minus rating on the insurance companies that make up Assurant Health, but it changed the outlook on Assurant Health to negative, from stable.

S&P did not mention PPACA in its comment on the Assurant Health news. 

3. A watchdog agency sees signs that the IRS has little ability to go after employers that fail to make PPACA-related payments.

PPACA requires the Internal Revenue Service (IRS) to work with HHS to enforce compliance with new tax, penalty and assessment provisions. 

One of the first PPACA revenue-raising provision to take effect has been a fee that’s supposed to fund the operations of the Patient-Centered Outcomes Research Institute (PCORI), a federal agency that’s supposed to commission studies comparing the effectiveness of various medical treatments.

Plans and insurers were supposed to pay $1 per covered life in July 2013, and $2 per life for plan years ending after Oct. 1, 2013.

Officials at the Treasury Inspector General for Tax Administration (TIGTA), an agency that keeps tabs on the IRS, says the IRS is having trouble administering the PCORI fee requirement.

Insurers and plan sponsors filed 72,035 PCORI fee forms for the 2012 tax year, and paid $114 million through the forms, TIGTA officials say.

When TIGTA officials themselves looked at the data from outside sources, they found evidence that 25 of the 391 health policy issuers that filed supplemental health care exhibits with state insurance regulators had failed to file PCORI tax forms. Those issuers covered about 1.5 million people, or about 1 percent of the lives included in the supplemental health care exhibit filings.

TIGTA officials also estimated that sponsors of self-insured health plans with about 1.8 million enrollees had failed to file PCORI tax forms.

4. Some carriers just didn’t talk about PPACA all that much, when they could avoid it.

Cigna Corp. (NYSE:CI), for example, spoke only briefly about PPACA and the public exchange system when it announced its first-quarter earnings.

The company is reporting $531 million in net income for the first quarter on $9.5 billion in revenue, compared with $528 million in net income on $8.5 billion in revenue for the first quarter of 2014.

Cigna says in its quarterly financial filing that it hopes to collect $30 million in PPACA “risk mitigation programs” money as of the first quarter of 2015. A year earlier, it posted a $10 million risk mitigation programs receivable.

During a conference call with securities analysts, company executives said that most of the receivable would be coming from the PPACA reinsurance program. They said of exchange plan financial performance that they knew going in that the plans would probably not generate much revenue or income early on.

This year, the loss in the business is probably lower than it was in 2014, and the company is hoping performance will improve in 2016, executives said.

David Cordani, the company’s president, talked more about private exchanges. The company has seen “relatively modest adoption,” but that the private exchange system is also in its early stages. Many adopters are using health accounts or coinsurance requirements to give the enrollees an incentive to hold down the cost of care, he said.