News : Online Insurance Company eHealth Lays Off 72 in Gold River
Sacramento, CA, USA, March 23, 2015 - Obamacare has taken a toll on sign-ups through online health insurance giant eHealth Inc., and employment at the company’s Gold River call center off Highway 50.
The company laid off 72 employees at the center March 10, according to information filed with the state Employment Development Department. A number of executives, including senior vice president Robert Hurley, still work there, eHealth spokesman Nate Purpura said. He declined further comment. In 2012, the office had more than 100 employees.
eHealth is eliminating a total of 160 jobs, about 15 percent of its total workforce. The move comes after its online insurance marketplace - dubbed ehealthinsurance.com - got lower-than-expected new membership and renewals in its individual and family insurance business as consumers shifted attention to health benefit exchanges such as Covered California.
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Estimated total membership at eHealth was 1,117,400 members in December 2014, a 10 percent decrease from estimated membership of 1,244,900 the previous year. Individual and family plan membership declined 29 percent - to 565,900 from 796,100 - during the same period, the first year of exchange sales under the Affordable Care Act.
The company reported a net loss of $16.2 million for the calendar year ended December 2014, compared to net income of $1.7 million for 2013.
"We recognize the need to adjust our fixed cost structure as the result of lower membership than we expected in our individual and family health insurance business," eHealth CEO Gary Lauer said in a news release when the layoffs were announced.
Some resources will be shifted to an area of growing enrollment: Medicare. eHealth reported a 15 percent increase in Medicare-related revenue last year, to $44.5 million in 2014 from $38.8 million in 2013.
The company expects to spend up to 4.7 million in 2015 on layoff-related costs like termination benefits. The cuts primarily affect technology, customer care and enrollment workers, but also some in marketing, advertising and administrative jobs, financial documents show.
Employees laid off in Gold River have no bumping rights and they are not represented by a union, according to the layoff notice filed with the state. Their employment ended at the close of business March 10.
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About eHealth Inc.:
eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, America's first and largest private health insurance exchange where individuals, families and small businesses can compare health insurance products from leading insurers side by side and purchase and enroll in coverage online. eHealthInsurance offers thousands of individual, family and small business health plans underwritten by more than 180 of the nation's leading health insurance companies.
Published: Monday, March 23, 2015