TAMPA, Fla., Dec. 20, 2018 (GLOBE NEWSWIRE) -- Health Insurance Innovations, Inc. (NASDAQ:HIIQ), a leading cloud-based technology platform and distributor of affordable individual and family health insurance and supplemental plans, announced today the Company is introducing new guidance under Accounting Standards Codification (ASC) 606. As required by the Securities and Exchange Commission, this new accounting standard will be adopted on December 31, 2018 and will be applied retrospectively for the 2018 and prior fiscal years and will replace the previous accounting standards for revenue recognition under ASC 605. The Company’s full year 2018 guidance of expected revenue now ranges from $315 million to $330 million, Adjusted EBITDA from $67 million to $72 million, and Adjusted EPS from $2.95 to $3.15. Due to the market dynamics of Agilehealthinsurance.com and a shift in its product focus, as discussed below, the Company’s expected 2018 results are on the lower end of its previously announced guidance under its legacy accounting ASC 605.
During the fourth quarter to-date, the Company has achieved a record open enrollment period for consumers purchasing health insurance through the Company’s non-owned third-party distribution partners and submitted individual and family plan (IFP) applications have met the Company’s expectations despite the loss of an 8% distributor.
The Department of Health and Human Services implemented a rule change at the beginning of the fourth quarter 2018 allowing for longer duration Short Term Medical (STM) products. During the fourth quarter to-date, approximately 70% of the Company’s STM submitted applications were 12 months or longer in duration, including 30% which were three 12 month consecutive plans for a total of 36 months of coverage. These longer durations result in a greater lifetime values (LTV). The Company also experienced a shift towards greater STM sales as a percentage of total submitted IFP applications during the fourth quarter to-date in 2018 as compared to the same prior-year period, with STM comprising approximately 50% of fourth quarter to-date submitted IFP applications.
Health Benefits One, LLC (“Simple Health”) and all downlines and affiliates, which were terminated in early November 2018, represented 8% of submitted policies year to-date through the date of their termination. As of today, the outstanding balance of advanced commissions to Simple Health was approximately $0.6 million.
In the Company’s eCommerce channel - AgileHealthInsurance.com - the potential LTV of policies sold to-date, has increased by approximately 250% in Q4 2018 compared to Q4 2017, even as the cost of acquisition has increased, and the number of submitted policies were lower 30% year over year for the fourth quarter to-date as compared to the same period in 2017. ASC 606 recognizes a majority of the revenue of the policies and the costs of acquisition at the time of the enrollment, while ASC 605 recognizes the acquisition costs but defers the revenue recognition over the life of the policy. The Company continues to successfully execute on distributing higher-value products for consumers resulting in far greater LTV.
The Company looks forward to providing further updates around present and future business opportunities, new strategic initiatives, and compliance processes at the Analyst Day today in New York City.
About Health Insurance Innovations, Inc. (HIIQ)
HIIQ is a market leading cloud-based technology platform and distributor of innovative health insurance products that are affordable and meet the needs of health insurance plan consumers. HIIQ helps develop insurance products through our relationships with best-in-class insurance companies and markets them via its broad distribution network of third party licensed insurance agents across the nation, its call center network and its unique online capability. Additional information about HIIQ can be found at HiiQuote.com. HIIQ’s Consumer Division includes AgileHealthInsurance.com, a website for researching, comparing and purchasing short-term health insurance products online and HealthPocket.com, a free website that compares and ranks all health insurance plans, and uses objective data to publish unbiased health insurance market analyses and other consumer advocacy research.
