H&R Block sets up health care partnership with GoHealth LLC
09/04/2013 10:35 AM
09/04/2013 10:35 AM
H&R Block Inc. has teamed up with an online health insurance company to help tax customers enroll at health care exchanges next month under the Affordable Care Act.
Chicago-based GoHealth LLC also will provide call center support for the online service that will carry the Block name.
Block will employ insurance agents in its Arizona tax offices starting Oct. 1 under a pilot program.
Bill Cobb, chief executive of Block, announced the partnership with GoHealth during a conference call with stock analysts Tuesday in which the Kansas City tax preparation company discussed its first-quarter earnings.
Cobb said the partnership with GoHealth won’t generate meaningful revenue for Block right away, but the company expects health care and taxes to become closely tied in the future.
“This is a long-term play, and we’ll need to be prepared when our clients turn to us,” Cobb said during the call.
Cobb said GoHealth would provide the online platform behind Block’s help with enrolling at health care exchanges and choosing health coverage. A GoHealth official referred questions to Block.
GoHealthInsurance.com, launched in 2010, allows consumers to search for and compare available health coverage.
Block had said previously it was working on plans to help customers with the new exchange system, which is part of the Affordable Care Act, widely known as Obamacare.
The law set Oct. 1 as a deadline for state and federally established health care exchanges to begin offering health care coverage. Some consumers will qualify for subsidies to help pay for insurance. The amounts will depend in part on consumers’ expected income.
Block tax preparers had raised the Affordable Care Act’s provisions with customers in the tax season that ended in April. The company again plans to include health care as part of the tax review in the coming tax season.
Financially, Block announced higher revenues and losses in its seasonally slow first quarter, which ended July 31.
The tax preparer also said it had asked for but been denied regulatory approval to buy back more of its own shares. Stock buybacks have been a traditional use of the company’s capital and are intended to increase the returns to stockholders.
Block said its revenue grew to $127.2 million, up 31.8 percent, in the three months that ended July 31. It attributed the increase mostly to “timing differences” in its Australian tax operations.
Losses in the quarter totaled $115.2 million, or 42 cents a share, compared with $107.4 million, or 39 cents a share, a year ago.
Shares of H&R Block fell 3 cents and closed Tuesday at $27.88 before the company’s report.
Block’s announcement said some of the increase in losses was due to costs from its plans to sell most of the assets of its H&R Block Bank.
Block said in July that it would sell most of the bank’s assets to Republic Bank & Trust Co. The sale will free Block from what it counts as considerable regulatory costs triggered by owning a bank.
Regulatory delays, however, will prevent it from completing the sale before the end of the month as planned. Block said it therefore would use H&R Block Bank for next year’s tax filing season. It still expects to complete the bank sale to Republic next year and rely on Republic in the following tax season.
Block’s announcement said Republic’s decision to convert itself to a national bank charter had led to the delay. Republic doesn’t expect to complete all the regulatory steps before the sale agreement deadline.