USA ASC 606 - Health Insurance Implications

[FooserX]

Hey Everyone,

Being tasked to see how ASC606 impacts major Health Insurance Company (Kaiser Permanente) receivables, and the reserve of the receivables....any thoughts?

When I look up 606, it clearly states that insurance companies are out of scope, but I'm struggling to find out why....which step in the process makes insurance steps out of scope?

It's so tricky, because Health Insurance companies deal with direct pays and Medicaid...which are all over 606 examples. It's nuts trying to dig through all this...

TIA!

 

[kirby]

https://www.ey.com/publication/vwluassetsdld/technicalline_05263-181us_insurancerevenue_19december2018/$file/technicalline_05263-181us_insurancerevenue_19december2018.pdf?OpenElement

This might help

 

[FooserX]

Hey - I found that one today!

To me, I thought it was clear that Health Insurance wasn't impacted by 606, but when I brought this up to my supervisors, they said the reserves portion/bad debt is "variable consideration" - and then dumped 20 pages of white paper accounting theory on me lol. It will be a while before I understand it all.

Thank you Kirby!