Welcome to the May 9 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Aetna CEO hopeful about Obamacare’s long-term future despite difficulties
As health insurers including Humana are weighing whether to exit some state health exchanges, Aetna’s CEO said he believes the Affordable Care Act market will continue to be beset by difficulties — though he remains hopeful about its long-term prospects.
Humana said Wednesday that its earnings took a hit in part because health care expenditures for customers it has gained through the Affordable Care Act continue to outstrip those customers’ health insurance premiums.
Humana said it is weighing whether to leave the ACA exchanges in some states in 2017 — though according to ACASignups.net, the company already has decided to leave exchanges in Alabama, Kansas, Virginia and Wisconsin, which would affect about 25,500 customers.
Aetna CEO Mark Bertolini said in the company’s most recent earnings call that the company would like to see some structural changes in the exchanges related to risk pooling and flexibility.
Aetna wouldn’t elaborate on what specific changes it would like to see, but Bertolini said that the types of changes Aetna wants to see require a “legislative response.”
Given the gridlock in Washington, D.C., at least until a new White House occupant, that’s not going to happen, he said. And at some point, if legislators fail to make some changes to the ACA, earning a profit in the exchange market will get tougher — though Aetna, unlike Humana, expects that portion of its business to generate a profit this year.
Aetna, based in Hartford, Conn., wants to buy Humana and hopes to complete the acquisition in the second half of this year.
Humana, which employs about 12,000 in Louisville, told IL via email that it “will continue to work closely with the current and future administrations, as well as state governments, to address persistent challenges including the need for up-front, real-time eligibility verification by plans, risk adjustment model enhancements, and other changes that encourage all individuals to obtain and maintain ACA-compliant coverage.”
Bertolini also told investors that despite the challenges, participation on the exchanges remains a good investment for Aetna because it has allowed the company to gain hundreds of thousands of customers at a cost that is far below what it would have cost without the exchange infrastructure.
The CEO said that Aetna has gained 911,000 customers through exchanges and has 1.2 million customers with ACA-compliant health insurance. The company would have had to spend about $2 billion to acquire those customers without the ACA, which is much higher than the losses the company has suffered in the program in the last 2.5 years, he said.
“We see this as a good investment, hoping that we have an administration and a Congress that will allow us to change the product like we change Medicare every year and we change Medicaid every year,” Bertolini said. “We haven’t been able to touch this product because of the politics, but if we get to that point, we believe we are in a very good place to make this a sustainable program.” —Boris Ladwig
Escape Lou gives customers the chance to play 007
A new type of escape game is coming to Clifton this summer.
Nestled next to The Hub at 2235 Frankfort Ave. in Suite 107, Escape Lou is under construction. Escape Inc., which operates in Minneapolis, Milwaukee, Kansas City and St. Louis, is in the same genre as existing concepts Breakout Louisville and Escape Louisville, but Escape Lou has one common theme of putting customers in the place of government agents including the CIA, MI6 and the CDC.
For those who haven’t heard of the growing industry, escape adventures give groups one hour to solve puzzles and find clues to save themselves from a kidnapper, pull off a bank heist or foil a terrorism attack.
“I’m really into immersive entertainment,” said Matt Ames, founder of Escape Inc.
Ames started the company after growing bored with running a 200-acre outdoor paintball park in Minnesota that he started while still in high school. He left a friend to run the business and took off on a trip to various parts of the world. It was in Athens, Greece about three years ago that he first encountered escape games — they hadn’t yet caught on in the U.S.
“I was like ‘This is incredible,’ ” he said. “I immediately started nerding out and doing research.”
Ames has been living in Louisville for three months to help launch Escape Lou and through Realtor Zachary Swanson of Hoagland Commercial Realtors found the Clifton building, which once renovated will include a briefing room for missions, secret passages and more.
“We were looking for an area with good bars and restaurants,” Ames said. “We like the vibe” on Frankfort Avenue.
He is now hiring a full-time manager and assistant manager as well as 10 part-time “mission producers.” Pay for mission producers is $12.50 an hour. Email [email protected] for more information.
Escape Lou will open in early to mid-July. It will start with three different missions — defusing a bomb, finding evidence against an international criminal, and preventing a global viral outbreak. A fourth mission will be added after about six months.
Teams can have four to 10 members, and missions cost $29.95 per person. Overall, Escape teams have a 30 percent success rate, Ames said. (So, don’t feel bad if you don’t solve all the puzzles in an hour the first time around.)
If you can’t wait until July, Escape Lou has a puzzle hidden in plain site on its website that offers those who solve it a discount code.
Get a quick glimpse at one of Escape’s missions below. —Caitlin Bowling
Pending judicial approval, Louisville-based steakhouse chain Texas Roadhouse will pay out $5.5 million in a class-action lawsuit settlement.
The company last week reported the expense in its first quarter earnings release, which noted that the settlement had a negative impact of 5 cents on the diluted earnings per share. Texas Roadhouse reported a diluted earnings per share of 50 cents for the quarter, a 9.8 percent increase compared to the same period a year ago.
Executives declined to comment further on the payout or say what the case involved because it’s still pending approval.
Back in 2012, the company paid out a similar amount in a class-action lawsuit regarding wages and tips filed by employees from nine restaurants in Massachusetts, according to an online legal platform. The employees argued that Texas Roadhouse did not pay them minimum wage and violated state law by splitting waiters’ tips with manager, hosts and other non-wait staff. —Caitlin Bowling
Jeffersontown residents opening sand volleyball court, restaurant
A group of nine Jeffersontown residents are coming together to create a new hangout for their neighbors.
Plans for the proposed J-town Beach include a sand volleyball court, an 1,410-square-foot outdoor patio and a 2,378-square-foot restaurant and bar inside. It will be located at 10315 Watterson Trail, next to Cafe on Main Street, with which the business will share a parking lot.
Louisville has several sand volleyball courts, but there isn’t one in J-town, said Danny Butler, a partner in J-town Beach. “We saw a hole right where we lived in J-town, so we decided to give it a go.”
Although food and adult beverages will be sold there, the main reason the group decided to start J-town Beach is for the sport.
“We are doing this for the volleyball,” Butler said.
The menu is still up in the air, but it will consist of light, inexpensive fare, he said, which can easily be made in the building’s small kitchen.
Quite a bit of work needs to be done, according to Butler, including installing garage doors, adding a second bathroom, setting up the courts and cosmetic changes.
The group plans to start with one outdoor court, but there is enough space for two, which would allow for tournaments. The courts will feature white sand and include 10 feet of out-of-bounds sand surrounding the court for safety reasons if a player decided to take a dive, Butler said. “We really spend a lot of time on the volleyball court.”
Pending construction and city approvals, Butler said he hopes to open by the end of July and offer volleyball teams the chance to participate in a short league session. J-town Beach is looking to cap its league at 12 teams to keep weekly matches from running late into the evening. —Caitlin Bowling
New boutique opens in downtown New Albany
A new business, Dream Boutique Clothing and Accessories, has opened in The Underground Station, a retail center at 37 Bank St. in downtown New Albany.
“We are offering a store where every woman can walk away with something that flatters their body type and makes them feel beautiful, comfortable and confident,” co-owner Tianna Barnes-Palmer said in a news release. “Our clothing ranges from size 2 to 22.”
Among its inventory is a maxi dress that can be twisted and tied in 24 ways, Ebony Bunny Luxury Hair extensions, and men’s accessories including ties, cuff links and socks. Jewelry and women’s clothing prices range from $29.98 to $119.98, according to the store’s website.
The store will host a grand opening celebration at 3 p.m. June 3, and a fashion show previewing the boutique’s Dream Summer Collection at 7 p.m. June 4. The fashion show will be followed by a light reception, live music and dancing.
KFC debuts edible nail polish
KFC is making it harder for nail biters to quit.
The Louisville-based chicken chain premiered two edible nail polishes in Hong Kong, according to BuzzFeed.
“It actually tastes like KFC,”Anna Mugglestone, marketing director at Ogilvy Hong Kong, which is responsible for the advertising stunt, told BuzzFeed.
The recipes were developed by McCormick & Co. — yes, that McCormick. The polishes come in two flavors, Original Recipe and Hot & Spicy. However, only one will be made available for purchase. People can vote by liking or loving the photo on Facebook.
Louisville Forward honored by magazine
For the second year in a row, Site Selection magazine has named Louisville Forward, the city’s economic development department, one of the Top U.S. Economic Development Groups. Louisville Forward was founded in 2014 when the Mayor’s Office decided to take over business attraction activities for Greater Louisville Inc., which focuses on the city’s existing businesses community.
Site Selection is a trade magazine in the economic development community.
“This highly-coveted national recognition is well deserved by Louisville Forward and represents another record year for 2015,” Mayor Greg Fischer said in a news release. “Our integrated approach to economic and community development with coordinated concierge-style assistance has produced the highest amount of job creation in the last decade and points to Louisville’s future success.”
Louisville Forward is credited with helping businesses create nearly 10,500 new jobs in Louisville, representing an investment of nearly $3 billion. New jobs heralded by the magazine included those at Ford, GE and Grupo Antolin.
The recognition is based on four objective criteria: jobs, capital investment, jobs per capita and investment per capita.
River Ridge hires director of finance and marketing
The River Ridge Development Authority has named Dustin Coffman as its new director of finance and marketing.
In addition to managing River Ridge Commerce Center’s finances, Coffman will lead the expansion of the national and international marketing efforts of the 6,00o-acre business park in Southern Indiana to location consultants, developers, corporate real estate executives and project managers.
“The addition of Dustin Coffman in this key position will enhance our efforts to continue the ever expanding development of the River Ridge Commerce Center as the premier industrial site in the Midwest,” Jerry Acy, executive director of the River Ridge Development Authority, said in a news release. “Dustin’s previous experience in industrial development, commercial/industrial marketing and as a national sales manager will serve him well as he joins the River Ridge team.” — Caitlin Bowling
Valspar and volunteers to revitalize Portland’s Habitat for Humanity
Valspar, one of the nation’s leading manufacturers of interior and exterior paint, is teaming up with Habitat for Humanity of Metro Louisville for their National Neighborhood Week. On May 14, local Valspar employees will donate their time to revitalize the community space and building on the Habitat campus, clearing out materials from an old truck dock, and, of course, painting.
People in the neighborhood and Habitat homebuyers will also help at the event.
Habitat is in the Portland neighborhood and the campus is used for events with Habitat homebuyers, volunteers and the community. It also features a green space that is used for raised-bed gardens.
“Louisville Habitat is deeply grateful to Valspar for choosing our campus in the Portland neighborhood for their ‘Let’s Roll’ project,” Rob Locke, president and CEO of Habitat for Humanity of Metro Louisville, said in a press release. “Dozens of local volunteers will join others across the country in this ambitious project designed to help neighborhoods become brighter. When this project is done, a significant portion of Columbia Street will be repainted and feel more like home.”
Valspar’s National Neighborhood Week is May 9-14. Valspar donates paint for every Habitat home built, repaired or refurbished in the United States — a total of 2.5 million gallons through the end of 2015. Valspar is also providing $2.5 million in cash and product donations to support 51 Habitat organizations, including nearly $110,000 for Habitat for Humanity of Metro Louisville. –Melissa Chipman