Vijay Kotte: I’ll answer the last part first. It’s hard for me to assess what other players are going to do. I think everybody’s got different strategies as to how do they address their short-term needs versus thinking about the long-term as to who they want to be, et cetera. But as it relates to the health plan, the health plans have leaned into this. As we indicated in the prepared remarks, we had nearly 75 plus percent of all of our enrollments run through the Encompass workforce. That is the multi-tiered approach, it is the high touch, really shopping experience that is truly unparalleled in the industry at this point. And the health plans have found that that is higher quality and resulting in better results. So they have definitely leaned into wanting us to continue that program and supporting us through that process.
They wanted us to find ways to expand that program. As you know, we have downline agents who work underneath our umbrella, use our technology as well, expand that as well so that we can improve the quality of those downlines similar to what we’ve done with our internal agents. So we have definite strong support on it, pretty much driven off of the fact that we’re delivering better quality, while still maintaining pretty high volumes at the same time.
Jim Sidoti: And it’s clear that the shift has improved your ability to predict cash flows and receivables or from collection of receivables, but do you think it’s also improved your ability to predict future revenues?
Vijay Kotte: I think it’s from the stability of the revenue that we are booking and recognizing in a period, it is absolutely giving us better predictability of that. So when you think about cash and you think about the revenue you book in a period, so we can manage our cash flow in a much better way when you have the Encompass world with our shift to non-agency. And you also have an ability, when you book that revenue, as you saw in this last period, even with that Encompass workflow, we still have 606 revenue running through the Encompass workflow, such that that quality and predictability and stability of what we write under that is even higher. So we have a higher confidence in what we book on a 606 basis, because it will never go to zero as we’ve always said. And then you have an even higher confidence of what you book in revenue for that that runs through the non-agency line.
Jim Sidoti: And then just back to my initial question. If you have this better visibility on revenue, should we expect any major changes on investments and operating expenses in 2024?
Vijay Kotte: We’re going to continue to invest. There will be incremental investments in technology that you should expect for us to continue to get standardization, systematic improvements in the experience for the consumer, more engagement points as we described, moving from just enrollment to more of that engagement, activation, and full support of the consumer through the process. So you’ll see some more investment in that as we go into the year. And in most of that, we’re finding internal opportunities to reallocate our dollars to make those investments within the company for the future.
Jim Sidoti: Great. Thank you.
Operator: One moment for our next question. The next question comes from Sandeep Soorya with Delaware Street Capital. Your line is open.
Sandeep Soorya: Hi, can you guys hear me okay?
Vijay Kotte: Yes. Hi, Sandeep. How are you?
Sandeep Soorya: Hi, good. Thanks for taking the question. I have a couple questions. The first is, how should we think about the proposed regulations? And how do we think about regulations in general on the Encompass business relative to the agency business?
Vijay Kotte: Great question, Sandeep. I think as we’ve all learned, it is really important to wait for two things when it comes to proposed regulations. As we know, this is an annual event. And there is a proposed rule, and then there is a final rule. And even after a final rule comes out, it’s generally not specific enough to get clear guidance from it. You end up going to each individual health plan in our business to understand their interpretation of those rules. So I think it’s a little too early as to understanding what it would be, what it could be, et cetera. What I would say is, we are generally in alignment with the concept of protecting the consumers. We want to make sure that there is more access to all the different health plans and the information around that, and that there aren’t inappropriate incentives to sway that unbiased shopping experience.
So, we’ve always been supportive of that, and I think we’ve proven in the last period that we’re absolutely investing in that experience. And as we look at what the proposed rule is and what they’re controlling for. I think they’re really trying to find more and more ways to drive that, to support that experience. So we believe there’s a lot of great regulations already out there today before the proposed rule that could lean into just really focusing on enforcing what’s there with all the bad actors that are out there that are causing more of the noise than the problem. But that said, again, to your primary question, it’s more left to let’s see what comes out. Let’s see what the interpretations of that are going to be. And I’m assuming most of what you’re describing is less about operational workflows.
