Humana is offering early retirement packages among measures it is taking to prepare for 2018, when it will cease to participate in the Affordable Care Act.
The Louisville-based insurer declined to cite the reasons for and scope of the action, saying only that the offers are being made “companywide.”
Humana also declined to say whether it was targeting a specific number of early retirements and whether, if that target was not met, it would take further steps to reduce its workforce. A source with knowledge of the company told Insider that the retirement offer email contained a “veiled reference to a reduction in force by the end of the year.” A writer on an online jobs portal appeared to quote a communication from the company saying that it was planning “additional involuntary workforce reductions” in the next two months.
Humana told Insider via email today that it “is adopting a number of measures to prepare for 2018 and to further position the company for a strong long-term future.” The early retirement program “will enable those who decide to take this option to pursue new goals and interests,” the email read.
Humana declined to provide information about the other measures, but said the early retirements are being offered to employees who are at least 55, have at least five years of service and a combination of age and years of service that equals at least 65.
Employees who take early retirement will receive a severance package that includes two weeks’ pay per year of service, up to a maximum of 52 weeks.
The retirement offer comes on the heels of the company cutting 180 positions in its home-based care division.
Humana had said in February that it would exit the ACA business next year because it had incurred hundreds of millions of dollars in losses because the health care costs of customers it has gained through ACA, informally known as Obamacare, had far outstripped the insurance premiums those customers have paid.
In early August, Humana’s shares rose after the company said that its struggling ACA business was doing better than expected and that it expected higher profits for the year because of its strong Medicare business. Some high-ranking Humana officials also dumped significant amounts of stock recently, with CEO Bruce Broussard selling 12,000 shares valued at more than $3 million.
Humana also is hiring in some areas: The company told Insider that it had hired or had extended employment offers to about 50 enrollment specialists in Louisville to review and process applications for TRICARE, the health plan for members of the U.S. military, retirees and their dependents. The company won a one-year, $3.8 billion extension of its government contract for about three million members of the TRICARE South Region. The company last year had won a five-year, $40.5 billion contract for the TRICARE East Region, taking that business from rival UnitedHealthcare.
Humana also told Insider that it continued to have about 700 open jobs in Kentucky “that span the organization and require a variety of skills.” Across the country, Humana has about 2,000 job openings.