Humana said it is cutting 1,300 jobs, while another 1,150 employees have taken early retirement, as the company prepares for 2018, when it ceases to participate in the Affordable Care Act.
The Louisville-based insurer did not specify what prompted the decisions, telling Insider via email only that the actions are “part of a series of measures to position the company for long-term success” and that the job cuts and layoffs are “being made across work groups and across geographies.”
Humana said the 1,300 jobs represented less than 3 percent of its workforce.
In an email sent to employees and obtained by Insider, Humana Chief Human Resources Officer Tim Huval wrote, “ … from time to time we must not only address the opportunities that come with operating in a rapidly changing sector, but we must also address the challenges.
“As we’ve shared previously, the current environment requires us to take a number of measures to position the company for long-term sustainable success,” Huval wrote.
Humana had offered early retirement packages in September 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. The company said Monday that 1,150 had agreed to take the offer, which reduced the number of jobs the company is cutting by early next year to 1,300.
Humana said in an email that it is encouraging the employees whose jobs are being eliminated to apply for the more than 1,450 open positions it has. That’s down about 500 from late September.
The company said that employees who did not move into a new position would receive career counseling, severance pay and help with finding a new job.
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. The company this month also filed a lawsuit against the federal government, seeking $600 million in ACA-related payments.
The company this year also has cut at least 680 positions in its Humana at Home division.
Humana will release third-quarter earnings on Wednesday.