Layoffs Announced At North Haven Based Health Insurer
WellPoint Inc., parent of Anthem Blue Cross and Blue Shield plans, is cutting 1,500 jobs countrywide, including some in Connecticut, as it tries to reduce expenses in response to the nation's recession.
About 600 of the job cuts are layoffs, and the other 900 positions are already vacant, said the Indianapolis-based health insurer.
WellPoint wouldn't say how many layoffs there are at Anthem in Connecticut, which is based in North Haven. But company spokeswoman Kristin Binns said, "I can tell you they are very small numbers, relatively speaking in the state."
The 1,500 job cuts represent about 3.6 percent of WellPoint's 42,000 employees. The company operates health plans in 14 states including New York, New Hampshire, Ohio, and Virginia.
"With the current state of the economy, we made the difficult decision to adjust the size of our workforce as we continue to meet our members' needs while appropriately controlling operating expenses," Angela F. Braly, WellPoint's president and chief executive, said in a statement.
WellPoint didn't say how much the job cuts would reduce expenses. WellPoint will record a $24 million after-tax charge to fourth-quarter 2008 earnings to reflect costs of the job cuts including severance and outplacement services.
WellPoint's net profit fell to $820.7 million or $1.60 a share in the third quarter of 2008, a 5.4 percent drop from the 2007 third quarter. Fourth-quarter results will be reported Jan. 28.
The company recently disclosed it had $349 million of after-tax net realized investment losses in the fourth quarter.
In addition to investment losses, some insurers have forecast a decline in health plan membership this year as employers lay off workers and people struggle to afford premiums.
WellPoint hasn't discussed its enrollment outlook for 2009 but is expected to on its Jan. 28 earnings conference call.
The largest health insurance company by enrollment, WellPoint had 35.3 million members at the most recent count. The company is under a temporary federal order not to enroll any new members into its Medicare Advantage and Medicare Part D (prescription) plans because members were stopped from getting drugs or were overcharged due to computer and administrative problems.
Other health insurers including Aetna and CIGNA have already announced substantial job cuts.
About 600 of the job cuts are layoffs, and the other 900 positions are already vacant, said the Indianapolis-based health insurer.
WellPoint wouldn't say how many layoffs there are at Anthem in Connecticut, which is based in North Haven. But company spokeswoman Kristin Binns said, "I can tell you they are very small numbers, relatively speaking in the state."
The 1,500 job cuts represent about 3.6 percent of WellPoint's 42,000 employees. The company operates health plans in 14 states including New York, New Hampshire, Ohio, and Virginia.
"With the current state of the economy, we made the difficult decision to adjust the size of our workforce as we continue to meet our members' needs while appropriately controlling operating expenses," Angela F. Braly, WellPoint's president and chief executive, said in a statement.
WellPoint didn't say how much the job cuts would reduce expenses. WellPoint will record a $24 million after-tax charge to fourth-quarter 2008 earnings to reflect costs of the job cuts including severance and outplacement services.
WellPoint's net profit fell to $820.7 million or $1.60 a share in the third quarter of 2008, a 5.4 percent drop from the 2007 third quarter. Fourth-quarter results will be reported Jan. 28.
The company recently disclosed it had $349 million of after-tax net realized investment losses in the fourth quarter.
In addition to investment losses, some insurers have forecast a decline in health plan membership this year as employers lay off workers and people struggle to afford premiums.
WellPoint hasn't discussed its enrollment outlook for 2009 but is expected to on its Jan. 28 earnings conference call.
The largest health insurance company by enrollment, WellPoint had 35.3 million members at the most recent count. The company is under a temporary federal order not to enroll any new members into its Medicare Advantage and Medicare Part D (prescription) plans because members were stopped from getting drugs or were overcharged due to computer and administrative problems.
Other health insurers including Aetna and CIGNA have already announced substantial job cuts.
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