Humana 2008 Annual Report Download - page 20
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For the year ended December 31, 2008, employer and individual commercial PPO premium revenues
totaled approximately $3.6 billion, or 12.6% of our total premiums and ASO fees.
ASO
In addition to fully-insured Smart plans and other consumer offerings, HMO and PPO products, we also
offer ASO products to employers who self-insure their employee health plans. We receive fees to provide
administrative services which generally include the processing of claims, offering access to our provider
networks and clinical programs, and responding to customer service inquiries from members of self-funded
employers. These products may include all of the same benefit and product design characteristics of our fully-
insured PPO, HMO or Smart plans and other consumer products described previously. Under ASO contracts,
self-funded employers retain the risk of financing substantially all of the cost of health benefits. However, most
ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate
annual costs. For the year ended December 31, 2008, commercial ASO fees totaled $351.0 million, or 1.2% of
our total premiums and ASO fees.
Specialty
We also offer various specialty products, including dental, vision, and other supplemental products as well
as disease management services under Corphealth, Inc. (d/b/a LifeSynch) and mail-order pharmacy benefit
administration services for our members under RightSourceRxSM. During 2007, we made investments which
significantly expanded our specialty product offerings with the acquisitions of CompBenefits Corporation and
KMG America Corporation. These acquisitions significantly increased our dental membership and added new
product offerings, including vision and other supplemental health and life products primarily sold on a voluntary
basis. The supplemental health plans cover, for example, some of the costs associated with cancer and critical
illness. Other supplemental health products also include a closed block of approximately 37,000 long-term care
policies acquired in connection with the KMG acquisition. No new policies have been written since 2005 under
this closed block. At December 31, 2008, we had approximately 6.8 million specialty members, including
3.6 million dental members and 2.2 million vision members. For the year ended December 31, 2008, specialty
product premiums and ASO fees were approximately $942.2 million, or 3.3% of our total premiums and ASO
fees.
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