Humana 2011 Annual Report Download - page 54

offering us an opportunity to further expand our Medicare footprint and grow our Medicare enrollment.
The closing of this acquisition is subject to regulatory approval.
Health and Well-Being Services Segment
• During the second half of 2011, we entered into a definitive agreement to acquire SeniorBridge, a
chronic-care provider providing in-home care for seniors that will expand our existing clinical and
home health capabilities and strengthen our offerings for members with complex chronic-care needs.
The closing of this acquisition is subject to regulatory approval.
• In 2011, we launched HumanaVitality, a joint venture with Discovery Holdings Ltd., providing our
members with access to a science-based, actuarially driven wellness and loyalty program that features a
wide range of well-being tools and rewards that are customized to an individual’s needs and wants.
Other Businesses
• Comparisons to 2010 within Other Businesses are impacted by the net charge of $139 million due to
reserve strengthening for our closed block of long-term care policies during the year ended
December 31, 2010 as discussed above.
• As more fully discussed in Note 15 to the consolidated financial statements included in Item 8. –
Financial Statements and Supplementary Data. On February 25, 2011, the Department of Defense
TRICARE Management Activity, or TMA, awarded the new TRICARE South Region contract to us,
which we expect to take effect on April 1, 2012. The new 5-year South Region contract, which expires
March 31, 2017, is subject to annual renewals on April 1 of each year during its term at the
government’s option.
Health Insurance Reform
In March 2010, the President signed into law The Patient Protection and Affordable Care Act and The
Health Care and Education Reconciliation Act of 2010 (which we collectively refer to as the Health Insurance
Reform Legislation) which enact significant reforms to various aspects of the U.S. health insurance industry.
While regulations and interpretive guidance on some provisions of the Health Insurance Reform Legislation have
been issued to date by the Department of Health and Human Services (HHS), the Department of Labor, the
Treasury Department, and the National Association of Insurance Commissioners, there are many significant
provisions of the legislation that will require additional guidance and clarification in the form of regulations and
interpretations in order to fully understand the impacts of the legislation on our overall business, which we expect
to occur over the next several years.
Implementation dates of the Health Insurance Reform Legislation vary from September 23, 2010 to as late
as 2018. The following outlines certain provisions of the Health Insurance Reform Legislation:
• Changes effective for plan years which began on or after September 23, 2010 included: elimination of
pre-existing condition limits for enrollees under age 19, elimination of certain annual and lifetime caps
on the dollar value of benefits, expansion of dependent coverage to include adult children until age 26,
a requirement to provide coverage for preventive services without cost to members, new claim appeal
requirements, and the establishment of an interim high risk program for those unable to obtain
coverage due to a pre-existing condition or health status.
• Effective January 1, 2011, minimum benefit ratios were mandated for all commercial fully-insured
medical plans in the large group (85%), small group (80%), and individual (80%) markets, with annual
rebates to policyholders if the actual benefit ratios, calculated in a manner prescribed by HHS, do not
meet these minimums. Certain states were approved to apply an individual threshold lower than the
80% requirement temporarily to avoid market disruption. In 2011, we accrued for rebates, based on the
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