A health insurer today followed announcements of large class-action settlements with an announcement that it will be eliminating 4,000 jobs.
UnitedHealth Group Inc., Minnetonka, Minn., says it will be streamlining technology, back-office support, network management and clinical operations in an effort to cut costs.
The company also will be putting Uniprise brand commercial benefits accounts under the company’s main UnitedHealthcare brand name.
UnitedHealthcare also will handle large governmental employers and their employees, and student communities, UnitedHealth says.
Mike Matteo, the chief executive officer of Uniprise, will become the leader of a UnitedHealthcare national accounts business, UnitedHealth says.
UnitedHealth started the day by reporting that it has agreed to pay more than $900 million into settlement funds to resolve class-action lawsuits stemming from allegations that it gave executives too much control over stock option compensation and did not give investors enough information about the stock option program.
UnitedHealth has not admitted to any wrongdoing in connection with the settlement agreements, the company says.
The company also has cut its 2008 earnings forecast to about $6.5 billion in adjusted earnings for the year on $81 billion in revenue, down about 20% from the previous adjusted earnings forecast.
Intense competition in the commercial health insurance market has put greater-than-expected pressure on premium yields, UnitedHealth reports.
Margins at Medicare Part D prescription drug plans and Medicare special needs plans also are narrowing, the company says.
In addition to cutting jobs and streamlining operations, UnitedHealth is making “changes in commercial market approaches related to underwriting and pricing” and putting more emphasis on care management, the company says.