Proposed Acquisition of Control of Humana Ins. Co. by Aetna

​​​​​Last Updated: April 18, 2016 

​Information on the Proposed Acquisition of Control of Humana Insurance Company, HumanaDental Insurance Company, Humana Wisconsin Health Organization Insurance Corporation, and Independent Care Health Plan, (Collectively, the Wisconsin Domestic Insurers) by Aetna Inc.

On August 4, 2015, Aetna Inc. (Applicant) filed a plan to acquire control of the above-referenced Wisconsin domestic insurers, pursuant to the terms and conditions set forth in the Agreement and Plan of Merger (the Merger Agreement) dated July 2, 2015, by and between Aetna Inc. and Humana Inc. (Humana) (the ultimate parent company of the Wisconsin domestic insurers). The Applicant, headquartered in Hartford, Connecticut, is the ultimate parent company in the Aetna Inc. holding company group. Through its subsidiaries, Aetna Inc. is one of the largest providers of employee health insurance and related benefits in the United States, with over 23.7 million members as of March 31, 2015.

Pursuant to the Merger Agreement, Aetna Inc. will acquire all outstanding shares of Humana for a combination of cash and stock valued at $37 billion (or approximately $230 per Humana share based on the closing price of Aetna common shares on July 2, 2015).

Humana Insurance Company (HIC) is a Wisconsin-domiciled for-profit life and health insurer licensed under ch. 611, Wis. Stat. Operating and licensed in 49 states and the District of Columbia,HIC offers a broad range of employee benefit products, including group health and life, dental, vision, voluntary benefits, and disability income insurance. HIC also offers Medicare Advantage and Medicare Prescription Drug plans to eligible individuals, an administrative service only (ASO) product (to self-insured employee health plans), and a HumanaOne product, which is marketed to the individual major medical and individual life markets. In 2014, HIC also began offering health insurance as a Qualified Health Plan insurer on the individual market public exchanges in 22 states through the Affordable Care Act (ACA).

HumanaDental Insurance Company (HDIC) is a Wisconsin-domiciled for-profit life and health insurer licensed under ch. 611, Wis. Stat. Operating and licensed in 49 states and the District of Columbia, HDIC offers dental and vision products (which are marketed primarily to employer groups).

Humana Wisconsin Health Organization Insurance Corporation (HWHO) is a Wisconsin-domiciled for-profit health maintenance organization (HMO) licensed under ch. 611, Wis. Stat. In addition to operating in Wisconsin, HWHO became licensed to write business in the following states beginning in 2015: Delaware, Kentucky, Montana, New Jersey, Rhode Island, and Virginia. In addition to marketing HMO products to employer and other groups, HWHO offers a Medicare Advantage plan to eligible individuals and offers a group health insurance product as a Qualified Health Plan insurer through the public exchange in the state of Wisconsin through the ACA.

Independent Care Health Plan (I-Care) is a Wisconsin-domiciled for-profit HMO licensed under ch. 611, Wis. Stat. Formed in 1994, I-Care is a joint venture between Humana Wisconsin Health Organization and Centers for Independence. I-Care offers a comprehensive health and social services program for individuals ages 19 and over with special needs who receive both Medicaid and Supplemental Social Security Income (SSI) benefits. As of December 31, 2014, I-Care was licensed in two states (Wisconsin and Illinois), but currently writes business only in the state of Wisconsin.

As required by Wisconsin law, a Public Hearing is required concerning this application for change of control.

Notations on Accessing Information

Financial information concerning individual insurance companies, including key annual statement pages, may be accessed on the Consumers Information Source section of the National Association of Insurance Commissioners' Web site at http://www.naic.org/cis/.

Form A and Exhibits, Filed with the Wisconsin OCI on August 3, 2015​

• Exhibit A: Form A Cover Letter to Kristin Forsberg of the Wisconsin Office of the Commissioner of Insurance
• Exhibit A-1: Form A - Acquisition of Control of the Wisconsin Domestic Insurers by Aetna Inc.
• Exhibit A-2: Consent to Jurisdiction
• Exhibit 1: Agreement and Plan of Merger dated July 2, 2015
• Exhibit 2: Current Organizational Chart of Humana and its Affiliates
• Exhibit 3: Directors and Executive Officers of the Applicant
• Exhibit 4-A: Current Organizational Chart of Aetna and its Affiliates
• Exhibit 4-B: Pro Forma Organizational Chart of Aetna and its Affiliates
• Exhibit 5-A: Item 1 of Aetna's 2014 Annual Report on Form 10-K
• Exhibit 5-B: Item 1 of Aetna's 2013 Annual Report on Form 10-K
• Exhibit 5-C: Item 1 of Aetna's 2012 Annual Report on Form 10-K
• Exhibit 5-D: Item 1 of Aetna's 2011 Annual Report on Form 10-K
• Exhibit 5-E: Item 1 of Aetna's 2010 Annual Report on Form 10-K
• Exhibit 6: Aetna's Quarterly Report on Form 10-Q for the QE March 31, 2015

• Exhibit 7: Biographical Affidavits [REDACTED]

• Exhibit 8-A: Humana's 2014 Annual Report to Stockholders
• Exhibit 8-B: Humana's 2013 Annual Report to Stockholders
• Exhibit 9-A: Aetna's 2014 Annual Report to Stockholders
• Exhibit 9-B: Aetna's 2013 Annual Report to Stockholders
• Exhibit 9-C: Aetna's 2012 Annual Report to Stockholders
• Exhibit 9-D: Aetna's 2011 Annual Report to Stockholders
• Exhibit 9-E: Aetna's 2010 Annual Report to Stockholders

• Exhibit 10: Financial Projections of Humana Insurance Company [REDACTED]

• Exhibit 11: Aetna Form 8-K filed July 6, 2015

Wisconsin OCI Form A Follow-up Letters:

• Exhibit B-1: WI OCI Form A follow-up letter #1 dated 8/25/15
• Exhibit B-2: WI OCI Form A follow-up letter #2 dated 9/8/15

• Exhibit B-3: WI OCI Form A follow-up letter #3 dated 9/17/18 [REDACTED]

Applicant Response Cover Letters (Referenced Exhibits are listed above):

• Exhibit B-1-1: Applicant's 9/28/15 response to WI OCI's follow-up letter #1

• Exhibit B-3-1: Applicant's 10/12/15 response to WI OCI's follow-up letter #3 [REDACTED]

Hearing Documents:

• Exhibit D-1: Notice of Hearing - Case No. 15-C40896
• Exhibit D-2: Open Meeting Notice - Aetna-Humana Prehearing Conference - 3-15-16
• Exhibit D-3: Open Meeting Notice - Aetna-Humana Class 1 Hearing - 3-30-16​
• Exhibit D-4: OCI Prehearing Conference Memorandum dated 3-15-16
• Exhibit D-5: Affidavit of Gregory Martino on behalf of the Aetna Inc.
• Exhibit D-6: Affidavit of Joseph C. Ventura on Behalf of Humana Inc. and Humana Insurance Company, HumanaDental Insurance Company, Humana Wisconsin Health Organization Insurance Corporation, and Independent Care Health Plan
• Exhibit D-7: List of Hearing Exhibits - Case No. 15-C40896

Wisconsin OCI Recommendation Memo:

• Exhibit E-1: WI OCI Form A Recommendation Memo - Case No. 15-C40896

Public Comment Letters and Motions to Intervene:

• Exhibit F-1: Motion to Intervene submitted on March 15, 2016, from the Law Offices of David Balto
• Exhibit F-2: Corrected Motion to Intervene submitted on March 16, 2016, by the Law Offices of David Balto on behalf of Citizen Action of Wisconsin and SEIU Healthcare Wisconsin
• Exhibit F-3: Public Comment Letter submitted on March 17, 2016, by the American Medical Association
• Exhibit F-4: Public Comment letter submitted on March 21, 2016 (Various Groups)
• Exhibit F-5: Aetna's March 21, 2016, letter responding to the March 16, 2016, Motion to Intervene
• Exhibit F-6: Law Firm of David Balto's March 22, 2016, response to Aetna's March 21, 2016, letter
• Exhibit F-7: WI OCI's Order Re: Motion to Intervene, dated March 25, 2016 - Case No. 15-C40896
• Exhibit F-8: Public Comment Letter submitted on March 28, 2016, by WI State Representative Eric Genrich and WI State Senator Dave Hansen
• Exhibit F-9: Public Comment Letter submitted on March 28, 2016, by the Green Bay Chamber
• Exhibit F-10: Public Comment Letter submitted on March 28, 2016, by Achieve Brown County
• Exhibit F-11: Public Comment Letter submitted on March 28, 2016, by the Brown County United Way
• Exhibit F-12: Public Comment Letter submitted on March 28, 2016, by the Special Olympics Wisconsin
• Exhibit F-13: Public Comment Letter submitted on March 29, 2016, by the United Hospital System

Proposed and Final Decision:

• Exhibit G-1: Proposed Decision - Case No. 15-C40896
• Exhibit G-2: Final Decision - Case No. 15-C40896​