Aetna Inc. (AET) isn't the only health insurer paring its work force as the managed-care industry faces rising medical costs, enrollment pressures and a competitive marketplace.

WellPoint Inc. (WLP) has eliminated jobs over the past several weeks, although the managed-care giant isn't providing any numbers or making any kind of layoff announcement. In addition, Cigna Corp. (CI) has cut hundreds of jobs this year beyond those announced in January.

The layoffs highlight the effects of the economic downturn, which has caused the highest unemployment rate in the U.S. in 25 years, reducing the number of commercial members. The job cuts also come ahead of anticipated government-led changes to the nation's health-care system.

Wednesday, Aetna said it was cutting some 3.5% of its work force--625 positions immediately and about the same number in the first quarter of next year. These reductions are in addition to the 1,000 job eliminations, or nearly 3% of its work force, that the Hartford insurer announced last December.

Meanwhile, Cigna has cut 1,810 jobs so far this year, a company spokesman confirmed Thursday. That includes the 1,100 layoffs, representing 4% of its work force, that the insurer announced in January. During the second and third quarters, Cigna took charges for severance tied to the elimination of 710 positions, according to a recent Securities and Exchange Commission filing.

WellPoint, also in an SEC filing, said it made $18.5 million in payments in the first nine months of this year related to employee terminations and indicated it may incur charges in future periods related to job cuts. It was unclear from the filing whether any of these cuts were in addition to the 1,500 job eliminations, representing 3.6% of WellPoint's work force, that the company announced in January; those eliminations included 900 open positions.

WellPoint has not updated layoff figures since January, although a spokeswoman said Thursday that positions were eliminated and added in recent weeks.

"As the economic environment changes, WellPoint reviews the size and skills of our work force and makes adjustments as necessary. The current economic downturn has affected our customers, and many employers have reduced the size of their labor force in response. This in turn has affected the membership of WellPoint's affiliated health plans. As a result, we are examining ways we can operate more efficiently in 2010," said spokeswoman Kristin Binns earlier this month.

Meanwhile, WellPoint's recently announced decision to withdraw its UniCare commercial plans from Texas and Illinois means a number of employees in that division will lose their jobs, although the company said it does not yet know how many of the 700 UniCare employees will be laid off.

A staff reduction will be necessary as 360,000 affected UniCare members switch to another insurer, as most are expected to do next month, according to UniCare spokesman Tony Felts. The business has about 285,000 members outside the two states, he said.

UniCare expects the first staff reductions will start in January and continue in phases throughout 2010, depending on how many stay with UniCare until their policies expire sometime next year, he said.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@dowjones.com

 
 
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