The healthcare insurer will offer employees 55 and older who meet certain requirements an early retirement package. Mary Ann Gerth/Courier-Journal/USA TODAY Network
Humana will extend the offer new incentive pay and increase its minimum wage for employees, a move that it credited to federal tax reform.
A note sent to employees said that “like many U.S. companies, Humana will begin benefitting this year from a lower corporate income tax rate. This provides Humana with the opportunity to make an investment in our employees, using the proceeds from tax reform to further the long-term financial health and well-being of our employee population.”
The company will accelerate the timeline for workers to take part in an annual performance-based incentive program. Instead of starting in 2019, employees in the program will start this year.
They will have a minimum incentive target of 4 percent of their base salary for 2018 and will receive payouts in March 2019, according to a statement sent to employees and provided to Courier Journal.
Humana also intends to raise the minimum hourly rate in the continental U.S. for full- and part-time employees to $15. A spokeswoman did not respond to questions about how many workers would be eligible for bonuses or how much of a raise the $15 rate represents over the unspecified current rate.
The lowest paid employees appear to work in the company’s call centers.
Humana is also considering “additional investments designed to benefit health plan members and communities we serve.” Passing some cash back to shareholders also is under review, the note said.
The announcement was circulated internally Monday and made public on Tuesday afternoon when Sen. Mitch McConnell, the GOP Majority Leader from Louisville, mentioned Humana’s plans for salary increases in a floor speech Tuesday.
Humana, which ranks among the country’s top Medicare Advantage providers, has 12,000 employees in Louisville and about 50,000 nationwide.
Executives announced in November that laying off 1,300 workers and having another 1,150 people accept buyout offers would trim payroll costs by hundreds of millions of dollars. CEO Bruce Broussard and Brian Kane, the chief financial officer, told analysts then that the reduction would help offset an estimated $700 million in increased costs from a federal health insurance fee.
The company is still flush with cash, and has been looking for acquisitions. It announced in December that it would partner with two private equity firms to buy an $800 million minority stake in Kindred Healthcare. The $4.1 billion transaction would give Humana a 40 percent stake in Kindred’s home health and hospice care businesses, with the balance controlled by the firms Welsh, Carson, Anderson & Stowe and TPG.
Grace Schneider: 502-582-4082; firstname.lastname@example.org; Twitter: @gesinfk. Support strong local journalism by subscribing today: www.courier-journal.com/graces