LOS ANGELES--(BUSINESS WIRE)--May 31, 2007--Health Net, Inc. (NYSE:HNT) today announced that it has received regulatory approval and completed its acquisition of the 50 percent interest in the Healthcare Solutions joint venture previously marketed with The Guardian Life Insurance Company of America ("Guardian"). The transition of the Healthcare Solutions business to Health Net is limited to small group medical plans in the New York tri-state area.
The company will recognize 100 percent of the premium revenue and 100 percent of associated health care costs for Healthcare Solutions members in its financial statements effective June 1, 2007. Previously, Health Net and Guardian each recorded 50 percent of premiums and health care costs in their respective financial statements, with Health Net recording 100 percent of membership, prior to the transaction.
The company expects the transaction to be neutral to earnings in 2007, and accretive in 2008 by $0.05 to $0.07 per diluted share. More detailed guidance will be provided on the company's second quarter 2007 earnings conference call on August 2, 2007.
"Small business is one of the top growth opportunities for Health Net. This transaction enables us to get closer to our customers and the brokers that represent them in the small business segment," said Steven H. Nelson, president of Health Net of the Northeast.
Health Net noted that "non medical" plans offered by Guardian, such as life and disability insurance as well as dental and vision products, were not part of the joint venture and therefore, are unaffected by this transition.
Health Net will be communicating to members, clients and brokers that Health Net Healthcare Solutions plans will offer the same or enhanced medical benefits to replace the Guardian/Health Net Healthcare Solutions plans.
The transition for members will be simple since Health Net had been providing all member benefit administration and customer services for Guardian/Health Net Healthcare Solutions members prior to the transaction with Guardian. The only change is that member materials, including identification cards, will now be branded as Health Net Healthcare Solutions.
About Health Net
Health Net, Inc. is among the nation's largest publicly traded managed health care companies. Its mission is to help people be healthy, secure and comfortable. The company's health plans and government contracts subsidiaries provide health benefits to approximately 6.6 million individuals across the country through group, individual, Medicare, Medicaid and TRICARE and Veterans Affairs programs. Health Net's behavioral health services subsidiary, MHN, provides mental health benefits to approximately 7.1 million individuals in all 50 states. The company's subsidiaries also offer managed health care products related to prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs.
For more information on Health Net, Inc., please visit the company's Web site at www.healthnet.com.
Cautionary Statements
This release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve a number of risks and uncertainties. All statements, other than statements of historical information provided herein, may be deemed to be forward-looking statements. These statements are based on management's analysis, judgment, belief and expectation only as of the date hereof, and are subject to uncertainty and changes in circumstances. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "may," "should," "could," "estimate," "intend" and other similar expressions are intended to identify forward-looking statements. Actual results could differ materially due to, among other things, rising health care costs, negative prior period claims reserve developments, trends in medical care ratios, issues relating to provider contracts, litigation costs, operational issues, health care reform and general business conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the "Risk Factors" section included within the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this release.
CONTACT: Health Net, Inc.
Angie McCabe, 818-676-8692
angeline.c.mccabe@healthnet.com
SOURCE: Health Net, Inc.