Anthem Says ‘No Present Plans’ To Cut Cigna Workers

Sept. 25--HARTFORD -- Anthem, in its application to the Connecticut Insurance Department to acquire Cigna, says it has "no present plans" to make any material changes to Cigna's business operations.

"While employment levels at the Companies can be expected to vary in the ordinary course of business including as a result of health care reform, Anthem has no current plans or proposals to reduce in any material respect the number of employees employed by the Companies," the application says.

The application also lays out the Indianapolis-based insurer's arguments for why the merger will not damage competition. It was filed with the department Tuesday and became available for public view Friday.

However, the application noted that no top Cigna executive, other than CEO David Cordani, has an explicit offers on what his or her role would be after a merger. And, it said, Cigna's human resources, payroll, finance and accounting departments "may be integrated with Anthem's existing operations following consummation of the mergers."

Other than the application, the two companies have said little or nothing publicly about possible job reductions in Connecticut, where Bloomfield-based Cigna has 4,200 employees. Anthem has 1,400 at its Anthem Blue Cross and Blue Shield in Connecticut operations, in Wallingford.

As for the merger's effect on competition, in several businesses -- commercial health insurance, stand-alone vision policies and dental -- the combined market share is high enough to invite further scrutiny from regulators. Anthem said the combined companies' business in Medicare Advantage, disability insurance and group life insurance are less than 5 percent of the state's market in those areas.

However, in every case, Anthem argued, the merger "will not substantially lessen competition in insurance or tend to create a monopoly in the State of Connecticut."

That claim, made broadly about the merger on Tuesday by Anthem CEO Joseph Swedish at a hearing of the Senate Judiciary Committee in Washington, DC, was met with sharp skepticism by Sen. Richard Blumenthal and others.

On the Connecticut public health care exchange, Anthem said it competes against low-cost offerings from HealthyCT, ConnectiCare and UnitedHealthcare. "Medical Loss Ratios and other federal and state laws and regulations also limit the profit margins that insurers can make and further ensures that pricing within the health insurance industry will remain highly competitive."

In small group insurance policies, Anthem wrote that Cigna is a very small player.

In large group insurance policies, Anthem said it competes with Aetna, AIG, EmblemHealth, Harvard Pilgrim, HealthyCT and UnitedHealthcare. "Large group business is dictated by large and sophisticated buyers like Disney, MassMutual Financial Group and Covidien," Anthem said. Disney is the parent company of ESPN.

In dental plans, Anthem said, "Aetna is the clear market leader. The combined Anthem and Cigna would maintain Cigna's current second place market position followed by United and Guardian Life."

In vision plans, Anthem said "Vision Service Plan and Aetna dominate the market. Anthem is a distant third; it estimates that it is approximately half the size of Aetna in this line of business.

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