WPS Health Insurance files notice of 451 layoffs in Monona, Madison and Wausau [The Wisconsin State Journal]

Jan. 29--Hundreds of job cuts stemming largely from the pending loss of two major federal contracts will begin soon at Monona-based WPS Health Insurance.

WPS filed notice with the state Monday that 451 employees in Monona, Madison and Wausau would likely lose their jobs starting March 29. That includes 250 people in Madison and Monona, and 201 in Wausau, where about 300 work now.

And there could be more job cuts coming.

Founded in 1946, WPS is Wisconsin's leading nonprofit health insurer. It currently employs about 3,600 people, including some 2,500 in the Madison area.

In November, WPS CEO Mike Hamerlik told the State Journal that up to 600 employees could lose their jobs in 2013, mostly locally and in Wausau, because of pending contract losses involving Medicare claims processing and the handling of managed care claims for the military in 21 states in a program known as TRICARE. The two contracts made up about 40 percent of WPS' annual revenue in 2012 of nearly $1 billion.

On Monday, WPS spokeswoman Tami Gilbertson said the company continues trying to find new business to replace the federal contracts, but had nothing to announce. How many people at WPS ultimately lose their jobs will depend on whether those efforts are successful.

"It's too soon to tell," she said. "We're working on some other business opportunities and hoping the number will be smaller (than 451). We are continuing to analyze things."

In September, Hamerlik said there would "undoubtedly be significant downsizing" of the Wausau office, which handles most of the company's TRICARE business, though he also said it likely would remain open.

In November, Hamerlik described the nature of the federal business WPS does as a high-risk, high-reward proposition, because the contracts are so big. "When we grow, we grow in very large numbers," Hamerlik said. "And when we shrink, we have to shrink similarly."

The TRICARE contract ends April 1, while the Medicare work -- handling Part B claims in Wisconsin, Illinois and Minnesota -- is expected to end at about the same time, staff said.

WPS has had the Medicare contract in those three states since 1966, but received word in late September that another contractor, National Government Services in Indianapolis, won the job. WPS will continue to handle Medicare claims in several other states, including Michigan, Indiana, Iowa, Kansas and Missouri.

WPS had appealed both of the contract losses but lost, with final denial of the TRICARE appeal received by WPS in mid-January.

The expected job losses in the Madison area were described in the notice as 244 in four buildings in the 1700 block of West Broadway in Monona and another six in a Madison office at 208 E. Olin Ave.

Hamerlik was hired in June to replace 39-year company veteran Jim Riordan. WPS also owns EPIC Life Insurance and WPS Community Bank, and has additional offices in Milwaukee, Appleton, Eau Claire and Green Bay.

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