United Healthcare Enters Agreement to Take Over Principal Financial Group Membership
UnitedHealthcare today announced it has entered into an agreement to renew medical insurance coverage for The Principal Financial Group’s (The Principal®) medical plan customers as The Principal completes its plans to exit the medical insurance business. The Principal will continue to offer life insurance, dental, disability, vision and wellness programs.
The Principal selected UnitedHealthcare to provide an easy and attractive transition option for its customers to renew their health plans. The Principal currently covers customers in 31 markets nationwide, predominantly throughout the Central United States, where UnitedHealthcare offers an extensive network of physicians, hospitals and other health care providers.
“UnitedHealthcare provides a broad range of coverage options to meet customers’ needs. By working with UnitedHealthcare, a proven leader and long-term player in the business with an extensive local and national network, we will ensure a smooth transition for customers and brokers,” said Dan Houston, president – Retirement, Insurance & Financial Services at The Principal.
“We are grateful for the opportunity to serve the health and well-being needs of The Principal’s customers with a broad range of high-quality, affordable health care products from traditional plans to innovative consumer-driven services,” said Kathryn Sullivan, CEO, UnitedHealthcare’s Central Region. “Through UnitedHealthcare, The Principal’s customers will have one of the largest local and national care provider networks in the country, highly integrated clinical programs, proactive care management and wellness tools, and technology that simplifies health care delivery.”
As The Principal’s medical insurance customers reach their medical plan renewal dates, UnitedHealthcare will work to enroll them in a comparable UnitedHealthcare plan. Until plan participants are enrolled in a replacement plan, their current benefits remain in effect under their existing contract. The Principal is committed to ensuring continued service, medical coverage and payments for its customers during the transition period.
Principal generated $344 million in premium revenue by providing health coverage for about 725,000 people in the second quarter.
Principal has about 1,500 employees in its health insurance business. The decision to get out of the health insurance business will affect 150 employees immediately, the company says.
Principal hopes to place some of the affected employees in other jobs at the company, the company says.
Principal has been selling group health insurance since 1941.
Principal Chairman Larry Zimpleman says rapid changes in the medical insurance business would require the company to invest more capital to continue to offer competitive products.
“For us, that just does not make sense,” Zimpleman says in a statement.
Principal’s medical insurance business has been performing well financially, but the company’s retirement and asset management businesses have grown more quickly, and the relative size of the medical insurance business has been declining, Zimpleman says.
Shutting down the medical insurance business should free more than $100 million in capital, the company says.