Aetna 2012 Annual Report Download - page 88

Annual Report- Page 82
Notes to Consolidated Financial Statements
1. Organization
We conduct our operations in three business segments:
• Health Care consists of medical, pharmacy benefit management services, dental, behavioral health and
vision plans offered on both an Insured basis (where we assume all or a majority of the risk for medical and
dental care costs) and an employer-funded basis (where the plan sponsor under an administrative services
contract (“ASC”) assumes all or a majority of this risk) and emerging businesses products and services,
such as Accountable Care Solutions (“ACS”) that complement and enhance our medical products. Medical
products include point-of-service (“POS”), preferred provider organization (“PPO”), health maintenance
organization (“HMO”) and indemnity benefit plans. Medical products also include health savings accounts
(“HSAs”) and Aetna HealthFund®, consumer-directed health plans that combine traditional POS or PPO
and/or dental coverage, subject to a deductible, with an accumulating benefit account (which may be
funded by the plan sponsor and/or the member in the case of HSAs). We also offer Medicare and Medicaid
products and services and other medical products, such as medical management and data analytics services,
medical stop loss insurance, and products that provide access to our provider network in select markets.
• Group Insurance primarily includes group life insurance products offered on an Insured basis, including
basic and supplemental group term life, group universal life, supplemental or voluntary programs and
accidental death and dismemberment coverage. Group Insurance also includes (i) group disability products
offered to employers on both an Insured and an ASC basis which consist primarily of short-term and long-
term disability insurance (and products which combine both), (ii) absence management services offered to
employers, which include short-term and long-term disability administration and leave management, and
(iii) long-term care products that were offered primarily on an Insured basis, which provide benefits
covering the cost of care in private home settings, adult day care, assisted living or nursing facilities. We
no longer solicit or accept new long-term care customers.
• Large Case Pensions manages a variety of retirement products (including pension and annuity products)
primarily for tax-qualified pension plans. These products provide a variety of funding and benefit payment
distribution options and other services. Large Case Pensions also includes certain discontinued products
(refer to Note 20 beginning on page 131 for additional information).
Our three business segments are distinct businesses that offer different products and services. Our Chief Executive
Officer evaluates financial performance and makes resource allocation decisions at these segment levels. The
accounting policies of the segments are the same as those described in the summary of significant accounting
policies in Note 2, below. We evaluate the performance of these business segments based on operating earnings
(net income or loss, excluding net realized capital gains or losses and other items, if any) (refer to Note 19
beginning on page 128 for segment financial information).
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally-
accepted accounting principles (“GAAP”) and include the accounts of Aetna and the subsidiaries that we control.
All significant intercompany balances have been eliminated in consolidation. The Company has evaluated
subsequent events from the balance sheet date through the date the financial statements were issued and determined
there were no other items to disclose.
Reclassifications
Certain reclassifications were made to 2010 and 2011 financial information to conform with 2012 presentation.