Humana 2015 Annual Report Download - page 24
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16
Government Regulation
Diverse legislative and regulatory initiatives at both the federal and state levels continue to affect aspects of the
nation’s health care system.
Our management works proactively to ensure compliance with all governmental laws and regulations affecting
our business. We are unable to predict how existing federal or state laws and regulations may be changed or interpreted,
what additional laws or regulations affecting our businesses may be enacted or proposed, when and which of the
proposed laws will be adopted or what effect any such new laws and regulations will have on our results of operations,
financial position, or cash flows.
For a description of certain material current activities in the federal and state legislative areas, see Item 1A. – Risk
Factors in this 2015 Form 10-K.
Certain Other Services
Captive Insurance Company
We bear general business risks associated with operating our Company such as professional and general liability,
employee workers’ compensation, and officer and director errors and omissions risks. Professional and general liability
risks may include, for example, medical malpractice claims and disputes with members regarding benefit coverage.
We retain certain of these risks through our wholly-owned, captive insurance subsidiary. We reduce exposure to these
risks by insuring levels of coverage for losses in excess of our retained limits with a number of third-party insurance
companies. We remain liable in the event these insurance companies are unable to pay their portion of the losses.
Centralized Management Services
We provide centralized management services to each of our health plans and to our business segments from our
headquarters and service centers. These services include management information systems, product development and
administration, finance, human resources, accounting, law, public relations, marketing, insurance, purchasing, risk
management, internal audit, actuarial, underwriting, claims processing, billing/enrollment, and customer service.
Through intercompany service agreements approved, if required, by state regulatory authorities, Humana Inc., our
parent company, charges a management fee for reimbursement of certain centralized services provided to its subsidiaries.
Employees
As of December 31, 2015, we had approximately 50,100 employees and approximately 1,600 additional medical
professionals working under management agreements primarily between us and affiliated physician-owned
associations. We believe we have good relations with our employees and have not experienced any work stoppages.