WellPoint lowers earnings forecast after $90M legal bill

Back to TopCommentsE-mailPrintBookmark and Share

WellPoint Inc., the second-biggest U.S. health insurer, said it is lowering its profit forecast for the year by 3 percent after reaching a $90 million legal settlement.

Indianapolis-based WellPoint expects to earn at least $7.57 per share for 2012 compared with its June 4 estimate of $7.80, the insurer said Friday in a regulatory filing. While the forecast includes first-quarter net investment gains of 19 cents a share, the company hasn’t estimated the investment earnings for the rest of the year.

WellPoint is the biggest seller of health plans to individuals, a market set to grow by as much as 22 million people under the 2010 U.S. health-care law. Analysts estimated the company would earn $7.71 a share, excluding some items, according to the average of 18 estimates compiled by Bloomberg.

If approved by U.S. District Judge Tanya Walton Pratt, the $90 million settlement will resolve a class-action lawsuit brought on behalf of more than 700,000 former members of Anthem Insurance Cos. Inc., lawyers for the plaintiffs said Friday afternoon.

The lawsuit, which was set for a June 18 trial in federal court in Indianapolis, arose from Anthem’s 2001 conversion from a mutual company, owned by its insured policyholders, to a public company. WellPoint is the corporate parent of Anthem.

Anthem members received nearly $2.1 billion in cash compensation as part of the conversion process to a public company, but their complaint alleged that was not the fair value of their interests.

Other policyholders elected to receive stock in the conversion, and they sued WellPoint in a separate lawsuit. Pratt dismissed that case in December, in favor of WellPoint.



  • Hmmmm
    Policyholders and investors both lose. Now what was the argument for private companies issuing health insurance policies????

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ