Health Net has reported a $170.6 million charge related to the pending sale of its Northeast division to UnitedHealth Group, the insurer stated in its third-quarter earnings report. The noncash charge is for the impairment of goodwill and other assets related to the sale, Health Net said.
Health Net reports $170.6 million charge
In July, Health Net announced it had entered into a definitive agreement with UnitedHealthcare, a division of UnitedHealth Group, to sell its Northeast health plan subsidiaries and membership renewal rights for up to $510 million.
The deal involves up to 578,000 members in Connecticut, New Jersey and New York, with anticipated revenue for year-end of about $2.7 billion. The sale is on track to close by late 2009 or early 2010, Health Net officials said.
The Woodland Hills, Calif.-based insurer reported total net income of $69.6 million for the third quarter, excluding the impact of the charges, up from $37.8 million a year ago. However, total health plan enrollment slipped by about 144,000 members, or 3.8%, largely because of the economic downturn. Health Net has about 3.6 million members.
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