as nyse hnt industry managed health care headquarters woodland hills los angeles california key people jay gellert ceo products health insurance number of employees 9 300 website healthnet.com health net inc. is an american health care insurance provider . hmo pos insured ppo and government contracts subsidiaries provide health benefits to approximately 5.9 million individuals in all 50 states and the district of columbia through group individual medicare medicaid tricare and veterans affairs programs . 1 health net s behavioral health services subsidiary mhn provides behavioral health substance abuse and employee assistance programs eaps to approximately 7.3 million individuals in various states including the company s own health plan members . the company s subsidiaries also offer managed health care products related to prescription drugs and offer managed health care product coordination for multi region employers and administrative services for medical groups and self funded benefits programs . st. louis based centene announced in july that it plans to buy health net for 6.8 billion . health net s headquarters are located in st. louis mo. woodland hills los angeles california . contents 1 history 1.1 divestures 2 divisions and subsidiaries 3 awards and recognitions 4 sponsorships and philanthropy 4.1 health net foundation 4.2 other sponsorships 5 quality of care 6 controversies 6.1 restatement 6.2 patsy bates lawsuit 6.3 connecticut attorney general investigation 6.4 cms suspension 6.5 network data breach 6.6 los angeles county medical association lawsuit 7 see also 8 references 9 external links history edit health net of california was first established as a non profit corporation in 1977 . a 1992 state of california order permitted the health care company to convert itself from a nonprofit into a for profit company . at the same time the state order required the new company to transfer 80 % of its equity to the california wellness foundation a successor charity to its non profit status . 2 under the terms of the california department of corporations conversion order approving health net s for profit status the california wellness foundation received 300 million plus 80 percent of the equity of health net s parent holding company . 3 in august 1993 health net merged with qualmed to form health systems international . the merger created a 1.8 million member hmo with a market value of 725 million one of the biggest publicly traded health care companies at the time . dr. malik hasan had founded qual med with his wife seeme hasan in southern colorado . qual med first went public in june 1991 . 4 in may 1997 health systems international merged with foundation health corporation to form foundation health systems . at the time of the merger the newly created foundation health was valued at 1.27 billion and was the 4th largest health insurer in the u.s. and the second largest hmo in california . it had more than 5 million members in 17 states and in 2.8 california . 4 in november 2000 foundation health systems officially changed its name to health net inc. when the company started trading on the new york stock under the symbol hnt . 5 6 state specific divisions existed under a variety of names prior to the 2000 renaming of health net inc. health net of california inc. the company s california division incorporated in 1977 7 founded as qualmed oregon health plan it was officially renamed health net health plan of oregon in 2000 inc. 8 health net of arizona inc. was founded in 1981 as intergroup of arizona by a multi specialty medical group in tucson . in 1994 intergroup became a wholly owned subsidiary of foundation health corporation . 6 in july 2 2015 centene corporation announces it will acquire health net for 6.8 billion . upon completion health net shareholders will own 29 % of the combined company . 9 divestures edit in july 2009 unitedhealth group bought health net s northeastern licensed subsidiaries for 450 million . at the time the subsidiaries had 578 000 members in connecticut new york and new jersey . 10 11 in january 2012 health net sold its medicare prescription drug plan business to a subsidiary of cvs caremark for approximately 160 million in cash . 12 divisions and subsidiaries edit health net insurance health net offers health insurance plans for individuals and families groups companies and medicare beneficiaries in arizona california oregon and washington .29 in addition health net provides health coverage for california state plans such as healthy families and medi cal . 13 its individual and family plans include preferred provider organization ppo health maintenance organization hmo short term health insurance plans and health savings account hsa health insurance options . the company s large and small business portfolio of products include hmo ppo tailored networks health savings account hsa and salud a plan specifically for hispanics . 14 the health insurance company offers public health insurance through california state programs such as medicaid healthy families healthy kids welfare and medi cal . the state of california offers low cost health insurance for children under 19 years of age via its healthy families program ; while low income individuals can enroll for california s medi cal . 15 health net federal services inc. hnfs is the government operations division of health net . it is the tricare north region provider as of july 1 2004 . health net s bid for the tricare north region business contract effective starting april 1 2010 was given to aetna 16 however aetna s contract has been suspended pending the outcome of health net s protest . on november 4 2009 the gao upheld health net s protest . 17 on may 13 2010 health net federal services was formally awarded the contract as the tricare managed care support mcs contractor for the tricare north region by the united states department of defense dod . 18 the announcement followed the may 5 2010 news of the dod s intent to award . hnfs was awarded the t 3 tricare39 north region contract beginning on april 1 2011 which includes the following states connecticut delaware illinois indiana kentucky maine maryland massachusetts michigan new hampshire new jersey new york north carolina ohio pennsylvania rhode island vermont virginia washington dc west virginia and wisconsin . 6 hnfs also provides health care for u.s. veterans nationwide . hnfs s programs include community based outpatient clinics recovery audit services and rural mental health programs . 6 health net dental is based in irvine ca and offers dental coverage for healthy families los angeles medi cal and sacramento medi cal customers . managed health network inc. is a subsidiary that offers employee assistance program eaps behavioral health solutions integrated disease management as well as work life balance wellness employee productivity and organizational efficiency programs . 19 awards and recognitions edit in 2010 healthnet.com and the newly launched health net mobile app received numerous awards official honoree insurance category 2010 webby awards 20 silver award winner insurance site 2010 w3 awards 21 silver award winner health & wellness mobile app 2010 w3 awards 21 sponsorships and philanthropy edit health net foundation edit the health net foundation was created in 2007 as the philanthropic arm of health net . it makes charitable contributions to organizations that promote wellness and preventive care combat childhood obesity and support health programs for military families in communities where health net does business . health net launched its foundation in september 2007 by providing a three year 1.35 million grant to the american heart association . 22 the health net foundation has provided other grants such as the 175 000 given to twelve california schoolbased health centers and community medical clinics to improve dental care and oral health . 23 other sponsorships edit in addition to its foundation health net federal services has also participated in philanthropic causes . the division established a scholarship to be administered through national military family association nmfa designating 150 000 to be awarded to military spouses in the tricare north region . 6 health net federal services sponsors military related sports related events and veterans sports clinics such as the national veterans golden age games in honolulu 24 and the veterans wheelchair games . since the 1980s health net has been a sponsor of the march of dimes largest fund raising event march for babies . in 2008 more than 300 health net associates walked in march for babies events across california contributing more than 325 000 through various fund raising efforts . for a number of years health net sponsored the health net pro cycling team which now is sponsored by unitedhealth group . health net pro cycling team presented by maxxis was run by momentum sports group and based in the united states . health net won the team title in the 2004 2005 2006 and 2007 usa cycling national racing calendar series competition . quality of care edit in california s health care quality report card 2011 edition by california s office of the patient advocate healthnet ca received 2 out of 4 stars in meeting national standards of care . 25 controversies edit restatement edit on february 11 2004 the company restated its results for the first three quarters of 2003 and for the full years of 2002 and 2001 . the adjustments amounted to a 4.4 million increase in net income for the first three quarters of 2003 or about 3 cents a share . 26 patsy bates lawsuit edit in 2007 patsy bates a california beautician sued health net claiming that they wrongfully terminated her care in the middle of her chemotherapy treatments . an internal company employee performance review made public during the lawsuit revealed that one of the company s managers had tied bonuses to the rescission rate for one analyst in charge of recission reviews to discover reasons such as application fraud to discontinue coverage to enrollees . the company pointed out that bates had withheld critical information that she had damaged her heart by the use of fen phen for diet purposes and stated an inaccurate weight ; bates replied that the insurance broker had filled out the form for her and she had been busy in her salon . 27 in february 2008 the court ruled in favor of bates ordering health net to pay 8.4 million in punitive damages and 750 000 for emotional distress . 28 connecticut attorney general investigation edit in november 2009 connecticut attorney general richard blumenthal said health net lost the personal information of nearly 450 000 state residents and failed to inform consumers for six months . 29 30 the data on the drive was unencrypted and included information about financial health and personal information . 30 it was discovered missing from the company s connecticut office . 30 health net circulated a letter to customers in december 2009 including an offer of free credit protection from a company called debix for two years . cms suspension edit on november 19 2010 the centers for medicare and medicaid services cms immediately suspended health net because the insurer improperly administered the medicare drug benefit in contracts for its national prescription drug plan and local medicare advantage prescription drug plans . 31 the suspension required health net to cease marketing and enrollment of new members of all health net medicare advantage prescription drug mapd and stand alone prescription drug plan part d contracts effective november 20 2010 . the sanctions relate to compliance with certain part d requirements . the suspension did not affect existing health net medicare enrollees . 32 although the company was allowed to resume marketing its medicare products in august 2011 on january 6 2012 the company agreed to sell its medicare stand alone prescription drug plan pdp business to cvs caremark corp. cvs for about 160 million in cash . health net would continue to provide prescription drug plans as part of its medicare advantage plan offerings . 33