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TableofContents
 
UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
 
FORM 10-K 
 
˛
ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
ForthefiscalyearendedDecember 31, 2008OR 
 
TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
Forthetransitionperiodfrom to Commissionfilenumber 1-5975
 
HUMANAINC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
61-0647538
(State of incorporation)
 
(I.R.S. Employer Identification Number)
500 West MainStreetLouisville, Kentucky
 
40202
(Address of principal executive offices)
 
(Zip Code)
Registrant’stelephonenumber,includingareacode: (502) 580-1000Securities registeredpursuanttoSection12(b)oftheAct:
 
Title of each class
 
Name of exchange on whichregistered
Commonstock,$0.16
2
/
3
 parvalue
 
  NewYorkStockExchange
Securities registeredpursuanttoSection12(g)oftheAct:None
 
Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct. Yes
˛
 No
®
IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct. Yes
®
 No
˛
Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months (or for such shorter period that the registrant was required to file such reports), and (2) has beensubjecttosuchfilingrequirements for the past 90 days. Yes
˛
 No
®
IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-Kisnotcontainedherein,andwillnotbecontained,tothebestofregistrant’sknowledge,indefinitiveproxyorinformation statementsincorporatedbyreferenceinPartIIIofthisForm10-Koranyamendment to this Form10-K.
˛
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,“acceleratedfiler”and“smallerreportingcompanyinRule12b-2oftheExchangeAct.(Checkone):Largeacceleratedfiler 
˛
 Acceleratedfiler 
®
 Non-acceleratedfiler 
®
 Smallerreportingcompany
®
Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct). Yes
®
 No
˛
The aggregate marketvalueofvotingstockheldbynon-affiliatesoftheRegistrantasofJune30,2008was$6,776,160,320calculatedusingtheaveragepriceonsuchdateof$40.56.The number of shares outstanding of the Registrant’s CommonStockasofJanuary31,2009was168,854,995.
DOCUMENTSINCORPORATEDBYREFERENCE
PartsIIandIIIincorporatehereinbyreferenceportionsoftheRegistrant’sProxy StatementtobefiledpursuanttoRegulation14AwithrespecttotheAnnualMeetingofStockholdersscheduledtobeheldApril23,2009.
 
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TableofContentsHUMANAINC.INDEXTOANNUALREPORTONFORM10-K FortheYearEndedDecember 31, 2008
 
Page
 
PartI
 
Item1.
 
Business
 
3Item1A.
 
RiskFactors
 
17Item1B.
 
UnresolvedStaffComments
 
29Item2.
 
Properties
 
30Item3.
 
LegalProceedings
 
30Item4.
 
Submission of Matters to a VoteofSecurityHolders
 
30
 
PartII
 
Item5.
 
MarketfortheRegistrant’sCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities
 
31Item6.
 
SelectedFinancialData
 
33Item7.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
34Item7A.
 
QuantitativeandQualitativeDisclosuresaboutMarketRis
 
64Item8.
 
FinancialStatements and Supplementary Data
 
65Item9.
 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
105Item9A.
 
Controls and Procedures
 
105Item9B.
 
OtherInformation
 
107
 
PartIII
 
Item10.
 
Directors,ExecutiveOfficersandCorporateGovernance
 
107Item11.
 
ExecutiveCompensation
 
109Item12.
 
SecurityOwnershipofCertainBeneficialOwnersandManagement and Related Stockholder Matters
 
110Item13.
 
CertainRelationshipsandRelatedTransactions,andDirectorIndependence
 
110Item14.
 
PrincipalAccountingFeesandServices
 
110
 
PartIV
 
Item15.
 
Exhibits,FinancialStatement Schedules
 
111
 
SignaturesandCertifications
 
121
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TableofContentsForward-LookingStatements
Some of the statements under “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of                Operations,” and elsewhere in this report may contain forward-looking statements which reflect our current views with respect to futureevents and financial performance. These forward-looking statements are made within the meaning of Section 27A of the Securities Act of                1933 and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements to be covered by the safe harbor  rovisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe harbor provisions. We have based these forward-looking statements on our current  expectations and projections about future events, trends and uncertainties. These forward-looking statements are not guarantees of futureerformance and are subject to risks, uncertainties and assumptions, including, among other things, the information discussed under the section entitled “Risk Factors” in this report. In making these statements, we are not undertaking to address or update them in futureilings or communications regarding our business or results. Our business is highly complicated, regulated and competitive with manydifferentfactorsaffectingresults.
PARTI
 
ITEM1.BUSINESSGeneral
HeadquarteredinLouisville,Kentucky,Humana Inc. and its subsidiaries, referred to throughout this document as “we,” “us,” “our,” the“Company” or “Humana,” is one of the nation’s largest publicly traded health and supplemental benefits companies,basedonour2008revenuesof$28.9billion.Weareafull-servicebenefitssolutionscompany,offeringawidearrayofhealthandsupplemental benefit productsforemployer groups, government benefit programs,andindividuals.AsofDecember31,2008,wehadapproximately11.6millionmembersenrolledinourmedicalbenefitplans,aswellasapproximately6.8millionmembersenrolledinourspecialtyproducts.During2008,72%ofour  premiums and administrativeservicesfeeswerederivedfromcontracts with the federal government,including16%relatedtoourcontractsinFloridawiththeCentersforMedicareandMedicaidServices,orCMS,and12%relatedtoourmilitaryservicescontracts.UnderourCMScontractsinFlorida,weprovidehealthinsurancecoveragetoapproximately492,700members as of December31,2008.HumanaInc.wasorganizedasaDelawarecorporationin1964.Ourprincipalexecutiveofficesarelocatedat500WestMainStreet,Louisville,Kentucky40202,thetelephonenumberatthataddressis(502)580-1000,andourwebsiteaddressiswww.humana.com. We havemadeavailablefreeofchargethroughtheInvestorRelationssectionofourwebsiteourannualreportsonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-K,proxy statements,and,ifapplicable,amendments to those reports filed or furnished pursuant toSection13(a)oftheExchangeAct,assoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwith,orfurnishitto,theSEC.ThisAnnualReportonForm10-Kcontainsbothhistoricalandforward-lookinginformation.SeeItem1A.—RiskFactorsforadescriptionofanumber of factors that could adversely affect our results or business.
Business Segments
We manage our business with two segments: Government and Commercial.TheGovernment segment consists of beneficiaries of         government benefit programs,andincludesthreelinesofbusiness:Medicare,Military,andMedicaid.TheCommercialsegment consists of         membersenrolledinourmedical and specialty products marketedtoemployer groups and individuals. We identified our segments inaccordance with the
 
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