¨     Preliminary Proxy Statement ¨     CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

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No fee required

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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form of Schedule and the date of its filing.

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(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form of Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

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The notice of meeting

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The Proxy Statement

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Financial information about Humana and Management’s Discussion and Analysis of Humana’s results of operations and financial condition

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Humana’s 2001 Summary Annual Report to Stockholders

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A proxy card

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A postage-paid envelope

Sincerely,

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1.

Elect directors; and

2.

Transact any other business properly brought before the meeting.

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VIA THE INTERNET

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BY TELEPHONE

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BY RETURNING THE ENCLOSED PROXY CARD

By

Order of the Board of Directors,

Jo

an O. Lenahan

Se

cretary

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Q:

When will this proxy statement be sent to stockholders?

A:

This proxy statement is being sent to stockholders of record on or about March 29, 2002. It will also be available at the Company’s web site: www.humana.com on that date.

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Q:

When and where is the annual meeting?

A:

The Annual Meeting will be held on Thursday, May 16, 2002 at 10:00 a.m. at 500 West Main

Street,

Louisville, Kentucky at The Humana Building, 25th Floor.

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Q:

What am I voting on?

A:

You are being asked to elect individuals to serve on the Board of Directors of the Company.

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Q:

How does the Board recommend I vote on the proposal?

A:

The Board recommends that you vote FOR each of the nominees.

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Q:

Who is entitled to vote?

A:

Anyone who owns Humana Inc. Common Stock as of the close of business on March 20, 2002 (the Record Date) is entitled to vote at the Annual Meeting or any adjournment or postponement of the meeting.

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Q:

What if my shares are not registered in my name?

A:

If you own your shares in “street name,” meaning that your broker is actually the record owner, you should receive proxy materials from your broker.

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Q:

How many shares can vote?

A:

As of the Record Date, March 20, 2002, 168,866,651 Shares of Company Common Stock were outstanding and entitled to vote. Every stockholder is entitled to one vote for each share held.

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Q:

How do I vote?

A:

There are four ways that you can vote your shares.

1.

Over the internet.    The Web site for voting is at http: //www.ProxyVote.com.

2.

By telephone. If you are in the United States or Canada, call 1-800-690-6903, which is a toll-free number. The telephone voting system is available 24 hours a day, seven days a week, until 11:59 p.m. on Wednesday, May 15, 2002.

3.

By mail. Mark your voting instructions on, sign and date the proxy card and then return it in the postage-paid envelope provided. If you mail your proxy card, we must receive it by 10:00 a.m. EDT the day of the Annual Meeting.

4.

In person. Attend the Annual Meeting. However, you can vote by methods 1, 2 or 3 above and still attend the Meeting.

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Q:

How do I vote the shares held in the Humana Common Stock Fund of the Humana 401(k) plan and retirement plan (“HRSP”)?

A:

If you have money in the Humana Common Stock Fund of the HRSP, you may vote. Under the HRSP you do have “pass-through voting rights” based on your interest—the amount of money you have invested—in the Humana Common Stock Fund.

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Q:

How many votes are required to elect the directors?

A:

The affirmative vote of a plurality of the Shares of Company Common Stock represented in person or by properly executed proxy is required to approve each of the Company’s nominees for election as a director.

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Q:

What is a “quorum”?

A:

A “quorum” is a majority of the outstanding shares. Shares may be voted at the meeting or represented by proxy. There must be a quorum for the meeting to be held. Any stockholder of record present at the Annual Meeting, but who abstains from voting, shall be counted for purposes of determining whether a quorum is present at the Annual Meeting.

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Q:

How do I revoke my proxy?

A:

You have the right to revoke your proxy at any time before the meeting. To do so, you must give written notice of revocation to the Automatic Data Processing, Investor Communication Services, 51 Mercedes Way, Edgewood, NY 11717 or by fax at (515) 254-7733, submit another properly signed proxy with a more recent date, or vote in person at the meeting. For written and fax notices, you must include the control number that is printed on the upper portion of the proxy card.

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Q:

What if I received more than one set of materials?

A:

The Securities and Exchange Commission recently approved a new rule concerning the delivery of annual disclosure documents. The rule allows us to send a single set of our annual report and proxy statement to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. This rule benefits both you and Humana. It reduces the volume of duplicate information received at your household and helps to reduce Humana expenses. The rule applies to Humana’s annual reports, proxy statements or information statements. Each stockholder will continue to receive a separate proxy card or voting instruction card.

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Q:

Who will count the votes?

A:

Automatic Data Processing, Investor Communication Services, and D. F. King & Co., Inc. will tabulate the votes cast by proxy. In addition, the Company’s Inspectors of Election will tabulate the votes cast at the Annual Meeting together with the votes cast by proxy.

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Q:

When are the stockholder proposals for the 2003 Annual Meeting due?

A:

Stockholder proposals for inclusion in the proxy materials relating to the Annual Meeting of Stockholders to be held in May 2003 must be submitted to the Corporate Secretary in writing no later than November 29, 2002. Proposals should be submitted to Joan O. Lenahan, Secretary, Humana Inc., 500 West Main Street, Louisville, KY 40202.

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Q:

How much did this proxy solicitation cost?

A:

D. F. King & Co., Inc. was hired to assist in the distribution of proxy materials and solicitation of votes for $10,000 plus expenses.

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Q:

How can I obtain additional information about the Company?

A:

We will provide a copy of our Annual Report on Form 10-K for the year ended December 31, 2001, excluding certain of its exhibits, without charge to anyone who makes a written request to Humana Inc., Investor Relations Department, 500 West Main Street, Louisville, KY 40202. The Company’s Annual Report on Form 10-K and various other filings may also be accessed via the Investor Relations page on the Company’s web site at www.humana.com. Attached as Appendix A to this Proxy Statement is much of the financial information contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

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Q:

Where can I find voting results for this Annual Meeting?

A:

The voting results will be published in the Company’s Form 10-Q for the period ending June 30, 2002 which will be filed with the Securities and Exchange Commission on or before August 14, 2002.

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(1)

Each director except Mr. Jones received 2,165 shares in 2001. Mr. Jones does not participate due to his retainer provisions as Chairman described below.

(2)

The director options granted on January 2, 2001 had an exercise price of $14.7813, the fair market value on that date.

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Recommends to the Board the appointment of the Company’s independent accountants;

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Meets with the independent accountants and financial management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized and, at the conclusion, reviews such audit;

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Reviews with the independent accountants, the Company’s Internal Audit Department, and financial and accounting personnel, the effectiveness of the accounting and financial controls of the Company and makes recommendations for the improvement of such internal control procedures;

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Reviews the internal audit function of the Company including the independence and authority of its reporting obligations, the proposed audit plans for the coming year, and the coordination of such plans with the independent accountants;

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Receives prior to each meeting, a summary of findings from completed internal audits and progress reports on the internal audit plan;

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Reviews the financial statements contained in the annual report and other reports to stockholders with management and the independent accountants to determine that the external auditors are satisfied with the disclosure and content of the financial statements to be presented to the stockholders and reviews any changes in accounting principles;

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Provides the opportunity to confer independently with the internal auditors and the independent accountants; and

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Determines the appropriateness of fees for audit and non-audit services performed by the independent accountants.

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Exercises all the powers of the Board of Directors except as otherwise provided by Delaware law and the Company’s Bylaws during intervals between meetings of the Board.

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Establishes investment objectives and policies for the various investment portfolios of the Company and investment options available under various employee benefit plans; and

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Analyzes and ratifies the investment decisions.

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Identifies members’ needs in the facilitation of health services and oversees their implementation;

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Reviews the effectiveness of the functions which form managed care affiliations with physicians and which develop medical management processes designed to improve the quality of care delivered to the Company’s members; and

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Reviews processes which allow the Company to maintain accreditation and meet quality-based and privacy regulatory requirements.

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Recommends to the full Board criteria for the selection and qualification of the members of the Board;

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Evaluates and recommends for nomination by the Board candidates to be proposed for election by the stockholders at each annual meeting;

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Seeks out possible candidates and aids in attracting highly qualified candidates to serve on the Board;

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Recommends for Board approval, candidates to fill vacancies on the Board which occur between annual meetings;

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Studies and reviews with management the overall effectiveness of the organization of the Board and the conduct of its business, and makes appropriate recommendations to the Board; and

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Considers the overall relationship of the Board and management.

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Reviews and approves compensation for the Chief Executive Officer of the Company;

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Administers the Company’s equity compensation plans;

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Reports to the Board regarding performance appraisals and compensation guidelines concerning the Chief Executive Officer and other executive officers;

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Reviews and recommends to the Board additional executive compensation and employee benefit programs, including incentive-based compensation programs, non-cash compensation programs, retirement and savings plans, severance programs, and any material changes to existing programs; and

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Reviews and approves changes required by law to be made to existing employee benefit programs.

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Established the Nominating & Corporate Governance Committee of the Board;

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A majority of the Directors should come from outside the Company and independence is important in the selection of new candidates. The Board selects candidates and extends invitations to join the Board;

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The Board of Directors meets regularly on a bi-monthly basis. Special sessions are scheduled as required. The Chairman and the President set the agenda, and directors may suggest items for inclusion. Information is made available to the Board of Directors a reasonable period of time before each meeting;

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Only independent outside directors serve on the Company’s Audit and Organization & Compensation Committees;

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All directors stand for election every year;

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Directors have an annual written self-evaluation process;

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Outside directors meet in executive session as required; and

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Every year the Board of Directors reviews and approves a one-year operating plan for the Company.

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(1)

The percentage is based on 168,866,651 shares outstanding on the Record Date.

(2)

Based upon a Form 13G/A filed with the Commission for the year ended December 31, 2001, Dreman Value Management, L.L.C. has sole power to vote 1,834,688 shares; has no shared power to vote any shares; has sole power to dispose of 15,419,463 shares; and has no shared power to dispose of any shares.

(3)

Based upon a Form 13G/A filed with the Commission for the year ended December 31, 2001, Wellington Management Company, LLP has shared power to vote 1,855,100 shares; has shared dispositive power over 14,019,300 shares; and no sole power to vote or dispose of any shares.

(4)

Based upon a Form 13G/A filed with the Commission for the year ended December 31, 2001, Scudder Kemper Investments, Inc. has sole power to vote 60,500 shares; has sole power to dispose of 65,899 shares; and has shared power to vote or dispose of 13,415,866 shares.

(5)

Based upon a Form 13G/A filed with the Commission for the year ended December 31, 2001, Vanguard Specialized Funds-Vanguard Health Care Fund has sole power to vote 11,495,000 shares; has shared power to dispose of 11,495,000 shares; and has no shared power to vote or dispose of any shares.

(6)

Based upon information available to Company as of March 20, 2002, the Record Date. Includes 20,000 shares which may be acquired through the exercise of currently exercisable options and excludes 31,385 shares held by Mr. Jones’ wife directly and by a trust for her behalf.

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(1)

Beneficial ownership of Shares of Company Common Stock, for purposes of this Proxy Statement, includes Shares of Company Common Stock as to which a person has or shares voting and/or investment power. Therefore, all restricted stock for which a person has voting power and all shares in the Humana Retirement and Savings Plan (the “HRSP”) are included. See the Summary Compensation Table in the Proxy Statement for additional

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information.

These footnotes describe whenever an individual shares voting and/or investment power over the Shares of Company Common Stock beneficially owned by them.

(a)

Certain Shares of Company Common Stock held for the benefit of the individuals in the HRSP as of February 1, 2002, over which the employee participant has voting power and investment power. They are as follows:

(b)

Shares of Company Common Stock which may be acquired by these individuals through the exercise of options, which are exercisable currently or within 60 days after March 20, 2002 under the Company’s 1989 Stock Option Plan for Employees, the 1989 Stock Option Plan for Non-employee Directors and the 1996 Stock Incentive Plan for Employees (collectively the “Stock Option Plans”). They are as follows:

(2)

Excludes Shares of Company Common Stock held by directors’ spouses and/or family trusts for which they disclaim beneficial ownership:

(3)

Unless indicated, less than 1% of the class.

(4)

In March 2001, Mr. Jones entered into a Forward Agreement covering 451,700 of his shares of Company Common Stock. Upon expiration, Mr. Jones, at his election, may settle the Forward Agreement in either cash or stock. Depending upon the price at expiration, he must relinquish up to 451,700 shares of Company Common Stock. This Forward Agreement expires in March 2004. In March 2002, Mr. Jones entered into Section 10b5-1 Trading Plans covering up to 80,000 shares of Humana Common Stock per month for a one-year period. Mr. Jones’ ownership excludes Shares of Company Common Stock owned by the adult children of Mr. Jones over which Mr. Jones has no voting or investment power.

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(1)

The amounts listed under Other Annual Compensation include Company provided transportation, executive insurance, relocation expenses, and miscellaneous items, which are listed in the table below. The amounts listed under All Other Compensation represent amounts contributed or accrued to the HRSP and contributions and earnings related to the Supplemental Executive Retirement Plan and Thrift Excess Plan (collectively “Long Term Benefit Plans”). The breakdown is listed in the table below.

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(2)

The Value of the Restricted Stock at Date of Grant is calculated based on the average of the high and low trading prices of the Company Common Stock (“fair market value”) on the date of grant, less amounts paid by the recipient. The aggregate number of shares and the value at December 31, 2001 of all restricted shares (including the 1998 awards listed below) held by the Named Executive Officers are as follows:

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(1)

Mr. Bloem’s February 2001 options were granted to him upon his election as Senior Vice President and Chief Financial Officer. His July 2001 options were granted upon recognition of his contributions to the Company. All of Mr. Bloem’s options become exercisable in equal annual one-third installments from date of grant. In the event of a Change in Control of the Company, all outstanding stock options become fully vested and immediately exercisable in their entirety. In addition, during the 60-day period following the Change in Control, any stock option (or portion thereof) may generally be surrendered for cancellation for a payment of the difference between the fair market value and option price as more fully described in the 1996 Plan.

(2)

The exercise price per share for the options is equal to the fair market value of the Common Stock on the date of grant. The exercise price may be paid in cash or, at the discretion of the Organization & Compensation Committee, in Shares of Company Common Stock valued at the fair market value on the date immediately preceding the date of exercise, or any combination thereof.

(3)

The dollar amounts in this table represent the potential realizable value of the stock options granted, assuming that the market price of the Shares of Company Common Stock appreciate in value from the date of grant to the end of the option term at annualized rates of 5% and 10%. Therefore, these amounts are not the actual value of the options granted and are not intended to forecast possible future appreciation, if any, of Company Common Stock prices. No assurances can be given that the stock price will appreciate at these rates or experience any appreciation at all. The fair market value of the Company’s Common Stock was $11.9250 on December 31, 2001.

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(1)

The Value of Unexercised “In-the-Money” Options is based on the difference between the December 31, 2001 fair market value of the Company’s Common Stock of $11.9250 as reported on the New York Stock Exchange Composite Tape, and the exercise price of the options. If the December 31, 2001 price of $11.9250 is less than the per share exercise price, no amounts are shown.

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(1)

These estimates are based on the assumption that (a) the OTRP will be continued under its present terms; (b) the participant will continue with the Company until, and retire at, age 65; and (c) the participant elects to receive an annual distribution instead of a lump sum payment.

(2)

The amounts shown are the total targeted retirement benefit and are reduced with respect to benefits received under the Retirement Account in the HRSP, the Supplemental Executive Retirement Plan and Social Security benefits.

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By

Order of the Board of Directors,

Jo

an O. Lenahan, Secretary

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(a)

Includes charges of $584.8 million pretax ($499.3 million after tax, or $2.97 per diluted share) primarily related to goodwill impairment, losses on non core asset sales, professional liability reserve strengthening, premium deficiency and medical reserve strengthening.

(b)

Includes charges of $132.4 million pretax ($84.1 million after tax, or $0.50 per diluted share) primarily related to the costs of certain market exits and product discontinuances, asset impairments, premium deficiency and a one-time non-officer employee incentive.

(c)

Includes the operations of the following entities since the dates we acquired them: Health Direct, Inc., February 28, 1997; Physician Corporation of America, September 8, 1997; and ChoiceCare Corporation, October 17, 1997.

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(a)

Reflects the previously discussed medical expenses of $90.0 million, SG&A expenses of $34.9 million and asset impairments and other charges of $459.9 million.

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(a)

Excludes the previously discussed medical expenses of $90.0 million, SG&A expenses of $34.9 million, and asset impairments and other charges of $459.9 million.

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(a)

The largest component of medical and other expenses payable represents the liability established for those services incurred during the current period but for which the claim invoice had not yet been received as of the balance sheet date. This liability is commonly known as IBNR (incurred but not reported). This liability will increase or decrease with corresponding membership levels.

(b)

All other, net items consist primarily of changes in provider balances from risk sharing arrangements due to the timing of settlements with providers.

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increased use of services, including prescription drugs;

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increased cost of individual services;

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catastrophes or epidemics;

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the introduction of new or costly treatments, including new technologies;

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medical cost inflation;

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new government mandated benefits or other regulatory changes; and

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increased use of health care, including doctors’ office visits and prescriptions resulting from terrorists’ attacks and subsequent terrorists threats, including bioterrorism.

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claims relating to the denial of health care benefits;

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medical malpractice actions;

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allegations of anti-competitive and unfair business activities;

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provider disputes over compensation and termination of provider contracts;

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disputes related to self-funded business, including actions alleging claim administration errors;

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claims related to the failure to disclose certain business practices; and

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claims relating to customer audits and contract performance.

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regulation relating to minimum net worth;

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licensing requirements;

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approval of policy language and benefits;

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mandated benefits and processes;

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provider compensation arrangements;

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member disclosure;

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premium rates; and

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periodic examinations by state and federal agencies.

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patients’ rights;

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mandatory benefits and products, such as a Medicare pharmacy benefit;

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defining medical necessity;

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health insurance access;

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provider compensation and contract terms;

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health plan liability to members who fail to receive appropriate care;

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disclosure and composition of physician networks;

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physicians’ ability to collectively negotiate contract terms with carriers, including fees;

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rules tightening time periods in which claims must be paid; and

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mental health parity.

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the possibility of reduced or insufficient government reimbursement in the future;

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higher comparative medical costs;

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government regulatory and reporting requirements;

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higher marketing and advertising costs per member as a result of marketing to individuals as opposed to groups;

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state budget constraints;

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the possibility that we will not be able to extend or renew any of the contracts relating to these programs. These contracts also are generally subject to frequent change, including changes which may reduce the number of persons enrolled or eligible to enroll, reduce the revenue we receive or increase our administrative or health care costs under those programs. In the event government reimbursement were to decline from projected amounts, our failure to reduce the health care costs associated with these programs could have a material adverse effect on our business. Changes to these government programs in the future may also affect our ability or willingness to participate in these programs. The loss of these contracts or significant changes in these programs as a result of legislative action, including reductions in payments or increases in benefits without corresponding increases in payments, may have a material adverse effect on our financial condition, results of operations and cash flows; and

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in addition at December 31, 2001, under one of our CMS contracts, we provided health insurance coverage to approximately 232,500 members in Florida. This contract accounted for approximately 16.9% of our total premiums and ASO fees for 2001. The termination of this contract would likely have a material adverse effect upon our financial condition, results of operations, and cash flows.

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1.

The election of (01) Charles M. Brewer, (02) Michael E. Gellert, (03) John R. Hall, (04) David A. Jones, (05) David A. Jones, Jr., (06) Irwin Lerner, (07) Michael B. McCallister, (08) W. Ann Reynolds, Ph.D. as Directors except as indicated to the right.

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