The new dividend bumps the yield up to 1.9 percent from about 1.4 percent, based on the stock's Tuesday closing price. The dividend yield is calculated by dividing the annual dividend by the company's stock price.
That new yield matches the average for Standard & Poor's 500 index companies.
A total of 209 companies in the S&P 500 have raised their dividend so far this year, according to Howard Silverblatt, senior index analyst for S&P Dow Jones Indices. They've hiked their payouts 15 percent on average, not counting those that have doubled.
Companies often look to spend the cash they pile up from strong performances on shareholder dividends or stock buybacks. If their share price grows, they can face shareholder pressure to raise the payout and avoid diluting the yield.
UnitedHealth's stock has climbed 28 percent since June 4, 2013, the day before its last dividend increase.
Investors have turned more to health insurance stocks in recent years as the health care overhaul has unfolded and uncertainty about the law's effect on that sector has dissipated. Investors also like UnitedHealth for the company's business diversity, as well as its growing quarterly payout.
Health insurance is the company's largest business, but it also operates segments that sell information technology services and pharmacy benefits management. UnitedHealth also is the largest provider of Medicare Advantage plans, which are privately run versions of the government's Medicare program for the elderly and disabled people.
UnitedHealth also said Wednesday that it renewed the company's share buyback program, by authorizing the purchase of 100 million shares over time. That can add to the value of company shares by taking more of them out of play.
Citi analyst Carl McDonald had predicted earlier this week that UnitedHealth would announce a sizeable dividend hike.
While UnitedHealth's share price has grown over the past few years, McDonald noted that the stock has underperformed competitors like Aetna Inc. and the Blue Cross Blue Shield insurer WellPoint Inc. so far in 2014. He said in a research note that UnitedHealth "could use a positive catalyst."
The insurer said in April that government budget cuts and costs imposed by the health care overhaul dented its performance and contributed to an 8 percent drop in first-quarter earnings. Still, it earned $1.1 billion on $31.71 billion in revenue.
The company's stock slipped 13 cents to $79.75 Wednesday morning, while broader trading indexes also fell slightly.