Blue Shield of California will return $50 million to customers
Health insurer Blue Shield of California said it would return $50 million to customers by year-end as part of its pledge to limit its annual profit to 2% of revenue.
The San Francisco company said most customers would receive credit on their December bills. It said the average credit would be about $25 for an individual customer and roughly $75 for a family of four, depending on their premiums.
For most employers, the company said, the average credit will be about $40 per employee.
After receiving criticism for hefty rate hikes, Blue Shield announced last year that it would begin issuing credits to customers if its net income exceeded 2% of revenue. As a result, the nonprofit company already has returned more than $470 million to customers for 2010 and 2011.
“This pledge continues to demonstrate that we put affordability before profit,” said Bruce Bodaken, Blue Shield’s chairman.
Separately, Blue Shield issued nearly $11 million in rebates to customers earlier this year as part of new requirements under the federal healthcare law for a minimum amount of premiums to be spent on medical care.
Last year, Blue Shield had annual revenue of $9.5 billion and net income of $78 million. It reported reserves of $3.8 billion in the first quarter this year.
Bodaken, who is retiring in December, earned $4.6 million last year. The company has declined to comment on the value of his retirement compensation or the pay of his successor, Paul Markovich.
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