Advertisement
Business

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.

Advertisement

“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.

Advertisement

chad.terhune@latimes.com


Newsletter
Get our weekly Business newsletter

A look back, and ahead, at the latest California business news.

You may occasionally receive promotional content from the Los Angeles Times.
Advertisement