SAN FRANCISCO, Oct. 30, 2012 /PRNewswire/ -- In fulfillment of its pledge to limit net income to 2 percent of revenue, Blue Shield of California Chairman and CEO Bruce Bodaken announced today that the not-for-profit company will return $50 million to its customers by December 31, 2012.
The funds will be returned to eligible customers in the form of credits on their billing statement for December 2012 dues/premium.
Blue Shield has returned more than $470 million to customers and the community to offset net income earned above the 2 percent threshold in 2010 and 2011. This year's pledge amount brings the total pledge-related givebacks to $520 million to date. This year, Blue Shield came closer to hitting its 2 percent target by adjusting rates to make care more affordable. This means Blue Shield will return a smaller amount than in 2011.
"As a not-for-profit, we are committed to expanding access to high-quality health care at an affordable price. This pledge continues to demonstrate that we put affordability before profit," said Bodaken.
How the $50 million will be paid
- Customers with continuous fully insured coverage in the same eligible product from August 1 through December 31, 2012 (other than certain federal and state government programs whose contracts do not give us a way to make such credits) will receive a credit in the bill for their December 2012 dues/premium.
- Blue Shield's fully insured customers (individual plan and group) will each get a 9 percent credit against one month of dues/premium. Customers with whom Blue Shield shares risk will get a 3 percent credit against one month of dues/premium. The credit amounts are based on customers' August 2012 dues/premium amount.
How this translates into actual dollars for contractholders and policyholders
All eligible customers with fully insured continuous coverage from August 1 through at least December 31, 2012 will receive a credit in the bill for their December 2012 dues/premium. The average credit will vary depending on the monthly dues/premium:
- For individual and family plans (IFP), the average individual customer will be credited approximately $25 and an average family of four will be credited approximately $75. The range is roughly $7 - $50 for individuals and $40 - $125 for a family of four.
- For all fully insured mid/large group customers (51 employees and above), the average credit to the group will be $35 - $40 per member. Employers who pay part of the dues/premium must decide whether and how to apportion it.
- For small groups (2-50 employees), the averages are $40 for one employee and approximately $105 for an employee with dependents covering a family of four.
- Self-funded groups are not eligible for the credit. Nor are persons covered under certain federal and state government contracts that don't provide a way to give credits.
About Blue Shield of California
Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with 3.3 million members and 4,800 employees. Founded in 1939 and headquartered in San Francisco, Blue Shield of California provides health, life, dental, vision, and Medicare insurance and health care service plans in California, has one of the largest provider networks, and $9.7 billion in annual revenue. In 2012, Blue Shield of California was named one of the World's Most Ethical Companies. Since 2005, the company has contributed more than $200 million to Blue Shield of California Foundation, one of BusinessWeek's most generous corporate foundations. Contact your local agent or broker about Blue Shield of California products and services, or visit www.blueshieldca.com.
SOURCE Blue Shield of California