Blue Cross of Northeastern Pennsylvania and Highmark Inc. sign definitive merger agreement

WILKES-BARRE, Pa. and PITTSBURGH, Feb. 18, 2014 /PRNewswire/ -- The boards of directors of Blue Cross of Northeastern Pennsylvania (BCNEPA) and Highmark Inc. (Highmark) today announced the signing of a definitive agreement to merge, marking a key milestone in bringing together the two not-for-profit health insurance leaders to better serve the communities of northeastern and north central Pennsylvania.

"This definitive agreement meets the goals we established when we set out to explore options for BCNEPA's future," said Denise S. Cesare, president and CEO of Blue Cross of Northeastern Pennsylvania. "The merger will allow us to create greater efficiencies and offer new products and services to meet the changing health care needs of our members, customers, providers and the people of northeastern and north central Pennsylvania."

Highmark has submitted a Form A filing to the Pennsylvania Insurance Department (PID) to seek merger approval.

"Health care is changing at an incredible pace. This merger will enable BCNEPA to continue to improve the quality, accessibility and affordability of health care across its region while taking advantage of Highmark's resources, tools and advanced technologies," said William Winkenwerder Jr., M.D., president and CEO of Highmark Health, the parent company of Highmark Inc. "Bringing together BCNEPA and Highmark will be good for northeastern and north central Pennsylvania residents and the communities in which BCNEPA operates."                                                  

Under the terms of the merger agreement, which builds on the two organizations' longstanding and successful collaboration, BCNEPA's local operations will be merged with Highmark, and Highmark will become the Blue Cross and Blue Shield Association affiliate for BCNEPA's 13-county service area.

The agreement also contains provisions that are designed to preserve BCNEPA's historical presence, operations and significant workforce in northeastern and north central Pennsylvania.  For example:

• Highmark will maintain regional operations in the BCNEPA service area, will make efforts to maintain local staffing levels, and will attempt to identify and create new employment opportunities in the BCNEPA service area as business needs and conditions permit.   
• Highmark will create a local advisory board to include Board members of BCNEPA, which will have a voice in major decisions relating to the transition and operations in the BCNEPA service area for at least four years.
• Highmark and BCNEPA agreed that BCNEPA will provide up to $100 million through a charitable foundation to benefit health and wellness and economic development efforts across the region.

"Highmark has a strong track record of successful relationships and affiliations with other Blue Cross and Blue Shield companies," said Deborah Rice-Johnson, president of Highmark Health Plan for Highmark Inc. "The merger will preserve jobs and maintain the strong presence of a Pennsylvania-based not-for-profit organization that is committed to the economic vitality of northeastern and north central Pennsylvania."

Together, BCNEPA and Highmark provide health insurance plans that serve nearly 5 million members in 62 of Pennsylvania's 67 counties as well as in Delaware and West Virginia. Both organizations have been recognized for maintaining a strong commitment to community and strong service to their customers while driving innovative health care solutions for the future.

About Blue Cross of Northeastern Pennsylvania
Headquartered in Wilkes-Barre, Pa., Blue Cross of Northeastern Pennsylvania is an independent licensee of the Blue Cross and Blue Shield Association. BCNEPA offers a comprehensive portfolio of health insurance products and administrative services to more than 545,000 individuals in 13 counties in northeastern and north central Pennsylvania. The company's mission is to provide integrated health care services and products to improve the quality, accessibility and affordability of health care in the populations it serves.  For more information, visit www.bcnepa.com.

About Highmark Inc.
Highmark Inc. is among the largest health insurers in the United States and the fourth-largest Blue Cross and Blue Shield-affiliated company. Highmark operates health insurance plans in Pennsylvania, Delaware and West Virginia that serve 5.2 million members. Its diversified health businesses serve group customer and individual health needs across the United States through dental insurance, vision care and other related businesses. With 20,000 employees, these organizations serve 33.5 million customers nationwide through health, dental, vision and supplemental health products. Highmark is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. For more information, visit www.highmark.com.

SOURCE Highmark Inc.; Blue Cross of Northeastern Pennsylvania