Blue Shield of California Fulfills 2 Percent Pledge to Customers

Sep 09, 2011, 11:30 ET from Blue Shield of California

Employers, Individuals and Families Statewide to Receive Premium Credits in October

SAN FRANCISCO, Sept. 9, 2011 /PRNewswire-USNewswire/ -- Credits ranging from 10 percent to 30 percent of one month's premium will appear on October bills as Blue Shield of California fulfills its pledge to limit its net income to 2 percent of revenue.  That pledge committed Blue Shield to return the difference collected above 2 percent to customers and the community.

Starting this week, letters will be mailed to subscribers and group customers who are eligible to receive a credit as part of the pledge giveback. The letters will alert them to the fact that their October bill will reflect the credit, and will list the amount of their credit, which is based on their dues/premiums from May 2011.

"As a mission-based, not-for-profit health plan, we made this commitment to help keep coverage affordable for our members.  While these credits will help our customers, every player in the healthcare industry must do more to reduce the cost of care," said Bruce Bodaken, chairman and CEO of Blue Shield of California.

The company will give premium credits back to individual and fully insured group customers based on a percentage of one month's dues/premium from May 2011:

  • Individual and family plan (IFP) customers: IFP subscribers will receive a credit of 30 percent of one month's dues/premium.

  • Group plan customers: Fully insured groups will receive a credit of 30 percent of one month's dues/premium; groups with shared risk agreements will receive a credit of 10 percent of one month's dues/premium.

How the credit translates into actual dollars for policyholders

Customers with fully insured coverage in May 2011 (other than government programs whose contracts do not permit such credits) will receive a credit in the bill for their October 2011 dues/premiums. The average credit will vary depending on the monthly amount due:

  • The average individual customer will be credited approximately $80 and an average family of four will be credited approximately $250. The range is roughly $25 - $160 for individuals and $130 - $415 for a family of four.

  • For all mid/large group customers, the average credit to the group will be $110 - $130 per employee. Employers who pay part of the premium must decide whether and how to apportion it.

  • For small groups (2-50 employees), the averages are $125 for one employee and approximately $340 for a family of four.

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, 4,800 employees, and one of the largest provider networks in California. Founded in 1939 and headquartered in San Francisco, Blue Shield of California offers a wide range of commercial and government products throughout the state. The company has contributed more than $125 million over the past four years to the Blue Shield of California Foundation—which was named one of BusinessWeek's 20 most generous corporate foundations. Contact your local agent or broker for more information about Blue Shield products and services, or visit the Blue Shield website at

SOURCE Blue Shield of California