Big news for Blue Cross-Blue Shield of Montana customers and employees. Chief legal counsel for the State Auditor's office, Jesse Laslovich, recommended Saturday that the merger with Health Care Service Corporation (HCSC) be approved.
Laslovich said that if the merger is approved by State Auditor Monica Lindeen and Attorney General Tim Fox, Blue Cross and HCSC have signed an agreement that stipulates several terms they will have to meet. These stipulations would be in place to protect Montanans and were signed by each party.
Laslovich believes this merger will save those customers from major premium hikes.
"One thing that is a guarantee that had this transaction not been approved that rates would have gone up much more than had it been approved and the reason for that is the commitments we got them to make. Keeping their administrative costs low and their profit targets low," said Laslovich.
Laslovich also addressed the concern about those nearly 450 current Montana Blue Cross employees. The stipulations say that they will be safe from layoffs and will not be paid any less than their already making.
Laslovich's recommendation will have to go through the hearing examiner, former Montana Supreme Court Justice W. William Leaphart -- who will make an official recommendation to Lindeen and Fox.
Before the merger can proceed State Auditor Lindeen and Attorney General Fox must approve it.
Note: 'State Auditor' is Monica Lindeen's official title, but the office refers to itself as 'Office of the Commissioner of Securities and Insurance (CSI)', and Lindeen as 'Commissioner.'
Below is a list of stipulations provided by the State Auditor and Commissioner of Securities and Insurance office:
- HCSC agrees to create 100 jobs in Montana by Dec. 31, 2016. HCSC will establish a customer service center or other facility with 100 new jobs in Montana.
- HCSC agrees that all Montana employees will keep their jobs at current or greater pay. About 450 current BCBSMT employees will be safe from layoffs that would otherwise be necessary to keep administrative costs under control.
- HCSC agrees to keep its administrative costs and profit margin lower than BCBSMT's current costs and margin. This will result in lower increases in premiums charged to Montanans.
- HCSC agrees to pay Montana's premium tax - a tax paid by all other for-profit insurance companies under Montana law. This stipulation avoids years of potential litigation about whether or not HCSC would pay premium tax in Montana. This is estimated to bring in approximately $12 million more per year to the state general fund.
- HCSC agrees that certain disputes over coverage from Montana customers will continue to be handled by employees in Montana. Montana complaints will initially be handled by HCSC's current inquiry process. However, if the concern is escalated, it is guaranteed to be handled by a Montana employee.
- HCSC agrees to match BCBSMT's past charitable giving over the next three years. HCSC will also make an additional $3 million donation to foundations that fight childhood obesity and support dental care for children. HCSC will continue nearly $200,000 in annual giving in communities across Montana, on top of the initial $3 million donation.
- HCSC agrees to make public the salaries of its top five highest-paid Montana employees. Salary information for HCSC's top employees is public record in its home state of Illinois, but Montana's top-paid people would not make that list. Salary information for BCBSMT's top-paid executives is currently public information, and this stipulation ensures Montanans can continue to access that information indefinitely.
- HCSC agrees to create a "vaccination van" to offer at least 2,000 free vaccinations in underserved areas of Montana, including Montana's Indian reservations.