Empire Blue Cross Blue Shield Agrees to Delay Dissolution of 7 N.Y. Plans

New York-based Empire Blue Cross Blue Shield has agreed to delay the dissolution of seven small-group products after conversations with the New York Department of Financial Services.

Seven plans the company offers will be phased out by April 1, 2013 instead of April 1, 2012 in what a spokeswoman for the company said was an effort to reduce disruptions for policyholders. The plans at issue cover roughly 20,000 businesses, with a total of about 250,000 employees.

"Based on ongoing discussions with the Department of Financial Services, Empire voluntarily agreed to dismantle several small-group products on their specific renewal date. While we believe we have the statutory and contractual right to dismantle them on a fixed date, we think it would be less disruptive to members if we dismantle them on the renewal date," Sally Kweskin, a spokeswoman for Empire said in a statement.

Kweskin said members in those plans will not be switched into new plans automatically, but will receive word that the plans are ending ahead of the expiration deadline. She said the affected members will receive information about other Empire products, including two newly created offerings, and those offered by competitors to ease in the transition.

Kweskin said the move to dissolve the plans was driven by "dysfunctions" in the New York market that make it difficult to spread risks around more healthy policyholders.

"We have no intention of withdrawing from the small-group market in New York," Kweskin said. "We're trying to reduce the increased losses realized in this area during the past four years."

The New York Department of Financial Services has been pushing health insurers in the state to be more consumer friendly in recent months.

In November, the department began posting dozens of documents on its website that had been submitted by health insurance carriers in support of proposed rate increases. The department's decision to post those documents online came after a fight between health insurers and regulators over whether they should be public, with many of the companies ultimately agreeing to release the documents to the public (Best's News Service, Nov. 18, 2011).

Also that month, regulators ordered 11 health insurance companies to refund a total of $114.6 million in health care premiums to nearly 600,000 New York policyholders who were overcharged for premiums (Best's News Service, Nov. 9, 2011).

(By Jeff Jeffrey, Washington Correspondent: [email protected])