Companies pay out big bonuses to executives

HELENA - Health insurance companies that sold policies on the Montana Internet "marketplace" reported some substantial losses in 2014 - but that didn't stop their executives from collecting some big bonuses.

Patricia Hemingway Hall, the head of Health Care Service Corp., which is the Illinois-based parent firm of Blue Cross and Blue Shield of Montana, received a $10.4 million bonus for 2014, on top of her $1.25 million salary, for total compensation of $11.7 million.

The company increased its 2014 revenue from $22.7 billion to $27.7 billion, but had a net loss of $281 million - about $1 billion lower than its 2013 net revenue of $684 million.

HCSC includes Blue Cross operations in Illinois, Texas, New Mexico, Oklahoma and Montana. It has 15 million customers in those five states.

In Montana, Blue Cross President Mike Frank's total compensation for 2014 was $849,000, including a $355,000 bonus and salary of $488,000.

Montana Blue Cross spokesman John Doran said Frank's total compensation package in 2014 was slightly lower than Frank's $870,000 compensation for the previous year.

"Compensation is a way to attract and retain experienced professionals who will serve our members' long-term interests at a time when the health-care system is undergoing historic changes," he said. "We need the best and the brightest at all levels of our business to ensure insurance works for everyone over the long term."

Doran said bonuses paid by Blue Cross are tied to the overall performance of the company, but often focus on certain aspects of growth or duties of the employee. Bonuses are available to most employees, he said.

Top executive salaries for other companies selling on Montana's marketplace include:

* Montana Blue Cross: Vice President for Provider Services Mark Burzynski had nearly $485,000 in total compensation last year, down from $647,000 the previous year. Frank Cote, vice president for Montana sales, had $352,000 in compensation last year, down from $410,500 the previous year. Both men had bonuses for 2014.

Blue Cross in Montana has about 255,000 customers and 600 employees.

* Montana Health Co-op: CEO Jerry Dworak had $272,000 in total compensation for 2014, including a $35,000 bonus. His pay was slightly less than in 2013, when he was paid $295,000.

The co-op, created with the help of a federal loan to provide competition on local health insurance marketplaces, has about 44,000 customers and 26 employees.

* PacificSource: CEO Kenneth Provencher was paid $515,000 in 2014, including a $52,500 bonus His salary for 2014 was unchanged from 2013, when he did not get a bonus.

PacificSource, based in Oregon, has about 720 employees and serves 275,000 customers, including those covered by commercial insurance, Medicare Advantage plans and managed care programs under Medicaid offered by the state of Oregon.

Information wasn't available on Assurant, the fourth company that sold insurance on Montana's exchange for 2015.