For starters, some its top executives are getting paid much like their counterparts in the private sector.
A confidential state audit reviewed by the L.A. Times shows that executive compensation soared by 64 percent in 2012, to $61 million.
The health insurer won’t say who got the money – or how much. But a former official who left this company this year says he believes that up to $20 million went to former CEO Bruce Bodaken as part of his retirement package. That was on top Bodaken’s regular salary. He left the company in 2012.
In March, California tax officials moved to revoke Blue Shield’s tax-exempt status because the company was sitting on reserves of more than $4 billion. Blue Shield – which could be on the hook for tens of millions of dollars in unpaid taxes – has appealed the decision.
Last month, Blue Shield was ordered to repay more than $80 million to small businesses and individual customers after failing to meet requirements of the Affordable care Act. The refunds are required when insurers fail to spend at least 80 per cent of premiums on actual medical care.
Blue Shield got around reporting some executives’ compensation to the IRS because of a legal loophole that exempts employees who are no longer with the company at the time when filings are due. The San Francisco insurer says numerous factors led to the jump in compensation in 2012, including severance, pension and incentive pay.
State insurance Commissioner Dave Jones says the newest revelations about executive pay raise questions about whether Blue Shield may have misled his department. Jones says he’ll be looking into that.