Take It Back

December 09, 2009

Fair Game
By Shay Totten [Seven Days]

The jaw-dropping $6.8 million retirement package [1] awarded to the outgoing president and chief executive officer of Blue Cross Blue Shield of Vermont may have been illegal, according to the state’s top insurance regulator.

The finding was issued last month by Banking, Insurance, Securities and Health Care Administration commissioner Paulette Thabault in a six-page “show cause order” denying the insurance company’s proposed rate hikes for roughly 6000 health savings accounts customers.

The average proposed premium increase for that group is 25 percent, though some plan premiums could rise as much as 50 percent.

It’s enough to make you sick.

“There is cause to believe that this excessive monetary award is contrary to the insurance laws of this state, contrary to the laws regulating the company and its obligations to subscribers, and contrary to the company’s obligations to its subscribers as a nonprofit corporation,” Thabault’s order noted. “The commissioner acknowledges and supports the continuing efforts of the current management of the company to reduce the total retirement compensation paid to the company’s former chief operating officer.”

As “Fair Game” first reported in January, William R. Milnes Jr. received $7.25 million when he left BCBS last December after 20 years of service, 10 of them in Vermont. He is credited for “saving” BCBS in the state. In this case, heroism pays.

BCBS officials tell “Fair Game” they do not believe they broke any Vermont law by gilding Milnes’ parachute.

“We are talking with the department about how to resolve their concerns on the issues surrounding the retirement payment,” said Kevin Goddard, vice president of external affairs.

How so?

“We have engaged in the process to determine if it’s possible for some of the retirement benefit to be reduced or recouped,” said Goddard. He declined to provide further details.

In the meantime, they’ll just keep squeezing blood from their subscribers.