Del. insurer wants 2004 law revised

Jessica M. Karmasek Jun. 20, 2011, 1:42pm

Beau Biden

DOVER, Del. (Legal Newsline) - Blue Cross Blue Shield of Delaware says it believes "current questions" about the intent of some of the language contained in the state's 2004 Not-for-profit Health Care Conversion Act warrant the input of the General Assembly.

Earlier this month, Delaware Attorney General Beau Biden announced that his office completed its examination of the proposed transaction between BCBSD and Pittsburgh-based Highmark Inc. under the conversion act.

"After carefully reviewing Delaware law, thousands of documents and other information provided to us we have determined that the proposed transaction constitutes a not-for-profit health care conversion transaction under Delaware law," Biden said in a June 1 statement.

As a result of the ruling, Biden's office informed BCBSD that Delaware law requires that a foundation be created for the public benefit asset that has accrued because of BCBSD's favorable tax exempt status.

The foundation, Biden explained, is designed to ensure that the portion of BCBSD's reserves that accrued at the expense of Delaware taxpayers -- the "public benefit asset" -- be used for the benefit of Delawareans. The Attorney General's Office said it is working to determine the amount to be set aside in the foundation.

On Thursday, BCBSD issued a statement asking state lawmakers to consider revising the 2004 law.

The health insurer said it has "reached out to the Legislature to involve them in this important conversation."

"BSBSD further believes that the citizens of Delaware will benefit from any clarity that can be brought to bear on this issue and look forward to continuing to be an active partner in this ongoing conversation," it said.

Biden said he has an ongoing responsibility to "continue to ask questions and examine the broader implications of the proposed affiliation on the quality of care and level of customer service provided to BCBSD customers."

BCBSD, he noted, is the state's largest health insurer.

The Attorney General's Office said the state Insurance Commissioner is conducting a separate review of the proposed affiliation. Biden's office said it will continue reviewing documents and "other important information" as a party in that proceeding.

"We stand in the shoes of the citizens of Delaware and will continue to fulfill our responsibility to protect the public interest in our review of this proposed transaction," the attorney general said.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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