According to AL.com, BCBSAL charged different rates in roughly 1,400 small-group employer plans — those with two to 50 employees — and some COBRA plans for former employees from 2005 to 2013. The result? Nearly $107 million undercharges and almost $33 million overcharges.
“The goal was to smooth rate adjustments over time and provide small employers more predictability in their business planning,” said a statement issued by Blue Cross Blue Shield of Alabama to AL.com. “We believed these practices were beneficial overall to our small business customers.”
BCBSAL has 60 days to pay the penalty, as well as an additional $100,000 to the department for costs related to the investigation.
“Within 60 days of the date of this order, Blue Cross shall pay the amount of $8,000,000 to the commissioner of insurance as an assessment for Blue Cross’ oversight in not filing its renewal rating methodology with the department pursuant to [Alabama law],” the order from ALDOI read. “This assessment is a result of Blue Cross’ inability to reasonably conduct variance analysis outside of the study period due to incomplete data.”