Legislation passed late in 2020 gave Horizon Blue Cross Blue Shield of New Jersey the go-ahead to to pursue a reorganization of its corporate structure by applying for the change with the New Jersey Department of Banking and Insurance.
That application is complete, NJDOBI announced Sept. 22, along with a schedule for three public hearings.
At the meetings, the state’s largest insurer will present an overview of its plan to become a mutual holding company, the same structure Blue Cross Blue Shield companies operate under in 18 other states.
In her letter of completeness, NJDOBI Commissioner Marlene Caride identified seven points from the application the insurer should be prepared to address across the meetings, including how the company plans to make care more affordable, particularly given rising costs and what purpose a proposed $300 million distribution from one or more regulated insurance entities to Horizon Mutual Holdings Inc. would serve.
“The public will have multiple opportunities to share comments on the application and plan through one in-person hearing, two virtual sessions as well as the submission of written comments,” Caride said in a statement.
Caride must decide whether or not to approve the move 30 days after the final hearing, which is scheduled for October.
According to the insurer, a study conducted by Econsult Solutions before the legislation was introduced predicted that over the next decade the move will produce $4.16 billion in additional economic output, 1,958 new jobs, and $62 million in added state revenue. For every $100 million in investment in N.J. firms, it said the state can expect $206 million in additional economic output. Find out more about the change.
Horizon is currently a not-for-profit health services corporation. The company reports more than 5,000 employees and 3.7 million members, $13.6 billion in annual revenue, and that it paid 70.4 million claims in 2019. The measure to change its structure to a not-for-profit mutual was signed into law by Gov. Phil Murphy in December 2020. According to the legislation, and the insurer, the move will allow it to make investments in technology and services that it says its current structure restricts.
“For almost 90 years, Horizon’s members have relied on us to help them achieve their best health, to work with their doctors to improve quality, and to make care more affordable and convenient. What our members need and demand from health care today is rapidly changing and becoming a not-for-profit mutual will better position Horizon to continue meeting their needs,” Horizon Senior Director, Public Affairs Thomas Wilson said in a statement. “We appreciate the very thorough and complete effort that the Department has invested in evaluating the application. We remain committed to continue working with the Department to achieve a successful completion of this process and to providing the benefits that the reorganization will deliver to our members.”
The application was submitted by Horizon Aug. 1. It highlights two specific “immediate investment priorities” the company could, and would, pursue under the new structure: addressing Social Determinants of Health and addressing mental health needs for members through its Integrate System of Care. In her letter, Caride inquired if the $300 million figure could be for the benefit of these initiatives.
The way the law is written, the commissioner must approve the plan unless it goes against the law, would negatively impact “the safety or soundness of the proposed reorganized insurer and insurance company subsidiaries of the proposed mutual holding company;” or if it treats unfairly or is not in the best interests of policyholders.
The in-person and virtual meetings are scheduled for October:
• Oct. 6, 2022, 11 a.m., New Jersey Department of Banking and Insurance, 20 W. State St., Trenton
• Oct. 11, 2022, 6 p.m., Virtual hearing
• Oct. 17, 2022, 1 p.m., Virtual hearing
Horizon’s application and information on attending the hearings are available online.
Editor’s note: This story was updated at 3:20 p.m. ET on Sept. 23, 2022. A prior version indicated that Horizon Blue Cross Blue Shield’s application was approved by the New Jersey Department of Banking and Insurance; that was incorrect, the application is completed and references to approval were updated accordingly.