Most Blue Shield of California customers will receive a credit on their… (Susana Gonzalez/Bloomberg )
Health insurer Blue Shield of California said it will return $50 million to customers by year-end as part of its pledge to limit its annual profit.
The San Francisco company said most customers will receive a credit on their December bill. It said the average credit for an individual customer will be about $25 and roughly $75 for a family of four, depending on their premiums.
For most employers, the company said the average credit will be about $40 per employee.
After receiving criticism for hefty rate hikes, Blue Shield announced last year it would begin issuing credits to customers if its net income exceeded 2% of revenue. As a result, the nonprofit company has already returned more than $470 million to customers for 2010 and 2011.
"This pledge continues to demonstrate that we put affordability before profit," said Bruce Bodaken, Blue Shield's chairman and chief executive.
Separately, Blue Shield issued nearly $11 million in rebates to customers earlier this year as part of new requirements under the federal healthcare law for a minimum amount of premiums to be spent on medical care.
Last year, Blue Shield had annual revenue of $9.53 billion and net income of $78 million. It reported reserves of $3.77 billion in the first quarter of this year.
Bodaken, who is retiring in December, earned $4.6 million last year. The company has declined to comment on the value of his retirement compensation or the pay of his successor, Paul Markovich.
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