Philadelphia, PA – Independence Blue Cross (IBC) announces today it has filed a request with the Pennsylvania Insurance Department to redesign its corporate structure. Under the new structure, the company would remain a nonprofit, taxpaying corporation, but it will gain more flexibility to rapidly respond to the fast-changing health care environment and to continue to best serve its customers.
There have been enormous changes in health care since IBC was founded in 1938 as a hospital plan corporation offering only coverage for hospital care. Over the years, IBC’s corporate structure has become unnecessarily complex as the organization created or acquired subsidiaries to respond to changing market needs.
Today, IBC and its affiliates and subsidiaries serve seven million people across 22 states and the District of Columbia. To fulfill the company’s mission of enhancing the health and wellness of the people and communities it serves, IBC needs a structure that will allow the company to more quickly invest in innovative products and services, continue to respond to its customers’ needs, and add jobs in Pennsylvania.
“We’re redesigning a 75-year-old structure that reflects our past, not our present or our future, ” said Daniel J. Hilferty, IBC president and CEO. “This redesign will give us a structure similar to our competitors and peers. We will gain the flexibility we need to continue boldly leading the transformation of health care in our region and the nation.”
The proposed redesign would give IBC a simpler structure and give regulators a clearer line of sight into IBC and its finances. The parent company would be a nonprofit holding company, which is expected to use the Independence name. Below this would be a second holding company, which would be for-profit and is expected to use the AmeriHealth name, similar to what currently exists today. Beneath this second holding company would be the existing subsidiaries and affiliates, organized into four sub-holding companies based on geography and products.
Beyond giving IBC increased flexibility, speed, and efficiency, little else would change because of the proposed redesign of its corporate structure. IBC’s tax status, as one of the largest taxpayers in Pennsylvania, would not change. In 2012, IBC paid more than $250 million in federal, state, and local nonpayroll taxes. And, in 2014, IBC will begin paying new, additional federal taxes for health care reform, which are expected to exceed $180 million.
In addition, there would be no change to the health plans and services IBC provides its customers in the region and throughout the country. There would be no change to IBC’s local network of more than 155 hospitals and more than 42,000 physicians and other health care professionals, or IBC’s longstanding relationships with the area’s leading medical professionals to improve health care quality and lower cost.
Also, there would be no change to the day-to-day operations or the work performed by IBC associates as a result of the redesign of its structure. There would be no change to the executive leadership team or their compensation as a result of the redesign of IBC’s corporate structure.
Hilferty added, “There will be no change in our deep commitment to enhancing the health and wellness of the people and communities we serve. The new structure will allow us to continue to increase the quality and lower the cost of care and continue to exceed our customers’ expectations in the five-county region and nationwide.”