Kaiser Permanente Colorado has reached an agreement with the state to return $155 million to its customers over the next two years.
The money will come from about $700 million in reserves that the state’s largest health-maintenance organization has built up over the years.
The Colorado Division of Insurance considered the amount excessive for the nonprofit and a year ago began to negotiate an agreement, state Insurance Commissioner Marcy Morrison said.
Although the division sets minimum reserves that insurance companies must maintain, it doesn’t have a maximum.
“It is up to my discretion when reserves exceed those minimums to step in,” Morrison said.
Kaiser Permanente will provide a credit of $287 per individual subscriber in 2009 and again in 2010. That’s about the same as the average monthly premium charged to cover a single adult.
Employers will also receive a credit for $287 in each of those years per enrolled employee. They can keep the credit, pass it on to their employees or boost the benefits offered in their plans.
Kaiser Permanente also has agreed to contribute $2.5 million more per year to a program that helps low-income subscribers meet their co-pays.
“It is a win for Colorado consumers and for health care in the state,” Gov. Bill Ritter said.
The health-care provider, focused primarily in Denver and Boulder, also agreed to boost its presence in El Paso, Teller, Fremont and Pueblo counties as part of the agreement.
“We have a more aggressive expansion plan,” said Donna Lynne, president of Kaiser Permanente Colorado.
Insurance regulators also didn’t like that Kaiser Permanente Colorado was sending reserve funds to its California affiliate to invest on its behalf.
Although Kaiser Permanente argued it was more efficient to pool investments and that the money was coming back to the state, insurance regulators wanted to see more of the reserve funds managed in Colorado.
Kaiser Permanente also agreed to lease rather than buy facilities in southern Colorado as it expands, reducing the amount of capital it needs to keep in reserve.
Kaiser Permanente provides health-care services to more than 485,000 residents in the state and employs more than 5,000 people.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
