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By Janell Cole, Published March 21 2009

Blues bill becomes a study

BISMARCK – A proposal to slap a surtax on the former Blue Cross Blue Shield of North Dakota executive’s $2.2 million severance package is now a study of health insurance costs.

House leaders approved a bill Friday morning put forth by House Majority Leader Al Carlson, R-Fargo, calling for a Legislative Council to study about 20 factors, including “corporate structure of health insurance companies” and “statutory barriers to competition and lower costs.”

Democratic-NPL leaders proposed earlier this week that the Legislature consider a 70-percent state income tax surtax on amounts over $1 million paid to employees of nonprofit corporations. It was aimed at fired BCBS president and chief executive officer Mike Unhjem, who was ousted by the board this month but with the severance package representing two years of salary and benefits.

They said it would apply to any other nonprofit company employees who made more than $1 million in a year.

The proposed bill called for the tax to be in effect as of Jan. 1 this year.

Republicans at a Delayed Bills Committee meeting Wednesday had balked so House Minority Leader Merle Boucher, D-Rolette, came to Friday’s meeting with a few changes – the surtax would go into effect for 2010 and would be charged half to the employer and half to the employee.

Republicans said that, as objectionable as the Unhjem severance was, they couldn’t go along with, even the toned down version.

Boucher said that to do nothing in response to the severance package was to condone it.

House Assistant Majority Leader Don Vigesaa, R-Cooperstown, said a new law would simply be evaded by creative contracts to avoid the tax.

Carlson said the Democrats’ bill would do nothing for BCBS premium payers.

“I don’t agree with what they did (with Unhjem payment),” he said. “But what does the average North Dakotan get out of this?”

Eventually, the committee voted along party lines to not accept the Democrats bill. Republicans agreed to add a section to Carlson’s study bill saying the study of health insurance costs should include accountability and transparency of nonprofit corporations’ salary, benefits and severance packages. It passed the committee 5-0.

It will be assigned to the House Industry, Business and Labor Committee for a hearing.

Cole works for Forum Communications Co., which own The Forum. She can be reached at (710) 224-0830 or forumcap@btinet.net.