Horizon Announces Plan to Use Tax Refunds to Provide $150 Million to Customers in 2018 and for $125 Million Multi-Year Investment to Improve Care
(Newark, NJ) – Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ) announced today that as a result of the federal tax reforms enacted in December, it will work with the Department of Banking and Insurance to identify the most appropriate mechanism to use these funds in 2018 for its policyholders and will invest an additional $125 million in anticipated refunds over the next five years in significant initiatives that will drive improvements in health care for Horizon BCBSNJ members in the areas of behavioral health, access to care, and addiction.
“Horizon is entirely focused on serving our 3.8 million members. In keeping with our long-standing mission to operate for the benefit of our customers, this plan seeks to provide to them this year, in the most direct way possible, $150 million in relief. Members will also benefit from the substantial investments this plan makes to expand access to care, improve health care quality and lower costs,” said Kevin P. Conlin, Chairman, President, and CEO of Horizon BCBSNJ.
As a result of the elimination of the Alternative Minimum Tax (AMT) in the Tax Cut and Jobs Act of 2017, Horizon is due federal refunds over each of the next five years (2018-2022). Horizon, a not-for-profit health services corporation, has paid the AMT since 1986 and consequently paid federal taxes that were higher than it would have under standard corporate tax rates. As a result, Horizon earned AMT credits that have accrued every year since 1986 and now total $550 million. Per the new tax law, companies with AMT tax credits are expected to be refunded the full value of those credits with a portion being refunded in each of the next five years (2018-2022). Consistent with Horizon’s mission to focus on our members, the plan announced today:
- Provides $150 million to benefit its customers. Horizon is working with the Department of Banking and Insurance to determine the most appropriate mechanism to use these funds in 2018 for its policyholders.
- Invests $125 million for multi-year, significant health care initiatives beginning in 2018, including efforts to:
- Expand programs and platforms that connect members with behavioral and mental health services and accelerate initiatives that fully integrate medical and behavioral services to address a material lack of integration of physical medicine and behavioral health.
- Provide members with more access to primary care and address social determinants of care that can be a barrier to achieving good health with an emphasis on members living in underserved areas.
- Increase Horizon BCBSNJ’s already extensive efforts to prevent substance abuse and help members with addiction and substance use illness.
Horizon will manage the balance of refunds, as they are distributed by the federal government in future years, to benefit our members on cost, quality and the consumer experience.
Horizon will rely upon New Jersey health care providers and organizations to help deliver many of the planned initiatives. The Company has earned national recognition for its efforts to collaborate with the health care provider community, transform the way we deliver and pay for health care, and achieve the triple aim of lower costs, higher quality and a better patient experience.
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Horizon Blue Cross Blue Shield of New Jersey, the state's oldest and largest health insurer is a tax-paying, not-for-profit health service corporation, providing a wide array of medical, dental, vision and prescription insurance products and services. Horizon BCBSNJ is leading the transformation of health care in New Jersey by working with doctors and hospitals to deliver innovative, patient-centered programs that reward the quality, not quantity, of care patients receive. Learn more at www.HorizonBlue.com. Horizon BCBSNJ is an independent licensee of the Blue Cross and Blue Shield Association serving more than 3.8 million members.