2014 Calif. Audit Blasted Blue Shield for $4 Billion Surplus
July 6, 2015 | Read Time: 1 minute
The revocation last year of Blue Shield of California’s state tax exemption came on the heels of a blistering audit by state tax officials who assailed the nonprofit health insurer’s provision of coverage and multibillion-dollar cash stockpile, the Los Angeles Times writes.
The previously secret report, dated June 3, 2014, asserts that in building up a $4-billion plus surplus while failing to offer its 3.4 million customers more affordable coverage, the state’s third-largest health insurance provider was “not operating exclusively for the promotion of civic betterment or social welfare.”
The California Franchise Tax Board cited those reasons, among others, in deciding two months later to strip Blue Shield of its state tax break, according to other previously undisclosed records reviewed by the Times. The company is appealing the decision.
