March 11, 1999 | Read Time: 1 minute
A four-year legal dispute between the Ohio Attorney General’s Office and Anthem, a health-insurance provider, has been settled with the creation of a $28-million health-care foundation.
The Anthem Foundation, to be based in Cincinnati, will support health-care services for poor residents in 36 Ohio counties.
The foundation will operate as a supporting arm of the Cincinnati Foundation, a community fund.
The dispute arose in 1995, when Anthem merged with Community Mutual Insurance Company. Because Community Mutual itself had been created from a merger between an insurance company and a non-profit health-care provider, the Ohio Attorney General said that the state should be reimbursed for tax breaks given to the non-profit organization over the years.
In such cases, the recouped money is usually turned over to charity.
Anthem initially fought the Attorney General, arguing that its merger was not the same as if a non-profit organization were converting to a for-profit company.
Not everyone is pleased with the settlement. Two watchdog groups that monitor such mergers complained that the method used to determine how much money should be turned over to charity was not disclosed.
The groups, Community Catalyst, in Boston, and the Universal Health Care Action Network of Ohio, say they are also concerned about the foundation’s structure.
Under the terms of the agreement, Anthem and the Attorney General each will appoint one of the fund’s five board members.
The groups say that allowing Anthem to appoint a board member could compromise the foundation’s independence from the company. And they say that since the Attorney General’s Office regulates foundations in the state, it would be a bad idea for the Attorney General to appoint a board member.
The three remaining members of the board will be appointed by the Cincinnati Foundation.
