State regulators have approved Florida Blue's request to reorganize its corporate structure, allowing it to become a nonprofit mutual insurer.
Florida Blue, the state's largest health insurer, said the reorganization will help the company become more flexible as it responds to changes under the healthcare reform law. "The Affordable Care Act is very clearly going to reduce the [profit] margin that health insurers are able to produce," Florida Blue CEO Pat Geraghty told the Jacksonville Times-Union. "It's very important we have an opportunity to diversify the business."
In becoming a nonprofit mutual company, Florida Blue will create a new corporate parent to oversee all subsidies, including the insurance company, and will own all stock. However, state officials prohibited the insurer from converting to for-profit status, LifeHealthPro reported.
Florida Blue will likely seek to expand its reach beyond the health insurance market, including potentially acquiring other companies. For example, the insurer is considering capitalizing on business from its 11 retail stores throughout the state, which allow consumers to buy health plans, discuss claim questions and receive general wellness services. It might start selling products not related to insurance, such as vitamins or fitness equipment, in the stores to help increase revenue, reported CBSMiami/Associated Press.
The restructure still requires approval from Florida Blue policyholders. They currently own the insurance company, but would be moved to the new parent company, along with any stock created by the change.