June 15 , 2006

FirstCarolinaCare Returns Premiums to Employers

PINEHURST – In an unusual move in the health benefits industry, FirstCarolinaCare Inc., the locally owned health plan of FirstHealth of the Carolinas, is returning to its clients a portion of the premiums they paid for group health coverage during 2005. FirstCarolinaCare’s decision to return the premium is based on fulfilling its mission as a not-for-profit organization and on having a successful year in 2005.

“FirstCarolinaCare had stronger-than-expected financial results in 2005, primarily due to lower-than-expected medical costs for its members,” said Ken Lewis, president of FirstCarolinaCare. “Because our clients are as committed as we are to preventive care and health education for their employees, we felt that they deserved to share in this success. We will encourage employers to utilize the premium dollars to implement new health and wellness incentive programs.”

According to Lewis, FirstCarolinaCare’s business strategy is to make minimal “profit” and to keep administrative costs in control, so that the premium dollars go toward paying fair and timely reimbursement to providers and on keeping premium increases down as much as possible. “In that way, FirstCarolinaCare strives to make health coverage more affordable and accessible and, in turn, reduce the growth rate of uninsured in our service area,” Lewis said.

To qualify for the disbursement, an employer group have been under contract with FirstCarolinaCare for at least six months during 2005. The amount of each disbursement is based on the number of employee participants for each group. Groups with 50 or fewer employees will receive between $6 and $8 per employee per month of coverage.

Lewis specifically noted that returning these premiums does not come at the expense of any employer or provider or weaken the organization financially. “FirstCarolinaCare is committed to maintaining adequate reserves based on industry standards,” he said.

According to Weiss Ratings Inc., an independent financial rating agency, FirstCarolinaCare rates in the B, or good category, by having a solid financial position and exceeding in all the rating criteria set forth in its evaluation.

“The role of our local physicians cannot be overlooked in this success,” said Lewis. “We are fortunate to have physicians who are dedicated and focused on the health of the community while reinforcing FirstHealth’s mission of caring for people. As health care partners, we will continue to move toward the standard of best practices and the use of evidence-based medicine in an effort to improve health care in this region.”

“Giving back to the community is in line with FirstHealth’s mission, to care for people,” said Charles T. Frock, CEO of FirstHealth of the Carolinas, FirstCarolinaCare’s parent company. “Our mission is the same whether we are delivering patient care or providing health coverage for the business community. Our focus is to have a healthy community and encourage healthy lifestyles. Hopefully, employers and employees will see how they personally made a difference in their health care costs by leading healthier lifestyles.”

“I cannot predict what will happen in subsequent years, so we are calling this disbursement a one-time event,” Lewis said. “The possibility of returning premiums in the future will be carefully considered if the conditions are appropriate. The key factor is having lower-than-anticipated medical costs, and that is something no one can predict.

“I can predict, however, that FirstCarolinaCare will continue to encourage preventive care, provide work-site health screenings and offer chronic care management and education in order to assist its members in reducing avoidable medical costs.”

About FirstCarolinaCare

FirstCarolinaCare, a wholly owned subsidiary of FirstHealth of the Carolinas, is headquartered in Pinehurst, North Carolina, and serves nearly 11,000 members in a six-county service area. It offers a range of small and large group health benefit plans. FirstCarolinaCare received the 2006 Honor Roll For Coverage Award from the Health Care Leadership Council, which recognizes exemplary community programs that have distinguished themselves as leaders in providing access to health coverage for uninsured Americans. FirstCarolinaCare has also been given a financial safety rating of B “or good,” by the respected Weiss Ratings Inc., which is noted for its objective and accurate insurance company evaluations. Athenahealth ranked FirstCarolinaCare first in the South in a recent first-ever review of performance in the health insurance industry.