Blue Cross of California will make an additional $100 million in health-related charitable donations in 1994 in connection with the creation of its for-profit unit, Wellpoint Health Networks, in 1993.
Blue Cross also will file "a comprehensive plan for expanding its public benefit obligations" by Sept. 15, it announced.
Critics such as the California Medical Association argue that Blue Cross should abide by a state law requiring companies that convert to for-profit status to donate their fair value to charity. They say the insurer evaded the law by calling the creation of Wellpoint a "corporate restructuring."
In negotiations with the state Department of Corporations, Blue Cross already has agreed to donate $5 million a year to charity for 20 years.
Commissioner of Corporations Gary Mendoza said, "I am pleased and encouraged that BCC has complied with requests by the department that they donate $100 million to California charitable organizations during 1994. This is an important interim commitment, while the company works to create a long-term public benefit plan."
The commissioner expects that Blue Cross' plan "will demonstrate that they will use all of their assets for the benefit of Californians," a spokeswoman for the Department of Corporations said. "That doesn't necessarily mean a lump-sum gift" of its $2.6 billion in assets, she said. It means Blue Cross "must work with us to develop mechanisms"-for example, the establishment of a foundation-that will apply all its assets to the public benefit, she said.