In a cross-state initiative to build market clout, the Blue Cross and Blue Shield plans of New Jersey and Delaware announced a definitive agreement to merge.
In effect, the Newark, N.J.-based insurer will take control of the smaller Wilmington, Del.-based plan. Together, they cover more than 2 million customers and have combined premium income of about $3 billion for 1996.
Each plan will remain a separate and distinct organization under a new Newark-based holding company. The boards of both plans have approved the agreement and hope to receive required regulatory approvals by the end of August.
As part of the deal, Blue Cross and Blue Shield of New Jersey will pay $30 million over four years for the Delaware operation, said Cathleen Coleman, a spokeswoman for the New Jersey plan. Those funds, and another $73 million held in reserve by the Delaware plan, will underwrite the creation of a new not-for-profit corporation that will provide free healthcare information to individuals and businesses in Delaware, she said.
The boards voluntarily funded the new corporation to continue the plan's community mission.
William J. Marino, president and chief executive officer of the Newark plan, also will serve as chairman and chief executive officer of the Delaware Blues. Robert C. Cole Jr. will leave the top post of the Delaware plan to become president and CEO of the Center for HealthCare Economics, the not-for-profit consumer information company created though the merger.