More than 500 non-union employees at Blue Cross Blue Shield of Michigan have accepted voluntary separation offers and will leave the state's largest health insurer by the end of the year.
The Michigan Blues made the offer to about 8,650 nonbargaining unit employees in September. The offer to retire or leave employment was made for several reasons, including helping to lower the Detroit-based company's administrative costs.
Nearly 6 percent of its workforce, or 513 workers, have accepted the offer, said Andy Hetzel, Blue Cross' vice president of corporate communications. Employees include 441 from Blue Cross subsidiaries and 72 from its emerging markets division, he said.
Hetzel said Blue Cross has offered the same terms to its 2,060-employee union workforce, UAW International.
Each termination offer includes compensation and health care benefits up to a maximum of 52 weeks, depending on length of service. Those eligible to retire can accept the offer in addition to their retirement benefits.
"We knew heading in that we had a significant number of retirement-eligible employees and expected that others might be considering doing something different given the impact of COVID on our lives," Hetzel said in an email to Crain's.
"The VSO allows people to transition into their next steps with more financial and benefit security, commensurate with their years of service to the company," Hetzel said. "It benefits our business, and does right by the dedicated employees whose work helped make our success possible."
Hetzel said the voluntary terminations will help Blue Cross further cut administrative costs.
"We are constantly looking at ways to lower our administrative costs through efficiency and continuous improvement, to ensure affordable coverage and care for our customers and members," Hetzel said.
In 2019, Blue Cross completed a three-year cost-cutting effort called "strategic business transformation" that trimmed more than $300 million in administrative costs from Blue Cross.
"Nobody could have predicted the great disruption to our lives that the coronavirus pandemic brought over these past months," said Blue Cross Dan Loepp in a statement to employees in September. "Many of us have lost family, friends and neighbors to COVID-19. Each of our lives — at home and at work — has been fundamentally changed by the events of this year. Some of you have expressed to me, personally, an interest in reordering your work-life balance or doing something new."
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