Ad Links Buy a link » Anne Krishnan, Staff Writer When FirstCarolinaCare's board of directors realized the small Pinehurst health insurer had made more money than expected last year, it did an unusual thing.

FirstCarolinaCare is returning $300,000 to 167 companies that paid premiums for its HMO plan for at least six months last year. The rebates range from about $1,000 for a group with 10 employees to about $8,000 for a company with 100 employees.

The nonprofit health plan had lots of options, including banking the money or giving it to doctors, employees or its hospital owner, said CEO Ken Lewis. But with the company's reserves at a comfortable level, one of the directors had the winning proposal.

"He said, 'You give it to the people who paid the bulk of the premiums,' " Lewis said. " 'Give it to the people who kept this going, and that's the businesses.' "

When Blue Cross and Blue Shield of North Carolina generated a profit of $196 million -- its highest ever -- in 2003, regulators and critics had a similar idea. The Department of Insurance went so far as to draft a bill that would cap the amount of money the nonprofit insurer could keep in its reserves, but it was never heard in the legislature.

"It would be a much larger scale from Blue Cross because they have so much more tucked away in terms of premium volume," she said. Blue Cross had revenue of $3.8 billion in 2005 and profits of $167.6 million.

Rather than giving rebates, Blue Cross' approach is to invest in programs such as its generic co-payment waiver and preventive care initiatives that help save customers money on up-front payments for drugs, doctor visits and medical supplies, said spokeswoman Gayle Tuttle.

Likewise, FirstCarolinaCare is encouraging its customers to invest the givebacks in wellness programs for employees. An existing effort to keep its 11,000 members healthy was one of the reasons for the insurer's lower medical expenses and higher profits in 2005, Lewis said.

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