March 5, 2009-Bismarck Tribune

“I don’t think this is going to sit well with policyholders, especially in this economic climate that we’re all in, where folks are struggling,” Commissioner Adam Hamm said Wednesday. “For Blue Cross Blue Shield to pay for a trip to the Cayman Islands on the policyholders’ dime - I don’t think it will sit well, and rightly so.”

Blues spokeswoman Denise Kolpack said 33 employees and their guests, along with North Dakota Blues President Mike Unhjem and marketing vice president Chad Niles, took part in the trip. She said it began Monday and ends Friday.

Kolpack said the annual retreat is meant to reward the insurers’ top sales representatives.

“It’s really an award for achieving their sales goals,” Kolpack said. “It’s considered part of their salary and they pay taxes on it.”

Kolpack estimated the trip cost the Blues more than $250,000, or about $6,500 per couple. She said employees were allowed to bring one guest. Unhjem went alone, she said.

Blue Cross Blue Shield of North Dakota is the state’s dominant insurer. Hamm and the Blues have been at odds over premium rate increases since last year, when Hamm denied them.

The insurer has said it lost $6.7 million - or about $950,000 a month - in premium revenue since August in its bank depositor group, which represents individuals, because rate increases were not approved by Hamm. Unhjem says the higher rates are needed to cover the costs.

While the insurer has struggled to cover the cost of claims, records show Unhjem’s total compensation has increased 61 percent, from $412,371 in 2006 to $664,431 last year. Unhjem’s bonus, which is included in the compensation package, tripled in three years, from $90,245 in 2006 to $285,909 in 2008.

An audit of the Blues in the early 1990s questioned travel expenses for its top executives and board members. The audit found Unhjem charged the company for an $800 helicopter ride in Hawaii and $280 for one day’s taxi fares in New York City in June 1992. He eventually reimbursed the company for both bills.

Former insurance commissioner Glenn Pomeroy said then that the audit revealed a “country club mentality” among Blue Cross executives.

Hamm, who has been North Dakota’s insurance commissioner since October 2007, said he was unaware until recently of the insurer’s annual retreats. He said no such thing happens at his agency.