March 9, 2009-Minot Daily News Editorial

‘Incentive’ trips give us the Blues

Perception can be reality. Blue Cross Blue Shield of North Dakota found that out this past week.

The insurance giant announced it would no longer send employees on “incentive trips,” which have for years been used as part of employee compensation.

The company is under fire after sending more than 30 employees and guests on a trip to the Caribbean this past week, which cost the insurer more than $250,000. The trip came after the company reported that it lost $28 million last year. It’s also been reported that Blues CEO Mike Unhjem’s total compensation has increased 61 percent since 2006. He earned a total of $412,371 in 2006 (including a bonus of $90,245), which skyrocketed to $664,431 last year, including a bonus of $285,909.

The average person with Blue Cross Blue Shield coverage surely could rationalize that such extravagances are why their insurance rates are so high. That may or may not be correct, but perception is hard to argue with.

By the way, state Insurance Commissioner Adam Hamm has called for a “targeted financial examination” of the company. Given the recent spate of news concerning the expensive trips and Unhjem’s compensation, the news of an examination really shouldn’t have come as a surprise.

We, too, would like to know why the company continued spending hundreds of thousands of dollars on “incentive trips” even as it continued to lose money.