Blue Shield Heading To Court Over Group Policy Cancellation

The California Association of Realtors on Monday filed a lawsuit seeking to stop Blue Shield of California from canceling a contract for coverage of up to 8,000 association members and dependents, the Los Angeles Times reports.

David Seldin, a spokesperson for Blue Shield, said the insurer in December 2006 notified the association that its contract would be canceled.

Colleen Badagliacco, the association's president, said the group was informed that coverage would end on May 31.

Seldin said the association failed to meet a provision in the contract that required 75% of its members to enroll in the Blue Shield plan, the only guarantee issue association plan that the insurer offers in California. Such plans cover all members of a group regardless of individual medical histories, and state law requires that groups maintain a minimum level of enrollment in guarantee issue association plans to spread health care costs among as many members as possible.

However, Debra Ferrier, the association's assistant general counsel, said CAR leaders believe the group had 99% participation in the plan.

Los Angeles County Superior Court on March 14 will hear the association's request for a court order to temporarily stop the cancellation (Girion, Los Angeles Times, 2/13).