The New Jersey Department of Banking and Insurance has approved Horizon Blue Cross Blue Shield of New Jersey's application to reorganize its corporate structure as a nonprofit mutual holding company.
The reorganization allows Horizon to create for-profit subsidiaries through the acquisition of providers or pharmacy benefit managers. Critics of the move allege it shifts the payer's focus to shareholders and away from members.
Department of Banking and Insurance Commissioner Marlene Caride said in a Nov. 1 news release the department conducted a comprehensive review of the plan and determined that it met the requirements for approval. The department also imposed conditions that Horizon must meet.
"It is important to note that under the law, the company must maintain its mission as a charitable and benevolent institution, and the state attorney general has confirmed that any nonprofit mutual holding company formed under the law remains subject to its oversight," Ms. Caride said in the release.
The reorganization is effective Nov. 1, according to the release. Under the restructure, Horizon also agreed to pay New Jersey $1.25 billion over 25 years.