WEA Trust and Health Tradition Health Plan will exit the Wisconsin health insurance market by the end of 2022, citing financial challenges with maintaining the business.
Nonprofit WEA Trust will continue to maintain long-term care, life and vision coverage for its members, and health coverage benefits will continue with no changes until Dec. 31, according to a June 1 news release.
As part of the departure, the Madison, Wis.-based payer will gradually lay off 110 employees.
"The challenges related to healthcare consolidation, the costs associated with the global pandemic and the drop in the stock market have made it difficult for local, not-for-profit organizations like ours who seek to provide families with high value personal care," President and CEO Vaughn Vance said. "It became clear that we had to make the difficult decision to pivot as an organization before we sacrificed what has made WEA Trust unique for many years."
Health Tradition Health Plan is an HMO that was sold to WEA by Rochester, Minn.-based Mayo Clinic Health System in 2018.
WEA Trust was formed in 1970 by the Wisconsin Education Association Council to provide health insurance to school district employees.
In 2011, state legislation (Act 10) blocked unions from negotiating members' benefits, which eventually led to increased competition and steep revenue losses for WEA, according to the Wisconsin State Journal. The company then expanded to begin offering plans for state, county and municipal employees.
A WEA Trust spokesperson told the Journal that Act 10 did not influence the company's decision to leave the state.
"We made long-term commitments decades ago to members in our long term care and life products that will be in place well into the future. It is in the best interest of our members to pivot our offerings to sustain those promises," Mr. Vance said.