Years of pummeling losses crippled LifeWise Health Plan’s ability to remain solvent in Oregon, yet that didn’t hamper top management from earning handsome salaries in 2015, with some of its sales and account managers taking home double digit increases, according to filings with the Oregon Insurance Division.
Currently LifeWise has 47,400 members in Oregon, including 21,000 in the large groupa and self-funded category, 8,400 in the small business group and 18,000 individuals.
On the financial side, LifeWise lost $35.7 million in 2015, which followed a $24.3 million loss the prior year. At the same time, its cash and equivalents increased by nearly $2 million since 2014 – reaching $7.2 million.
But when it came to hospital and other medical costs, LifeWise suffered a crippling blow – spending $255.4 million in 2015 compared to only $80.6 million the year prior.
LifeWise’s self-insured employer clients have lost the company money. It reported a net loss from operations of its administrative services contracts of $1.4 million.
Who was the top wage earner at LifeWise last year? Majd Fowzi El-Azma, president and CEO, who took home $562,537, which included a $265,133 bonus, while his overall compensation increased by 1.41 percent over the previous year. Executive Vice President David Lechner was next in line, earning $272,288 with a $106,020 bonus, for a 22.3 percent hike.
LifeWise didn’t hesitate to reward its sales and account managers with high salaries, some of them earning double digit increases. They included:
- Kristine Lloyd, a sales manager, was paid $188,704, including a $72,516 bonus. Her salary increased 26.04 percent.
- Farah Loudermilk, a sales manager, earned $187,053, including a $61,379 bonus, for a 4.79 percent salary increase.
- Miesha Johnson, an account manager, $150,754, including a $63,751 bonus, for a 30.32 percent increase
- Susan Hershell, an account manager, earned $137,614, with a $56,637 bonus, whose salary grew by 23.38 percent.
In its press release, El-Azma said: “Our focus is on making this transition as smooth as possible for our customers. We will continue to provide excellent service to our nearly 50,000 customers while they remain with us. We have the financial resources to ensure we can support our customers and meet our commitments to them during this transition.”
“We have made considerable efforts and investments in the Oregon market that effectively served our customers. In spite of that commitment, LifeWise Oregon has experienced substantial membership and financial losses over the last ten years,” said Jeff Roe, President and CEO of
LifeWise Oregon’s parent company. “As we looked ahead, given LifeWise Oregon’s relatively small size and the market conditions in Oregon, we decided to focus on our other markets, where we serve more than two million members. In those markets we are well positioned to serve our customers and make healthcare work better.”
LifeWise Oregon will remain on the individual market Exchange through the end of 2016. LifeWise Oregon’s current individual market customers will be covered through December 31, 2016.
LifeWise Oregon will stop selling new employer group coverage in the state effective immediately. LifeWise Oregon's current employer group customers will be able to retain their coverage through their current plan year, which will be in 2017 in some cases based on the group’s last renewal.
Affiliates of LifeWise Health Plan of Oregon, including LifeWise Health Plan of Washington and Vivacity, are not affected by this decision.
LifeWise is owned by Connexion Insurance Solutions Inc., which is owned by Premera Blue Cross, based in Washington.
In disclosures about legal risks it faces, LifeWise reported to regulators that a class-action suit against Premera Blue Cross, filed in October 2015, alleges violations of state and federal laws stemming from a 2014 cyberattack on Premera’s networks.
This insurance company is disproportionately dependent on a small number of relationships, it disclosed in its annual report, with Columbia Distributing, Marquis Companies and Smith Equipment & Welding each contributing greater than 10 percent of receivables for the company. Diane can be reached at [email protected].
