Blue Healthcare Bank Receives Federal Regulatory Approval

Bank Is Financial Centerpiece of Blue Cross and Blue Shield Companies’ Commitment to Growing Consumer-Directed Market

February 13, 2007

CHICAGO — The Blue Cross and Blue Shield Association (BCBSA) announced today approval by the Office of Thrift Supervision of its application for a Federal Savings Bank charter for the Blue Healthcare Bank.  The charter allows the Blue Healthcare Bank to provide healthcare-related banking services in all 50 states.  The bank is located in Sandy, Utah, a suburb of Salt Lake City.

"More and more Americans are taking greater control of their healthcare choices by enrolling in consumer-directed health plans (CDHPs), such as health savings accounts (HSAs).  As this trend continues, consumers will be in greater need of reliable financial services," said Scott P. Serota, BCBSA president and CEO.  "The Blue Healthcare Bank responds by providing consumers with access to a trusted and secure financial resource to help them efficiently manage their healthcare dollars." 

The bank will allow consumers to manage and direct their healthcare spending by paying for qualified medical expenses via a debit card linked to multiple personal accounts such as health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs).  Participating Blue Cross and Blue Shield companies can aggregate a member's claims and personal health savings information into a single integrated customer service report.

The Blue Healthcare Bank will offer consumers:

• Continuity – the bank can be integrated with the account holder's health plan;
• Convenience – an array of services are provided, including on-line banking, banking-by-phone, debit cards, checks, investment options and statements to help customers manage their accounts;
• Stability – the bank is affiliated with a health plan that consumers trust; and,
• Expertise – the bank employees specialize in healthcare-related financial services.

The first four Blue Cross and Blue Shield Companies to work with the bank are:  Arkansas Blue Cross and Blue Shield, Blue Cross of Idaho, Blue Cross and Blue Shield of Michigan, and Blue Cross and Blue Shield of South Carolina.  An additional 12 to 15 BCBS companies will come on line later this year.

The market for healthcare banking is strong, particularly in light of the continued growth and popularity of HSAs.  According to BCBSA research, in 2006, 57 percent of HSA-eligible enrollees opened HSA accounts.  The U.S. Department of Treasury estimates that 40-45 million Americans will be enrolled in HSA-eligible insurance plans by 2010.

Bank Leadership Team  

The Blue Healthcare Bank will be headed by Robert C. Gross, president and chief executive officer.

Before joining Blue Healthcare Bank, Gross was senior attorney and chair of the financial services regulatory group for law firm Jones Waldo Holbrook & McDonough. Before that, he served as president and executive board chair of First Interstate Bank of Utah N.A. Gross was also appointed by then-Utah Governor and current Health and Human Services Secretary Michael O. Leavitt, to oversee the formation of Utah's Department of Workforce Services as its founding executive director. Most recently, Gross served as senior advisor to the Iraqi ministry of labor and social affairs.

"Bob's expertise in banking and finance makes him an excellent choice to build Blue Healthcare Bank into a leader in financial healthcare products and services," said Serota.

"Consumers need to be able to manage their healthcare assets, submit claims and make co-pays in a single, seamless transaction with personalized healthcare spending reports from one source," said Gross. "The Blue Healthcare Bank will do this and more for consumers, and I am excited to be leading the effort."

In addition to Serota and Gross, three other individuals will serve on the Blue Healthcare Bank Board of Directors:

• G. Scott Romney, partner, Honigman Miller Schwartz and Cohn, LLP; member Board of Trustees, Michigan State University;
• John Sherman, Jr., formerly CEO, Scott & Stringfellow brokerage, Richmond, VA; board member, Albemarle Corporation; and,
• Robert H. Smith, former chairman and CEO, Security Pacific Bank, Calif.

For more information on health savings accounts go to:

United States Department of Treasury
National Consumer Driven Healthcare Summit of 2006