North Carolina can switch to Aetna for state worker health insurance contract, judge rules

RALEIGH, N.C. (AP) — In a legal fight involving two health insurance companies seeking to manage North Carolina’s public employee benefits plan, a judge ruled Monday that the plan’s board acted properly when it switched to Aetna and dropped longtime administrator Blue Cross and Blue Shield of North Carolina.

Contract costs — with health care claims included — exceed $3 billion annually.

Blue Cross has administered the State Health Plan for over 40 years. The administrator handles health care expenses for several hundred thousand state employees, teachers, their family members and retirees, ensuring claims are paid and building out a provider network. After a bid process, the plan’s trustee board voted in December 2022 to award the initial three-year contract to Aetna over Blue Cross and a unit of United Healthcare, which also competed.

Blue Cross challenged the decision, arguing that the State Health Plan erred in how it decided which company would get the contract and calling the bid process oversimplified and arbitrary. But Administrative Law Judge Melissa Owens Lassiter, who heard the contested case in February, wrote Monday that Blue Cross had not met the burden of proof necessary to show that plan leaders had acted erroneously or failed to follow proper procedures.

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