(Bloomberg) -- Horizon Blue Cross Blue Shield of New Jersey, the state’s largest health insurer, said the new federal tax law will result in the company receiving $550 million of refunds over the next five years.
The measure, enacted by President Donald Trump in 2017, eliminated the alternative minimum tax for businesses. As a result, Horizon can receive a refund for unused tax credits, the not-for-profit insurer said in a statement.
Horizon plans to use the refunds to provide $150 million to customers this year “in the most direct way possible,” Kevin Conlin, president and chief executive officer of Horizon, said Wednesday in a statement. The insurer said it’s working with the state Banking and Insurance department to “determine the most appropriate mechanism to use these funds in 2018” for its 3.8 million policyholders.
The insurer said it also plans to invest $125 million of the money on multiyear health-care improvements, including efforts to expand mental-health services and provide help with drug addiction and more access to primary care.
The balance will be managed “to benefit our members on cost, quality and the consumer experience,” Horizon said in its statement.
Governor Phil Murphy, in a statement provided by Horizon, said the insurer is “setting the bar for how corporations can responsibly reinvest in our communities.”
“I commend Horizon Blue Cross Blue Shield for reinvesting these profits into New Jersey through efforts such as increasing access to primary care in underserved communities, more fully connecting their members to behavioral and mental health programs, and strengthening substance abuse prevention,” Murphy said in the statement.
Horizon came under fire last year from the previous governor, Republican Chris Christie, who wanted the insurer to give the cash-strapped state $300 million annually from its surplus account. That effort failed to win support from lawmakers.
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