Philip Morris to drop Trigon plan / Dental insurer's role in national tobacco suit is reason
TOBACCO
Friday, August 14, 1998
BY CHIP JONES
Times-Dispatch Staff Writer
Cigarette giant Philip Morris USA will drop Trigon Blue Cross Blue Shield's dental coverage for 5,000 area employees, switching to another insurer because of Trigon's role in a national lawsuit against the tobacco industry.
Trigon will lose a claims processing fee worth more than $200,000 per year when Philip Morris switches its dental plan Oct. 1.
Philip Morris has chosen Delta Dental Plan of Virginia, a Roanoke-based nonprofit corporation with such local clients as Reynolds Metals Co. and the counties of Henrico and Chesterfield.
Yesterday's announcement is the latest round in a three-month-long dispute that began when Trigon joined a national coalition of 43 Blue Cross companies suing major cigarette companies such as Philip Morris for smokers' health costs.
The Machinists union, with 600 local employees at Philip Morris'
cigarette factories, called on the tobacco giant to drop Trigon -- and now it has.
In late June, Philip Morris
dropped a vision plan with Trigon thought to be worth more than $125,000.
"Philip Morris USA makes business decisions . . . that are in the best interests of the company and its employees," spokeswoman Terry
Hanson said yesterday.
She declined to discuss the company's reasons further. But company officials earlier expressed "regret" at the actions by Trigon, which had provided health and dental coverage at the tobacco company for years.
Trigon spokeswoman Jane Olsen said the state's largest health insurer was disappointed at losing the area's largest private employer.
"But we understand," she said, "and are working with Philip Morris to make sure the transition goes smoothly and is problem-free."
Delta Dental officials, by contrast, were elated at getting the cigarette giant's claims administration business. Like many large companies, Philip Morris is self-insured and uses health insurers to handle the administrative work.
"We're just real excited to work with people of the quality of Philip Morris," said Dyke Davies, vice president of marketing at Delta Dental.
Along with the Richmond business, Delta Dental of Virginia will take on Philip Morris' dental claims work at cigarette factories in Louisville, Ky., and Cabarrus County, N.C.
Trigon only handled Philip Mor-
ris' 5,000 employee subscribers in Virginia. But in making the switch, the cigarette-maker decided to consolidate its dental plan under one umbrella.
In all, Delta Dental will process more than $6 million in claims per year for about 11,000 Philip Morris employees, along with 5,000 retirees and dependents in the three-state region.
Neither Davies nor Philip Morris officials would disclose terms of the contract. But industry sources estimated that, in Richmond alone, the dental claims work has been worth at least $200,000 per year to Trigon.
That's small change for Trigon, which has 1.8 million subscribers and posted revenue of nearly $2 billion last year.
"But it goes beyond financial damage," said one health insurance executive familiar with the deal. "What Trigon is losing is good will, and they may suffer collateral damage with vendors that work with Philip Morris."
The switch isn't expected to affect area dentists, said Dr. Charles Cuttino, president-elect of the Virginia Dental Association.
"If enough companies pull out from Trigon, I'd imagine it would feel the financial impact," he said. "But it's not going to affect the delivery of care."
The state AFL-CIO will vote today on a resolution urging the labor federation's 190,000 members to stop using Trigon's services.
Such a measure was passed last month by the 20,000-member Richmond Regional Labor Council, which accused the health insurer of "attempting to undermine the job security" of tobacco workers.
© 1998, Richmond Newspapers Inc.
Richmond Times-Dispatch | Feedback | Classified | Gateway Virginia
Daily News from the Times-Dispatch
Virginia | Business | Flair | Sports | Obits | Editorials
