$18 million severance package reinstated for CareFirst ex-CEO

A Maryland judge overrules the state insurance commissioner's decision to cut the amount in half.

By Emily Berry — Posted Dec. 2, 2009

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A Baltimore County Circuit Court judge has restored an $18 million severance package to the former chief executive of CareFirst, the nonprofit BlueCross BlueShield-affiliated plan based in Owings Mills, Md.

William Jews was CEO of CareFirst from 1993 until November 2006, when he was fired by the company's board of directors. Earlier this year, Maryland Insurance Commissioner Ralph Tyler ruled that Jews' $18 million severance package was excessive and moved to cut it in half.

The Circuit Court upheld Jews' appeal of that decision in an order signed Nov. 10. The commissioner immediately appealed the decision to the state's Court of Special Appeals.

Jews' attorney, Andrew Jay Graham, said in an e-mailed statement that his client "earned every penny of his compensation and retirement payments."

CareFirst spokesman Kevin Kane declined comment.

During his time as CEO, Jews spearheaded an ultimately unsuccessful effort to convert CareFirst to a for-profit company, positioning it for a takeover by for-profit Blues conglomerate WellPoint.

In 2003, the state Legislature passed a law limiting executive compensation at CareFirst to keep executives from benefiting personally from any potential conversion and sale.

The new law required that executive compensation be comparable to other nonprofit Blues plans, subject to review by the insurance commissioner.

When Tyler reviewed the severance package, he found the package was not "fair and reasonable" and did not represent "work actually performed," as required by the 2003 law.

Circuit Court Judge Timothy J. Martin characterized the language in Tyler's decision as "unobjective, biased and quite personal in nature." He added: "The commissioner blurred his role and overstepped his authority in his scope of inquiry and in the basis for his reasons."

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