Massachusetts poised to bar nonprofit board payments

Nonprofit health insurers in Massachusetts may soon be barred from providing compensation for their board of directors.

Attorney General Martha Coakley already filed a bill to end nonprofit directors from getting pay, but Sen. Mark Montigny has now attached the no-pay measure to the state budget, which could significantly fast-track the process of it becoming law, potentially ending the controversial practice as soon as July 1, reports 22News.

"We found four healthcare insurance companies that compensated their directors. We felt it was at least appearance of conflict of interest. We believe it was not appropriate practice," Coakley told 22News. She says that her office is still investigating Blue Cross Blue Shield, whose directors were reportedly paid as much as $90,000 per year and approved an $11 million golden parachute to former CEO Cleve Killingsworth.

"We are not going to let this drop," Coakley told the Boston Herald. "We feel very strongly that not-for-profit boards should be voluntary and not paid," Coakley said. "The issue goes to the root of what a not-for-profit is. ... The board's loyalty is to the mission of the organization. Getting paid creates an appearance of a conflict of interest."

Insurers already are pushing back against the measure, signaling they want to keep paying directors. "Harvard Pilgrim continues to believe that compensating our board is fiscally responsible," spokeswoman Sharon Torgerson told the Herald. "Our practice has been externally validated by nationally recognized compensation consultants."

Tufts Health Plan spokeswoman Patti Embry-Tautenhan said that although it won't:"work to oppose the legislation," it remains concerned that "compensation of board members is only one element of responsible governance of public charities."

To learn more:
- read the Boston Herald article 1 and article 2
- see the 22News story

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