Note: This is a summary/reaction of a news story originally posted by an outside organization. To read the original article, follow the links in this post.
Back in March, we posted a story about nonprofit health insurers in Massachusetts coming under fire for what was viewed as excessive pay for their board members and executives. Now, the Attorney General of Massahussetts, Martha Coakley, has stated her intention to file legislation to make it illegal for public charities to pay their director's; this according to Bloomberg BusinessWeek.
Coakley made the decision to move on this after her office conducted a review about this type of compensation, and subsequently found their was no justification for it to continue. Executive compensation has been a sore subject for many Americans in the wake of the Great Recession and Bank Bailouts, but the compensation that these health insurers were getting were particularly outrageous to MA residents as health care costs soared in the state. These organizations receive tax benefits in addition to the other advantages non profits get, so Coakley saw even more reasons for this pay trend to continue.
Although the insurers defended the pay by saying that their boards dealt with very complicated issues, and needed to be compensated appropriately for their time. However, Coakley said that her review found no evidence of this, and that unpaid boards at nonprofit hospitals dealt with the same issues.
Obviously, this legislation is going to be met with stiff resistance from these non profit health insurers, and it remains to be seen whether it has the votes to make it through the Massachusetts State Senate. We will certainly have an update on this law if we hear any more news about it.
Read the original article about this story at Bloomberg BusinessWeek.