Blue Cross Blue Shield hit with penalties

The Alabama Department of Insurance is hitting Blue Cross Blue Shield of Alabama with an eight million dollar penalty. The insurer is being fined for charging rates higher or lower than those approved by the state. The unauthorized rates were imposed between 2005 and 2013 and resulted in thirty three million dollars in over charges and one hundred and seven million in undercharges. Al.com reports the charges occurred in about 1,400 plans issued to small group employers and some insurance plans for former employees. Company officials have said the rate variations were tied to a policy that was intended to reduce the shock of large rate increases and saved customers money. The company must also pay $100,000 to the department for costs related to the investigation.