Blue Cross of Minnesota CEO saw 34% pay increase to $4.3 million

The chief executive of Minnesota’s largest nonprofit health insurer saw her annual compensation grow by more than $1 million last year.

Eagan-based Blue Cross and Blue Shield of Minnesota reported total pay of $4.3 million in 2024 for CEO Dana Erickson, a 34% increase over compensation of $3.2 million the previous year.

The payout in 2024 included a salary of more than $1.3 million, a $2.6 million bonus and nearly $350,000 in other compensation, according to an April filing with state insurance regulators obtained by the Minnesota Star Tribune.

Blue Cross did not detail the performance metrics that drove the increase for Erickson, who was named chief executive in October 2021.

“Under Dana Erickson’s leadership, Blue Cross continues to advance our main goals of growing membership, reducing administrative costs and posting positive results,” the health insurer said in a statement.

“Many details behind the business goals that inform CEO total compensation are often competitive in nature,” Blue Cross said. “Due to the unique structure of Blue Cross as a tax-paying nonprofit, company performance is the result of competing for business and market share against other local nonprofits and national for-profit insurers.”

Like other health insurers, Blue Cross in recent years has seen a steady decline in profitability after reporting strong earnings in 2020 with utilization cuts related to the COVID-19 pandemic.

Nonprofits often pay executive bonuses early in the calendar year, once final results are available for the previous 12-month period. At Blue Cross, membership in 2023 was flat year-over-year while operating income declined 40%.

The insurer, however, did not specify its timeline for judging progress on membership, administrative costs and financial results, nor did Blue Cross detail which performance measures it used.

“Achieving a responsible measure of positive results is the goal of our business every year,” Blue Cross said. “Annual CEO compensation also reflects performance against long-term strategic goals and not just results from the previous year.”

About 2.7 million people had coverage administered by Blue Cross in 2021, when Erickson started as CEO. The tally stood at about 2.5 million people the next two years, according to company news releases, before increasing to 2.7 million people in 2024.

“Blue Cross is pleased with enrollment growth in recent years, including a significant increase in new membership for 2025,” the insurer said.

Blue Cross of Minnesota is operated by parent company Aware Integrated, which also is a nonprofit group.

The Blues health plan business is divided into two units: a nonprofit insurance company called BCBSM that pays premium, income and property taxes; and a nonprofit HMO division called Blue Plus that also pays premium taxes while avoiding tax on its income and property.

Aware Integrated includes some 20 for-profit entities, all of which are subject to corporate income tax and premium taxes, where applicable.

Blue Plus has benefited from state laws that often exclude for-profit insurers from serving as managed care organizations in Medicaid and related Minnesota health care programs.

HMO contracts in these programs, which have been a large source of revenue for insurers, were reserved for nonprofits from the 1980s until 2017, when the Legislature decided to allow competition from for-profit carriers. Last year, lawmakers effectively reinstated the ban on for-profit carriers in state public programs, with the change taking effect in 2025.

“Blue Cross believes the best way for us to advance good health for all Minnesotans is by operating as a nonprofit organization,” the insurer said.

“The main advantage of being a nonprofit is how it focuses and reaffirms our long-term commitment across the entire state. With everything we do being rooted in sustainable and responsible growth for our core insurance business, Blue Cross remains focused on long-term mission and not short-term margin.”