NU Online News Service, June 6, 4:45 p.m. – Minnesota Commerce Commissioner Jim Bernstein has approved a plan for the funds that Blue Cross and Blue Shield of Minnesota, St. Paul, Minn., expects to receive in connection with the national tobacco settlement.

The plan requires Minnesota Blue to spend $160 million of what state officials call “excess surplus.”

Minnesota Blue, a nonprofit health service plan, says it will give $70 million to the Minnesota Comprehensive Health Association, which will use the cash to reduce the assessments paid by Minnesota health insurers and health maintenance organizations.

Minnesota Blue will also contribute $30 million to the Better Health for Children and Communities Foundation, to provide grants for community clinics.

Minnesota Blue will pay $30 million in excess surplus refunds to 220,000 individual and Medicare subscribers, and another $30 million in excess surplus refunds to 18,689 employer groups.

Minnesota officials asked Minnesota Blue to come up with the excess surplus plan because Minnesota law sets an upper limit as well as a lower limit on the amount of surplus funds that a nonprofit health service plan can carry.

The present value of Minnesota’s tobacco settlement investments and future payments is now about $434 million, officials estimate.

Minnesota Blue intends to spend $252 million on tobacco cessation, heart disease, and cancer programs. This amount is not part of the excess surplus, Minnesota officials say.

Minnesota officials expect Minnesota Blue to have $118 million in excess surplus, but they say it will have to spend more than that amount to make up for tax savings.

Minnesota officials have also approved separate plans that call for Minnesota Blue to give $21 million to the Blue Cross Blue Shield of Minnesota Foundation and reserve $75 million for taxes.