OMB No. 1545-0047 2?17 Open to Public Return of Organization Exempt From Income Tax Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations) Do not enter social security numbers on this form as it may be made public. F0m990 Department of the Treasury lntemal Revenue Service Go to for instructions and the latest information. inspection A For the 2017 calendar year, or tax year beginning 2017, and ending 20 Name of organization Employer identi?cation number BLUE CROSS BLUE SHIELD ASSOCIATION 13?5656874 23,1325 Doing business as Name change Number and street (or P.O. box if mail is not delivered to street address) Room/suite Telephone number Initial return 225 NORTH MICHIGAN AVENUE (312) 297-6000 City or town, state or province, country, and ZIP or foreign postal code 59:11:?? CHICAGO, IL 60601 GGrossreceipts$ 670,558, 891. Name and address of principal of?cer: SCOTT SEROTA Hi3) remm for Yes i No 2 2 5 NORTH MICH IGAN AVENUE CHICAGO IL 6 6 H(b) Are all subordinates included? Yes - No If attach a list. (see instructions) I I I501(c)(3) 4 )4 (insertno.)I Website: . BCBS . COM I4947(a)(1)or I [527 H(c) Group exemption number Form of organization: I I Corporation I I TrustI I Association I I Other I Year of formation; 1 94 8 State of legal domicile: IL Summary 1 Briefly describe the organization's mission or most significant activities: SEE SCHEDULE 0 8 2 Check this box El if the organization discontinued its Operations or disposed of more than 25% of its net assets. 8 3 Number of voting members of the governing body (Part VI. line 1a) 3 37 - 4 Number of independent voting members of the governing body (Part VI, line 1b) 4 3 6 - 5 Total number of individuals employed in calendar year 2017 (Part v. line 2aTotal number of volunteers (estimate if necessary) 6 0 - ?t 7a Total unrelated business revenue from Part column (C). line Net unrelated business taxable income from Form 990-T, line 34 7b 0 - Prior Year Current Year a, 8 Contributions and grants (Part line 1h) 0 - 0 - 9 Program service 529: 379r 397- 580r392r385- 10 Investment income (Part column(A), lines 3,4, and 7d) 3, 493, 769- 8, 208, 551. 11 Other revenue (Part column (A),lines 5, 6d, SC, SC. 10c. and 11e) 3,256, 939- 3,390, 438- 12 Total revenue - add lines 8 through 11 (must equal Part column (A), line 12) 536r 130r 105 - 591 991, 374 - 13 Grants and similar amounts paid (Part IX, column (A), lines 1-3) - - 14 Benefits paid to or for members (Part IX, column (A). line 4) - 3 15 Salaries. other compensation, employee benefits (Part IX, column (A), lines 5-1016a Professional fundraising fees (Part IX. column (A), line 116) - - Total fundraising expenses (Part IX. column (D), line 25) 0 - 17 Other expenses (PartIX. column 11f-24e) 325,374,555. 365,743,613- 18 Total expenses. Add lines 13-17 (must equal Part IX, column (A). line 25) 534, 956, 329- 593. 423, 726. 19 Revenue less expenses. Subtract line 181mm ine12 1r 173: 776- 432: 352 - 3g Beginning of Current Year End of Year ?g 20 Totalassets(PartX,line16) 646,430,672 727,717,175. 5?23 21 Total liabilities (PartX ine26) 539,476,077. 628,999,945- EEZZ Net assets or fund balances Subtract line 21 from line 20 106r 954 593 - 98 7 17 230 - Signature Block Under penalties of perjury I declare that I have examined this return, including accompanying schedules and statements and to the best of my knowledge and belief it is true correct and complete. Deci aration of preparer (otherthan of?cer) is based on all information of which preparer has any knowledge May ef?f??dgs?/ I /zo/8 Sign atur ofof? Date Here ROBERT KOLODGY EVP a CFO Type or print name and title Print/Type preparer?s name Preparers signature Date Check if P'llN Paid ERICA MCREYNOLDS self-employed P00977806 3:36; Firm-5mm LLP Firm-35m >13?4008324 Firm's address >2001 MARKET STREET, SUITE 1800 PHILADELPHIA, PA 19103 Phone no. 267~330-3000 May the IRS discuss this return with the preparer shown above? (see instructions) LI Yes Ill No For Paperwork Reduction Act Notice, see the separate instructions. Form 990 (2017) JSA 7E1010?l.000 4287KD R19F 10/24/2018 10:25:23 AM l7?7.2F Form 8868 (Rev. January 2017) Application for Automatic Extension of Time To File an Exempt Organization Return Department of he Treasury Internal Revenue Service OMB No. 1545-1709 File a separate application for each return. Information about Form 8868 and its instructions is at www.irs.gov/form8868. Electronic filing (e-file). You can electronically file Form 8868 to request a 6-month automatic extension of time to file any of the forms listed below with the exception of Form 8870, Information Return for Transfers Associated W ith Certain Personal Benefit Contracts, for which an extension request must be sent to the IRS in paper format (see instructions). For more details on the electronic filing of this form, visit www.irs.gov/efile, click on Charities & Non-Profits, and click on e-file for Charities and Non-Profits. Automatic 6-Month Extension of Time. Only submit original (no copies needed). All corporations required to file an income tax return other than Form 990-T (including 1120-C filers), partnerships, REMICs, and trusts must use Form 7004 to request an extension of time to file income tax returns. Enter filer's identifying number, see instructions Name of exempt organization or other filer, see instructions. Type or print Employer identification number (EIN) or BLUE CROSS AND BLUE SHIELD ASSOCIATION File by the due date for filing your return. See instructions. 13-5656874 Number, street, and room or suite no. If a P.O. box, see instructions. Social security number (SSN) 225 NORTH MICHIGAN AVENUE City, town or post office, state, and ZIP code. For a foreign address, see instructions. CHICAGO, IL 60601 0 1 Enter the Return Code for the return that this application is for (file a separate application for each return) Application Is For Return Code Form 990 or Form 990-EZ Form 990-BL Form 4720 (individual) Form 990-PF Form 990-T (sec. 401(a) or 408(a) trust) Form 990-T (trust other than above) The books are in the care of 01 02 03 04 05 06 Application Is For Return Code Form 990-T (corporation) Form 1041-A Form 4720 (other than individual) Form 5227 Form 6069 Form 8870 07 08 09 10 11 12 ROBERT J. KOLODGY 225 NORTH MICHIGAN AVENUE CHICAGO IL 60601 312 297-6462 Telephone No. Fax No. If the organization does not have an office or place of business in the United States, check this box . If this is If this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) for the whole group, check this box . If it is for part of the group, check this box and attach a list with the names and EINs of all members the extension is for. 11/15 , 20 18 , to file the exempt organization return I request an automatic 6-month extension of time until 1 for the organization named above. The extension is for the organization’s return for: X calendar year 20 17 or tax year beginning , 20 , and ending , 20 . If the tax year entered in line 1 is for less than 12 months, check reason: Initial return Final return Change in accounting period 3 a If this application is for Forms 990-BL, 990-PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions. 3a $ b If this application is for Forms 990-PF, 990-T, 4720, or 6069, enter any refundable credits and estimated tax payments made. Include any prior year overpayment allowed as a credit. 3b $ c Balance due. Subtract line 3b from line 3a. Include your payment with this form, if required, by using EFTPS (Electronic Federal Tax Payment System). See instructions. 3c $ 2 0. 0. 0. Caution. If you are going to make an electronic funds withdrawal (direct debit) with this Form 8868, see Form 8453-EO and Form 8879-EO for payment instructions. For Privacy Act and Paperwork Reduction Act Notice, see instructions. JSA 7F8054 1.000 4287KD R19F 4/30/2018 9:16:17 AM V 17-4.5F Form 8868 (Rev. 1-2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Page 2 Part III 1 Statement of Program Service Accomplishments Check if Schedule O contains a response or note to any line in this Part III Briefly describe the organization's mission: X SEE SCHEDULE O 2 3 4 Did the organization undertake any significant program services during the year which were not listed on the X No prior Form 990 or 990-EZ? Yes If "Yes," describe these new services on Schedule O. Did the organization cease conducting, or make significant changes in how it conducts, any program X No services? Yes If "Yes," describe these changes on Schedule O. Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. 4a (Code: ) (Expenses $ 203,148,009. including grants of $ ) (Revenue $ 203,306,029. ) 160,764,928. including grants of $ ) (Revenue $ 164,327,626. ) 61,634,128. including grants of $ ) (Revenue $ 56,972,198. ) SEE SCHEDULE O 4b (Code: ) (Expenses $ SEE SCHEDULE O 4c (Code: ) (Expenses $ SEE SCHEDULE O 4d Other program services (Describe in Schedule O.) 146,236,593. including grants of $ (Expenses $ 571,783,658. 4e Total program service expenses JSA 7E1020 1.000 ) (Revenue $ 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 155,786,533. ) Form 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part IV Page Yes 1 2 3 4 5 6 7 8 9 10 11 a b c d 3 Checklist of Required Schedules Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If "Yes," complete Schedule A Is the organization required to complete Schedule B, Schedule of Contributors (see instructions)? Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If "Yes," complete Schedule C, Part I Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If "Yes," complete Schedule C, Part II Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? If "Yes," complete Schedule C, Part III Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D, Part I Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? If "Yes," complete Schedule D, Part II Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete Schedule D, Part III Did the organization report an amount in Part X, line 21, for escrow or custodial account liability, serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments? If "Yes," complete Schedule D, Part V If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable. Did the organization report an amount for land, buildings, and equipment in Part X, line 10? If "Yes," complete Schedule D, Part VI Did the organization report an amount for investments-other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VII Did the organization report an amount for investments-program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VIII Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part IX e Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, Part X f Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes," complete Schedule D, Part X X X 1 2 3 No X 4 5 X 6 X 7 X 8 X 9 X X 10 11a X 11b X X 11c X 11d 11e X 11f X 12 a Did the organization obtain separate, independent audited financial statements for the tax year? If "Yes," complete Schedule D, Parts XI and XII b Was the organization included in consolidated, independent audited financial statements for the tax year? If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If "Yes," complete Schedule E 14 a Did the organization maintain an office, employees, or agents outside of the United States? b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If "Yes," complete Schedule F, Parts I and IV 15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If "Yes," complete Schedule F, Parts II and IV 16 Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If "Yes," complete Schedule F, Parts III and IV 17 Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If "Yes," complete Schedule G, Part I (see instructions) 18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If "Yes," complete Schedule G, Part II 19 Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If "Yes," complete Schedule G, Part III 12b 13 14a 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F X X X 14b X 15 X 16 X 17 X 18 X 19 Form JSA 7E1021 1.000 X 12a X 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part IV Page Yes 20 a b 21 22 23 24 a b c d 25 a b 26 27 28 a b c 29 30 31 32 33 34 35 a b 36 37 38 Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return? Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic government on Part IX, column (A), line 1? If "Yes," complete Schedule I, Parts I and II Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? If "Yes," complete Schedule I, Parts I and III Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about compensation of the organization's current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule J Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If "Yes," answer lines 24b through 24d and complete Schedule K. If "No," go to line 25a Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax-exempt bonds? Did the organization act as an "on behalf of" issuer for bonds outstanding at any time during the year? Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," complete Schedule L, Part I Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ? If "Yes," complete Schedule L, Part I Did the organization report any amount on Part X, line 5, 6, or 22 for receivables from or payables to any current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons? If "Yes," complete Schedule L, Part II Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? If "Yes," complete Schedule L, Part III Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions): A current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV A family member of a current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or direct or indirect owner? If "Yes," complete Schedule L, Part IV Did the organization receive more than $25,000 in non-cash contributions? If "Yes," complete Schedule M Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If "Yes," complete Schedule M Did the organization liquidate, terminate, or dissolve and cease operations? If "Yes," complete Schedule N, Part I Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete Schedule N, Part II Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If "Yes," complete Schedule R, Part I Was the organization related to any tax-exempt or taxable entity? If "Yes," complete Schedule R, Part II, III, or IV, and Part V, line 1 Did the organization have a controlled entity within the meaning of section 512(b)(13)? If "Yes" to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2 Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non-charitable related organization? If "Yes," complete Schedule R, Part V, line 2 Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If "Yes," complete Schedule R, Part VI Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11b and 19? Note. All Form 990 filers are required to complete Schedule O. JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F No 20a 20b X 21 X 22 X 23 X X 24a 24b 24c 24d 25a X 25b X 26 X 27 X 28a X 28b X 28c 29 X X 30 X 31 X 32 X 33 X 34 35a X X 35b X 36 37 38 Form 7E1030 1.000 4 Checklist of Required Schedules (continued) X X 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part V Page Yes 212 1a 1 a Enter the number reported in Box 3 of Form 1096. Enter -0- if not applicable 0. 1b b Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? 2 a Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax 1,542 2a Statements, filed for the calendar year ending with or within the year covered by this return b If at least one is reported on line 2a, did the organization file all required federal employment tax returns? Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e-file (see instructions) 3 a Did the organization have unrelated business gross income of $1,000 or more during the year? b If "Yes," has it filed a Form 990-T for this year? If "No" to line 3b, provide an explanation in Schedule O 4 a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)? b If "Yes," enter the name of the foreign country: 5a b c 6a b 7 a b c d e f g h 8 9 a b 10 a b 5 Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Was the organization a party to a prohibited tax shelter transaction at any time during the tax year? Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? If "Yes" to line 5a or 5b, did the organization file Form 8886-T? Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions? If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? Organizations that may receive deductible contributions under section 170(c). Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? If "Yes," did the organization notify the donor of the value of the goods or services provided? Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282? 7d If "Yes," indicate the number of Forms 8282 filed during the year Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required? If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C? Sponsoring organizations maintaining donor advised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? Sponsoring organizations maintaining donor advised funds. Did the sponsoring organization make any taxable distributions under section 4966? Did the sponsoring organization make a distribution to a donor, donor advisor, or related person? Section 501(c)(7) organizations. Enter: 10a Initiation fees and capital contributions included on Part VIII, line 12 10b Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities Section 501(c)(12) organizations. Enter: 11a a Gross income from members or shareholders b Gross income from other sources (Do not net amounts due or paid to other sources 11b against amounts due or received from them.) 12 a Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041? 12b b If "Yes," enter the amount of tax-exempt interest received or accrued during the year 13 Section 501(c)(29) qualified nonprofit health insurance issuers. a Is the organization licensed to issue qualified health plans in more than one state? Note. See the instructions for additional information the organization must report on Schedule O. b Enter the amount of reserves the organization is required to maintain by the states in which 13b the organization is licensed to issue qualified health plans 13c c Enter the amount of reserves on hand No 1c 2b X 3a 3b X X 4a X 5a 5b 5c X X 6a X 6b 7a 7b 7c 7e 7f 7g 7h 8 9a 9b 11 14 a Did the organization receive any payments for indoor tanning services during the tax year? b If "Yes," has it filed a Form 720 to report these payments? If "No," provide an explanation in Schedule O JSA 7E1040 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 12a 13a 14a 14b Form X 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Page 6 Governance, Management, and Disclosure For each "Yes" response to lines 2 through 7b below, and for a "No" Form 990 (2017) Part VI response to line 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions. Check if Schedule O contains a response or note to any line in this Part VI X Section A. Governing Body and Management Yes 1a 1a Enter the number of voting members of the governing body at the end of the tax year No 37 If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O. 36 1b b Enter the number of voting members included in line 1a, above, who are independent Did any officer, director, trustee, or key employee have a family relationship or a business relationship with 2 any other officer, director, trustee, or key employee? Did the organization delegate control over management duties customarily performed by or under the direct 3 supervision of officers, directors, or trustees, or key employees to a management company or other person? 4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? 5 Did the organization become aware during the year of a significant diversion of the organization's assets? 6 Did the organization have members or stockholders? 7a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? 8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following: a The governing body? b Each committee with authority to act on behalf of the governing body? 9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization's mailing address? If "Yes," provide the names and addresses in Schedule O X 2 X X X 3 4 5 6 X 7a X 7b X 8a 8b X X X 9 Section B. Policies (This Section B requests information about policies not required by the Internal Revenue Code.) Yes 10 a Did the organization have local chapters, branches, or affiliates? b If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? 11 a Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? b Describe in Schedule O the process, if any, used by the organization to review this Form 990. 12 a Did the organization have a written conflict of interest policy? If "No," go to line 13 b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? c Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe in Schedule O how this was done 13 Did the organization have a written whistleblower policy? 14 Did the organization have a written document retention and destruction policy? 15 Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision? a The organization's CEO, Executive Director, or top management official b Other officers or key employees of the organization If "Yes" to line 15a or 15b, describe the process in Schedule O (see instructions). 16 a Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? b If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization's exempt status with respect to such arrangements? 10a X 10b 11a X X 12a X 12b X 12c 13 14 X X X 15a 15b X X 16a X 16b X No Section C. Disclosure 17 18 19 20 List the states with which a copy of this Form 990 is required to be filed IL, Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990-T (Section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. X Upon request Own website Another's website Other (explain in Schedule O) Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. State the name, address, and telephone number of the person who possesses the organization's books and records: ROBERT J. KOLODGY 225 NORTH MICHIGAN AVENUE CHICAGO, IL 60601 JSA 7E1042 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 312-297-6462 Form 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Page 7 Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors X Check if Schedule O contains a response or note to any line in this Part VII Form 990 (2017) Part VII Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees 1a Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization's tax year. List all of the organization's current officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation. Enter -0- in columns (D), (E), and (F) if no compensation was paid. List all of the organization's current key employees, if any. See instructions for definition of "key employee." List the organization's five current highest compensated employees (other than an officer, director, trustee, or key employee) who received reportable compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the organization and any related organizations. List all of the organization's former officers, key employees, and highest compensated employees who received more than $100,000 of reportable compensation from the organization and any related organizations. List all of the organization's former directors or trustees that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and any related organizations. List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest compensated employees; and former such persons. Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee. (C) (A) Name and Title Position (B) Former Highest compensated employee 4.00 0. 4.00 0. 4.00 0. 4.00 0. 1.00 0. 4.00 0. 1.00 0. 4.00 0. 4.00 0. 6.00 0. 4.00 0. 4.00 0. 4.00 0. 4.00 0. Key employee BOARDMEMBER (2) CURTIS BARNETT BOARDMEMBER (3) RICHARD L BOALS BOARDMEMBER (4) CHRISTOPHER BOOTH BOARDMEMBER (5) GAIL BOUDREAUX BOARDMEMBER (6) CHESTER BURRELL BOARDMEMBER (7) PATRICK CONWAY BOARDMEMBER (8) ANDREW C CORBIN BOARDMEMBER (9) ANDREW DREYFUS BOARDMEMBER (10) JOHN D FORSYTH BOARDMEMBER (11) MARK B GANZ BOARDMEMBER (12) ROBERTO GARCIA-RODRIGUEZ BOARDMEMBER (13) DON C GEORGE BOARDMEMBER (14) PATRICK J GERAGHTY BOARDMEMBER Officer (1) DAVID W ANDERSON Institu ional trustee Individual trustee or director (do not check more han one Average box, unless person is both an hours per week (list any officer and a director/trustee) hours for related organizations below dotted line) (D) (E) (F) Reportable compensation from the organization (W-2/1099-MISC) Reportable compensation from related organizations (W-2/1099-MISC) Estimated amount of other compensation from the organization and related organizations X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. Form JSA 7E1041 1 000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 0. 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 2.00 0. 4.00 0. 4.00 0. 6.00 0. 6.00 0. 4.00 0. 4.00 0. 4.00 0. 1.00 0. 4.00 0. 4.00 0. Key employee ( 15) SANDY A GIBSON BOARDMEMBER ( 16) MICHAEL A GOLD BOARDMEMBER ( 17) MICHAEL GUYETTE BOARDMEMBER ( 18) J D HICKEY BOARDMEMBER ( 19) DANIEL J HILFERTY BOARDMEMBER ( 20) DAVID HOLMBERG BOARDMEMBER ( 21) TIM HUCKLE BOARDMEMBER ( 22) KIM KECK BOARDMEMBER ( 23) PAM KEHALY BOARDMEMBER ( 24) TERRY KELLOGG BOARDMEMBER ( 25) SCOTT D KREILING BOARDMEMBER Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. 0. 0. 0. 0. 6,447,966. 6,447,966. 1b c d 2 0. Sub-total 23,699,195. Total from continuation sheets to Part VII, Section A 23,699,195. Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address (B) Description of services X (C) Compensation ATTACHMENT 1 2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization 146 JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 6.00 0. 4.00 0. 4.00 0. 6.00 0. 4.00 0. 6.00 0. 4.00 0. 4.00 0. 6.00 0. 4.00 0. 4.00 0. Key employee ( 26) DANIEL LOEPP BOARDMEMBER ( 27) CHARLENE MAHER BOARDMEMBER ( 28) ROBERTO MARINO BOARDMEMBER ( 29) PAUL MARKOVISH BOARDMEMBER ( 30) STEVEN S MARTIN BOARDMEMBER ( 31) DAVID S PANKAU BOARDMEMBER ( 32) CAROL PIGOTT BOARDMEMBER ( 33) JEFF ROE BOARDMEMBER ( 34) RICK SCHUM BOARDMEMBER ( 35) GARY D ST HILAIRE BOARDMEMBER ( 36) PAULA A STEINER BOARDMEMBER Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. 1b c d 2 Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address 2 (B) Description of services X (C) Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 4.00 0. 4.00 0. 4.00 0. 4.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. Key employee ( 37) JOSEPH R SWEDISH BOARDMEMBER ( 38) UDVARHELYI STEVEN BOARDMEMBER ( 39) J BRADLEY WILSON BOARDMEMBER ( 40) DANETTE K WILSON BOARDMEMBER ( 41) SCOTT P SEROTA PRESIDENT, CEO & BOARD MEMBER ( 42) JENNIFER ATKINS VP, NETWORK SOLUTIONS ( 43) WILLIAM A BRESKIN SR. VP, GOVERNMENT PROGRAMS ( 44) BHASKAR BULUSU VP, ENTERPRISE INFORMATION ( 45) MAUREEN CAHILL SVP & CHIEF HUMAN RES. OFFICER ( 46) JOHN CERISANO VP, FEDERAL RELATIONS ( 47) TERESA CLARK VP, OFFICE OF CLINICAL AFFAIRS Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 0. 0. 0. X 5,564,769. 0. 3,246,079. X 125,104. 0. 25,433. X 678,712. 0. 141,463. X 316,115. 0. 71,520. X 577,157. 0. 55,479. X 439,377. 0. 112,848. X 390,922. 0. 59,528. 1b c d 2 Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address 2 (B) Description of services X (C) Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. Key employee ( 48) TERRY COONEY VP INVEST. & NAT EMP BEN ADMIN ( 49) KATHY DIDAWICK VP CONGRESSIONAL COMMUNICATION ( 50) ROBERT DRELICK SR VP, CHIEF INFORMATION OFFIC ( 51) ALISSA T FOX SR VP, POLICY & REPRESENTATION ( 52) PAUL GERRARD VP, STRATEGIC COMMUNICATIONS ( 53) KRIS O HALTMEYER VP, HEALTH POLICY & ANALYSIS ( 54) JUSTINE HANDELMAN SVP, POLICY AND REPRESENTATION ( 55) TRENT T HAYWOOD SR VP & CHIEF MEDICAL OFFICER ( 56) KARI J HEDGES SVP, NATIONAL PROGRAMS ( 57) MITCHELL J HELFAND VP, FINANCIAL OPERATIONS ( 58) KIM D HOLLAND VP, STATE AFFAIRS Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 490,834. 0. 225,379. X 491,058. 0. 138,732. X 235,414. 0. 46,218. X 1,778,404. 0. 31,296. X 385,451. 0. 62,219. X 467,182. 0. 112,301. X 544,708. 0. 94,599. X 659,862. 0. 63,926. X 626,768. 0. 119,117. X 452,390. 0. 133,508. X 354,109. 0. 54,725. 1b c d 2 Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address 2 (B) Description of services X (C) Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. Key employee ( 59) MIKE JOYCE VP CHIEF AUDITOR & COMPLIANCE ( 60) NASIR KHAN VP & CHIEF TECHNOLOGY OFFICER ( 61) JULIE LYNN KOEWLER VP, BRAND STRATEGY ( 62) ROBERT J KOLODGY JR EXECUTIVE VP & CFO ( 63) BRAD LUBRANT VP, FINANCIAL SERVICES ( 64) NISHA K LULLA VP, OFFICE OF THE PRESIDENT ( 65) NGAN MACDONALD VP, ENTERPRISE DATA SOLUTION ( 66) PETAR NAUMOVSKI VP & CHIEF INFO. SECURITY OFCR ( 67) WILLIAM S NEHS SR VP, GEN COUNSEL & SECRETARY ( 68) WILLIAM O'LOUGHLIN VP & CIO FED. EMPLOYEE PROGRAM ( 69) PATRICK POPE VP, DEP GENL COUN STRAT CO Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 374,445. 0. 141,433. X 492,320. 0. 100,642. X 170,070. 0. 29,685. X 968,451. 0. 55,014. X 224,160. 0. 131,781. X 64,074. 0. 27,719. X 65,411. 0. 28,504. X 642,548. 0. 55,872. X 664,985. 0. 60,881. X 609,307. 0. 33,581. X 294,289. 0. 52,198. 1b c d 2 Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address 2 (B) Description of services X (C) Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part VII Page 8 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (A) Name and title (B) (C) Average Position (do not check more han one box, unless person is both an officer and a director/trustee) hours per week (list any hours for Former Highest compensated employee 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. 40.00 0. Key employee ( 70) MELISSA ROTUNNO VP, DEPUTY GEN. COUNSEL, BRAND ( 71) MAUREEN E SULLIVAN CHIEF STRATEGY & INNOV OFFICER ( 72) MARK TALLUTO VP, STRATEGY AND ANALYTICS ( 73) JENNIFER VACHON EXECUTIVE VP & CHIEF OF STAFF ( 74) JODY A VOSS VP DEVELOP., INNOVATION & GPO ( 75) JOHN BANTA ED, VENTURE FUND ( 76) CAROLE R FLAMM EXECUTIVE MEDICAL DIRECTOR ( 77) WINFRED D LAWRENCE JR ED, ENTERPRISE PROGRAM ( 78) STEVEN PUTZIGER EXC DIR BRAND PROTECT&FINANCE ( 79) DAVID YODER ED, INTEGRATED CARE MGMT Officer line) Institutional trustee below dotted Individual trustee or director related organizations (D) (E) Reportable Reportable compensation compensation from from related the organizations organization (W-2/1099-MISC) (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations X 268,193. 0. 47,695. X 763,770. 0. 64,040. X 398,837. 0. 52,991. X 839,682. 0. 145,083. X 453,366. 0. 68,083. X 340,867. 0. 243,340. X 408,241. 0. 98,130. X 343,879. 0. 109,054. X 351,796. 0. 53,588. X 382,168. 0. 54,282. 1b c d 2 Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization 37 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual 3 For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual 4 Yes No 4 X X Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person 5 Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. 5 (A) Name and business address 2 (B) Description of services X (C) Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization JSA 7E1055 1 000 Form 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION Statement of Revenue 13-5656874 Form 990 (2017) Part VIII Page 9 Check if Schedule O contains a response or note to any line in this Part VIII Contributions, Gifts, Grants Program Service Revenue and Other Similar Amounts (A) Total revenue Federated campaigns 1a b Membership dues 1b c Fundraising events 1c d Related organizations 1d e Government grants (contributions) 1e f All other contributions, gifts, grants, 1a (D) Revenue excluded from tax under sections 512-514 Noncash contributions included in lines 1a-1f: $ 0. Total. Add lines 1a-1f Business Code FEDERAL EMPLOYEE PROGRAM 900099 203,306,029. 203,306,029. b BLUECARD 900099 164,327,625. 164,327,625. c OTHER SERVICES 900099 68,070,175. 66,678,444. d BRAND ENHANCEMENTS 900099 56,972,198. 56,972,198. e CONSULTING & MISC. SERVICES 900099 48,090,468. 48,090,468. 39,625,890. 35,435,845. 2a f g All other program service revenue Total. Add lines 2a-2f Investment 3 income 4 5 (including dividends, 2,057,550. Gross amount from sales of (i) Securities (ii) O her assets other than inventory 76,968,656. 7,749,863. 70,827,603. 7,739,914. 6,141,053. 9,949. Gross rents Less: rental expenses Rental income or (loss) Net rental income or (loss) 8a 0. Less: cost or other basis and sales expenses c d 0. (ii) Personal c d b 2,057,550. 0. (i) Real b 7a 4,190,045. interest, Income from investment of tax-exempt bond proceeds Royalties 6a 1,391,731. 580,392,385. and other similar amounts) Other Revenue (C) Unrelated business revenue 1f and similar amounts not included above g h (B) Related or exempt function revenue Gain or (loss) Net gain or (loss) 6,151,001. 6,151,001. Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line 18 b c 9a b c 10a b c Gross income from gaming activities. See Part IV, line 19 0. a b Less: direct expenses Net income or (loss) from gaming activities Gross sales of inventory, returns and allowances 0. less a b Less: cost of goods sold Net income or (loss) from sales of inventory Miscellaneous Revenue 11a a b Less: direct expenses Net income or (loss) from fundraising events K-1 INCOME 0. Business Code 900001 3,390,438. 3,390,438. b c d All other revenue e Total. Add lines 11a-11d Total revenue. See instructions. 12 3,390,438. 591,991,374. JSA 7E1051 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F 574,810,609. 8,972,214. 8,208,551. Form 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION Part IX Statement of Functional Expenses Form 990 (2017) 13-5656874 Page Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A). Check if Schedule O contains a response or note to any line in this Part IX Do not include amounts reported on lines 6b, 7b, 8b, 9b, and 10b of Part VIII. 1 Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 2 Grants and other assistance individuals. See Part IV, line 22 to domestic 3 Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16 4 Benefits paid to or for members 5 Compensation of current officers, directors, trustees, and key employees (A) Total expenses (B) Program service expenses (C) Management and general expenses 10 X (D) Fundraising expenses 0. 0. 0. 0. 25,869,441. 17,329,576. 8,539,865. 0. 157,396,344. 155,968,741. 1,427,603. 14,040,668. 19,015,161. 11,358,499. 10,934,534. 17,572,982. 11,039,939. 3,106,134. 1,442,178. 318,560. 29,599,949. 1,818,623. 4,772,893. 1,998,406. 196,984,374. 8,796,497. 10,113,955. 52,131,758. 829,022. 11,701,748. 6,353,686. 409,206. 893,315. 6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) 7 Other salaries and wages 8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) 9 Other employee benefits 10 Payroll taxes Fees for services (non-employees): a Management 11 b Legal c Accounting d Lobbying e Professional fundraising services. See Part IV, line 17 f Investment management fees g Other. (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O.) ATCH 2 12 Advertising and promotion 13 Office expenses 14 Information technology 15 Royalties 16 Occupancy 17 Travel 18 Payments of travel or entertainment expenses for any federal, state, or local public officials 19 Conferences, conventions, and meetings 20 Interest 21 Payments to affiliates 22 Depreciation, depletion, and amortization 23 Insurance 24 O her expenses. Itemize expenses not 0. 31,598,354. 1,818,623. 4,772,893. 0. 0. 197,813,396. 8,796,497. 10,213,770. 52,858,979. 0. 12,110,954. 7,247,001. 99,816. 727,222. 0. 6,310,565. 16,875. 0. 17,612,594. 6,652,390. 5,521,172. 789,393. 16,875. 17,391,734. 6,575,924. 220,860. 76,466. 2,160,483. 3,098,995. 1,908,582. 752,662. 1,849,632. 2,817,374. 1,802,042. 706,525. 310,851. 281,621. 106,540. 46,137. 593,423,726. 571,783,658. 21,640,070. covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O ) a MEMBERSHIP & SPONSORSHIP CONTRIBUTIONS c BOOKS & PERIODICALS d MISCELLANEOUS b GENERAL e All other expenses 25 Total functional expenses. Add lines 1 through 24e 26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here if following SOP 98-2 (ASC 958-720) 0. JSA 7E1052 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Form 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part X Page (A) Beginning of year 1 2 3 4 5 Net Assets or Fund Balances Liabilities Assets 6 Cash - non-interest-bearing Savings and temporary cash investments Pledges and grants receivable, net Accounts receivable, net Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions). Complete Part II of Schedule L Notes and loans receivable, net Inventories for sale or use Prepaid expenses and deferred charges Land, buildings, and equipment: cost or 103,356,137. 10a other basis. Complete Part VI of Schedule D 77,028,021. 10b b Less: accumulated depreciation 11 Investments - publicly traded securities 12 Investments - other securities. See Part IV, line 11 13 Investments - program-related. See Part IV, line 11 14 Intangible assets 15 Other assets. See Part IV, line 11 16 Total assets. Add lines 1 through 15 (must equal line 34) Accounts payable and accrued expenses 17 Grants payable 18 Deferred revenue 19 Tax-exempt bond liabilities 20 Escrow or custodial account liability. Complete Part IV of Schedule D 21 Loans and other payables to current and former officers, directors, 22 trustees, key employees, highest compensated employees, and disqualified persons. Complete Part II of Schedule L Secured mortgages and notes payable to unrelated third parties 23 Unsecured notes and loans payable to unrelated third parties 24 Other liabilities (including federal income tax, payables to related third 25 parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D Total liabilities. Add lines 17 through 25 26 X and Organizations that follow SFAS 117 (ASC 958), check here complete lines 27 through 29, and lines 33 and 34. 7 8 9 10 a 27 28 29 Unrestricted net assets Temporarily restricted net assets Permanently restricted net assets Organizations that do not follow SFAS 117 (ASC 958), check here complete lines 30 through 34. 30 31 32 33 34 Capital stock or trust principal, or current funds Paid-in or capital surplus, or land, building, or equipment fund Retained earnings, endowment, accumulated income, or other funds Total net assets or fund balances Total liabilities and net assets/fund balances JSA 7E1053 1.000 11 Balance Sheet Check if Schedule O contains a response or note to any line in this Part X 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F (B) End of year 1,232,240. 332,382,459. 0. 49,392,994. 1 2 3 4 1,553,513. 485,181,159. 0. 39,445,250. 0. 5 0. 0. 3,055,997. 0. 11,403,334. 6 7 8 9 0. 0. 0. 13,424,929. 25,384,300. 10c 15,000. 11 203,092,575. 12 0. 13 3,961,052. 14 16,510,719. 15 646,430,670. 16 148,319,317. 17 0. 18 5,877,081. 19 0. 20 317,274,989. 21 26,328,116. 15,000. 141,931,768. 0. 4,793,929. 15,043,511. 727,717,175. 167,168,875. 0. 4,477,061. 0. 376,543,915. 0. 22 0. 23 0. 24 0. 0. 0. 68,004,690. 25 539,476,077. 26 80,810,094. 628,999,945. 106,954,593. 27 0. 28 0. 29 98,717,230. 0. 0. and 30 31 32 106,954,593. 33 646,430,670. 34 98,717,230. 727,717,175. Form 990 (2017) BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Form 990 (2017) Part XI 1 2 3 4 5 6 7 8 9 10 Page Reconciliation of Net Assets Check if Schedule O contains a response or note to any line in this Part XI Total revenue (must equal Part VIII, column (A), line 12) Total expenses (must equal Part IX, column (A), line 25) Revenue less expenses. Subtract line 2 from line 1 Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) Net unrealized gains (losses) on investments Donated services and use of facilities Investment expenses Prior period adjustments Other changes in net assets or fund balances (explain in Schedule O) Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 33, column (B)) Part XII 1 2 3 4 5 6 7 8 9 X 591,991,374. 593,423,726. -1,432,352. 106,954,593. 3,259,923. 0. 0. 0. -10,064,934. 10 98,717,230. Financial Statements and Reporting Check if Schedule O contains a response or note to any line in this Part XII Yes 1 12 No X Accrual Accounting method used to prepare the Form 990: Cash Other If the organization changed its method of accounting from a prior year or checked "Other," explain in Schedule O. 2 a Were the organization's financial statements compiled or reviewed by an independent accountant? If "Yes," check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both: Separate basis Consolidated basis Both consolidated and separate basis b Were the organization's financial statements audited by an independent accountant? If "Yes," check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both: Separate basis X Consolidated basis 2b X 2c X Both consolidated and separate basis c If "Yes" to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant? If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. 3 a As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133? b If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits. 3a JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F X 3b Form 7E1054 1.000 X 2a 990 (2017) Political Campaign and Lobbying Activities SCHEDULE C (Form 990 or 990-EZ) Department of he Treasury Internal Revenue Service OMB No. 1545-0047 For Organizations Exempt From Income Tax Under section 501(c) and section 527 Complete if the organization is described below. Attach to Form 990 or Form 990-EZ. Go to www.irs.gov/Form990 for instructions and the latest information. Open to Public Inspection If the organization answered "Yes," on Form 990, Part IV, line 3, or Form 990-EZ, Part V, line 46 (Political Campaign Activities), then Section 501(c)(3) organizations: Complete Parts I-A and B. Do not complete Part I-C. Section 501(c) (other than section 501(c)(3)) organizations: Complete Parts I-A and C below. Do not complete Part I-B. Section 527 organizations: Complete Part I-A only. If the organization answered "Yes," on Form 990, Part IV, line 4, or Form 990-EZ, Part VI, line 47 (Lobbying Activities), then Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)): Complete Part II-A. Do not complete Part II-B. Section 501(c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II-B. Do not complete Part II-A. If the organization answered "Yes," on Form 990, Part IV, line 5 (Proxy Tax) (see separate instructions) or Form 990-EZ, Part V, line 35c (Proxy Tax) (see separate instructions), then Section 501(c)(4), (5), or (6) organizations: Complete Part III. Name of organization Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Complete if the organization is exempt under section 501(c) or is a section 527 organization. Part I-A Provide a description of the organization's direct and indirect political campaign activities in Part IV. (see instructions for definition of "political campaign activities") 880,973. $ Political campaign activity expenditures (see instructions) Volunteer hours for political campaign activities (see instructions) 1 2 3 Part I-B 1 2 3 4a b Complete if the organization is exempt under section 501(c)(3). Enter the amount of any excise tax incurred by the organization under section 4955 Enter the amount of any excise tax incurred by organization managers under section 4955 If the organization incurred a section 4955 tax, did it file Form 4720 for this year? Was a correction made? If "Yes," describe in Part IV. Part I-C $ $ Yes No Yes No Complete if the organization is exempt under section 501(c), except section 501(c)(3). 1 Enter the amount directly expended by the filing organization for section 527 exempt function activities $ 2 Enter the amount of the filing organization's funds contributed to other organizations for section 527 exempt function activities $ 3 Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120-POL, 580,000. line 17b $ X Yes No Did the filing organization file Form 1120-POL for this year? Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing organization made payments. For each organization listed, enter the amount paid from the filing organization's funds. Also enter the amount of political contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action committee (PAC). If additional space is needed, provide information in Part IV. 4 5 (a) Name (1) (2) (3) (4) (5) (6) DEMOCRATIC GOVERNORS ASSOCIATION REPUBLICAN GOVERNORS ASSOCIATION DEMOCRATIC ATTORNEY GENERAL ASSOCIATION REPUBLICAN ATTORNEY GENERAL ASSOCATION DEMOCRATIC LEGISLATI VE CAMPAIGN REPUBLICAN STATE LEA DERSHIP COMMITTEE (b) Address 1401 K STREET NW, STE. WASHINGTON, DC 20005 1747 PENNSYLVANIA AVE. WASHINGTON, DC 20006 1580 LINCOLN ST., STE. DENVER, CO 80203 1747 PENNSYLVANIA AVE. WASHINGTON, DC 20006 1225 I ST NW 1250 WASHINGTON, DC 20005 1201 F ST NW STE 675 WASHINGTON, DC 20004 (c) EIN (d) Amount paid from filing organization's funds. If none, enter -0-. 580,000. (e) Amount of political contributions received and promptly and directly delivered to a separate political organization. If none, enter -0-. 52-1304889 250,000. 0. 11-3655877 250,000. 0. 05-0532524 25,000. 0. 46-4501717 25,000. 0. 52-1870839 15,000. 0. 05-0532524 15,000. 0. For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ. JSA 7E1264 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule C (Form 990 or 990-EZ) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Complete if the organization is exempt under section 501(c)(3) and filed Form 5768 (election under section 501(h)). Schedule C (Form 990 or 990-EZ) 2017 Part II-A A Check B Check 1a b c d e f Page 2 if the filing organization belongs to an affiliated group (and list in Part IV each affiliated group member's name, address, EIN, expenses, and share of excess lobbying expenditures). if the filing organization checked box A and "limited control" provisions apply. Limits on Lobbying Expenditures (a) Filing organization's totals (The term "expenditures" means amounts paid or incurred.) (b) Affiliated group totals Total lobbying expenditures to influence public opinion (grass roots lobbying) Total lobbying expenditures to influence a legislative body (direct lobbying) Total lobbying expenditures (add lines 1a and 1b) Other exempt purpose expenditures Total exempt purpose expenditures (add lines 1c and 1d) Lobbying nontaxable amount. Enter the amount from the following table in both columns. If the amount on line 1e, column (a) or (b) is: The lobbying nontaxable amount is: g h i j Not over $500,000 20% of the amount on line 1e. Over $500,000 but not over $1,000,000 $100,000 plus 15% of the excess over $500,000. Over $1,000,000 but not over $1,500,000 $175,000 plus 10% of the excess over $1,000,000. Over $1,500,000 but not over $17,000,000 $225,000 plus 5% of the excess over $1,500,000. Over $17,000,000 $1,000,000. Grassroots nontaxable amount (enter 25% of line 1f) Subtract line 1g from line 1a. If zero or less, enter -0Subtract line 1f from line 1c. If zero or less, enter -0If there is an amount other than zero on either line 1h or line 1i, did the organization file Form 4720 Yes reporting section 4911 tax for this year? 4-Year Averaging Period Under section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns below. See the separate instructions for lines 2a through 2f.) No Lobbying Expenditures During 4-Year Averaging Period Calendar year (or fiscal year beginning in) (a) 2014 (b) 2015 (c) 2016 (d) 2017 (e) Total 2a Lobbying nontaxable amount b Lobbying ceiling amount (150% of line 2a, column (e)) c Total lobbying expenditures d Grassroots nontaxable amount e Grassroots ceiling amount (150% of line 2d, column (e)) f Grassroots lobbying expenditures Schedule C (Form 990 or 990-EZ) 2017 JSA 7E1265 1 000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Page Schedule C (Form 990 or 990-EZ) 2017 Part II-B For each "Yes," response on lines 1a through 1i below, provide in Part IV a detailed description of the lobbying activity. 1 a b c d e f g h i j 2a b c d (a) Yes (b) No Amount During the year, did the filing organization attempt to influence foreign, national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of: Volunteers? Paid staff or management (include compensation in expenses reported on lines 1c through 1i)? Media advertisements? Mailings to members, legislators, or the public? Publications, or published or broadcast statements? Grants to other organizations for lobbying purposes? Direct contact with legislators, their staffs, government officials, or a legislative body? Rallies, demonstrations, seminars, conventions, speeches, lectures, or any similar means? Other activities? Total. Add lines 1c through 1i Did the activities in line 1 cause the organization to be not described in section 501(c)(3)? If "Yes," enter the amount of any tax incurred under section 4912 If "Yes," enter the amount of any tax incurred by organization managers under section 4912 If the filing organization incurred a section 4912 tax, did it file Form 4720 for this year? Part III-A Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6). Yes Were substantially all (90% or more) dues received nondeductible by members? Did the organization make only in-house lobbying expenditures of $2,000 or less? Did the organization agree to carry over lobbying and political campaign activity expenditures from the prior year? 1 2 3 3 Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768 (election under section 501(h)). 1 2 3 No X X X Part III-B Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6) and if either (a) BOTH Part III-A, lines 1 and 2, are answered "No," OR (b) Part III-A, line 3, is answered "Yes." 87,000,000. 1 Dues, assessments and similar amounts from members 1 2 a b c 3 4 5 Section 162(e) nondeductible lobbying and political expenditures (do not include amounts of political expenses for w hich the section 527(f) tax was paid). Current year Carryover from last year Total Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political expenditure next year? Taxable amount of lobbying and political expenditures (see instructions) Part IV 2a 2b 2c 3 11,263,683. 11,263,683. 11,263,683. 4 5 Supplemental Information Provide the descriptions required for Part I-A, line 1; Part I-B, line 4; Part I-C, line 5; Part II-A (affiliated group list); Part II-A, lines 1 and 2 (see instructions); and Part II-B, line 1. Also, complete this part for any additional information. SCHEDULE C, PART I-A, LINE 1 THE FILING ORGANIZATION MADE CONTRIBUTIONS FROM THE GENERAL TREASURY TO SIX SECTION 527 POLITICAL ORGANIZATIONS AND SPONSORED A SEPARATE FUND DESIGNATED FOR EXEMPT PURPOSES. JSA 7E1266 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule C (Form 990 or 990-EZ) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Schedule C (Form 990 or 990-EZ) 2017 Part IV Page 4 Supplemental Information (continued) Schedule C (Form 990 or 990-EZ) 2017 JSA 7E1500 1 000 13-5656874 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F SCHEDULE D (Form 990) Department of the Treasury Internal Revenue Service Name of the organization OMB No. 1545-0047 Supplemental Financial Statements Complete if the organization answered "Yes" on Form 990, Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b. Open to Public Inspection Attach to Form 990. Go to www.irs.gov/Form990 for instructions and the latest information. Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Part I Complete if the organization answered "Yes" on Form 990, Part IV, line 6. (a) Donor advised funds (b) Funds and other accounts Total number at end of year Aggregate value of contributions to (during year) Aggregate value of grants from (during year) Aggregate value at end of year Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds are the organization's property, subject to the organization's exclusive legal control? Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit? 1 2 3 4 5 6 Part II 1 2 a b c d 3 4 5 Yes No Yes No Conservation Easements. Complete if the organization answered "Yes" on Form 990, Part IV, line 7. Purpose(s) of conservation easements held by the organization (check all that apply). Preservation of land for public use (e.g., recreation or education) Preservation of a historically important land area Protection of natural habitat Preservation of a certified historic structure Preservation of open space Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation Held at the End of the Tax Year easement on the last day of the tax year. 2a Total number of conservation easements 2b Total acreage restricted by conservation easements 2c Number of conservation easements on a certified historic structure included in (a) Number of conservation easements included in (c) acquired after 7/25/06, and not on a 2d historic structure listed in the National Register Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year Number of states where property subject to conservation easement is located Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? Yes No 6 Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year 7 Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year 8 Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(ii)? Yes In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements. $ 9 Part III 1a b 2 a b No Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets. Complete if the organization answered "Yes" on Form 990, Part IV, line 8. If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items. If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items: $ (i) Revenue included on Form 990, Part VIII, line 1 Assets included in Form 990, Part X $ (ii) If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the following amounts required to be reported under SFAS 116 (ASC 958) relating to these items: Revenue included on Form 990, Part VIII, line 1 $ Assets included in Form 990, Part X $ For Paperwork Reduction Act Notice, see the Instructions for Form 990. JSA 7E1268 2.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule D (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Schedule D (Form 990) 2017 Part III Page 2 Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued) Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply): Public exhibition Loan or exchange programs a d Scholarly research Other b e Preservation for future generations c Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part 4 XIII. During the year, did the organization solicit or receive donations of art, historical treasures, or other similar 5 assets to be sold to raise funds rather than to be maintained as part of the organization's collection? Yes No 3 Part IV Escrow and Custodial Arrangements. Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21. 1 a Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included on Form 990, Part X? b If "Yes," explain the arrangement in Part XIII and complete the following table: Amount c Beginning balance 1c d Additions during the year 1d e Distributions during the year 1e f Ending balance 1f 2 a Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability? b If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided on Part XIII Part V d e f g 2 a b c 3a b 4 (b) Prior year (c) Two years back (d) Three years back Beginning of year balance Contributions Net investment earnings, gains, and losses Grants or scholarships Other expenditures for facilities and programs Administrative expenses End of year balance Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as: Board designated or quasi-endowment % Permanent endowment % Temporarily restricted endowment % The percentages on lines 2a, 2b, and 2c should equal 100%. Are there endowment funds not in the possession of the organization that are held and administered for the organization by: (i) unrelated organizations (ii) related organizations If "Yes" on line 3a(ii), are the related organizations listed as required on Schedule R? Describe in Part XIII the intended uses of the organization's endowment funds. Part VI X Yes No X Endowment Funds. Complete if the organization answered “Yes” on Form 990, Part IV, line 10. (a) Current year 1a b c X No Yes (e) Four years back Yes No 3a(i) 3a(ii) 3b Land, Buildings, and Equipment. Complete if the organization answered "Yes" on Form 990, Part IV, line 11a. See Form 990, Part X, line 10. Description of property (a) Cost or other basis (investment) (b) Cost or other basis (other) (c) Accumulated depreciation Land Buildings 26,497,782. 15,581,864. Leasehold improvements 76,858,355. 61,446,157. Equipment Other Total. Add lines 1a through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10c.) 1a b c d e (d) Book value 10,915,918. 15,412,198. 26,328,116. Schedule D (Form 990) 2017 JSA 7E1269 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Schedule D (Form 990) 2017 Part VII Page 3 Investments - Other Securities. Complete if the organization answered "Yes" on Form 990, Part IV, line 11b. See Form 990, Part X, line 12. (a) Description of security or category (including name of security) (b) Book value (1) Financial derivatives (2) Closely-held equity interests (3) Other (A) NON-PUBLIC MUTUAL FUNDS (B) WELLS FARGO MUTUAL FUNDS (C) EXCHANGE TRADED FUNDS (D) 1 SHARE COMMON BSBSA SRVCS.INC (E) INVEST. IN AFFILIATES >5% (F) 206,839 COMMON, BCS INSR. CORP (G) (H) 70,655,073. 28,449,157. 21,876,072. 13,344,165. 7,397,301. 210,000. (c) Method of valuation: Cost or end-of-year market value COST FMV COST COST COST COST 141,931,768. Investments - Program Related. Complete if the organization answered "Yes" on Form 990, Part IV, line 11c. See Form 990, Part X, line 13. Total. (Column (b) must equal Form 990, Part X, col. (B) line 12 ) Part VIII (a) Description of investment (b) Book value (c) Method of valuation: Cost or end-of-year market value (1) (2) (3) (4) (5) (6) (7) (8) (9) Total. (Column (b) must equal Form 990, Part X, col. (B) line 13 ) Part IX Other Assets. Complete if the organization answered "Yes" on Form 990, Part IV, line 11d. See Form 990, Part X, line 15. (a) Description (b) Book value (1) (2) (3) (4) (5) (6) (7) (8) (9) Total. (Column (b) must equal Form 990, Part X, col. (B) line 15.) Part X Other Liabilities. Complete if the organization answered "Yes" on Form 990, Part IV, line 11e or 11f. See Form 990, Part X, line 25. (a) Description of liability 1. (1) Federal income taxes (2) PENSION LIABILITES (3) LONG-TERM DEFERRED REVENUE (4) LEASE LIABILITY (5) OTHER BENEFITS (6) POST-RETIREMENT LIABILITY (7) LONG-TERM CONTRACT REVENUE (8) (9) Total. (Column (b) must equal Form 990, Part X, col. (B) line 25.) (b) Book value 31,415,815. 8,434,772. 15,872,135. 4,239,858. 20,847,514. 80,810,094. 2. Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII JSA 7E1270 1 000 X Schedule D (Form 990) 2017 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Schedule D (Form 990) 2017 Part XI 1 2 a b c d e 3 4 a b c 5 Total revenue, gains, and other support per audited financial statements Amounts included on line 1 but not on Form 990, Part VIII, line 12: Net unrealized gains (losses) on investments Donated services and use of facilities Recoveries of prior year grants Other (Describe in Part XIII.) Add lines 2a through 2d Subtract line 2e from line 1 Amounts included on Form 990, Part VIII, line 12, but not on line 1: Investment expenses not included on Form 990, Part VIII, line 7b Other (Describe in Part XIII.) Add lines 4a and 4b Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) Part XII 1 2 a b c d e 3 4 a b c 5 4 1 2a 2b 2c 2d 2e 3 4a 4b 4c 5 Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. Total expenses and losses per audited financial statements Amounts included on line 1 but not on Form 990, Part IX, line 25: Donated services and use of facilities Prior year adjustments Other losses Other (Describe in Part XIII.) Add lines 2a through 2d Subtract line 2e from line 1 Amounts included on Form 990, Part IX, line 25, but not on line 1: Investment expenses not included on Form 990, Part VIII, line 7b Other (Describe in Part XIII.) Add lines 4a and 4b Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) Part XIII Page Reconciliation of Revenue per Audited Financial Statements With Revenue per Return. Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. 1 2a 2b 2c 2d 2e 3 4a 4b 4c 5 Supplemental Information. Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part IV, lines 1b and 2b; Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information. SEE PAGE 5 Schedule D (Form 990) 2017 JSA 7E1271 1 000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F BLUE CROSS BLUE SHIELD ASSOCIATION Supplemental Information (continued) Schedule D (Form 990) 2017 Part XIII 13-5656874 Page 5 FORM 990, SCHEDULE D, PART IV, LINE 2B ESCROW & CUSTODIAL ARRANGEMENTS THE ASSOCIATION HOLDS FUNDS AS AGENT FOR ITS MEMBER PLANS UNDER ARRANGEMENTS COVERING ITS BLUE CARD AND FEDERAL EMPLOYEE PROGRAM. FORM 990, SCHEDULE D, PART X, LINE 2 FIN 48 (ASC 740) FOOTNOTE THE ASSOCIATION FOLLOWS THE REQUIREMENT OF ASC 740-10-25 "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES," WHICH CLARIFIES THE ACCOUNTING AND DISCLOSURES FOR UNCERTAINTY IN TAX POSITIONS, AS DEFINED. ASC 740-10-25 SEEKS TO REDUCE THE DIVERSITY IN PRACTICE ASSOCIATED WITH CERTAIN ASPECTS OF THE RECOGNITION AND MEASUREMENT RELATED TO ACCOUNTING FOR INCOME TAXES. UNDER ASC 740-10-25, AN ORGANIZATION MUST RECOGNIZE THE TAX BENEFIT ASSOCIATED WITH TAX POSITIONS TAKEN FOR TAX RETURN PURPOSES WHEN IT IS MORE-LIKELY-THAN-NOT THAT THE POSITION WILL BE SUSTAINED. THE ASSOCIATION DOES NOT BELIEVE THAT THERE ARE ANY UNCERTAIN TAX POSITIONS THAT SHOULD BE RECORDED. NO INTEREST OR PENALTIES WERE RECORDED OR INCLUDED IN THE CONSOLIDATED STATEMENT OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016. THE ASSOCIATION IS OPEN TO EXAMINATION BY TAXING AUTHORITIES FROM FISCAL YEAR 2014 FORWARD. Schedule D (Form 990) 2017 JSA 7E1226 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F SCHEDULE J (Form 990) Department of the Treasury Internal Revenue Service Compensation Information OMB No. 1545-0047 For certain Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees Complete if the organization answered "Yes" on Form 990, Part IV, line 23. Attach to Form 990. Go to www.irs.gov/Form990 for instructions and the latest information. Name of the organization Open to Public Inspection Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION Part I Questions Regarding Compensation 13-5656874 Yes No 1a Check the appropriate box(es) if the organization provided any of the following to or for a person listed on Form 990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items. X First-class or charter travel X Travel for companions Tax indemnification and gross-up payments Discretionary spending account X Housing allowance or residence for personal use Payments for business use of personal residence Health or social club dues or initiation fees Personal services (such as, maid, chauffeur, chef) b If any of the boxes on line 1a are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all 2 directors, trustees, and officers, including the CEO/Executive Director, regarding the items checked on line 1a? X Compensation committee X Independent compensation consultant X Form 990 of other organizations a b 6 a b 8 9 X X X 2 X 4a 4b 4c X W ritten employment contract Compensation survey or study Approval by the board or compensation committee During the year, did any person listed on Form 990, Part VII, Section A, line 1a, with respect to the filing organization or a related organization: a Receive a severance payment or change-of-control payment? b Participate in, or receive payment from, a supplemental nonqualified retirement plan? c Participate in, or receive payment from, an equity-based compensation arrangement? If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III. 5 7 X Indicate which, if any, of the following the filing organization used to establish the compensation of the organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III. 3 4 1b Only section 501(c)(3), 501(c)(4), and 501(c)(29) organizations must complete lines 5-9. For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any compensation contingent on the revenues of: The organization? Any related organization? If "Yes" on line 5a or 5b, describe in Part III. For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any compensation contingent on the net earnings of: The organization? Any related organization? If "Yes" on line 6a or 6b, describe in Part III. For persons listed on Form 990, Part VII, Section A, line 1a, did the organization provide any nonfixed payments not described on lines 5 and 6? If "Yes," describe in Part III Were any amounts reported on Form 990, Part VII, paid or accrued pursuant to a contract that was subject to the initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe in Part III If "Yes" on line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? For Paperwork Reduction Act Notice, see the Instructions for Form 990. JSA 7E1290 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F X X 5a 5b X X 6a 6b X X 7 8 X X 9 Schedule J (Form 990) 2017 Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. Page 13-5656874 2 WILLIAM A BRESKIN BHASKAR BULUSU MAUREEN CAHILL JOHN CERISANO TERESA CLARK TERRY COONEY KATHY DIDAWICK ROBERT DRELICK ALISSA T FOX PAUL GERRARD KRIS O HALTMEYER JUSTINE HANDELMAN TRENT T HAYWOOD 16 KARI J HEDGES (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) 1,214,535. 0. 110,983. 0. 313,285. 0. 231,117. 0. 376,260. 0. 262,276. 0. 275,455. 0. 252,861. 0. 323,049. 0. 189,710. 0. 480,353. 0. 274,290. 0. 275,005. 0. 367,118. 0. 421,862. 0. 322,188. 0. (i) Base compensation 3,774,871. 0. 0. 0. 195,000. 0. 65,000. 0. 200,000. 0. 104,000. 0. 112,400. 0. 131,800. 0. 106,000. 0. 0. 0. 325,000. 0. 110,000. 0. 115,000. 0. 115,000. 0. 220,000. 0. 185,100. 0. (ii) Bonus & incentive compensation 7E1291 1.000 575,363. 0. 14,121. 0. 170,427. 0. 19,998. 0. 897. 0. 73,101. 0. 3,067. 0. 106,173. 0. 62,009. 0. 45,704. 0. 973,051. 0. 1,161. 0. 77,177. 0. 62,590. 0. 18,000. 0. 119,480. 0. (iii) Other reportable compensation (B) Breakdown of W-2 and/or 1099-MISC compensation 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F SVP, NATIONAL PROGRAMS 15 SR VP & CHIEF MEDICAL OFFICER 14 SVP, POLICY AND REPRESENTATION 13 VP, HEALTH POLICY & ANALYSIS 12 VP, STRATEGIC COMMUNICATIONS 11 SR VP, POLICY & REPRESENTATION 10 SR VP, CHIEF INFORMATION OFFIC 9 VP CONGRESSIONAL COMMUNICATION 8 VP INVEST. & NAT EMP BEN ADMIN 7 VP, OFFICE OF CLINICAL AFFAIRS 6 VP, FEDERAL RELATIONS 5 SVP & CHIEF HUMAN RES. OFFICER 4 VP, ENTERPRISE INFORMATION 3 JSA JENNIFER ATKINS SR. VP, GOVERNMENT PROGRAMS 2 VP, NETWORK SOLUTIONS 1 PRESIDENT, CEO & BOARD MEMBER SCOTT P SEROTA (A) Name and Title 3,213,542. 0. 0. 0. 110,809. 0. 10,717. 0. 18,000. 0. 63,165. 0. 13,500. 0. 175,235. 0. 96,187. 0. 4,442. 0. 8,100. 0. 15,822. 0. 74,462. 0. 66,538. 0. 16,200. 0. 71,897. 0. (C) Retirement and other deferred compensation 32,537. 0. 25,433. 0. 30,654. 0. 60,803. 0. 37,479. 0. 49,683. 0. 46,028. 0. 50,144. 0. 42,545. 0. 41,776. 0. 23,196. 0. 46,397. 0. 37,839. 0. 28,061. 0. 47,726. 0. 47,220. 0. (D) Nontaxable benefits 1,394,262. 0. 0. 0. 157,775. 0. 0. 0. 0. 0. 55,101. 0. 0. 0. 41,805. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. (F) Compensation in column (B) reported as deferred on prior Form 990 Schedule J (Form 990) 2017 8,810,848. 0. 150,537. 0. 820,175. 0. 387,635. 0. 632,636. 0. 552,225. 0. 450,450. 0. 716,213. 0. 629,790. 0. 281,632. 0. 1,809,700. 0. 447,670. 0. 579,483. 0. 639,307. 0. 723,788. 0. 745,885. 0. (E) Total of columns (B)(i)-(D) For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual. Part II Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. Page 13-5656874 2 MIKE JOYCE NASIR KHAN JULIE LYNN KOEWLER ROBERT J KOLODGY JR BRAD LUBRANT PETAR NAUMOVSKI WILLIAM S NEHS WILLIAM O'LOUGHLIN PATRICK POPE MELISSA ROTUNNO MAUREEN E SULLIVAN MARK TALLUTO JENNIFER VACHON 16 JODY A VOSS (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) 242,945. 0. 246,109. 0. 232,110. 0. 280,139. 0. 149,702. 0. 580,710. 0. 179,425. 0. 400,387. 0. 427,117. 0. 331,983. 0. 223,378. 0. 207,193. 0. 405,473. 0. 262,057. 0. 419,093. 0. 264,897. 0. (i) Base compensation 96,400. 0. 90,000. 0. 100,000. 0. 110,000. 0. 0. 0. 355,000. 0. 43,700. 0. 239,500. 0. 235,000. 0. 147,000. 0. 70,000. 0. 56,000. 0. 213,000. 0. 115,000. 0. 245,000. 0. 110,000. 0. (ii) Bonus & incentive compensation 7E1291 1.000 113,045. 0. 18,000. 0. 42,335. 0. 102,181. 0. 20,368. 0. 32,741. 0. 1,035. 0. 2,661. 0. 2,868. 0. 130,324. 0. 911. 0. 5,000. 0. 145,297. 0. 21,780. 0. 175,589. 0. 78,469. 0. (iii) Other reportable compensation (B) Breakdown of W-2 and/or 1099-MISC compensation 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F VP DEVELOP., INNOVATION & GPO 15 EXECUTIVE VP & CHIEF OF STAFF 14 VP, STRATEGY AND ANALYTICS 13 CHIEF STRATEGY & INNOV OFFICER 12 VP, DEPUTY GEN. COUNSEL, BRAND 11 VP, DEP GENL COUN STRAT CO 10 VP & CIO FED. EMPLOYEE PROGRAM 9 SR VP, GEN COUNSEL & SECRETARY 8 VP & CHIEF INFO. SECURITY OFCR 7 VP, FINANCIAL SERVICES 6 EXECUTIVE VP & CFO 5 VP, BRAND STRATEGY 4 VP & CHIEF TECHNOLOGY OFFICER 3 JSA KIM D HOLLAND VP CHIEF AUDITOR & COMPLIANCE 2 VP, STATE AFFAIRS 1 VP, FINANCIAL OPERATIONS MITCHELL J HELFAND (A) Name and Title 107,784. 0. 16,974. 0. 92,757. 0. 53,325. 0. 718. 0. 18,000. 0. 92,445. 0. 13,500. 0. 18,000. 0. 7,756. 0. 10,182. 0. 5,402. 0. 28,160. 0. 16,206. 0. 98,573. 0. 47,325. 0. (C) Retirement and other deferred compensation 25,724. 0. 37,751. 0. 48,676. 0. 47,317. 0. 28,967. 0. 37,014. 0. 39,336. 0. 42,372. 0. 42,881. 0. 25,825. 0. 42,016. 0. 42,293. 0. 35,880. 0. 36,785. 0. 46,510. 0. 20,758. 0. (D) Nontaxable benefits 0. 0. 0. 0. 8,101. 0. 37,909. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 1,054. 0. 0. 0. 0. 0. 0. 0. 0. 0. 49,458. 0. 0. 0. (F) Compensation in column (B) reported as deferred on prior Form 990 Schedule J (Form 990) 2017 585,898. 0. 408,834. 0. 515,878. 0. 592,962. 0. 199,755. 0. 1,023,465. 0. 355,941. 0. 698,420. 0. 725,866. 0. 642,888. 0. 346,487. 0. 315,888. 0. 827,810. 0. 451,828. 0. 984,765. 0. 521,449. 0. (E) Total of columns (B)(i)-(D) For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual. Part II Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed. Page 13-5656874 2 WINFRED D LAWRENCE JR STEVEN PUTZIGER 16 15 14 13 12 11 10 9 8 7 6 5 DAVID YODER (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) (i) (ii) 257,987. 0. 255,755. 0. 223,362. 0. 241,074. 0. 240,212. 0. (i) Base compensation 78,600. 0. 79,300. 0. 63,900. 0. 73,000. 0. 122,300. 0. (ii) Bonus & incentive compensation 7E1291 1.000 4,280. 0. 73,186. 0. 56,617. 0. 37,722. 0. 19,656. 0. (iii) Other reportable compensation (B) Breakdown of W-2 and/or 1099-MISC compensation 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F ED, INTEGRATED CARE MGMT 4 EXC DIR BRAND PROTECT&FINANCE 3 JSA CAROLE R FLAMM ED, ENTERPRISE PROGRAM 2 EXECUTIVE MEDICAL DIRECTOR 1 ED, VENTURE FUND JOHN BANTA (A) Name and Title 203,514. 0. 56,894. 0. 94,970. 0. 28,227. 0. 18,000. 0. (C) Retirement and other deferred compensation 39,826. 0. 41,236. 0. 14,084. 0. 25,361. 0. 36,282. 0. (D) Nontaxable benefits 0. 0. 14,353. 0. 20,337. 0. 0. 0. 0. 0. (F) Compensation in column (B) reported as deferred on prior Form 990 Schedule J (Form 990) 2017 584,207. 0. 506,371. 0. 452,933. 0. 405,384. 0. 436,450. 0. (E) Total of columns (B)(i)-(D) For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list any individuals that aren't listed on Form 990, Part VII. Note: The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual. Part II Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F POLICY. TAXABLE COMPENSATION, IF APPLICABLE, IN ACCORDANCE WITH THE ASSOCIATION'S DUE TO RELOCATION EXPENSES. THE EXPENSES ARE REIMBURSED AND INCLUDED IN ASSIST THE RELOCATING EMPLOYEE OR NEW HIRE FOR NEGATIVE TAX CONSEQUENCES PART OF A RELOCATING EMPLOYEE'S TAXABLE RELOCATION EXPENSES IN ORDER TO RELOCATION PROCESS. THE ASSOCIATION MAY PROVIDE A TAX GROSS UP ON ALL OR RELOCATION PROGRAM TO ASSIST RELOCATING EMPLOYEES AND NEW HIRES WITH THE THE ASSOCIATION HAS DESIGNED A COMPREHENSIVE FINANCIAL AND SERVICE SCHEDULED COMMERCIAL FLIGHTS UNDER CERTAIN LIMITED CIRCUMSTANCES. POLICIES INCLUDE THE USE OF CHARTER AIRCRAFT AND FIRST CLASS TRAVEL ON COMMITMENTS, INCLUDING TRAVEL TO UNDERSERVED REGIONAL DESTINATIONS. THESE POLICIES DESIGNED TO ASSURE THE ORGANIZATION IS ABLE TO MEET HIS TRAVEL COMPRISED OF INDEPENDENT PLAN EXECUTIVES HAS ESTABLISHED CEO TRAVEL TRAVEL SCHEDULE. ACCORDINGLY, A COMMITTEE OF THE ASSOCIATION'S BOARD ASSOCIATION'S OFFICERS ARE EXPECTED TO MAINTAIN AN UNUSUALLY DEMANDING OFFERING HEALTH INSURANCE IN ALL 50 STATES, DC AND PUERTO RICO, THE AS AN ORGANIZATION SERVING A SYSTEM OF LOCALLY BASED INDEPENDENT PLANS FORM 990, SCHEDULE J, PART I, LINE 1A Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F SCHEDULED MEETING. THE BOARD DELIBERATES ON BOTH MATTERS. EXTENSION OF COMMITTEES DECISIONS ARE REPORTED TO THE FULL BOARD DURING A REGULARLY CAPACITIES COMPARABLE TO THAT OF THE ASSOCIATIONS CEO. EACH YEAR THIS COMPENSATION PAID BY OTHER ORGANIZATIONS FOR OFFICERS SERVING IN THE RESULTS OF THE INDEPENDENT CONSULTANTS RESEARCH REGARDING FIRM. THE CONSULTANTS ADVICE AND THOSE DELIBERATIONS INCLUDE A REVIEW OF BASED UPON ADVICE FROM A QUALIFIED INDEPENDENT COMPENSATION CONSULTING OF INDEPENDENT PLAN EXECUTIVES. THAT COMMITTEE ACTS AFTER DELIBERATIONS ARE APPROVED EACH YEAR BY A COMMITTEE OF THE ASSOCIATIONS BOARD COMPRISED THE COMPENSATION OF THE CEO AND THE CONTINUED RETENTION OF HIS SERVICES FORM 990, SCHEDULE J, PART I, LINE 3 POLICY. TAXABLE COMPENSATION, IF APPLICABLE, IN ACCORDANCE WITH THE ASSOCIATION'S CLUB MEMBERSHIP FOR OFFICERS. THE EXPENSES ARE REIMBURSED AND INCLUDED IN AND TO FOSTER THEIR GOOD HEALTH, THE ASSOCIATION REIMBURSES A LUNCHEON AND TO FOSTER SOCIAL INTERACTION SERVING THE INTERESTS OF THE ASSOCIATION TO FACILITATE BUSINESS MEETINGS WITH VISITING PLAN OFFICIALS AND OTHERS Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F METHODOLOGY AND THE INSTRUCTIONS TO SCHEDULE J SPECIFY THAT AMOUNTS ACCRUALS UNDER THE SERP ARE CURRENTLY TAXED BASED ON A DIFFERENT METHODOLOGY SPECIFIED IN THE INSTRUCTIONS TO SCHEDULE J. BECAUSE VESTED DETERMINED USING THE ASSOCIATION'S BEST ESTIMATE OF THE ACCRUAL USING THE WAS ELIGIBLE TO PARTICIPATE IN THAT PROGRAM. THE ACCRUAL AMOUNTS WERE HYPOTHETICAL SERP ACCRUAL WAS CALCULATED FOR EACH REPORTABLE PERSON WHO AS REQUIRED BY THE INSTRUCTIONS TO FORM 990, SCHEDULE J, PART II, A FORM 990, SCHEDULE J, PART I, LINE 4 CONSULTANTS ADVICE. MARKET RESEARCH REGARDING COMPARABLE OFFICER PAY AND THE INDEPENDENT RECOMMENDATION ARE BASED UPON THE RESULTS OF AN INDEPENDENT CONSULTANTS OF THIS COMMITTEE AND ITS DECISIONS TO APPROVE OR MODIFY THE CEOS BE PAID TO THE OFFICERS. AS WITH THE CEOS COMPENSATION, THE DELIBERATIONS ANNUALLY RECEIVES THE CEOS RECOMMENDATIONS REGARDING THE COMPENSATION TO COMPENSATION DECISIONS. THE SAME COMMITTEE OF INDEPENDENT PLAN EXECUTIVES BOARD EXERCISES ITS INHERENT PREROGATIVE TO MODIFY THE COMMITTEES COMPENSATION DETERMINATIONS OF THE COMMITTEE STAND APPROVED UNLESS THE THE PERIOD OF THE CEOS SERVICE REQUIRES ACTION BY THE FULL BOARD. THE Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F STEVEN PUTZIGER - 50 JODY A VOSS - 2,221 JENNIFER VACHON - 52,164 MIKE JOYCE - 35,288 MITCHELL J HELFAND - 12,220 KARI J HEDGES - 28,142 JUSTINE HANDELMAN - 27,723 KRIS O HALTMEYER - 25,087 KATHY RIPLEY DIDAWICK - 39,427 TERRY COONEY - 82,493 JOHN CERISANO - 11,336 WILLIAM A BRESKIN - 36,434 SCOTT P SEROTA - 1,286,632 FOLLOWS: ACCRUAL WAS INCLUDED IN COLUMN C FOR THE APPLICABLE REPORTABLE PERSONS AS B(III) WAS SUBTRACTED IN EACH CASE AND THE BALANCE OF THE HYPOTHETICAL COLUMN C OR D, THE AMOUNT OF IMPUTED SERP INCOME REPORTED IN COLUMN REPORTED IN COLUMNS B(I) THROUGH B(III) SHOULD NOT BE REPORTED AGAIN IN Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F OPERATES ON A MULTI-YEAR CYCLE TO ASSURE THAT THE CEO AND EXECUTIVE THE ANNUAL PERFORMANCE BONUS PROGRAM, THE LONG TERM INCENTIVE PROGRAM TO WHICH PRE-ESTABLISHED PERFORMANCE GOALS ARE REACHED. HOWEVER, UNLIKE PROGRAM, PAYOUTS UNDER THE LONG TERM INCENTIVE PROGRAM REFLECT THE EXTENT TERM INCENTIVE BONUS PROGRAM. AS WITH THE REGULAR PERFORMANCE BONUS COMMITTEE. THE CEO AND AN EXECUTIVE DIRECTOR ALSO PARTICIPATE IN A LONG JUDGMENTS AND THE APPROVAL OF ACTUAL PAYOUTS REQUIRE APPROVAL BY THAT INDEPENDENT PLAN EXECUTIVES. MOREOVER, THE PERFORMANCE ASSESSMENT BOARD BASED UPON RECOMMENDATIONS FROM A BOARD COMMITTEE CONSISTING OF BUDGET FOR THIS BONUS PROGRAM ARE APPROVED EACH YEAR BY THE ASSOCIATIONS ELIGIBLE TO PARTICIPATE IN THIS PROGRAM. THE PERFORMANCE GOALS AND THE EACH INDIVIDUAL EMPLOYEES EFFORTS. OFFICERS, LIKE ALL EMPLOYEES, ARE GOALS, AS WEIGHTED BY THE PERFORMANCE MEASUREMENT PROCESS THAT EVALUATES CONTINGENT UPON THE ATTAINMENT OF PRE-APPROVED ORGANIZATIONAL PERFORMANCE PROGRAM THAT ASSURES A PORTION OF EMPLOYEES ANNUAL COMPENSATION IS THE ASSOCIATION MAINTAINS AN ASSOCIATION WIDE ANNUAL PERFORMANCE BONUS FORM 990, SCHEDULE J, PART I, LINE 7 THE COMBINED TOTAL OF IMPUTED SERP INCLUDED IN COLUMN C: $1,639,219. Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 13-5656874 3 7E1505 1.000 JSA 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F COMPARABLE PROGRAMS FOR COMPARABLE EXECUTIVES. INDEPENDENT COMPENSATION CONSULTANT BASED UPON A MARKET STUDY OF PERFORMANCE ALL INCLUDE CONSULTATION AND RECOMMENDATION FROM A QUALIFIED THE PROGRAM, THE SELECTION OF THE PERFORMANCE FACTORS AND ASSESSMENT OF FULL BOARD. THE COMMITTEES DELIBERATIONS REGARDING THE ESTABLISHMENT OF APPROVED BY THE SAME BOARD COMMITTEE DESCRIBED ABOVE AND REPORTED TO THE ACHIEVEMENT OF THOSE GOALS AND THE RESULTING PAYOUT AMOUNTS ARE ALL PROGRAM, THE PERFORMANCE MEASUREMENTS AND THE ASSESSMENT OF THE DIRECTOR HAVE INCENTIVES THAT LOOK BEYOND THE IMMEDIATE YEAR. THIS Schedule J (Form 990) 2017 Part III Supplemental Information Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information. Schedule J (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Transactions With Interested Persons SCHEDULE L (Form 990 or 990-EZ) Department of he Treasury Internal Revenue Service OMB No. 1545-0047 Complete if the organization answered "Yes" on Form 990, Part IV, line 25a, 25b, 26, 27, 28a, 28b, or 28c, or Form 990-EZ, Part V, line 38a or 40b. Attach to Form 990 or Form 990-EZ. Go to www.irs.gov/Form990 for instructions and the latest information. Name of the organization Open To Public Inspection Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Excess Benefit Transactions (section 501(c)(3), section 501(c)(4), and 501(c)(29) organizations only). Part I Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b. 1 (a) Name of disqualified person (b) Relationship between disqualified person and organization (d) Corrected? (c) Description of transaction Yes No (1) (2) (3) (4) (5) (6) 2 3 Enter the amount of tax incurred by the organization managers or disqualified persons during the year under section 4958 Enter the amount of tax, if any, on line 2, above, reimbursed by the organization Part II $ $ Loans to and/or From Interested Persons. Complete if the organization answered "Yes" on Form 990-EZ, Part V, line 38a or Form 990, Part IV, line 26; or if the organization reported an amount on Form 990, Part X, line 5, 6, or 22. (a) Name of interested person (b) Relationship with organization (c) Purpose of loan (d) Loan to or from the organization? To (e) Original principal amount (f) Balance due From (g) In default? (h) Approved (i) Written by board or agreement? committee? Yes No Yes No Yes No (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Total Part III $ Grants or Assistance Benefiting Interested Persons. Complete if the organization answered "Yes" on Form 990, Part IV, line 27. (a) Name of interested person (b) Relationship between interested (c) Amount of assistance (d) Type of assistance (e) Purpose of assistance person and the organization (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ. JSA 7E1297 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule L (Form 990 or 990-EZ) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Page 2 Schedule L (Form 990 or 990-EZ) 2017 Part IV Business Transactions Involving Interested Persons. Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c. (a) Name of interested person (b) Relationship between interested person and the organization (c) Amount of transaction (d) Description of transaction (e) Sharing of organization's revenues? Yes (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) N PARKER Part V OFFICER'S FAMILY MEMBER 104,264. EMPLOYEE SALARY No X Supplemental Information Provide additional information for responses to questions on Schedule L (see instructions). JSA 7E1507 1 000 Schedule L (Form 990 or 990-EZ) 2017 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F SCHEDULE O Supplemental Information to Form 990 or 990-EZ (Form 990 or 990-EZ) Department of the Treasury Internal Revenue Service Complete to provide information for responses to specific questions on Form 990 or 990-EZ or to provide any additional information. Attach to Form 990 or 990-EZ. Information about Schedule O (Form 990 or 990-EZ) and its instructions is at www.irs.gov/form990. Name of the organization OMB No. 1545-0047 Open to Public Inspection Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 FORM 990, PART I, LINE 1 THE ORGANIZATION'S TAX EXEMPT PURPOSE IS PROMOTING THROUGH INDEPENDENT BLUE CROSS AND BLUE SHIELD MEMBER PLANS, THE COMMON GOOD AND GENERAL WELFARE OF THE COMMUNITY BY FOSTERING BROAD-BASED HEALTH INSURANCE COVERAGE. FORM 990, PART III, LINE 1 THE ASSOCIATION SERVES ITS MEMBERSHIP CONSISTING OF INDEPENDENT BLUE CROSS AND BLUE SHIELD MEMBER PLANS THAT OPERATE WITHIN SPECIFIC GEOGRAPHIC SERVICE AREAS. THE ASSOCATION PROVIDES A VARIETY OF SERVICES TO MEMBER PLANS AND COORDINATES GOVERNMENT SERVICES, SUCH AS THE CONTRACT UNDER THE FEDERAL EMPLOYEE HEALTH BENEFIT PROGRAM (FEP), WHICH IS THE CORE OF THE ORGANIZATION'S EXEMPT PURPOSE OF PROMOTING THE COMMON GOOD AND GENERAL WELFARE OF THE COMMUNITY BY FOSTERING BROAD-BASED HEALTH INSURANCE COVERAGE. FORM 990, PART III, LINE 4A THE BLUE CROSS AND BLUE SHIELD ASSOCIATION'S FEDERAL EMPLOYEE PROGRAM (FEP) ADMINISTERS THE BLUE CROSS AND BLUE SHIELD SERVICE BENEFIT PLAN. APPROXIMATELY 64 PERCENT OF ALL FEDERAL EMPLOYEES AND RETIREES WHO RECEIVED THEIR HEALTH CARE BENEFITS THROUGH THE GOVERNMENT'S FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP) ARE MEMBERS OF THE SERVICE BENEFIT PLAN RECEIVING HEALTH COVERAGE THROUGH MEMBER PLANS. SERVICE BENEFIT PLAN HAS BEEN PART OF THE FEHBP SINCE ITS INCEPTION IN 1960 AND For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ. JSA 7E1227 7E1227 1 0001.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) (2017) Schedule O (Form 990 or 990-EZ) 2017 Name of the organization Page 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 IS THE LARGEST PLAN IN THE PROGRAM. ACCOMPLISHMENTS IN 2017 INCLUDED THE CONTINUED MODERNIZATION OF FEP'S CENTRAL CLAIM SYSTEM, FURTHER ENHANCEMENTS TO MEMBER HEALTH TOOLS AND MEMBER'S DIGITAL EXPERIENCE WITH THE INTRODUCTION OF A MOBILE APP. ADDITIONAL ACHIEVEMENTS INCLUDE THE CONTINUED DEVELOPMENT OF INTEGRATED CARE MANAGEMENT PROGRAMS ACROSS THE ENTIRE SPECTRUM TO SERVE MEMBERS AND IMPROVE MEMBER'S EXPERIENCE, INCLUDING THE IMPLEMENTAITON OF TELEHEALTH SERVICES FOR MINOR ACUTE CONDITIONS. RETENTION RATE WAS 99.1%. FORM 990, PART III, LINE 4B THE BLUECARD PROGRAM ENABLES BLUE PLAN MEMBERS TO RECEIVE THE BENEFITS OF THEIR INSURANCE CONTRACTS WHILE TRAVELING OR LIVING IN ANOTHER MEMBER PLAN'S GEOGRAPHIC SERVICE AREA. THROUGH BLUECARD, BLUE PLAN MEMBERS ARE GIVEN SEAMLESS NATIONAL ACCESS TO PHYSICIANS AND HOSPITALS THAT PARTICIPATE IN BLUE NETWORKS. ADDITIONALLY, THE PROGRAM LINKS PARTICIPATING HEALTHCARE PROVIDERS WITH THE INDEPENDENT BLUE CROSS AND BLUE SHIELD PLANS THROUGH A SINGLE ELECTRONIC NETWORK FOR CLAIMS PROCESSING AND REIMBURSEMENT. FORM 990, PART III, LINE 4C AS THE UMBRELLA ORGANIZATION FOR THE MEMBER PLANS, THE ASSOCIATION COORDINATES ADVERTISING AND COMMUNICATION PROGRAMS, PROVIDING POLICY AND REPRESENTATION OF MEMBER INTERESTS, MONITORS AND FOSTERS THE FINANCIAL STABILITY OF ALL THE PLANS AND SUPPORTS THE ABILITY OF THE PLANS TO OPERATE EFFICIENTLY BY PROVIDING CONFERENCES, CONSULTING AND JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Page Name of the organization 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 MISCELLANEOUS SERVICES TO THE PLANS. FORM 990, PART III, LINE 4D OTHER PROGRAM SERVICE ACCOMPLISHMENTS THE ASSOCIATION DEVELOPS, ENHANCES AND PROTECTS THE VALUE OF THE BLUE CROSS AND BLUE SHIELD BRAND NAMES AND SYMBOLS AND SUPPORTS THE OVERSIGHT AND MANAGEMENT OF MEMBER PLAN LICENSE AGREEMENTS. EXPENSE: 59,239,622 GRANTS: NONEREVENUE: 68,195,562. THE ASSOCIATION PROVIDES OPTIONAL CONSULTING SERVICES AND OTHER MISCELLANEOUS PROJECTS.EXPENSE: 43,634,677 GRANTS: NONEREVENUE: 47,965,080 OPERATION OF THE NATIONAL EMPLOYEE BENEFITS ADMINISTRATION PROGRAM WHICH PROVIDES A COMPREHENSIVE GROUP PACKAGE OF EMPLOYEE BENEFITS PROGRAMS TO THE PLANS.EXPENSE: 15,680,090 GRANTS: NONEREVENUE: 16,081,662 NATIONAL DATA WAREHOUSE (NDW) IS A CENTRAL DATA WAREHOUSE COMPOSED OF AGGREGATE STANDARDIZED AND DE-IDENTIFIED DATA (SUCH AS MEDICAL AND DRUG CLAIMS, MEMBERSHIP AND OTHER PROVIDER INFORMATION) OBTAINED FROM PARTICIPATING MEMBER PLANS FOR USE IN COMPLEMENTING THE ANALYTICAL SYSTEM WITHIN EACH OF THE PLANS TO IMPROVE BUSINESS INTELLIGENCE AND FOR THE BENEFIT OF UNDERSTANDING AND MANAGING HEALTH CARE COSTS AND QUALITY VIA BENCHMARKING AND TREND ANALYSIS.EXPENSE: 15,453,424 GRANTS: NONEREVENUE: 4,190,045 OPERATION OF THE TELECOMMUNICATION NETWORK WHICH FACILITATES INTER-PLAN COMMUNICATION.EXPENSE: 12,228,779 GRANTS: NONEREVENUE: 19,354,183 FORM 990, PART IV, LINE 28 FOR YEARS THROUGH 2016, THE ORGANIZATION RESPONDED YES TO FORM 990, PART JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Name of the organization Page 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 IV, LINE 28(C) AND REPORTED ON SCHEDULE L PART IV, TRANSACTIONS WITH ENTITIES WHERE AN OFFICER OR DIRECTOR OF THE ENTITY WAS ALSO AN OFFICER OR DIRECTOR OF THE ORGANIZATION. THIS IS CONSISTENT WITH THE 2013 SCHEDULE L PART IV DEFINITION OF AN INTERESTED PERSON. THIS DEFINITION OF INTERESTED PERSON IN THE 2013 INSTRUCTIONS TO SCHEDULE L WAS DELETED IN THE 2014 SCHEDULE L INSTRUCTIONS. THE CURRENT INSTRUCTIONS TO SCHEDULE L PROVIDE THAT ORGANIZATION SHOULD ANSWER YES TO FORM 990, PART IV, LINES 28A, 28B, OR 28C, ONLY IF THE PARTY TO THE TRANSACTION WAS AN INTERESTED PERSON AS DEFINED IN THE SCHEDULE L INSTRUCTIONS, AND THE THRESHOLD AMOUNTS DESCRIBED IN THE SPECIFIC INSTRUCTIONS TO SCHEDULE L, PART IV ARE MET. THERE ARE NO ENTITIES THAT MEET THE DEFINITION OF AN INTERESTED PERSON UNDER THE CURRENT INSTRUCTIONS TO SCHEDULE L. ACCORDINGLY, THE ORGANIZATION HAS RESPONDED NO TO FORM 990, PART IV, LINE 28(C) AND NO ENTITIES ARE REPORTED IN SCHEDULE L PART IV AS HAVING BUSINESS TRANSACTION WITH THE ORGANIZATION. FORM 990, PART VI, SECTION A, LINE 2 VARIOUS ASSOCIATION BOARD MEMBERS (DIRECTORS) ALSO SIT ON THE BOARD OF BLUE CROSS BLUE SHIELD ASSOCIATION AFFILIATES. FORM 990, PART VI, SECTION A, LINE 6 BCBSA HAS THIRTY-SIX (36) INDEPENDENT HEALTH CARE PLAN LICENSEES OPERATING IN SPECIFIED DOMESTIC SERVICE AREAS. ALL HEATH CARE PLAN LICENSEES ARE ASSOCIATION MEMBERS. JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Name of the organization Page 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 FORM 990, PART VI, SECTION A, LINE 7A EACH PRIMARY LICENSEE MEMBER PLAN, BY THE AUTHORITY OF THEIR INDIVIDUAL GOVERNING DOCUMENTS, SELECT THE CEO OF THEIR RESPECTIVE COMPANIES TO SERVE AS A MEMBER OF THE ASSOCIATION'S BOARD. FORM 990, PART VI, SECTION A, LINE 7B CERTAIN GOVERNING DECISIONS, SUCH AS BY-LAW AMENDMENTS, REQUIRE ACTION BY BOTH THE ASSOCIATION'S BOARD AND ITS MEMBER PLANS. FORM 990, PART VI, SECTION B, LINE 11B IN GENERAL, FORM 990 CONTENT AND SOURCES OF INFORMATION ARE REVIEWED BY SUBJECT MATTER EXPERTS INCLUDING, BUT NOT LIMITED TO, INTERNAL AND EXTERNAL TAX (PWC) AND ACCOUNTING PROFESSIONALS AND INTERNAL LEGAL PERSONNEL. FINALIZING THE RETURN DRAFT CONSISTS OF DISCUSSIONS BETWEEN FINANCE OFFICERS AND FINANCE MANAGERS REGARDING THE NUMERIC RESULTS AND WRITTEN RESPONSES TO SELECT RETURN QUESTIONS. UPON INTERNAL AGREEMENT AS TO THE FORM AND CONTENT, AN ELECTRONIC DRAFT 990 IS SENT TO THE ASSOCIATION'S BOARD PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C BCBSA MAINTAINS A COMPREHENSIVE CODE OF CONDUCT AND COMPLIANCE PROGRAM APPLICABLE TO ALL EMPLOYEES AND OFFICERS. IN ADDITION, ALL EMPLOYEES, OFFICERS, AND BOARD MEMBERS ARE REQUIRED TO COMPLETE AN ANNUAL CONFLICT OF INTEREST FORM. THE BCBSA CHIEF AUDITOR AND COMPLIANCE OFFICER IS CHARGED WITH INVESTIGATING ANY ALLEGATIONS OF NON-COMPLIANCE WITH THE CODE OF CONDUCT, INCLUDING ANY COMPLAINTS REPORTED THROUGH THE ANONYMOUS HOTLINE MAINTAINED THROUGH AN INDEPENDENT ORGANIZATION. THE RESULTS OF JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Name of the organization Page 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 THE COMPLIANCE PROGRAMS EFFECTIVENESS ARE REPORTED TO THE FINANCIAL AND AUDIT COMMITTEE OF THE BOARD OF DIRECTORS ON AN ANNUAL BASIS. FAILURE TO ADHERE TO THE CODE OF CONDUCT MAY RESULT IN DISCIPLINARY ACTION, UP TO AND INCLUDING TERMINATION OF EMPLOYMENT. FORM 990, PART VI, SECTION B, LINES 15A & 15B THE COMPENSATION OF THE CEO AND THE CONTINUED RETENTION OF HIS SERVICES ARE APPROVED EACH YEAR BY A COMMITTEE OF THE ASSOCIATION'S BOARD COMPRISED OF INDEPENDENT PLAN EXECUTIVES. THAT COMMITTEE ACTS AFTER DELIBERATIONS BASED UPON ADVICE FROM A QUALIFIED INDEPENDENT COMPENSATION CONSULTING FIRM. THE CONSULTANT'S ADVICE AND THOSE DELIBERATIONS INCLUDE A REVIEW OF THE RESULTS OF THE INDEPENDENT CONSULTANT'S RESEARCH REGARDING COMPENSATION PAID BY OTHER ORGANIZATIONS FOR OFFICERS SERVING IN CAPACITIES COMPARABLE TO THAT OF THE ASSOCIATION'S CEO. EACH YEAR THIS COMMITTEE'S DECISIONS ARE REPORTED TO THE FULL BOARD DURING A REGULARLY SCHEDULED MEETING. THE BOARD DELIBERATES ON BOTH MATTERS. EXTENSION OF THE PERIOD OF THE CEO'S SERVICE REQUIRES ACTION BY THE FULL BOARD. THE COMPENSATION DETERMINATIONS OF THE COMMITTEE STAND APPROVED UNLESS THE BOARD EXERCISES ITS INHERENT PREROGATIVE TO MODIFY THE COMMITTEE'S COMPENSATION DECISIONS. THE SAME COMMITTEE OF INDEPENDENT PLAN EXECUTIVES ANNUALLY RECEIVES THE CEO'S RECOMMENDATIONS REGARDING THE COMPENSATION TO BE PAID TO THE OFFICERS. AS WITH THE CEO'S COMPENSATION, THE DELIBERATIONS OF THIS COMMITTEE AND ITS DECISIONS TO APPROVE OR MODIFY THE CEO'S RECOMMENDATION ARE BASED UPON THE RESULTS OF AN INDEPENDENT CONSULTANT'S MARKET RESEARCH REGARDING COMPARABLE OFFICER PAY AND THE INDEPENDENT CONSULTANT'S ADVICE. JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Page Name of the organization 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 FORM 990, PART VI, SECTION C, LINE 19 THE ASSOCIATION COMPLIES WITH ALL APPLICABLE PUBLIC DISCLOSURE REQUIREMENTS. THUS, FOR EXAMPLE, MEMBERS OF THE PUBLIC MAY REQUEST AN OPPORTUNITY TO REVIEW THE ASSOCIATION'S FORM 990 OR TO MAKE A COPY BY SENDING A WRITTEN REQUEST OR APPEARING IN PERSON AT ITS PRINCIPAL OFFICE OR ANY OF ITS OTHER LOCATIONS. THE ASSOCIATION'S FAVORABLE DETERMINATION LETTER REGARDING ITS TAX EXEMPT STATUS AND MATERIALS COMPRISING ITS EXEMPTION APPLICATION ARE ALSO AVAILABLE IN THIS MANNER. IF THE ASSOCIATION'S GOVERNING DOCUMENTS (ARTICLES OF INCORPORATION AND BYLAWS) AND CONFLICT OF INTEREST POLICY ARE SUBJECT TO APPLICABLE FEDERAL OR STATE PUBLIC DISCLOSURE REQUIREMENTS, THOSE DOCUMENTS WILL BE MADE PUBLICLY AVAILABLE AS APPLICABLE LAW MAY REQUIRE. FOR EXAMPLE, FORM 990 FILINGS MAY INCLUDE BYLAW AMENDMENTS AND THOSE AMENDMENTS WILL BE MADE AVAILABLE AS NOTED ABOVE. OTHERWISE, THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY WILL BE PROVIDED TO THE PUBLIC AT THE DISCRETION OF THE ASSOCIATION'S MANAGEMENT. FORM 990, PART XI, LINE 9 OTHER CHANGES IN NET ASSETS: OTHER COMPREHENSIVE INCOME-ASC 715 $(2,998,179) LOSS ON SETTLEMENT OF RETIREMENT OBLIGATION $(4,873,794) ADDITIONAL K-1 REVENUE $(2,192,961) --------------- TOTAL JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F $ (10,064,934) Schedule O (Form 990 or 990-EZ) 2017 Schedule O (Form 990 or 990-EZ) 2017 Page Name of the organization 2 Employer identification number BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 ATTACHMENT 1 990, PART VII- COMPENSATION OF THE FIVE HIGHEST PAID IND. CONTRACTORS NAME AND ADDRESS DESCRIPTION OF SERVICES COMPENSATION HEALTH INTELLIGENCE CO. LLC 225 N. MICHIGAN AVENUE CHICAGO, IL 60601 DATA ANALYTICS 24,300,460. KIRKLAND & ELLIS 200 E RANDOLPH DRIVE CHICAGO, IL 60601 LEGAL SERVICES 24,526,249. BEELINE SETTLEMENT COMPANY 12724 GRAN BAY PKWY WEST JACKSONVILLE, FL 32258 WORKFORCE STAFFING 13,409,640. DXC TECHNOLOGY SERVICES LLC 1775 TYSONS BLVD TYSONS, VA 22102 IT SERVICE SOLUTIONS 11,388,137. WORLDWIDE INSURANCE SERVICES LLC 100 MATSONFORD ROAD RADNOR, PA 19087 INTERL MED INSURANCE 9,842,712. ATTACHMENT 2 FORM 990, PART IX - OTHER FEES DESCRIPTION VARIOUS CONSULTING FEES TEMPORARY HELP PRINTING & GRAPHICS RECRUITING TOTALS (A) TOTAL FEES (B) PROGRAM SERVICE EXP. 174,447,708. 173,767,476. (C) MANAGEMENT AND GENERAL 680,232. 19,989,967. 19,919,368. 70,599. 2,388,895. 2,326,309. 62,586. 986,826. 971,221. 15,605. 197,813,396. 196,984,374. 829,022. JSA 7E1228 1.000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F (D) FUNDRAISING EXPENSES Schedule O (Form 990 or 990-EZ) 2017 (b) Primary activity (c) Legal domicile (state or foreign country) (d) Total income Open to Public Inspection OMB No. 1545-0047 (e) End-of-year assets (f) Direct controlling entity 13-5656874 Employer identification number 13-5656874 225 NORTH MICHIGAN AVENUE BC AND BS FOUNDATION ON HEALTH CARE 225 NORTH MICHIGAN AVENUE 23-7011867 CHICAGO, IL 60601 23-7164980 CHICAGO, IL 60601 (a) Name, address, and EIN of related organization 4287KD R19F 10/24/2018 (c) Legal domicile (state or foreign country) 10:25:23 AM V 17-7.2F EDUC., RSRCH. IL EDUC., RSRCH. IL (b) Primary activity 501(C)(3) 501(C)(3) Exempt Code section (d) 10 10 (e) Public charity status (if section 501(c)(3)) N/A N/A Yes X X No (g) Section 512(b)(13) controlled entity? Schedule R (Form 990) 2017 (f) Direct controlling entity Identification of Related Tax-Exempt Organizations. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related tax-exempt organizations during the tax year. (a) Name, address, and EIN (if applicable) of disregarded entity Identification of Disregarded Entities. Complete if the organization answered "Yes" on Form 990, Part IV, line 33. HEALTH SERVICES FOUNDATION 7E1307 1.000 JSA Attach to Form 990. Go to www.irs.gov/Form990 for instructions and the latest information. For Paperwork Reduction Act Notice, see the Instructions for Form 990. (7) (6) (5) (4) (3) (2) (1) Part II (6) (5) (4) (3) (2) (1) Part I Related Organizations and Unrelated Partnerships Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37. BLUE CROSS BLUE SHIELD ASSOCIATION Name of the organization Department of the Treasury Internal Revenue Service SCHEDULE R (Form 990) BLUE CROSS BLUE SHIELD ASSOCIATION (c) Legal domicile (state or foreign country) (d) Direct controlling entity (e) Predominant income (related, unrelated, excluded from tax under sections 512 - 514) (f) Share of total income (g) Share of end-ofyear assets (h) Yes No allocations? Disproportionate (i) Code V - UBI amount in box 20 of Schedule K-1 (Form 1065) (j) Yes No General or managing partner? (a) Name, address, and EIN of related organization 4287KD R19F 10/24/2018 COMMUNITY HEA 10:25:23 AM V 17-7.2F 225 NORTH MICHIGAN AVENUE CHICAGO, IL 60601 36-4176277 (b) Primary activity IL Legal domicile (state or foreign country) (c) N/A (d) Direct controlling entity C CORP (C corp, S corp, or trust) (e) Type of entity -2,807,710. (f) Share of total income 2 controlled entity? (k) Percentage ownership Page Schedule R (Form 990) 2017 1,994,091. 100.0000 X Yes No (g) (h) (i) Share of Percentage Section 512(b)(13) end-of-year assets ownership Identification of Related Organizations Taxable as a Corporation or Trust. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related organizations treated as a corporation or trust during the tax year. (b) Primary activity BLUE CROSS BLUE SHIELD INSTITUTE, INC. JSA 7E1308 1.000 (7) (6) (5) (4) (3) (2) (1) Part IV (7) (6) (5) (4) (3) (2) (1) (a) Name, address, and EIN of related organization Part III 13-5656874 Identification of Related Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related organizations treated as a partnership during the tax year. Schedule R (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION Page 3 4287KD R19F 10/24/2018 JSA 7E1309 2.000 (6) (5) (4) 10:25:23 AM V 17-7.2F P BLUE CROSS BLUE SHIELD INSTITUTE, INC. (2) (3) Q BLUE CROSS BLUE SHIELD INSTITUTE, INC. (1) (a) Name of related organization (b) Transaction type (a-s) ACTUAL COST ACTUAL COST (d) Method of determining amount involved X X Schedule R (Form 990) 2017 94,201. 3,838,872. (c) Amount involved X X X X X X X 1k 1l 1m 1n 1o Lease of facilities, equipment, or other assets from related organization(s) Performance of services or membership or fundraising solicitations for related organization(s) Performance of services or membership or fundraising solicitations by related organization(s) Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) Sharing of paid employees with related organization(s) k l m n o 1p 1q X X X X 1f 1g 1h 1i 1j Dividends from related organization(s) Sale of assets to related organization(s) Purchase of assets from related organization(s) Exchange of assets with related organization(s) Lease of facilities, equipment, or other assets to related organization(s) f g h i j p Reimbursement paid to related organization(s) for expenses q Reimbursement paid by related organization(s) for expenses X X X X X 1a 1b 1c 1d 1e During the tax year, did the organization engage in any of the following transactions with one or more related organizations listed in Parts II-IV? Receipt of (i) interest, (ii) annuities, (iii) royalties, or (iv) rent from a controlled entity Gift, grant, or capital contribution to related organization(s) Gift, grant, or capital contribution from related organization(s) Loans or loan guarantees to or for related organization(s) Loans or loan guarantees by related organization(s) a b c d e Yes No 1r r Other transfer of cash or property to related organization(s) s Other transfer of cash or property from related organization(s) 1s 2 If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds. 1 13-5656874 Transactions With Related Organizations. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36. BLUE CROSS BLUE SHIELD ASSOCIATION Note: Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule. Part V Schedule R (Form 990) 2017 13-5656874 Unrelated Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 37. BLUE CROSS BLUE SHIELD ASSOCIATION Page 4 7E1310 1.000 JSA (16) (15) (14) (13) (12) (11) (10) (9) (8) (7) (6) (5) (4) (3) (2) (1) 4287KD R19F 10/24/2018 (a) Name, address, and E N of entity (c) Legal domicile (state or foreign country) 10:25:23 AM V 17-7.2F Primary activity (b) (d) Predominant income (related, unrelated, excluded from tax under sections 512-514) Yes No (e) Are all partners section 501(c)(3) organizations? (f) Share of total income (g) Share of end-of-year assets Yes No allocations? Disproportionate (h) Yes No (j) General or managing partner? (k) Percentage ownership Schedule R (Form 990) 2017 (i) Code V - UBI amount in box 20 of Schedule K-1 (Form 1065) Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships. Part VI Schedule R (Form 990) 2017 BLUE CROSS BLUE SHIELD ASSOCIATION 13-5656874 Schedule R (Form 990) 2017 Part VII Page 5 Supplemental Information Provide additional information for responses to questions on Schedule R. See instructions. Schedule R (Form 990) 2017 7E1510 1 000 4287KD R19F 10/24/2018 10:25:23 AM V 17-7.2F