AM Best Affirms Credit Ratings of BCBSM, Inc. and HMO Minnesota; Maintains Under Review With Negative Implications Status for Credit Ratings of MII Life Insurance, Incorporated

AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of BCBSM, Inc., d/b/a Blue Cross Blue Shield of Minnesota (BCBSM), and its subsidiary, HMO Minnesota, d/b/a Blue Plus (Blue Plus). In addition, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb+” (Good) on the $250 million 3.79% senior unsecured notes due 2025 issued by BCBSM. The outlook of the Credit Ratings (ratings) is stable. Both companies are domiciled in Eagan, MN.

Concurrently, AM Best has maintained the under review with negative implications status for the FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of MII Life Insurance, Incorporated (MII Life) (Eagan, MN).

The ratings of BCBSM and HMO Minnesota reflect their balance sheet strength, which AM Best assesses as strong, as well as their adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings of BCBSM remain supported by strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). BCBSM has been able to grow capital organically, mainly from profitable operating and investment performance. However, this is partially offset by dividend payments to its parent, a trend that is expected to continue in the near term. Furthermore, financial flexibility is enhanced through access to Federal Home Loan Bank borrowings and lines of credit with several banks, as well as parent company cash. BCBSM’s operating performance turned positive in 2020 and remained favorable through the first half of 2021, but it has moderated. The improved underwriting performance in 2020 was driven primarily by a decline in utilization as elective procedures have been delayed; however, trends have returned to a more normal level for 2021 across various core product lines. BCBSM continues to maintain a dominant market position in Minnesota with strong brand recognition, strategic relationships with a diverse group of provider networks and a balanced product portfolio. However, AM Best notes that BCBSM operates in a highly competitive environment in which market pricing pressures affect underwriting earnings. Further, there is geographic limitation to its business based on the Blue Cross Blue Shield licenses.

The under review with negative implications status for MII Life reflects AM Best’s ongoing review of the pending acquisition of MII Life’s health savings account business by HealthEquity, Inc. [NASDAQ: HQY]. The purchase price for MII Life’s business is $500 million. The transaction expected to close on Nov. 1, 2021 for the health savings account and all other business except the voluntary beneficiary association (VEBA) business. Further, the VEBA business is expected to close in the first quarter 2022, all subject to regulatory and other closing conditions.

AM Best will continue to hold discussions with MII Life’s management and monitor its balance sheet strength, operating performance, business profile and ERM. In addition, MII Life’s ratings consider the implicit and explicit support from its ultimate parent, Aware Integrated, Inc. The ratings will remain under review until the close of the transaction and a review by AM Best of the post-transaction details.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Jennifer Asamoah
Senior Financial Analyst
+1 908 439 2200, ext. 5203

Bridget Maehr
Associate Director
+1 908 439 2200, ext. 5321

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644

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