Blue Cross RI moving customer service operations to East Providence

Blue Cross & Blue Shield of Rhode Island's headquarters in Providence.

PROVIDENCE, R.I. (WPRI) – Rhode Island’s largest health insurer is moving its customer service operations from downtown Providence to East Providence.

Jill Flaxington, a spokesperson for Blue Cross & Blue Shield of Rhode Island, confirmed Wednesday the move from the company’s headquarters on 500 Exchange St. to 50 Jordan St. in East Providence is planned for late 2017 or early 2018.

Flaxington said less than 15% of the company’s workforce will make the move, but said she did not know how many people Blue Cross currently employs. The company’s website says it has more than 800 employees in Rhode Island.

The move was first reported by the website GoLocalProv.

Blue Cross received a generous tax-stabilization agreement from the city to open its downtown high-rise headquarters, which was completed in 2009. In the current fiscal year, the company is scheduled to pay the city $1.6 million on a building assessed at $48.9 million, according to city tax records. Its tax payments are scheduled to increase gradually to $2.2 million by the 2023-24 fiscal year, the final year of the deal.

The company’s tax break has come under scrutiny in recent years, particularly from former Mayor Joe Paolino, a major property owner in the capital. In a lawsuit against the city and Blue Cross in 2015, Paolino argued that the tax break created a “substantial competitive disadvantage” for other commercial property owners. A judge dismissed the suit.

Flaxington said nothing in the tax deal requires a certain number of jobs remain in Providence.

In a statement Wednesday, City Council President Luis Aponte said he was “extremely disappointed” about the insurer’s decision to move jobs out of the capital and said he will seek a meeting with executives there to discuss the matter.

“The city did not enter into this sort of a generous TSA only to have Blue Cross slowly but surely become a glorified landlord,” Aponte said. “It would appear as though they have broached the spirit of the agreement, if not the actual legality of it, and this is deserving of the council’s immediate attention.”

Eyewitness News reported last month that Blue Cross lost $35 million in 2016 as its members increased their use of medical services more than expected. It was the company’s third annual loss in the last five years.

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan