VIRGINIA, MN-Blue Cross and Blue Shield of Minnesota will open a new $7.4-million customer service facility here this month, starting out with 30 employees and expanding by up to 185 employees by the end of 2005.

The health plan is building a 30,000-sf expansion to its year-old claims processing operations. The project recently won $2.5 million in public subsidies—$1.3 million from the City of Virginia and $1.2 from the Iron Range Resources and Rehabilitation Agency, says Roger Kleppe, VP of human resources and facilities for the Blues of Minnesota.

Architect on the project is locally based Damberg Scott Gerzina & Wagner, while the contractor is Minneapolis-based Kraus-Anderson, says Kleppe.

Although the Minnesota Department of Trade and Economic Development has approved a $500,000 subsidy for the project, there were a few problems. During last session’s budget crisis it made the project reapply then rejected it, according to Kleppe. The expansion project is coming in under budget, which had been targeted to cost $8.2 million.

After farming out its claims processing to Blue Cross and Blue Shield of Maine in the mid-90s, the Blues of Minnesota decided several years ago to move it back to Minnesota, splitting it between its Eagan and new operations in northern Minnesota, Kleppe says. The company is pleased with the decision to move back in large part due to the quality of the 250 employees it has hired in northern Minnesota for its claims processing centers in Virginia and Aurora, which had opened last year.

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