In November of 1996, Kentucky Department of Insurance Commissioner, George Nichols and Attorney General Albert B. Chandler began an investigation of the conversion of charitable assets of Blue Cross & Blue Shield to Anthem, Inc. as a result of their 1993 merger.
At that time, Kentucky had no statutes to regulate non-profit conversions, but there was common law power of the court to impose provisions to protect charitable assets. In October 1997, Attorney General Chandler filed a lawsuit against Anthem, Inc. for the protection of converted assets dedicated to a charitable purpose.
Attorney General Chandler, representing the Commonwealth of Kentucky and the legal counsel for Anthem, Inc., in November of 1999 reached an agreement for Anthem to place $45 Million into an independent charitable foundation that would address the unmet health care needs of Kentuckians.
One month after the agreement was reached, a restricted account was established by the court to hold the funds from Anthem Inc. until such time that a new, independent charitable foundation could be launched. Throughout the year 2000, a volunteer workgroup studied the issues related to creating the new foundation and presented their recommendations to the court. In the fall of 2000, a 34-member Community Advisory Committee was named with members reflecting the geographic, gender, racial and ethnic diversity of Kentucky. The Community Advisory Committee was charged with developing Articles of Incorporation and Bylaws and proposing members of an initial Board of Directors. The name selected for the new organization was the Foundation for a Healthy Kentucky and it was approved by the court as a worthy entity for receipt of the settlement funds on May 3, 2001. The Board of Directors held its inaugural meeting a few days later on May 9, 2001.
The Foundation’s Articles of Incorporation called for two initial grants, $1 Million to the University of Kentucky and $1 Million to the University of Louisville each matched by $1 Million from Kentucky’s “Bucks for Brains” Initiative. The grants were given for the purpose of creating Endowed Chairs in rural (UK) and urban (U of L) health policy to attract scholars and enhance Kentucky's research capacity related to health policy.