Wellmark, Inc. says it will shut down First Administrators - KTIV News 4 Sioux City IA: News, Weather and Sports

UPDATE: Wellmark, Inc. says it will shut down its First Administrators facility in Sioux City

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SIOUX CITY, Iowa (KTIV) -

A Sioux City employer that was honored a year ago this week for growth and adding jobs is saying that it will close.

Wednesday, Wellmark, Incorporated announced that by the end of the year, it will shut down its subsidiary, First Administrators, Incorporated.

Wellmark says the closure is necessary due to changes in federal health care regulations.

FAI operates as a third-party administrator, providing sales, operations and customer service for its health plan members in Iowa, South Dakota, Wisconsin, Nebraska, and Minnesota.

Wellmark says it wants to consolidate this business under one roof in Des Moines.

Along with employees in Sioux City, workers in Des Moines and Rapid City, South Dakota will also be impacted.

"Wellmark did not make this decision lightly. The employees at these locations have done excellent work. Although our business strategy led us to this decision, we are fully committed to the employees at each of these locations," said Courtney Greene, Wellmark, Inc.

Wellmark said some employees will be able to transfer to Des Moines. Others will get a financial severance package.

The company has spent nearly $2 million to remodel their Hamilton Boulevard office, using targeted job funding. Something, city officials say will end with the closure.

"It does strike me a little bit unusual, having just brought those jobs here, and spent the money that they did, but there are a lot of changes going on in health care. But yes it is surprising and disappointing," said Marty Dougherty, Economic Development.

Dougherty says the city will support employees during the transition. They will also pursue other businesses to come into the building when it closes in early next year.

Last year, First Administrators was presented the "Growing Sioux City Award" after adding 30 new jobs and remodeling its workspace.

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