26 U.S. Code § 833 - Treatment of Blue Cross and Blue Shield organizations, etc.
Such organization shall be taxable under this part in the same manner as if it were a stock insurance company.
The deduction determined under subsection (b) for any taxable year shall be allowed.
The deduction determined under paragraph (1) for any taxable year shall not exceed taxable income for such taxable year (determined without regard to such deduction).
The adjusted surplus as of the beginning of the organization’s 1st taxable year beginning after December 31, 1986, shall be its surplus as of such time. For purposes of the preceding sentence and subsection (c)(3)(C), the term “surplus” means the excess of the total assets over total liabilities as shown on the annual statement.
The term “adjusted net operating loss” means the net operating loss for any taxable year determined with the adjustments set forth in subparagraph (C).
Paragraph (2) shall be applied to an organization described in subparagraph (B) as if it were a Blue Cross or Blue Shield organization.
Notwithstanding the preceding paragraphs, paragraphs (2) and (3) of subsection (a) shall not apply to any organization unless such organization’s percentage of total premium revenue expended on reimbursement for clinical services and for activities that improve health care quality provided to enrollees under its policies during such taxable year (as reported under section 2718 of the Public Health Service Act) is not less than 85 percent.
Section 2718 of the Public Health Service Act, referred to in subsec. (c)(5), is classified to section 300gg–18 of Title 42, The Public Health and Welfare.
2014—Subsec. (b)(3)(E). Pub. L. 113–295 struck out “, 244,” after “sections 243” in cl. (ii) and in concluding provisions.
Subsec. (c)(5). Pub. L. 113–235 substituted “paragraphs (2) and (3) of subsection (a)” for “this section” and inserted “and for activities that improve health care quality” after “clinical services”.
2010—Subsec. (c)(5). Pub. L. 111–148 added par. (5).
1997—Subsec. (b)(1)(A)(i). Pub. L. 105–34, § 1604(d)(2)(A)(i), inserted “and liabilities incurred during the taxable year under cost-plus contracts” before the comma.
Subsec. (b)(1)(A)(ii). Pub. L. 105–34, § 1604(d)(2)(A)(ii), inserted “or in connection with the administration of cost-plus contracts” before the last comma.
1996—Subsec. (c)(4). Pub. L. 104–191 added par. (4).
Amendment by Pub. L. 113–295 not applicable to preferred stock issued before Oct. 1, 1942 (determined in the same manner as under section 247 of this title as in effect before its repeal by Pub. L. 113–295), see section 221(a)(41)(K) of Pub. L. 113–295, set out as a note under section 172 of this title.
Except as otherwise provided in section 221(a) of Pub. L. 113–295, amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
Written determinations for this section
These documents, sometimes referred to as "Private Letter Rulings", are taken from the IRS Written Determinations page; the IRS also publishes a fuller explanation of what they are and what they mean. The collection is updated (at our end) daily. It appears that the IRS updates their listing every Friday.
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- Existing Blue Cross or Blue Shield Organizations : 2016-10-14
- Organizations Subject to Sec. 833 : 2016-10-14
- Medical Loss Ratio : 2015-05-08
- Definitions Relating to Corporate Reorganizations : 2014-04-18
- Transfer to Corporation Controlled by Transferor : 2014-04-18
- Treatment of Blue Cross Blue Shield Organizations : 2014-04-18
- Special Deduction : 2006-02-17
- Existing Blue Cross or Blue Shield Organizations : 2005-07-15
- Existing Blue Cross or Blue Shield Organizations : 2004-12-31
- Successor Casualty Ins. Co. : 2004-04-30
- Adjusted Surplus : 2004-04-30
- Treatment of Blue Cross Blue Shield Organizations : 2002-01-04
- Special Deduction : 2000-05-26
- Carryback and Carryover : 2000-01-21
- Special Deduction : 2000-01-21
- Special Deduction : 1999-08-20
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