The Law of Tax-Exempt Healthcare Organizations 2017 Cumulative Supplement, Fourth Edition + website

CHAPTER THIRTEENOther Provider and Supplier Organizations

1. § 13.3 Qualified Nonprofit Health Insurance Issuers
2. *§ 13.5 Accountable Care Organizations

§ 13.3 QUALIFIED NONPROFIT HEALTH INSURANCE ISSUERS

p. 336. Insert following last paragraph of the section:

Subsequently, the IRS issued final regulations regarding applying for recognition as a tax‐exempt qualified nonprofit health insurance issuer (QNHII)^79.1 These regulations became effective on January 29, 2015. The final regulations provide that the Commissioner of the IRS has authority to prescribe application procedures that must be followed by QNHIIs seeking recognition of tax‐exempt status. The regulations underscore the statutory application of notice rules to QNHIIs, requiring them to apply for recognition of exempt status and confirming that this is the only path for treating such organizations as described as tax‐exempt under this section of the Code.^79.2 Accordingly, QNHIIs cannot rely on self‐declaring their exempt status.

The final regulations authorize the Commissioner to recognize QNHIIs as tax‐exempt effective at a date prior to the date of its application if the application is properly and timely submitted and the QNHII's prior purposes and activities are consistent with the requirements for exemption for such organizations. However, if the IRS requires a QNHII to alter its activities or make substantive amendments to its enabling instrument, the IRS will recognize exemption effective only as of the date specified ...