Homecomplaint › Kris - Portland, OR - "Nonprofit" insurance companies Cambia/Regence Blue Cross Blue Shield and PacificSource

Consumer Complaint

Kris - Portland, OR - "Nonprofit" insurance companies Cambia/Regence Blue Cross Blue Shield and PacificSource

Companies Involved: 
Cambia/Regence Blue Cross Blue Shield and PacificSource
Issue Area: 
Insurance

I have been tracking massive donations to an opposition campaign intended to raise taxes on big (primarily out-of-state) Oregon corporations. Willamette Week has written about the money in politics. http://www.wweek.com/news/2016/10/26/a-killer-dispatched-from-california... Willamette Week also reported in their "murmurs" column that health "nonprofit" Cambia contributed $500,000. "Cambia is a taxpaying nonprofit C corporation that would be subject to Measure 97 tax." http://www.wweek.com/news/2016/10/12/murmurs-portland-failing-to-watchdo... Quite the oxymoronic statement! Cambia is also contributing directly and indirectly (through Regence Oregon PAC) to politicians. This is true for "nonprofit" PacificSource. That got me wondering about the "nonprofit" status of these two insurance companies. I couldn't find any 990s. How much are money are their corporate executives raking in? Are their "nonprofit" subsidiaries paying Oregon income taxes? What benefits does this ambiguous "nonprofit" status confer--other than opacity of incomes and PR? I made a complaint to the Oregon Department of Justice. Now I wonder whether 1986 tax law gives an unfair advantage to under-regulate BC/BS and other similarly organized "nonprofit" insurance companies. Indeed, should we expect more for-profits to masquerade as "nonprofits"? 26 U.S. Code § 833 - Treatment of Blue Cross and Blue Shield organizations, etc. https://www.law.cornell.edu/uscode/text/26/833 Here is response from Oregon DOJ: Dear Dr. Alman, we have received and reviewed your four complaint messages. I wanted to pass along that most of the issues included in your complaints are not issues our office has authority to investigate, or are not contrary to Oregon nonprofit laws. For example, while most entities like BlueCross or PacificSource are incorporated as nonprofit corporations they are not necessarily required to register with our office or file Form 990s with the IRS. Instead, these corporations file standard for-profit corporate tax filings with the IRS and state Department of Revenue. Alternatively, several other types of organizations incorporate as nonprofit in Oregon, register with our office, but never seek IRS exempt status, so they also file corporate tax forms and not public Form 990s. In summary, how a corporation incorporates under state law is not necessarily an indicator of whether or not they will be 990 filers. With regards to the corporations and related charitable foundations, there is no prohibition against them donating funds to PACs or even engaging in direct lobbying activity. However, the IRS determines whether or not these activities exceed allowable levels, or if executive compensation is excessive. In our experience, the reported levels to date compared to revenue levels would like not likely raise alarm with the IRS. However, in election years, it is not unusual that the IRS finds (long after elections) that organizations have violated lobbying exemption limits, or have engaged in prohibited political activity. I would direct you to these agencies to address some of your specific questions: Property taxes: http://vance.co.multnomah.or.us/cgi-bin/tax-page?R272212 State property tax exemption information: http://www.oregon.gov/dor/programs/property/Pages/exemptions.aspx IRS Nonprofit Referral Form: https://www.irs.gov/pub/irs-pdf/f13909.pdf Oregon Insurance Division: https://www.oregon.gov/DCBS/insurance/gethelp/Pages/fileacomplaint.aspx We appreciate you contacting our office and we will maintain your complaints on file in the event that we receive additional related complaints. Sincerely, Doug Pearson. Douglas W. Pearson, CFE Chief Investigator | Charitable Activities Section |Civil Enforcement Division Oregon Department of Justice 100 SW Market Street, Portland, OR 97201 971.673.1955