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Why some nonprofit health plans pay taxes
Sacramento Business Journal

Blue Shield of California is not the only nonprofit health plan on the hook for income taxes. The IRS revoked VSP’s tax-exempt status in 2003. The Rancho Cordova-based eye-care giant also wasn’t paying state income taxes, but has since paid both federal and state taxes back to 2003. It continues to pay them, even though the corporate structure has stayed the same since VSP was founded in 1955. Sacramento-based Western Health Advantage, a small nonprofit health plan like Blue Shield and VSP, also pays both state and federal income taxes.