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Publication 557
taxmap/pubs/p557-041.htm#en_us_publink1000294222

New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers(p59)

rule
Section 501(c)(29), added to the Code by section 1322(h)(1) of the Affordable Care Act, provides for the exemption of qualified nonprofit health insurance issuers (QNHIIs) that have received a loan or grant under the Centers for Medicare and Medicaid Services (CMS) CO-OP program for periods that they meet both the requirements of section 1322 of the Affordable Care Act and of any loan agreement with CMS. The CO-OP program provides loans and repayable grants to foster the creation of member governed QNHIIs that will operate with a strong consumer focus and offer qualified health insurance plans. Notice 2011-23, 2011-13 I.R.B. 588, discussed requirements for tax exemption for QNHIIs described in new Internal Revenue Code section 501(c)(29). IRS Notice 2011-23. The Notice provides guidance on the annual filing requirement for organizations that intend to apply for recognition of section 501(c)(29) status. Revenue Procedure 2012-11, 2012-7 I.R.B. 368, issued in conjunction with temporary regulations and a notice of proposed rulemaking, sets out the procedures for issuing determination letters and rulings on the exempt status of QNHIIs and provides guidance on the effective date of exempt status. Revenue Procedure 2012–11.