California Blue Shield Gives Up Tax Exempt Charity Status For $1.2 Billion Acquisition Of CareFirst

On October 8, 2015, the California Department of Managed Health Care (DMHC) approved Blue Shield of California's proposed acquisition valued at $1.2 billion, of CareFirst. Blue Shield agreed to the DMHC's condition that it use $200 million in reserves to fund projects to improve health care quality and access statewide. Blue Shield also tacitly agreed with the DMHC's determination that Blue Shield, although structured as a not-for-profit organization, does not operate as a public charity that would be exempt from state income taxes. Until August 2014, Blue Shield had been exempt from state income . . .