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HEALTH INSURANCE PROVIDERS:
Blue Cross / Blue Shield

 

Domestic, Foreign and Alien Companies

Here in the United States, companies are usually organized and chartered under the laws of one particular state and it is common for them to do business in many states. A company that operates its home office in the state where it is organized is known in that state as a domestic company. In any other states where they do business the company is considered a foreign company. If the home office of a company is located outside the United States, it is considered an alien company. No matter whether it is domestic, foreign or alien a company must be registered in every state in which they operate.

Blue Cross/Blue Shield

These service organizations represent producers cooperatives. Hospitals and physicians who sponsor Blue Cross/Blue Shield plans are providing the insurance, therefore they are considered to be the producers of the cooperative.

Originally Blue Cross and Blue shield were separate voluntary and tax-exempt associations. Blue Cross provided payments to hospitals and Blue Shield covered physicians, medical and surgical fees. People originally covered under these plans were traditionally known as subscribers since Blue Cross and Blue shield differ from traditional insurance companies.

In most states, the two have merged, but each group still covers the expenses for which they were initially created. Over the years the tax advantages they originally enjoyed have deteriorated and many states have removed their exempt status. Additionally the federal Tax Reform Act of 1986 now makes them taxable as insurance companies.

 

          

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