Do Horizon BCBSNJ’s assets belong to the State of New Jersey or the people of New Jersey?
No. The company owns all of its assets. New Jersey law states that “conducting the business of insurance” is one of the purposes of the health service corporation (N.J.S.A. 17:48E-1). Under its certificate of incorporation, Horizon BCBSNJ operates a health insurance business for the benefit of its members. A health service corporation is defined as a “charitable and benevolent institution.” This designation dates back to 1938 and was given for the purpose of exempting health service corporations from taxes. Most of the former tax exemptions have been eliminated. Horizon BCBSNJ has paid federal taxes since 1986 and state premium taxes since 1989. Last year, Horizon BCBSNJ paid nearly $157 million in federal and state taxes and assessments. Upon conversion, however, New Jersey law requires that 100% of the initial stock of the company (its fair market value) be placed into an independent foundation to be used solely for the “purposes of expanding access to affordable, quality health care
