AO 2024-04: Independence Blue Cross PAC is no longer affiliated with BluePAC
Independence Health Group, Inc. (IHG) and Independence Blue Cross LLC Political Action Committee (IBC PAC) are no longer affiliated with the Blue Cross Blue Shield Association (BCBSA) or its separate segregated fund (SSF), the Blue Cross Blue Shield Association Political Action Committee (BluePAC).
Background
IBC PAC is the SSF of AmeriHealth, Inc., a subsidiary of IHG. AmeriHealth also owns Independence Blue Cross, LLC (IBC).
IHG and BCBSA have treated IBC PAC and BluePAC as affiliated committees under the Federal Election Campaign Act (the Act) because IHG is a BCBSA member and owns a 100 percent interest in AmeriHealth, Inc. and IBC. In AO 1990-22 (BCBSA), the Commission concluded that BCBSA is affiliated with each of its licensed plans. IHG asserts in its request that in the intervening years, the relationship between the organizations has evolved to the point where IHG no longer believes that the organizations are affiliated.
IHG holds licensing agreements with BCBSA that provide it with exclusive rights to sell products utilizing the Blue Cross name and marks in its service area within Pennsylvania. Additionally, IHG offers a wide range of products that do not fall under the umbrella term of BCBSA business (Blue Business), and that non-Blue business extends well beyond the borders of its BCBSA licensing area. IHG also has a number of non-health insurance subsidiaries.
Analysis
Political committees are considered affiliated if they are established, maintained, or controlled by the same corporation, labor organization, person or group of persons, including any parent, subsidiary, branch or division. When these criteria are not directly met, the Commission will examine the relationship between sponsoring organizations and the committees themselves to determine whether the entities are affiliated.
One factor the Commission considers is the provision of funds or goods by one organization to the other. Here, BCBSA provides IHG the exclusive rights to market products under the Blue Cross name in Southeastern Pennsylvania as well as administrative services to IHG for the benefits it offers to federal employees and retirees. In exchange, IHG provides funds to BCBSA in the form of licensing and membership fees. The Commission has previously concluded that a similar relationship weighs in favor of finding the entities to be affiliated.
Among other factors, however, the circumstances do not indicate affiliation. For instance, neither IHG nor BCBSA have common shareholders or shared equity, and while each exercises some degree of governance over the other, that factor is mitigated by the fact that one entity controls only one seat on the other's board of directors. Neither IHG nor BCBSA have common or overlapping members, officers, or employees, and neither played a role in forming the other.
Finally, the Commission examines the patterns of contributions made by both committees. Since 2019, the number of federal committees receiving contributions from both IBC PAC and BluePAC has declined. During the 2020 election cycle, the two committees collectively gave to 247 committees but only 12 percent received contributions from both. During the 2022 cycle, that number dropped to 10.4 percent. During the ongoing cycle, that number has dwindled to 7.6 percent.
An examination of these circumstances and of the ongoing relationship between the entities involved led the Commission to conclude that IHG and BCBSA as well as their SSFs are no longer affiliated.
Date Issued: May 1, 2024; Length: 12 pages
Citations
Statutes
52 U.S.C. § 30116(a)(5)
Limitations on contributions and expenditures
Regulations
11 CFR 100.5(g)(4)
Political committee; Determination of affiliation
11 CFR 110.3(a)(3)
Contribution limitations for affiliated committees; Factors indicating affiliation
Advisory opinions
Advisory Opinion 1999-39
WellPAC
Advisory Opinion 1990-22
BCBSA
Advisory Opinion 2014-11
HCSC