With Billions in the Bank, Blue Shield of California Loses State Tax-Exempt Status

Authorities have revoked the tax-exempt status of nonprofit Blue Shield of California, potentially putting it on the hook for tens of millions of dollars in state taxes each year. The move by the California Franchise Tax Board comes as the state's third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves.

The state quietly stripped the San Francisco insurer of its exemption from California income taxes in August. The company held that since its founding in 1939.