Why You Benefit from Our Structure as a Nonprofit Organization

As an organization that reports annual revenue, we are often asked, how can Blue Cross Blue Vermont be considered a nonprofit organization?

Being a nonprofit isn’t about the money a company takes in or pays out – as much as it is about the purpose put behind that money. Many companies in our health care industry are investor-owned, meaning their primary purpose is to maximize value for those investors in the form of profit. At Blue Cross Vermont, we have no investor owners. Instead, we are mission-driven to serve our members and to return value to our communities.

How do we accomplish these objectives? There are many community benefits of our corporate structure as a nonprofit organization, including:

• We have no shareholders – meaning that health care dollars go back into health care, including 89.7 percent of every premium dollar goes directly to paying health care claims.  
• We give back to the community – including $200,000 in corporate contributions to 100 not-for-profit organizations in Vermont in 2022.
• Our work is informed by community leaders who bring diverse perspectives from many sectors of Vermont’s economy.
• Our business is not primarily motivated by profit. In fact, operating expenses average approximately one percent.
• We pay taxes – in 2022, we paid taxes and assessments totaling approximately $22.8 million.

That final point is a critical difference with our nonprofit structure, in that we are not a charity. Traditionally, private nonprofit charitable organizations receive tax exemptions from local, state, and federal governments in exchange for delivering a community benefit – for providing a service that can be considered part of the organization’s nonprofit charitable work. For example, like the care provided to the uninsured by many nonprofit hospital systems, these “community benefits” have a financial valuation that the government agrees offsets the tax exemptions provided to the nonprofit. We are different. Blue Cross Vermont pays taxes while also providing a substantial community benefit through our support and sponsorship of community events and organizations.

Being a nonprofit allows us to focus on the right priorities – our members’ care and making health care work better for Vermonters. This approach has been in place since we were founded more than 40 years ago. These tangible benefits are felt every day in our members’ care and within the Vermont communities we call home.