Health Care Tax

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Crowell & Moring's Tax practice represents health care industry clients with respect to federal and state tax matters in business transactions, controversies, and litigation. Our practice encompasses all U.S. tax aspects of business dealings and all administrative and litigation forums.

We have extensive experience advising charitable and social welfare health care organizations that are recognized as tax-exempt under Code section 501(c)(3), 501(c)(4), and 501(c)(9) (Voluntary Employees’ Beneficiary Associations) on whether proposed activities are consistent with their exempt status, structuring and ongoing administration and compliance issues (including formation, best practices, policies and procedures), unrelated business income issues, and issues arising from participation in partnerships, LLCs, and joint ventures. We also provide counseling on application of Code section 501(m) and a range of issues affecting trade and professional associations exempt under Code section 501(c)(6).

In the transactional area, we counsel health care organizations on the tax aspects of mergers, stock and asset acquisitions, joint ventures, and debt and equity financings. We have drafted numerous executive compensation arrangements, including option and stock plans, for health care clients, and advise on the application of Code sections 162(m)(6), 280G, and 409A. We also work with clients on state tax law matters, including, when applicable, federal preemption of state tax obligations.

We also have extensive experience advising our health care industry clients on all aspects of ERISA and the Affordable Care Act (ACA), including the complex compliance and reporting requirements under Code section 4980H (also known as employer shared responsibility or "pay or play") as well as regulatory and compliance issues concerning HSA’s, HRA’s, FSA’s and other health and welfare benefit plans.

Recent engagements for health care clients include:

  • $440 million stock acquisition of a health management company by a NYSE-listed insurance company. 
  • $165 million merger acquisition of a medical diagnostic company by a NASDAQ corporation.
  • Joint venture establishing a high-volume specialty pharmacy business between two NYSE-listed corporations. 
  • Advised an integrated health care delivery network in consideration of application for tax-exempt status. 
  • Advised on structure, establishment and administration of Voluntary Employees’ Beneficiary Associations under Code Section 501(c)(9).
  • Provided advice regarding application of the Code and ERISA to health insurers and Pharmacy Benefit Managers (PBM’s) with respect to the application of prohibited transaction rules and fiduciary compliance issues regarding health and welfare plans.
  • Provided advice regarding High Deductible Health Plans (HDHPs), HSA’s, FSA’s, HRA’s and related tax issues. 
  • Advised health insurance issuers on application to state governmental entities regarding state law requirements applicable to group Medicare Part D prescription drug plans offered to retirees.
  • Counseled managed care organization in developing tax-qualified travel reimbursement program for employees.
  • Advised tax-exempt health plan in connection with tax consequences of joint marketing agreement.
  • Counseled for-profit health plans and other health care delivery entities in structuring joint ventures with tax-exempt entities.
  • Counseled integrated delivery network in consideration of application for tax-exempt status.
  • Advised hospice in structuring compensation arrangements to doctors.
  • Advised university health system in creation of new fund entities to invest corporate and pension assets.
  • Counseled private equity sponsor in connection with its acquisition of several dermatology businesses.
  • Advised health insurance issuer in resolving Code section 4980H compliance issues, including tax reporting and employee classification issues.

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Crowell & Moring LLP is an international law firm with offices in the United States, Europe, MENA, and Asia that represents clients in litigation and arbitration, regulatory and policy, and transactional and corporate matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation and government-facing matters, as well as its ongoing commitment to pro bono service and diversity, equity, and inclusion.

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