small group
(3) Other organizations (A) In general An organization meets the requirements of this paragraph for any taxable year if— (i) substantially all the activities of such organization involve the providing of health insurance, (ii) at least 10 percent of the health insurance provided by such organization is provided to individuals and small groups (not taking into account any medicare supplemental coverage), (iii) such organization provides continuous full-year open enrollment (including conversions) for individuals and small groups, (iv) such organization’s policies covering individuals provide full coverage of pre-existing conditions of high-risk individuals without a price differential (with a reasonable waiting period), and coverage is provided without regard to age, income, or employment status of individuals under age 65, (v) at least 35 percent of its premiums are determined on a community rated basis, and (vi) no part of its net earnings inures to the benefit of any private shareholder or individual. (B) Small group defined For purposes of subparagraph (A), the term “small group” means the lesser of— (i) 15 individuals, or (ii) the number of individuals required for a small group under applicable State law. (C) Special rule for determining adjusted surplus For purposes of subsection (b), the adjusted surplus of any organization meeting the requirements of this paragraph as of the beginning of the 1st taxable year for which it meets such requirements shall be its surplus as of such time.
Source
26 USC § 833(c)(3)
Scoping language
None identified, default scope is assumed to be the parent (part II) of this section.