The U.S. Postal Service proposed a rule yesterday in the Federal Register that would change the Domestic Mail Manual to let nonprofit groups mail ads that offer general types of insurance at the Nonprofit Standard rate, even if the insurance is underwritten by the nonprofit organization itself.
Nonprofit mailers also could send such material at the nonprofit rate even if the coverage is promoted by the group in such a way that members may make tax-deductible donations to the organization of their proportional shares of income in excess of costs that the nonprofit group receives from the purchase of the coverage by its members.
Nonprofit mailers currently cannot use the nonprofit rate in these circumstances.
The USPS was challenged in U.S. District Court for the District of Columbia in the mid-1990s by two groups authorized to mail qualifying matter at nonprofit rates. Each organization offered insurance to its members, and the USPS had determined that the mailings promoting insurance were ineligible for nonprofit rates. The court reversed the postal service's decisions.
One group was a fraternal benefit organization that offered life, medical, disability and long-term-care insurance to members. The policies were underwritten by the organization itself.
The other group gave charitable grants for legal research funded through tax-deductible donations of dividends that otherwise would be payable to its members who were insured through group insurance policies that the organization offered. In this case, the policies were underwritten by major insurance carriers.
The public can submit comments about the proposal by July 15 to the Manager, Mailing Standards, U.S. Postal Service, 475 L'Enfant Plaza SW, Room 3436, Washington, DC 20260-3436. The full proposed ruling can be viewed at: http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/04-13347.htm.
