---
kind: "section"
citation: "45 C.F.R. § 156.510"
title: "45"
number: "156.510"
heading: "Eligibility."
url: "https://uscodex.org/cfr/45/156.510"
---

# §156.510. Eligibility.

- (a) **General.** In addition to the eligibility standards set forth in the CO-OP program Funding Opportunity Announcement (FOA), to be eligible to apply for and receive a loan under the CO-OP program, an organization must intend to become a CO-OP and be a nonprofit member organization.
- (b) **Exclusions from eligibility.**
  - (1) **Subject to paragraph (b)(2) of this section, an organization is not eligible to apply for a loan if—**
    - (i) The organization or a sponsor of the organization is a pre-existing issuer, a holding company (an organization that exists primarily to hold stock in other companies) that controls a pre-existing issuer, a trade association comprised of pre-existing issuers and whose purpose is to represent the interests of the health insurance industry, a foundation established by a pre-existing issuer, a related entity, or a predecessor of either a pre-existing issuer or related entity;
    - (ii) The organization receives 25 percent or more of its total funding (excluding any loans received from the CO-OP Program) from pre-existing issuers, holding companies (organizations that exists primarily to hold stock in other companies) that control pre-existing issuers, trade associations comprised of pre-existing issuers and whose purpose is to represent the interests of the health insurance industry, foundations established by a pre-existing issuer, a related entity, or a predecessor of either a pre-existing issuer or related entity; or
    - (iii) A State or local government, any political subdivision thereof, or any instrumentality of such government or political subdivision is a sponsor of the organization. The organization receives 40 percent or more of its total funding (excluding any loans received from the CO-OP Program) from a State or local government, any political subdivision thereof, or any instrumentality of such a government or political subdivision.
  - (2) The exclusions in paragraphs [(b)(1)(i)](#b-1-i) and [(b)(1)(ii)](#b-1-ii) of this section do not exclude from eligibility an applicant that:
    - (i) Has as a sponsor a nonprofit, not-for-profit, public benefit, or similarly organized entity that is also a sponsor for a pre-existing issuer but is not an issuer, a foundation established by a pre-existing issuer, a holding company that controls a pre-existing issuer, or a trade association comprised of pre-existing issuers and whose purpose is to represent the interests of the health insurance industry, provided that the pre-existing issuer sponsored by the nonprofit organization does not share any of its board or the same chief executive with the applicant; or
    - (ii) Has purchased assets from a preexisting issuer provided that it is an arm's-length transaction where each party acts independently and has no other relationship with the other party.
  - (3) The exclusion of any instrumentality of a State or local government in [paragraph (b)(1)(iii)](#b-1-iii) of this section does not exclude from eligibility or sponsorship an organization that:
    - (i) Is not a government organization under State law;
    - (ii) Has no employee of a State or local government serving in his or her official capacity as a senior executive (for example, President, Chief Executive Officer, or Chief Financial Officer) for the organization; and
    - (iii) Has a board of directors on which fewer than half of its directors are employees of a State or local government serving in their official capacities.

## Notes

### Amendments

[76 FR 77411, Dec. 13, 2011, as amended at 77 FR 18474, Mar. 27, 2012]

### Authority

Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.

### Source

Source: 76 FR 77411, Dec. 13, 2011, unless otherwise noted.

### Amendments

[76 FR 77411, Dec. 13, 2011, as amended at 77 FR 18474, Mar. 27, 2012]