To amend the Internal Revenue Code of 1986 with respect to the treatment of certain nonprofit organizations providing health benefits, and for other purposes.

Amends the Internal Revenue Code to provide that the special deduction and rules extended to certain existing Blue Cross or Blue Shield organizations shall be extended to an organization that is not a health maintenance organization and is organized under and governed by State laws which are specifically and exclusively applicable to not-for-profit health insurance or health service type organizations.

Provides that the limitation on deductions for certain dividends paid on employer securities held in an employee stock ownership plan does not apply to employer securities acquired with assets transferred from a defined benefit plan through an employer reversion transaction.

Declares that the characterization (at the time of issuance) of a corporate interest as stock or debt by the corporate issuer is binding on the issuer and on all holders (but not binding on the Secretary of the Treasury). Requires holders who treat such interest in an inconsistent manner to disclose such inconsistent treatment on the first tax return for the first year during which such instrument was held.