- 27 -
Health Association v. Commissioner, 71 T.C. 158 (1978). In
particular, we found that, like Sound Health Association,
Geisinger HMO was operated for the charitable purpose of
promoting health insofar as its class of possible enrollees was
practically unlimited, it had adopted a subsidized dues program
for its enrollees, it offered health care services to Medicare
recipients at a reduced rate, and it was not operated for the
private benefit of its enrollees. Geisinger Health Plan v.
Commissioner, T.C. Memo. 1991-649.
In Geisinger II, the United States Court of Appeals for the
Third Circuit reversed and remanded our decision in Geisinger I.
Geisinger Health Plan v. Commissioner, supra at 1218-1219.
Although the Court of Appeals agreed with the Court that an HMO
seeking tax-exempt status must provide a community benefit, see
id., the Court of Appeals concluded that Geisinger HMO did not
provide a primary benefit to the community but, rather, provided
benefits solely to its members. The Court of Appeals, looking at
the totality of the circumstances, stated:
GHP standing alone does not merit tax-exempt status
under section 501(c)(3). GHP cannot say that it
provides any health care services itself. Nor does it
ensure that people who are not GHP subscribers have
access to health care or information about health care.
According to the record, it neither conducts research
nor offers educational programs, much less educational
programs open to the public. It benefits no one but
its subscribers. [Id.]
Further, the Court of Appeals attached little significance to
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011