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1. Whether Petitioner Satisfies The Community Benefit Test
The community benefit test requires consideration of a
variety of factors that indicate whether an organization is
involved in the promotion of health on a communitywide basis.
See Sound Health Association v. Commissioner, 71 T.C. at 181-185
(comparing Sound Health Association’s operations with “hospital
A” in Rev. Rul. 69-545, 1969-2 C.B. 117). Considering all the
facts and circumstances surrounding petitioner’s operations, even
though petitioner is instrumental in arranging for the provision
of health care to a large number of individuals in the geographic
area that it serves, we are not persuaded that petitioner
provides a meaningful community benefit. Accordingly, petitioner
does not qualify for tax-exempt status as an organization
described in section 501(c)(3) based upon the provision of a
community benefit.
Significantly, unlike the HMOs in Geisinger Health Plans v.
Commissioner, supra, and Sound Health Association v.
Commissioner, supra, petitioner did not offer its health plans to
the general public. Petitioner offered its SelectMed plan to
only employees of large employers; i.e., employers with more than
100 employees. Moreover, petitioner no longer offers its Senior
Care plan to Medicare patients. In sum, petitioner operates in a
manner that substantially limits its universe of potential
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