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enrollees.
Against this backdrop, we further note that, unlike the HMO
in Sound Health Association v. Commissioner, supra, petitioner
did not own or operate its own medical facilities, nor did
petitioner employ its own physicians. Consequently, petitioner
could not provide free medical care to those otherwise unable to
pay for medical services. Additionally, petitioner did not
establish a subsidized premiums program, conduct research, or
offer free education programs to the public. Petitioner’s Core
Wellness Program was offered exclusively to its enrollees.
We recognize that petitioner’s operations, and particularly
petitioner’s practice of setting premiums based upon an adjusted
community rating system, likely allowed its enrollees to obtain
medical care at a lower cost than might otherwise have been
available. However, the benefit associated with these cost
savings is more appropriately characterized as a benefit to
petitioner’s enrollees as opposed to the community at large.
In sum, the record does not establish that petitioner
provides a community benefit that would qualify petitioner for
tax-exempt status pursuant to section 501(c)(3). We next
consider whether petitioner qualifies for tax-exempt status as an
integral part of a related tax-exempt entity.
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