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its heavy reliance on independent physicians, would be essential
to or substantially related to Health Services’ exempt functions.
To the contrary, petitioner’s method of arranging for its
enrollees to receive physician services suggests that petitioner
conducted its operations on a scale “larger than is reasonably
necessary to accomplish the purposes of the exempt entities”.
Geisinger Health Plans v. Commissioner, 100 T.C. at 406.11
In sum, petitioner’s practice of offering its SelectMed
health plan solely to the employees of large employers does not
provide the community benefit required for petitioner to qualify
as an organization described in section 501(c)(3). Further,
petitioner’s operations are not essential to or substantially
related to Health Services’ exempt functions. Consequently,
petitioner is not entitled to the declaratory judgment it seeks.
To reflect the foregoing,
Decision will be entered
for respondent.
11 Under the circumstances, we need not consider whether we
would apply the “boost” test set forth in Geisinger Health Plan
v. Commissioner, 30 F.3d 494, 501 (3d Cir. 1994).
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