IHC Health Plans, Inc. - Page 8

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               Respondent recognized Health Services as an organization               
          described in section 501(c)(3) that is exempt from taxation                 
          pursuant to section 501(a), and as a public charity described in            
          sections 509(a)(1) and 170(b)(1)(A)(iii).                                   
          C.  IHC Health Plans, Inc.                                                  
               As a further step in its reorganization plan, IHC initially            
          intended to organize an affiliate to provide professional,                  
          general liability, and worker's compensation insurance.  However,           
          upon further reflection, IHC decided to create an affiliate to              
          operate as a State-licensed health maintenance organization                 
               IHC’s decision was based on its consideration of an HMO’s              
          potential for generating medical care cost savings and                      

          2    Utah Code Ann. sec. 31A-8-101(5) (1999 Repl.) defines the              
          term “Health maintenance organization” as follows:                          
               (5) “Health maintenance organization” means any                        
               person, other than an insurer licensed under Chapter 7                 
               or an individual who contracts to render professional                  
               or personal services that he performs himself, which:                  
                         (a) furnishes at a minimum, either directly                  
                    or through arrangement with others, basic health                  
                    care services to an enrollee in return for prepaid                
                    periodic payments agreed to in amount prior to the                
                    time during which the health care may be                          
                    furnished; and                                                    
                         (b) is obligated to the enrollee to arrange                  
                    for or to directly provide available and                          
                    accessible health care.                                           

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Last modified: May 25, 2011