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Group was licensed to operate an HMO in Utah and Wyoming.
In 1991, HCFA recognized Group as a federally qualified HMO.
In 1991, Group filed with respondent an application for
recognition as an organization that is exempt from taxation
pursuant to section 501(c)(3). In June 1999, respondent denied
Group’s application for tax-exempt status.
3. IHC Benefit Assurance Company
In May 1992, petitioner organized IHC Benefit Assurance
Company (Benefit), a taxable business corporation, to underwrite
traditional indemnity health insurance risks, particularly
point-of-service options offered by petitioner, Care, and Group.
Petitioner was Benefit’s sole shareholder.
4. Management Services
Health Services provided management services to petitioner
and its affiliates on a centralized basis, including legal
services, human resources, public relations, and treasury
functions. Each affiliate was subject to an annual intercompany
overhead allocation charge for these services.
Petitioner provided general management and administrative
services to Care and Group including marketing, sales,
enrollment, customer service, claims processing, underwriting and
actuarial services, provider relations and contracting,
management information systems, and general accounting services.
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