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substantial part of its activities consists of providing
commercial type insurance.
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 charitable activity of promoting health on a
communitywide basis. Considering all the facts and circumstances
surrounding petitioner’s operations, we conclude that petitioner
did not provide a meaningful community benefit, and, therefore,
petitioner does not qualify for exemption pursuant to section
501(a) as an organization described in section 501(c)(3).
Much like the HMOs under consideration in Sound Health
Association v. Commissioner, supra, and Geisinger Health Plan,
supra, petitioner offered its health plans to a broad cross-
section of the community including individuals, the employees of
both large and small employers, and individuals eligible for
Medicaid benefits. Petitioner offered several different health
plans encompassing a range of health services at varying prices.
There is no indication in the record that petitioner rejected any
potential enrollees, although it was petitioner’s practice to
deny an enrollee coverage with respect to certain preexisting
conditions for the first 12 months of enrollment.
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