2016-11-14T17:55:50-06:00 2015-12-31 PricewaterhouseCoopers LLP 101 SEAPORT BOULEVARD BOSTON MA 02210 990 2015-01-01 042452600 HARVARD PILGRIM HEALTH CARE INC % BETH CREAVIN HARV 7812636000 93 WORCESTER STREET WELLESLEY MA 024819181 CHARLES R GOHEEN TREASURER 7812636000 2016-11-14 true GWEN SPENCER P00641463 6175305000 2015 2017-02-10 21:41:12Z ERIC H SCHULTZ 93 WORCESTER STREET WELLESLEY MA 024819181 1979581176 false X www.harvardpilgrim.org X 1969 MA SEE SCHEDULE O 12 11 1375 0 220367743 -6958288 40901467 41478344 1713071603 1758496615 32441959 30785590 2966150 3141773 1789381179 1833902322 4242389 6220994 1455756684 1550231914 60668297 66096315 0 0 0 253161686 245677244 1773829056 1868226467 15552123 -34324145 947570384 958882498 373138343 473885211 574432041 484997287 X SEE SCHEDULE O false false 1784912599 6220994 1759346008 TO IMPROVE THE QUALITY AND VALUE OF HEALTH CARE FOR THE PEOPLE AND COMMUNITIES WE SERVE. AT 12/31/15, HPHC, INC. HAD 304,395 FULLY INSURED MEMBERS, AMBULATORY ENCOUNTERS WERE 2,283,035 AND HOSPITAL DAYS INCURRED WERE 124,473. 41478345 0 0 THE HARVARD PILGRIM HEALTH CARE INSTITUTE, LLC PERFORMS RESEARCH AND RESEARCH ADMINISTRATION FOR GRANTS AND CONTRACTS AWARDED TO HPHC, INC. 1826390944 true true false true false false false false false false true true false true true true false true false false false false false false false false false true false true false false false false false false false false false false false false true true true true true false true 24963 0 true 1375 true true true false false false false false false false false false X 12 11 true false false false false false false true true false false true true true true true true true true false MA X BETH CREAVIN 6175095692 93 WORCESTER STREET Wellesley MA 024819181 X MARY ANN TOCIO CHAIRMAN/DIRECTOR 5.0 0.0 X 22450 0 0 Hedwig V Whitney DIRECTOR 5.0 0.0 X 21050 0 0 EDWARD F MCCAULEY CPA DIRECTOR (UNTIL 5/15) 5.0 0.0 X 13750 0 0 JOSEPH F O'DONNELL MD DIRECTOR 3.0 2.0 X 16450 0 0 SUSAN V DUPREY DIRECTOR 3.0 0.0 X 15250 0 0 JOYCE A MURPHY VICE CHAIR/DIRECTOR 5.0 0.0 X 20450 0 0 SCOTT S HARTZ DIRECTOR 3.0 0.0 X 16733 0 0 EARL W BAUCOM DIRECTOR 5.0 0.0 X 19850 0 0 SHELBY M CHODOS DIRECTOR 3.0 0.0 X 18050 0 0 TRAMMELL LOUIS GUTIERREZ DIRECTOR (UNTIL 1/15) 3.0 0.0 X 600 0 0 Myechia Minter-Jordan Director 3.0 0.0 X 17150 0 0 MICHAEL J SHEA DIRECTOR 5.0 0.0 X 19192 0 0 RAYMOND PAWLICKI DIRECTOR (AS OF 9/15) 3.0 0.0 X 1000 0 0 ERIC H SCHULTZ PRESIDENT/CEO/DIRECTOR 35.0 15.0 X X 1366581 0 306781 CHARLES R GOHEEN TREASURER 40.0 10.0 X 633786 0 145531 DEBORAH A NORTON CIO (Officer until 5/15) 50.0 0.0 X 540636 0 135933 JOHN F LANE CHIEF HR OFFICER (UNTIL 1/15) 50.0 0.0 X 421570 0 73410 MICHAEL S SHERMAN MD SR VP CMO (OFFICER UNTIL 5/15) 40.0 10.0 X 470298 0 52894 TU NGUYEN VP/CHIEF ACTUARY (UNTIL 10/15) 40.0 10.0 X 236560 0 42291 TISA K HUGHES SECRETARY AND CLERK 40.0 10.0 X 508172 0 129810 VINCENT CAPOZZI Sr VP Sales & MARKETING 40.0 10.0 X 469243 0 47892 BETH ANN ROBERTS SR VP REGIONAL MARKETS 35.0 15.0 X 334904 0 46773 RICHARD WEISBLATT CHIEF OF INNOVATION & STRATEGY 40.0 10.0 X 421541 0 93655 PRANAV MEHTA SVP PROD & BUS PLAN 40.0 10.0 X 293971 0 57188 MARTHA MURPHY VP SALES 40.0 10.0 X 331405 0 42208 Richard Platt EXEC DIR OF HPHC INSTITUTE 50.0 0.0 X 395312 0 23414 Cynthia Napier Rosenberg SR MEDICAL DIR (until 10/15) 40.0 10.0 X 319080 0 41042 MICHELLE J CLAYMAN Sr VP Fin/Treas.(as of 11/15) 35.0 15.0 X 313557 0 48129 WILLIAM GRAHAM SVP PUBLIC AFFAIRS & GVMT PROG 40.0 10.0 X 299482 0 48607 THOMAS F MALONEY VP - Deputy General Counsel 40.0 10.0 X 263418 0 49240 SCOTT ALLEN Senior Actuarial Consultant 20.0 5.0 X 235276 0 0 8056767 0 1384798 365 true true false DELL MARKETING LP 2300 W PLANO PARKWAY PLANO TX 75075 SEE SCHEDULE O 121320220 HILL HOLIDAY CONNORS COSMOPULOS INC PO BOX 3600-16 BOSTON MA 022410616 ADVERTISING 4831491 ORACLE AMERICA INC 500 ORACLE PARKWAY REDWOOD SHORES CA 94065 IT CONSULTING 3357362 TERADATA OPERATIONS INC 125 HIGH STREET BOSTON MA 02110 CONSULTING 1440821 BOSTON CONSULTING GROUP INC EXCHANGE PLACE 31ST FLOOR BOSTON MA 02109 MGMT CONSULTING 565000 401 31066739 10411605 41478344 MEMBER PREMIUMS & FEES 524114 1540268502 1540268502 PPO PREMIUMS (FULLY INSURED) 524298 218228113 218228113 1758496615 15386512 15386512 0 0 3992800 1700420 2292380 0 2292380 2139630 152750 159377512 143978434 15399078 15399078 15399078 0 0 0 PROVIDER SETTLEMENT & OTHER 900099 849393 849393 849393 1833902322 1541117895 220367743 30938340 X 6220994 6220994 0 0 1550231914 1550231914 7320015 5856012 1464003 909620 727696 181924 42596627 34077302 8519325 3428220 2742576 685644 8411435 6729148 1682287 3430398 2744318 686080 0 406615 406615 2977328 2977328 1805312 1805312 0 550968 550968 14485037 14485037 5530441 5530441 3879913 3103931 775982 62249726 49799781 12449945 0 6388486 5110788 1277698 1295970 1295970 0 199537 199537 4691560 3753248 938312 0 20413501 16330801 4082700 0 FEDERAL & STATE ASSESSMENTS 28509071 28509071 PREMIUM TAX EXPENSE 3111750 3111750 BROKER FEES 42488805 42488805 RESEARCH GRANT EXPENSE 44363873 41478344 2885529 2329351 1863480 465871 1868226467 1826390944 41835523 0 58639548 66903364 2761706 10457206 0 0 74837005 125612812 0 0 0 0 0 0 0 0 3142797 3364254 411987061 382220472 34144406 29766589 135537157 137291911 476826980 400082368 0 0 0 0 161680785 185403994 947570384 958882498 236962177 257322414 0 0 0 0 0 0 0 0 0 0 29000000 29000000 0 0 107176166 187562797 373138343 473885211 X 0 0 0 0 574432041 484997287 574432041 484997287 947570384 958882498 X -34324145 -39125520 -15985089 X X false true X true true true X 35248737 39383858 38820660 40901467 41478344 195833066 1923464188 1792048879 1661588555 1523957313 1540268502 8441327437 0 0 0 1958712925 1831432737 1700409215 1564858780 1581746846 8637160503 2136833 1783862 670272 4590967 273971394 158993588 35731402 46237943 44558194 559492521 276108227 160777450 36401674 46237943 44558194 564083488 8073077015 28486210 26701263 25536284 24954982 19379312 125058051 0 28486210 26701263 25536284 24954982 19379312 125058051 0 4325170 672396 797805 584921 849393 7229685 1991524305 1858806396 1726743304 1590398683 1601975551 8769448239 0.92059 0.89951 0.01426 0.01461 X SCHEDULE A, PART III, LINE 12 THIS LINE IS COMPOSED OF PROVIDER SETTLEMENT/OTHER INCOME FOR 2011, 2012, 2013, 2014, AND 2015. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false true false false false false true 631012 false true 1325912 1956924 false FORM 990, SCHEDULE C, PART II-B, LINE 1 During the year, HPHC paid $1,325,912 in membership dues allocable to lobbying activities. Of the amount shown, $44,533 was paid to the Maine Association of Health Plans, $476,790 was paid to America's Health Insurance Plans, $769,204 was paid to the Massachusetts Association of Health Plans and $35,385 was paid to the firm of Robinson and Cole for the Connecticut Association of Health Plans. HPHC hired a number of consulting firms to advise them on strategies for addressing pending legislation and to provide legislators with information regarding the impact of pending legislation on HPHC's activities. Of the amount shown, $413,400 was paid to consulting firms. HPHC also has internal staff who lobby. Of the amount shown, $151,612 represents the portion of the employee's salary spent on lobbying activities. On behalf of Harvard Pilgrim Health Care of New England Harvard Pilgrim Health Care, Inc., paid $66,000 to a consulting firm for lobbying costs. 2287688 4000000 6287688 13944230 38223830 30717042 21451018 353531313 351503430 2027883 29766589 SECURITIES 163052384 C CORPORATE DEBT SECURITIES 237029984 C 400082368 INVESTMENTS IN AFFILIATES 164250720 SPECIAL DEPOSITS 1643564 DUE FROM AFFILIATES 1316784 OTHER INVESTED ASSETS 18192926 185403994 0 UNEARNED GROUP PREMIUM 51909760 DUE TO AFFILIATES 30468360 ACCIDENT AND HEALTH PLANS 75173310 BORROWED MONEY AND INTEREST THEREON 30011367 187562797 X PART X, LINE 2 THE CONSOLIDATED FINANCIAL STATEMENTS OF HARVARD PILGRIM HEALTH CARE, INC. AND AFFILIATES INCLUDE THE FOLLOWING ENTITIES: HARVARD PILGRIM HEALTH CARE, INC. ("HPHC, INC."), HARVARD PILGRIM HEALTH CARE OF NEW ENGLAND, INC. ("NEW ENGLAND"), HARVARD PILGRIM HEALTH CARE OF CONNECTICUT, INC. ("HPHC OF CT"), HARVARD PILGRIM HEALTH CARE FOUNDATION, INC. (THE "FOUNDATION"), HARVARD PILGRIM HEALTH CARE INSTITUTE, LLC (THE "INSTITUTE"), HPHC INSURANCE AGENCY (THE "AGENCY"), HPHC INSURANCE COMPANY, INC. (THE "INSURANCE COMPANY"), HPHC HOLDING CORPORATION AND SUBSIDIARY ("HOLDINGS"), AND HEALTH PLANS, INC. AND SUBSIDIARIES ("HPI"). FOLLOWING IS THE RELEVANT PORTION OF THE FIN 48 FOOTNOTE FROM HARVARD PILGRIM HEALTH CARE, INC. AND AFFILIATES CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES THAT APPLIES TO THE FILING ORGANIZATION. HPHC, INC., NEW ENGLAND, HPHC OF CT, AND THE FOUNDATION ARE TAX-EXEMPT ORGANIZATIONS UNDER INTERNAL REVENUE SERVICE REGULATIONS. THE INSTITUTE HAS NO TAX STATUS AND THEREFORE FOLLOWS THE TAX-EXEMPT STATUS OF HPHC, INC. AS ITS SOLE MEMBER. HARVARD PILGRIM DID NOT HAVE ANY UNRECOGNIZED TAX BENEFITS AS OF DECEMBER 31, 2015 AND 2014. true HARVARD PILGRIM HEALTH CARE FOUNDATION INC 93 WORCESTER ST WELLESLEY MA 024819181 042708004 501(C)(3) 6220994 N/A N/A 1 SCHEDULE I, PART I, LINE 2 HARVARD PILGRIM HEALTH CARE (HPHC) INC. MAKES GRANTS TO ITS SUPPORTING ORGANIZATION, HPHC FOUNDATION (THE FOUNDATION), WHOSE PURPOSE IS TO MAKE COMMUNITY GRANTS AND MONITOR THEM IN ACCORDANCE WITH HPHC'S TAX-EXEMPT MISSION. THE FOUNDATION MAKES MINI GRANTS OF $500 EACH THAT ARE APPROVED BY APPOINTED COMMITTEE MEMBERS PRIOR TO BEING ISSUED. MINI GRANTS OF $500 EACH ARE RECOMMENDED BY EMPLOYEES WHO FILL OUT A DETAILED APPLICATION REGARDING PURPOSE OF FUNDS, AND MUST PROVE THAT FUNDS WILL GO TO A LEGAL, NOT-FOR-PROFIT ORGANIZATION, WHERE THE EMPLOYEE LIVES OR WHERE HPHC DOES BUSINESS. THE FOUNDATION STAFF REVIEWS THESE APPLICATIONS FOR ACCURACY OF PURPOSE AND LEGITIMACY OF THE ORGANIZATION. THE FOUNDATION STAFF RECOMMENDATIONS ARE REVIEWED BY A NON-STAFF APPOINTED COMMITTEE. REPORTS ON THESE GRANTS ARE COLLECTED FROM A SAMPLE OF THESE ORGANIZATIONS. THE FOUNDATION'S INTERNAL MANAGEMENT REPORTS A SUMMARY OF THIS INFORMATION TO THE FOUNDATION'S BOARD. OTHER MORE SIGNIFICANT COMMUNITY GRANTS MADE BY THE FOUNDATION REQUIRE A CONCEPT PROPOSAL TO BE SUBMITTED AND APPROVED BY AN APPOINTED COMMITTEE. ONCE THE GRANTS ARE APPROVED, THE FOUNDATION EMPLOYEES PERFORM SITE VISITS AND REGULAR EVALUATIONS OF THE GRANTS. IN ADDITION, THE FOUNDATION HIRES AN INDEPENDENT EVALUATION GROUP TO REVIEW GRANT RESULTS. ADDITIONALLY, FORMAL FISCAL REPORTING OF ALL GRANTS IS PERFORMED AND REVIEWED BY EMPLOYEES OF THE FOUNDATION. X X true true X X X X true true false false false false false true false ERIC H SCHULTZ PRESIDENT/CEO/DIRECTOR 870489 0 473190 0 22902 0 283700 0 23081 0 1673362 0 0 0 CHARLES R GOHEEN TREASURER 458362 0 152522 0 22902 0 115200 0 30331 0 779317 0 0 0 DEBORAH A NORTON CIO (Officer until 5/15) 387290 0 127822 0 25524 0 101200 0 34733 0 676569 0 0 0 JOHN F LANE CHIEF HR OFFICER (UNTIL 1/15) 20651 0 84467 0 316452 0 65226 0 8184 0 494980 0 0 0 MICHAEL S SHERMAN MD SR VP CMO (OFFICER UNTIL 5/15) 366668 0 83008 0 20622 0 21200 0 31694 0 523192 0 0 0 THOMAS F MALONEY VP - Deputy General Counsel 227767 0 33840 0 1811 0 20945 0 28295 0 312658 0 0 0 TU NGUYEN VP/CHIEF ACTUARY (UNTIL 10/15) 171994 0 42300 0 22266 0 19466 0 22825 0 278851 0 0 0 TISA K HUGHES SECRETARY AND CLERK 406402 0 99148 0 2622 0 100408 0 29402 0 637982 0 0 0 VINCENT CAPOZZI Sr VP Sales & MARKETING 343608 0 100111 0 25524 0 21200 0 26692 0 517135 0 0 0 BETH ANN ROBERTS SR VP REGIONAL MARKETS 271798 0 55650 0 7456 0 21200 0 25573 0 381677 0 0 0 RICHARD WEISBLATT CHIEF OF INNOVATION & STRATEGY 327138 0 69307 0 25096 0 72746 0 20909 0 515196 0 0 0 PRANAV MEHTA SVP PROD & BUS PLAN 240714 0 52500 0 757 0 21200 0 35988 0 351159 0 0 0 MARTHA MURPHY VP SALES 137028 0 175232 0 19145 0 17033 0 25175 0 373613 0 0 0 Richard Platt EXEC DIR OF HPHC INSTITUTE 371243 0 0 0 24069 0 21200 0 2214 0 418726 0 0 0 Cynthia Napier Rosenberg SR MEDICAL DIR (until 10/15) 221507 0 51300 0 46273 0 21200 0 19842 0 360122 0 0 0 MICHELLE J CLAYMAN Sr VP Fin/Treas.(as of 11/15) 260960 0 47662 0 4935 0 17945 0 30184 0 361686 0 0 0 WILLIAM GRAHAM SVP PUBLIC AFFAIRS & GVMT PROG 228752 0 51495 0 19235 0 21002 0 27605 0 348089 0 0 0 SCOTT ALLEN Senior Actuarial Consultant 235276 0 0 0 0 0 0 0 0 0 235276 0 0 0 SCHEDULE J, PART I, LINE 1a Tax gross-up payments 3 Officers were provided tax gross-up payments along with supplemental retirement payments to compensate for retirement contribution limitations. These payments were reported as taxable income. Personal services 1 NON MANAGEMENT Director was provided reimbursement for tax preparation services needed due to an inadvertent prior year over-reporting made by the organization. The payment was reported as taxable income. SCHEDULE J, PART I, LINE 4A JOHN LANE'S EMPLOYMENT WITH HPHC TERMINATED IN JANUARY 2015. PURSUANT TO THE SEVERANCE PROVISION OF HIS CONTRACT, MR. LANE WAS ELIGIBLE TO RECEIVE A CONTINUATION OF HIS BASE SALARY AND BENEFITS FOR A PERIOD OF UP TO ONE YEAR AND ANY INCENTIVE COMPENSATION HE WAS ENTITLED TO FOR 2013 THROUGH 2015. IN 2015, HE RECEIVED SEVERANCE PAYMENTS OF $279,192 AND INCENTIVE COMPENSATION OF $84,467. In connection with his severance arrangement, the officer was provided outplacement services. The value of the services was treated as nontaxable. SCHEDULE J, PART I, LINE 4B LONG TERM INCENTIVE PLAN HPHC ADOPTED A LONG-TERM INCENTIVE PLAN FOR ITS CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, CHIEF LEGAL OFFICER, CHIEF INFORMATION OFFICER, CHIEF INNOVATION AND STRATEGY OFFICER, AND CHIEF HUMAN RESOURCES OFFICER FOR 2013-2015. THE PLAN IS BASED ON A VARIETY OF PERFORMANCE MEASURES AND AMOUNTS ARE EARNED OVER A THREE YEAR PERIOD. SOME OR ALL OF THE DEFERRED COMPENSATION AMOUNTS REPORTED HEREIN FOR THE POTENTIAL EARNINGS UNDER THE PLAN MAY OR MAY NOT BE PAID TO THE EXECUTIVES BASED ON THE ACTUAL RESULTS OF THE PERFORMANCE MEASURES AS DETERMINED AT THE END OF THE APPLICABLE THREE YEAR PERIOD. ANNUAL ACCRUALS ARE INCLUDED IN SCHEDULE J, PART II, COLUMN(C). NO PAYMENTS WERE MADE FROM THE PLAN DURING 2015. SCHEDULE J, PART I, LINE 7 EXECUTIVE INCENTIVE PLAN HPHC HAS AN EXECUTIVE INCENTIVE PLAN TO INCENT AND REWARD PARTICIPANTS AND PERMIT THEM TO SHARE IN SUCCESSFUL COMPANY FINANCIAL RESULTS, ENCOURAGE THEM TO WORK AS A TEAM AND PAY THEM COMPETITIVELY, CONSIDERING FINANCIAL CONSTRAINTS. ON AN ANNUAL BASIS, SUBJECT TO ORGANIZATION AND INDIVIDUAL PERFORMANCE, THE COMPANY PAYS ELIGIBLE PARTICIPANTS THEIR INCENTIVE COMPENSATION, PART OF WHICH (NO MORE THAN 40% OF THE GOAL) IS CONTINGENT ON ACHIEVING A CERTAIN OPERATING EARNINGS TARGET OF HPHC, INC. AND AFFILIATES (ON A COMBINED STATUTORY ACCOUNTING BASIS). DISCRETIONARY RETIREMENT BENEFIT PLAN HPHC OFFERS A 457(B) PLAN AS A RETIREMENT BENEFIT TO A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES AND FACULTY MEMBERS OF HARVARD PILGRIM HEALTH CARE, INC. AND HARVARD PILGRIM HEALTH CARE INSTITUTE, LLC. THE PLAN PROVIDES ELIGIBLE PARTICIPANTS AN ADDITIONAL OPPORTUNITY TO DEFER PRE-TAX COMPENSATION FOR RETIREMENT. THE PLAN ALSO PROVIDES FOR EMPLOYER CONTRIBUTIONS (FOR NON-FACULTY PARTICIPANTS) AND RESTORATION CREDITS (FOR FACULTY MEMBERS) WHICH ARE INTENDED TO MAKE UP FOR THE SHORTFALL SOME PARTICIPANTS MAY EXPERIENCE UNDER THE HPHC-SPONSORED 401(K) PLAN DUE TO INTERNAL REVENUE CODE OR PLAN CONTRIBUTION LIMITS. HPHC MAKES UP FOR THIS SHORTFALL IN THE 401(K) PLAN BY FUNDING THE 457(B) ACCOUNT ON BEHALF OF THE ELIGIBLE EMPLOYEE UP TO THE 457(B) ANNUAL CONTRIBUTION LIMIT AND ANY AMOUNT ABOVE THIS LIMIT IS PAID TO THE PARTICIPANT IN CASH. FORM 990, PART I, LINE 1, AND PART III, LINE 1 ORGANIZATION MISSION HARVARD PILGRIM OPERATES AS A NOT-FOR-PROFIT HEALTH PLAN PROVIDING COMPREHENSIVE HEALTH BENEFIT PLANS, ACCESS TO HEALTH CARE AND OTHER RELATED SERVICES IN MASSACHUSETTS AND MAINE TO GROUP, INDIVIDUAL AND MEDICARE MEMBERS THROUGH CONTRACTS WITH PHYSICIANS, ESTABLISHED PRIMARY CARE AND MULTISPECIALTY PHYSICIAN GROUPS, HOSPITALS AND OTHER HEALTH CARE PROVIDERS. HARVARD PILGRIM'S MISSION IS TO IMPROVE THE QUALITY AND VALUE OF HEALTH CARE FOR THE PEOPLE AND COMMUNITIES WE SERVE. FOR MORE THAN 45 YEARS, HARVARD PILGRIM HAS BUILT A REPUTATION FOR EXCEPTIONAL CLINICAL QUALITY, PREVENTIVE CARE, DISEASE MANAGEMENT AND MEMBER SATISFACTION AND HAS CONSISTENTLY RATED AMONG THE TOP PLANS IN THE COUNTRY. PHYSICIAN PRACTICES IN MASSACHUSETTS, NEW HAMPSHIRE, MAINE, AND CONNECTICUT WILL RECEIVE GRANTS FROM HARVARD PILGRIM TO IMPROVE CLINICAL CARE, QUALITY AND SERVICE. HARVARD PILGRIM'S ANNUAL QUALITY AWARDS PROGRAM WILL FUND VARIOUS PHYSICIAN-GROUP INITIATIVES THAT FOCUS ON MANAGING CHRONIC AND PREVENTABLE DISEASES, INCLUDING PATIENT SATISFACTION AND SAFETY AND INCREASING PREVENTATIVE CARE. THE RESULTS OF THESE PROGRAMS WILL BE SHARED WITH OTHER HARVARD PILGRIM PROVIDERS SO THAT THEIR "BEST PRACTICES" CAN BENEFIT THE BROADER POPULATION. THROUGH THE HARVARD PILGRIM HEALTH CARE INSTITUTE (THE "INSTITUTE"),OUR SPONSORED EDUCATIONAL PROGRAMS AND RESEARCH AGENDA SEEK TO DISCOVER THE MOST EFFECTIVE WAYS TO DELIVER AMBULATORY MEDICAL CARE, REDUCE UNWARRANTED VARIATION IN PRACTICE, IMPROVE PATIENT SAFETY AND, WHENEVER POSSIBLE, IMPROVE PUBLIC HEALTH. THE "INSTITUTE" CHAMPIONS INNOVATIVE RESEARCH THAT DIRECTLY IMPROVES THE HEALTH AND SAFETY OF SOCIETY. FORM 990,PART VI, LINE 2 BUSINESS RELATIONSHIP - THE FOLLOWING INDIVIDUALS SERVE ON THE BOARDS OR ARE AN OFFICER OR KEY EMPLOYEE OF ONE OR MORE FOR PROFIT ORGANIZATIONS AFFILIATED WITH HPHC, INC.: ERIC H. SCHULTZ PRESIDENT/CEO CHARLES R. GOHEEN TREASURER TISA K. HUGHES - SECRETARY AND CLERK TU NGUYEN - VP/CHIEF ACTUARY (UNTIL 10/15) FORM 990, PART VI, LINE 11B ONCE HPHC, INC.'S FORM 990 IS COMPLETED WITH THE ASSISTANCE OF ITS OUTSIDE TAX ADVISORS, IT IS FIRST REVIEWED BY HPHC, INC.'S INTERNAL MANAGEMENT AND THEN HPHC, INC.'S AUDIT COMMITTEE CHAIRPERSON (AN INDEPENDENT MEMBER OF THE BOARD OF DIRECTORS OF THE ORGANIZATION). FOLLOWING THAT REVIEW, THE AUDIT COMMITTEE CHAIR AND OUTSIDE ADVISORS PRESENT THE FORM 990 TO THE AUDIT COMMITTEE. THE COMPLETED FORM 990 IS PROVIDED TO ALL MEMBERS OF THE BOARD OF DIRECTORS PRIOR TO THE FORM BEING FILED WITH THE IRS. FORM 990, PART VI, LINE 12C ALL HPHC, INC. DIRECTORS, OFFICERS AND EMPLOYEES ARE SUBJECT TO HPHC,INC.'S CODE OF CONDUCT, WHICH INCLUDES A CONFLICT OF INTEREST POLICY. THE CONFLICT OF INTEREST POLICY REQUIRES DIRECTORS, OFFICERS, AND EMPLOYEES TO DISCLOSE ON AN ONGOING BASIS THE OCCURRENCE OF ANY SITUATION WHEN THEIR OUTSIDE ACTIVITIES, PERSONAL INTERESTS OR RELATIONSHIPS MIGHT INFLUENCE, OR APPEAR TO INFLUENCE, THEIR ABILITY TO MAKE OBJECTIVE DECISIONS IN THE COURSE OF PERFORMING THEIR JOB RESPONSIBILITIES, HINDER OR DISTRACT FROM THE PERFORMANCE OF THEIR JOB RESPONSIBILITIES, ARE PREJUDICIAL TO THE LEGITIMATE INTERESTS OF HPHC,INC. OR CAUSE THE USE OF HPHC,INC.'S RESOURCES FOR OTHER THAN HPHC,INC.'S PURPOSE. IN ADDITION TO BEING SUBJECT TO THE HPHC,INC. CONFLICT OF INTEREST POLICY, HPHC,INC. BOARD OF DIRECTORS AND BOARD COMMITTEE MEMBERS ARE ANNUALLY REQUIRED TO COMPLETE AND SIGN A CONFLICT OF INTEREST DISCLOSURE FORM, WHICH IS REPORTED TO THE BOARD OF DIRECTORS IN ACCORDANCE WITH THE DISCLOSURES AND REVIEW PROCESS SET FORTH IN HPHC,INC.'S BYLAWS. IN ADDITION, ROUGHLY HALF OF HPHC,INC. EMPLOYEES WHO MAKE DECISIONS ON BEHALF OF THE ORGANIZATION, OR ARE IN A POSITION TO INFLUENCE DECISIONS MADE ON BEHALF OF HPHC,INC. ARE SURVEYED ON AN ANNUAL BASIS. THESE EMPLOYEES MUST COMPLETE AND SIGN A CONFLICT OF INTEREST DISCLOSURE FORM AND SUBMIT IT TO THE VICE PRESIDENT OF CORPORATE COMPLIANCE PROGRAMS (COMPLIANCE OFFICER). THESE FORMS ARE THEN REVIEWED BY THE COMPLIANCE OFFICER AND THE ASSOCIATE GENERAL COUNSEL RESPONSIBLE FOR CORPORATE COMPLIANCE & SPECIAL INVESTIGATIONS "COUNSEL". IF A DISCLOSURE OF A CONFLICT OF INTEREST OR POTENTIAL CONFLICT OF INTEREST IS MADE, THE COMPLIANCE OFFICER AND COUNSEL MAKE A DETERMINATION IF SUCH DISCLOSURE IS MATERIAL AND NEEDS TO BE MANAGED, MITIGATED OR ELIMINATED. THE COMPLIANCE OFFICER INFORMS EACH DEPARTMENTAL VICE PRESIDENT RESPONSIBLE FOR THE DISCLOSING EMPLOYEE OF THE DISCLOSURE. HPHC,INC. ALSO HAS MORE STRINGENT CONFLICT OF INTEREST POLICIES AND PROCEDURES FOR CERTAIN DEPARTMENTS WHERE CONFLICTS, OR THE APPEARANCE OF CONFLICTS, ARE MORE LIKELY TO EXIST. FOR EXAMPLE, THE PHARMACY DEPARTMENT, PROVIDER CONTRACTING DEPARTMENT, AND MEDICAL MANAGEMENT DEPARTMENT ARE SUBJECT TO MORE STRINGENT POLICIES GOVERNING THE OFFER OR ACCEPTANCE OF ANY REMUNERATION, IN CASH OR IN KIND, FROM INDUSTRIES RELATED TO THEIR FUNCTION (E.G. PHARMACEUTICAL MANUFACTURERS AND HEALTHCARE DELIVERY ENTITIES). AS A GENERAL RULE, CONFLICTS OF INTEREST ARE NOT PERMITTED. HOWEVER, IN CERTAIN CASES, IF THE CONFLICT IS NOT MATERIAL AND IS PROMPTLY AND FULLY DISCLOSED TO THE EMPLOYEE'S MANAGER AND VICE PRESIDENT OF THE EMPLOYEE'S DEPARTMENT, AND IS APPROVED BY THE COMPLIANCE OFFICER, A WAIVER OF THE CONFLICT MAY BE GRANTED AND APPROPRIATE STEPS WILL BE TAKEN TO MITIGATE THE CONFLICT. FORM 990, PART VI, LINES 15A AND 15B HPHC,INC. HAS AN INDEPENDENT COMPENSATION COMMITTEE THAT ANNUALLY REVIEWS THE COMPENSATION OF THE CEO AND OTHER OFFICERS AND KEY EMPLOYEES. THE COMPENSATION COMMITTEE CONSIDERS MARKET DATA AND ANALYSES ASSEMBLED BY INDEPENDENT COMPENSATION CONSULTANTS. THE COMPENSATION COMMITTEE'S DELIBERATIONS ARE REFLECTED IN ITS MINUTES. FORM 990, PART VI, LINE 19 HPHC, INC. FURNISHES ITS GOVERNING DOCUMENTS, FINANCIAL STATEMENTS AND CONFLICT OF INTEREST POLICY TO THE PUBLIC UPON REQUEST. THE STATUTORY FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC VIA THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS WEB SITE. FORM 990, PART VII, SECTION B ATTACHMENT 1 NAME: DELL MARKETING LP DESCRIPTION OF SERVICES: IT CONSULTING AND BUSINESS PROCESS OUTSOURCING FORM 990, PART IX, COLUMN (D) THERE ARE NO EXPENSES FOR FUNDRAISING INCLUDED IN THE INCOME STATEMENT FOR HARVARD PILGRIM HEALTH CARE, INC. ANY COSTS INCURRED WITH THE ADMINISTRATION OF FEDERAL OR PRIVATE GRANTS ARE INCURRED BY THE INSTITUTE. THEY ARE TYPICALLY FUNDED BY THE INDIRECT COST RECOVERIES ON THOSE GRANTS. FORM 990, PART XI, LINE 9 CHANGE IN NON ADMITTED ASSETS (8,684,177) CHANGE IN SURPLUS NOTES (9,305,594) CHANGE IN PRIOR SERVICE COSTS AND RECOGNIZED GAIN FOR POSTRETIREMENT MEDICAL PLAN 2,004,681 ___________ TOTAL ($15,985,090) ____________ FORM 990, PART XII, LINE 1 HARVARD PILGRIM HEALTH CARE, INC. FOLLOWS THE STATUTORY ACCOUNTING METHOD PRESCRIBED BY THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS' ACCOUNTING PRACTICES AND PROCEDURES MANUAL FOR STATUTORY ACCOUNTING PRINCIPLES. Harvard Pilgrim Health Care Inst LLC 133 BROOKLINE AVE BOSTON MA 02215 943477531 RESEARCH MA 5930986 28326038 HPHC INC HPHC FOUNDATION INC 93 WORCESTER STREET WELLESLEY MA 02481 042708004 community svc MA 501(c)(3) 11a-I HPHC Inc true HPHC of New England Inc 93 WORCESTER STREET WELLESLEY MA 02481 042663394 health insura MA 501(c)(4) HPHC Inc true HPHC OF CONNECTICUT 185 ASYLUM STREET HARTFORD CT 06103 461681667 HEALTH INSURA CT 501(C)(4) HPHC Inc true HPHC Insurance Company Inc 93 WORCESTER STREET WELLESLEY MA 024819181 043149694 HEALTH INSURANCE MA HPHC INC C CORP 667987158 226348021 1.00000 true HPHC Holding Corporation 93 WORCESTER STREET WELLESLEY MA 024819181 043306439 HOLDING COMPANY MA HPHC INC C CORP 8361543 15429085 1.00000 true Plan Marketing Insurance Agency Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 042734281 BROKERAGE MA HEALTH PLANS C CORP 1.00000 true HPHC Insurance Agency Inc 93 WORCESTER STREET WELLESLEY MA 024819181 043016201 BROKERAGE MA HPHC INC C CORP 39939 484625 1.00000 true Health Plans Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 042734278 TPA MA HPHC INC C CORP 37279452 20955481 1.00000 true Care Management Services Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 043438779 ASO SERVICES MA HEALTH PLANS C CORP 1.00000 true HARVARD PILGRIM PHYSICIANS ASSOC INC 93 WORCESTER ST WELLESLEY MA 024819181 PHYSICIAN ORG MA HPHC INC SEE PART VII 1.00000 true true true true true true false false false false true false true false true true false true false false HPHC FOUNDATION INC B 6220994 CASH HPHC OF NEW ENGLAND INC L,N,O 41177853 ALLOCATION HPHC FOUNDATION INC L,N,O 681244 ALLOCATION HPHC INSURANCE COMPANY INC L,N,O 92697803 ALLOCATION HEALTH PLANS INC L,N,O 4638653 ALLOCATION HPHC OF CONNECTICUT L,N,O 1654851 ALLOCATION HPHC FOUNDATION INC A (IV 649592 CONTRACT HEALTH PLANS INC A (IV 293451 CONTRACT HPHC OF CONNECTICUT B 3000000 CASH HPHC Holding Corporation B 1843135 CASH HPHC INSURANCE COMPANY INC B 40000000 CASH HPHC FOUNDATION INC D 344259 CONTRACT HEALTH PLANS INC D 756147 CONTRACT HPHC OF NEW ENGLAND INC E 11513605 CONTRACT HPHC INSURANCE COMPANY INC E 18951813 CONTRACT HPHC INSURANCE AGENCY INC E 2941 CONTRACT HPHC OF CONNECTICUT D 215366 CONTRACT HPHC OF NEW ENGLAND INC C 10000000 RET. OF CAPITAL Schedule R, Part IV HARVARD PILGRIM PHYSICIANS ASSOCIATION, INC. IS A NONPROFIT ORGANIZED UNDER THE LAWS OF MASSACHUSETTS. THIS IS AN INACTIVE ORGANIZATION WHICH WAS DISSOLVED IN 2015.