2015-11-12T09:36:54-06:00 2014-12-31 ERNST & YOUNG LLP 5 TIMES SQUARE NEW YORK NY 100366530 990 2014-01-01 510609967 Healthfirst Health Plan of New Jersey Inc % CRAIG BARATTIN-VP CONTROLLER HEAL 1 Washington Street Ste 1405 Newark NJ 071023105 ELIZABETH ST CLAIR CHIEF LEGAL OFFICER 2015-10-15 CHRISTOPHER B BOGGS P00032493 2127733000 2014 2016-02-25 16:41:14Z Healthfirst NJ TERENCE BYRD 1 Washington Street STE 1405 Newark NJ 071023105 207647926 false X WWW.HEALTHFIRSTNJ.ORG X 2006 NJ TO PROMOTE THE HEALTH OF THE PEOPLE OF THE STATE OF NEW JERSEY BY ARRANGING FOR THE PROVISION OF HEALTH CARE SERVICES TO MEDICARE AND MEDICAID BENEFICIARIES. 17 15 0 0 0 0 0 266729016 207606174 44045 41752 0 0 266773061 207647926 0 0 0 0 0 0 0 0 0 267388963 225443259 267388963 225443259 -615902 -17795333 57604636 57759248 55996429 49528680 1608207 8230568 X TO PROMOTE THE HEALTH OF THE COMMUNITY BY ARRANGING FOR THE PROVISION OF HEALTH CARE SERVICES TO MEDICARE AND MEDICAID BENEFICIARIES AND TO RELIEVE THE POOR AND DISTRESSED BY MEETING THE SPECIAL HEALTH CARE NEEDS OF MEDICARE AND MEDICAID BENEFICIARIES. false true 77195793 75695401 MEDICARE HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. (HFNJ) PROVIDES AFFORDABLE QUALITY HEALTH PLANS TO ELIGIBLE MEDICARE RECIPIENTS. FOR 2014 THERE WERE 4,517 MEMBERS ENROLLED IN HFNJ'S MEDICARE PLANS. HFNJ'S NETWORK INCLUDES APPROXIMATELY 27 REGIONAL HOSPITALS THAT PROVIDE SERVICES TO MEMBERS. 134525434 131910773 MEDICAID/NJFAMILYCARE HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. (HFNJ) PROVIDES AFFORDABLE QUALITY HEALTH PLANS TO ELIGIBLE MEDICAID RECIPIENTS. FOR 2014 THERE WERE 43,194 MEMBERS ENROLLED IN HFNJ'S MEDICAID/NJFAMILYCARE PLANS. HFNJ'S NETWORK INCLUDES APPROXIMATELY 27 REGIONAL HOSPITALS THAT PROVIDE SERVICES TO MEMBERS. 211721227 false false false false false false false false false false false false true true true false true false false false false false false false false false false false true false false false false false false false true false false false false false true true false false true 3354 0 0 false false false false false false X 17 15 false true false false true true true true true false false true true true true true true false false false X CRAIG BARATTIN-VP CONTROLLER 2128016000 100 CHURCH ST FL 18 NEW YORK NY 100072601 GARY HORAN DIRECTOR 1.0 0.0 X 0 0 0 PETER A KELLY DIRECTOR 1.0 0.0 X 0 0 0 DANIEL P MCCARTHY PRESIDENT & COO 1.0 40.0 X X 0 984361 0 DEBORAH E HAMMOND VP, MEDICAL DIRECTOR 1.0 40.0 X 0 359740 0 MICHAEL D D'AGNES DIRECTOR 1.0 0.0 X 0 0 0 ANTHONY T ORLANDO DIRECTOR 1.0 0.0 X 0 0 0 AXEL RAMOS DIRECTOR 1.0 0.0 X 0 0 0 LESLIE D HIRSCH DIRECTOR 1.0 0.0 X 0 0 0 MICHAEL MARON DIRECTOR 1.0 0.0 X 0 0 0 JOHN CALANDRIELLO DIRECTOR 1.0 0.0 X 0 0 0 AL ABOUD DIRECTOR 1.0 0.0 X 0 0 0 RICHARD SMITH DIRECTOR 1.0 0.0 X 0 0 0 RONALD NAPIORSKI DIRECTOR 1.0 0.0 X 0 0 0 RONALD RAK DIRECTOR 1.0 0.0 X 0 0 0 EDWARD CONDIT DIRECTOR 1.0 0.0 X 0 0 0 TOM DALY DIRECTOR 1.0 0.0 X 0 0 0 ROBERT PETERSON DIRECTOR 1.0 0.0 X 0 0 0 MARYBETH A TITA SVP, CORP. FINANCE 1.0 40.0 X 0 669733 0 ELIZABETH R ST CLAIR CHIEF LEGAL OFFICER 1.0 40.0 X 0 1006265 0 TERENCE L BYRD PRESIDENT 1.0 40.0 X 0 311548 0 PATRICIA J WANG CHIEF EXECUTIVE OFFICER 1.0 40.0 X 0 1597100 0 MICHAEL FEDYNA CFO 1.0 40.0 X 0 218056 0 JAY A SCHECHTMAN CHIEF MEDICAL OFFICER 1.0 40.0 X 0 695229 0 PAUL E PORTSMORE JR SVP, BUS DEV AND MBR ACQUIS 1.0 40.0 X 0 470563 0 IAN SHAFFER EXE MED DIR BEHAV HEALTH 1.0 40.0 X 0 392065 0 SEAN M NATARO DEPUTY GENERAL COUNSEL 1.0 40.0 X 0 382462 0 REBECCA SCHWIETZ SVP CLINICAL SERVICES 1.0 40.0 X 0 376809 0 ANDREA C FORINO SVP HUMAN RESOURCES TERM-9/13 1.0 0.0 X 0 346954 0 0 7810885 0 0 true true false CAREMARK LLC ONE CVS DRIVE WOONSOCKET RI 02895 PHARMACY 63769014 ST JOSEPHS REGIONAL MED CTR PO BOX 36284 NEWARK NJ 071886284 MEDICAL/HOSPITAL 17598180 LOVING CARE AGENCY INC COMMERCIAL LOCKBOX PO BOX 12400 NEWARK NJ 07101 MEDICAL/HOSPITAL 4263742 TRINITAS REGIONAL MEDICAL CENTER 750 WALNUT AVENUE CRANFORD NJ 07016 MEDICAL/PROFESSIONAL 4821872 DENTAQUEST LLC 465 MEDFORD STREET BOSTON MA 02129 MEDICAL/HOSPITAL 4755012 263 0 MEDICARE ADVANTAGE (PART C) 524114 67112889 67112889 MEDICARE PRESCRIPTION DRUG CVG (PART D) 524114 8582512 8582512 MEDICAID / NJFAMILYCARE 524114 131910773 131910773 207606174 41752 41752 0 0 0 0 0 0 0 0 0 0 207647926 207606174 41752 0 0 0 0 0 0 0 0 0 0 23028967 16350566 6678400 2460020 2460020 0 0 0 0 14931990 10721199 4210791 1000 1000 53000 53000 0 0 0 0 0 0 112894 112894 0 0 0 HEALTHCARE SERVICE COSTS 193175889 193175889 CLAIMS ADJUSTMENT EXPENSE -8526427 -8526427 ASSESSMENT FEE PAY TO NJ DOBI 133573 133573 W/O NEGATIVE RETAINED PAYMENT 72345 72345 8 8 225443259 211721227 13722032 0 0 0 43551411 40060672 0 0 7133299 1994080 0 0 0 0 0 0 0 0 479784 0 0 0 0 0 0 0 0 0 0 6440142 15704496 57604636 57759248 39339103 26867628 0 0 0 0 0 0 0 0 0 0 0 0 0 0 16657326 22661052 55996429 49528680 X 1608207 8230568 0 0 0 0 1608207 8230568 57604636 57759248 X -17795333 -10959 24428653 X X false true X true false OTHER RECEIVABLES 10639750 SECURITY DEPOSITS 51800 MEDICARE PART D PLAN DEP.REC. 5011761 DUE FROM SUBSIDIARIES 1185 15704496 0 NOTES PAYABLE TO AFFILIATE 4350734 DUE TO AFFILIATE 41638 DUE TO STATE OF NJ 2820834 UPCAE/UNPAID VENDOR PAYABLE 946341 DUE TO HFMS 14500000 MEDICARE PART D PLAN DEPOSIT LIABILITY 1505 22661052 X Schedule D - Part X, LINE 2 THE FOLLOWING IS DISCLOSED IN THE AUDITED FINANCIAL STATEMENTS OF HF MANAGEMENT SERVICES, LLC, THE PARENT COMPANY OF HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC.: It is the Companys policy to provide for uncertain tax positions and the related interest and penalties based upon managements assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2014, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company's effective tax rate in a given financial statement period may be affected. true true false false false false false false false JAY A SCHECHTMAN CHIEF MEDICAL OFFICER 0 426680 0 163435 0 105114 0 0 0 0 0 695229 0 104035 DANIEL P MCCARTHY PRESIDENT & COO 0 624390 0 267278 0 92693 0 0 0 0 0 984361 0 88889 DEBORAH E HAMMOND VP, MEDICAL DIRECTOR 0 286901 0 70887 0 1952 0 0 0 0 0 359740 0 0 MARYBETH A TITA SVP, CORP. FINANCE 0 437159 0 165923 0 66651 0 0 0 0 0 669733 0 65350 ELIZABETH R ST CLAIR CHIEF LEGAL OFFICER 0 462832 0 172943 0 370490 0 0 0 0 0 1006265 0 366148 TERENCE L BYRD PRESIDENT 0 262862 0 42619 0 6067 0 0 0 0 0 311548 0 0 PATRICIA J WANG CHIEF EXECUTIVE OFFICER 0 892547 0 440090 0 264463 0 0 0 0 0 1597100 0 260107 PAUL E PORTSMORE JR SVP, BUS DEV AND MBR ACQUIS 0 346704 0 121999 0 1860 0 0 0 0 0 470563 0 0 IAN SHAFFER EXE MED DIR BEHAV HEALTH 0 337137 0 48401 0 6527 0 0 0 0 0 392065 0 0 SEAN M NATARO DEPUTY GENERAL COUNSEL 0 283041 0 98207 0 1214 0 0 0 0 0 382462 0 0 REBECCA SCHWIETZ SVP CLINICAL SERVICES 0 303974 0 72413 0 422 0 0 0 0 0 376809 0 0 MICHAEL FEDYNA CFO 0 216185 0 0 0 1871 0 0 0 0 0 218056 0 0 ANDREA C FORINO SVP HUMAN RESOURCES TERM-9/13 0 0 0 31401 0 315553 0 0 0 0 0 346954 0 0 SCHEDULE J, PART 1, LINE 4A THE FOLLOWING INDIVIDUAL ENTERED INTO SEVERANCE AGREEMENTS AND/OR RECEIVED SEVERANCE PAYMENTS FROM HF MANAGEMENT SERVICES, LLC - A RELATED ORGANIZATION. ANDREA FORINO TOTAL OF SEVERANCE AGREEMENT IN 2013: $442,771 SEVERANCE PAID IN 2013: $85,148 SEVERANCE PAID IN 2014: $295,181 SEVERANCE DEFERRED: $62,442 SCHEDULE J, PART 1, LINE 4B THE FOLLOWING INDIVIDUALS PARTICIPATED IN THE NON-QUALIFIED RETIREMENT PLAN PROVIDED BY HF MANAGEMENT SERVICES, LLC - A RELATED ORGANIZATION. THE AMOUNTS BELOW REPRESENT CONTRIBUTIONS FROM THE PLAN SPONSOR FOR 2014: PATRICIA J. WANG $314,732. [Col. C] DANIEL P. McCARTHY $153,004. [Col. C] ELIZABETH R. ST CLAIR $108,327. [Col. C] JAY A. SCHECHTMAN $77,409 [Col. C] MARYBETH A. TITA $98,433. [Col. C] PAUL PORTSMORE $53,398. [Col. C] REBECCA SCHWIETZ $15,036 [Col. C]. HF MANAGEMENT SERVICES LLC SOLE CORPORATE MEMBER 4350734 SURPLUS NOTES OUTSTANDING false HF MANAGEMENT SERVICES LLC SOLE CORPORATE MEMBER 23028967 MANAGEMENT AND ADMIN SERVICES false HF MANAGEMENT SERVICES LLC SOLE CORPORATE MEMBER 14500000 OTHER MGMT & ADMIN SVCS. FEES false FORM 990, PART VI, SECTION A, LINE 3 HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC.(HFNJ) CONTRACTS WITH HF MANAGEMENT SERVICES, LLC (HFMS) TO PROVIDE ALL OF ITS MANAGEMENT AND ADMINISTRATIVE SERVICES. THE NOT-FOR-PROFIT ENTITY DOES NOT MAINTAIN ITS OWN STAFF OR OFFICE SPACE, THESE ARE SUPPLIED BY HFMS. HFMS CHARGES A PERCENT OF PREMIUM ON A PER MEMBER PER MONTH BASIS OR A FLAT FEE PER MEMBER PER MONTH. THE ARRANGEMENT IS APPROVED BY RESOLUTION OF THE BOARD OF DIRECTORS. ALL OFFICERS, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES WERE PAID BY, AND WORKED FOR HFMS, A MANAGEMENT COMPANY WHICH PROVIDES MANAGEMENT SERVICES FOR MULTIPLE ENTITIES. NONE OF THE INDIVIDUALS LISTED EARNED ANY COMPENSATION FROM HFNJ. FORM 990, PART VI, SECTION A, LINE 6 HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. IS A NEW JERSEY NOT-FOR-PROFIT CORPORATION WITH ONE CORPORATE MEMBER, HF MANAGEMENT SERVICES, LLC. FORM 990, PART VI, SECTION A, LINES 7A AND 7B 7A: HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. IS A NEW JERSEY NOT FOR PROFIT CORPORATION WITH ONE CORPORATE MEMBER, HF MANAGEMENT SERVICES, LLC. THE CORPORATE MEMBER HAS THE RIGHT TO APPOINT THE BOARD OF DIRECTORS OF HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. 7B: AMENDMENTS TO THE GOVERNING DOCUMENTS REQUIRE APPROVAL OF THE SOLE CORPORATE MEMBER, HF MANAGEMENT SERVICES, LLC. CERTAIN DECISIONS OF THE BOARD OF DIRECTORS RELATING TO PRODUCTS OFFERED, RELATED PARTY TRANSACTIONS AND REPAYMENT OF SURPLUS NOTES REQUIRE APPROVAL OF THE NEW JERSEY DEPARTMENT OF BANKING AND INSURANCE. FORM 990, PART VI, SECTION B, LINE 11B THE 990 IS PREPARED BY THE HF MANAGEMENT SERVICES, LLC (HFMS) CORPORATE FINANCE DEPARTMENT STAFF AND THEN REVIEWED BY THE HFMS TREASURER AND VICE PRESIDENT CONTROLLER. SECONDARY REVIEWS ARE ALSO PERFORMED BY THE HFMS CHIEF LEGAL OFFICER. THE DRAFT 990 IS THEN REVIEWED BY AN INDEPENDENT ACCOUNTING FIRM. THE DRAFT 990 IS THEN TRANSMITTED TO THE BOARD OF DIRECTORS. THE FINAL 990 IS SUBMITTED AFTER THE RETURN IS REVIEWED BY THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 12C A CONFLICT OF INTEREST DISCLOSURE STATEMENT IS COMPLETED ANNUALLY BY EACH BOARD MEMBER, OFFICER AND KEY EMPLOYEE. EACH BOARD MEMBER, OFFICER AND KEY EMPLOYEE IS GIVEN A COPY OF THE DISCLOSURE STATEMENT TO COMPLETE ON AN ANNUAL BASIS. A MEMBER WHO DOES NOT COMPLETE THE STATEMENT IS NOT ALLOWED TO ATTEND BOARD MEETINGS AND MAY BE REMOVED FROM THE BOARD. AN OFFICER OR KEY EMPLOYEE WHO DOES NOT COMPLETE THE STATEMENT WILL BE DISCIPLINED, UP TO TERMINATION FROM THE POSITION. ANY DISCLOSURE OF A CONFLICT OR POTENTIAL CONFLICT IS REVIEWED BY THE CHIEF COMPLIANCE OFFICER. CONFLICTS ARE ADDRESSED BY EXAMINING THE RELATIONSHIP OF THE INDIVIDUAL TO THE ORGANIZATION AND THE NATURE OF THE DISCLOSURE. A REPORT OF ANY CONFLICTS IS PREPARED FOR DISCUSSION WITH AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF MANAGERS OF HF MANAGEMENT SERVICES, LLC, THE NOT FOR PROFIT CORPORATE PARENT, AS WELL AS THE FULL BOARD OF DIRECTORS OF HEALTHFIRST HEALTH PLAN OF NEW JERSEY, INC. AS APPROPRIATE, ACTION IS TAKEN, INCLUDING BUT NOT LIMITED TO DISCLOSURE AND RECUSAL FROM DECISION MAKING, MODIFICATIONS TO BUSINESS AGREEMENTS, CHANGES IN VENDORS OR REPLACEMENT OF THE DIRECTOR, OFFICER OR KEY EMPLOYEE WITH A NON-CONFLICTED INDIVIDUAL. FORM 990, PART VI, SECTION B, LINE 15 BECAUSE THE REPORTING ORGANIZATION DID NOT COMPENSATE ANY OFFICER OR EMPLOYEE, THE REPORTING ORGANIZATION HAS RESPONDED "NO." HOWEVER, THE COMPENSATION OF THE PRESIDENT, CEO, OTHER OFFICERS AND CERTAIN KEY EMPLOYEES IS DETERMINED BY THE COMPENSATION COMMITTEE OF HF MANAGEMENT SERVICES, LLC (A RELATED ORGANIZATION). THE COMMITTEE CONSISTS ONLY OF INDEPENDENT DIRECTORS. THE PROCESS FOR DETERMINING COMPENSATION IS DESCRIBED IN THE COMMITTEES CHARTER. THE PROCESS INCLUDES ENGAGEMENT OF AN OUTSIDE HUMAN RESOURCES CONSULTING FIRM TO CONDUCT A COMPARABILITY ANALYSIS. THE ANALYSIS INCLUDES COMPARABLE RANGES OF EXECUTIVE COMPENSATION USING THE COMPANY'S INDUSTRY CLASSIFICATION. THE COMMITTEE MEETS PRIOR TO IMPLEMENTATION OF ANY CHANGE IN COMPENSATION. CONTEMPORANEOUS MINUTES OF EACH MEETING ARE PREPARED. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE GENERAL PUBLIC BY PROVIDING COPIES ON REQUEST FOR INSPECTION AT ITS CORPORATE OFFICES. FORM 990, PART XI, LINE 9 RETAINED HOSPITAL PAYMENTS: $(2,536,748) million. The health care service agreements with Sponsors, provide that a portion of the premium revenue allocated to each Sponsor, as health care provider to Healthfirst Health Plan of New Jersey, Inc (HFNJ) plan members, attributable to a specified initial period of enrollment of each enrollee, is retained by HFNJ as additional capital contributions for the purpose of providing applicable statutory financial reserves. The portion may be subject to periodic adjustment by HFNJ's Board of Directors, subject to any restrictions by the State of New Jersey, as detailed in the health care service agreement. Retained hospital payments withheld by HFNJ totaled approximately $1.9 million. Due to the termination of a Sponsor's risk-sharing contract during 2013, additional health care service costs and exposure to premium deficiency liabilities were incurred by HFNJ, and Sponsors' risk sharing pools were updated to address these costs. As of December 31, 2014, Sponsors' risk-sharing pools reflected an approximate $4.5 million deficit, resulting in a net reduction of approximately $2.6 million in the retained payments balance for the year ended December 31, 2014. GAIN ON SALE OF MEDICAID MEMBERSHIP: $26,965,401. In September 2013, HFNJ entered into an asset purchase agreement with WellCare Health Plans of New Jersey, Inc. ("WellCare") to sell certain non-financial assets owned by HFNJ which were used in operation of HFNJ's Medicare and Medicaid business. In June 2014, HFNJ sold these non-financial assets relating to the Medicaid business to WellCare for approximately $27.0 million. FORM 990, PART XII, LINE 2B The filing organization does not publish stand-alone financial statements for general disclosure and use. Stand-alone financial statements are prepared solely for the New Jersey Department of Banking and Insurance and New Jersey Department of Human Services and are restricted as to their use. Such financial statements are prepared in conformity with accounting practices prescribed or permitted by the New Jersey Department of Banking and Insurance, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States. The statutory-basis financial statements are audited by an independent accountant. For purposes of general disclosure and use, including the Form 990, the filing organization is included in the consolidated financial statements of HF Management Services, LLC, a related organization, which are prepared in accordance with US GAAP and audited by an independent accountant. Other financial information included in the consolidated financial statements contains the GAAP-Basis balance sheet and income statement of the filing organization. FORM 990, PART XII, LINE 2C THE SELECTION OF THE INDEPENDENT AUDITOR IS ADMINISTERED BY THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF MANAGERS OF HF MANAGEMENT SERVICES, LLC (A RELATED ORGANIZATION). FORM 990, PART III, LINE 3 EFFECTIVE DECEMBER 31, 2014, HFNJ NO LONGER ACTIVELY MARKETS ITSELF AS AN INSURER AND BEGAN LIQUIDATION ACTIVITIES TO WIND-DOWN ITS OPERATIONS. HFNJ EXPECTS RUN-OUT OPERATIONS WILL LAST APPROXIMATELY TWO YEARS AND AT THE COMPLETION OF THIS PERIOD OF TIME, A PROPOSAL FOR DISSOLUTION OF HFNJ WILL BE SUBMITTED TO DOBI FOR APPROVAL. HEALTHFIRST INC 100 CHURCH ST FL 18 NEW YORK NY 10007 133714932 MANAGED CARE NY 501(C)(3) 11 Type I NA false MANAGED HEALTH INC 100 CHURCH ST FL 18 NEW YORK NY 10007 113029569 MANAGED CARE NY 501(C)(4) HEALTHFIRST true HEALTHFIRST PHSP INC 100 CHURCH ST FL 18 NEW YORK NY 10007 133783732 MANAGED CARE NY 501(C)(3) 9 HEALTHFIRST true SENIOR HEALTH PARTNERS INC 100 CHURCH STREET 18FL NEW YORK NY 10007 134103882 MGD LT CARE NY 501(C)(3) 9 HF MGMT SVCS true NEIGHBORHOOD HEALTH PROVIDERS INC 100 CHURCH ST FL 18 NEW YORK NY 10007 943474115 MANAGED CARE NY 501(C)(3) 9 HEALTHFIRST true HF MANAGEMENT SERVICES LLC 100 CHURCH ST FL 18 NEW YORK NY 100072601 134069806 3RD PTY ADM S NY NA false 0 HF ADMINISTRATIVE SERVICES INC 100 CHURCH ST FL 18 NEW YORK NY 100072601 133873482 3RD PTY ADM S NY MF MGMT SVCS C CORP true HEALTHFIRST INSURANCE COMPANY INC 100 Church Street FL 18 NEW YORK NY 100072601 464545744 INSUR. PROVIDER NY NA C CORP false false false false false true false false false false false false false true false false false false false false HF MANAGEMENT SERVICES LLC M 23028967 CONTRACTED RATE HF MANAGEMENT SERVICES LLC E 4350734 SURPLUS NOTE HF MANAGEMENT SERVICES LLC M 14500000 Cost FORM 990, SCHEDULE R, PART V, LINE 2 METHOD OF DETERMINING AMOUNT INVOLVED ITEM (1): THE AMOUNT REPRESENTS THE EXPENSES INCURRED AND PAID OR DUE TO THE RELATED ORGANIZATION FOR SERVICES RENDERED BASED ON CONTRACTED RATES APPROVED BY RESOLUTION OF THE ORGANIZATION'S BOARD OF DIRECTORS AND BY STATE REGULATORS. FORM 990, SCHEDULE R, PART V, LINE 2 METHOD OF DETERMINING AMOUNT INVOLVED ITEM (2): The amount represents Surplus Note Payable which was monies borrowed from HF Management Services, LLC to fund Healthfirst Health Plan of New Jersey, Inc. It represents two 7 year note payables to HF Management Services, LLC. Interest is calculated and is adjusted at the prime rate. FORM 990, SCHEDULE R, PART V, LINE 2 METHOD OF DETERMINING AMOUNT INVOLVED ITEM (3): In 2014, subsequent to the closing of the sale transaction to Wellcare, HFNJ recorded a liability due to HFMS in the amount of $14.5 million for the system configuration and programming, marketing and vendor costs that HFMS previously provided to HFNJ, as a component of its administrative services agreement with HFMS. The payment of these costs was contingent upon the closing of a sale transaction between HFNJ and Wellcare, which took place in June 2014.