2014-11-14T13:27:35-06:00 2013-12-31 PricewaterhouseCoopers LLP 125 High Street Boston MA 02110 990 2013-01-01 042452600 HARVARD PILGRIM HEALTH CARE INC % BETH CREAVIN HARV 7812636000 93 WORCESTER STREET Suite WELLESLEY MA 024819181 CHARLES GOHEEN CFO/TREASURER 7812636000 2014-11-13 true GWEN SPENCER P00641463 7812636000 2013 2015-11-30 17:44:51Z ERIC H SCHULTZ 93 WORCESTER STREET WELLESLEY MA 024819181 2142477807 false X www.harvardpilgrim.org X 1969 MA SEE SCHEDULE O. 13 10 1323 0 191346363 -21279078 39383858 38820660 1983079801 1851354606 20277787 18796382 2906947 3157900 2045648393 1912129548 568167 1781384 1707014804 1584854375 70826952 70580461 0 0 0 246841239 241768556 2025251162 1898984776 20397231 13144772 903918416 878795837 399673770 358071709 504244646 520724128 X SEE SCHEDULE O. false false 1814280350 1781384 1852152411 To improve the quality and value of health care for the people and COMMUNITIES WE SERVE. AT 12/31/13, HPHC, INC. HAD 328,793 FULLY INSURED MEMBERS, AMBULATORY ENCOUNTERS WERE 2,378,202 AND HOSPITAL DAYS INCURRED WERE 93,207. 38820660 0 0 The Harvard Pilgrim Health Care Institute, LLC performs research AND RESEARCH ADMINISTRATION, FOR GRANTS AND CONTRACTS AWARDED TO HPHC, INC. 0 0 0 1853101010 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 true false false false false true true true true true false true 26431 0 true 1323 true true true false false false false false false false false false X 13 10 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 BARRY L SHEMIN CHAIRMAN/DIRECTOR 5.0 0.0 X 37100 0 0 MARY ANN TOCIO VICE CHAIRMAN/DIRECTOR 5.0 0.0 X 34500 0 0 CONSTANCE SMITH BARR MD DIRECTOR 5.0 0.0 X 37613 0 0 JOHN H BUDD ESQ DIRECTOR (UNTIL 5/13) 5.0 0.0 X 20377 0 0 Hedwig Whitney DIRECTOR (as of 5/13) 3.0 0.0 X 15733 0 0 EDWARD F MCCAULEY CPA DIRECTOR 5.0 0.0 X 32300 0 0 JOSEPH F O'DONNELL DIRECTOR 3.0 2.0 X 35150 0 0 SUSAN V DUPREY DIRECTOR 3.0 0.0 X 27300 0 0 JOYCE A MURPHY DIRECTOR 5.0 0.0 X 34500 0 0 SCOTT S HARTZ DIRECTOR 3.0 0.0 X 25500 0 0 EARL W BAUCOM DIRECTOR 5.0 0.0 X 28500 0 0 SHELBY M CHODOS DIRECTOR 3.0 0.0 X 24900 0 0 TRAMMELL LOUIS GUTIERREZ DIRECTOR 3.0 0.0 X 29100 0 0 ERIC H SCHULTZ PRES/CEO/DIR 35.0 15.0 X X 1879386 0 302393 ROBERTA H HERMAN MD COO (UNTIL 7/13) 40.0 10.0 X 1107888 0 124874 LAURA S PEABODY CLERK/SECR/CLO (UNTIL 6/13) 35.0 15.0 X 609715 0 35682 CHARLES R GOHEEN CFO/TREASURER 40.0 10.0 X 544048 0 113994 DEBORAH A NORTON CHIEF INFORMATION OFFICER 50.0 0.0 X 575573 0 124443 JOHN F LANE CHIEF HUMAN RESOURCES OFFICER 50.0 0.0 X 469646 0 105835 MICHAEL S SHERMAN MD SR VP CMO 40.0 10.0 X 429461 0 51443 SCOTT ALLEN CHIEF ACTUARY (UNTIL 11/13) 40.0 10.0 X 643912 0 45644 THOMAS F MALONEY INTERIM LEGAL OFF (AS OF 6/13) 40.0 10.0 X 245057 0 47440 TU NGUYEN VP/CHIEF ACTUARY (AS OF 12/13) 40.0 10.0 X 210372 0 33782 VINCENT CAPOZZI Sr VP Sales & MARKETING 40.0 10.0 X 484762 0 47798 BETH ANN ROBERTS SR VP REGIONAL MARKETS 35.0 15.0 X 311511 0 50897 RICHARD WEISBLATT SVP PROV NTWRK & HEALTH SERVS 40.0 10.0 X 398970 0 43316 PRANAV MEHTA SVP PROD&BUS PLAN (AS OF 4/13) 40.0 10.0 X 318624 0 19297 MARTHA MURPHY VP SALES 40.0 10.0 X 305914 0 45767 Jonathan Edwards SALES EXECUTIVE 40.0 10.0 X 445390 0 47263 Richard Platt EXEC DIR OF HPHC INSTITUTE 50.0 0.0 X 357041 0 30819 Debra Ann Rittenour VICE PRESIDENT-SENIOR PROGRAMS 40.0 10.0 X 338623 0 22735 Cynthia Napier Rosenberg SENIOR MEDICAL DIRECTOR 40.0 10.0 X 310238 0 30516 JAMES W DUCHARME FORMER CFO 0.0 0.0 X 152919 0 0 MICHELLE J CLAYMAN FORMER INTERIM CFO 35.0 15.0 X 289073 0 45342 10810696 0 1369280 354 true true false DELL MARKETING LP 2300 W PLANO PARKWAY PLANO TX 75075 SEE SCHEDULE O 131429928 ORACLE AMERICA INC 500 ORACLE PARKWAY REDWOOD SHORES CA 94065 IT CONSULTING 7781413 HILL HOLLIDAY CONNORS COSMOPULOS IN PO BOX 3600-16 BOSTON MA 022410616 ADVERTISING 7359640 BOSTON CONSULTING GROUP INC Exchange Place 31st Floor BOSTON MA 02109 MGMT. CONSULTING 4480000 TERADATA OPERATIONS INC 125 HIGH STREET BOSTON MA 02110 CONSULTING 4061191 392 32837599 5983061 38820660 Member Premiums & Fees 524114 1661588555 1661588555 PPO Premiums (fully insured) 524298 189766051 189766051 1851354606 18456286 18456286 0 0 7079998 4719903 2360095 0 2360095 1580312 779783 225968452 225628356 340096 340096 340096 0 0 0 Provider Settlement & Other 900099 797805 797805 797805 1912129548 1662386360 191346363 19576165 X 1781384 1781384 0 0 1584854375 1584854375 9756311 7805049 1951262 487334 389867 97467 43149256 34519405 8629851 3773343 3018674 754669 9466091 7572873 1893218 3948126 3158501 789625 0 547706 547706 4119757 4119757 1692170 1692170 0 0 23121173 23121173 8437647 8437647 4605955 3684764 921191 71578346 57262677 14315669 0 6767582 5414066 1353516 1010888 1010888 0 184348 184348 5022532 4018026 1004506 0 23084523 18467618 4616905 0 STATE ASSESSMENT 2019334 2019334 PREMIUM TAX EXPENSE 2798594 2798594 BROKER FEES 42337389 42337389 RESEARCH GRANT EXPENSE 41410989 38820660 2590329 3029623 2423698 605925 1898984776 1853101010 45883766 0 59191230 -40592673 6598905 37038054 0 0 68187886 73018854 0 0 0 0 0 0 0 0 1973959 2710167 338756462 299173124 40039440 39583338 108075389 150783820 550521053 551823957 0 0 0 0 69330554 64430320 903918416 878795837 286967373 238001151 0 0 0 0 0 0 0 0 0 0 29000000 29000000 0 0 83706397 91070558 399673770 358071709 X 0 0 504244646 520724128 0 0 504244646 520724128 903918416 878795837 X 13144772 24907132 -21572422 X X false true X true true true X 26678179 25533070 35248737 39383858 38820660 165664504 2019092004 2192961680 1923464188 1792048879 1661388555 9588955306 0 0 0 2045770183 2218494750 1958712925 1831432737 1700209215 9754619810 4600991 2069803 2136833 1783862 670272 11261761 262742257 280563873 273971394 158993588 35731402 1012002514 267343248 282633676 276108227 160777450 36401674 1023264275 8731355535 31408392 31909635 28486210 26701263 25536284 144041784 0 31408392 31909635 28486210 26701263 25536284 144041784 0 2652972 287932 4325170 672396 797805 8736275 2079831547 2250692317 1991524305 1858806396 1726543304 9907397869 0.88130 0.98225 0.01454 0.01521 X SCHEDULE A, PART III, LINE 12 THIS LINE IS COMPOSED OF PROVIDER SETTLEMENT/OTHER INCOME FOR 2011, 2012, AND 2013 AND OTHER INCOME FOR 2009 AND 2010. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false true false false false false true 603070 false true 1224770 1827840 false SCHEDULE C, PART II-B, LINE 1 DURING THE YEAR, HPHC PAID $1,224,770 IN MEMBERSHIP DUES. OF THE AMOUNT SHOWN, $35,635 WAS PAID TO THE MAINE ASSOCIATION OF HEALTH PLANS, $476,790 WAS PAID TO AMERICA'S HEALTH INSURANCE PLANS, $698,545 WAS PAID TO THE MASSACHUSETTS ASSOCIATION OF HEALTH PLANS AND $13,800 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, $401,400 WAS PAID TO CONSULTING FIRMS. HPHC ALSO HAS INTERNAL STAFF WHO LOBBY. OF THE AMOUNT SHOWN, $135,670 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 13944229 36222063 28220050 21946242 282302482 270953074 11349408 39583338 SECURITIES 218222485 C CORPORATE DEBT SECURITIES 333601472 C 551823957 INVESTMENT IN AFFILIATES 59762842 SPECIAL DEPOSITS 1910688 DUE FROM AFFILIATES 2756790 64430320 0 UNEARNED GROUP PREMIUM 25777133 DUE TO AFFILIATES 12952996 ACCIDENT AND HEALTH PLANS 51185964 OTHER ACCRUED EXPENSES 1154465 91070558 X PART X, LINE 2: THIS IS THE FIN 48 FOOTNOTE FROM HARVARD PILGRIM HEALTH CARE, INC. AND AFFILIATES CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. HPHC, INC., NEW ENGLAND, 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. THE AGENCY, THE INSURANCE COMPANY, HOLDINGS, AND HPI ARE TAXABLE ENTITIES. AMOUNTS PROVIDED FOR FEDERAL AND STATE INCOME TAXES RELATED TO THE TAXABLE ENTITIES HAVE BEEN CLASSIFIED AS OPERATING EXPENSES BECAUSE THEY ARE IMMATERIAL. IN ADDITION, THE AGENCY, INSURANCE COMPANY, HOLDINGS, AND HPI HAVE IMMATERIAL CURRENT AND DEFERRED TAX ASSETS AND LIABILITIES RELATED TO TEMPORARY DIFFERENCES BETWEEN THE TAX AND FINANCIAL STATEMENT BASIS OF ASSETS AND LIABILITIES. HARVARD PILGRIM DID NOT HAVE ANY UNRECOGNIZED TAX BENEFITS AS OF DECEMBER 31, 2013 AND 2012. true Harvard Pilgrim Health Care Foundation Inc 93 Worcester St Wellesley MA 024819181 042708004 501(c)(3) 1781384 1 SCHEDULE I, PART I, LINE 2 HARVARD PILGRIM HEALTH CARE (HPHC) 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 MINIGRANTS OF $500 EACH THAT ARE APPROVED BY AN APPOINTED COMMITTEE BEFORE THEY ARE 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. FOUNDATION STAFF REVIEWS THESE APPLICATIONS FOR ACCURACY OF PURPOSE AND LEGITIMACY OF THE ORGANIZATION. 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 X X true true false false false false false true true true ERIC H SCHULTZ PRES/CEO/DIR 844331 0 448408 0 586647 0 275400 0 26993 0 2181779 0 566525 0 ROBERTA H HERMAN MD COO (UNTIL 7/13) 275832 0 207500 0 624556 0 98421 0 26453 0 1232762 0 306375 0 LAURA S PEABODY CLERK/SECR/CLO (UNTIL 6/13) 218160 0 157001 0 234554 0 20400 0 15282 0 645397 0 196493 0 CHARLES R GOHEEN CFO/TREASURER 421044 0 69069 0 53935 0 108400 0 5594 0 658042 0 31533 0 DEBORAH A NORTON CHIEF INFORMATION OFFICER 337613 0 129731 0 108229 0 90400 0 34043 0 700016 0 83205 0 JOHN F LANE CHIEF HUMAN RESOURCES OFFICER 279086 0 103900 0 86660 0 77400 0 28435 0 575481 0 69660 0 MICHAEL S SHERMAN MD SR VP CMO 318909 0 90440 0 20112 0 20400 0 31043 0 480904 0 0 0 SCOTT ALLEN CHIEF ACTUARY (UNTIL 11/13) 378422 0 219200 0 46290 0 20400 0 25244 0 689556 0 0 0 THOMAS F MALONEY INTERIM LEGAL OFF (AS OF 6/13) 200140 0 43378 1539 19672 0 27768 0 292497 0 0 0 TU NGUYEN VP/CHIEF ACTUARY (AS OF 12/13) 183640 0 26143 589 4251 0 29531 0 244154 0 0 0 VINCENT CAPOZZI Sr VP Sales & MARKETING 320237 0 139694 0 24831 0 20400 0 27398 0 532560 0 0 0 BETH ANN ROBERTS SR VP REGIONAL MARKETS 241794 0 63700 0 6017 0 20400 0 30497 0 362408 0 0 0 RICHARD WEISBLATT SVP PROV NTWRK & HEALTH SERVS 291490 0 83248 0 24232 0 19476 0 23840 0 442286 0 0 0 PRANAV MEHTA SVP PROD&BUS PLAN (AS OF 4/13) 168275 0 150000 349 0 0 19297 0 337921 0 0 0 MARTHA MURPHY VP SALES 139608 0 148059 0 18247 0 20400 0 25367 0 351681 0 0 0 Jonathan Edwards SALES EXECUTIVE 55195 0 383691 0 6504 0 19608 0 27655 0 492653 0 0 0 Richard Platt EXEC DIR OF HPHC INSTITUTE 332683 0 0 0 24358 0 28326 0 2493 0 387860 0 0 0 Debra Ann Rittenour VICE PRESIDENT-SENIOR PROGRAMS 264439 0 70337 0 3847 0 12451 0 10284 0 361358 0 0 0 Cynthia Napier Rosenberg SENIOR MEDICAL DIRECTOR 282244 0 21613 0 6381 0 5262 0 25254 0 340754 0 0 0 JAMES W DUCHARME FORMER CFO 0 0 0 152919 0 0 0 0 0 152919 0 152919 0 MICHELLE J CLAYMAN FORMER INTERIM CFO 233125 0 51413 0 4535 0 17203 0 28139 0 334415 0 0 0 SCHEDULE J, PART I, LINE 4A JAMES W. DUCHARME'S EMPLOYMENT WITH HPHC WAS TERMINATED IN JANUARY 2012. PURSUANT TO THE SEVERANCE PROVISION OF HIS HPHC EMPLOYMENT CONTRACT, MR. DUCHARME WAS ELIGIBLE TO RECEIVE A CONTINUATION OF HIS BASE SALARY AND BENEFITS FOR A PERIOD OF UP TO ONE YEAR AND ANY INCENTIVE COMPENSATION THAT HE WAS ENTITLED TO FOR FISCAL YEARS 2010 THROUGH 2012. IN 2013, HE RECEIVED INCENTIVE COMPENSATION OF $152,919. ROBERTA HERMAN'S EMPLOYMENT WITH HPHC TERMINATED IN JULY 2013. PURSUANT TO THE SEVERANCE PROVISION OF HER CONTRACT, DR. HERMAN WAS ELIGIBLE TO RECEIVE A CONTINUATION OF HER BASE SALARY AND BENEFITS FOR A PERIOD OF UP TO ONE YEAR AND ANY INCENTIVE COMPENSATION SHE WAS ENTITLED TO FOR FISCAL YEARS 2013 THROUGH 2015. IN 2013 SHE RECEIVED SEVERANCE PAYMENTS OF $244,865. SCHEDULE J, PART I, LINE 4B LONG TERM INCENTIVE PLAN HPHC ADOPTED LONG-TERM INCENTIVE PLANS FOR ITS CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, CHIEF FINANCIAL OFFICER, CHIEF LEGAL OFFICER, CHIEF INFORMATION OFFICER, AND CHIEF HUMAN RESOURCES OFFICER FOR FISCAL YEARS 2010-2012 AND FOR 2013-2015. THE PLANS ARE 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 THESE PLANS 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. THE FOLLOWING INDIVIDUALS WERE PAID THE FOLLOWING AMOUNTS FROM THE 2010-2012 PLAN DURING FY 2013: ERIC H. SCHULTZ - $566,525 ROBERTA H. HERMAN, M.D. - $306,375 LAURA S. PEABODY - $196,493 CHARLES R. GOHEEN - $31,533 DEBORAH A. NORTON - $83,205 JOHN F. LANE - $69,660 JAMES W. DUCHARME - $152,919 SCHEDULE J, PART I, LINE 7 EXECUTIVE INCENTIVE PLAN HPHC HAS AN EXECUTIVE INCENTIVE PLAN TO INCENT AND REWARD PARTICIPANTS & PERMIT THEM TO SHARE IN SUCCESSFUL COMPANY FINANCIAL RESULTS, ENCOURAGE THEM TO WORK AS A TEAM AND PAY 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 ADOPTED A PLAN (THE "457(B) PLAN") TO PROVIDE ADDITIONAL DISCRETIONARY RETIREMENT BENEFITS TO THOSE EXECUTIVES WHO MAY LOSE BENEFITS DUE TO THE IRS LIMITATIONS ON COMPENSATION IN THE 401(K) PRISM RETIREMENT PLAN FOR THE PERIOD BETWEEN JANUARY 1 AND DECEMBER 31, 2013. ELIGIBLE PARTICIPANTS WILL RECEIVE A DISCRETIONARY 8% EMPLOYER CONTRIBUTION TO THE 457(B) PLAN FROM HARVARD PILGRIM HEALTH CARE TO MAKE UP FOR THE SHORT FALL THEY EXPERIENCE IN THE COMPANY CONTRIBUTION TO THE PRISM 401(K) RETIREMENT PLAN BECAUSE THEY HAVE EARNINGS IN EXCESS OF THE ANNUAL IRS LIMIT FOR COVERED COMPENSATION. THE EMPLOYER CONTRIBUTION AMOUNT FOR THE 2013 PLAN YEAR IS BASED ON 8% OF THE PARTICIPANTS' 2012 ELIGIBLE EARNINGS IN EXCESS OF $255,000, UP TO $17,500. IF THE TOTAL CALCULATION OF THE 8% DIFFERENCE IS ABOVE THE IRS ANNUAL CONTRIBUTION LIMIT, THE COMPANY WILL PAY THE AMOUNT ABOVE THE IRS LIMIT TO THE EXECUTIVE IN CASH. SCHEDULE J, PART I, LINE 8 CHARLES GOHEEN ENTERED INTO AN EMPLOYMENT CONTRACT WITH HPHC IN AUGUST 2012. THE TERMS OF HIS CONTRACT INCLUDE A BASE SALARY, INCENTIVE PROGRAM, HEALTH BENEFITS, AND A SEVERANCE PROVISION. SCHEDULE J, PART II, COLUMN (F) COMPENSATION REPORTED AS DEFERRED IN PRIOR FORM 990 FOR CERTAIN INDIVIDUALS LISTED ON SCHEDULE J, PART II, AMOUNTS CREDITED UNDER THE 2013-2015 LONG TERM INCENTIVE PLAN ARE INCLUDED IN SCHEDULE J, PART II, COLUMN (C). AMOUNTS CREDITED AND DISCLOSED ON THE FORM 990 IN PRIOR YEARS THAT VESTED AND WERE PAID OUT IN CALENDAR YEAR 2013 FOR THE 2010-2012 LONG TERM INCENTIVE PLAN ARE REPORTED IN COLUMN (B)(III) AND IN COLUMN (F). BRIGHT HORIZONS VICE CHR/DIR IS PRES/COO 2444354 PAYMENTS FOR HEALTH INSURANCE false JOHN HANCOCK USA DIRECTOR IS BOD MEM / EE 23938484 PAYMENTS FOR HEALTH INSURANCE false SCHEDULE L, PART IV 1) MARY ANN TOCIO, VICE CHAIR/DIRECTOR OF HPHC, IS PRESIDENT/COO OF BRIGHT HORIZONS. 2) SCOTT HARTZ, DIRECTOR OF HPHC, IS A BOARD MEMBER AT JOHN HANCOCK, USA. FORM 990, PART I, LINE 1 & PART III, LINE 1 ORGANIZATION'S MISSION HARVARD PILGRIM OPERATES AS A NOT-FOR-PROFIT HEALTH PLAN PROVIDING COMPREHENSIVE HEALTH MAINTENANCE ORGANIZATION SERVICES, ACCESS TO HEALTH CARE AND OTHER RELATED SERVICES IN MASSACHUSETTS, NEW HAMPSHIRE AND MAINE TO GROUP AND INDIVIDUAL MEMBERS THROUGH CONTRACTS WITH PHYSICIANS, ESTABLISHED PRIMARY CARE AND MULTI-SPECIALTY PHYSICIAN GROUPS, HOSPITALS AND OTHER HEALTH CARE PROVIDERS. OUR MISSION IS TO IMPROVE THE QUALITY AND VALUE OF HEALTH CARE FOR THE PEOPLE AND COMMUNITIES WE SERVE. FOR MORE THAN 30 YEARS, HARVARD PILGRIM HAS BUILT A REPUTATION FOR EXCEPTIONAL CLINICAL QUALITY, PREVENTIVE CARE, DISEASE MANAGEMENT AND MEMBER SATISFACTION. WE REMAIN AN INDUSTRY LEADER BY CONTINUING TO DEVELOP NEW WAYS TO IMPROVE UPON HOW WE CARE FOR OUR MEMBERS. PHYSICIAN PRACTICES IN MASSACHUSETTS, NEW HAMPSHIRE AND MAINE 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, INCREASING 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 A BROADER PATIENT POPULATION. THROUGH THE HARVARD PILGRIM HEALTH CARE INSTITUTE, OUR SPONSORED EDUCATIONAL PROGRAMS AND RESEARCH AGENDA SEEKS 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 HPHC 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/Director CHARLES R. GOHEEN - CFO/Treasurer THOMAS F. MALONEY - Interim Legal Officer (as of 6/13) LAURA S. PEABODY - Clerk/Secretary/CLO (until 6/13) SCOTT ALLEN - Chief Actuary (until 11/13) FORM 990, PART VI, LINE 11B ONCE HARVARD PILGRIM'S FORM 990 IS COMPLETED WITH THE ASSISTANCE OF ITS OUTSIDE TAX ADVISORS, IT IS FIRST REVIEWED BY HPHC'S INTERNAL MANAGEMENT AND THEN HPHC'S AUDIT COMMITTEE CHAIRPERSON (AN INDEPENDENT MEMBER OF THE BOARD OF DIRECTORS OF THE ORGANIZATION). FOLLOWING THAT REVIEW, HARVARD PILGRIM INTERNAL MANAGEMENT AND OUTSIDE TAX 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 DIRECTORS, OFFICERS AND EMPLOYEES ARE SUBJECT TO HPHC'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 AND ITS SUBSIDIARIES, OR CAUSE THE USE OF HPHC RESOURCES FOR OTHER THAN HPHC PURPOSE. IN ADDITION TO BEING SUBJECT TO HPHC'S CONFLICT OF INTEREST POLICY, HPHC'S BOARD OF DIRECTORS AND BOARD COMMITTEE MEMBERS ARE ANNUALLY REQUIRED TO COMPLETE AND SIGN A CONFLICTS OF INTEREST DISCLOSURE FORM, WHICH IS REPORTED TO THE BOARD OF DIRECTORS IN ACCORDANCE WITH THE DISCLOSURES AND REVIEW PROCESS SET FORTH IN HPHC'S BYLAWS. IN ADDITION, ROUGHLY HALF OF HPHC'S EMPLOYEES WHO MAKE DECISIONS ON BEHALF OF THE ORGANIZATION, OR ARE IN A POSITION TO INFLUENCE DECISIONS MADE ON BEHALF OF HPHC, 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 ALSO HAS MORE STRINGENT CONFLICTS 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 & 15B HPHC HAS AN INDEPENDENT COMPENSATION COMMITTEE THAT ANNUALLY REVIEWS THE COMPENSATION OF THE COMPANY'S OFFICERS AND KEY EMPLOYEES. THE COMPENSATION COMMITTEE CONSIDERS MARKET DATA AND ANALYSES ASSEMBLED BY INDEPENDENT COMPENSATION CONSULTANTS. THE COMMITTEE'S DELIBERATIONS ARE REFLECTED IN ITS MINUTES. FORM 990, PART VI, LINE 19 HPHC 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 (NAIC) 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 NONADMITTED ASSETS ($5,951,755) CHANGE IN SURPLUS NOTES ($9,714,897) CHANGE IN NET POST-RETIREMENT SERVICE COSTS & RECOGNIZED LOSS FOR POST-RETIREMENT MEDICAL PLAN $2,376,579 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ($8,282,349) ____________ TOTAL ($21,572,422) FORM 990, PART XII, LINE 1 HARVARD PILGRIM HEALTH CARE 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 Institute L 133 BROOKLINE AVE BOSTON MA 02215 943477531 RESEARCH MA 1640578 25267880 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 ST 2ND FL 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 INSURA MA HPHC INC C CORP 654942674 162235024 1.00000 true HPHC Holding Company Inc 93 WORCESTER STREET WELLESLEY MA 024819181 043306439 HOLDING COMPA MA HPHC INC C CORP 0 0 1.00000 true Plan Marketing Insurance Agency Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 042734281 BROKERAGE MA HEALTH PLANS C CORP 0 0 1.00000 true HPHC Insurance Agency Inc 93 WORCESTER STREET WELLESLEY MA 024819181 043016201 BROKERAGE MA HPHC INC C CORP 99654 508415 1.00000 true Health Plans Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 042734278 TPA MA HPHC INC C CORP 30584908 20882523 1.00000 true Care Management Services Inc 1500 W PARK DRIVE STE 330 WESTBOROUGH MA 01581 043438779 ASO SERVICES MA HEALTH PLANS C CORP 0 0 1.00000 true HARVARD PILGRIM PHYSICIANS ASSOC INC 93 WORCESTER ST WELLESLEY MA 024819181 PHYSICIAN ORG MA HPHC INC SEE PART VII 0 0 1.00000 true true true false true true false false false false true false true false true true false true false false HPHC Foundation Inc b 1781384 cash HPHC of New England Inc l,n,o 27055208 allocation HPHC Foundation Inc l,n,o 395447 allocation HPHC Insurance Company Inc l,n,o 108765456 allocation Health Plans Inc l,n,o 4410571 allocation HPHC Foundation Inc a (iv 221173 contract Health Plans Inc a (iv 297019 contract HPHC of New England Inc e 5679981 contract HPHC Foundation Inc d 2840724 contract Health Plans Inc d 1221369 contract HPHC Insurance Agency Inc e 17558 contract HPHC Insurance Company Inc e 6818107 contract HPHC Insurance Company Inc b 8000000 cash Schedule R, Part II HARVARD PILGRIM HEALTH CARE OF CONNECTICUT WAS INACTIVE DURING 2013. Schedule R, Part IV HARVARD PILGRIM PHYSICIANS ASSOCIATION, INC. IS A NONPROFIT ORGANIZED UNDER THE LAWS OF MASSACHUSETTS. THIS IS AN INACTIVE ORGANIZATION.