2012-05-15T09:05:14-05:00 2011-06-30 Deloitte Tax LLP 50 So 6th St Suite 2800 Minneapolis MN 554021538 990 2010-07-01 743121855 Agassiz Assurance Company AGAS 8028645599 100 Bank Street No 610 Burlington VT 05401 Lisa M Carlson 7012344811 2012-05-15 1 Kristina Rasmussen 6123974000 2010 2016-02-24 21:20:13Z Kelby Krabbenhoft 1305 W 18th St Sioux Falls SD 57117 17145229 0 X N/A X 2004 VT Dedicated to the work of health and healing. 20 7 0 0 0 0 0 0 6006379 1342015 639805 1460631 0 0 6646184 2802646 0 0 0 0 0 0 0 0 0 5321899 1482365 5321899 1482365 1324285 1320281 28176904 25716738 17866647 13932587 10310257 11784151 X Sanford's mission is "Dedicated to the Work of Health and Healing." Part of the Sanford Health System, Sanford is committed to the healthcare needs of communities throughout South Dakota, North Dakota, Minnesota and Iowa. Sanford provides a full range of primary and specialty health care services. 0 1 1332345 1342015 Agassiz Assurance Company (the company) was formed under the captive insurance laws of the state of Vermont in 2004 and provides claims made and occurrence based health care professional liability and commercial general liability coverage to Sanford and its affiliates. The purpose of this company is to provide other Sanford entities a long term, stable access to healthcare professional liability coverage and over the long term reduce the cost of this coverage through improved risk control and better claim management. The company has no employees and is managed by Marsh Management Services, Inc. pursuant to a management agreement. 1332345 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 X 20 7 1 1 1 0 1 0 0 1 0 0 0 0 1 1 1 1 1 1 1 0 X Heather Cook CO Marsh Management 8028645599 100 Bank Street Suite 610 Burlington VT 05401 X Ann Christenson 0.50 X 0 0 0 Barb Everist 0.50 X 0 0 0 Barbara Stork 0.50 X 0 0 0 Barry Martin 0.50 X 0 0 0 Brent Teiken 0.50 X 0 0 0 David Beito 0.50 X 0 0 0 Don Morton 0.50 X 0 0 0 Jerome Feder 0.50 X 0 0 0 Jim Entenman 0.50 X 0 0 0 John C Vanderwoude 60.00 X 0 1184560 30701 John Jambois 0.50 X 0 0 0 Lauris Molbert 0.50 X 0 0 0 Marcy Waterfall 0.50 X 0 0 0 Mark Paulson MD 60.00 X 0 220036 46521 Michael L Olson 60.00 X 0 518455 6998 Michael L Olson Deferred Comp 60.00 X 0 0 46935 Mikal Claar 0.50 X 0 0 0 Pamela Anderson 0.50 X 0 0 0 Richard D Hardie 60.00 X 0 444434 18343 Ronald Moquist 0.50 X 0 0 0 Terrence Grimm MD 60.00 X 0 585887 42328 Terry Baloun 0.50 X 0 0 0 Kelby K Krabbenhoft 60.00 X X 0 1274514 19513 Kelby K Krabbenhoft Deferred Comp 60.00 X X 0 0 565838 Lisa Carlson 60.00 X X 0 418112 51907 Bill Marlette 60.00 X X 0 695355 1438 Bill Marlette Deferred Compensation 60.00 X X 0 0 129024 Paul Richard 60.00 X X 0 395926 41452 Kim J Patrick 60.00 X X 0 438522 55000 0 6175801 1055998 0 0 1 0 0 Favorable Loss Develop 900099 1304727 1304727 Net conversion to depo 525100 37288 37288 1342015 1415642 1415642 14387572 14342583 44989 44989 44989 2802646 1342015 0 1460631 57500 57500 13667 13667 27500 27500 51353 51353 PolicyHolder Dividend 1304727 1304727 Premium Tax 26165 26165 Misc Expenses 1453 1453 1482365 1332345 150020 0 826356 5221704 6670000 1364202 21110 25193 20436313 18900715 223125 204924 28176904 25716738 67789 93516 5555288 6965231 12243570 6873840 17866647 13932587 X 0 0 750000 750000 9560257 11034151 10310257 11784151 28176904 25716738 X 1320281 153613 X 0 1 1 X 0 X X X 0 0 0 Sanford USD Medical Center 460227855 3 1 116514 Sanford Medical Center Fargo 460226909 3 1 77676 Sanford Clinic 460447693 3 1 565078 Sanford Clinic North 911770748 9 1 612810 Sanford Home Health 460282134 9 1 0 Sanford Health Foundation North 450398104 7 1 0 Sanford ResearchUSD 460450378 3 1 1038 Sanford Medical Center Thief River Falls 410709579 3 1 19567 Sanford Medical Center Mayville 450228899 3 1 889 Meritcare Minnesota 261530302 3 1 0 Sanford Medical Center Wheaton 272042143 3 1 0 Sanford Health of Northern Minnesota 411266009 3 1 0 North Country Medical Clinic 411753855 3 1 0 Baker Park Inc 411372480 9 1 0 14 1393572 0 Losses & Loss Adjustments 2821752 Due to Related Parties 2747361 Policyholder Dividend Payable 1304727 6873840 2802646 1482365 1320281 782260 -628647 153613 1473894 3584906 782260 782260 2802646 0 2802646 1482365 0 1482365 0 1482365 Description of Uncertain Tax Positions Under FIN 48: Part X: The Company recognizes uncertain tax positions under accounting guidance which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. Accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company had no uncertain tax positions as of June 30, 2011 and 2010. Part XI, Line 8 - Other Adjustments: Transfer to trading securities -628,647. 0 1 0 0 0 0 1 0 0 John C Vanderwoude 0 1000000 0 0 0 184560 0 7350 0 23351 0 1215261 0 0 Mark Paulson MD 0 196432 0 0 0 23604 0 31527 0 14994 0 266557 0 0 Michael L Olson 0 504486 0 0 0 13969 0 0 0 6998 0 525453 0 0 Michael L Olson Deferred Comp 0 0 0 0 0 0 0 46935 0 0 0 46935 0 0 Richard D Hardie 0 414473 0 0 0 29961 0 7350 0 10993 0 462777 0 0 Terrence Grimm MD 0 500004 0 0 0 85883 0 34928 0 7400 0 628215 0 0 Kelby K Krabbenhoft 0 789232 0 0 0 485282 0 0 0 19513 0 1294027 0 0 Kelby K Krabbenhoft Deferred Comp 0 0 0 0 0 0 0 565838 0 0 0 565838 0 0 Lisa Carlson 0 335811 0 0 0 82301 0 34928 0 16979 0 470019 0 0 Bill Marlette 0 440759 0 0 0 254596 0 0 0 1438 0 696793 0 0 Paul Richard 0 314418 0 0 0 81508 0 34928 0 6524 0 437378 0 0 Kim J Patrick 0 303696 0 0 0 134826 0 35520 0 19480 0 493522 0 0 Part I, Line 1a On Part I, Questions Regarding Compensation, Sanford checked several of the items as provided to listed persons: First Class or Charter Travel - Charter travel for business purposes is provided for individuals as needed and as cost appropriate, in accordance with written policies. These costs are not included in the W-2's of the individuals as they are incurred for business purposes of Sanford. Travel for Companions - Limited travel for companions is required for certain annual meetings. These costs are not included in the W-2's of the individuals as they are incurred for business purposes of Sanford. Tax Indemnification and gross-up payments - Certain compensation may be grossed up to include appropriate tax amounts. Health or social club dues or initiation fees - All Sanford employees are eligible for discounted wellness memberships, a portion of these discounts and other club dues are included as fringe benefits, and taxed as such. Personal services - Individuals may have benefits which include tax preparation or planning, this benefit is included in income and taxed. Part I, Line 3: The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation of arrangements of the officers of the organization, and to report findings and recommendations to the Sanford Board of Trustees for deliberation and action. The most recent study was completed in 2011. Part I, Line 4b Part I, Line 4b / Schedule J, Part II, Column C: Employer contributions to defined contribution SERP Plans are included in Column C. Participants and contributions include: Kim Patrick $28,170. In addition to employer contributions to pension plans, amounts representing increases and decreases in actuarial value (actuarial value factors include age, tenure and salary) of defined benefit SERP Plans are included in Column C. Participants and changes in values include: Kelby Krabbenhoft $420,519, Bill Marlette $96,062. Part I, Line 6 Sanford physicians are compensated based on the professional services they perform within the clinic in which they provide care. Generally, the model is revenues less expenses. Physicians listed that were paid on this model include: Michael Olson, Richard Hardie. Part I, Line 7 Certain Executives are eligible for a discretionary incentive bonus, based on financial targets and other goals. Supplemental Information Part III Supplemental: Compensation reported on Schedule J includes: (B)(i) Base compensation - salaries are based on the experience and performance of each executive and bench-marked using independent compensation survey information. (B)(ii) - Bonus & incentive compensation - as part of executive compensation, individuals may be eligible for incentive performance compensation, however if the organization does not meet its financial targets, incentive payments are not paid, regardless of performance. (B)(iii) Other Reportable Compensation - generally includes taxable executive benefits. It also includes the one-time payout of previously deferred compensation (which was also reported as compensation in the earned period). To be in compliance with the IRS regulatory environment, listed individuals compensation includes a one-time payment of deferred compensation; this compensation was earned over multiple periods, and should be treated as earned over that length of time in exchange for services provided. (C) Deferred Compensation includes employer contributions to pension plans and the increase (or decrease) in the actuarial value (actuarial value factors include age, tenure and salary) of the defined benefit plans. (D) Nontaxable Benefits generally includes health insurance premiums. Supplemental Information Part III The Sanford Board of Trustees is comprised of 15 members, including nine volunteer community members, five physicians and the CEO. Compensation paid to any trustee is for full-time professional responsibilities as physicians or administrators of the organization. Supplemental Information Part III A memo regarding executive compensation, written by the Chairman of the Sanford Board of Trustees, is on file and available upon request. Supplemental Information Part III Compensation paid to trustees is for full-time professional responsibilities as physicians, administrators or employees of the organization. The total compensation paid to Kelby Krabbenhoft of $1,274,514 is comprised of Base salary of $789,232, and Other Taxable Earnings of $485,282. In addition, an amount of $565,838 has been reported for the estimated amount of ratable increase in value of the defined benefit pension plan, defined benefit SERP and a Gift Agreement Management Continuity Retention. Changes in Program Services Form 990, Part III, line 3 Change to Deposit Accounting. Deposit accounting is utilized for policies beginning May 1, 2010 effective July 1, 2010. Under deposit accounting, funds transferred to the Company are recorded as deposit liabilities. These liabilities are reduced as claim payments are made. Form 990, Part VI, Section A, line 2 Lisa Carlson and Pamela Anderson have a business relationship. The following officers, board members, and key employees are employees of Sanford or its related organizations. Many of these employees also serve on other related Sanford boards, or have business relationships with each other that span the organization as a whole: John Vanderwoude, Mark Paulson, Michael Olson, Richard Hardie, Terrence Grimm, Kelby Krabbenhoft, Lisa Carlson, Bill Marlette, Paul Richard. Form 990, Part VI, Section A, line 3 Agassiz utilized Marsh Vermont to provide management services to the Corporation. Form 990, Part VI, Section A, line 4 The sole member of the organization is Sanford. This was changed in the Articles of Incorporation and the By-Laws effective September 2010. Form 990, Part VI, Section A, line 6 Sole member is Sanford or its subsidiaries or affiliates. Form 990, Part VI, Section A, line 8b There are no committees with authority to act on behalf of the board. Form 990, Part VI, Section B, line 11 The Form 990 is prepared internally by the finance department and reviewed by executive management. An external accounting firm reviews the return prior to filing and prepares return highlights and key disclosures for the Board of Trustees meeting immediately following the return filing date. After the return is filed, a complete copy is made available to the current trustees. Form 990, Part VI, Section B, line 12c The annual Conflict of Interest disclosure process is managed by the Chief Compliance Officer (CCO). The CCO is responsible for assuring that all completed forms are returned in a timely and complete manner. Conflict of Interest questionnaires are sent to Sanford Trustees, members of the governing boards for subsidiary entities, officers, and key employees for all entities subject to the IRS Form 990 filings. The disclosures are summarized for review by the executive committee of the Board of Trustees, pursuant to policy. This review allows: 1) The Board to acquire an awareness of financial relationships of board members and key management employees and can invoke the recusal process on a case-by-case basis when potential conflicts are implicated in Board decisions and deliberations, and, 2) Gives the Board the opportunity to seek additional information and clarification about disclosures to determine potential conflicts of interest and how to manage such. Form 990, Part VI, Section B, line 15 The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation arrangements of the officers and operating unit executives of the organization, including the CEO, and to report the findings and recommendations to them for deliberation and action. The deliberations and actions are recorded in the minutes of the Sanford Board of Trustees. The most recent study was completed in 2011. Additionally, Sanford periodically engages an independent compensation consultant to review and issue a report regarding the reasonableness of the total compensation arrangements of all physicians employed by the organization. The most recent study of physician total compensation arrangements was completed in 2009. Form 990, Part VI, Section C, line 19 Although the organization does not maintain a website where the public can access these documents, it would respond individually to any requests or inquiries from the public for these documents. Form 990, Part VII: Sanford Trustees provide services to Sanford and its subsidiaries. Hours reported for each individual reflect the time spent on work related to either the filing organization or a related organization. Sanford Board of Trustees has ultimate governance responsibilities for each entity within the Sanford system. In addition, a Board of Directors is established for each entity, which has specific delegated responsibilities from the Board of Trustees related to the oversight of day to day operations of that entity. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 782,260. Transfer to trading securities -628,647. Total to Form 990, Part XI, Line 5: 153,613. Sanford Health 1305 West 18th Street Sioux Falls SD 57117 311527032 Supporting Organization SD 501(c)(3) 11-III Sanford 0 Sanford Health Foundation 1305 West 18th Street Sioux Falls SD 57117 363297853 Supporting Organization SD 501(c)(3) 11-I Sanford Health 1 Sanford 801 Broadway Drive Fargo ND 58122 271218956 Supporting Organization ND 501(c)(3) 11-II 0 SHM-Sanford 1305 West 18th Street Sioux Falls SD 57105 271213769 Supporting Organization SD 501(c)(3) 11-II 0 SHM-MeritCare 801 Broadway Drive Fargo ND 58122 271213717 Supporting Organization ND 501(c)(3) 11-II 0 Sanford North PO Box 2010 Fargo ND 58122 450385890 Supporting Organization ND 501(c)(3) 11-II Sanford 0 Sanford Medical Center Fargo PO Box 2010 Fargo ND 58122 450226909 Hospital ND 501(c)(3) 3 Sanford North 1 Sanford Clinic North PO Box 2010 Fargo ND 58122 911770748 Clinics ND 501(c)(3) 9 Sanford North 1 Sanford Health Network North PO Box 2010 Fargo ND 58122 450409348 Hospitals/Clinics ND 501(c)(3) 11-II Sanford North 1 Sanford Medical Center Wheaton 401 12th Street North Wheaton MN 56296 272042143 Hospital/Clinic MN 501(c)(3) 3 Sanford North 1 Sanford Health Foundation North PO Box 2010 Fargo ND 58122 450398104 Supporting Organization ND 501(c)(3) 7 Sanford North 1 Sanford Medical Center Thief River Falls 120 Labree Ave S Thief River Falls MN 56701 410709579 Hospital MN 501(c)(3) 3 Sanford North 1 Sanford Medical Center Mayville 42 6th Ave SE Mayville ND 58257 450228899 Hospital ND 501(c)(3) 3 Sanford North 1 MeritCare Minnesota 1720 South Highway 59 Thief River Falls MN 56701 261530302 Promotion of health MN 501(c)(3) 3 Sanford North 1 MeritCare Health Enterprises Inc PO Box 2010 Fargo ND 58122 450359785 Prescription drugs ND 501(c)(4) Sanford North 1 FM Ambulance Service 2215 18 St South Fargo ND 58103 450344371 EMT ND 501(c)(4) Sanford North 1 Sanford Health of Northern Minnesota 1300 Anne St NW Bemidji MN 56601 411266009 Hospital MN 501(c)(3) 3 Sanford North 1 Baker Park Inc 803 Dewey Ave NW Bemidji MN 56601 411372480 Low Income Senior Housing MN 501(c)(3) 9 Sanford Health of Northern Minnesota 1 Sanford Health Foundation of Northern Minnesota 1300 Anne St NW Bemidji MN 56601 411389317 Fundraising - Support MN 501(c)(3) 11-I Sanford Health of Northern Minnesota 1 North Country Medical Clinic 1300 Anne St NW Bemidji MN 56601 411753855 Family Practice Medical Clinic MN 501(c)(3) 3 Sanford Health of Northern Minnesota 1 Sanford ResearchUSD 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460450378 Research SD 501(c)(3) 3 Sanford Health 1 Sanford USD Medical Center 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460227855 Hospital SD 501(c)(3) 3 Sanford Health 1 Sanford Clinic 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460447693 Clinical Services SD 501(c)(3) 3 Sanford Health 1 Sanford Health Network 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460388596 Hospitals/Clinics SD 501(c)(3) 11-I Sanford Health 1 Sanford Home Health 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460282134 Home Health Services SD 501(c)(3) 9 Sanford Health 1 National Student Housing South Dakota LLC 100 S Phillips Sioux Falls SD 57104 202129839 Investment SD N/A RAC Rentals LLC 100 S Phillips Sioux Falls SD 57104 261961077 Investment SD N/A Heart Partners at Sanford 1305 W 18th Street Sioux Falls SD 57117 460449572 Healthcare SD N/A C Sanford Home Medical Equipment Inc 2710 W 12th Street Sioux Falls SD 57105 460388597 Healthcare Equipment SD N/A C Sanford Health Plan 300 Cherapa Place Sioux Falls SD 57103 911842494 Insurance SD N/A C Sanford Health Plan of MN 300 Cherapa Place Sioux Falls SD 57103 460445852 Insurance MN N/A C Healthcare Environmental Services Inc 1420 40th St NW Fargo ND 58102 450336598 Laundry and Incineration Services ND N/A C Bemidji Medical Equipment Inc 1300 Anne St NW Bemidji MN 56601 411551725 Retail Sales of DME MN N/A C North Country Management Inc 1300 Anne St NW Bemidji MN 56601 411820025 Management Services MN N/A C Sanford World Clinics 1305 West 18th Street Sioux Falls SD 57117 262707628 Healthcare SD N/A C 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 Sanford Medical Center Fargo K 3558942 Cost Sanford USD Medical Center K 3074294 Cost