2017-11-09T15:42:06-06:00 2016-12-31 860683059 BEACHFLEISCHMAN PC 1985 EAST RIVER ROAD SUITE 201 TUCSON AZ 85718 990 2016-01-01 461509576 COMPASS COOPERATIVE HEALTH PLAN INC COMP 6029572113 15333 N PIMA RD SUITE 305 SCOTTSDALE AZ 852602717 DARREN ELLINGSON SPECIAL DEPUTY RECEIVER 6029572113 2017-11-01 1 KAREN K MCCLOSKEY CPA P00099644 5203214600 64.128.200.66 2017-11-01 11:00:30 PD P 55503C6901EC926464890FD20C246F2690D179B8 AFFAC29B9D440C7753BFE4B45ABB66C0235D4EF1 2016 2018-03-14 21:41:22Z X MERITUS HEALTH PARTNERS DARREN ELLINGSON 15333 N PIMA RD SUITE 305 SCOTTSDALE AZ 852602717 19442192 0 X WWW.MERITUSAZ.COM X 2012 AZ MERITUS IS ORGANIZED AS A HEALTH INSURANCE CO-OP PURSUANT TO SECTION 1322 OF THE AFFORDABLE CARE ACT AND PROVIDES HEALTH INSURANCE TO INDIVIDUALS AND SMALL GROUPS IN THE STATE OF ARIZONA BOTH ON AND OFF THE FEDERAL HEALTH INSURANCE EXCHANGE. IN THE YEAR 2016 MERITUS WAS PLACED IN RECEIVERSHIP BY THE ARIZONA DEPARTMENT OF INSURANCE AND DID NOT SELL ANY HEALTH INSURANCE COVERAGE. X 0 0 60 5 0 0 0 0 98571976 19429719 6190 12473 0 0 98578166 19442192 3315 0 0 0 6270835 3181313 0 0 0 118035152 87622582 124309302 90803895 -25731136 -71361703 -1621558 5479761 24854349 114979404 -26475907 -109499643 X MERITUS WAS ESTABLISHED AS A HEALTH INSURANCE COMPANY THAT WOULD FACILITATE THE DELIVERY OF QUALITY CARE PROVIDING HEALTH INSURANCE TO INDIVIDUALS AND SMALL GROUPS. IN 2016 MERITUS CEASED SELLING HEALTH INSURANCE COVERAGE AND WAS PLACED INTO RECEIVERSHIP BY THE MARICOPA COUNTY SUPERIOR COURT. 0 1 THE COMPANY WAS ORGANIZED AS A NONPROFIT HEALTH PLAN COOPERATIVE. THE AFFORDABLE CARE ACT ENABLED A NEW TYPE OF HEALTH INSURER CALLED A CONSUMER ORIENTED AND OPERATED PLAN, MORE COMMONLY KNOWN AS A CO-OP. CO-OPS, REGULATED BY EACH STATE'S DEPARTMENT OF INSURANCE, ARE DIRECTED BY THEIR CUSTOMERS AND DESIGNED TO OFFER INDIVIDUALS, FAMILIES AND SMALL BUSINESSES MORE AFFORDABLE, CONSUMER-FRIENDLY AND HIGH-QUALITY HEALTH INSURANCE OPTIONS. ON OR BEFORE DECEMBER 31, 2016 MERITUS SUSPENDED THE ISSUANCE OF NEW OR RENEWAL BUSINESS AND CANCELLED ALL EXISTING POLICIES. IN ADDITION, MERITUS WAS PLACES UNDER THE ARIZONA DEPARTMENT OF INSURANCE SUPERVISION AND SUBSEQUENTLY ON AUGUST 10, 2016 INTO LIQUIDATION BY THE MARICOPA COUNTY SUPERIOR COURT. 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 1 621 0 1 60 1 0 0 0 0 0 0 0 0 0 X 0 0 0 1 0 0 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 AZ X DARREN ELLINGSON SPECIAL DEPUTY RECEIVER 6029572113 1533 N PIMA RD SUITE 305 SCOTTSDALE AZ 85260 LANCE DONKERBROOK DIRECTOR 2.20 0.40 X 0 0 0 CARRIE MATTESON DIRECTOR 2.20 0.40 X 0 0 0 RICHARD J VOTH SR DIRECTOR 2.20 0.40 X 0 0 0 MARILYN TEPLITZ DIRECTOR 2.20 0.40 X 0 0 0 LAWRENCE ALDRICH SECRETARY 2.20 0.40 X X 0 0 0 THOMAS S ZUMTOBEL CHIEF EXEC. OFFICER (THRU 8/11/16) 36.00 4.00 X 231945 25771 0 THOMAS J NAPOLITANO CHIEF FIN. OFFICER (THRU 11/26/16) 36.00 4.00 X 374175 41575 14253 JAMES J WALSH JR CHIEF OP. OFFICER (THRU 1/9/16) 36.00 4.00 X 63139 7015 0 LAURIE A BLAKE DIRECTOR, QUALITY (THRU 12/31/16) 36.00 4.00 X 196383 21820 15488 JEANICE CADY SENIOR ACCOUNTANT 36.00 4.00 X 114114 12679 5033 KEVIN M GIBBS CONTROLLER (THRU 7/20/16) 36.00 4.00 X 137862 15318 562 THERESA M MAHLER DIR. BUS. TRANS. (THRU 5/14/16) 36.00 4.00 X 112368 12485 2168 DEBRA M SINGPRADITH MANAGER NETWORK DEVELPOMENT 36.00 4.00 X 117169 13019 8953 1347155 149682 46457 5 0 1 0 CARE1ST 2355 E CAMELBACK ROAD SUITE 300 PHOENIX AZ 85016 TPA 1996455 ITEME CONSULTING 1806 CREEKSIDE LANE DARIEN IL 60561 IT CONSULTING 194885 BUSINESS & DECISION NORTH AMERICA 900 WEST VALLEY ROAD 1000 WAYNE PA 19087 IT CONSULTING 171460 SPERIDIAN TECHNOLOGIES 2400 LOUISIANA BLVD NE BLDG 3 ALBUQUERQUE NM 87110 IT CONSULTING 120000 MICROSOFT CORPORATION PO BOX 842103 DALLAS TX 752842103 SOFTWARE 114779 5 CHANGE IN RISK CORRIDOR 524114 19429719 19429719 19429719 12473 12473 19442192 19429719 0 12473 682087 2174682 12308 118576 193660 30225 206012 1940100 9819 176052 231238 263549 7107 19 134222 BAD DEBT EXPENSE 76327312 MEDICAL AND HOSPITAL EX 7085616 REINSURANCE RECOVERIES 1202237 TAXES AND FEES 9074 90803895 17279611 4679375 836351 230614 3915823 -23653343 569772 -1621558 5479761 6176208 788575 18678141 114190829 24854349 114979404 X 0 0 51652071 0 -78127978 -109499643 -26475907 -109499643 -1621558 5479761 X -71361703 39990038 -51652071 X X 0 0 0 0 AMOUNTS RECOVERABLE FROM REINSURERS 54870 AMOUNTS DUE FROM AFFILIATE 62716 HEALTHCARE AND OTHER AMOUNTS RECEIVABLE 288752 ACCRUED RISK CORRIDOR 55513299 RESERVED CMS RECEIVABLE -62684619 ACCRUED FEDERAL REINSURANCE 7171320 NEGATIVE BALANCE CLAIMS 163434 569772 CLAIMS UNPAID 8648279 LIABILITY FOR CSR CLAIMS 3807544 MEMBER MEDICAL REIMBURSEMENTS 13110 RISK ADJUSTMENT TRANSFER 49285083 SOLVENCY LOAN TO MMHP 510975 PICORRO TAX 100464 VENDOR PAYABLES 173303 SOLVENCY LOAN PAYABLE TO MMHP 51652071 114190829 SCHEDULE D, PART IX, OTHER ASSETS OTHER ASSETS IS SUBJECT TO CHANGE BASED UPON FURTHER INVESTIGATION OF THE RECEIVER. SCHEDULE D, PART X, OTHER LIABILITIES THE MARICOPA COUNTY SUPERIOR COURT WILL MAKE A FINAL DETERMINATION OF LIABILITIES UPON THE RECEIVER COMPLETING THE PROOF OF CLAIM PROCESS AND MAKING A RECOMMENDATION TO THE COURT. X X X X 1 0 0 THOMAS S ZUMTOBEL CHIEF EXEC. OFFICER (THRU 8/11/16) 38099 4233 0 0 193846 21538 0 0 0 0 231945 25771 0 0 THOMAS J NAPOLITANO CHIEF FIN. OFFICER (THRU 11/26/16) 194175 21575 0 0 180000 20000 0 0 12828 1425 387003 43000 0 0 LAURIE A BLAKE DIRECTOR, QUALITY (THRU 12/31/16) 130953 14550 0 0 65430 7270 0 0 13939 1549 210322 23369 0 0 KEVIN M GIBBS CONTROLLER (THRU 7/20/16) 74862 8318 0 0 63000 7000 0 0 506 56 138368 15374 0 0 PART I, LINE 4A THE FOLLOWING INDIVIDUALS RECEIVED SEVERANCE PAYMENTS FROM MERITUS MUTUAL HEALTH PARTNERS AND MERITUS HEALTH PARTNERS: THOMAS S ZUMTOBEL $215,384.64, THOMAS J NAPOLITANO $200,000, JAMES J WALSH JR. $45,000, LAURIE A BLAKE $72,700.01, KEVIN M GIBBS $70,000, THERESA M MAHLER $65,000. THE FOLLOWING INDIVIDUALS RECEIVED RETENTION PAYMENTS FROM MERITUS MUTUAL HEALTH PARTNERS AND MERITUS HEALTH PARTNERS: JEANICE CADY $41,500, DEBRA M SINGPRADITH $43,800. THESE AMOUNTS REPRESENT THE TOTAL RECEIVED FROM THE TWO MERITUS ENTITIES COMBINED. SEE PART III 0 0 0 0 SCHEDULE N, PART II, LINE 1 ON AUGUST 10, 2016, THE MARICOPA COUNTY SUPERIOR COURT ISSUED A RECEIVERSHIP ORDER AGAINST COMPASS COOPERATIVE MUTUAL HEALTH NETWORK (MERITUS MUTUAL HEALTH PARTNERS) AND COMPASS COOPERATIVE HEALTH PLAN (MERITUS HEALTH PLAN), COLLECTIVELY REFERRED TO AS MERITUS. UNDER THE RECEIVERSHIP ORDER, THE INTERIM DIRECTOR OF THE DEPARTMENT OF INSURANCE WAS APPOINTED AS RECEIVER AND LIQUIDATOR OF MERITUS AND WAS ORDERED TO TAKE POSSESSION OF THE ASSETS OF THE COMPANIES (WHEREVER LOCATED) AND TO ADMINISTER THE ASSETS UNDER THE ORDERS OF THE COURT. THE RECEIVER HAS BEEN VESTED BY OPERATION OF LAW WITH THE TITLE TO ALL OF THE PROPERTY, CONTRACTS AND RIGHTS OF ACTION, AND BOOKS AND RECORDS OF MERITUS AND HAS BEEN ORDERED TO LIQUIDATE MERITUS. FORM 990, PART III, LINE 3 IN 2016 MERITUS CEASED SELLING HEALTH INSURANCE POLICIES. ON AUGUST 10, 2016 THE MARICOPA COUNTY SUPERIOR COURT PLACED MERITUS INTO RECEIVERSHIP AND APPOINTED THE DIRECTOR OF ARIZONA DEPARTMENT OF INSURANCE AS RECEIVER. THE SOLE MISSION OF THE RECEIVER IS TO MARTIAL ASSETS AND LIQUIDATE THE COMPANY FOR THE BENEFIT OF ALL CREDITORS IN ACCORDANCE WITH ARIZONA LAW. FORM 990, PART V, LINE 13A AZ FORM 990, PART VI, SECTION A, LINE 3 IN 2016 MERITUS MUTUAL HEALTH PARTNERS TERMINATED EMPLOYMENT AGREEMENTS WITH THE CEO, COO, AND CFO. MERITUS WAS PLACED INTO RECEIVERSHIP BY THE MARICOPA COUNTY SUPERIOR COURT. FORM 990, PART VI, SECTION A, LINE 6 COMPASS COOPERATIVE MUTUAL HEALTH NETWORK, INC. (DBA MERITUS MUTUAL HEALTH PARTNERS) IS THE SOLE MEMBER OF THE CORPORATION. FORM 990, PART VI, SECTION B, LINE 11B FORM 990 IS PREPARED BY AN INDEPENDENT CPA USING INFORMATION PROVIDED BY THE ORGANIZATION. THE 990 FORM WILL BE REVIEWED BY DARREN ELLINGSON, SPECIAL DEPUTY RECEIVER APPOINTED BY THE DIRECTOR OF ARIZONA DEPARTMENT OF INSURANCE AS RECEIVER. FORM 990, PART VI, SECTION B, LINE 12C ON MARCH 11, 2014 THE MERITUS BOARD OF DIRECTORS APPROVED A "CONFLICTS OF INTEREST" POLICY REQUIRING THE DIRECTORS AND OFFICERS TO DISCLOSE ANY CONFLICTS OF INTEREST BETWEEN THEM AND THE ORGANIZATION FOR THE PURPOSE OF FULFILLING THEIR ETHICAL AND LEGAL DUTIES TO THE COMPANY AND ITS MEMBERS. THE POLICY REQUIRES "EACH MEMBER OF MERITUS LEADERSHIP WILL DISCLOSE ANY CONFLICTS OF INTEREST OR APPARENT CONFLICTS THROUGH AN ANNUAL DISCLOSURE STATEMENT." FORM 990, PART VI, SECTION B, LINE 15 IN 2016 MERITUS MUTUAL HEALTH PARTNERS TERMINATED EMPLOYMENT AGREEMENTS WITH THE CEO, COO, AND CFO. MERITUS WAS PLACED INTO RECEIVERSHIP BY THE MARICOPA COUNTY SUPERIOR COURT. FORM 990, PART VI, SECTION C, LINE 19 THRU AUGUST 2016 QUARTERLY AND ANNUAL FINANCIAL STATEMENTS, WHICH CONTAIN A DESCRIPTION OF THE CONFLICT OF INTEREST POLICY, ARE FILED WITH THE ARIZONA DEPARTMENT OF INSURANCE AND BECOME PUBLIC DOCUMENTS UPON THEIR FILING. ON AUGUST 10, 2016 THE MARICOPA COUNTY SUPERIOR COURT PLACED MERITUS INTO RECEIVERSHIP. FROM THAT POINT ON, THE COMPANY PREPARED FINANCIAL STATEMENTS IN ACCORDANCE WITH STATUTORY LIQUIDATION BASIS ACCOUNTING IN ACCORDANCE WITH GAAP PRINCIPLES. FORM 990, PART XI, LINE 9: SOLVENCY LOAN RECLASSIFIED FROM APIC TO DEBT -51,652,071. FORM 990, PART XII, LINE 1: THRU AUGUST 2016 THE FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) ACCOUNTING PRACTICES AND PROCEDURES MANUAL AND THE STATUTORY ACCOUNTING PRINCIPLES AS PRESCRIBED BY THE ARIZONA DEPARTMENT OF INSURANCE. ON AUGUST 10, 2016 THE MARICOPA COUNTY SUPERIOR COURT PLACED MERITUS INTO RECEIVERSHIP. FROM THAT POINT ON THE COMPANY NO LONGER FOLLOWS STATUTORY ACCOUNTING PRINCIPALS, INSTEAD FINANCIAL STATEMENTS ARE PREPARED IN ACCORDANCE WITH STATUTORY LIQUIDATION BASIS ACCOUNTING IN ACCORDANCE WITH GAAP PRINCIPLES. COMPASS COOPERATIVE MUTUAL HEALTH NETWORK INC 15333 N PIMA RD SUITE 305 SCOTTSDALE AZ 85260 273835905 HEALTH CARE SERVICES AZ 501(C)(29) 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 COMPASS COOPERATIVE MUTUAL HEALTH NETWORK E 51652071 AMOUNT OF SURPLUS NOTES COMPASS COOPERATIVE MUTUAL HEALTH NETWORK P 62716 AMOUNT DUE AT YEAR END