2016-11-05T09:51:57-05:00 2015-12-31 ERNST & YOUNG US LLP 4370 LA JOLLA VILLAGE DR STE 500 SAN DIEGO CA 92122 990 2015-01-01 990289310 SUTTER INSURANCE SERVICES CORPORATION % LYNN SAITO SUTT 9162866665 745 FORT STREET STE 1100 HONOLULU HI 96813 SHELLY BOEHM CFO 2016-11-03 true DEBRA HEISKALA P00649485 8585357200 2015 2017-02-10 21:41:12Z X BONNIE GEORGE 745 FORT STREET1100 HONOLULU HI 96813 52199553 false X WWW.SUTTERHEALTH.ORG X 1992 HI SEE SCHEDULE O 4 0 0 0 138215 4853 0 0 54483337 55106161 7593978 -3044823 130075 138215 62207390 52199553 0 0 0 0 0 0 0 0 0 45334011 61850596 45334011 61850596 16873379 -9651043 203523343 190351726 153147599 149627025 50375744 40724701 X SEE SCHEDULE O false false 60726428 0 55106161 SEE SCHEDULE O 60726428 true false false false false false false false false false false false false false true true true true false false false false false false false false false false false true false false false false false false false false false false false false false true true true false false true 280 0 true 0 true true false false false false false false false false false X 4 0 false false false false true true true true true false false true true true true true true true true false X LYNN SAITO 8085853530 745 FORT STREET SUITE 1100 HONOLULU HI 96813 FLORENCE DI BENEDETTO SECR SISCO, SVP GEN COUNCIL SH 1.0 40.0 X X 0 1282152 368123 PATRICK FRY CHAIR SISCO, PRES/CEO SH 1.0 40.0 X X 0 3841745 3627909 BONNIE GEORGE PRESIDENT/CEO SISCO 40.0 0.0 X X 0 498019 87370 ROBERT REED SVP & CFO SUTTER HLTH (PT YR) 1.0 40.0 X 0 1725254 151622 JEFF SPRAGUE SVP & CFO SUTTER HEALTH 1.0 40.0 X 0 1264833 516068 SHELLY BOEHM CFO SUTTER INSURANCE SVCS CORP 10.0 30.0 X 0 419887 79974 0 9031890 4831066 0 false true false SEDGWICK CLAIMS MANAGEMENT SVCS INC PO BOX 102514 ATLANTA GA 303682514 3RD PARTY ADMIN FEES 2106654 HANSON BRIDGETT MARCUS VLAHOS AND R 425 MARKET STREET 26TH FLOOR SAN FRANCISCO CA 94105 LOSS ADJUSTMENT 1774675 QUINN EMANUEL URQUHART AND SULLIVAN 865 SOUTH FIGUEROA STREET 10TH FLO LOA ANGELES CA 90017 LOSS ADJUSTMENT 1569258 LA FOLLETTE JOHNSON DEHASS FESLER 865 SOUTH FIGUEROA STREET SUITE 31 LOS ANGELES CA 900175431 LOSS ADJUSTMENT 1317032 PORTER SCOTT APC 350 UNIVERSITY AVENUE SUITE 200 SACRAMENTO CA 95825 LOSS ADJUSTMENT 1108423 23 0 PREMIUM REVENUE 524298 55106161 55106161 55106161 -3044823 -3044823 0 0 0 0 0 0 0 0 0 UBI - MALPRACTICE INSURANCE 524298 138215 138215 138215 52199553 55106161 138215 -3044823 0 0 0 0 0 0 0 0 0 0 0 14774 14774 22400 22400 0 0 326384 326384 0 0 76317 76317 0 0 0 17177 17177 0 0 0 0 0 11551 11551 UBI TAXES 15260 15260 LOSS AND LOSS ADJUSTMENT 47209238 47209238 PURCHASED SERVICES 9575904 8949739 626165 INSURED INCENTIVE FEE 2835927 2835927 1745664 1702796 42868 61850596 60726428 1124168 0 0 0 607477 226206 0 0 0 0 0 0 0 0 0 0 0 0 397007 397007 0 199739901 187276553 0 0 0 0 0 0 2778958 2451960 203523343 190351726 145512 374387 0 0 0 0 0 0 0 0 0 0 0 0 0 0 153002087 149252638 153147599 149627025 X 50375744 40724701 0 0 0 0 50375744 40724701 203523343 190351726 -9651043 X false true X true false X X 25 ADOLESCENT TREATMENT CENTER INC 680088443 3 true 0 0 SUTTER WEST BAY HOSPITALS 940562680 3 true 0 0 EAST BAY PERINATAL CENTER 510172285 3 true 0 0 EDEN MEDICAL CENTER 942948100 3 true 0 0 SUTTER CENTRAL VALLEY HOSPITALS 941080917 3 true 0 0 MILLS-PENINSULA HEALTH SERVICES 941156265 3 true 0 0 PALO ALTO MEDICAL FOUNDATION FOR HEALTH CARE RESEARCH & ED 941156581 3 true 0 0 SUTTER WEST BAY MEDICAL FOUNDATION 942948131 3 true 0 0 SAMUEL MERRITT UNIVERSITY 942992642 2 true 0 0 SUTTER AUBURN FAITH HOSPITAL FOUNDATION 942594966 9 true 0 0 SUTTER COAST HOSPITAL 942988520 3 true 0 0 SUTTER EAST BAY HOSPITALS 941196176 3 true 0 0 SUTTER EAST BAY MEDICAL FOUNDATION 942690415 3 true 0 0 SUTTER GOULD MEDICAL FOUNDATION 941682256 3 true 0 0 SUTTER HEALTH PACIFIC 990298651 3 true 0 0 SUTTER HEALTH SACRAMENTO SIERRA REGION 941156621 3 true 0 0 SUTTER MEDICAL CENTER FOUNDATION 942788906 3 true 0 0 SUTTER ROSEVILLE MEDICAL CENTER FOUNDATION 680040113 9 true 0 0 SUTTER SOLANO CHARITABLE FOUNDATION 942668262 9 true 0 0 SUTTER VISITING NURSES ASSOCIATION AND HOSPICE 946068843 9 true 0 0 BETTER HEALTH EAST BAY FOUNDATION 510160184 9 true 0 0 CALIFORNIA PACIFIC MEDICAL CENTER FOUNDATION 942728423 9 true 0 0 MILLS-PENINSULA HOSPITAL FOUNDATION 237288765 9 true 0 0 SUTTER DAVIS HOSPITAL FOUNDATION 680217870 9 true 0 0 SUTTER MEDICAL CENTER CASTRO VALLEY 770146047 3 true 0 0 25 0 0 true false false false false false false false false false false false false false false true true true X true true SCHEDULE A, PART I, LINE 11G THE PRINCIPAL ACTIVITY OF SISCO IS TO PROVIDE INSURANCE AND RISK MANAGEMENT SERVICES AND SERVING AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SCHEDULE A, PART IV, SECTION D, LINE 3 This organization is an affiliate of Sutter Health, a 501(c)(3) tax-exempt support organization. Sutter Health is the sole member of SISCO with the right to elect and remove at least a majority of the board of directors, and the majority of SISCO's Board of Directors are officers of Sutter Health. In addition, Sutter Health is also the sole member or controls all of the organizations that SISCO supports. The Sutter Health Board of Directors retains certain "reserved powers" which require that certain decisions made by supported organization boards (including SISCO) must be approved by the Sutter Health Board of Directors before being effective. Because of this structure, supported organizations have a significant voice in the operations of SISCO. SCHEDULE A, PART IV, SECTION E, LINE 2A SISCO IS A RISK MANAGEMENT SUPPORT ORGANIZATION THAT ASSISTS SUTTER HEALTH, ITS PARENT, AND AFFILIATES OF SUTTER HEALTH (LISTED IN SCHEDULE A, PART VI) IN PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES, AND SERVING AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SCHEDULE A, PART IV, SECTION E, LINE 2B PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES IS A NECESSARY PART OF THE ADMINISTRATIVE FUNCTION OF ANY ORGANIZATION, AND THIS IS ESPECIALLY TRUE IN HEALTH CARE. WITH A LARGE HEALTH CARE SYSTEM LIKE SUTTER HEALTH, INSURANCE COSTS ARE SUBSTANTIAL, BUT TO BETTER CONTAIN COSTS AND PROVIDE APPROPRIATE AND TIMELY RISK SERVICES, SUTTER HEALTH PROVIDES SELF-INSURING TO AFFILIATES THROUGH SISCO. SISCO CONTROLS RISK AND COSTS WHICH FREE UP ADDITIONAL FUNDS TO ASSIST THE COMMUNITIES WE SERVE. 0 INSURANCE LIABILITIES 137063122 PAYABLE TO RELATED PARTIES 12189516 149252638 X 50620198 50620198 326384 1252971 1579355 52199553 60271242 60271242 326384 1252970 1579354 61850596 SCHEDULE D, PART X, LINE 2 ASC 740 (FIN48) FOOTNOTE FROM AUDIT: THIS ORGANIZATION WAS PART OF A CONSOLIDATED FINANCIAL SYSTEM AUDIT. THE ASC 740 AUDIT FOOTNOTE DISCLOSURE FOR THE SUTTER SYSTEM IS AS FOLLOWS: SUTTER HEALTH, THE LEGAL ENTITY, AND MOST AFFILIATES HAVE BEEN DETERMINED TO BE EXEMPT ORGANIZATIONS BY THE INTERNAL REVENUE SERVICE, (PURSUANT TO INTERNAL REVENUE CODE SECTION 501(C)(3)), AND THE CALIFORNIA FRANCHISE TAX BOARD (PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE 23701(D)) AND, GENERALLY, ARE NOT SUBJECT TO TAXES ON INCOME. CERTAIN ACTIVITIES OF SUTTER ARE SUBJECT TO INCOME TAXES; HOWEVER, SUCH ACTIVITIES ARE NOT SIGNIFICANT TO THE CONSOLIDATED FINANCIAL STATEMENTS. WITH RESPECT TO ITS TAXABLE ACTIVITIES, SUTTER RECORDS INCOME TAXES USING THE LIABILITY METHOD, UNDER WHICH DEFERRED TAX ASSETS AND LIABILITIES ARE DETERMINED BASED ON THE DIFFERENCES BETWEEN THE FINANCIAL ACCOUNTING AND TAX BASIS OF ASSETS AND LIABILITIES. DEFERRED TAX ASSETS OR LIABILITIES AT THE END OF EACH PERIOD ARE DETERMINED USING THE CURRENTLY ENACTED TAX RATE EXPECTED TO APPLY TO TAXABLE INCOME IN THE PERIODS THAT THE DEFERRED TAX ASSET OR LIABILITY IS EXPECTED TO BE REALIZED OR SETTLED. SUTTER RECOGNIZES THE TAX BENEFIT FROM UNCERTAIN TAX POSITIONS ONLY IF IT IS MORE LIKELY THAN NOT THAT THE TAX POSITIONS WILL BE SUSTAINED ON EXAMINATION BY THE TAX AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. THE TAX BENEFIT IS MEASURED BASED ON THE LARGEST BENEFIT THAT HAS A GREATER THAN 50% LIKELIHOOD OF BEING REALIZED UPON ULTIMATE SETTLEMENT. SUTTER RECOGNIZES INTEREST AND PENALTIES RELATED TO INCOME TAX MATTERS IN OPERATING EXPENSES. AT DECEMBER 31, 2015 AND 2014, THERE WERE NO SUCH UNCERTAIN TAX POSITIONS. SCHEDULE D, PART XI, LINE 4B REINSURANCE RECOVERABLES $ (347,029) REINSURANCE ADD BACK $ 1,600,000 ---------- TOTAL $ 1,252,971 ========== SCHEDULE D, PART XIII, LINE 4B REINSURANCE RECOVERABLES $ (347,029) REINSURANCE ADD BACK $ 1,600,000 ----------- TOTAL $ 1,252,971 =========== X true true X X X X false true false false false false false true false SHELLY BOEHM CFO SUTTER INSURANCE SVCS CORP 0 244011 0 160953 0 14923 0 67429 0 12545 0 499861 0 92493 FLORENCE DI BENEDETTO SECR SISCO, SVP GEN COUNCIL SH 0 613929 0 583503 0 84720 0 349442 0 18681 0 1650275 0 374281 PATRICK FRY CHAIR SISCO, PRES/CEO SH 0 1562833 0 1913420 0 365492 0 3592743 0 35166 0 7469654 0 1281022 BONNIE GEORGE PRESIDENT/CEO SISCO 0 287937 0 178419 0 31663 0 76042 0 11328 0 585389 0 109448 ROBERT REED SVP & CFO SUTTER HLTH (PT YR) 0 19833 0 908476 0 796945 0 149984 0 1638 0 1876876 0 935017 JEFF SPRAGUE SVP & CFO SUTTER HEALTH 0 676648 0 503008 0 85177 0 486742 0 29326 0 1780901 0 257560 SCHEDULE J, PART I, LINE 1A TAX INDEMNIFICATION: STANDARD POLICY FOR ALL SUTTER HEALTH EMPLOYEES IS THAT NON-CASH GIFTS AND AWARDS ARE GROSSED-UP FOR TAX PURPOSES. THE AMOUNT OF THE GROSS-UP IS ADDED TO THE EMPLOYEES WAGES AND TAXED ACCORDINGLY. SCHEDULE J, PART I, LINE 3 SUPPLEMENTAL COMPENSATION INFORMATION: THE CEO OF THIS ORGANIZATION IS AN EMPLOYEE OF SUTTER HEALTH, A RELATED TAX-EXEMPT ORGANIZATION. THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTERS EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATIONS OVERALL MISSION. SEE SCHEDULE O NARRATIVE FOR PART VI, LINE 15 FOR A FULL DESCRIPTION OF THE COMPENSATION APPROVAL PROCESS COMPLETED BY SUTTER HEALTH. SCHEDULE J, PART I, LINE 4B NONQUALIFIED RETIREMENT PLAN: THE PURPOSE OF THE NONQUALIFIED RETIREMENT PLAN IS TO PROVIDE SUTTER HEALTH EXECUTIVES WITH A COMPETITIVE RETIREMENT BENEFIT CONSISTENT WITH SUTTER HEALTHS OVERALL COMPENSATION PHILOSOPHY FOR ALL EMPLOYEES. CONTRIBUTIONS ARE DESIGNED TAKING INTO CONSIDERATION LOST RETIREMENT BENEFITS THAT WOULD OTHERWISE BE OBTAINED THROUGH THE QUALIFIED PENSION PLAN. SUTTERS PLANS ARE DESIGNED CONSISTENT WITH COMPETITIVE INDUSTRY PRACTICES. THE RETIREMENT PLAN FOR SUTTER HEALTH EMPLOYEES IS A COMBINATION OF SOCIAL SECURITY, 403(B) EMPLOYER MATCH CONTRIBUTIONS AND QUALIFIED PLAN BENEFITS. SUTTER HEALTH EXECUTIVES ARE GENERALLY INELIGIBLE FOR EMPLOYER MATCH CONTRIBUTIONS. ADDITIONALLY, QUALIFIED PLAN BENEFITS CAPS HAVE THE EFFECT OF SUBSTANTIALLY REDUCING RETIREMENT BENEFITS THAT ARE OTHERWISE PROVIDED TO ALL EMPLOYEES. THE EFFECT IS THAT EXECUTIVES OFTEN DO NOT RECEIVE THE SAME LEVEL OF RETIREMENT BENEFIT ON AN INCOME REPLACEMENT BASIS AS OTHER EMPLOYEES. TO ENSURE A COMPETITIVE RETIREMENT BENEFIT AND TO ADDRESS THE SHORTFALLS DESCRIBED ABOVE, SUTTER HEALTH MAKES AN ANNUAL CONTRIBUTION TO A NON-QUALIFIED 457(F) PLAN FOR ITS EXECUTIVES. THE FORMULA HAS TWO PARTS: (1) 4% TO 7% OF BASE SALARY (COMMENSURATE WITH MANAGEMENT LEVEL), PLUS (2) A CONTRIBUTION STARTING AT 5% (BASED UPON TENURE) FOR ELIGIBLE EARNINGS BEYOND THE IRS DEFINITION OF INCLUDIBLE COMPENSATION ("PENSION PAY CAP"). THE LATTER OF WHICH IS DESIGNED TO HELP RESTORE LOST PENSION BENEFITS FORFEITED UNDER THE QUALIFIED PLAN FOR EARNINGS OVER THE PENSION PAY CAP LIMIT. CONTRIBUTIONS ARE ALSO MADE FOR A SMALL GROUP OF SENIOR LEVEL EXECUTIVES WHOSE ESTIMATED RETIREMENT BENEFIT (SOCIAL SECURITY PLUS QUALIFIED PLAN BENEFITS PLUS 457(F)) FALLS BELOW 50% - 65% OF FINAL 4-YEAR AVERAGE BASE SALARY WHEN RETIRING AT AGE 65 WITH 22.5 YEARS OF SERVICE. TARGET BENEFIT LEVELS ARE DISCOUNTED FOR YEARS OF SERVICE LESS THAN 22.5 AT AGE 65. UNLIKE SUTTER HEALTHS QUALIFIED PLAN WHERE EMPLOYEE BENEFITS ARE GUARANTEED (I.E., A DEFINED BENEFIT), SUTTERS NON-QUALIFIED PLAN BENEFITS ARE NOT GUARANTEED BY SUTTER HEALTH. INVESTMENT RISK IS BORNE BY PARTICIPANTS AND BENEFITS ARE NOT PROTECTED SHOULD SUTTER HEALTH BECOME INSOLVENT. THE FOLLOWING INDIVIDUAL RECEIVED 457(F) NON-QUALIFIED PAYMENTS DURING THE YEAR: ROBERT REED - $570,148 SCHEDULE J, PART I, LINE 7 NON-FIXED PAYMENTS: SPOT AWARDS ARE INFREQUENTLY USED TO REWARD EMPLOYEES. THERE ARE NO SPECIFIC GUIDELINES FOR THE AMOUNT OF THE SPOT AWARD BUT THE AMOUNT TENDS TO NOT EXCEED 5% TO 10% OF GROSS ANNUAL SALARY. ANNUAL INCENTIVE PLAN (AIP) THE PURPOSE OF THE PLAN IS TO FOCUS EXECUTIVES ON SPECIFIC, SHORTER-TERM GOALS THAT ARE CRITICAL TO THE ACHIEVEMENT OF AFFILIATE, REGION, AND SYSTEM-WIDE OBJECTIVES THAT DRIVE OVERALL ORGANIZATION PERFORMANCE. A PORTION OF THE PLAN AWARD IS DISCRETIONARY IN THAT THE SUPERVISOR MAY ADD UP TO 5% TO THE AWARD PROVIDED THE TOTAL AWARD (FORMULA PORTION PLUS DISCRETIONARY) DOES NOT EXCEED THE MAXIMUM ESTABLISHED FOR ANY GIVEN EXECUTIVE. LONG TERM PERFORMANCE PLANS SUTTER HEALTH ALSO EMPLOYS LONG TERM PERFORMANCE PLANS WHICH ARE DESIGNED TO FOCUS ON LONGER TERM STRATEGIC OBJECTIVES OF THE ORGANIZATION. SUTTERS LONG TERM PERFORMANCE PLAN APPROACH IS A COMBINATION OF BOTH LONGER TERM MEASURES OF ORGANIZATION SUCCESS AND KEY ORGANIZATION STRATEGIES WHICH REQUIRE THE COMBINED EFFORT OF ALL LEADERSHIP TO ACHIEVE SUCCESS. SUTTER USES A COMMON FATE APPROACH IN THAT ALL PLAN PARTICIPANTS ARE MEASURED AGAINST THE SAME, ORGANIZATION-WIDE CRITERIA VS. INDIVIDUAL EFFORTS. THIS FOSTERS A COMMON PURPOSE ACROSS LEADERSHIP AND A SHARED SENSE OF ACCOUNTABILITY FOR THE OVERALL SUCCESS OF SUTTER HEALTH. TO ENSURE THAT EXTRAORDINARY EFFORTS BY INDIVIDUALS CAN BE RECOGNIZED AND THAT ACTIONS OF LEADERSHIP ARE CONSISTENT WITH SUPPORTING SUTTER HEALTHS OVERALL MISSION, VISION, AND VALUES, SUTTERS LONG TERM INCENTIVE PLAN APPROACH ALSO INCORPORATES A COMBINATION OF CEO AND SUTTER HEALTH COMPENSATION COMMITTEE DISCRETION. IN SOME CASES, THE SUTTER HEALTH COMPENSATION COMMITTEE HAS DELEGATED AUTHORITY TO THE PRESIDENT & CEO TO MODIFY INDIVIDUAL AWARDS WITHIN LIMITS THAT HAVE BEEN PRE-APPROVED BY THE SUTTER HEALTH COMPENSATION COMMITTEE. THIS INCLUDES BOTH THE REDUCTION AND INCREASE OF AWARD AMOUNTS. SUCH MODIFICATIONS GENERALLY DO NOT EXCEED +/- 20% AND ARE EMPLOYED JUDICIOUSLY. IN ALL CASES, THE COMPENSATION COMMITTEE OF THE BOARD DETERMINES ACHIEVEMENT OF ORGANIZATION GOALS AND MAKES FINAL AWARD DETERMINATION WHICH MAY RESULT IN A REDUCTION OF AWARD IF APPROPRIATE. ALL SENIOR EXECUTIVE AWARDS ARE REVIEWED FOR COMPENSATION REASONABLENESS AND APPROVED PRIOR TO PAYMENT BY THE COMPENSATION COMMITTEE. FORM 990 PART I, LINE 1 AND PART III, LINE 1 MISSION STATEMENT: SUTTER INSURANCE SERVICES INCORPORATION (SISCO) IS A RISK MANAGEMENT SUPPORTING ORGANIZATION THAT ASSISTS SUTTER HEALTH SYSTEM AND ITS AFFILIATES IN ACCOMPLISHING THEIR FINANCIAL, PATIENT CARE, AND BUSINESS GOALS AND OBJECTIVES THROUGH SOUND RISK FINANCING AND RISK MANAGEMENT PROGRAMS AND PRACTICES. FORM 990 PART III, LINE 4A EXEMPT PURPOSE ACHIEVEMENTS: THE PRINCIPAL ACTIVITY OF SUTTER INSURANCE SERVICES CORPORATION (SISCO) IS TO PROVIDE SUPPORT AND BENEFIT TO SUTTER HEALTH SYSTEM AND ITS AFFILIATES. SISCO DOES THIS BY PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES AND SERVING AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH SYSTEM AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SISCO IS OPERATED AS AN INTEGRAL PART OF AND PERFORMS AN ESSENTIAL FUNCTION FOR SUTTER HEALTH SYSTEM AND ITS AFFILIATES. FORM 990, PART VI, LINES 6 & 7A DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS: THIS CORPORATION IS AN AFFILIATE OF SUTTER HEALTH, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION. SUTTER HEALTH IS THE SOLE MEMBER WITH THE RIGHT TO ELECT AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS. FORM 990, PART VI, LINE 7B DESCRIBE CLASSES OF PERSONS, DECISIONS REQUIRING APPROVAL & TYPE OF VOTING RIGHTS: SUTTER HEALTH AS THE SOLE MEMBER OF THE ORGANIZATION IS ENTITLED TO EXERCISE FULLY ALL RIGHTS AND PRIVILEGES OF MEMBERS OF NONPROFIT CORPORATIONS UNDER ALL APPLICABLE LAWS. THE MEMBER HAS THE RIGHTS AND POWERS TO APPOINT (AND REMOVE) MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS, SUBJECT TO THE PROVISIONS OF THE BYLAWS. IN ADDITION, THE MEMBER HAS THE RIGHT TO APPROVE THE FOLLOWING ACTIONS OF THE CORPORATION'S BOARD OF DIRECTORS: (1) MERGER, CONSOLIDATION OR DISSOLUTION OF THE CORPORATION; (2) AMENDMENT/RESTATEMENT OF THE ARTICLES OF INCORPORATION OR THESE BYLAWS; (3) APPROVAL OF OPERATING AND CAPITAL BUDGETS, HOWEVER, THE CORPORATION MAY DEVELOP BUDGETS WITHIN GUIDELINES AS SET BY THE SOLE MEMBER; (4) LONG-TERM OR MATERIAL AGREEMENTS; (5) APPOINTMENT OF AN INDEPENDENT AUDITOR AND THE HIRING OF CORPORATE COUNSEL EXCEPT IN CONFLICT SITUATIONS BETWEEN THE SOLE MEMBER AND THE CORPORATION; (6) THE CREATION OR ACQUISITION OF ANY SUBSIDIARY OR AFFILIATED ENTITY; (7) CONTRACTING WITH AN UNRELATED THIRD PARTY FOR ALL OR SUBSTANTIALLY ALL OF THE MANAGEMENT OF THE ASSETS OR OPERATIONS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE THEREOF; (8) APPROVAL OF STRATEGIC PLANS OF THE CORPORATION; AND (9) A TRANSACTION BETWEEN THE CORPORATION AND A DIRECTOR OF THE CORPORATION. SOLE MEMBER REVIEW OF MAJOR ACTIVITIES. THE SOLE MEMBER MAY REVIEW MAJOR ACTIVITIES OF THE CORPORATION. "MAJOR ACTIVITIES" ARE MATTERS THAT THE SOLE MEMBER HAS DECLARED MAJOR, BY WRITTEN NOTICE TO THE CORPORATION THAT IDENTIFIES THE MATTER REQUIRING APPROVAL. NOTICES RECEIVED PURSUANT TO THIS SUBSECTION SHALL BE RECORDED IN THE CORPORATE RECORDS OF THE CORPORATION. FORM 990, PART VI, LINE 11B DESCRIBE THE PROCESS USED BY MANAGEMENT &/OR GOVERNING BODY TO REVIEW FORM 990: SUTTER HEALTH, A RELATED TAX-EXEMPT ORGANIZATION, HAS A CENTRALIZED TAX DEPARTMENT RESPONSIBLE FOR THE PREPARATION OF THE FORM 990. ANNUALLY THE TAX DEPARTMENT PROVIDES TRAINING AND EDUCATION TO AFFILIATE PERSONNEL WHO ASSIST THE TAX DEPARTMENT IN COLLECTING AND REVIEWING DATA TO BE REPORTED ON THE FORM 990. THE PREPARATION MATERIAL IS REVIEWED BY VARIOUS DEPARTMENTS INCLUDING TAX, FINANCE, LEGAL, AND HUMAN RESOURCES. A NATIONAL ACCOUNTING FIRM PREPARES AND/OR REVIEWS THE RETURN. A COMPLETED RETURN IS THEN REVIEWED BY THE TAX DEPARTMENT, THE AFFILIATE, AND THE CFO BEFORE THE RETURN IS FILED. A COPY OF THE FORM 990 HAS BEEN PROVIDED TO ALL MEMBERS OF THE GOVERNING BODY BEFORE FILING THE FORM. FORM 990, PART VI, LINE 12 DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST: EMPLOYEES ARE EDUCATED ON THE CONFLICT OF INTEREST POLICY AND THE NEED TO MAKE DISCLOSURE AS PART OF ANNUAL COMPLIANCE EDUCATION. IN ADDITION, ANNUALLY A DISCLOSURE STATEMENT IS COMPLETED BY ALL DIRECTORS AND OFFICERS THAT INCLUDES AN ACKNOWLEDGEMENT THAT THEY HAVE READ THE CONFLICT OF INTEREST POLICY. ON THIS STATEMENT THE INDIVIDUAL WILL LIST A WIDE RANGE OF INFORMATION WHICH INCLUDES BUSINESS RELATIONSHIPS, EMPLOYMENT RELATIONSHIPS, PROPERTY INTERESTS, AND THOSE OF RELATED PARTIES. THE CEO AND BOARD CHAIR WILL REVIEW THE STATEMENTS AND MONITOR SITUATIONS THAT MAY POSE A POTENTIAL CONFLICT OF INTEREST. THE CEO AND BOARD CHAIR MAY CONSULT WITH THE OFFICE OF THE GENERAL COUNSEL AS NECESSARY. IF THERE IS A POTENTIAL CONFLICT OF INTEREST RELATED TO A PARTICULAR TRANSACTION, THE INTERESTED INDIVIDUAL MUST DISCLOSE THE EXISTENCE AND NATURE OF THE RELATIONSHIP. THE BOARD CHAIR MAY APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE THE CONFLICT. UNTIL THE POTENTIAL CONFLICT IS RESOLVED, THE BOARD CHAIR MAY REQUEST THE INDIVIDUAL TO NOT PARTICIPATE DURING RELATED PRESENTATIONS AND DISCUSSIONS. IN ALL CIRCUMSTANCES INVOLVING AN ACTUAL CONFLICT, THE INTERESTED INDIVIDUAL SHALL REFRAIN FROM VOTING ON ANY MATTER RELATED TO THE TRANSACTION. FORM 990, PART VI, LINE 15 PROCESS FOR DETERMINING COMPENSATION: THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ENSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. IN ORDER TO ENSURE EXTERNAL COMPETITIVENESS, NATIONAL, CALIFORNIA AND LOCAL MARKET AREA COMPENSATION DATA COMPARISONS ARE REVIEWED. COMPETITIVE ANALYSIS INCLUDES: (A) BASE SALARY, (B) TOTAL CASH (BASE SALARY + ANNUAL INCENTIVE) AND (C) TOTAL REMUNERATION (BASE SALARY + ANNUAL INCENTIVE + BENEFITS AND LONG TERM INCENTIVE). THIS ANALYSIS INCLUDES COMPARABLE ORGANIZATIONS AND GEOGRAPHIC CONSIDERATIONS. FOR THE MOST SENIOR EXECUTIVE POSITIONS, NATIONAL COMPARISONS FOR ORGANIZATIONS SIMILAR IN SIZE, SCOPE AND COMPLEXITY AS SUTTER HEALTH ARE MOST APPROPRIATE SINCE IT IS A NATIONAL MARKETPLACE IN WHICH SUTTER COMPETES FOR EXECUTIVE TALENT. ON THE OTHER HAND, BECAUSE CALIFORNIA'S UNDERLYING COMPENSATION STRUCTURE IS HIGHER THAN NATIONAL DATA (ESPECIALLY IN THE BAY AREA), REGIONAL PAY COMPARISONS AND ADJUSTMENTS ARE MADE. OFFICERS AND KEY EMPLOYEES OF THIS ORGANIZATION WHO ARE SUTTER HEALTH EMPLOYEES UNDERGO A REVIEW AND COMPENSATION COMMITTEE APPROVAL, AND SUCH APPROVAL IS RECORDED IN THE MINUTES. THE COMPENSATION REVIEW PROCESS WAS LAST COMPLETED IN DECEMBER OF 2015. FORM 990, PART VI, LINE 19 AVAILABILITY OF GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS TO THE GENERAL PUBLIC: THE SUTTER HEALTH SYSTEM POSTS ITS CURRENT AND PAST AUDITED FINANCIAL STATEMENTS AT SUTTERHEALTH.ORG. OTHER DOCUMENTS ARE ALSO LOCATED AT THIS WEBSITE INCLUDING THE ANNUAL REPORT, MISSION STATEMENT, HISTORY, AND LINKS TO AFFILIATE WEBSITES. THE GOVERNING DOCUMENTS ARE NOT AVAILABLE TO THE PUBLIC AT THIS TIME. FORM 990, PART VI, LINE 2 THE BOARD MEMBERS OF SUTTER INSURANCE SERVICES CORPORATION (SISCO) ARE PAID BY SISCO'S SOLE MEMBER, SUTTER HEALTH AND THEREFORE SHARE A BUSINESS RELATIONSHIP WITH THIS ENTITY. ADOLESCENT TREATMENT CENTERS INC C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 680088443 HEALTHCARE CA 501(C)(3) 3 SUTTER EBH true BETTER HEALTH EAST BAY FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 510160184 FUNDRAISING CA 501(C)(3) 7 SUTTER EBH true CALIFORNIA PACIFIC MEDICAL CTR FOUND C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942728423 FUNDRAISING CA 501(C)(3) 7 SUTTER WBH true EAST BAY PERINATAL CENTER 3012 SUMMIT STREET 3RD FLOOR OAKLAND CA 94609 510172285 HEALTHCARE CA 501(C)(3) 3 SUTTER EBH true EDEN MEDICAL CENTER C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942948100 HEALTHCARE CA 501(C)(3) 9 SUTTER HLTH true MEMORIAL HOSPITAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942290244 FUNDRAISING CA 501(C)(3) 11a - I SUTTER CVH true MILLS-PENINSULA HEALTH SERVICES C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941156265 HOSPITAL CA 501(C)(3) 3 PAMF true MILLS-PENINSULA HOSPITAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 237288765 FUNDRAISING CA 501(C)(3) 7 MPHS true PALO ALTO MEDICAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941156581 HEALTHCARE CA 501(C)(3) 3 SUTTER HLTH true SAMUEL MERRITT UNIVERSITY 450 30TH STREET SUITE 2820 OAKLAND CA 94609 942992642 UNIVERSITY CA 501(C)(3) 2 SUTTER EBH true SUTTER AUBURN FAITH HOSPITAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942594966 FUNDRAISING CA 501(C)(3) 7 SUTTER SSR true SUTTER CENTRAL VALLEY HOSPITALS C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941080917 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER COAST HOSPITAL C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942988520 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER DAVIS HOSPITAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 680217870 FUNDRAISING CA 501(C)(3) 7 SUTTER SSR true SUTTER EAST BAY HOSPITALS C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941196176 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER EAST BAY MEDICAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942690415 HEALTHCARE CA 501(C)(3) 11B-II SUTTER HLTH true SUTTER GOULD MEDICAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941682256 HEALTHCARE CA 501(C)(3) 3 SUTTER HLTH true SUTTER HEALTH PACIFIC 91-2301 FT WEAVER RD EWA BEACH HI 96706 990298651 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER HEALTH PLAN 2200 RIVER PLAZA DRIVE SACRAMENTO CA 95833 461183948 HEALTH PLAN CA PENDING PENDING SUTTER HLTH true SUTTER HEALTH SACRAMENTO SIERRA REGION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 941156621 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER MEDICAL CENTER FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 942788906 FUNDRAISING CA 501(C)(3) 7 SUTTER SSR true SUTTER MEDICAL CENTER CASTRO VALLEY C/O SH TAX 2200 RIVER PLAZA DRIVE SACRAMENTO CA 95833 770146047 HOSPITAL CA 501(C)(3) 3 SUTTER HLTH true SUTTER VALLEY MEDICAL FOUNDATION C/O SH TAX 2200 RIVER PLAZA DR SACRAMENTO CA 95833 680273974 HEALTHCARE CA 501(C)(3) 11b - 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