2015-11-11T18:56:41-06:00 2014-12-31 271728945 O'CONNOR DAVIES LLP 500 MAMARONECK AVENUE HARRISON NY 105281633 990 2014-01-01 450553664 HEALTHIX INC HEAL 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 JOHN GUASTELLA SVP FINANCE & ADMIN 8776954749 2015-11-03 1 GARRETT M HIGGINS P00543209 9143818900 2015-11-03 2014 2016-02-25 16:41:14Z THOMAS F CHECK 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 12135137 0 X WWW.HEALTHIX.ORG X 2007 NY THE MISSION OF THE COMPANY IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 13 13 32 13 0 0 8865940 9349985 2251418 2448114 11708 5688 2199 331350 11131265 12135137 126400 5000 0 0 2626495 3633986 0 0 0 6459055 8257468 9211950 11896454 1919315 238683 13326560 10129502 8711059 5275318 4615501 4854184 X THE MISSION OF HEALTHIX INC. IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 0 0 9622660 5000 2448114 HCRA/MEDICAID PROGRAM:THE INNOVATION TEAM WORKS WITH HEALTHIX PARTICIPANTS TO INTEGRATE THEM INTO THE HIE AND TO WORK WITH THEM TO DESIGN AND DEVELOP PRODUCTS AND SERVICES THAT HELP THEM TO IMPROVE CARE THROUGH BETTER CARE COORDINATION. IN 2014 WE USED THE FUNDING FROM HCRA/MEDICAID TO SUPPORT STAFF AND TECHNOLOGY FOR THIS WORK. THIS INCLUDED A TEAM OF FIVE PROJECT MANAGERS AND THE VP OF INNOVATION. IN ADDITION, THE FUNDING COVERED DATA CENTER OPERATIONS AND THE USE OF TECHNICAL STAFF AND CONSULTANTS TO BUILD INTERFACES BETWEEN HEALTHIX AND ITS PARTICIPANTS AND SOFTWARE PRODUCTS AND SERVICES. [SEE CONTINUATION ON SCHEDULE O]ACCOMPLISHMENTS - HEALTHIX INNOVATION TEAM PERFORMS A WIDE VARIETY OF PROJECTS FOR A VARIETY OF DIFFERENT TYPES OF FACILITIES. AT THE END OF 2014 HEALTHIX HAD COMPLETED 56 PROJECTS AND WAS IN THE PROCESS OF PLANNING OR EXECUTING ANOTHER 67. PROJECTS INCLUDED INTEGRATING NEW INTERFACES (54), SETTING UP CLINICAL EVENT NOTIFICATIONS (17), PERFORMING ANALYTICS & REPORTING (14), INTEGRATING THE HEALTHIX PORTAL INTO CUSTOMER SYSTEMS (6) AND OTHER (19).PCORI CDRN PROGRAM:THE PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE (PCORI) AWARDED A CONTRACT TO WEILL CORNELL MEDICAL COLLEGE FOR THE NEW YORK CITY CLINICAL DATA RESEARCH NETWORK (CDRN) TO:- BUILD INFRASTRUCTURE TO PERFORM COMPARATIVE EFFECTIVENESS RESEARCH- PERFORM TWO OBSERVATIONAL STUDIES ON DIABETES AND CYSTIC FIBROSIS- FACILITATE PATIENT-CENTERED RESEARCH THAT CAN BE LINKED TO A NATIONAL NETWORK- COLLABORATE NATIONALLY WITH 10 OTHER CDRNS TO DEVELOP BEST PRACTICES AND SUPPORT JOIN STUDIESHEALTHIX CONTRIBUTION - THE NEW YORK GENOME CENTER FUNCTIONS AS A TRUSTED BROKER COMBINING THE CLINICAL DATA FROM SIX MAJOR HEALTH SYSTEMS IN NYC AND SEVERAL FEDERALLY QUALIFIED HEALTH CENTERS. THE HEALTHIX MASTER PATIENT INDEX (MPI) IS USED TO LINK PATIENTS' RECORDS FROM ACROSS THESE FACILITIES INTO A COMMON DATA SET FOR RESEARCH. IN 2014 HEALTHIX COMPLETED TWO ROUNDS OF MATCHING: ONE IN JULY AND ONE IN OCTOBER. REGIONAL EXTENSION CENTER ("REC") PROGRAM:HEALTHIX PROVIDES FEDERALLY-SUBSIDIZED SERVICES TO ELIGIBLE CLINICIANS - THIS INCLUDES TAILORED AND PERSONAL SERVICE, GUIDANCE, ON-SITE SUPPORT, AND INFORMATION ON BEST PRACTICES TO HELP YOU BECOME A MEANINGFUL USER OF A CERTIFIED ELECTRONIC MEDICAL RECORD (EMR). HEALTHIX EMR IMPLEMENTATION AND MEANINGFUL USE SERVICES ARE OVERSEEN BY NYEC (NEW YORK EHEALTH COLLABORATIVE), THE FEDERALLY-CERTIFIED REGIONAL EXTENSION CENTER ("REC") THAT COORDINATES SERVICES IN ALL COUNTIES IN NEW YORK STATE OUTSIDE OF NEW YORK CITY. THIS NATIONWIDE INITIATIVE WAS ENABLED THROUGH THE HITECH ACT OF 2009. ACCOMPLISHMENTS - SPECIFICALLY, HEALTHIX IS HELPING OVER 100 CLINICIANS WITH EHR IMPLEMENTATION AND MEANINGFUL USE OF ELECTRONIC CAPABILITIES INCLUDING:- EHR VENDOR SELECTION SUPPOR- ASSISTANCE WITH EHR IMPLEMENTATION AND PROJECT MANAGEMENT- FUNCTIONAL INTEROPERABILITY & HIE INTEGRATION WITH HEALTHIX - FACILITATE COMPREHENSIVE PRACTICE READINESS ASSESSMENT - PRACTICE AND WORKFLOW DESIGN AND TRAINING- EDUCATION AND OUTREACH TOOLKITS AND TEMPLATES- PROVIDE PRIVACY AND SECURITY BEST PRACTICES AND TOOLKITS FOR RISK ANALYSIS- ASSISTANCE IN MU REPORTING AND AUDIT PREPARATION- CMS (MEDICAID) REGISTRATION AND ATTESTATION FACILITATION AND GUIDANCE 9622660 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 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 0 0 0 0 1 13 0 32 1 0 0 0 0 0 0 0 0 0 0 X 13 13 0 1 0 0 1 0 0 1 1 0 0 1 1 1 1 1 0 1 1 0 NY X X JOHN GUASTELLA 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 RICHARD DONOGHUE CHAIR 4.00 X X 0 0 0 PAMELA BRIER VICE CHAIR 1.00 X X 0 0 0 MICHAEL ROSENBLUT TREASURER 1.00 X X 0 0 0 NEIL CALMAN MD DIRECTOR 1.00 X 0 0 0 THOMAS EARLY DIRECTOR 1.00 X 0 0 0 JEFFREY KRAUT DIRECTOR 1.00 X 0 0 0 MITRA BEHROOZI DIRECTOR 1.00 X 0 0 0 AURELIA BOYER DIRECTOR 1.00 X 0 0 0 ROBERT HEATLEY DIRECTOR 1.00 X 0 0 0 CHARLES KING DIRECTOR 1.00 X 0 0 0 DONNA LICHTI DIRECTOR 1.00 X 0 0 0 LARRY MCREYNOLDS DIRECTOR 1.00 X 0 0 0 DAVID SCHIMEL DIRECTOR 1.00 X 0 0 0 IRENE KOCH EXECUTIVE VP & GENERAL COUNSEL 40.00 X 280738 0 71895 THOMAS F CHECK PRESIDENT & CEO 40.00 X 391951 0 78012 JOHN GUASTELLA SVP FINANCE & ADMIN 40.00 X 226972 0 42825 ADAM BECKER VP MEMBER SERVICES 40.00 X 284727 0 68409 THOMAS MOORE VICE PRESIDENT-INNOVATION 40.00 X 224285 0 60058 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP. COMMUNICATIONS 40.00 X 149169 0 32402 COREY ELLIS PROGRAM DIRECTOR 40.00 X 150746 0 24179 PUNITA MISRA PROGRAM MANAGER 40.00 X 151420 0 21909 GERI ALMER CONTROLLER 40.00 X 124902 0 22351 JASON THAW SENIOR ACCOUNT MANAGER 40.00 X 114152 0 34992 2099062 0 457032 11 0 1 0 NEW YORK EHEALTH COLLABORATIVE 40 WORTH STREET 5TH FLOOR NEW YORK NY 10013 CONSULTING 6225251 ST LUKE'S ROOSEVELT 1090 AMSTERDAM AVENUE 16TH FLOOR NEW YORK NY 10025 CONSULTING 604474 NETSMART 3500 SUNRISE HIGHWAY SUITE D122 GREAT RIVER NY 11739 CONSULTING 594803 KORN FERRY INTERNATIONAL NW PO BOX 1450 MINNEAPOLIS MN 665965064 RECRUITING FEES 100600 4 9196985 153000 9349985 MEMBERSHIP DUES 518210 1733737 1733737 CONTRACT REVENUE 518210 714377 714377 2448114 5688 5688 RECOVERY OF BAD DEBT 900099 330220 330220 OTHER REVENUE 900099 1130 1130 331350 12135137 2448114 0 337038 X 5000 5000 1607797 1047436 560361 1718024 1624721 93303 52670 52435 235 91845 90008 1837 163650 136092 27558 50362 40793 9569 83522 83522 7415382 6074111 1341271 8395 6800 1595 83436 67583 15853 99334 80461 18873 311596 252393 59203 59694 48352 11342 29396 23811 5585 25469 25469 9055 7335 1720 75967 61533 14434 DIRECT OPERATING EXPENS 4678 2839 1839 STORAGE EXPENSE 1182 957 225 11896454 9622660 2273794 0 4053184 315181 4411459 5006147 2175305 3442842 2486975 146636 151236 338828 890696 38349 20880 852347 27521 27521 13326560 10129502 3949825 4318869 1953117 202900 2808117 753549 8711059 5275318 X 4615501 4854184 4615501 4854184 13326560 10129502 238683 0 X X 0 1 X 1 1 1 X 4088471 4551340 5093277 8865940 9349985 31949013 221512 1781116 2930892 2251418 2448114 9633052 4309983 6332456 8024169 11117358 11798099 41582065 0 1122754 224645 143303 1490702 1122754 224645 143303 1490702 40091363 5118 34170 2117729 11708 5688 2174413 5118 34170 2117729 11708 5688 2174413 1985 2199 331350 335534 4315101 6366626 10143883 11131265 12135137 44092012 0.90930 0.89940 0.04930 0.06200 X SCHEDULE A, PART III, LINE 12, EXPLANATION OF OTHER INCOME: OTHER REVENUE - 2012 AMOUNT: $ 1,985. 2014 AMOUNT: $ 1,130. REFUNDS - 2013 AMOUNT: $ 2,199. RECOVERY OF BAD DEBT - 2014 AMOUNT: $ 330,220. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 580648 38349 542299 310048 310048 852347 NOTE PAYABLE-MEMBER 753549 753549 X 11804917 0 11804917 330220 330220 12135137 11566234 0 11566234 330220 330220 11896454 PART X, LINE 2: FASB GUIDANCE HAS ESTABLISHED A SINGLE MODEL TO ADDRESS ACCOUNTING FOR UNCERTAIN TAX POSITIONS AND CLARIFIES THE ACCOUNTING FOR INCOME TAXES BY PRESCRIBING A MINIMUM RECOGNITION THRESHOLD THAT A TAX POSITION IS REQUIRED TO MEET BEFORE BEING RECOGNIZED IN THE FINANCIAL STATEMENTS. THE COMPANY EVALUATES UNCERTAIN TAX POSITIONS, IF ANY, BY DETERMINING IF IT IS MORE LIKELY THAN NOT TO BE SUSTAINED UPON EXAMINATION BY THE TAXING AUTHORITIES. THE COMPANY RECORDS UNCERTAIN TAX POSITIONS WHEN THEY ARE ESTIMATABLE AND PROBABLE THAT SUCH LIABILITIES HAVE BEEN INCURRED. THE COMPANY WILL RECORD ANY INTEREST AND PENALTIES, IF THEY SHOULD ARISE, AS A COMPONENT OF TAX EXPENSE. MANAGEMENT HAS DETERMINED THAT THE COMPANY HAS NO UNCERTAIN TAX POSITIONS THAT WOULD REQUIRE FINANCIAL STATEMENT RECOGNITION OR DISCLOSURE. THE COMPANY IS NO LONGER SUBJECT TO EXAMINATIONS BY THE APPLICABLE TAXING JURISDICTIONS FOR PERIODS PRIOR TO DECEMBER 31, 2011. PART XI, LINE 4B - OTHER ADJUSTMENTS: RECOVERY OF BAD DEBT REPORTED ON PART VIII, LINE 11 330,220. PART XII, LINE 4B - OTHER ADJUSTMENTS: RECOVERY OF BAD DEBT REPORTED ON PART VIII, LINE 11 330,220. X X X 0 0 0 1 0 0 0 1 0 IRENE KOCH EXECUTIVE VP & GENERAL COUNSEL 280738 0 0 0 0 0 47639 0 24256 0 352633 0 0 0 THOMAS F CHECK PRESIDENT & CEO 341951 0 50000 0 0 0 60640 0 17372 0 469963 0 50000 0 JOHN GUASTELLA SVP FINANCE & ADMIN 189240 0 37732 0 0 0 33950 0 8875 0 269797 0 37732 0 ADAM BECKER VP MEMBER SERVICES 270352 0 0 0 14375 0 42961 0 25448 0 353136 0 14375 0 THOMAS MOORE VICE PRESIDENT-INNOVATION 204317 0 19968 0 0 0 36046 0 24012 0 284343 0 19968 0 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP. COMMUNIC 149169 0 0 0 0 0 18360 0 14042 0 181571 0 0 0 COREY ELLIS PROGRAM DIRECTOR 139228 0 11518 0 0 0 23065 0 1114 0 174925 0 11518 0 PUNITA MISRA PROGRAM MANAGER 135938 0 15482 0 0 0 20792 0 1117 0 173329 0 15482 0 PART I, LINE 5 THE FOLLOWING INDIVIDUALS RECEIVED COMMISSION PAYMENTS THAT WERE INCLUDED IN THEIR 2014 W-2 BASED ON THE ORGANIZATION'S REVENUE. THE COMMISSION PLAN WAS TERMINATED IN 2014. - ADAM BECKER, $14,375 - JASON THAW, $6,006 PART I, LINE 7 AN EMPLOYEE MAY RECEIVE AN ANNUAL BONUS EQUAL TO AS MUCH AS 12% OF HIS/HER BASE SALARY (EXCEPT FOR THE CEO, WHOSE ANNUAL BONUS IS SET BY HIS EMPLOYMENT AGREEMENT). THE BONUS WILL BE DETERMINED BASED UPON PERFORMANCE OBJECTIVES OUTLINED BY THE EMPLOYEE'S SUPERVISOR AND DISCUSSED WITH THE EMPLOYEE, IN MOST CIRCUMSTANCES, EARLY IN THE FIRST QUARTER OF THE COMPENSATION YEAR. FOR NEW EMPLOYEES, WHOSE FIRST ANNUAL BONUS IS PRORATED FROM THEIR DATE OF HIRE TO THE END OF THE YEAR, THEIR PERFORMANCE OBJECTIVES ARE DISCUSSED WITH THEM SHORTLY AFTER THEY ARE HIRED. THE DOCUMENT OUTLINING THE PERFORMANCE OBJECTIVES IS CALLED THE "CRITERIA FOR INCENTIVE PAY", IN WHICH AN EMPLOYEE'S "CRITERIA FOR SUCCESS" (TO EARN A BONUS) IS OUTLINED AND MATCHED TO THE COMPANY'S STRATEGIC GOALS FOR EACH YEAR. ONCE THE COMPANY'S FISCAL YEAR HAS ENDED, THE SUPERVISOR PREPARES AN EVALUATION TO SEE IF THE EMPLOYEE HAS MET THE CRITERIA FOR INCENTIVE PAY FOR THE PERFORMANCE OBJECTIVES OUTLINED, AND DETERMINES HOW THE EMPLOYEE HAS PERFORMED. THE OVERALL PERFORMANCE IS THE DETERMINED AND AN OVERALL RATING IS ASSIGNED TO THE PERFORMANCE. THIS OVERALL RATING IS THE DETERMINING FACTOR FOR THE PERCENTAGE BONUS WHICH THE EMPLOYEE HAS EARNED FOR THE PREVIOUS FISCAL YEAR. A SCHEDULE IS DISTRIBUTED TO ALL EMPLOYEES WHICH SHOWS THE PERCENTAGE BONUS AN EMPLOYEE CAN EARN BASED UPON HOW THEIR PERFORMANCE IS RATED. THIS SCHEDULE ALSO BRIEFLY SUMMARIZES THE COMPANY'S INCENTIVE COMPENSATION PROGRAM. THIS IS DISTRIBUTED TO EMPLOYEES IN THE COMPENSATION YEAR SO THAT EACH EMPLOYEE AND THEIR SUPERVISOR ARE AWARE OF WHAT CAN BE EARNED. PAYMENT OF ANY INCENTIVE COMPENSATION IS WHOLLY DEPENDENT UPON THE COMPANY MEETING ITS OPERATING INCOME TARGET, AS IS ESTABLISHED AT THE BEGINNING OF EACH FISCAL YEAR AND APPROVED BY THE BOARD OF DIRECTORS. ONCE THE COMPANY'S BOOKS ARE CLOSED IN THE SUBSEQUENT PERIOD, AND THE COMPANY HAS RECEIVED CONFIRMATION FROM ITS INDEPENDENT AUDITORS AS TO ITS RESULTS OF OPERATIONS FOR THE COMPENSATION YEAR, THE COMPANY THEN COMPARES ITS ACTUAL OPERATING INCOME TO ITS TARGETED OPERATING INCOME. ASSUMING THE OPERATING INCOME TARGET IS MET OR EXCEEDED, MANAGEMENT THEN INFORMS THE HEALTHIX FINANCE COMMITTEE OF THIS AND RECOMMENDS THAT BONUSES CAN BE PAID. PROPOSED BONUSES ARE THEN SUBMITTED TO THE CEO (OR PREPARED BY HIM FOR HIS DIRECT REPORTS). SUBSEQUENT TO THIS, THE HEALTHIX EXECUTIVE COMMITTEE (WHICH FUNCTIONS AS ITS COMPENSATION COMMITTEE AND HAS RECEIVED THE FINANCE COMMITTEE'S RECOMMENDATION TO PAY OUT BONUSES) MEETS TO DISCUSS AND APPROVE THE SPECIFIC BONUSES TO BE PAID, WHICH USUALLY OCCURS IN APRIL OR MAY OF THE YEAR FOLLOWING THE YEAR IN WHICH THEY WERE EARNED (THE COMPENSATION YEAR). INCENTIVE COMPENSATION EARNED IN 2013 AND PAID IN 2014 (ONLY FOR THOSE EMPLOYEES WHO EARNED OVER $100,000 IN 2014 EXCLUDING THE CEO): - COREY ELLIS $11,518 - JOHN GUASTELLA $37,732 (INCLUDES $17,000 DEFERRED FROM 2012) - THOMAS MOORE $19,968 - PUNITA MISRA $15,482 FORM 990, PART VI, SECTION A, LINE 3 THE ORGANIZATION USES AN OUTSIDE PROFESSIONAL EMPLOYER ORGANIZATION ("PEO"), PAYCHEX BUSINESS SOLUTIONS, INC., AS A CO-EMPLOYER. THE PEO LEASES EMPLOYEES TO THE ORGANIZATION, AND IS RESPONSIBLE FOR THE PROCESSING AND PAYMENT OF ALL PAYROLL. THE PEO WAS PAID $18,038 DURING 2014 FOR SERVICES PROVIDED. FORM 990, PART VI, SECTION A, LINE 6 MEMBERSHIP: IN ORDER FOR AN ORGANIZATION OR INDIVIDUAL TO QUALIFY TO BE A PARTICIPANT IN THE REGIONAL HEALTH INFORMATION ORGANIZATION ("RHIO") OPERATED BY THE CORPORATION ("PARTICIPANT"), HE/SHE OR IT MUST ENTER INTO A RHIO SERVICES, PARTICIPATION OR SIMILAR AGREEMENT WITH THE CORPORATION (EACH, A "RHIO SERVICES AGREEMENT"), THE FORM OF WHICH HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF THE CORPORATION ("BOARD"), TO PARTICIPATE IN A CLINICAL INFORMATION DATA EXCHANGE PROGRAM WITH THE CORPORATION AND TO ACT AS A DATA SOURCE AND/OR DATA USER WITH RESPECT TO THE CORPORATION'S DATA EXCHANGE. A PARTICIPANT'S PARTICIPATION IN THE CORPORATION WILL TERMINATE IF THE RHIO SERVICES AGREEMENT IS TERMINATED FOR ANY REASON. FORM 990, PART VI, SECTION B, LINE 11 AFTER THE FORM IS PREPARED BY OUTSIDE ACCOUNTANTS, IT WILL FIRST BE REVIEWED BY THE SVP OF FINANCE & ADMINISTRATION. IF THERE ARE ANY SUGGESTED CHANGES OR MODIFICATIONS, HE WILL COMMUNICATE DIRECTLY WITH THE OUTSIDE ACCOUNTANTS. ONCE THE SVP OF FINANCE IS SATISFIED WITH THE 990, HE WILL PASS IT ON TO THE CEO FOR HIS REVIEW. ONCE THE CEO IS SATISFIED WITH THE 990, THE NEXT STEP IS TO PASS IT ON TO THE TREASURER, WHO IS ALSO THE CHAIRMAN OF THE FINANCE COMMITTEE AND A MEMBER OF THE EXECUTIVE COMMITTEE AND THE BOARD OF DIRECTORS, FOR HIS REVIEW. ONCE THE TREASURER IS SATISFIED WITH THE 990, IT WILL BE PASSED ON TO THE FULL EXECUTIVE COMMITTEE. THIS COMMITTEE IS A SUBSET OF THE FULL HEALTHIX, INC. BOARD AND IS CHARGED WITH MAKING MANY KEY DECISIONS AFFECTING THE COMPANY. IT IS THIS GROUP OF INDIVIDUALS THAT WILL AUTHORIZE THE FILING OF THE 990. ONCE THE EXECUTIVE COMMITTEE IS SATISFIED WITH THE 990 AND HAS AUTHORIZED ITS FILING, THE SVP OF FINANCE WILL PROVIDE AN ELECTRONIC COPY TO THE FULL BOARD OF DIRECTORS PRIOR TO THE EXTENDED DUE DATE OF THE RETURN. THE BOARD WILL BE INFORMED THAT THE EXECUTIVE COMMITTEE HAS REVIEWED AND APPROVED THE 990. IF ANY BOARD MEMBER HAS ANY QUESTIONS OR CONCERNS THEY WILL BE INSTRUCTED TO CONTACT THE SVP OF FINANCE, WHO WILL RESOLVE THEIR INQUIRIES PROMPTLY. FORM 990, PART VI, SECTION B, LINE 12C ALL DIRECTORS, OFFICERS, COMMITTEE MEMBERS AND KEY EMPLOYEES WILL, AT LEAST ANNUALLY, FILE A WRITTEN CONFLICT OF INTEREST DISCLOSURE STATEMENT WITH HEALTHIX GENERAL COUNSEL. HEALTHIX GENERAL COUNSEL WILL ADVISE THE CHAIR OF THE BOARD THAT ALL SUCH STATEMENTS HAVE BEEN RECEIVED. FOR DIRECTORS, THE CONFLICT OF INTEREST DISCLOSURE STATEMENT WILL SPECIFICALLY INCLUDE, AMONG OTHER DISCLOSABLE CONFLICTS OF INTEREST, A STATEMENT IDENTIFYING, TO THE BEST OF THE DIRECTOR'S KNOWLEDGE, ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PARTNER), OR EMPLOYEE AND WITH WHICH HEALTHIX HAS A RELATIONSHIP, AND ANY TRANSACTION IN WHICH HEALTHIX IS A PARTICIPANT AND IN WHICH THE DIRECTOR MIGHT HAVE A DISCLOSABLE CONFLICT OF INTEREST. ALL COMPLETED CONFLICT OF INTEREST DISCLOSURE STATEMENTS THAT RAISE AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, OR THAT CREATE THE APPEARANCE OF AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, WILL BE FORWARDED BY THE CHAIR OF THE BOARD TO THE INDEPENDENT DIRECTORS ON THE BOARD FOR THEIR CONSIDERATION. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONDUCT A FULL REVIEW OF ALL MATTERS (E.G., CONTRACTS, TRANSACTIONS OR ARRANGEMENTS) FOR WHICH AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST HAS BEEN IDENTIFIED. IN SO DOING, THE INDEPENDENT DIRECTORS ON THE BOARD WILL: 1. CONSIDER ALL RELEVANT FACTS AND CIRCUMSTANCES INVOLVED IN THE MATTER, AND IN PARTICULAR, WHAT IS FAIR, REASONABLE AND IN THE BEST INTERESTS OF HEALTHIX; 2. EXCLUDE THE AFFECTED INDIVIDUAL(S) FROM BEING PRESENT AT OR PARTICIPATING IN, OR BEING COUNTED IN THE QUORUM FOR, THE DELIBERATIONS OR VOTING ON THE MATTER; 3. PROHIBIT THE AFFECTED INDIVIDUAL(S) FROM ANY ATTEMPT TO INFLUENCE IMPROPERLY THE DELIBERATIONS OR VOTING ON THE MATTER; 4. PERMIT THE AFFECTED INDIVIDUAL(S), UPON REQUEST OF THE INDEPENDENT DIRECTORS ON THE BOARD, TO PRESENT INFORMATION CONCERNING THE MATTER AT A MEETING PRIOR TO COMMENCEMENT OF DELIBERATIONS OR VOTING ON THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL MAKE A FINAL AND BINDING DETERMINATION AS TO WHETHER A CONFLICT OF INTEREST EXISTS OR MAY EXIST ON ANY MATTER IN WHICH THERE IS A DISCLOSABLE CONFLICT OF INTEREST, AND WHAT COURSE HEALTHIX WILL TAKE IN CONNECTION WITH THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONTEMPORANEOUSLY DOCUMENT IN WRITING IN APPROPRIATE MINUTES OF ANY MEETING AT WHICH THE MATTER IS DELIBERATED OR VOTED UPON ALL DELIBERATIONS AND DETERMINATIONS RELATING THERETO, INCLUDING, AT A MINIMUM: 1. THE NAMES AND POSITIONS OF PERSONS WHO DISCLOSED THAT THEY WERE RELATED PARTIES OR OTHERWISE WERE FOUND TO BE RELATED PARTIES OR TO HAVE A CONFLICT OF INTEREST, A DESCRIPTION OF THE NATURE OF THE RELATIONSHIP AND/OR SUBSTANTIAL FINANCIAL INTEREST WHICH GAVE RISE TO SUCH DISCLOSURE OR IDENTIFICATION, AND A DESCRIPTION OF THE CONTRACT, TRANSACTION OR ARRANGEMENT AT ISSUE; 2. THE NAMES OF THE INDEPENDENT DIRECTORS WHO WERE PRESENT DURING THE TAKING OF THE ACTION TO DETERMINE WHETHER A CONFLICT OF INTERESTS WAS PRESENT, AND THE BASIS FOR THERE BEING A QUORUM FOR THE TAKING OF SUCH ACTION WITHOUT INCLUDING ANY RELATED PARTIES OR AFFECTED PARTIES; 3. THE STEPS TAKEN BY THE INDEPENDENT DIRECTORS ON THE BOARD TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT; 4. THE BOARD'S DECISION AS TO WHETHER A CONFLICT OF INTERESTS WAS PRESENT AND THE BASIS FOR SUCH DECISION; 5. THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER TO PROCEED WITH THE MATTERS (INCLUDING, BUT NOT NECESSARILY LIMITED TO, WHETHER THE MATTER IS AS FAIR AND REASONABLE TO HEALTHIX AS WOULD OTHERWISE THEN BE OBTAINABLE BY HEALTHIX) AND THE NAMES OF THE PERSONS WHO VOTED TO APPROVE THE MATTER. FORM 990, PART VI, SECTION B, LINE 15 CEO COMPENSATION AND THAT OF THE SVP OF MEMBER SERVICES (I.E., SALES) ARE SET BY EMPLOYMENT AGREEMENTS. IN 2012, THE COMPANY ENGAGED AN INDEPENDENT COMPENSATION CONSULTING COMPANY, THE "HAY GROUP", WHICH PERFORMED A FORMAL MARKET STUDY AND PROVIDED RANGES FOR SALARIES, BONUSES & COMMISSION PLANS FOR THE ENTIRE COMPANY. IT WAS NOT NECESSARY TO PERFORM THIS ANALYSIS AGAIN IN 2014. GOALS WERE SET FOR ALL EMPLOYEES AT THE BEGINNING OF 2014, AND THEIR PERFORMANCE WAS MEASURED AGAINST GOALS AFTER 2014 CONCLUDED. BONUSES, WHICH WERE ACCRUED AT 12/31/13 (BASED ON 2013 PERFORMANCE), WERE PAID IN 2014, AND THOSE WHICH ACCRUED AT 12/31/14 (BASED ON 2014 PERFORMANCE) WERE PAID OUT IN 2015. THE INCENTIVE COMPENSATION (I.E, BONUS) PROGRAMS WERE APPROVED BY THE EXECUTIVE COMMITTEE FOR BOTH 2013 AND 2014, AND WERE ALSO DISTRIBUTED TO ALL EMPLOYEES. THE BY-LAWS CREATE A COMMITTEE OF THE BOARD WITH FULL POWERS OF THE BOARD TO REVIEW AND APPROVE THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES. THE COMMITTEE, WHICH IS HEALTHIX'S EXECUTIVE COMMITTEE, CONSISTS OF TRUSTEES WHO HAVE NO CONNECTION TO HEALTHIX EXCEPT AS TRUSTEES AND THEY HAVE NO CONFLICTS AS TO MATTERS THEY CONSIDER. THE COMMITTEE MEETS SEVERAL TIMES A YEAR AS NEEDED AND ALWAYS REVIEWS AND DETERMINES OFFICER AND KEY EMPLOYEE COMPENSATION. FOR PURPOSES OF THEIR REVIEW THE COMMITTEE CONSIDERS THE RECOMMENDATIONS OF THE CEO FOR ALL PERSONS OTHER THAN THE CEO. THIS PROCESS WAS LAST UNDERTAKEN IN 2014. THE BOARD'S APPROVAL FOR THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES IS DOCUMENTED VIA EMAIL. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS FORM 990 AND FORM 1023 AVAILABLE FOR PUBLIC INSPECTION AS REQUIRED UNDER SECTION 6104 OF THE INTERNAL REVENUE CODE BY POSTING IT ON GUIDESTAR.ORG AND OTHER SIMILAR TYPES OF WEBSITES. IN ADDITION, THE FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, ARTICLES OF INCORPORATION AND BY-LAWS ARE ALSO AVAILABLE UPON WRITTEN REQUEST OR BY CALLING THE ORGANIZATION DIRECTLY. FORM 990, PART IX, LINE 11G CONSULTING FEES: PROGRAM SERVICE EXPENSES 684,414. MANAGEMENT AND GENERAL EXPENSES 77,021. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 761,435. PAYROLL PROCESSING FEES: PROGRAM SERVICE EXPENSES 14,611. MANAGEMENT AND GENERAL EXPENSES 3,427. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 18,038. RECRUITING FEES: PROGRAM SERVICE EXPENSES 179,242. MANAGEMENT AND GENERAL EXPENSES 42,045. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 221,287. NYEC BASIC SERVICE FEES: PROGRAM SERVICE EXPENSES 5,195,844. MANAGEMENT AND GENERAL EXPENSES 1,218,778. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 6,414,622. FORM 990,PART XII, LINE 2C: THE ORGANIZATION'S FINANCE COMMITTEE ASSUMES RESPONSIBILITY FOR THE OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND SELECTION OF ITS INDEPENDENT AUDITORS. THE POLICY FOR SELECTION AND OVERSIGHT OF THE INDEPENDENT AUDITORS HAS NOT CHANGED SINCE LAST YEAR.