2015-09-28T09:38:22-05:00 2014-12-31 134008324 PRICEWATERHOUSECOOPERS LLP 76 S LAURA STREET SUITE 2100 JACKSONVILLE FL 32202 990 2014-01-01 592742907 AVMED INC AVME 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDALL L STUART ASSISTANT TREASURER 3523378730 2015-09-25 1 MICHAEL J MULDOON P00889797 9043540671 2014 2016-02-25 16:41:14Z MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 883691960 0 X WWW.AVMED.ORG X 1986 FL TO HELP OUR MEMBERS LIVE HEALTHIER BY PROVIDING HIGH QUALITY HEALTH CARE PLANS. 17 16 895 0 2075 0 0 0 830505714 771835375 10613152 15138797 2589384 1387437 843708250 788361609 12500000 0 0 0 68575587 69479673 0 0 0 752528316 761006626 833603903 830486299 10104347 -42124690 324019338 304403355 146988326 174561692 177031012 129841663 X THE MISSION OF AVMED, INC. (AVMED) IS TO HELP OUR MEMBERS LIVE HEALTHIER BY PROVIDING ACCESS TO HIGH QUALITY, AFFORDABLE HEALTH CARE SERVICES THROUGH A NETWORK OF CREDENTIALED HEALTH CARE PROVIDERS LOCATED THROUGHOUT AVMED INC.'S SERVICE AREAS. AVMED PROVIDES AFFORDABLE, NON-COMMERCIAL-TYPE HEALTH BENEFITS CONTRACTS, EDUCATES ITS ENROLLEES ABOUT HEALTH ISSUES, PROVIDES WELLNESS AND DISEASE PREVENTION PROGRAMS, CONDUCTS HEALTH FAIRS, PROVIDES DISEASE AND CHRONIC CARE MANAGEMENT PROGRAMS, MANAGES COMPLEX CASES, AND PROVIDES PRESCRIPTION DRUGS AND CERTAIN MEDICAL RESEARCH PROGRAMS. AVMED OFFERS ITS PROGRAM OF SERVICES AT AFFORDABLE FIXED PRICES TO FLORIDA EMPLOYERS AND VULNERABLE POPULATIONS INCLUDING INDIVIDUALS, SMALL EMPLOYER GROUPS AND SENIOR CITIZENS THROUGH THE MEDICARE ADVANTAGE PROGRAM (INCLUDING PRESCRIPTION DRUGS). 0 0 761515724 773165105 AVMED PROVIDED HEALTH MAINTENANCE ORGANIZATION SERVICES TO EMPLOYERS AND INDIVIDUALS, INCLUDING SMALL EMPLOYER GROUPS AND SENIOR CITIZENS, REPRESENTING 1,225,286 MEMBER MONTHS OF NETWORK ACCESS, 1,813,595 DRUG PRESCRIPTIONS, AND 56,585 DAYS OF INPATIENT CARE. AVMED ALSO PROVIDED ADMINISTRATIVE SERVICES FOR SELF-FUNDED HEALTH CARE PLANS.IN ADDITION, AVMED PROVIDED EDUCATION, WELLNESS AND DISEASE PREVENTION, HEALTH FAIRS, DISEASE AND CHRONIC CARE MANAGEMENT, MANAGEMENT OF COMPLEX CASES, CLINICAL EDUCATION AND COORDINATION, AND OTHER HEALTH IMPROVEMENT SERVICES. CONTINUED AT SCHEDULE O. AVMED EARNED A "COMMENDABLE" ACCREDITATION STATUS FOR BOTH ITS MEDICARE AND COMMERCIAL PRODUCTS FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) FOR ITS PROGRAMS OF HEALTH CARE. AVMED ANNUALLY MEASURES THE HEALTH CARE PERFORMANCE OF ITS NETWORK OF PROVIDERS THROUGH THE HEALTHCARE EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) PROCESS. HEDIS INCLUDES 81 MEASURES ACROSS 5 DOMAINS OF CARE.FOR HEDIS 2014, AVMED'S RESULTS WERE RANKED AT THE 75TH PERCENTILE OR HIGHER NATIONALLY FOR 6 OF THE 30 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 21 OF THE 30 HEALTH CARE MEASURES USED IN THE NCQA ACCREDITATION SCORING FOR ITS COMMERCIAL PRODUCTS. FOR THE MEDICARE PRODUCT, AVMED'S RESULTS WERE RANKED AT THE 75TH PERCENTILE OR HIGHER FOR 15 OF THE 20 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 17 OUT OF THE 20 HEALTH CARE MEASURES USED IN THE NCQA ACCREDITATION SCORING. AVMED ALSO ANNUALLY MEASURES THE SATISFACTION OF ITS MEMBERS THROUGH THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY. THE SURVEY PROVIDES INFORMATION ON THE EXPERIENCES OF AVMED MEMBERS WITH THE HEALTH PLAN AND HOW WELL THE HEALTH PLAN MEETS MEMBERS' EXPECTATIONS. AN OVERWHELMING MAJORITY OF AVMED'S MEMBERS WHO RESPONDED TO THE 2014 ANNUAL SURVEY RATED AVMED OVERALL AS A HEALTH PLAN AT 8, 9, OR 10 ON A SCALE OF 0 TO 10, WHERE 10 IS THE HIGHEST RATING (80.65% OF COMMERCIAL MEMBERS AND 93.48% OF MEDICARE MEMBERS). 761515724 0 0 1 0 0 0 0 1 0 1 1 0 1 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 0 0 1 19793 0 1 895 1 1 1 0 0 0 0 0 X 17 16 0 0 1 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X RANDALL L STUART ASST TREASURER 3523378730 4300 NW 89TH BLVD GAINESVILLE FL 326065688 X SCOTTIE J BUTLER CHAIRMAN/DIRECTOR 1.80 1.20 X X 0 72757 0 JOE G DUNLAP VICE CHAIRMAN/DIRECTOR 0.90 0.60 X X 56643 0 0 ROBERT L EPLING TREASURER/DIRECTOR 0.90 0.60 X X 57624 0 0 ALBERT E DOTSON PHD SECRETARY/DIRECTOR 0.90 0.60 X X 1500 49890 0 RICHARD M ANDERSON MD DIRECTOR 0.90 0.60 X 0 53132 0 JOSEPH W DAVIS DIRECTOR 0.90 0.60 X 55420 0 0 BEN I DOERR JR DIRECTOR 1.80 1.20 X 0 58059 0 GEORGE E FLETCHER DIRECTOR 0.90 0.60 X 0 53112 0 HUGH J FLOYD DIRECTOR 0.90 0.60 X 53920 0 0 GLENDA E HOOD DIRECTOR 0.90 0.60 X 500 56316 0 ROBERT C HUDSON DIRECTOR 0.90 0.60 X 52459 0 0 GORDON L JOHNSON DIRECTOR - THROUGH 12/10/2014 0.90 0.60 X 55663 0 0 PAMELA J MOONEY PHD DIRECTOR 0.90 0.60 X 49236 0 0 THOMAS A NATIELLO PHD DIRECTOR 0.90 0.60 X 0 54113 0 PAUL R PHILIP DIRECTOR 0.90 0.60 X 55420 0 0 JACKSON N SASSER PHD DIRECTOR 0.90 0.60 X 0 56316 0 JAMES L STRINGFELLOW SR DIRECTOR 0.90 0.60 X 0 54267 0 MICHAEL P GALLAGHER CEO/PRESIDENT/DIRECTOR 45.00 15.00 X X 0 2790372 280950 RANDALL L STUART SR VP/CFO/ASSISTANT TREASURER 53.00 7.00 X 0 768166 154160 CATHERINE E AYERS SR VP HUMAN RESOURCES/ASST SECRETARY 40.00 20.00 X 890578 0 68183 STEVEN M ZIEGLER SR VP GENERAL COUNSEL/ASSISTANT SECRETARY 47.00 16.00 X 606113 0 140971 SUSAN K PINNAS SR VP PROVIDER STRATEGY & ALLIANCES 50.00 X 667182 0 31664 ANN O WEHR MD CHIEF MEDICAL OFFICER 50.00 X 572018 0 145972 ROBERT BRADFORD BENTLEY SR VP PLM & INNOVATION 50.00 X 554480 0 152898 JAMES M REPP SR VP MEMBER RELATIONSHIP MANAGEMENT 50.00 X 551440 0 126800 WINSTON LONSDALE VP GOVERNMENT PROGRAMS 40.00 X 472933 0 65622 BARRY WAGNER VP CLAIMS & SERVICE OPERATIONS 40.00 X 457817 0 61495 EDWIN RODRIGUEZ MD REGIONAL MEDICAL DIRECTOR 40.00 X 450836 0 67784 ROBERT D BONNELL MD REGIONAL MEDICAL DIRECTOR 40.00 X 431566 0 55741 JAVIER MENDOZA VP PRODUCT PORTFOLIO & MANAGEMENT 40.00 X 375333 0 61219 6468681 4066500 1413459 107 0 1 0 BAPTIST HOSPITAL OF MIAMI INC 8900 N KENDALL DRIVE MIAMI FL 33176 MEDICAL 100611862 SOUTH BROWARD HOSPITAL DISTRICT PO BOX 538527 ATLANTA GA 303538527 MEDICAL 96533890 SOUTH MIAMI HOSPITAL INC 6200 SW 73RD ST MIAMI FL 331434679 MEDICAL 49269936 NORTH FLORIDA MEDICAL CENTER INC PO BOX 406407 ATLANTA GA 303846407 MEDICAL 32031910 ADVENTIST HEALTH SYSTEMS PO BOX 538700 ORLANDO FL 328538700 MEDICAL 28356455 1092 MEDICARE REVENUE 524114 400223762 400223762 COMPREHENSIVE REVENUE 524114 303230387 303230387 SELF-FUNDED ADMIN FEE 524292 49854264 49854264 FEDERAL REVENUE 524114 18526962 18526962 771835375 4793134 4793134 43018 43018 4704240 6230792 -1526552 -1526552 -1526552 95076918 4325286 89099559 0 5977359 4325286 10302645 2075 10300570 MANAGEMENT FEES 561000 1457930 1457930 FEE CREDITS AND SETTLEMENTS 900099 1329730 1329730 MISCELLANEOUS REBATES 900099 126329 126329 2913989 788361609 773165105 2075 15194429 X 4080545 2336746 1743799 52438466 31664856 20773610 3031462 1328263 1703199 5574103 3404989 2169114 4355097 2656713 1698384 2571595 2571595 649766 4729 645037 556755 556755 502764 502764 704929202 692675102 12254100 5023481 5023481 9982292 2886178 7096114 7969405 67042 7902363 2702053 2256823 445230 1130364 511574 618790 437827 142129 295698 425336 425336 7443442 5184106 2259336 382984 382984 DUES AND ASSESSMENTS 10878991 10349975 529016 LICENSES AND FEES 5174682 1023018 4151664 COMMUNITY SUPPORT 245687 245687 830486299 761515724 68970575 0 36795686 10266560 1357059 2913371 41710931 37782499 2339352 901020 117590202 62855379 39156425 54734823 161538100 147638684 25018174 17654207 16103611 32512191 324019338 304403355 108927430 110993612 3736503 4614109 8126264 10694652 26198129 48259319 146988326 174561692 X 177031012 129841663 177031012 129841663 324019338 304403355 X -42124690 -569446 -4495213 X X 0 1 X 1 0 37000 PART I-A, LINE 1: AVMED MADE DIRECT CONTRIBUTIONS TO GENERAL CAMPAIGN FUNDS OF STATE AND LOCAL POLITICAL CANDIDATES IN 2014. 0 1 X 4395800 4395800 38176417 29474112 8702305 614754 495156 119598 66071883 32760388 33311495 8331348 125723 8205625 54734823 INTECH ENHANCED PLUS FUND 17484332 F PRIVATE INVESTMENTS 169875 C 17654207 INTEREST RECEIVABLE 1158519 DEPOSITS AND OTHER ASSETS 416394 REBATE RECEIVABLES 11095667 OTHER RECEIVABLES 18696528 DUE FROM AFFILIATES 456672 ASSETS HELD FOR SALE 688411 32512191 CAPITAL LEASE OBLIGATION 828418 BENEFITS PAYABLE 4703784 OTHER LIABILITIES 835781 EQUIPMENT FINANCING 33692482 AFFORDABLE CARE ACT LIABILITIES 8198854 48259319 X 784629485 535437 535437 784094048 4267561 4267561 788361609 831261499 775200 775200 830486299 0 830486299 PART IV, LINE 2B: INCLUDED IN THIS LINE ARE OBLIGATIONS TO PAY BENEFITS FROM ESCROWED FUNDS ON BEHALF OF SELF-FUNDED HEALTH PLANS. PART X, LINE 2: AVMED HAD NO UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2014. AVMED INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2014 OR 2013. TAX YEARS 2011 THROUGH 2013 ARE SUBJECT TO EXAMINATION BY FEDERAL AND STATE TAXING AUTHORITIES AND THERE ARE NO INCOME TAX EXAMINATIONS IN PROCESS AS OF THE DATE OF THIS REPORT. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS FOR TAX 775,200. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -239,763. PART XI, LINE 4B - OTHER ADJUSTMENTS: INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK 4,267,561. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS 775,200. X X 1 1 0 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER CEO/PRESIDENT/DIRECTOR 0 925247 0 1326646 0 538479 0 254966 0 25984 0 3071322 0 207121 RANDALL L STUART SR VP/CFO/ASSISTANT TREASURER 0 384984 0 237560 0 145622 0 131130 0 23030 0 922326 0 71484 CATHERINE E AYERS SR VP HUMAN RESOURCES/ASST SECRETARY 320919 0 203097 0 366562 0 35900 0 32283 0 958761 0 191352 0 STEVEN M ZIEGLER SR VP GENERAL COUNSEL/ASSISTANT SECR 325228 0 202887 0 77998 0 110220 0 30751 0 747084 0 61592 0 SUSAN K PINNAS SR VP PROVIDER STRATEGY & ALLIANCES 333857 0 205286 0 128039 0 20600 0 11064 0 698846 0 0 0 ANN O WEHR MD CHIEF MEDICAL OFFICER 371256 0 176663 0 24099 0 114929 0 31043 0 717990 0 0 0 ROBERT BRADFORD BENTLEY SR VP PLM & INNOVATION 310474 0 183460 0 60546 0 120515 0 32383 0 707378 0 30467 0 JAMES M REPP SR VP MEMBER RELATIONSHIP MANAGEMENT 320533 0 182542 0 48365 0 105613 0 21187 0 678240 0 30467 0 WINSTON LONSDALE VP GOVERNMENT PROGRAMS 254155 0 127511 0 91267 0 35900 0 29722 0 538555 0 25606 0 BARRY WAGNER VP CLAIMS & SERVICE OPERATIONS 267506 0 130852 0 59459 0 47016 0 14479 0 519312 0 12944 0 EDWIN RODRIGUEZ MD REGIONAL MEDICAL DIRECTOR 279481 0 103795 0 67560 0 35376 0 32408 0 518620 0 28832 0 ROBERT D BONNELL MD REGIONAL MEDICAL DIRECTOR 267679 0 96560 0 67327 0 31746 0 23995 0 487307 0 26296 0 JAVIER MENDOZA VP PRODUCT PORTFOLIO & MANAGEMENT 224471 0 112623 0 38239 0 32419 0 28800 0 436552 0 0 0 PART I, LINE 1A CERTAIN DIRECTORS AND THEIR COMPANIONS ATTENDED COMPANY PAID INDUSTRY SEMINARS AND TRADE CONVENTIONS AT THE REQUEST OF AVMED, INC (AVMED). ALL BUSINESS COSTS, INCLUDING TRAVEL COSTS, PAID DIRECTLY BY THE ORGANIZATION OR REIMBURSED TO THE LISTED PERSON, WERE ACCOUNTED FOR UNDER AN ACCOUNTABLE PLAN UTILIZED BY THE ORGANIZATION. NO PART OF ANY TRAVEL COST WAS DEEMED A BENEFIT FOR ANY PERSON LISTED IN FORM 990, PART VII. INCIDENTAL EXPENSES ARE NOT REIMBURSED BY THE ORGANIZATION. TAX GROSS-UP PAYMENTS OCCUR FOR GROUP VARIABLE LIFE INSURANCE PREMIUMS PAID ON BEHALF OF THE LISTED AND OTHER EMPLOYEES. EMPLOYER PAID PREMIUMS ARE DEEMED TO BE TAXABLE COMPENSATION AND ARE GROSSED-UP FOR THE TAX IMPACT PRIOR TO BEING ADDED AS IMPUTED INCOME TO AN EMPLOYEE'S YEAR-END FORM W-2. TAX GROSS-UP PAYMENTS ARE PROVIDED FOR VESTED DISTRIBUTIONS FROM THE DEFINED CONTRIBUTION AND (NOW FROZEN) DEFINED BENEFIT PENSION RESTORATION PLANS. PART I, LINE 3 MICHAEL P GALLAGHER IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) OF AVMED. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW,THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE FIRM. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE CEO'S FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. PART I, LINE 4B (RELATES TO PART I, LINE 4A): LISTED PERSONS ARE EMPLOYEES OF AVMED OR RELATED ORGANIZATIONS AND ARE COVERED UNDER A SEVERANCE POLICY FOR THEIR RESPECTIVE RELATED ORGANIZATION. THE SEVERANCE POLICY INCLUDES MONTHLY PAYMENTS UP TO A MAXIMUM OF 12 - 36 MONTHS UNDER QUALIFYING CIRCUMSTANCES DEPENDING ON POSITION. NO ONE LISTED RECEIVED SEVERANCE OR CHANGE OF CONTROL PAYMENTS DURING 2014. PART I, LINE 4B: LISTED PERSONS PARTICIPATING IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: AVMED MAINTAINS TWO ACTIVE NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS FOR A CERTAIN GROUP OF EXECUTIVES TO INCLUDE THOSE LISTED EMPLOYEES OF THE ORGANIZATION OR RELATED ORGANIZATIONS. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401(A)(17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN.)VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. LISTED PERSONS VESTED AND RECEIVED PAYMENTS FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN DURING 2014 AS FOLLOWS: CATHERINE E AYERS RECEIVED $339,470 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. STEVEN M ZIEGLER RECEIVED $66,343 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2014. ROBERT BRADFORD BENTLEY RECEIVED $38,419 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2014. SUSAN K PINNAS RECEIVED $101,102 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. JAMES M REPP RECEIVED $32,818 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2014. ROBERT D BONNELL MD RECEIVED $43,648 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. WINSTON LONSDALE RECEIVED $72,680 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. JAVIER MENDOZA RECEIVED $23,784 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2014. EDWIN RODRIGUEZ MD RECEIVED $56,405 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. BARRY WAGNER RECEIVED $43,238 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. MICHAEL P GALLAGHER AND RANDALL L STUART ARE EMPLOYEES OF SANTAFE, A RELATED SUPPORTING ORGANIZATION. THEY PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY SANTAFE FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401 (A) (17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MR. GALLAGHER VESTED AND RECEIVED $437,059 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2014. MR. STUART VESTED AND RECEIVED $109,740 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2014. SCHEDULE J, PART II: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE AND EACH OF ITS AFFILIATES. SANTAFE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE OR AVMED AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2014, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) ARE APPORTIONED AND CHARGED TO AVMED AS FOLLOWS: 75% - MICHAEL P GALLAGHER, PRESIDENT AND CEO 88% - RANDALL L STUART, SENIOR VICE PRESIDENT AND CFO FORM 990, PART VI, SECTION A, LINE 4 IN 2014, THE BOARD OF DIRECTORS FOR AVMED AMENDED AND RESTATED THE ARTICLES OF INCORPORATION AND BYLAWS. THE CHANGES WERE MADE FOR THE PURPOSES OF (I) STANDARDIZING THE GOVERNANCE PROVISIONS FOR ALL OF THE AFFILIATES OF SANTAFE HEALTHCARE, INC. (SANTAFE), WHICH INCLUDES AVMED; (II) ADOPTING A UNIFIED BOARD STRUCTURE IN WHICH THE MEMBERS OF THE BOARD OF DIRECTORS OF SANTAFE ALSO SERVE AS THE BOARD OF DIRECTORS FOR ALL OF THE AFFILIATES OF SANTAFE, INCLUDING AVMED; AND (III) ADOPTING A UNIFIED BOARD COMMITTEE STRUCTURE IN WHICH THE BOARD COMMITTEES FOR SANTAFE SERVE AS THE BOARD COMMITTEES FOR ALL OF THE AFFILIATES, INCLUDING AVMED. FORM 990, PART VI, SECTION A, LINE 7A SANTAFE, A 501(C)(3) SUPPORTING ORGANIZATION TO AVMED, HAS RESERVED POWERS AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS THAT PERMITS IT TO ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY OF AVMED. FORM 990, PART VI, SECTION A, LINE 7B THE RESERVED POWERS OF SANTAFE, AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS, PERMIT IT TO APPROVE OR RATIFY THE GOVERNING BODY'S DECISIONS RELATED TO BOARD MEMBER ELECTIONS OR REMOVALS, THE DECISION TO DISSOLVE THE ORGANIZATION AND OTHER MATTERS THAT MAY COME BEFORE THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION'S PROCESS FOR ENSURING THE ACCURATE PREPARATION, REVIEW AND APPROVAL OF THE 2014 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2014 FORM 990. IN ADDITION TO STAFF DEVELOPMENT, WHICH INCLUDED ATTENDING TAX SEMINARS AND CLASSES, MANAGEMENT ALSO CONSULTED WITH INDEPENDENT ACCOUNTING FIRMS AND TAX LEGAL COUNSEL REGARDING THE IRS FORM 990 CODE AND FILING REQUIREMENTS. THE ORGANIZATION ALSO PREVIOUSLY EDUCATED ITS MANAGEMENT TEAM, OFFICERS AND DIRECTORS, WITH THE ASSISTANCE OF PRICEWATERHOUSECOOPERS LLP, REGARDING THE FORM 990 AND THEIR INVOLVEMENT IN REVIEWING THE RETURN. FOLLOWING MANAGEMENT'S PREPARATION OF THE 2014 FORM 990, PRICEWATERHOUSECOOPERS LLP REVIEWED THE 2014 FORM 990. A COPY OF THE 2014 FORM 990 AND ATTACHMENTS WERE PROVIDED TO THE ORGANIZATION'S CURRENT BOARD OF DIRECTORS FOR THEIR REVIEW AND COMMENT. EXECUTIVE MANAGEMENT ADDRESSED ANY QUESTIONS RAISED BY THE BOARD MEMBERS PRIOR TO FILING THE 2014 FORM 990 AND ATTACHMENTS WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C AVMED HAS A PROCEDURE FOR MONITORING AND ENFORCING COMPLIANCE WITH ITS CORPORATE CONFLICT OF INTEREST POLICY (POLICY). EACH COVERED PERSON SHALL RECEIVE A COPY OF THE POLICY FOR REVIEW, SUBMIT AN AFFIRMATION, AND COMPLETE A QUESTIONNAIRE WHICH IS ATTACHED TO THE CODE OF ETHICAL BUSINESS CONDUCT. THE PROCEDURE DETAILS THAT THE CORPORATE SECRETARY HAS RESPONSIBILITY FOR DELIVERY OF THE POLICY TO DIRECTORS AND OFFICERS AND RECEIPT OF THEIR AFFIRMATIONS AND QUESTIONNAIRES. THE HUMAN RESOURCES DEPARTMENT SHALL OBTAIN THE AFFIRMATION AND QUESTIONNAIRE FROM EVERY NEW EMPLOYEE AT ORIENTATION AND FROM ALL EMPLOYEES ANNUALLY. MEMBERS OF CORPORATE ADVISORY BOARDS SUBMIT THE AFFIRMATION AND QUESTIONNAIRE TO THE CHIEF COMPLIANCE OFFICER. ANNUAL CONFLICT OF INTEREST STATEMENTS ARE REVIEWED BY INTERNAL STAFF TO ENSURE RECORDS ARE COMPLETE. AS PART OF THE CORPORATE CONTRACT REVIEW PROCESS, CONSIDERATION IS GIVEN TO ANY POTENTIAL CONFLICTS OF INTEREST INVOLVING OPERATIONAL OR FINANCIAL TRANSACTIONS. ALL EMPLOYEES ARE EXPECTED TO DISCLOSE ANY POTENTIAL OR ACTUAL CONFLICT. INITIAL REVIEW OF EMPLOYEE QUESTIONNAIRES WILL BE PERFORMED BY THE HUMAN RESOURCES DEPARTMENT WITH REVIEW OF ANY DISCLOSURES BY THE CHIEF COMPLIANCE OFFICER WHO WILL EVALUATE, MAKE NECESSARY INQUIRIES, AND INVESTIGATE ALTERNATIVES. BOARD MEMBERS SHALL DISCLOSE ANY POTENTIAL OR ACTUAL CONFLICT TO THE CHAIRMAN OF THE SANTAFE HEALTHCARE, INC. BOARD, AND THE CHAIRMAN OR CHIEF COMPLIANCE OFFICER SHALL EVALUATE CONFLICT DISCLOSURES AND, IF APPROPRIATE, INVESTIGATE ALTERNATIVES AND REPORT TO DISINTERESTED BOARD MEMBERS FOR RESOLUTION. THE MINUTES OF THE BOARD OR ANY COMMITTEE MEETING AT WHICH A POTENTIAL OR ACTUAL CONFLICT OF INTEREST IS DISCLOSED OR DISCUSSED SHALL REFLECT THE NAME OF THE INTERESTED PARTY, THE NATURE OF THE CONFLICT, THE DELIBERATIONS AND THE RESOLUTION OF THE CONFLICT. IF IT IS DETERMINED THAT A COVERED PERSON HAS FAILED TO COMPLY WITH THE POLICY, THE CHIEF COMPLIANCE OFFICER OR THE CHAIRMAN SHALL TAKE APPROPRIATE ACTION, WHICH MAY INCLUDE REMOVAL FROM OFFICE OR TERMINATION OF EMPLOYMENT. FORM 990, PART VI, SECTION B, LINE 15 MICHAEL P GALLAGHER IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) OF AVMED. MR. GALLAGHER IS COMPENSATED BY SANTAFE, A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW, THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE FIRM. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE CEO'S FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. FORM 990, PART VI, SECTION B, LINE 15B: PROCESS FOR DETERMINING COMPENSATION FOR ALL EMPLOYEE OFFICERS, KEY EMPLOYEES, AND DIRECTORS OF AVMED IS AS FOLLOWS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF ALL AVMED OFFICERS AND KEY EMPLOYEES' TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG-TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISONS TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW, THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF TOTAL DIRECT COMPENSATION AND EXECUTIVE BENEFITS. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETINGS. THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY CONSULTANT TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE BOARD OF DIRECTORS' (INCLUDING OFFICER POSITIONS) COMPENSATION EVERY TWO TO THREE YEARS. THE COMPETITIVENESS ANALYSIS INCLUDES COMPARISONS TO BOTH NOT-FOR-PROFIT AND PUBLIC COMPANY (EXCLUDING EQUITY COMPONENT) DATA FOR COMPANIES WITHIN THE SAME OR SIMILAR INDUSTRY. ANY COMPENSATION CHANGES ARE APPROVED BY THE SANTAFE BOARD OF DIRECTORS BASED ON THE MARKET COMPETITIVENESS STUDY. A MARKET COMPETITIVENESS STUDY WAS CONDUCTED IN NOVEMBER 2012 FOR CHANGES MADE EFFECTIVE JANUARY 1, 2013. FORM 990, PART VI, SECTION C, LINE 19 AVMED'S PROCESS FOR MAKING ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC ARE AS FOLLOWS: AVMED'S CONFLICT OF INTEREST POLICY STATEMENT IS INCLUDED IN ITS CODE OF ETHICAL BUSINESS CONDUCT AND IS AVAILABLE TO THE GENERAL PUBLIC AT HTTP://WWW.AVMED.ORG. THE ARTICLES OF INCORPORATION ARE AVAILABLE FOR PUBLIC INSPECTION ONLINE AT THE STATE OF FLORIDA, DIVISION OF CORPORATIONS WEBSITE WWW.SUNBIZ.ORG. THE FLORIDA OFFICE OF INSURANCE REGULATION SERVES AS THE OVERSIGHT AND LICENSING ENTITY FOR FLORIDA HEALTH MAINTENANCE ORGANIZATIONS AND CONDUCTS ROUTINE AND REGULAR EXAMINATIONS OF THE FINANCIAL AND OPERATING CONDITIONS OF LICENSED ENTITIES. THE EXAMINATION REPORTS INCLUDE FINANCIAL STATEMENT DETAILS AND ANALYSIS, AS WELL AS EVALUATION AND OPINIONS ON THE ENTITY'S GOVERNING DOCUMENTS AND GOVERNING BODY OPERATIONS AND MEETINGS. THE GENERAL PUBLIC HAS ACCESS TO THE FULL EXAMINATION REPORTS AT HTTP://WWW.FLOIR.COM/SECTIONS/LANDH/MANAGEDCARE/IS_MC_FINANCIAL_EXAMS.ASPX FORM 990, PART VII, SECTION A, LINE 1A: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE AND EACH OF ITS AFFILIATES. SANTAFE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE OR AVMED AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2014, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) ARE APPORTIONED AND CHARGED TO AVMED AS FOLLOWS: 75% - MICHAEL P GALLAGHER, PRESIDENT AND CEO 88% - RANDALL L STUART, SENIOR VICE PRESIDENT AND CFO FORM 990, PART IX, LINE 11G HEALTH CARE SERVICES : PROGRAM SERVICE EXPENSES 670,895,785. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 670,895,785. AGENT/BROKER COMMISSIONS AND INCENT : PROGRAM SERVICE EXPENSES 16,109,005. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 16,109,005. TEMPORARY HELP : PROGRAM SERVICE EXPENSES 1,918,351. MANAGEMENT AND GENERAL EXPENSES 883,392. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 2,801,743. CONSULTING AND OUTSIDE SERVICES : PROGRAM SERVICE EXPENSES 3,751,961. MANAGEMENT AND GENERAL EXPENSES 10,740,260. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 14,492,221. RECRUITING AND TESTING SERVICES : PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 630,448. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 630,448. FORM 990, PART XI, LINE 9: CHANGE IN NET ASSETS FOR NONQUALIFIED PENSION PLAN 12,111. INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK -4,267,561. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -239,763. FORM 990, PART XII, LINE 2C: THERE HAS BEEN NO CHANGE FROM THE PRIOR YEAR TO THE PROCESS RELATED TO AUDIT OVERSIGHT AND SELECTION OF THE INDEPENDENT ACCOUNTANT FOR THE ORGANIZATION. SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 592317607 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11B TYPE II N/A 0 NORTH FLORIDA RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 591912330 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 NORTH CENTRAL FLORIDA HOSPICE INC PO BOX 749 GAINESVILLE FL 326270749 592490893 HOSPICE CARE FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 SANTAFE SENIOR LIVING INC PO BOX 749 GAINESVILLE FL 326270749 203700526 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11A TYPE I SANTAFE HEALTHCARE INC 0 BVG ACQUISITION INC PO BOX 749 GAINESVILLE FL 326270749 203701186 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 EAST RIDGE RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 590903331 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 BONITA SPRINGS RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 262386152 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 SANTAFE SENIOR LIVING FOUNDATION INC PO BOX 749 GAINESVILLE FL 326270749 264464727 CHARITABLE AND EDUCATIONAL PURPOSES FL 501(C)(3) 7 SANTAFE HEALTHCARE INC 0 SF HOLDING CORPINC PO BOX 749 GAINESVILLE FL 326270749 592903901 HOLDING COMPANY FL SANTAFE HEALTHCARE INC C 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0