2011-05-13T15:34:05-05:00 2010-06-30 Deloitte Tax LLP 50 So 6th St Suite 2800 Minneapolis MN 554021538 990 2009-07-01 743121855 Agassiz Assurance Company AGAS 8028645599 100 Bank Street No 610 Burlington VT 05401 Lisa Carlson 7012344811 2011-05-13 1 6123974000 2009 2016-02-24 21:20:13Z Kelby Krabbenhoft 1305 W 18th St Sioux Falls SD 57117 9030079 0 X N/A X 2004 VT Dedicated to the work of health and healing. 6 1 0 0 5245 0 0 6075686 6006379 651544 639805 0 6727230 6646184 0 0 0 0 0 4353189 5321899 4353189 5321899 2374041 1324285 22401903 28176904 13767531 17866647 8634372 10310257 Our Mission "Dedicated to the work of health and healing" and our Vision "Improving the human condition trhough exceptional care, innovation and discovery", is the constant force that drives our plans, decisions and actions. 0 0 5189631 6001134 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. 5189631 1 0 0 0 0 0 0 0 0 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 0 1 0 0 0 1 1 0 0 0 0 0 0 0 0 6 1 0 1 0 0 1 0 0 1 0 0 0 0 1 1 1 0 0 1 1 0 X Heather Cook CO Marsh Management 8028645599 100 Bank Street Suite 610 Burlington VT 05401 X Paul Richard 60.00 X X 0 286282 49603 Kim Patrick 60.00 X X 0 403448 61086 Bill Marlette 60.00 X X 0 567500 275751 Lisa Carlson 60.00 X X 0 294054 49603 Roger Gilbertson MD 60.00 X X 0 1004743 989160 Roger Lee 60.00 X X 0 141381 24886 Marcy Waterfall 0.50 X 0 0 0 Kelby Krabbenhoft 60.00 X 0 1123846 748719 0 3821254 2198808 0 0 1 0 0 Premiums Earned 525100 6006379 6001134 5245 6006379 571352 571352 2452348 2383895 68453 68453 68453 6646184 6001134 5245 639805 57500 57500 9243 9243 22320 22320 43205 43205 Losses Incurred 5152400 5152400 Premium Tax 22824 22824 Misc Expenses 14407 14407 5321899 5189631 132268 0 1749135 826356 3143877 6670000 11913 21110 17271952 20436313 225026 223125 22401903 28176904 577998 67789 3135000 5555288 10054533 12243570 13767531 17866647 X 0 0 750000 750000 7884372 9560257 8634372 10310257 22401903 28176904 X 0 1 1 X 0 X X X 0 0 0 Sanford Medical Center Fargo 450226909 3 1 0 Sanford Clinic North 911770748 9 1 0 Sanford North 450385890 11-II 1 2963363 Sanford Health Foundation North 450398104 7 1 0 Sanford Health Network North 450409348 11-II 1 0 MeritCare Health Enterprises Inc 450359785 501(C)(4) 1 0 6 2963363 0 Losses & Loss Adjustments 12148755 Due to Related Parties 94815 12243570 6646184 5321899 1324285 351600 351600 1675885 6712873 66689 66689 6646184 0 6646184 5321899 0 5321899 0 5321899 Part X: Description of Uncertain Tax Positions Under FIN 48: Certain controlled organizations are subject to income taxes. Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting basis of assets and liabilities based on enacted tax rates and laws. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. Agassiz Assurance Company did not have an income tax liability at June 30, 2010; some related organizations have established reserves. 1 1 0 0 0 0 0 0 0 Paul Richard 0 285250 0 0 0 1032 0 32720 0 16883 0 335885 0 0 Kim Patrick 0 298233 0 0 0 105215 0 44784 0 16302 0 464534 0 17587 Bill Marlette 0 409620 0 0 0 157880 0 274383 0 1368 0 843251 0 25619 Lisa Carlson 0 292197 0 0 0 1857 0 32720 0 16883 0 343657 0 0 Roger Gilbertson MD 0 567216 0 0 0 437527 0 973515 0 15645 0 1993903 0 48624 Roger Lee 0 134513 0 0 0 6868 0 18469 0 6417 0 166267 0 0 Kelby Krabbenhoft 0 746924 0 0 0 376922 0 730587 0 18132 0 1872565 0 79234 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. These costs are not included in the W-2's of the individuals as they meet the business purpose of Sanford North. Travel for Companions - Limited travel for companions is required for an annual meeting. These costs are not included in the W-2's of the individuals as they meet the business purpose of Sanford North. Tax Indemnification and gross-up payments - Compensation may be grossed up to include appropriate tax amounts in certain circumstances. 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 taxed as fringe benefits. 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 2010. Part I, Line 4a Part I, Line 4a: 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. These amounts were already reported in previous years as compensation. Distributions were paid to the following individuals: Kim Patrick $17,587 Bill Marlette $25,619 Kelby Krabbenhoft $79,234 Dr. Roger Gilbertson was President and CEO of MeritCare Health System. MeritCare and Sanford Health merged on November 2, 2009 at which time Dr. Gilbertson retired. Upon retirement Dr. Gilbertson received a separation payment of $1,000,920 of which $48,624 was paid during the calendar year and $952,295 was accrued to be paid monthly through November 1, 2011. The payment was consistent with the President's Employment Agreement effective January 1, 2007. Part I, Line 4b/Schedule J, Part II, Column C: 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 contribution and defined benefit SERP Plans are included in Column C. Participants and changes in values include: Kim Patrick $ 37,434 Bill Marlette $245,737 Kelby Krabbenhoft $706,194 Roger Gilbertson, MD $ 94,324 Supplemental Information Part III Compensation reported on Schedule J, Part II 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 make its financial budget, the Executive does not receive an incentive payment 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 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 The total compensation paid to Kelby Krabbenhoft of $1,123,846 is comprised of Base salary of $746,924, the one-time payment of previously deferred compensation of $79,234 (see also explanation above) and Other Taxable Earning of $297,688. Form 990, Part VI, Section A, line 1 Board members also serve on the boards of Sanford and/or related entities. 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 6 Sanford North is the sole member of the organization. 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, including both the System CEO and CFO. An external accounting firm reviews the return prior to filing and presents return highlights and key disclosures to the Board of Trustees at the 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. 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 2010. 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 Board members of Sanford provide services to Sanford subsidiaries. Hours reported for each individual reflect the time spent on work related to either the filing organization or related organization. Form 990, Schedule R, Part V Costing Method for Related Party Transactions Related Party Premiums are recorded at cost based on claims experience. Sanford North PO Box 2010 Fargo ND 58122 450385890 Supporting Organization ND 501(c)(3) 11-II Sanford Sanford Clinic North PO Box 2010 Fargo ND 58122 911770748 Clinical Services ND 501(c)(3) 11-II Sanford North MeritCare Minnesota 1720 South Highway 59 Thief River Falls MN 56701 261530302 Promotion of health MN 501(c)(3) 3 Sanford North Sanford Medical Center Fargo PO Box 2010 Fargo ND 58122 450226909 Hospital ND 501(c)(3) 3 Sanford North Sanford Health Foundation North PO Box 2010 Fargo ND 58122 450398104 Supporting Organization ND 501(c)(3) 7 Sanford North Sanford Health Network North PO Box 2010 Fargo ND 58122 450409348 Hospitals / Clinics ND 501(c)(3) 11-II Sanford North MeritCare Health Enterprises Inc PO Box 2010 Fargo ND 58122 450359785 Sales of prescription drugs ND 501(c)(4) Sanford North FM Ambulance Service 2215 18th St South Fargo ND 58103 450344371 Emergency Medical Transport Services ND 501(c)(4) Sanford North Sanford Medical Center Thief River Falls 120 Labree Ave S Thief River Falls MN 56701 410709579 Hospital MN 501(c)(3) 3 Sanford North Sanford Medical Center Mayville 42 6th Ave SE Mayville ND 58257 450228899 Hospital ND 501(c)(3) 3 Sanford North Sanford Medical Center Wheaton 401 12th St N Wheaton MN 56296 272042143 Hospitals / Clinics MN 501(c)(3) 3 Sanford North Sanford Health 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 311527032 Supporting Organization SD 501(c)(3) 11-II Sanford Sanford USD Medical Center 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460227855 Hospital SD 501(c)(3) 3 Sanford Health Sanford Clinic 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460447693 Clinics SD 501(c)(3) 3 Sanford Health Sanford Health Network 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460388596 Hospitals / Clinics SD 501(c)(3) 11-II Sanford Health 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 Sanford Health Foundation 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 363297853 Supporting Organization SD 501(c)(3) 11-I Sanford Health Sanford Research USD 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460450378 Medical Research SD 501(c)(3) 4 Sanford Health SHM-Sanford 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 271213769 Supporting Organization SD 501(c)(3) 11-II SHM-MeritCare 801 N Broadway Drive Fargo ND 58122 271213717 Supporting Organization ND 501(c)(3) 11-II Sanford 801 N Broadway Drive Fargo ND 58122 271218956 Supporting Organization ND 501(c)(3) 11-II Sanford World Clinics 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 262707628 Healthcare SD 501(c)(3) 3 Sanford Health National Student Housing South Dakota LLC 100 S Phillips Sioux Falls SD 57104 202129839 Investment SD Sanford Health Related 0 0 RAC Rentals LLC 100 S Phillips Sioux Falls SD 57104 261961077 Investment SD Sanford Health Related 0 0 Healthcare Environmental Services Inc 1420 40th St NW Fargo ND 58102 450336598 Laundry and Incineration Services ND Sanford North C Heart Partners at Sanford 1305 West 18th St Sioux Falls SD 57117 460449572 Healthcare SD Sanford Health C Sanford Home Medical Equipment Inc 2710 West 12th St Sioux Falls SD 571043701 460388597 Healthcare Equipment SD Sanford Health C Sanford Health Plan 300 Cherapa Place 201 Sioux Falls SD 57103 911842494 Insurance SD Sanford Health C Sanford Health Plan of Minnesota 300 Cherapa Place 201 Sioux Falls SD 57103 460445852 Insurance MN Sanford Health C 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 Sanford Clinic North K 4111144 Sanford Medical Center Fargo K 1278143