Benefis Health System Foundation Inc.

“The organization is an affiliate of Benefis Health System, Inc. (BHS), a tax exempt Montana non-profit corporation serving as the parent entity of an integrated system of provider organizations addressing the health needs of persons throughout North Central Montana. As the corporate member of the organization, BHS holds various reserved powers in relation to the organization, including the authority to elect its board of directors. The board of directors of the organization includes certain individuals who are employed by the organization or its affiliates, and who may not be considered "independent" for purposes of Form 990. However, as acknowledged by the IRS in its "CPE text for Fiscal year 1997," in a multi-entity hospital system, the board of a subsidiary non-profit health care organization is considered to be comprised of independent community members if it is controlled by an exempt organization whose own board is comprised of a majority of voting members who are independent community members. The organization meets this standard because it is a controlled subsidiary of BHS, and BHS's own governing board includes independent community members as a majority thereof.”

“Certain officers and directors listed in part vii also hold officer and/or director positions in relation to the organization's affiliates (as identified in schedule r) and, in that regard, may be considered to have business relationships with each other. Such business relationships are undertaken in the ordinary course of business.”

“Pursuant to a contractual arrangement, the organization obtains certain management and administrative services from its parent entity, benefis health system, inc. (bhs). Bhs, as the parent and system entity, provides the services to its subsidiary tax-exempt non-profit corporate entities on a centralized basis. The services include the following: - management of human resources including policies and practices - management, planning, budgeting and reporting of financial operations - management of billing and collections policies and functions - information systems coordination - oversight of quality standards, compliance and risk management - management of regional, community and government relations and marketing - management of grants development the following persons listed in part vii were compensated by bhs: forrest ehlinger - $474,160 (compensation for services as officer of bhs) daniel hollow - $167,118 marilyn parker - $85,577”

“The sole corporate member of the organization is benefis health system, inc., a montana non-profit public benefit corporation that has been recognized by the irs as described in irc section 501(c)(3).”

“Benefis health system is the sole voting member and has the following reserved powers over benefis health system foundation: - to elect and remove the directors and officers of the foundation - to initiate and approve any plan of merger, consolidation or dissolution - to approve all amendments to the foundation's articles of incorporation and bylaws - to continuously review and monitor the financial condition of the foundation, including through an annual audit - to approve the annual budget of the foundation and all material deviations from the approved budget - to delineate by policy the requirements for approval of all arrangements and transactions involving the assets and finances of the foundation - to set the compensation for all of the officers of the foundation, including the president - to approve all mission and/or vision statements and all strategic or long-term plans of the foundation - to approve the creation, acquisition, dispostion or termination of subsidiaries or controlled affiliates, and any mergers, consolidations, and permanent or long-term affiliations of the foundation or any of its subsidiaries or controlled entities - to appoint a certified public accountant to perform the annual audit of the foundation's financial statements in conjunction with the annual audit of the member's financial statements - to approve any agreement that obligates the foundation to pay or incur liability of more than ten thousand dollars ($10,000), and to approve any agreement that obligates the foundation to pay an amount or incur a liability not included in the then current budget of the foundation, which was approved by the member pursuant to these powers listed - to determine and ensure compliance with the foundation's stated charitable purposes - to initiate and approve, in consultation with the board, such operating policies regarding the foundation's activities, operations, finances and assets as it deems necessary or appropriate from time to time - to ensure that the foundation is honoring the intentions and directions of all of its donors with respect to the investment and use of their donations”

“As the sole corporate member of the organization, benefis health system, inc. Retains certain reserved powers with respect to the organization, including authority over matters such as (without limitation) the organization's mission and vision statements, strategic and long-term plans, election of its directors and officers, annual capital and operating budgets, charity care and community benefit policies, and any amendments to its articles of incorporation and bylaws.”

“This form 990 was prepared by the finance department personnel of benefis health system, inc. In collaboration with its accounting firm. Prior to filing, a copy of this form 990 was distributed to all members of the organization's board of directors, and was presented to the benefis health system, inc. Board by the accounting firm.”

“Board members annually complete a form to disclose interests that could give rise to conflicts. In addition, at the start of each board meeting, members are asked to indicate whether they have a conflict of interest with respect to any items on the agenda for the meeting. Consistent with the organization's conflicts of interest policy, board members are prohibited from participating in deliberations and voting on any matters as to which they have a conflict.”

“The compensation of the president was set by the independent compensation committee of benefis health system, inc., which is charged with administering the system's executive compensation philosophy, policies and programs in the manner set forth in the committee's written charter. The committee's responsibilities include (i) determining appropriate compensation for all executives and other key employees, (ii) evaluating and adopting executive compensation plans, policies and programs, (iii) reviewing and approving executive benefit plans, and (iv) verifying that compensation is appropriately and fully disclosed and reported. The committee has engaged an independent compensation consulting firm to assist in ensuring that amounts paid to the system's executives are consistent with reasonable, fair market levels. The process followed by the committee, including the data relied upon and the committee's decisions, was thoroughly and timely documented. The compensation of the organization's other officers, key employees and managers was set by their respective supervisory executives in consultation with benefis health system, inc.'s human resources department and executive leadership, based on a review of independent data as to amounts paid by similarly-situated organizations for persons performing comparable services.”

“Benefis health system foundation, inc. Provides copies of governing documents, conflict of interest policies, financial statements, and form 990 to the public upon request during normal business hours.”

“Change in value of split interest agreements -45,772.”