Group Health Foundation

“PART VI, SECTION A, LINE 6 GROUP HEALTH FOUNDATION IS ORGANIZED AS A NOT-FOR-PROFIT ORGANIZATION, GOVERNED BY AN ELECTED BOARD OF DIRECTORS. GROUP HEALTH COOPERATIVE IS THE SOLE MEMBER OF THE GROUP HEALTH FOUNDATION. GROUP HEALTH COOPERATIVE IS ALSO A 501(c)(3) ORGANIZATION. ITS BOARD OF TRUSTEES IS ITS GOVERNING BODY.”

“Part vi, section a, line 7a group health foundation's member (group health coopertive) controls the election of the foundation's board of directors, because the election of the foundation directors is subject to confirmation by the member.”

“Part vi, section a, line 7b the following powers are reserved to the member: 1) the power to alter, amend, repeal or suspend the bylaws or adopt new bylaws, except as such power is specifically delegated in the bylaws to the board of directors; 2) adoption of amendments of the articles of incorporation; 3) approval of a plan of merger or consolidation; 4) authorization of the sale, lease, exchange, mortgage, pledge, or other disposition of all or substantially all of the property and assets of the corporation; 5) authorization of the voluntary dissolution of the corporation and adoption of any plan of distribution.”

“Part vi, section b, line 11a the board of directors delegated the review of the form 990 to the finance & audit committee. The organization's director of operations worked with the group health cooperative manager of statutory and tax reporting and the outside accounting firm engaged to prepare the return. Subsequent to its preparation, the finance & audit committee reported back to the board regarding its review of the form 990. A complete copy of the final form 990 was provided to all voting members prior to filing with the irs.”

“Part vi, section b, line 12c director and officer written conflict of interest disclosure ghf directors and officers shall provide a written declaration of any actual or potential conflicts of interest or attest that no such conflicts exist on an annual basis using forms and procedures developed by the chief compliance officer of group health. The chief compliance officer, or his/her designee, will review the annual disclosures for compliance with this policy. Any apparent conflicts of interest or instances of noncompliance with this policy will be referred by the chief compliance officer to the chair of the ghf for resolution as described below. During the year, directors and officers shall report material additions or changes to the information provided on annual conflict of interest declarations. These additions or changes to the declarations will be submitted and assessed by the chief compliance officer and forwarded to the executive committee, as necessary, following the process used for annual declarations. The chair of the ghf shall counsel any director or officer about actual or potential conflicts of interest and other instances of noncompliance with this policy, including apparent undisclosed conflicts of interest and, if not resolved to his/her satisfaction, shall place the matter on the agenda of an executive session. The chief compliance officer will support the chair in fulfilling this responsibility. Director disclosure of actual or potential conflict of interests in advance of board action. Each director is obligated to disclose any actual or potential conflict of interest when such an interest becomes a matter for board action. After disclosure of a potential conflict of interest, including all material facts, and after discussion with the interested person, he/she shall leave the board or committee meeting while the remaining members discuss and vote on whether a conflict of interest exists. If there is a conflict of interest, the interested person may provide a presentation to the board or committee regarding the transaction and answer any questions regarding the proposed transaction. The interested person must then leave the meeting during any discussion of and the vote on the transaction or arrangement that resulted in a conflict of interest. After the interested person has left the board or committee meeting, the remaining members shall first discuss whether it is appropriate to appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. An example of a circumstance where it may not be appropriate to investigate alternatives would be conflicts arising in the ghf's grant making and awarding process. The purpose of such investigation shall be whether the ghf can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest. If a more advantageous transaction or arrangement that would not give rise to a conflict of interest is not reasonably attainable under the circumstances, the disinterested members of the board or committee shall vote on the transaction or arrangement considering whether it is in the best interest of ghf and fair and reasonable to ghf. Officer disclosure of actual or potential conflict of interest ghf officers shall disclose an actual or potential conflict of interest when such an interest is relevant to a matter in which they have a role, either directly or through subordinates acting at their direction. Any ghf officer having an actual conflict of interest related to a matter at issue should not participate in the matter or use his/her personal or professional influence on the matter. Any ghf officer who may have a potential conflict of interest is expected to abstain from participation or stating his/her position in the matter, or may ask his/her direct supervisor to determine if he/she feels the potential conflict of interest is significan”

“Part vi, section b, line 15 officers and directors of the foundation do not receive compensation and benefits from the foundation. Officers and directors receive compensation and benefits from group health cooperative (ghc). Group health cooperative (ghc) is governed by an independent board of trustees ("the board"), comprised of 11 consumers elected by ghc's voting members. The board has delegated to the compensation committee of the board (the "committee") the responsibility for negotiating and approving the employment agreement and compensation package for the ghc president and chief executive officer ("ceo"); approving the executive total compensation philosophy that drives all executive compensation decisions; and approving compensation for the executive vice presidents and vice presidents of ghc (except for compensation established in the initial written contracts offered to candidates for vice president positions who are not then employed by ghc and who have not been determined to be a "disqualified person" under applicable irs regulations, as to whom the board has delegated such authority to the ceo). The five members of the committee are the chair of the board of trustees, the vice chair, and three additional trustees selected by the chair. As adopted by the committee, the executive total compensation philosophy provides that ghc will maintain an executive total compensation program designed to facilitate the achievement of its charitable mission, values and organizational goals. Executive compensation is set at a level that enables the organization to attract, retain, motivate and reward the highest caliber executives at a cost that is consistent with our performance and charitable mission. Based upon those principles, the philosophy confirms that compensation will be compared to comparable organizations (hmos and managed care, health care, and health insurance organizations), and that base salary ranges will be built around 50th percentile market base pay levels, annual and long-term incentives will be targeted at the 50th percentile (with an opportunity to earn above that level based on performance), and benefits and perquisites will be established consistent with market practices. A significant portion of executives' total compensation is contingent on individual and organizational performance. Consistent with ghc's philosophy, the committee reviews and approves the annual performance goals and criteria to be used in determining salary increases and incentive compensation criteria for the ghc ceo, executive vice presidents and vice presidents (which group includes all ghc key employees and ghc officers, excluding the chair of the board and the vice chair, who are not employed by ghc). The committee also hires a qualified independent compensation consultant (an independent expert) to review, analyze and provide benchmarking data for the total compensation and benefits packages of the ceo, executive vice presidents and vice presidents. Appropriate comparability data is obtained from the independent expert, i.e., compensation paid by similarly situated organizations (both taxable and tax-exempt, of similar size and in the same industry) for similar job responsibilities. The committee's written records and minutes include the (1) terms of the arrangement with the disqualified person (including the date the arrangement was approved); (2) a list of members present during the debate on the transaction (and how the members voted when it was approved); and (3) a description of the comparable data relied on by the committee. Key deliberations of the committee are also documented in minutes which are approved at the next committee meeting. The committee's compensation decisions are shared with the board.”

“Part vi, section c, line 19 while federal tax laws do not mandate that the organization's governing documents, conflict of interest policy and financial statements be made available for public inspection, the organization makes these documents available upon request. Foundation policies including conflict of interest, disclosure of misconduct (whistleblower) and document retention and destruction are available on the website. Foundation form 990 is also available on the website.”

“Part xi, line 5 unrestricted - unrealized gain/loss on investments $1,031,771 temporary restricted - unrealized gain/loss on investments $1,781,421 annuity reserve adjustments - unrealized gain/loss $99,679 ---------- total $2,912,871”