Form990
Department of the Treasury
Internal Revenue Service
Return of Organization Exempt From Income Tax
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations)
MediumBullet Do not enter Social Security numbers on this form as it may be made public. By law, the IRS
generally cannot redact the information on the form.
MediumBullet Information about Form 990 and its instructions is at www.IRS.gov/form990.
OMB No. 1545-0047
2013
Open to Public Inspection
A For the 2013 calendar year, or tax year beginning 01-01-2013 , 2013, and ending 12-31-2013
BCheck if applicable:
CName of organization
PRIORITY HEALTH CHOICE INC
 
Doing Business As
 
 
Number and street (or P.O. box if mail is not delivered to street address)
1231 East Beltline NE
 
Room/suite
City or town, state or province, country, and ZIP or foreign postal code
Grand Rapids, MI49525
D Employer identification number

32-0016523
E Telephone number

G Gross receipts $ 309,210,838
F Name and address of principal officer:
MICHAEL P FREED
1231 East Beltline NE
Grand Rapids,MI495254501
I
Tax-exempt status: (   ) LeftBullet (insert no.) or
J
Website:MediumBullet
WWW.PRIORITYHEALTH.COM
H(a)
Is this a group return for
subordinates?
H(b)
Are all subordinates
included?
If "No," attach a list. (see instructions)
H(c)
Group exemption number MediumBullet  
K Form of organization:
 
L Year of formation: 2002
M State of legal domicile: MI
Part I
Summary
Activities & Governance 1 Briefly describe the organization’s mission or most significant activities: IMPROVING HEALTH BY PROVIDING ALL PEOPLE ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE.
2 Check this box MediumBullet
3 Number of voting members of the governing body (Part VI, line 1a) ........ 3 5
4 Number of independent voting members of the governing body (Part VI, line 1b) ..... 4 1
5 Total number of individuals employed in calendar year 2013 (Part V, line 2a) ...... 5 0
6 Total number of volunteers (estimate if necessary) ............. 6 1
7a Total unrelated business revenue from Part VIII, column (C), line 12 ........ 7a 0
b Net unrelated business taxable income from Form 990-T, line 34 ......... 7b 0
Revenues Prior Year Current Year
8 Contributions and grants (Part VIII, line 1h) ......... 0 0
9 Program service revenue (Part VIII, line 2g) ......... 192,615,762 231,486,741
10 Investment income (Part VIII, column (A), lines 3, 4, and 7d ) .... 136,005 563,557
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e) 0 0
12 Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)................... 192,751,767 232,050,298
Expenses; 13 Grants and similar amounts paid (Part IX, column (A), lines 1–3 )... 0 0
14 Benefits paid to or for members (Part IX, column (A), line 4)..... 171,879,666 216,358,253
15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10) 6,519,538 5,823,673
16a Professional fundraising fees (Part IX, column (A), line 11e)..... 0 0
b Total fundraising expenses (Part IX, column (D), line 25) MediumBullet0    
17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24e).... 10,320,973 9,969,246
18 Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 188,720,177 232,151,172
19 Revenue less expenses. Subtract line 18 from line 12....... 4,031,590 -100,874
Net Assets or Fund Balances; Beginning of Current Year End of Year
20 Total assets (Part X, line 16)............. 52,049,948 61,968,756
21 Total liabilities (Part X, line 26)............. 22,345,857 32,469,173
22 Net assets or fund balances. Subtract line 21 from line 20..... 29,704,091 29,499,583
Part II
Signature Block
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge.
Sign Here
JumboBullet
Signature of officer Date
JumboBullet
Type or print name and title
Paid Preparer Use Only
Print/Type preparer's name
Preparer's signature
Date
PTIN
Firm's name MediumBullet

Firm's EIN MediumBullet
Firm's address MediumBullet



Phone no.
May the IRS discuss this return with the preparer shown above? (see instructions) ............
For Paperwork Reduction Act Notice, see the separate instructions.
Cat. No. 11282Y
Form 990 (2013)
Form 990 (2013)
Page 2
Part III
Statement of Program Service Accomplishments
Check if Schedule O contains a response or note to any line in this Part III ..............
1
Briefly describe the organization’s mission: IMPROVING HEALTH BY PROVIDING ALL PEOPLE ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE.
2
Did the organization undertake any significant program services during the year which were not listed on
the prior Form 990 or 990-EZ? ......................
If "Yes," describe these new services on Schedule O.
3
Did the organization cease conducting, or make significant changes in how it conducts, any program services? ............................
If "Yes," describe these changes on Schedule O.
4
Describe the organization’s program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported.
4a (Code:   ) (Expenses $ 221,934,956 including grants of $ 0 ) (Revenue $ 227,715,296 )
MEDICAID: PRIORITY HEALTH CHOICE, INC. (PH CHOICE) WAS APPROVED BY THE STATE OF MICHIGAN TO SELL MEDICAID PRODUCTS. BY OFFERING MEDICAID PRODUCTS IN THE STATE OF MICHIGAN, THE BURDEN ON THE GOVERNMENT IS SUBSTANTIALLY LESS. IT PROVIDES MORE THAN 70,000 LOW INCOME RESIDENTS IN 17 WEST MICHIGAN COUNTIES WITH QUALITY CARE AND SERVICES. PH CHOICE PROMOTES AND INCENTIVIZES OPEN ACCESS TO PROVIDERS. IT HAS MAINTAINED "EXCELLENT" ACCREDITATION FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) FOR MORE THAN 10 YEARS. AS OF JUNE 2013, THE NCQA RANKED PH CHOICE AS THE 5TH BEST PLAN IN THE NATION. THIS RANKING IS BASED ON CLINICAL PERFORMANCE, MEMBER SATISFACTION AND NCQA ACCREDITATION. AS A RESULT OF PRIORITY HEALTH'S CONTINUED FOCUS OF PROVIDING ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE, MEMBERS OF PH CHOICE'S MEDICAID PROGRAM CONTINUE TO RECEIVE CARE AT OR ABOVE THE NATIONAL AVERAGE. SPECIFICALLY, PRIORITY HEALTH SETS THE NATION'S BENCHMARK IN AREAS SUCH AS CHILDHOOD IMMUNIZATIONS, DIABETES CARE AND CHOLESTEROL SCREENINGS AND THE MANAGEMENT OF ASTHMA. CHILDREN'S SPECIAL HEALTH CARE SERVICES (CSHCS) IS A PROGRAM OFFERED BY THE STATE OF MICHIGAN TO PROVIDE CARE FOR THE CHILDREN AND SOME ADULTS WITH CHRONIC HEALTH PROBLEMS, AS WELL AS SUPPORT THE NEEDS OF THEIR CAREGIVERS AND FAMILY MEMBERS. AS OF OCTOBER 1, 2012 CSHCS BENEFICIARIES WERE REQUIRED TO ENROLL IN A MEDICAID HEALTH PLAN. A DEDICATED TEAM WILL FACILITATE AND COORDINATE THE CARE OF THESE PATIENTS AND THEIR FAMILIES. THIS TEAM INCLUDES FIELD SERVICE REPRESENTATIVES, CASE MANAGERS, AND KEY PARTNERS SUCH AS COUNTY HEALTH DEPARTMENTS, THE FAMILY CENTER FOR CHILDREN AND YOUTH WITH SPECIAL HEALTH CARE NEEDS, AND THE CHILDREN'S SPECIAL NEEDS FUNDS. IN THE PAST, CHILDREN IN MEDICAID'S CSHCS PROGRAM WERE UNDER A "FEE-FOR-SERVICE" REIMBURSEMENT MODEL. THE STATE OF MICHIGAN DECIDED IN 2012 TO MOVE TOWARD A MANAGED CARE MODEL, IMPROVING COORDINATION BETWEEN THEIR SPECIALTY CARE (MANY OF THESE CHILDREN ARE AT RISK FOR LEAD EXPOSURE) AND PRIMARY CARE PHYSICIANS. PRIORITY HEALTH TOOK ON 1,400 OF THESE CHILDREN, AND SUCCESSFULLY PROVIDED EDUCATION TO THEIR PARENTS AND GUARDIANS FOR THE BENEFITS AND OPPORTUNITIES FOR BETTER OUTCOMES POSSIBLE WITH A MANAGED CARE SITUATION. AT A MORE GRANULAR LEVEL, OUR FIELD SERVICE REPRESENTATIVES REVIEW WITH EACH MEMBER/FAMILY TELEPHONICALLY, THE HEALTH BENEFITS (TRANSPORTATION, PRIMARY CARE PHYSICIAN ASSIGNMENT, ER AND URGENT CARE USE, REFERRAL PROCESS, PHARMACY AND BEHAVIORAL HEALTH EDUCATION, CASE MANAGEMENT, HEALTH DEPARTMENT ROLE) AND PARTICIPATING PROVIDERS. THE CASE MANAGERS CONTACT EACH MEMBER/FAMILY TO COMPLETE A COMPREHENSIVE ASSESSMENT TO IDENTIFY MEMBER NEEDS, DEVELOP CARE PLAN WITH GOALS, PROVIDE EDUCATION REGARDING CURRENT DISEASE PROCESS, PREVENTATIVE HEALTH, CHRONIC CONDITION, AND IMPORTANCE OF MEDICAL HOME, CREATE AND INTERACT WITH PROVIDER CARE TEAM TO TRY AND DIRECT ALL CARE IN STATE, IN NETWORK, AND ENSURE MEDICAL APPROPRIATENESS OF ALL SERVICES/SUPPLIES/MEDICATIONS AND IDENTIFY POTENTIAL SUBSTITUTIONS WHEN POSSIBLE. 100% OF THE CSHCS MEMBERSHIP IS OFFERED CASE MANAGEMENT SERVICES. THE MICHIGAN ASSOCIATION OF HEALTH PLANS, AN INDUSTRY VOICE FOR THE STATE'S HEALTH CARE PLANS, RECOGNIZES BEST PRACTICES IN HEALTH PLANS BY SPONSORING THE PINNACLE AWARDS. DURING 2013, PRIORITY HEALTH WAS A RECIPIENT TO 6 PINNACLE AWARDS WHICH INCLUDED 3 MEDICAID INITIATIVES: 1) THE TRANSITION OF CSHCS INTO MANAGED CARE, AN EFFORT THAT MOVED CHILDREN ENROLLED IN MEDICAID COVERAGE USING A "FEE-FOR-SERVICE" REIMBURSEMENT MODEL TO A MANAGED CARE MODEL, IMPROVING COORDINATION BETWEEN SPECIALTY CARE AND PRIMARY CARE PHYSICIANS. 2) CHILDREN'S HEALTHCARE ACCESS PROGRAM, AN EFFORT DEVELOPED FOR CHILDREN ON MEDICAID WHO HAVE LESS ACCESS TO PRIMARY CARE THAN THOSE WITH PRIVATE INSURANCE. FOCUSING ON CHILDREN UNDER 10 YEARS OLD, THE EFFORT REDUCED HOSPITAL EMERGENCY DEPARTMENT VISITS BY 5 PERCENT TO 15 PERCENT. ER VISITS FOR EAR INFECTIONS ALONE DECLINED BY 25 PERCENT. WELL-BABY VISITS INCREASED BY 25 PERCENT FOR CHILDREN UNDER 15 MONTHS OLD AND THE AVERAGE NUMBER OF SCHOOL DAYS MISSED DECREASED FROM 6.3 DAYS TO 1.4 DAYS. 3) THE ABRIIZ ASTHMA PILOT, WHICH IS A MOBILE APPLICATION FOR CHILDREN WITH ASTHMA THAT WAS DEVELOPED BY IDEOMED IN GRAND RAPIDS, MI. THE APP DELIVERS REAL-TIME DATA TO CARE PROVIDERS AND TRACKS MEDICATION ADMINISTRATION AND PROVIDES MEDICATION REMINDERS. IN A PILOT THAT RAN FROM AUGUST 2012 TO MAY 2013, ALL 13 PARTICIPANTS REPORTED BETTER MANAGING THEIR ASTHMA, ER VISITS DECLINED BY 79 PERCENT, THERE WERE NO INPATIENT ADMISSIONS, AND THE COST TO CARE FOR THOSE PATIENTS DECLINED TO $7,392 FROM $10,920. IN ADDITION TO THIS PILOT INITIATIVE, ABRIIZ IS AVAILABLE TO MEMBERS LIVING WITH CHRONIC DISEASES AS A FREE MOBILE APPLICATION. SUCH CHRONIC DISEASES INCLUDE DIABETES, ASTHMA, COPD, AND HEART FAILURE. ABRIIZ PROVIDES WEB BASED ACCESS TO REAL-TIME DATA FOR USERS AND IS FULLY CUSTOMIZABLE. USERS HAVE THE ABILITY TO TRACK/MANAGE A PLETHORA OF METRICS: FROM WEIGHT AND WATER INTAKE, TO MEDICATION ADMINISTRATION AND SLEEP HOURS, AND EVERYTHING IN BETWEEN. THE SOLUTION ALSO HAS REMINDERS FOR ANY ITEM BEING TRACKED. USERS HAVE THE OPTION TO SHARE THEIR ACCOUNT WITH FAMILY OR OTHER CARE GIVERS TO ENABLE TELEHEALTH FEATURES FOR REMOTE MANAGEMENT OF THEIR CHRONIC CONDITIONS. WITHIN THE SPECTRUM HEALTH SYSTEM, INDIVIDUALS AND TEAMS ARE RECOGNIZED FOR QUALITY IN ACTION THROUGH THE ANNUAL AWARDS PROGRAM CALLED SYNERGY AWARDS. THE PRIORITY HEALTH MEDICAID LEAD SCREENING PROGRAM TEAM WAS NOMINATED FOR THE 2013 GREATEST IMPROVEMENT SYNERGY AWARD. IN PURSUIT OF THE GOAL THAT 80 PERCENT OF CONTINUOUSLY ENROLLED MEDICAID MEMBERS WILL HAVE AT LEAST ONE LEAD SCREENING TEST BY THEIR SECOND BIRTHDAY, PRIORITY HEALTH REDESIGNED THE MEDICAID LEAD SCREENING PROGRAM. AS SUCH, PRIORITY HEALTH DEVELOPED A PROGRESSIVE THREE-TOUCH MEMBER OUTREACH REMINDER/INCENTIVE, PURCHASED LAB EQUIPMENT ON BEHALF OF PROVIDER OFFICES AND PROVIDED EDUCATION TO BOTH MEMBERS AND PROVIDERS AROUND THE IMPORTANCE OF LEAD SCREENING. BY THE END OF 2012, THE PRIORITY HEALTH HEALTHCARE EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) RATE FOR LEAD SCREENING ROSE FROM 71 PERCENT (2011) TO ALMOST 83 PERCENT, SURPASSING THE GOAL OF THE STATE STANDARD.
4b (Code:   ) (Expenses $ 3,101,001 including grants of $ 0 ) (Revenue $ 3,771,445 )
MICHILD: PRIORITY HEALTH CHOICE, INC. (PH CHOICE) ENROLLED MICHIGAN'S FIRST MICHILD MEMBERS MAY 1, 1998. MICHILD IS A HEALTH PLAN FOR UNINSURED CHILDREN OF MICHIGAN'S WORKING FAMILIES. MICHILD COVERAGE IS PROVIDED IN 19 COUNTIES IN WEST MICHIGAN. IN SEPTEMBER 2013, PH CHOICE EXPANDED THE MICHILD SERVICE AREA TO 11 NEW COUNTIES AND INCREASED MEMBERSHIP BY 148 PERCENT FROM THE PRIOR YEAR. THE CHILDREN'S HEALTHCARE ACCESS PROGRAM (CHAP) IS A COMMUNITY COLLABORATIVE BENEFITING ALL PH CHOICE MEDICAID CHILDREN INCLUDING, MICHILD MEMBERS. THROUGH CHAP, PH CHOICE PAYS PEDIATRICIANS A HIGHER RATE FOR SERVICE IN EXCHANGE FOR THEIR AGREEMENT TO OPEN THEIR PRACTICES TO ADDITIONAL MEDICAID MEMBERS. CHAP IS IN ITS SIXTH YEAR OF SERVING KENT COUNTY. IN LATE 2012, AN INDEPENDENT EVALUATION BY SRA INTERNATIONAL OF THIS PROJECT (WHICH IS SUPPORTED BY MAJOR IN-KIND EFFORTS, MEDICAL LEADERSHIP AND PARTICIPATION OF THE HELEN DEVOS CHILDREN'S HOSPITAL GENERAL PEDIATRIC UNIT AND PRIORITY HEALTH) CONCLUDED THAT THE MODEL PROVED TO BE SUCCESSFUL. THE PROGRAM RESULTED IN A 35 PERCENT DECREASE IN EMERGENCY DEPARTMENT USE AND A 46 PERCENT DECREASE IN AVOIDABLE HOSPITALIZATIONS FOR CLIENTS AFTER ONE YEAR IN THE PROGRAM. A SOCIAL COST-BENEFIT ANALYSIS ALSO SHOWED AN AVERAGE ANNUAL COST BENEFIT OF $1.16 FOR EVERY $1 SPENT ON CHAP. ADDITIONALLY, THE PROJECT RESULTED IN 1,445 NEW PRIMARY CARE PRACTICE OPENINGS FOR CHILDREN ON MEDICAID AND INCREASED HOURS OF SERVICE. PH CHOICE IS THE ONLY HEALTH PLAN INVOLVED AND IS THE PAYER FOR THE PROGRAM'S SERVICES. BECAUSE ACCESS TO PRIMARY CARE IS A GREAT CHALLENGE FOR THIS POPULATION, THE INABILITY TO FIND A PRIMARY CARE PROVIDER ACCEPTING MICHILD MEMBERS LEADS TO A HIGH NUMBER OF MICHILD ENROLLEES ACCESSING ROUTINE CARE THROUGH AN EMERGENCY ROOM VS. IN A PRIMARY CARE SETTING.
4c (Code:   ) (Expenses $   including grants of $   ) (Revenue $   )
4d Other program services (Describe in Schedule O.)
(Expenses $   including grants of $   ) (Revenue $   )
4e Total program service expensesMediumBullet225,035,957
Form 990 (2013)
Form 990 (2013)
Page 3
Part IV
Checklist of Required Schedules
Yes
No
1
Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If "Yes," complete Schedule AClick to see attachment........................
1
Yes
 
2
Is the organization required to complete Schedule B, Schedule of Contributors (see instructions)? ...
2
 
No
3
Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If "Yes," complete Schedule C, Part I..........
3
 
No
4
Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If "Yes," complete Schedule C, Part II........
4
 
No
5
Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? If "Yes," complete Schedule C,
Part III............................
5
 
 
6
Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D, Part I........................
6
 
No
7
Did the organization receive or hold a conservation easement, including easements to preserve open space,
the environment, historic land areas, or historic structures? If "Yes," complete Schedule D, Part II...
7
 
No
8
Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete Schedule D, Part III ....................
8
 
No
9
Did the organization report an amount in Part X, line 21 for escrow or custodial account liability; serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV..............
9
 
No
10
Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments? If "Yes," complete Schedule D, Part V......
10
 
No
11
If the organization’s answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable.
a
Did the organization report an amount for land, buildings, and equipment in Part X, line 10?
If "Yes," complete Schedule D, Part VI....................
11a
 
No
b
Did the organization report an amount for investments—other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VII.......
11b
 
No
c
Did the organization report an amount for investments—program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VIII.......
11c
 
No
d
Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part IX............
11d
 
No
e
Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, Part XClick to see attachment
11e
Yes
 
f
Did the organization’s separate or consolidated financial statements for the tax year include a footnote that addresses the organization’s liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes," complete Schedule D, Part X.........................
11f
 
No
12a
Did the organization obtain separate, independent audited financial statements for the tax year?
If "Yes," complete Schedule D, Parts XI and XII .................
12a
 
No
b
Was the organization included in consolidated, independent audited financial statements for the tax year? If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional Click to see attachment
12b
Yes
 
13
Is the organization a school described in section 170(b)(1)(A)(ii)? If "Yes," complete Schedule E....
13
 
No
14a
Did the organization maintain an office, employees, or agents outside of the United States?.....
14a
 
No
b
Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If "Yes," complete Schedule F, Parts I and IV.........
14b
 
No
15
Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If “Yes,” complete Schedule F, Parts II and IV
15
 
No
16
Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If “Yes,” complete Schedule F, Parts III and IV...
16
 
No
17
Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If "Yes," complete Schedule G, Part I (see instructions)....
17
 
No
18
Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If "Yes," complete Schedule G, Part II............
18
 
No
19
Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If "Yes," complete Schedule G, Part III...................
19
 
No
20a
Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H....
20a
 
No
b
If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return?
20b
 
 
Form 990 (2013)
Form 990 (2013)
Page 4
Part IV
Checklist of Required Schedules (continued)
21
Did the organization report more than $5,000 of grants or other assistance to any domestic organization or government on Part IX, column (A), line 1? If “Yes,” complete Schedule I, Parts I and II...
21
 
No
22
Did the organization report more than $5,000 of grants or other assistance to individuals in the United States on Part IX, column (A), line 2? If “Yes,” complete Schedule I, Parts I and III........
22
 
No
23
Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about compensation of the organization’s current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule J....................... Click to see attachment
23
Yes
 
24a
Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If “Yes,” answer lines 24b through 24d and complete Schedule K. If “No,” go to line 25a................
24a
 
No
b
Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception?...
24b
 
 
c
Did the organization maintain an escrow account other than a refunding escrow at any time during the year
to defease any tax-exempt bonds?......................
24c
 
 
d
Did the organization act as an "on behalf of" issuer for bonds outstanding at any time during the year?...
24d
 
 
25a
Section 501(c)(3) and 501(c)(4) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," complete Schedule L, Part I........
25a
 
No
b
Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization’s prior Forms 990 or 990-EZ? If "Yes," complete Schedule L, Part I...................
25b
 
No
26
Did the organization report any amount on Part X, line 5, 6, or 22 for receivables from or payables to any current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons? If so, complete Schedule L, Part II....................
26
 
No
27
Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? If "Yes," complete Schedule L, Part III.........
27
 
No
28
Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions):
a
A current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV ..........................
28a
 
No
b
A family member of a current or former officer, director, trustee, or key employee? If "Yes,"
complete Schedule L, Part IV.....................
28b
 
No
c
An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or direct or indirect owner? If "Yes," complete Schedule L, Part IV... Click to see attachment
28c
Yes
 
29
Did the organization receive more than $25,000 in non-cash contributions? If "Yes," complete Schedule M..
29
 
No
30
Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If "Yes," complete Schedule M.............
30
 
No
31
Did the organization liquidate, terminate, or dissolve and cease operations? If "Yes," complete Schedule N,
Part I...........................
31
 
No
32
Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete Schedule N, Part II......................
32
 
No
33
Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If "Yes," complete Schedule R, Part I........
33
 
No
34
Was the organization related to any tax-exempt or taxable entity? If "Yes," complete Schedule R, Part II, III, or IV, and Part V, line 1........................ Click to see attachment
34
Yes
 
35a
Did the organization have a controlled entity within the meaning of section 512(b)(13)?
35a
 
No
b
If ‘Yes’ to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2...
35b
 
No
36
Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non-charitable related organization? If "Yes," complete Schedule R, Part V, line 2............. Click to see attachment
36
Yes
 
37
Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If "Yes," complete Schedule R, Part VI
37
 
No
38
Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11b and 19? Note. All Form 990 filers are required to complete Schedule O. ............
38
Yes
 
Form 990 (2013)
Form 990 (2013)
Page 5
Part V
Statements Regarding Other IRS Filings and Tax Compliance
Check if Schedule O contains a response or note to any line in this Part V ..............
Yes
No
1a
Enter the number reported in Box 3 of Form 1096 Enter -0- if not applicable ..
1a
1,337
b
Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable .
1b
0
c
Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? ..................
1c
Yes
 
2a
Enter the number of employees reported on Form W-3, Transmittal of Wage and
Tax Statements, filed for the calendar year ending with or within the year covered by this return ..................
2a
0
b
If at least one is reported on line 2a, did the organization file all required federal employment tax returns?
Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e-file (see instructions)
2b
 
 
3a
Did the organization have unrelated business gross income of $1,000 or more during the year?...
3a
 
No
b
If “Yes,” has it filed a Form 990-T for this year? If “No” to line 3b, provide an explanation in Schedule O...
3b
 
 
4a
At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)?..........................
4a
 
No
b
If "Yes," enter the name of the foreign country: MediumBullet
See instructions for filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts.
5a
Was the organization a party to a prohibited tax shelter transaction at any time during the tax year?..
5a
 
No
b
Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction?
5b
 
No
c
If "Yes," to line 5a or 5b, did the organization file Form 8886-T? ............
5c
 
 
6a
Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions?...
6a
 
No
b
If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible?........................
6b
 
 
7
Organizations that may receive deductible contributions under section 170(c).
a
Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor?....................
7a
 
No
b
If "Yes," did the organization notify the donor of the value of the goods or services provided?.....
7b
 
 
c
Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282?...........................
7c
 
No
d
If "Yes," indicate the number of Forms 8282 filed during the year ....
7d
 
e
Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract?............................
7e
 
No
f
Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract?..
7f
 
No
g
If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?............................
7g
 
 
h
If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C?..........................
7h
 
 
8
Sponsoring organizations maintaining donor advised funds and section 509(a)(3) supporting organizations. Did the supporting organization, or a donor advised fund maintained by a sponsoring organization, have excess business holdings at any time during the year?............
8
 
 
9
Sponsoring organizations maintaining donor advised funds.
a
Did the organization make any taxable distributions under section 4966?..........
9a
 
 
b
Did the organization make a distribution to a donor, donor advisor, or related person?.......
9b
 
 
10
Section 501(c)(7) organizations. Enter:
a
Initiation fees and capital contributions included on Part VIII, line 12 ...
10a
 
b
Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities
10b
 
11
Section 501(c)(12) organizations. Enter:
a
Gross income from members or shareholders .........
11a
 
b
Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) ..........
11b
 
12a
Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041?
12a
 
 
b
If "Yes," enter the amount of tax-exempt interest received or accrued during the year. ....................
12b
 
13
Section 501(c)(29) qualified nonprofit health insurance issuers.
a
Is the organization licensed to issue qualified health plans in more than one state?
Note. See the instructions for additional information the organization must report on Schedule O.
13a
 
 
b
Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans ....
13b
 
c
Enter the amount of reserves on hand ............
13c
 
14a
Did the organization receive any payments for indoor tanning services during the tax year?.....
14a
 
No
b
If "Yes," has it filed a Form 720 to report these payments? If "No," provide an explanation in Schedule O..
14b
 
 
Form 990 (2013)
Form 990 (2013)
Page 6
Part VI
Governance, Management, and Disclosure For each "Yes" response to lines 2 through 7b below, and for a "No" response to lines 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions.
Check if Schedule O contains a response or note to any line in this Part VI ..............
Section A. Governing Body and Management
Yes
No
1a
Enter the number of voting members of the governing body at the end of the tax year .....................
1a
5
If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O.
b
Enter the number of voting members included in line 1a, above, who are independent ...................
1b
1
2
Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? .................
2
Yes
 
3
Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors or trustees, or key employees to a management company or other person? .
3
 
No
4
Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? ...........................
4
Yes
 
5
Did the organization become aware during the year of a significant diversion of the organization’s assets? .
5
 
No
6
Did the organization have members or stockholders? ................
6
Yes
 
7a
Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? ....................
7a
Yes
 
b
Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? ...................
7b
Yes
 
8
Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following:
a
The governing body? .........................
8a
Yes
 
b
Each committee with authority to act on behalf of the governing body? ............
8b
Yes
 
9
Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization’s mailing address? If "Yes," provide the names and addresses in Schedule O.......
9
 
No
Section B. Policies (This Section B requests information about policies not required by the Internal Revenue Code.)
Yes
No
10a
Did the organization have local chapters, branches, or affiliates? ............
10a
 
No
b
If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes?
10b
 
 
11a
Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? ............................
11a
Yes
 
b
Describe in Schedule O the process, if any, used by the organization to review this Form 990. .....
12a
Did the organization have a written conflict of interest policy? If "No," go to line 13.......
12a
Yes
 
b
Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? ..........................
12b
Yes
 
c
Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe in Schedule O how this was done.......................
12c
Yes
 
13
Did the organization have a written whistleblower policy? ...............
13
Yes
 
14
Did the organization have a written document retention and destruction policy? .........
14
Yes
 
15
Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision?
a
The organization’s CEO, Executive Director, or top management official ...........
15a
Yes
 
b
Other officers or key employees of the organization ................
15b
Yes
 
If "Yes" to line 15a or 15b, describe the process in Schedule O (see instructions).
16a
Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? ......................
16a
 
No
b
If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization’s exempt status with respect to such arrangements? ............
16b
 
 
Section C. Disclosure
17
List the States with which a copy of this Form 990 is required to be filedMediumBullet
18
Section 6104 requires an organization to make its Form 1023 (or 1024 if applicable), 990, and 990-T (501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply.
19
Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year.
20
State the name, physical address, and telephone number of the person who possesses the books and records of the organization:
MediumBulletMary Anne Jones1231 East Beltline NEGrand RapidsMI495254501 (616) 464-8695
Form 990 (2013)
Form 990 (2013)
Page 7
Part VII
Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Check if Schedule O contains a response or note to any line in this Part VII ..............
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees
1a Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization’s tax year.
RoundBullet List all of the organization’s current officers, directors, trustees (whether individuals or organizations), regardless of amount
of compensation. Enter -0- in columns (D), (E), and (F) if no compensation was paid.

RoundBullet List all of the organization’s current key employees, if any. See instructions for definition of "key employee."
RoundBullet List the organization’s five current highest compensated employees (other than an officer, director, trustee or key employee)
who received reportable compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the
organization and any related organizations.

RoundBullet List all of the organization’s former officers, key employees, or highest compensated employees who received more than $100,000
of reportable compensation from the organization and any related organizations.

RoundBullet List all of the organization’s former directors or trustees that received, in the capacity as a former director or trustee of the
organization, more than $10,000 of reportable compensation from the organization and any related organizations.

List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest
compensated employees; and former such persons.
Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee.
(A)
Name and Title 		(B)
Average hours per week (list any hours for related organizations below dotted line) 		(C)
Position (do not check more than one box, unless person is both an officer and a director/trustee) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; OfficerInd; Key Employee; Highest compensated employee; FormerOfcrDirectorTrusteeInd;
(1) MARY ANNE JONES........................................................................
TREASURER & CFO
 5.00
.......................45.00 		X   X       33,046 389,006 178,731
(2) MICHAEL P FREED........................................................................
PRESIDENT & CEO
 5.00
.......................45.00 		X   X       0 1,143,384 418,833
(3) ELIZABETH BAXTER........................................................................
DIRECTOR-Part Year
 1.00
.......................0 		X           225 0 0
(4) JAMES F BYRNE........................................................................
CHIEF MEDICAL OFFICER - Part Year
 5.00
.......................45.00 		X           112,365 1,322,738 59,899
(5) JAY LABINE........................................................................
CHIEF MEDICAL OFFICER
 5.00
.......................45.00 		X           27,033 318,222 65,535
(6) MICHAEL KOZIARA........................................................................
CHIEF OPERATING OFFICER
 5.00
.......................45.00 		X           36,999 435,546 172,965
(7) NICOLE KARSIES........................................................................
DIRECTOR
 1.00
.......................0 		X           0 0 0
(8) KIMBERLY L THOMAS........................................................................
SECRETARY
 5.00
.......................45.00 		    X       28,887 340,051 153,702
(9) JOAN A BUDDEN........................................................................
CHIEF MARKETING OFFICER
 5.00
.......................45.00 		      X     37,285 438,916 186,542
(10) KRISCHA WINRIGHT........................................................................
VP INFORMATION SERVICES
 5.00
.......................45.00 		      X     27,636 325,321 162,155
(11) PAMELA RIES........................................................................
VP, SYSTEM TOTAL VALUE
 2.00
.......................48.00 		      X     0 275,895 110,361
(12) BURTON VANDERLAAN........................................................................
MEDICAL DIRECTOR
 5.00
.......................45.00 		        X   26,076 306,962 35,268
(13) JIANHU YU........................................................................
CHIEF ACTUARY
 5.00
.......................45.00 		        X   28,871 339,866 136,492
(14) JOHN L FOX........................................................................
AVP MEDICAL Affairs
 5.00
.......................45.00 		        X   30,703 361,428 57,659
(15) KIMBERLY SUAREZ........................................................................
VP, MEDICAL OPERATIONS
 5.00
.......................45.00 		        X   25,351 298,432 107,749
(16) WAYNE WILSON........................................................................
VP GOVERNMENT PROGRAMS
 5.00
.......................45.00 		        X   25,199 296,642 63,810
(17) DEBORAH A PHILLIPS........................................................................
FORMER KEY EMPLOYEE
 0.00
.......................0.00 		          X 27,816 327,447 0
Form 990 (2013)
Form 990 (2013)
Page 8
Part VII
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued)
(A)
Name and Title 		(B)
Average hours per week (list any hours for related organizations below dotted line) 		(C)
Position (do not check more than one box, unless person is both an officer and a director/trustee) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; OfficerInd; Key Employee; Highest compensated employee; FormerOfcrDirectorTrusteeInd;
(18) JAMES S SLUBOWSKI........................................................................
FORMER KEY EMPLOYEE
 0.00
.......................0.00 		          X 28,162 331,518 0
(19) KIMBERLY K HORN........................................................................
FORMER OFFICER
 0.00
.......................0.00 		          X 55,465 652,921 762
(20) STEVEN A FLACK........................................................................
FORMER OFFICER
 0.00
.......................0.00 		          X 18,671 219,793 0




















1b Sub-Total................MediumBullet
c Total from continuation sheets to Part VII, Section A....MediumBullet
d Total (add lines 1b and 1c)............MediumBullet 569,790 8,124,088 1,910,463
2
Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organizationMediumBullet0
Yes
No
3
Did the organization list any former officer, director or trustee, key employee, or highest compensated employee on line 1a? If "Yes," complete Schedule J for such individual ..............
3
Yes
 
4
For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If "Yes," complete Schedule J for such individual...........................
4
Yes
 
5
Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If "Yes," complete Schedule J for such person ........
5
 
No
Section B. Independent Contractors
1
Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization’s tax year.
(A)
Name and business address 		(B)
Description of services 		(C)
Compensation
ARGUS HEALTH SYSTEMS1300 WASHINGTON STREETKANSAS CITYMO64105 CLAIMS SERVICES 27,287,088
MERCY HEALTH PARTNERSPO BOX 358MUSKEGONMI49442 CLAIMS SERVICES 4,331,454
HOLLAND HOSPITAL602 MICHIGAN AVENUEHOLLANDMI49423 CLAIMS SERVICES 4,171,432
METROPOLITAN HOSPITAL5900 BYRON CENTER AVE SWWYOMINGMI49519 CLAIMS SERVICES 2,570,152
ALLEGIANCE HEALTH205 N EAST AVENUEJACKSONMI49201 CLAIMS SERVICES 1,705,672
2
Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization MediumBullet99
Form 990 (2013)
Form 990 (2013)
Page 9
Part VIII
Statement of Revenue
Check if Schedule O contains a response or note to any line in this Part VIII .............
(A)
Total revenue 		(B)
Related or
exempt
function
revenue 		(C)
Unrelated
business
revenue 		(D)
Revenue
excluded from
tax under sections
512-514
Contributions, Gifts, GrantAmt and OtherAmt Similar Amounts 1a Federated campaigns..1a  
b Membership dues....1b  
c Fundraising events....1c  
d Related organizations...1d  
e Government grants (contributions)1e  
f All other contributions, gifts, grants, and
similar amounts not included above1f 		 
g Noncash contributions included in lines
1a-1f:$ 		 
h Total. Add lines 1a-1f.......MediumBullet 0
Program Service RevenueAmt Business Code
2a NET PREMIUM INCOME 524114 231,486,741 231,486,741    
b     0      
c     0      
d     0      
e     0      
f All other program service revenue . 0 0 0 0
g Total. Add lines 2a–2f........MediumBullet 231,486,741
OtherAmt RevenueAmt 3 Investment income (including dividends, interest, and other similar amounts).......MediumBullet 420,975     420,975
4 Income from investment of tax-exempt bond proceeds..MediumBullet 0      
5 Royalties...........MediumBullet 0      
(i) Real (ii) Personal
6a Gross rents    
b Less: rental expenses    
c Rental income or (loss) 0 0
d Net rental income or (loss).......MediumBullet 0      
(i) Securities (ii) Other
7a Gross amount from sales of assets other than inventory 77,303,122  
b Less: cost or other basis and sales expenses 77,160,540  
c Gain or (loss) 142,582 0
d Net gain or (loss)..........MediumBullet 142,582     142,582
8a Gross income from fundraising events (not including
$  
of contributions reported on line 1c). See Part IV, line 18 ..
a  
b Less: direct expenses ...b  
c Net income or (loss) from fundraising events..MediumBullet 0    
9a Gross income from gaming activities.
See Part IV, line 19 ...
a  
b Less: direct expenses ...b  
c Net income or (loss) from gaming activities...MediumBullet 0      
10a Gross sales of inventory, less
returns and allowances .
a  
b Less: cost of goods sold ..b  
c Net income or (loss) from sales of inventory..MediumBullet 0      
Miscellaneous Revenue Business Code
11a     0      
b     0      
c     0      
d All other revenue .... 0 0 0 0
e Total. Add lines 11a–11d ...... MediumBullet 0
12 Total revenue. See Instructions......MediumBullet 232,050,298 231,486,741 0 563,557
Form 990 (2013)
Form 990 (2013)
Page 10
Part IX
Statement of Functional Expenses
Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A).Check if Schedule O contains a response or note to any line in this Part IX ...............
Do not include amounts reported on lines 6b,
7b, 8b, 9b, and 10b of Part VIII. 		(A)
Total expenses 		(B)
Program service expenses 		(C)
Management and general expenses 		(D)
Fundraising expenses
1 Grants and other assistance to governments and organizations in the United States. See Part IV, line 21 0  
2 Grants and other assistance to individuals in the United States. See Part IV, line 22 0  
3 Grants and other assistance to governments, organizations, and individuals outside the United States. See Part IV, lines 15 and 16 0  
4 Benefits paid to or for members 216,358,253 216,358,253
5 Compensation of current officers, directors, trustees, and key employees .... 380,171 209,094 171,077  
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) .... 0      
7 Other salaries and wages 3,750,918 2,063,005 1,687,913  
8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) .... 0      
9 Other employee benefits ....... 1,242,096 683,153 558,943  
10 Payroll taxes ........... 450,488 247,768 202,720  
11 Fees for services (non-employees):        
a Management ...... 0      
b Legal ......... 15,275   15,275  
c Accounting ........... 0      
d Lobbying ........... 0      
e Professional fundraising services. See Part IV, line 17 0  
f Investment management fees ...... 30,144 16,579 13,565  
g Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O) ........ 729,056 400,981 328,075 0
12 Advertising and promotion .... 614,527 337,990 276,537  
13 Office expenses ....... 233,596 128,478 105,118  
14 Information technology ...... 193,348 106,341 87,007  
15 Royalties .. 0      
16 Occupancy ........... 410,182 225,600 184,582  
17 Travel ............ 53,140 29,227 23,913  
18 Payments of travel or entertainment expenses for any federal, state, or local public officials ...... 0      
19 Conferences, conventions, and meetings .... 17,293 9,511 7,782  
20 Interest ........... 130,232 71,628 58,604  
21 Payments to affiliates ....... 0      
22 Depreciation, depletion, and amortization ..... 628,037 345,420 282,617  
23 Insurance .............. 21,684 11,926 9,758  
24 Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.)
a SHARED SERVICES & MANAGEMENT FEES 4,403,982 2,422,190 1,981,792  
b CLAIMS TAX EXPENSE 2,118,117 1,164,964 953,153  
c COMMUNITY SUPPORT & SPONSORSHIPS 110,177 60,597 49,580  
d STATE REGULATORY FEE 41,896 23,043 18,853  
e All other expenses 218,560 120,209 98,351 0
25 Total functional expenses. Add lines 1 through 24e 232,151,172 225,035,957 7,115,215 0
26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here MediumBullet if following SOP 98-2 (ASC 958-720). 0      
Form 990 (2013)
Form 990 (2013)
Page 11
Part X Balance Sheet Check if Schedule O contains a response or note to any line in this Part X ..............
(A)
Beginning of year 		(B)
End of year
Assets 1 Cash–non-interest-bearing .............   1  
2 Savings and temporary cash investments ......... 12,101,626 2 20,944,392
3 Pledges and grants receivable, net ...........   3  
4 Accounts receivable, net ............. 2,815,485 4 4,304,783
5 Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
Schedule L ..................
0 5 0
6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions) Complete Part II of Schedule L
0 6 0
7 Notes and loans receivable, net .............   7  
8 Inventories for sale or use ..............   8  
9 Prepaid expenses and deferred charges ..........   9  
10a Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D 10a 0
b Less: accumulated depreciation ..... 10b 0 0 10c 0
11 Investments—publicly traded securities .......... 36,818,816 11 36,316,821
12 Investments—other securities. See Part IV, line 11 ..... 0 12 0
13 Investments—program-related. See Part IV, line 11 ..... 0 13 0
14 Intangible assets ...............   14  
15 Other assets. See Part IV, line 11 ........... 314,021 15 402,760
16 Total assets. Add lines 1 through 15 (must equal line 34)...... 52,049,948 16 61,968,756
Liabilities 17 Accounts payable and accrued expenses ......... 19,533,497 17 26,329,717
18 Grants payable .................   18  
19 Deferred revenue ................ 1,394,063 19 3,292,051
20 Tax-exempt bond liabilities .............   20  
21 Escrow or custodial account liability. Complete Part IV of Schedule D..   21  
22 Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
persons. Complete Part II of Schedule L.......... 0 22 0
23 Secured mortgages and notes payable to unrelated third parties ..   23  
24 Unsecured notes and loans payable to unrelated third parties ....   24  
25 Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D.................... 1,418,297 25 2,847,405
26 Total liabilities. Add lines 17 through 25......... 22,345,857 26 32,469,173
Net Assets or Fund Balance Organizations that follow SFAS 117 (ASC 958), check here MediumBullet and complete lines 27 through 29, and lines 33 and 34.
27 Unrestricted net assets ..............   27  
28 Temporarily restricted net assets ...........   28  
29 Permanently restricted net assets ...........   29  
Organizations that do not follow SFAS 117 (ASC 958), check here MediumBullet and complete lines 30 through 34.
30 Capital stock or trust principal, or current funds ........ 10,000 30 10,000
31 Paid-in or capital surplus, or land, building or equipment fund ..... 12,326,879 31 12,326,877
32 Retained earnings, endowment, accumulated income, or other funds 17,367,212 32 17,162,706
33 Total net assets or fund balances ........... 29,704,091 33 29,499,583
34 Total liabilities and net assets/fund balances ........ 52,049,948 34 61,968,756
Form 990 (2013)
Form 990 (2013)
Page 12
Part XI
Reconcilliation of Net Assets
Check if Schedule O contains a response or note to any line in this Part XI ..............
1
Total revenue (must equal Part VIII, column (A), line 12) ............
1
232,050,298
2
Total expenses (must equal Part IX, column (A), line 25) ............
2
232,151,172
3
Revenue less expenses. Subtract line 2 from line 1 ..............
3
-100,874
4
Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) ..
4
29,704,091
5
Net unrealized gains (losses) on investments ...............
5
-103,634
6
Donated services and use of facilities .................
6
 
7
Investment expenses .....................
7
 
8
Prior period adjustments .....................
8
 
9
Other changes in net assets or fund balances (explain in Schedule O) ........
9
 
10
Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 33, column (B))
10
29,499,583
Part XII
Financial Statements and Reporting
Check if Schedule O contains a response or note to any line in this Part XII .............
Yes
No
1
Accounting method used to prepare the Form 990:  
If the organization changed its method of accounting from a prior year or checked "Other," explain in
Schedule O.
2a
Were the organization’s financial statements compiled or reviewed by an independent accountant?
2a
 
No
If ‘Yes,’ check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both:
b
Were the organization’s financial statements audited by an independent accountant?
2b
Yes
 
If ‘Yes,’ check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both:
c
If "Yes," to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant?
2c
Yes
 
If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O.
3a
As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133?
3a
 
No
b
If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits.
3b
 
 
Form 990 (2013)
Form 990, Special Condition Description:
Special Condition Description
Additional Data


Software ID: 13000248
Software Version: 2013v3.1
SCHEDULE A
(Form 990 or 990EZ)

Department of the Treasury
Internal Revenue Service
Public Charity Status and Public Support
Complete if the organization is a section 501(c)(3) organization or a section 4947(a)(1) nonexempt charitable trust.
right arrow Attach to Form 990 or Form 990-EZ. right arrow See separate instructions.
right arrow Information about Schedule A (Form 990 or 990-EZ) and its instructions is at www.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public
Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Part I
Reason for Public Charity Status (All organizations must complete this part.) See instructions.
The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)
1
2
3
4
5
section 170(b)(1)(A)(iv). (Complete Part II.)
6
7
8
9
receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of
its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses
acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)
10
11
e
f
g
(i) A person who directly or indirectly controls, either alone or together with persons described in (ii)
Yes
No
and (iii) below, the governing body of the supported organization? ................
11g(i)
 
 
(ii) A family member of a person described in (i) above? ......................
11g(ii)
 
 
(iii) A 35% controlled entity of a person described in (i) or (ii) above? ................
11g(iii)
 
 
h
Provide the following information about the supported organization(s).
(i) Name of supported organization (ii) EIN (iii) Type of organization (described on lines 1- 9 above or IRC section (see instructions)) (iv) Is the organization in col. (i) listed in your governing document? (v) Did you notify the organization in col. (i) of your support? (vi) Is the organization in col. (i) organized in the U.S.? (vii) Amount of monetary support
Yes No Yes No Yes No
Total  

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990EZ.
Cat. No. 11285F
Schedule A (Form 990 or 990-EZ) 2013
Schedule A (Form 990 or 990-EZ) 2013
Page 2
Part II
Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi)
(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.)
Section A. Public Support
Calendar year (or fiscal year beginning in) right arrow (a) 2009 (b) 2010 (c) 2011 (d) 2012 (e) 2013 (f) Total
1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ....            
2 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf.......            
3 The value of services or facilities furnished by a governmental unit to the organization without charge..            
4 Total. Add lines 1 through 3            
5 The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)..  
6 Public support. Subtract line 5 from line 4.  
Section B. Total Support
Calendar year (or fiscal year beginning in) right arrow (a) 2009 (b) 2010 (c) 2011 (d) 2012 (e) 2013 (f) Total
7 Amounts from line 4..            
8 Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources...            
9 Net income from unrelated business activities, whether or not the business is regularly carried on..            
10 Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)..            
11 Total support (Add lines 7 through 10).  
12
12
 
13
First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization, check this box and stop here.................................................right arrow
Section C. Computation of Public Support Percentage
14
14
 
15
15
 
16a
b
17a
b
18
Private foundation. If the organization did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see
instructions ..................................................... right arrow
Schedule A (Form 990 or 990-EZ) 2013
Schedule A (Form 990 or 990-EZ) 2013
Page 3
Part III
Support Schedule for Organizations Described in Section 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.)
Section A. Public Support
Calendar year (or fiscal year beginning in) right arrow (a) 2009 (b) 2010 (c) 2011 (d) 2012 (e) 2013 (f) Total
1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .           0
2 Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose...... 172,147,008 180,644,511 188,233,144 192,615,762 231,486,741 965,127,166
3 Gross receipts from activities that are not an unrelated trade or business under section 513..           0
4 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf...           0
5 The value of services or facilities furnished by a governmental unit to the organization without charge..           0
6 Total. Add lines 1 through 5. 172,147,008 180,644,511 188,233,144 192,615,762 231,486,741 965,127,166
7a Amounts included on lines 1, 2, and 3 received from disqualified persons... 0 0 0 0 0 0
b Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year. 0 0 0 0 0 0
c Add lines 7a and 7b.. 0 0 0 0 0 0
8 Public support (Subtract line 7c from line 6.) 965,127,166
Section B. Total Support
Calendar year (or fiscal year beginning in) right arrow (a) 2009 (b) 2010 (c) 2011 (d) 2012 (e) 2013 (f) Total
9 Amounts from line 6... 172,147,008 180,644,511 188,233,144 192,615,762 231,486,741 965,127,166
10a Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources.. 344,908 98,231 83,100 135,907 420,975 1,083,121
b Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.           0
c Add lines 10a and 10b. 344,908 98,231 83,100 135,907 420,975 1,083,121
11 Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.           0
12 Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.) .. 0 0 0     0
13 Total support. (Add lines 9, 10c, 11, and 12.).. 172,491,916 180,742,742 188,316,244 192,751,669 231,907,716 966,210,287
14
Section C. Computation of Public Support Percentage
15
15
99.880 %
16
16
99.840 %
Section D. Computation of Investment Income Percentage
17
17
0.110 %
18
18
0.160 %
19a
b
20
Schedule A (Form 990 or 990-EZ) 2013
Schedule A (Form 990 or 990-EZ) 2013
Page 4
Part IV
Supplemental Information. Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; and Part III, line 12. Also complete this part for any additional information. (See instructions).
Facts And Circumstances Test
 
Explanation
 
 
 
 
Schedule A (Form 990 or 990-EZ) 2013

Additional Data


Software ID: 13000248
Software Version: 2013v3.1
SCHEDULE D
(Form 990)
Department of the Treasury
Internal Revenue Service
Supplemental Financial Statements
SchDMd Bullet Complete if the organization answered "Yes," to Form 990,
Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b
SchDMd Bullet Attach to Form 990. SchDMd Bullet See separate instructions. SchDMd Bullet Information about Schedule D (Form 990) and its instructions is at www.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Part I
Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990, Part IV, line 6.
(a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year .........    
2 Aggregate contributions to (during year) ...    
3 Aggregate grants from (during year) .....    
4 Aggregate value at end of year ........    
5
Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ............
6
Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit? ...................................
Part II
Conservation Easements. Complete if the organization answered "Yes" to Form 990, Part IV, line 7.
1
Purpose(s) of conservation easements held by the organization (check all that apply).
2
Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.
Held at the End of the Year
a Total number of conservation easements ....................... 2a  
b Total acreage restricted by conservation easements .................. 2b  
c Number of conservation easements on a certified historic structure included in (a) ..... 2c  
d Number of conservation easements included in (c) acquired after 8/17/06, and not on a historic structure listed in the National Register .................... 2d  
3
Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the tax year SchDMd Bullet  
4
Number of states where property subject to conservation easement is located SchDMd Bullet  
5
Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and
enforcement of the conservation easements it holds? .............................
6
Staff and volunteer hours devoted to monitoring, inspecting, and enforcing conservation easements during the year
SchDMd Bullet  
7
Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year
SchDMd Bullet $  
8
Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(ii)? .......................................
9
In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8.
1a
If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items.
b
If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items:
(i)
Revenues included in Form 990, Part VIII, line 1 ........................SchDMd Bullet $  
(ii)
Assets included in Form 990, Part X ..............................SchDMd Bullet $  
2
If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 (ASC 958) relating to these items:
a
Revenues included in Form 990, Part VIII, line 1 ..........................SchDMd Bullet $  
b
Assets included in Form 990, Part X ...............................SchDMd Bullet $  
For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 52283D
Schedule D (Form 990) 2013

Schedule D (Form 990) 2013
Page 2
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)
3
Using the organization’s acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply):
a
d
b
e
 
c
4
Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIII.
5
During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?........
Part IV
Escrow and Custodial Arrangements. Complete if the organization answered "Yes" to Form 990,
Part IV, line 9, or reported an amount on Form 990, Part X, line 21.
1a
Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................
b
If "Yes," explain the arrangement in Part XIII and complete the following table:
Amount
c Beginning balance ................................. 1c  
d Additions during the year .............................. 1d  
e Distributions during the year ............................. 1e  
f Ending balance ................................... 1f  
2a
Did the organization include an amount on Form 990, Part X, line 21? .....................
b
If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided in Part XIII ........
Part V
Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.
(a)Current year (b)Prior year b (c)Two years back (d)Three years back (e)Four years back
1a Beginning of year balance ....          
b Contributions ........          
c Net investment earnings, gains, and losses          
d Grants or scholarships .....          
e Other expenditures for facilities
and programs ........ 		         
f Administrative expenses ....          
g End of year balance ......          
2
Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as:
a
Board designated or quasi-endowment SchDMd Bullet  
b
Permanent endowment SchDMd Bullet  
c
Temporarily restricted endowment SchDMd Bullet  
The percentages in lines 2a, 2b, and 2c should equal 100%.
3a
Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes
No
(i) unrelated organizations ........................
3a(i)
 
 
(ii) related organizations ........................
3a(ii)
 
 
b
If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? .........
3b
 
 
4
Describe in Part XIII the intended uses of the organization's endowment funds.
Part VI
Land, Buildings, and Equipment. Complete if the organization answered 'Yes' to Form 990, Part IV, line 11a. See Form 990, Part X, line 10.
Description of property (a) Cost or other basis (investment) (b)Cost or other basis (other) (c) Accumulated depreciation (d) Book value
1a Land .................     0
b Buildings ................       0
c Leasehold improvements ............       0
d Equipment ................       0
e Other .................       0
Total. Add lines 1a through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10(c).).......SchDMdBullet 0
Schedule D (Form 990) 2013

Schedule D (Form 990) 2013
Page 3
Part VII
Investments—Other Securities. Complete if the organization answered 'Yes' to Form 990, Part IV, line 11b. See Form 990, Part X, line 12.
(a) Description of security or category
(including name of security)		 (b)Book value (c) Method of valuation:
Cost or end-of-year market value
(1)Financial derivatives    
(2)Closely-held equity interests    
Other








Total. (Column (b) must equal Form 990, Part X, col. (B) line 12.)Small Bullet  
Part VIII
Investments—Program Related. Complete if the organization answered 'Yes' to Form 990, Part IV, line 11c. See Form 990, Part X, line 13.
(a) Description of investment (b) Book value (c) Method of valuation:
Cost or end-of-year market value








Total. (Column (b) must equal Form 990, Part X, col.(B) line 13.)Small Bullet  
Part IX
Other Assets. Complete if the organization answered 'Yes' to Form 990, Part IV, line 11d. See Form 990, Part X, line 15.
(a) Description (b) Book value








Total. (Column (b) must equal Form 990, Part X, col.(B) line 15.)...........Small Bullet  
Part X
Other Liabilities. Complete if the organization answered 'Yes' to Form 990, Part IV, line 11e or 11f. See Form 990, Part X, line 25.
1.(a) Description of liability (b) Book value
Federal income taxes 0
DUE TO AFFILIATES 2,847,405








Total. (Column (b) must equal Form 990, Part X, col.(B) line 25.)Small Bullet 2,847,405
2. Liability for uncertain tax positions In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII ..................................................
Schedule D (Form 990) 2013

Schedule D (Form 990) 2013
Page 4
Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return Complete if the organization answered 'Yes' to Form 990, Part IV, line 12a.
1 Total revenue, gains, and other support per audited financial statements ....... 1  
2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a Net unrealized gains on investments .......... 2a  
b Donated services and use of facilities ......... 2b  
c Recoveries of prior year grants ........... 2c  
d Other (Describe in Part XIII.) ............ 2d  
e Add lines 2a through 2d ..................... 2e  
3 Subtract line 2e from line 1..................... 3  
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b . 4a  
b Other (Describe in Part XIII.) ........... 4b  
c Add lines 4a and 4b....................... 4c  
5 Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) ...... 5  
Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Complete if the organization answered 'Yes' to Form 990, Part IV, line 12a.
1 Total expenses and losses per audited financial statements ........... 1  
2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a Donated services and use of facilities .......... 2a  
b Prior year adjustments .............. 2b  
c Other losses ................ 2c  
d Other (Describe in Part XIII.) ............ 2d  
e Add lines 2a through 2d...................... 2e  
3 Subtract line 2e from line 1..................... 3  
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b .. 4a  
b Other (Describe in Part XIII.) ............ 4b  
c Add lines 4a and 4b....................... 4c  
5 Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) ...... 5  
Part XIII
Supplemental Information
Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.
Return Reference Explanation
SCHEDULE D, PART X, LINE 2, FIN 48 (ASC 740) FOOTNOTE PRIORITY HEALTH CONDUCTS AN ANALYSIS ANNUALLY TO DETERMINE THE ORGANIZATION'S LIABILITY WITH RESPECT TO UNCERTAIN TAX POSITIONS. FOR THE YEAR ENDED DECEMBER 31, 2013 IT WAS DETERMINED THAT THERE WERE NO MATERIAL UNCERTAIN TAX POSITIONS TO DISCLOSE. AS SUCH, THERE WAS NO FOOTNOTE ADDED TO THE AUDITED FINANCIAL STATEMENTS.
Schedule D (Form 990) 2013

Additional Data


Software ID: 13000248
Software Version: 2013v3.1




Schedule J
(Form 990)
Department of the Treasury
Internal Revenue Service
Compensation Information
For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet Complete if the organization answered "Yes" to Form 990, Part IV, line 23.
SchJMediumBullet Attach to Form 990. SchJMediumBullet See separate instructions.
SchJMediumBullet Information about Schedule J (Form 990) and its instructions is at www.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Part I
Questions Regarding Compensation
Yes
No
1a
Check the appropiate box(es) if the organization provided any of the following to or for a person listed in Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.
b
If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain....
1b
 
 
2
Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
directors, trustees, officers, including the CEO/Executive Director, regarding the items checked in line 1a? ..
2
 
 
3
Indicate which, if any, of the following the filing organization used to establish the compensation of the
organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods
used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.
4
During the year, did any person listed in Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:
a
Receive a severance payment or change-of-control payment? ................
4a
Yes
 
b
Participate in, or receive payment from, a supplemental nonqualified retirement plan? .........
4b
Yes
 
c
Participate in, or receive payment from, an equity-based compensation arrangement? .........
4c
 
No
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only 501(c)(3) and 501(c)(4) organizations only must complete lines 5-9.
5
For persons listed in Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the revenues of:
a
The organization? ...........................
5a
 
No
b
Any related organization? .........................
5b
 
No
If "Yes," to line 5a or 5b, describe in Part III.
6
For persons listed in Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the net earnings of:
a
The organization? ...........................
6a
 
No
b
Any related organization? .........................
6b
 
No
If "Yes," to line 6a or 6b, describe in Part III.
7
For persons listed in Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............
7
 
No
8
Were any amounts reported in Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................
8
 
No
9
If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................
9
 
 
For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50053T
Schedule J (Form 990) 2013

Schedule J (Form 990) 2013
Page 2
Part II
Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed.
For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions, on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.
Note. The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.
(A) Name and Title (B) Breakdown of W-2 and/or 1099-MISC compensation (C) Retirement and other deferred compensation (D) Nontaxable
benefits		 (E) Total of columns
(B)(i)-(D) 		(F) Compensation
reported as deferred
in prior Form 990
(i) Base compensation (ii) Bonus & incentive compensation (iii) Other reportable compensation
(1)KIMBERLY K HORNFORMER OFFICER (i)
(ii)		 0
0 		0
0 		55,465
652,921 		0
0 		60
702 		55,525
653,623 		0
0
(2)STEVEN A FLACKFORMER OFFICER (i)
(ii)		 0
0 		0
0 		18,671
219,793 		0
0 		0
0 		18,671
219,793 		0
0
(3)MICHAEL P FREEDPRESIDENT & CEO (i)
(ii)		 0
716,248 		0
382,842 		0
44,294 		0
321,897 		0
96,936 		0
1,562,217 		0
62,723
(4)MARY ANNE JONESTREASURER & CFO (i)
(ii)		 26,069
306,871 		6,731
79,238 		246
2,897 		9,568
112,636 		4,426
52,101 		47,040
553,743 		0
0
(5)JAMES F BYRNECHIEF MEDICAL OFFICER - PART YEAR (i)
(ii)		 15,260
179,643 		96,937
1,141,121 		168
1,974 		1,164
13,704 		3,526
41,505 		117,055
1,377,947 		90,198
1,061,788
(6)MICHAEL KOZIARACHIEF OPERATING OFFICER (i)
(ii)		 27,427
322,864 		8,459
99,575 		1,113
13,107 		8,973
105,626 		4,570
53,796 		50,542
594,968 		1,348
15,873
(7)JAY LABINECHIEF MEDICAL OFFICER (i)
(ii)		 22,868
269,201 		4,103
48,293 		62
728 		2,898
34,111 		2,234
26,292 		32,165
378,625 		0
0
(8)KIMBERLY L THOMASSECRETARY (i)
(ii)		 22,967
270,366 		5,870
69,099 		50
586 		8,861
104,305 		3,174
37,362 		40,922
481,718 		0
0
(9)DEBORAH A PHILLIPSFORMER KEY EMPLOYEE (i)
(ii)		 635
7,481 		6,724
79,149 		20,457
240,817 		0
0 		0
0 		27,816
327,447 		6,724
79,149
(10)JAMES S SLUBOWSKIFORMER KEY EMPLOYEE (i)
(ii)		 0
0 		28,162
331,518 		0
0 		0
0 		0
0 		28,162
331,518 		28,162
331,518
(11)JOAN A BUDDENCHIEF MARKETING OFFICER (i)
(ii)		 29,472
346,937 		7,703
90,679 		110
1,300 		9,550
112,426 		5,055
59,511 		51,890
610,853 		30
354
(12)KRISCHA WINRIGHTVP INFORMATION SERVICES (i)
(ii)		 21,914
257,967 		5,627
66,241 		95
1,113 		8,228
96,863 		4,468
52,596 		40,332
474,780 		0
0
(13)PAMELA RIESVP, SYSTEM TOTAL VALUE (i)
(ii)		 0
216,661 		0
57,089 		0
2,145 		0
69,851 		0
40,510 		0
386,256 		0
0
(14)JOHN L FOXAVP MEDICAL AFFAIRS (i)
(ii)		 22,879
269,330 		7,734
91,041 		90
1,057 		1,322
15,567 		3,192
37,578 		35,217
414,573 		1,690
19,894
(15)JIANHU YUCHIEF ACTUARY (i)
(ii)		 22,882
269,376 		5,867
69,059 		122
1,431 		8,201
96,540 		2,486
29,265 		39,558
465,671 		0
0
(16)BURTON VANDERLAANMEDICAL DIRECTOR (i)
(ii)		 21,635
254,687 		4,137
48,701 		304
3,574 		1,398
16,452 		1,364
16,054 		28,838
339,468 		0
0
(17)KIMBERLY SUAREZVP, MEDICAL OPERATIONS (i)
(ii)		 19,512
229,694 		5,648
66,487 		191
2,251 		5,616
66,104 		2,821
33,208 		33,788
397,744 		813
9,573
(18)WAYNE WILSONVP GOVERNMENT PROGRAMS (i)
(ii)		 18,712
220,280 		4,919
57,902 		1,568
18,460 		995
11,717 		4,001
47,097 		30,195
355,456 		0
0
Schedule J (Form 990) 2013

Schedule J (Form 990) 2013
Page 3
Part III
Supplemental Information
Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II.
Also complete this part for any additional information.
Return Reference Explanation
Schedule J, Part I, Line 3, Arrangement used to establish the top management official's compensation THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL, OTHER OFFICERS, AND KEY EMPLOYEES AT PRIORITY HEALTH. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS, HEALTH PLANS, AND MEDICAL GROUPS: * AMERICAN MEDICAL GROUP ASSOCIATION: 2012 MEDICAL GROUP COMPENSATION & FINANCIAL SURVEY * INTEGRATED HEALTHCARE STRATEGIES: 2012 HEALTH CARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2012 EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2012 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * MEDICAL GROUP MANAGEMENT ASSOCIATION: 2012 MANAGEMENT COMPENSATION SURVEY * SULLIVAN, COTTER AND ASSOCIATES: 2012 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * SULLIVAN, COTTER AND ASSOCIATES: 2012 PHYSICIAN COMPENSATION AND PRODUCTIVITY SURVEY REPORT * TOWERS WATSON: 2012/2013 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT * TOWERS WATSON: 2012/2013 TOP MANAGEMENT COMPENSATION REPORT * WARREN: 2012 COMPENSATION SURVEY COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATES CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III).
Schedule J, Part I, Line 4a, Severance or change-of-control payment $238,464 STEVEN FLACK $708,386 KIMBERLY HORN $261,275 DEBORAH PHILLIPS
Schedule J, Part I, Line 4b, Supplemental nonqualified retirement plan $ 384 JOAN BUDDEN $1,151,986 JAMES BYRNE $62,723 MICHAEL P. FREED $21,584 JOHN FOX $ 17,221 MICHAEL KOZIARA $ 85,872 DEBORAH PHILLIPS $359,680 JAMES SLUBOWSKI $ 10,386 KIMBERLY SUAREZ SCHEDULE J, PART I, LINE 4B IS ANSWERED "YES" BECAUSE INDIVIDUALS, WHOSE SALARY AND BENEFITS ARE ALLOCATED TO THIS ORGANIZATION, DO "PARTICIPATE IN" A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. SOME INDIVIDUALS RECEIVED DISTRIBUTIONS DURING THE YEAR (AS REPORTED ON THIS LINE) WHEREAS OTHERS PARTICIPATED IN THE PLAN BUT DID NOT RECEIVE DISTRIBUTIONS. DISTRIBUTIONS REPORTED ON THIS LINE ARE ALSO INCLUDED IN SCHEDULE J, PART II, COLUMN F AS COMPENSATION REPORTED IN A PRIOR YEAR. THE NONQUALIFIED RETIREMENT PLANS ARE AN INDUSTRY STANDARD AND ARE SUBJECT TO THE FUNDING REQUIREMENTS OF NONQUALIFIED DEFERRED COMPENSATION PLANS UNDER ERISA AND FEDERAL TAX REGULATIONS.
SCHEDULE J, PART II, COLUMN (F), DEFERRED COMPENSATION THE 2013 "BONUS & INCENTIVE COMPENSATION" INCLUDES CERTAIN DEFERRED COMPENSATION ARRANGEMENTS THAT WERE REPORTED IN PREVIOUS YEARS BUT PAID IN 2013. THIS RESULTS IN A CERTAIN AMOUNT OF WAGES BEING REPORTED IN THE FORM 990 TWICE. AMOUNTS REPORTED IN PART II COLUMN F REPRESENT COMPENSATION THAT WAS ALSO REPORTED IN A PREVIOUS YEAR'S FORM 990 WHILE ALSO BEING REPORTED IN THE CURRENT FORM 990 AS TOTAL COMPENSATION.
Schedule J (Form 990) 2013

Additional Data


Software ID: 13000248
Software Version: 2013v3.1
Schedule L
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Transactions with Interested Persons
MediumBullet Complete if the organization answered
"Yes" on Form 990, Part IV, lines 25a, 25b, 26, 27, 28a, 28b, or 28c,
or Form 990-EZ, Part V, line 38a or 40b.
MediumBullet Attach to Form 990 or Form 990-EZ. MediumBullet See separate instructions.
MediumBulletInformation about Schedule L (Form 990 or 990-EZ) and its instructions is at www.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Part I
Excess Benefit Transactions (section 501(c)(3) and section 501(c)(4) organizations only).
Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b.
1(a) Name of disqualified person (b) Relationship between disqualified person and organization (c) Description of transaction (d) Corrected?
Yes No





2
Enter the amount of tax incurred by organization managers or disqualified persons during the year under section 4958. ........................... Bullet Image$
 
3
Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ....... Bullet Image$
 

Part II
Loans to and/or From Interested Persons.
Complete if the organization answered "Yes" on Form 990-EZ, Part V, line 38a, or Form 990, Part IV, line 26; or if the organization reported an amount on Form 990, Part X, line 5, 6, or 22
(a) Name of interested person (b) Relationship with organization (c) Purpose of loan (d) Loan to or from the organization? (e)Original principal amount (f)Balance due (g) In default? (h) Approved by board or committee? (i)Written agreement?
To From Yes No Yes No Yes No
Total ......Small Bullet $  
Part III
Grants or Assistance Benefitting Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 27.
(a) Name of interested person (b) Relationship between interested person and the organization (c) Amount of assistance (d) Type of assistance (e) Purpose of assistance
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 50056A
Schedule L (Form 990 or 990-EZ) 2013
Schedule L (Form 990 or 990-EZ) 2013
Page 2
Part IV
Business Transactions Involving Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c.
(a) Name of interested person (b) Relationship between interested person and the organization (c) Amount of transaction (d) Description of transaction (e) Sharing of organization's revenues?
Yes No
(1) PRIORITY HEALTH MANAGED BENEFITS
  		SISTER MGMT CO 12,707,213 INTERCO MGMT FEES   No
Part V
Supplemental Information
Provide additional information for responses to questions on Schedule L (see instructions).
Return Reference Explanation
SCHEDULE L, PART IV, BUSINESS TRANSACTIONS WITH INTERESTED PERSONS CERTAIN MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS, AND KEY EMPLOYEES OF THE ORGANIZATION ARE ALSO OFFICERS AND/OR KEY EMPLOYEES OF PRIORITY HEALTH MANAGED BENEFITS, INC. ("PHMB") (EIN 38-3085182), AN AFFILIATED ORGANIZATION. THE FOLLOWING MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF THE ORGANIZATION ARE ALSO MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF PRIORITY HEALTH INSURANCE COMPANY ("PHIC") (EIN 20-1529553), A SISTER COMPANY AND WHOLLY OWNED TAXABLE SUBISIDARY OF THE PARENT ORGANIZATION. DIRECTORS-PHIC: FULL YEAR - MS. JOAN BUDDEN, MR. MICHAEL KOZIARA, AND MR. MICHAEL P. FREED. OFFICERS-PHIC: FULL YEAR - MS. KIMBERLY L. THOMAS, MR. MICHAEL P. FREED, AND MS. MARY ANNE JONES.
Schedule L (Form 990 or 990-EZ) 2013

Additional Data


Software ID: 13000248
Software Version: 2013v3.1




SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
MediumBullet Attach to Form 990 or 990-EZ.
MediumBullet Information about Schedule O (Form 990 or 990-EZ) and its instructions is at
www.irs.gov/form990.
OMB No. 1545-0047
2013
Open to Public
Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Return Reference Explanation
FORM 990, PART IV, LINE 12A, AUDITED FINANCIAL STATEMENTS THE ORGANIZATION'S FINANCIAL STATEMENTS ARE AUDITED ANNUALLY BY AN INDEPENDENT ACCOUNTING FIRM. THE "NO" RESPONSE TO THIS QUESTION RELATES TO THE FACT THAT THE GAAP BASIS FINANCIAL STATEMENTS WERE PREPARED ON A CONSOLIDATED BASIS AND NOT ON A STAND ALONE BASIS. THE ORGANIZATION IS AUDITED ANNUALLY ON A STAND ALONE BASIS AND ISSUED FINANCIAL STATEMENTS ON A STAND ALONE BASIS WHICH ARE PREPARED IN ACCORDANCE WITH SAP (STATUTORY ACCOUNTING PRINCIPLES), AS REQUIRED BY REGULATORY AUTHORITIES. THE FIGURES IN THIS FORM 990 RECONCILE TO THE FINANCIAL STATEMENTS PREPARED UNDER STATUTORY ACCOUNTING PRINCIPLES AS SUBMITTED TO THE STATE OF MICHIGAN.
FORM 990, PART V, LINE 2A, NUMBER OF EMPLOYEES REPORTED ON FORM W-3 ALL EMPLOYEES OF PRIORITY HEALTH CHOICE WERE EMPLOYED DURING THE YEAR BY SPECTRUM HEALTH SYSTEM (38-3382353) AND LEASED BACK TO PRIORITY HEALTH CHOICE. SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES ARE ALLOCATED TO PRIORITY HEALTH CHOICE VIA A MANAGEMENT FEE. THE SALARIES AND WAGES REPORTED IN PART IX STATEMENT OF FUNCTIONAL EXPENSES REFLECT THE PORTION OF SALARIES AND WAGES ALLOCATED TO PRIORITY HEALTH CHOICE. SPECTRUM HEALTH SYSTEM FILED ALL APPLICABLE IRS TAX FILINGS INCLUDING FORMS W-2 AND W-3 ON BEHALF OF PRIORITY HEALTH CHOICE.
FORM 990, PART VI, LINE 3, MANAGEMENT SERVICES PRIORITY HEALTH MANAGED BENEFITS, INC. (PHMB), AN ENTITY RELATED THROUGH COMMON OWNERSHIP, PROVIDES CONTRACTED MANAGEMENT SERVICES TO PRIORITY HEALTH CHOICE AND ITS AFFILIATES. PRIORITY HEALTH, A 501(C)(4), IS THE PARENT COMPANY TO THE ORGANIZATION. PRIORITY HEALTH'S GOVERNING BODY RETAINS CONTROL OF THE ACTIVITIES OF PHMB AS THE GOVERNING BODIES OF PRIORITY HEALTH AND PHMB ARE COMPRISED OF THE SAME DIRECTORS AND OFFICERS.
Form 990, Part VI, Sec A, Line 2, Family/business relationships amongst interested persons MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF THE ORGANIZATION ALSO SERVE ON THE BOARD OF DIRECTORS AND/OR AS OFFICERS OF RELATED TAXABLE ENTITIES - BUSINESS RELATIONSHIP
Form 990, Part VI, Sec A, Line 4, Significant changes to organizational documents THE ORGANIZATION'S ARTICLES OF INCORPORTION WERE AMENDED ON SEPTEMBER 30, 2013 TO REFLECT A CHANGE OF LEGAL NAME FROM PRIORITY HEALTH GOVERNMENT PROGRAMS, INC. TO PRIORITY HEALTH CHOICE, INC.
Form 990, Part VI, Sec A, Line 6, Classes of members or stockholders THE PARENT ORGANIZATION IS PRIORITY HEALTH (EIN 38-2715520), A TAX-EXEMPT 501(C)(4) ORGANIZATION. PRIORITY HEALTH CONTROLS 100% OF THE ORGANIZATION. PRIORITY HEALTH HAS THREE SHAREHOLDERS AS FOLLOWS: SPECTRUM HEALTH SYSTEM (EIN 38-3382353), CLASS A SHAREHOLDER - 93.9% MUNSON HEALTHCARE (EIN 38-1362830), CLASS B SHAREHOLDER - 5.5% NORTHERN MICHIGAN REGIONAL HEALTH SYSTEM (EIN 38-2146751), CLASS B SHAREHOLDER - .6% ALL SHAREHOLDERS ARE TAX-EXEMPT INTERNAL REVENUE CODE SECTION 501(C)(3) ORGANIZATIONS.
Form 990, Part VI, Sec A, Line 7a, Members or stockholders electing members of governing body ELECTION OF MEMBERS AND THEIR RIGHTS FROM PRIORITY HEALTH CHOICE BYLAWS: ARTICLE V SECTION 2. NUMBER AND CLASS OF DIRECTORS. THE BOARD OF DIRECTORS WILL BE COMPRISED OF SIX (6) MEMBERS AS FOLLOWS: A. ONE (1) MEMBER WILL BE THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF PRIORITY HEALTH. B. ONE (1) MEMBER WILL BE THE CHIEF FINANCIAL OFFICER OF PRIORITY HEALTH. C. ONE (1) MEMBER WILL BE THE CHIEF MEDICAL OFFICER OF PRIORITY HEALTH. D. ONE (1) MEMBER WILL BE THE CHIEF OPERATIONS OFFICER OF PRIORITY HEALTH. E. TWO (2) MEMBERS WILL BE ADULT ENROLLEE MEMBERS OF PRIORITY HEALTH CHOICE, INC. SECTION 3. ELECTION OF ADULT ENROLLEE MEMBERS. THE BOARD OF DIRECTORS WILL SOLICIT NAMES OF POTENTIAL CANDIDATES FROM THE MEMBERS, SHAREHOLDERS, DIRECTORS AND COMMUNITY. THE PRIORITY HEALTH CHOICE, INC. BOARD OF DIRECTORS WILL SUBMIT A LIST OF NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS AS ADULT ENROLLEE REPRESENTATIVES. AT LEAST ONE (1) MEMBER WILL BE NOMINATED FOR EACH DIRECTORSHIP TO BE FILLED AT SUCH ANNUAL MEETING. IN ADDITION, ANY GROUP OF ADULT ENROLLEES IN THE CORPORATION'S HEALTH MAINTENANCE PLAN, UPON FILING A PETITION WITH MORE THAN ONE HUNDRED (100) LEGITIMATE SIGNATURES OF CURRENT MEMBERS WITH THE SECRETARY OF THE BOARD OF DIRECTORS AT LEAST NINETY (90) DAYS PRIOR TO THE ANNUAL MEETING, MAY NOMINATE A CANDIDATE FOR ELECTION TO THE BOARD OF DIRECTORS. ELIGIBLE MEMBERS WILL BE GIVEN THE OPPORTUNITY TO VOTE ON THE CANDIDATES FOR ELECTION TO THE BOARD OF DIRECTORS.
Form 990, Part VI, Sec A, Line 7b, Decisions requiring approval by members or stockholders FROM PRIORITY HEALTH CHOICE BYLAWS: SECTION 1. VOTES. EACH SHAREHOLDER OF RECORD AS DETERMINED IN ACCORDANCE WITH SECTION 2 OF THIS ARTICLE WILL, AT EVERY MEETING OF SHAREHOLDERS, BE ENTITLED TO ONE (1) VOTE IN PERSON OR BY PROXY FOR EACH SHARE OF CAPITAL VOTING STOCK OF THE CORPORATION HELD BY THE SHAREHOLDER. A VOTE MAY BE CAST EITHER VERBALLY OR IN WRITING. UNLESS THE ARTICLES OF INCORPORATION OR BYLAWS STATE OTHERWISE, ALL MATTERS WILL BE DETERMINED BY THE VOTE OF THE HOLDERS OF A MAJORITY OF THE ISSUED AND OUTSTANDING STOCK IN THE CORPORATION. SECTION 2. RECORD DATE FOR DETERMINATION OF SHAREHOLDERS. FOR THE PURPOSE OF DETERMINING SHAREHOLDERS ENTITLED TO NOTICE OF, AND TO VOTE AT, A MEETING OF SHAREHOLDERS, OR ANY ADJOURNED MEETING, OR TO EXPRESS CONSENT TO OR DISSENT FROM A PROPOSAL WITHOUT A MEETING, OR FOR THE PURPOSE OF ANY OTHER ACTION, THE BOARD OF DIRECTORS MAY FIX IN ADVANCE A DATE, NOT MORE THAN SIXTY (60) DAYS NOR LESS THAN TWENTY-ONE (21) DAYS BEFORE THE DATE OF THE MEETING OR OTHER ACTION, AS THE RECORD DATE FOR THE DETERMINATION OF SHAREHOLDERS. SECTION 3. PROXIES. A SHAREHOLDER ENTITLED TO VOTE AT A MEETING OF SHAREHOLDERS OR TO EXPRESS CONSENT OR DISSENT WITHOUT A MEETING MAY AUTHORIZE OTHER PERSONS TO ACT FOR THE SHAREHOLDER BY PROXY. NO PROXY WILL BE DEEMED OPERATIVE UNLESS AND UNTIL SIGNED BY THE SHAREHOLDER OR THE SHAREHOLDER'S AUTHORIZED AGENT OR REPRESENTATIVE AND FILED WITH THE CORPORATION. UNLESS OTHERWISE PROVIDED IN THE PROXY, A PROXY IS VALID ONLY FOR THREE (3) YEARS FROM ITS DATE. SECTION 4. ANNUAL BUDGET AND STRATEGIC PLAN. AT THE FIRST MEETING OF THE BOARD OF DIRECTORS DURING EACH FISCAL YEAR, THE BOARD OF DIRECTORS WILL APPROVE THE ANNUAL BUDGET AND STRATEGIC PLAN FOR THE CORPORATION. AT THE FIRST MEETING OF THE BOARD OF DIRECTORS OF THE SHAREHOLDER DURING EACH FISCAL YEAR, THE SHAREHOLDER WILL APPROVE THE ANNUAL BUDGET AND STRATEGIC PLAN FOR THE CORPORATION. SECTION 5. POWER TO ELECT PRESIDENT. THE SHAREHOLDERS WILL SELECT A PRESIDENT FROM THE BOARD OF DIRECTORS. SECTION 6. REMOVAL OF OFFICERS AND AGENTS. ANY OFFICER OR AGENT MAY BE REMOVED BY THE SHAREHOLDERS WHENEVER, IN THEIR JUDGMENT, THE BUSINESS INTERESTS OF THE CORPORATION WILL BE SERVED BY THE REMOVAL. SECTION 7. DELEGATION OF POWERS. FOR ANY REASON THEY DEEM SUFFICIENT, WHETHER OCCASIONED BY ABSENCE OR OTHERWISE, THE SHAREHOLDERS MAY DELEGATE ALL OR ANY OF THE POWERS AND DUTIES OF ANY OFFICER TO ANY OTHER OFFICER OR DIRECTOR. SECTION 8. POWER TO REQUIRE BONDS. THE SHAREHOLDERS MAY REQUIRE ANY OFFICER OR AGENT TO FILE WITH THE CORPORATION A SATISFACTORY BOND CONDITIONED FOR FAITHFUL PERFORMANCE OF THE OFFICER'S OR AGENT'S DUTIES.
Form 990, Part VI, Sec B, Line 11b, Review of form 990 by governing body THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE ORGANIZATION'S CORPORATE TAX MANAGER. 2. A SECOND REVIEW IS PERFORMED BY AN EXTERNAL CPA FIRM WITH EXPERTISE IN TAX-EXEMPT RETURN PREPARATION. 3. THE RETURN IS REVIEWED BY THE ORGANIZATION'S FINANCE AND LEGAL DEPARTMENTS AND PRESENTED TO THE FINANCE AND AUDIT COMMITTEE WHO IS RESPONSIBLE FOR APPROVING THE RETURN FOR FILING AND DISTRIBUTION TO THE BOARD OF DIRECTORS. 4. THE RETURN IS SENT TO THE MEMBERS OF THE BOARD OF DIRECTORS. 5. THE ORGANIZATION'S CHIEF FINANCIAL OFFICER REVIEWS COMMENTS OR QUESTIONS RECEIVED BY MEMBERS OF THE BOARD OF DIRECTORS, IF ANY, TO ADDRESS OR TO INCORPORATE, AS APPROPRIATE, INTO THE RETURN PRIOR TO FILING.
Form 990, Part VI, Sec B, Line 12c, Conflict of interest policy BOARD OF DIRECTORS 1. CONFLICTS OF INTEREST MUST BE DISCLOSED, BOTH VIA AN ANNUAL ELECTRONIC DISCLOSURE PROCESS AS WELL AS VERBALLY AT A BOARD MEETING PRIOR TO DISCUSSION OF ANY AGENDA ITEM WITH REGARD TO WHICH A BOARD MEMBER HAS A CONFLICT. 2. A PERSON HAVING A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT MAY MAKE A PRESENTATION AT A MEETING OF THE BOARD OF DIRECTORS OR COMMITTEE CONSIDERING THAT TRANSACTION OR ARRANGEMENT, BUT AFTER THAT PRESENTATION HE OR SHE SHALL LEAVE THE MEETING DURING DISCUSSION AND VOTING ON THAT PROPOSED TRANSACTION OR ARRANGEMENT. THE PERSON HAVING THE FINANCIAL INTEREST SHALL NOT BE COUNTED IN DETERMINING WHETHER A QUORUM IS PRESENT. 3. THE CHAIRPERSON OF THE BOARD OF DIRECTORS OR COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE (INCLUDING OUTSIDE ADVISORS) TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND TO ADVISE WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN THE ORGANIZATION'S BEST INTEREST. 4. THE BOARD OF DIRECTORS OR COMMITTEE SHALL EXERCISE DUE DILIGENCE TO DETERMINE WHETHER THE ORGANIZATION CAN, WITH REASONABLE EFFORTS, OBTAIN A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. 5. IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY ATTAINABLE UNDER CIRCUMSTANCES THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST, THE BOARD OF DIRECTORS OR COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS AND MEMBERS WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN THE ORGANIZATION'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO THE ORGANIZATION, AND SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT IN CONFORMITY WITH SUCH DETERMINATION. 6. THE MINUTES OF THE MEETINGS OF THE BOARD OF DIRECTORS AND ALL OF THE ORGANIZATION'S COMMITTEES SHALL SET FORTH: A)THE NAMES OF THE PERSONS WHO DISCLOSED A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT INVOLVING THE ORGANIZATION OR ANY OF ITS SUBSIDIARIES AND THE NATURE OF THE FINANCIAL INTEREST; AND B)THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO SUCH TRANSACTION OR ARRANGEMENT, INCLUDING ANY DISCUSSION OF ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION WITH THAT MATTER. THE VOTES OF INDIVIDUAL MEMBERS NEED NOT BE RECORDED UNLESS OTHERWISE DIRECTED BY THE BOARD OF DIRECTORS OR COMMITTEE. 7. THERE IS AN ONGOING REQUIREMENT THAT MEMBERS OF THE BOARD OF DIRECTORS COMPLETE ANOTHER DISCLOSURE QUESTIONNAIRE AT ANY POINT DURING HIS/HER TENURE ON THE BOARD OF DIRECTORS WHEN A NEW POTENTIAL CONFLICT OF INTEREST ARISES. IF A MEMBER OF THE BOARD OF DIRECTORS COMPLETES A DISCLOSURE QUESTIONNAIRE AS A RESULT OF A NEW POTENTIAL CONFLICT OF INTEREST, THAT DISCLOSURE QUESTIONNAIRE IS SUBMITTED TO THE LEGAL, ORGANIZATIONAL INTEGRITY, INTERNAL AUDIT, AND HUMAN RESOURCES DEPARTMENTS FOR REVIEW. MANAGEMENT 1. UPON ACCEPTANCE OF AN EMPLOYMENT OFFER, EACH MEMBER OF MANAGEMENT COMPLETES A CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE. A COPY OF THE MEMBER OF MANAGEMENT'S DISCLOSURE QUESTIONNAIRE IS SENT TO THE ORGANIZATION'S LEGAL DEPARTMENT. A COPY OF THE MEMBER OF MANAGEMENT'S DISCLOSURE IS REVIEWED BY THE ORGANIZATION'S COI COORDINATOR AND ESCALATED TO THE COI COMMITTEE IF NECESSARY. 2. ANNUALLY, EACH MEMBER OF MANAGEMENT COMPLETES AN ANNUAL CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE ELECTRONICALLY. THE DISCLOSURE QUESTIONNAIRE IS REVIEWED THE LEGAL, ORGANIZATIONAL INTEGRITY, INTERNAL AUDIT, AND HUMAN RESOURCES DEPARTMENTS. 3. THERE IS AN ONGOING REQUIREMENT THAT MEMBERS OF MANAGEMENT COMPLETE ANOTHER DISCLOSURE QUESTIONNAIRE AT ANY POINT DURING HIS/HER EMPLOYMENT WHEN A NEW POTENTIAL CONFLICT OF INTEREST ARISES. IF A MEMBER OF MANAGEMENT COMPLETES A DISCLOSURE QUESTIONNAIRE AS A RESULT OF A NEW POTENTIAL CONFLICT OF INTEREST, THAT DISCLOSURE QUESTIONNAIRE IS SUBMITTED TO THE LEGAL, ORGANIZATIONAL INTEGRITY, INTERNAL AUDIT, AND HUMAN RESOURCES DEPARTMENTS. 4. THE LEGAL, ORGANIZATIONAL INTEGRITY, INTERNAL AUDIT, AND HUMAN RESOURCES DEPARTMENTS, IN CONSULTATION WITH EXECUTIVE MANAGEMENT, DETERMINE HOW ANY REPORTED CONFLICTS SHOULD BE MANAGED. MANAGEMENT OF A CONFLICT MAY TAKE A VARIETY OF DIFFERENT FORMS FROM IMPLEMENTATION OF A MANAGEMENT PLAN TO REQUIRING THAT THE MEMBER OF MANAGEMENT CEASE THE ACTIVITY CREATING THE CONFLICT OR, IN EXTREME CASES, LEAVE THE ORGANIZATION'S EMPLOYMENT. MANAGEMENT IS DETERMINED ON AN INDIVIDUAL BASIS BASED UPON THE FACTS AND CIRCUMSTANCES SURROUNDING THE DISCLOSURE. THE PURPOSE OF CONFLICT MANAGEMENT IS TO PROVIDE TRANSPARENCY WITHIN THE ORGANIZATION AND TO ENSURE THAT THE ORGANIZATION'S EMPLOYEES ARE ALWAYS ACTING IN THE BEST INTEREST OF THE ORGANIZATION.
Form 990, Part VI, Sec B, Line 15a, Process to establish compensation of top management official THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL, OTHER OFFICERS, AND KEY EMPLOYEES AT PRIORITY HEALTH. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS, HEALTH PLANS, AND MEDICAL GROUPS: * AMERICAN MEDICAL GROUP ASSOCIATION: 2012 MEDICAL GROUP COMPENSATION & FINANCIAL SURVEY * INTEGRATED HEALTHCARE STRATEGIES: 2012 HEALTH CARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2012 EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2012 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * MEDICAL GROUP MANAGEMENT ASSOCIATION: 2012 MANAGEMENT COMPENSATION SURVEY * SULLIVAN, COTTER AND ASSOCIATES: 2012 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * SULLIVAN, COTTER AND ASSOCIATES: 2012 PHYSICIAN COMPENSATION AND PRODUCTIVITY SURVEY REPORT * TOWERS WATSON: 2012/2013 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT * TOWERS WATSON: 2012/2013 TOP MANAGEMENT COMPENSATION REPORT * WARREN: 2012 COMPENSATION SURVEY COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATES CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III).
Form 990, Part VI, Sec B, Line 15b, Process to establish compensation of other employees SEE EXPLANATION PROVIDED FOR FORM 990, PART VI, LINE 15A.
Form 990, Part VI, Sec C, Line 19, Required documents available to the public THE ORGANIZATION'S ARTICLES OF INCORPORATION AND STATUTORY FINANCIAL STATEMENTS ARE ON FILE WITH THE STATE OF MICHIGAN AND AVAILABLE TO THE PUBLIC ON THE STATE'S WEBSITE. THE ORGANIZATION'S BYLAWS AND INTERNAL POLICIES ARE GENERALLY NOT MADE AVAILABLE TO THE PUBLIC. THE OVERALL SYSTEM CONSOLIDATED FINANCIAL STATEMENTS ARE PROVIDED AT WWW.SPECTRUMHEALTH.ORG IN THE SECTION TITLED "ABOUT US." FINANCIAL PERFORMANCE IS DISCUSSED AT AN ANNUAL PUBLIC MEETING HELD AND POSTED TO WWW.SPECTRUMHEALTH.ORG ANNUALLY (UNDER THE SECTION TITLED "ABOUT US").
FORM 990, PART VII, SECTION A, LINE 2, INDIVIDUALS COMPENSATED MORE THAN $100,000 THERE ARE NO INDIVIDUALS REPORTED DUE TO THE INTEGRATION WITH SPECTRUM HEALTH SYSTEM. REFER TO THE DISCLOSURE FOR FORM 990, PART V, LINE 2A FOR FURTHER DETAIL.
FORM 990, PART XII, LINE 2B, AUDITED FINANCIAL STATEMENTS THE ORGANIZATION'S FINANCIAL STATEMENTS ARE AUDITED ANNUALLY BY AN INDEPENDENT ACCOUNTING FIRM. THE ORGANIZATION ISSUED GAAP BASIS FINANCIAL STATEMENTS WHICH ARE PREPARED ON A CONSOLIDATED BASIS AND NOT ON A STAND ALONE BASIS. THE ORGANIZATION IS AUDITED ANNUALLY ON A STAND ALONE BASIS AND ISSUED FINANCIAL STATEMENTS ON A STAND ALONE BASIS WHICH ARE PREPARED IN ACCORDANCE WITH SAP (STATUTORY ACCOUNTING PRINCIPLES), AS REQUIRED BY REGULATORY AUTHORITIES. THE FIGURES IN THIS FORM 990 RECONCILE TO THE FINANCIAL STATEMENTS PREPARED UNDER STATUTORY ACCOUNTING PRINCIPLES AS SUBMITTED TO THE STATE OF MICHIGAN.
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2013

Additional Data


Software ID: 13000248
Software Version: 2013v3.1
SCHEDULE R
(Form 990)
Department of the Treasury
Internal Revenue Service
Related Organizations and Unrelated Partnerships
MediumBulletComplete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37.
MediumBulletAttach to Form 990. MediumBullet See separate instructions.
MediumBullet Information about Schedule R (Form 990) and its instructions is at www.irs.gov/form990.

OMB No. 1545-0047
2013
Open to Public Inspection
Name of the organization
PRIORITY HEALTH CHOICE INC
 
Employer identification number

32-0016523
Part I
Identification of Disregarded Entities Complete if the organization answered "Yes" on Form 990, Part IV, line 33.
(a)
Name, address, and EIN (if applicable) of disregarded entity


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Total income


 		(e)
End-of-year assets


 		(f)
Direct controlling
entity










Part II
Identification of Related Tax-Exempt Organizations Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.
(a)
Name, address, and EIN of related organization


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Exempt Code section


 		(e)
Public charity status
(if section 501(c)(3))

 		(f)
Direct controlling
entity

 		(g)
Section 512(b)(13) controlled entity?
Yes No
(1) SPECTRUM HEALTH SYSTEM

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
38-3382353 		MANAGEMENT MI 501(C)(3) Type III - FI NA
 
 
No
(2) PRIORITY HEALTH

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
38-2715520 		HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM
 
 
No
(3) TRINITY HEALTH PLANS

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
38-2663747 		HMO MGMT MI 501(C)(4) N/A PRIORITY HEALTH
 
 
No








For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50135Y
Schedule R (Form 990) 2013
Schedule R (Form 990) 2013
Page 2
Part III
Identification of Related Organizations Taxable as a Partnership Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.
(a)
Name, address, and EIN of
related organization



 		(b)
Primary activity




 		(c)
Legal
domicile
(state or foreign
country)


 		(d)
Direct controlling
entity



 		(e)
Predominant income(related, unrelated, excluded from tax under sections 512-514)

(f)
Share of total income




 		(g)
Share of end-of-year
assets



 		(h)
Disproprtionate allocations?




 		(i)
Code V-UBI
amount in box 20 of
Schedule K-1
(Form 1065)
 		(j)
General or
managing
partner?



 		(k)
Percentage
ownership
Yes No Yes No












Part IV
Identification of Related Organizations Taxable as a Corporation or Trust Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.
(a)
Name, address, and EIN of
related organization
 		(b)
Primary activity
 		(c)
Legal
domicile
(state or foreign
country)
 		(d)
Direct controlling
entity
 		(e)
Type of entity
(C corp, S corp,
or trust) 		(f)
Share of total income
 		(g)
Share of end-of-year
assets
 		(h)
Percentage
ownership
 		(i)
Section 512(b)(13) controlled entity?
Yes No
(1) PRIORITY HEALTH INSURANCE COMPANY

1231 EAST BELTLINE NE
GRAND RAPIDS,MI49525
20-1529553 		INSURANCE MI NA
  		C CORPORATION          












Schedule R (Form 990) 2013
Schedule R (Form 990) 2013
Page 3
Part V
Transactions With Related Organizations Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36.
Note. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule.
Yes
No
1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?
a Receipt of (i) interest (ii) annuities (iii) royalties or (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .
1a
 
No
b Gift, grant, or capital contribution to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1b
 
No
c Gift, grant, or capital contribution from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1c
 
No
d Loans or loan guarantees to or for related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1d
 
No
e Loans or loan guarantees by related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1e
 
No
f Dividends from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1f
 
No
g Sale of assets to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1g
 
No
h Purchase of assets from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1h
 
No
i Exchange of assets with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1i
 
No
j Lease of facilities, equipment, or other assets to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1j
 
No
k Lease of facilities, equipment, or other assets from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .
1k
 
No
l Performance of services or membership or fundraising solicitations for related organization(s) . . . . . . . . . . . . . . . . . . . .
1l
 
No
m Performance of services or membership or fundraising solicitations by related organization(s) . . . . . . . . . . . . . . . . . . . .
1m
Yes
 
n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) . . . . . . . . . . . . . . . . . . . . .
1n
Yes
 
o Sharing of paid employees with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1o
Yes
 
p Reimbursement paid to related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1p
Yes
 
q Reimbursement paid by related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1q
 
No
r Other transfer of cash or property to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1r
 
No
s Other transfer of cash or property from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1s
Yes
 
2
If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.
(a)
Name of related organization 		(b)
Transaction
type (a-s) 		(c)
Amount involved 		(d)
Method of determining amount involved
(1) PRIORITY HEALTH

 M 829,271 GAAP, CASH, OR FMV
(2) PRIORITY HEALTH

 S 640,000 GAAP, CASH, OR FMV




Schedule R (Form 990) 2013
Schedule R (Form 990) 2013
Page 4
Part VI
Unrelated Organizations Taxable as a Partnership Complete if the organization answered "Yes" on Form 990, Part IV, line 37.
Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.
(a)
Name, address, and EIN of entity 		(b)
Primary activity 		(c)
Legal domicile
(state or foreign
country) 		(d)
Predominant income (related, unrelated, excluded from tax under sections 512-514)

(e)
Are all partners
section
501(c)(3)
organizations? 		(f)
Share of total income




 		(g)
Share of
end-of-year
assets 		(h)
Disproprtionate allocations? 		(i)
Code V?UBI
amount in box 20
of Schedule K-1
(Form 1065) 		(j)
General or
managing
partner? 		(k)
Percentage
ownership
Yes No Yes No Yes No






























Schedule R (Form 990) 2013
Schedule R (Form 990) 2013
Page 5
Part VII
Supplemental Information
Provide additional information for responses to questions on Schedule R (see instructions).
Return Reference Explanation
PART II, COLUMN (G), SECTION 512(B)(13) CONTROLLED ENTITY? TAXPAYER IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM.
Schedule R (Form 990) 2013
Additional Data


Software ID: 13000248
Software Version: 2013v3.1