**ENCLOSURE B**

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**ANNUAL REPORTING PACKAGE**

**FOR EXPERIENCE-RATED CARRIERS**

**For the period January 1, 2001 - December 31, 2001**

**2001 ANNUAL REPORTING PACKAGE**

This section contains the guidelines for your **ANNUAL ACCOUNTING
STATEMENT REPORTING**, which is due no later than **March 29, 2002.** As
in prior periods, the accounting reports and supporting schedules must
be prepared using the accrual basis of accounting. The information
provided in Enclosure A must be used in the preparation of your
financial reports and its accuracy is essential. Please review this
information and contact the Benefits Accounting Branch if you feel it is
inaccurate.

**REPORTING REQUIREMENTS**

All the 2000 financial reporting requirements are required for 2001. You
should ensure that [all]{.underline} required statements and supporting
schedules are included before submitting your completed 2001 annual
accounting statement package. The last page of these instructions is a
checklist of required documents.

In addition, please remember that all administrative expenses and other
expenses and retentions shown on your report must be allowable under (1)
The Federal Employees Health Benefit Regulation, Part 890, Title 5, Code
of Federal Regulations; and (2) The Federal Acquisition Regulation,
Chapters 1 and 16 of Title 48, Code of Federal Regulations.

**MAINTENANCE OF HEALTH BENEFITS CLAIMS INFORMATION**

Each carrier must prepare computer tape(s) with back-up of the paid
claims history for each contract year. This tape(s) must support the
claims paid amount shown on your Supplemental Schedule of Health
Benefits Charges Paid, Part A before the reconciliation performed in
Part D. These tapes must be maintained as a part of each carrier\'s
financial records. The Office of the Inspector General (OIG) will
request this information as a part of their periodic audit.

**CONFIDENTIALITY**

It is OPM\'s policy to disclose the Summary Statement of FEHBP
Operations of participating carriers upon request, provided: (1) the
carrier\'s accounting statement is accepted by OPM for use in
administering the contract; and (2) the rate-negotiation process for the
contract year in which the accounting statements are due has been
completed for all participating carriers.

Consistent with Executive Order 12600, each carrier must designate, when
the financial information is submitted, whether any other information
submitted with the annual accounting statement is considered
confidential commercial information.

**2001 Annual Reporting Package,** continued

**COMPLIANCE WITH THE FEHBP AUDIT GUIDE**

If your carrier activity consists of claims expense greater than \$40
million and you have chosen either Option 3 or Option 4 of the Guide
with a December 31 accounting period, you must have your Independent
Public Accountant prepare the reports outlined in the \"FEHBP
Experience-Rated Carrier and Service Organization Audit Guide\". A
recent edition of the Audit Guide is available on
[http://www.opm.gov/carrier/carrier_letters/2001/2110-26.htm](http://www.opm.gov/carrier_letters/2001-2110-26.htm)
for your information and reference.

If your carrier activity consists of claims expense less than \$40
million and you have chosen either Option 3 or 4 of the Guide with a
December 31 accounting period, you must have your Independent Public
Accountant follow the instructions outlined at the top of Page I-4 of
the Audit Guide.

**DOD PROJECT**

If your Plan is participating in the Department of Defense Demonstration
Project, the financial activity pertaining this activity should be
reported separately from other FEHBP operations on the Summary
Statement, Supplemental Schedule of Administrative Expenses and the
Supplemental Schedule of Health Benefits Charges Paid. Beginning
balances for DOD reporting should be consistent with the prior year\'s
submission.

**DUE DATE**

In accordance with the Audit Guide, you are required to submit 4 copies
of the completed Fiscal Year Accounting Statement and all Supplementary
Schedules no later than March 29, 2002 to:

**U.S. Office of Personnel Management**

**Financial Management Division**

**Attention: Melanese Matthews**

**1900 E Street, NW, Room 3H25**

**Washington, D.C. 20415-001**

Please provide an electronic (MS Excel format) version of your Summary
Statement of FEHBP Financial Operations.

If you have any questions regarding the preparation of your accounting
statement or the Enclosure A for your plan, please contact Windy
Crawford at (202)606-4151.

Questions and requests for the Audit Guide may be faxed to the Office of
the Inspector General at (202)606-4823 or emailed to dlfletch@opm.gov.

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**ANNUAL ACCOUNTING STATEMENTS**

**FOR THE YEAR ENDING DECEMBER 31, 2001**

**TABLE OF CONTENTS**

A.  Financial statements and required supplementary schedules of the
    FEHBP as of and for the years ended December 31, 2001 and 2000 and
    independent auditors' report.

-   INDEPENDENT ACCOUNTANT\'S REPORT (If applicable)

-   SUMMARY STATEMENT OF FINANCIAL OPERATIONS

-   FEHBP BALANCE SHEET

-   STATEMENT OF OPERATIONS

-   STATEMENT OF CONSOLIDATED CASH FLOWS

-   NOTES TO FINANCIAL STATEMENTS

Required supplementary schedules include:

-   Supplemental Schedule of Administrative Expenses

-   Supplemental Schedule of Status of Reserves

-   Supplemental Schedule of Health Charges Paid

-   Supplemental Schedule of Monthly Cash Flows

-   Supplemental Schedule of Audit Findings

B.  Supplemental Data

-   Vendor Cost Containment Expenses

-   Other Expenses

C.  Checklist of documents to be submitted

**Instructions for Preparing 2001**

### SUMMARY STATEMENT OF FEHBP FINANCIAL OPERATIONS

Round all amounts to the nearest whole dollar and ensure they add to the
totals. Carriers participating in the Department of Defense (DOD)
Project should state this activity separately on the Summary Statement
and related schedules.

Enclosure A shows the Letter-of-Credit (LOC) authorizations and
reductions recorded by OPM for your plan during 2001. This information
[must]{.underline} be used to prepare your report. Please compare this
information with your records and notify Melanese Matthews at
(202)606-4498 of any differences.

1.  **[PROGRAM INCOME:]{.underline}**

```{=html}
<!-- -->
```
a.  **[Letter-of-Credit Authorizations:]{.underline}**

```{=html}
<!-- -->
```
1)  [Semi-monthly Premiums:]{.underline} Show the total 2001
    semi-monthly premium authorizations to your LOC account as stated on
    Enclosure A.

2)  [Interest:]{.underline} Show the 2001 interest credited to your LOC
    account as stated on Enclosure A.

```{=html}
<!-- -->
```
b.  **[Accrued Income 12/31/00:]{.underline}**

```{=html}
<!-- -->
```
1)  [Semi-monthly Premiums:]{.underline} Show the accrued premium income
    as of December 31, 2000 as stated on Enclosure A.

2)  [Interest:]{.underline} Show the accrued interest on your LOC
    account as of December 31, 2000 as stated on Enclosure A.

```{=html}
<!-- -->
```
c.  **[Accrued Income 12/31/01:]{.underline}**

```{=html}
<!-- -->
```
1)  [Semi-monthly Premiums:]{.underline} Show the accrued premium income
    as of December 31, 2001 as stated on Enclosure A.

2)  [Interest:]{.underline} Show the accrued interest on your LOC
    account as of December 31, 2001 as stated on Enclosure A.

```{=html}
<!-- -->
```
d.  **[Total Program Income:]{.underline}** The total of lines 1a, 1b,
    and 1c.

e.  **[Carrier Interest Income:]{.underline}** Your contract states that
    all funds in excess of those needed to properly discharge the
    obligations of the contract should be invested. Report on line 1e
    the amount of interest earned with FEHBP funds held other than in
    the LOC account during 2001. Attach a detailed schedule showing the
    development of interest earned on funds held by the Plan and/or
    Underwriter.

f.  **[Total Carrier Income:]{.underline}** Line 1d plus line 1e.

**Instructions for Preparing 2001**

**SUMMARY STATEMENT OF FEHBP FINANCIAL OPERATIONS,** continued

**2. [HEALTH BENEFITS CHARGES:]{.underline}**

a.  **[Paid:]{.underline}** This amount should agree with the \"TOTAL\"
    in Part D of the \"**Supplemental Schedule of Health Benefits
    Charges Paid\".**

b.  **[Accrued but Unpaid:]{.underline}**

```{=html}
<!-- -->
```
1)  [Beginning:]{.underline} Line 2 of Enclosure A shows the ending
    health benefits accrual reported on your December 31, 2000 annual
    accounting statement. This figure is to be used on Line 2b(1) of
    this year\'s SUMMARY STATEMENT. Attach a supplementary schedule
    showing the monthly liquidation of the previous year\'s accrual.

2)  [Ending:]{.underline} Show the charges incurred but unpaid as of
    December 31, 2001. Attach a schedule showing the development of the
    unreported health benefit charges. All assumptions, judgment factors
    and estimates should be supported and all sources of data
    identified.

> **c. [Total:]{.underline}** Line 2a minus line 2b(1) plus line 2b(2).

**3. [ADMINISTRATIVE EXPENSES:]{.underline}** If your plan has high and
standard options, show the basis and amounts used for prorating
administrative expenses between the two options. Note that development
costs of the Clearinghouse project, as reported on Enclosure A, are to
be included in your administrative expenses. In addition, Carriers can
choose to treat the cost of internally developed software in accordance
with the AICPA Statement of Position (SOP) 98-1, which requires that the
cost be capitalized and amortized over the useful life of the software.
If a carrier chooses, instead, to expense the cost of internally
developed software, the amount expensed must be reported as a separate
line item on the Supplemental Schedule of Other Administrative Expenses.

a.  **[Paid:]{.underline}** Should agree with the amount stated on the
    Statement of Cash Flows.

b.  **[Accrued but Unpaid:]{.underline}**

```{=html}
<!-- -->
```
1)  [Beginning:]{.underline} Show on Line 3b(1) the amount of the
    accrued administrative expenses as shown on your prior year\'s
    annual accounting statement.

2)  [Ending:]{.underline} Show on line 3b(2) the amount of accrued
    administrative expenses as of December 31, 2001.

```{=html}
<!-- -->
```
c.  **[Total:]{.underline}** Line 3a minus line 3b(1) plus line 3b(2).
    This should agree with the total amount shown on the Supplemental
    Schedule of Administrative Expenses.

**Instructions for Preparing 2001**

**SUMMARY STATEMENT OF FEHBP FINANCIAL OPERATIONS** continued:

**4. [OTHER EXPENSES AND RETENTIONS:]{.underline}**

a.  **[State Statutory Reserve:]{.underline}** Report the amount
    necessary to satisfy state requirements for mandatory statutory
    reserves if your contract provides for such a charge. Attach a
    supporting schedule showing in detail the calculation of the
    required reserve amount and citation to specific state statutes. If
    there is no requirement, enter zero.

b.  **[Reinsurance Expenses:]{.underline}** Report the amount of
    reinsurance expenses (if applicable) incurred in contract year 2001.
    Attach a supporting schedule showing the development of your
    reinsurance expenses and the basis for this charge.

c.  **[Service Charge:]{.underline}** Report the amount of service
    charge allowed under the provisions of your 2001 contract.

d.  **[Other Expenses not Listed Above:]{.underline}** The composition
    of this charge must be explained in a footnote or supplemental
    schedule.

e.  **[Total:]{.underline}** The sum of Lines 4a through 4d.

```{=html}
<!-- -->
```
5.  **[CHANGES TO SPECIAL RESERVE:]{.underline}**

```{=html}
<!-- -->
```
a.  **[Special Reserve, Beginning:]{.underline}** The amount of the
    prior year accounting statement ending Special Reserve balance. This
    must also be in agreement with the amount reported on your Enclosure
    A.

b.  **[Gain (Loss) on Operations:]{.underline}** This is calculated as
    follows: Total Carrier Income (line 1f), less Health Benefits
    Charges (line 2c), less Administrative Expenses (line 3c), less
    Other Expenses and Retentions (line 4e).

c.  **[Prior Period Adjustments:]{.underline}** Please provide separate
    schedules for adjustments made to the current contract year\'s
    report as a result of OPM audits and adjustments made from carrier
    financial records. A consolidated schedule combining these amounts
    should also be prepared. All OPM-related prior period adjustments
    should show the amount of adjustment by year and identify the OPM
    audit report number. Also reference the date of the adjustment and
    the audit finding.

d.  **[Contingency Reserve Transfers:]{.underline}** Show on line 5d the
    amount transferred from the contingency reserve to your LOC account
    during 2001 as shown on Enclosure A.

**Instructions for Preparing 2001**

**SUMMARY STATEMENT OF FEHBP FINANCIAL OPERATIONS** continued:

e.  **[Return of Excess Reserves:]{.underline}** Show on line 5e the
    amount of excess reserves withdrawn from your LOC account and
    transferred to the contingency reserve during 2001 as shown on
    Enclosure A.

f.  **[Other:]{.underline}** Show on line 5f any transfers or other
    additions or subtractions to the special reserve during 2001. The
    composition of this charge must be explained in a footnote or
    supplemental schedule.

g.  **[Special Reserve, Ending:]{.underline}** The total of lines 5a,
    5b, 5c, 5d, 5e, and 5f.

```{=html}
<!-- -->
```
6.  **[STATUS OF RESERVES:]{.underline}** Show on this line the excess
    or (deficiency) of your total reserves as of December 31, 2001.

***All reports and schedules must be supported by your***

***Plan\'s accounting and statistical records.***

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**FEHBP BALANCE SHEET**

**DECEMBER 31, 2001 AND 2000**

**[2001]{.underline}** **[2000]{.underline}**

**ASSETS**

Cash and Cash Equivalents \$ \$

####  

Balance in Letter of Credit (LOC) Account

Interest Income Receivable

Program Income Receivable

Prepaid Expenses

Other Assets(explain)

**TOTAL ASSETS** \$ \$

**LIABILITIES**

Health Benefits Accrued but Unpaid \$ \$

Accrued Administrative Expenses and Retentions

Other Accrued Liabilities (explain)

Special Reserve

**TOTAL LIABILITIES WITH SPECIAL RESERVE** \$ \$

***See accompanying notes to financial statements.***

**Instructions for Preparing 2001**

**FEHBP BALANCE SHEET**

If your plan has an underwriter, please provide a consolidated balance
sheet incorporating the financial activity of the underwriter,
organization and former underwriter(s), if applicable. Please provide
separate balance sheets for each entity if they are available.

In addition, if your plan has high and standard options, please provide
a separate balance sheet for each option.

**ASSETS**

**[Cash and Cash Equivalents.]{.underline}** The ending cash and cash
equivalents balance as shown on the Consolidated Statement of FEHBP Cash
Flows and other related schedules.

**[Balance in Letter of Credit Account.]{.underline}** The balance in
the LOC account as of December 31, 2001. This should agree with line 4e
of Enclosure A.

**[Interest Income Receivable.]{.underline}** All accrued interest
income from bank accounts or short-term investments maintained for
payment of FEHBP expenses as the end of the reporting period. [Do
not]{.underline} include accrued interest from the Letter of Credit
(LOC) account.

**[Program Income Receivable.]{.underline}** The ending accrued
semimonthly premiums and (LOC) account interest from line 1c of the
Summary Statement.

**[Prepaid Expenses.]{.underline}** The prepaid expenses as of December
31, 2001.

**[Other Assets.]{.underline}** Provide supplemental detailed
description of the assets.

**LIABILITIES**

**[Health Benefits Accrued but Unpaid.]{.underline}** The ending health
benefits charges accrued but unpaid from line 2b(2) of the Summary
Statement.

**[Accrued Administrative Expenses and Retentions.]{.underline}** The
total accrued administrative expenses and retentions as of the end of
the reporting period.

**[Other Accrued Liabilities.]{.underline}** Provide supplemental
detailed description of the liability.

**[Special Reserve.]{.underline}** The ending Special Reserve from line
5g of the Summary Statement.

**[Total Liabilities with Special Reserve.]{.underline}** Sum of
Liabilities and Special Reserve; should also agree with total
liabilities.

> **Note: The Balance Sheet should be prepared in accordance with the
> special purpose financial statements required by the U.S. Office of
> Personnel Management. This is a comprehensive basis of accounting
> other than generally accepted accounting principles.**

# FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**FEHBP STATEMENT OF OPERATIONS**

**FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000**

**[2001]{.underline}** **[2000]{.underline}**

**REVENUE**

Letter of Credit (LOC) Authorizations \$ \$

Net Investment Income

Total Revenue \$ \$

**BENEFITS AND EXPENSES**

Health Benefit Charges \$ \$

Administrative Expenses

State Statutory Reserve

Reinsurance Expenses

Service Charges

Other

Total Benefits and Expenses \$ \$

**GAIN (LOSS) FROM OPERATIONS \$ \$**

Special Reserve, Beginning of Year \$ \$

Gain (Loss) from Operations

Return of Excess Reserves

Contingency Reserve Payments

Other

Special Reserve, End of Year \$ \$

***See accompanying notes to financial statements***

**Instructions for Preparing 2001**

**FEHBP STATEMENT OF OPERATIONS**

Enclosure A of the covering letter shows the Letter of Credit (LOC)
authorizations and reductions recorded by OPM for your plan during
fiscal year 2001. This information [must]{.underline} be used to prepare
your report. Please compare this information to your records and notify
Melanese Matthews of the Benefits Accounting Branch on (202)606-4498 of
any differences. As noted previously, the amount reported as LOC
drawdowns must be the total amount requested from OPM and not the net
amount received pursuant to the provisions of the Debt Collection Act of
1996.

**[REVENUE:]{.underline}**

**[Letter of Credit Authorizations:]{.underline}** Show the total 2001
semi-monthly premium authorizations as stated on Enclosure A.

**[Net Investment Income:]{.underline}** Show the 2001 calendar year
interest credited to the LOC account as stated on Enclosure A plus
investment interest earned on funds held by the carrier, if applicable.

**[Total Revenue:]{.underline}** Letter of Credit Authorizations plus
Net Investment Income.

**[BENEFITS AND EXPENSES:]{.underline}**

**[Health Benefits Charges:]{.underline}** Show the amount paid for
health benefit charges during contract year 2001.

**[Administrative Expenses]{.underline}**: Your contract with OPM
provides for allowable charges to the Federal Employees Health Benefits
Program. The formula for allowable administrative expenses for the
contract year 2001 is stated in Appendix B of your 2001 contract.

Note that your premiums made available were offset each quarter for
development costs of the Clearinghouse Reconciliation Project. These
costs, specified in Enclosure A, should be considered administrative
expenses.

[**State Statutory Reserve**:]{.underline} Report the amount necessary
to satisfy State requirements for mandatory statutory reserves. Attach a
schedule showing in detail the calculation of the required reserve
amount and citation to specific state statues.

[**Reinsurance Expenses:**]{.underline} Report the amount of reinsurance
expenses, if applicable, incurred in contract year 2001. Attach a
schedule showing the development of your reinsurance expenses and the
basis for this charge.

**Instructions for Preparing 2001**

**FEHBP STATEMENT OF OPERATIONS,** continued

**[Service Charges:]{.underline}** Show the 2001 allowable service
charge as stated on Appendix B of the 2001 contract amendment.

**[Other:]{.underline}** Show all other expenses not previously listed
and disclose its nature with either a footnote or a supplemental
schedule.

**[Total Benefits and Expenses]{.underline}**: Sum of benefits and
expenses.

**GAIN (LOSS) FROM OPERATIONS:**

**[Special Reserve Beginning of Year:]{.underline}** Show the ending
special reserve from the prior year's annual accounting statement.

**[Gain (Loss) from Operations:]{.underline}** Total revenue minus total
benefits and expenses.

**[Return of Excess Reserves]{.underline}**: Show the amount of excess
reserves withdrawn from your LOC account and transferred to the
contingency reserve during contract year 2001 shown on Enclosure A.

**[Contingency Reserve Transfers:]{.underline}** Show the contingency
reserve transfer(s) authorized to the LOC account during contract year
2001 as shown on Enclosure A.

**[Other]{.underline}**: Show all other additions or subtractions not
classified. Include a supporting schedule to explain the source of the
adjustment(s).

**[Special Reserve at End of Year]{.underline}**: The beginning Special
Reserve plus or minus adjustments made during contract year 2001.

# FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**FEHBP STATEMENT OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000**

**[2001]{.underline} [2000]{.underline}**

**CASH FLOWS FROM OPERATING ACTIVITIES**

Net Gain (Loss) \$ \$

Adjustments to Reconcile Net Gain to Net Cash

Provided by (used in) Operating Activities:

(Increase) Decrease in Assets \$ \$

Letter of Credit Account

Program Income Receivable

Interest Income Receivable

Prepaid Expenses

Other Assets

Increase (Decrease) in Liabilities: \$ \$

Health Benefits Charges Accrued but Unpaid

Accrued Administrative Expenses

Accrued Service Charge

Other Accrued Liabilities

**TOTAL ADJUSTMENTS \$ \$**

Net cash provided by operating activities \$ \$

**(Continued Next Page)**

**[FEHBP STATEMENT OF CASH FLOWS]{.underline}** (Continued from previous
page)

**[2001]{.underline} [2000]{.underline}**

**CASH FLOWS FROM INVESTMENT ACTIVITIES**

Proceeds from Sale of Investments \$ \$

Purchase of Investments

Investment Income Received

Net Cash Provided by Investing Activities \$ \$

**NET INCREASE IN CASH AND CASH EQUIVALENTS**

Cash and Cash Equivalents, Beginning of Year \$ \$

Cash and Cash Equivalents, End of Year \$ \$

***See accompanying notes to financial statements.***

**Instructions for Preparing 2001**

**FEHBP STATEMENT OF CASH FLOWS**

**CASH FLOWS FROM OPERATING ACTIVITIES:**

**[Net Gain (Loss):]{.underline}** Show the net gain or (loss) from the
Statement of Operations.

**[Adjustments to Reconcile Net Gain (Loss) to Net Cash]{.underline}**

**[Provided by (used in) Operating Activities:]{.underline}**

Prior Period adjustments and other adjustments as shown on the Statement
of Operations

Contingency Reserve Payments

(Withdrawal of Excess Reserves)

**[(Increase) Decrease in Assets:]{.underline}**

Letter of Credit Account

Program Income Receivable

Interest Income Receivable

Prepaid Expenses

**[Increase (Decrease) in Liabilities:]{.underline}**

Health Benefits Charges Accrued but Unpaid

Accrued Administrative Expenses

Accrued Service Charge

Other Accrued Liabilities (provide explanation)

**[Total Adjustments:]{.underline}** The sum of Adjustments, (Increase)
Decrease in assets and Increase (Decrease) in Liabilities

**[Net Cash Provided by Operating Activities:]{.underline}** The total
net gain or (loss) plus total adjustments

**Instructions for Preparing 2001**

**FEHBP STATEMENT OF CASH FLOWS,** continued

**CASH FLOWS FROM INVESTMENT ACTIVITIES:**

**[Proceeds from Sale of Investments:]{.underline}** Present the sum of
proceeds received from the sale of FEHBP investments

**[Purchase of Investments:]{.underline}** Present the sum paid to
acquire FEHBP investments

**[Investment Income Received:]{.underline}** Non-LOC investment income.

[**Net Cash Provided by Investing Activities:**]{.underline} Proceeds
from the sale of investments plus non-LOC interest income minus payments
for purchase of investments.

**[NET INCREASE IN CASH AND CASH EQUIVALENTS:]{.underline}** Net Cash
Provided by Operating Activities plus or minus Net Cash Provided by
Investing Activities.

**[Cash and Cash Equivalents at Beginning of Year:]{.underline}** From
the 2000 FEHBP Balance Sheet.

**[Cash and Cash Equivalents at End of Year:]{.underline}** From the
2001 Balance Sheet

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000**

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**

**FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000**

**ADMINISTRATIVE EXPENSES [2001]{.underline} [2000]{.underline}**

Rent \$ \$

Salaries

Employee Benefits

Furniture and Equipment

Maintenance

Equipment Rental

Printing, Stationery and Supplies

Travel

Postage

Telephone & Telegraph

Private Wire System

Auditing Services

Legal Services

Consulting & Professional

Payroll Taxes

Utilities

Insurance

LOC Bank Charges

Facilities Cost of Capital

Clearinghouse Expense

Other Expenses (provide breakdown)

**TOTAL ACTUAL EXPENSES \$ \$**

2001 Contract Limitation \$ \$

Vendor Cost Containment Allowed per Contract

(see instructions; applies only to fee-for service carriers)

IPA Audit Fees

**TOTAL CHARGED TO CONTRACT \$ \$**

***See accompanying independent auditors' report.***

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**DOD PROJECT**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**SUPPLEMENTAL SCHEDULE OF DOD PROJECT ADMINISTRATIVE EXPENSES**

**FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000**

**ADMINISTRATIVE EXPENSES FOR DOD PROJECT [2001]{.underline}
[2000]{.underline}**

Rent \$ \$

Salaries

Employee Benefits

Furniture and Equipment

Maintenance

Equipment Rental

Printing, Stationery and Supplies

Travel

Postage

Telephone & Telegraph

Private Wire System

Auditing Services

Legal Services

Consulting & Professional

Payroll Taxes

Utilities

Insurance

LOC Bank Charges

Facilities Cost of Capital

Clearinghouse Expense

Other Expenses (provide breakdown)

**TOTAL ACTUAL DOD PROJECT EXPENSES \$ \$**

2001 Contract Limitation \$ \$

Vendor Cost Containment Allowed per Contract

(see instructions; applies to fee-for-service carriers only)

IPA Audit Fees

**TOTAL CHARGED TO CONTRACT FOR DOD PROJECT \$ \$**

***See accompanying independent auditors' report.***

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

SUPPLEMENTAL SCHEDULE OF OTHER ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2001

High Option \_\_\_\_\_\_\_\_\_\_\_\_

Standard \_\_\_\_\_\_\_\_\_\_\_\_

DOD Project \_\_\_\_\_\_\_\_\_\_\_\_

OTHER ADMINISTRATIVE EXPENSES

+-----------------+----------------+----------------+-----------------+
| Item            | Plan Total     | FEHBP          | Basis for       |
|                 |                |                |                 |
|                 | Expense        | Share          | Allocation      |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| TOTAL OTHER     |                |                |                 |
|                 |                |                |                 |
| EXPENSES\*      |                |                |                 |
+-----------------+----------------+----------------+-----------------+

\*Total should be brought forward to Supplemental Schedule of
Administrative Expenses.

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**Underwriter Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

# SUPPLEMENTAL SCHEDULE OF VENDOR COST CONTAINMENT EXPENSES

# FOR THE YEAR ENDED DECEMBER 31, 2001

+-----------------+----------------+----------------+-----------------+
| Item            | High           | Standard       | Total           |
|                 |                |                |                 |
|                 | Option         | Option         |                 |
+-----------------+----------------+----------------+-----------------+
| PPO             |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Pr              |                |                |                 |
| e-certification |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Second Surgical |                |                |                 |
| Opinion         |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Case Management |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Prescription    |                |                |                 |
| Benefit Manager |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| MHSA Vendor     |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Other (list)    |                |                |                 |
+-----------------+----------------+----------------+-----------------+
|                 |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Total Expenses  |                |                |                 |
+-----------------+----------------+----------------+-----------------+
| Total Charged   |                |                |                 |
| to              |                |                |                 |
|                 |                |                |                 |
| Contract\*      |                |                |                 |
+-----------------+----------------+----------------+-----------------+

\* Total Charged to Contract should be carried forward to the
Supplemental Schedule of Administrative Expenses.

**Instructions for Preparing 2001**

**FEHBP SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**

Show your Plan's total expenses, by object class. A separate schedule
should be submitted for each entity of your plan; i.e., Organization
and/or Underwriter, where applicable. The total charged should be shown
on the Statement of Operations and must not exceed the contract
limitation.

If your plan has two options, attach a supporting schedule showing the
basis and statistical data used for prorating administrative expenses
between options, e.g. number of claims paid, or other units of work
performed.

Carriers that are participating in the Department of Defense
Demonstration Project must report the administrative expenses incurred
for that project on a separate schedule. This should agree with
administrative expenses reported in the DOD column of your Summary
Statement.

**[NOTE:]{.underline}**

A detailed breakdown is required for \"Other Expenses.\"

A detailed breakdown is also required for the item \"Vendor Cost
Containment Expenses.\" PPO expenses should be shown as an
administrative expense, not an addition to benefit expenses. Also,
administrative expenses for vendor processing network drug and mental
health/substance abuse claims should be shown as separate line items.
Costs for processing non-network claims should be shown as a regular
administrative expense (subject to the administrative expense ceiling)
where feasible and material. Variations to these instructions should be
fully explained in footnotes to the statements.

**[This item only applies to FEE FOR SERVICE PLANS that have a provision
for this expense in their contract.]{.underline}**

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

# SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES

# AS OF DECEMBER 31, 2001

High Option \_\_\_\_\_\_\_\_\_\_\_\_

Standard \_\_\_\_\_\_\_\_\_\_\_\_

DOD Project \_\_\_\_\_\_\_\_\_\_\_\_

1.  **Reserves Held by Carrier:**

    a.  Ending Special Reserve Balance \$\_\_\_\_\_\_\_\_\_\_\_

    b.  Ending Accrued but Unpaid Health Benefits Charges
        \$\_\_\_\_\_\_\_\_\_\_\_

    c.  Total *(Line la + Line lb)* \$\_\_\_\_\_\_\_\_\_\_\_

2.  **One Month\'s Average Expenses:**

    a.  One Month\'s Average Claims Paid:

> Claims paid-last six months of 2001:

1.  July

    August

    September

    October

    November

    December

    Total \$\_\_\_\_\_\_\_\_\_ x 1/6 \$\_\_\_\_\_\_\_\_\_\_\_

```{=html}
<!-- -->
```
b.  One Month\'s Average Administrative Expenses

and Retentions *(Summary Statement Line 3c + Line 4e x 1/12)*
\$\_\_\_\_\_\_\_\_\_\_\_

c.  Total One Month\'s Average Expenses *(Line 2a + Line 2b)*
    \$\_\_\_\_\_\_\_\_\_\_\_

```{=html}
<!-- -->
```
3.  **Target Level of Carrier-Held Reserves:** *(Line 2c x 3.5)*
    \$\_\_\_\_\_\_\_\_\_\_\_

4.  **Status of Reserves:**

    a.  Excess Reserves (*if the amount on Line 1c is greater than the*

> *amount on Line 3, enter the difference here.)*
> \$\_\_\_\_\_\_\_\_\_\_\_

b.  Deficiency of Reserves *(if the amount on Line 3 is greater*

> *than the amount on Line 1c, enter the difference here.)*
> \$\_\_\_\_\_\_\_\_\_\_\_

*See accompanying independent auditors\' report.*

**Instructions for Preparing 2001**

SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES

[NOTE:]{.underline} If your plan has more than one option, this schedule
must be prepared for each option.

[Definitions (per 5 CFR 890)]{.underline}

1.  [Target Level of Carrier-Held Reserves]{.underline} -- 3.5 times an
    amount equal to the sum of an average month\'s paid claims plus an
    average month\'s administrative expenses and retentions.

2.  [Average Month\'s Paid Claims]{.underline} -- 1/6 of the total
    claims paid during the last 6 months of the most recent contract
    period.

3.  [Average Month\'s Administrative Expenses and
    Retentions]{.underline} -- 1/12 of the total administrative expenses
    and retentions paid during the last twelve months ((Summary
    Statement lines 3c + 4e) times 1/12).

4.  [Excess Reserves]{.underline} -- The amount by which the total of
    all reserves held by a plan as of the end of a contract period
    exceed the plan\'s target level (line 1c -- line 3).

5.  [Deficiency of Reserves]{.underline} -- The amount by which the
    plan\'s target level of reserves exceeds the reserves held at the
    end of a contract period (line 3 -- line 1c).

Line 1a. [Ending Special Reserve Balance:]{.underline} The ending
Special Reserve as shown on line 5g of the Summary Statement.

Line 1b. [Ending Accrued but Unpaid Health Benefits
Charges:]{.underline} The ending accrued claims reserve as shown on line
2b(2) of the Summary Statement.

Line 1c. [Total:]{.underline} Line 1a plus line 1b.

Line 2a. [One month\'s average claims paid:]{.underline} One sixth of
the total claims paid in the last six months of 2001. The monthly totals
of claims paid must agree with the amounts shown on the Supplemental
Schedule of Health Benefits Charges Paid.

Line 2b. [One month\'s average administrative expenses and
retentions:]{.underline} The total administrative expenses and
retentions as shown on the Summary Statement (line 3c + Line 4e) divided
by 12.

Line 2c. [Total:]{.underline} Line 2a plus line 2b.

**Instructions for Preparing 2001**

SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES, continued

Line 3. [Target Level of Carrier-Held Reserves:]{.underline} Line 2c
multiplied by three and one-half).

Line 4. [Status of Reserves:]{.underline}

a.  Enter the amount by which line 1c exceeds line 3. This is the amount
    of \"excess reserves\" that will be withdrawn from your
    Letter-of-Credit (LOC) account and transferred to your Contingency
    Reserve. If your annual accounting statement is not filed by March
    29, 2002 OPM may estimate the amount of excess reserves and transfer
    this amount from the LOC account to the contingency reserve.

b.  Enter the amount by which line 3 exceeds line 1c. This is the amount
    of your \"deficiency of reserves\". If the balance in your
    contingency reserve is above the preferred minimum amount, transfers
    may be made available to your LOC account based on a preliminary
    review of your 2001 annual accounting statement.

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

# SUPPLEMENTAL SCHEDULE OF HEALTH BENEFIT CHARGES PAID

**FOR THE YEAR ENDED DECEMBER 31, 2001**

**High Option \_\_\_\_\_\_\_ Standard Option** \_\_\_\_\_\_\_ **DOD**
\_\_\_\_\_\_\_

**PART A - Monthly Claims Paid**

+-----------------+--------+-----------+---------------+-------------+
|                 |        | ###  YEAR |               |             |
|                 |        |  INCURRED |               |             |
+-----------------+--------+-----------+---------------+-------------+
| ### MONTH       | **AM   | **0       | **01/01/00**  | **1999**    |
|                 | OUNT** | 1/01/01** |               |             |
|                 |        |           | **12/31/00**  | **& PRIOR** |
|                 | **     | **1       |               |             |
|                 | PAID** | 2/31/01** |               |             |
+-----------------+--------+-----------+---------------+-------------+
| October         | \$     | \$        | \$            | \$          |
|                 |        |           |               |             |
| November        |        |           |               |             |
|                 |        |           |               |             |
| December        |        |           |               |             |
|                 |        |           |               |             |
| January         |        |           |               |             |
|                 |        |           |               |             |
| February        |        |           |               |             |
|                 |        |           |               |             |
| March           |        |           |               |             |
|                 |        |           |               |             |
| April           |        |           |               |             |
|                 |        |           |               |             |
| May             |        |           |               |             |
|                 |        |           |               |             |
| June            |        |           |               |             |
|                 |        |           |               |             |
| July            |        |           |               |             |
|                 |        |           |               |             |
| August          |        |           |               |             |
|                 |        |           |               |             |
| September       |        |           |               |             |
|                 |        |           |               |             |
| Total           |        |           |               |             |
+-----------------+--------+-----------+---------------+-------------+

PART B - Number of Claims Paid

  ----------------- ----------------- ----------------- -----------------
                    **CALENDAR YEAR                     
                    INCURRED**                          

                    2001              **2000**          **1999 & PRIOR**

  TOTAL \#          \#                \#                \#
  ----------------- ----------------- ----------------- -----------------

**(Continued Next Page)**

**SUPPLEMENTAL SCHEDULE OF HEALTH BENEFIT CHARGES PAID**

**FOR THE YEAR ENDED DECEMBER 31, 2001** (Continued from previous page)

**PART C - Types of Claim Paid**

  -------------- --------------------- ---------------- -------------- --------------
  **TOTAL**      **Hospitalization**   **Physicians**   **Drugs**      **Other**

  \$             \$                    \$               \$             \$

  \#             \#                    \#               \#             \#
  -------------- --------------------- ---------------- -------------- --------------

**PART D - Reconciliation of Health Benefit Charges Paid**

Total Claims Paid from Part A *(above)* \$

Less: Reinsurance Recovery \$

Other Adjustments *(explain)* \$

TOTAL (Summary Statement) \$

***See accompanying independent auditors' report.***

**Instructions for Preparing 2001**

**FEHBP SUPPLEMENTAL SCHEDULE OF HEALTH BENEFITS CHARGES PAID**

**Part A: Monthly Claims Paid**

Report in the first column the amount of health benefits charges paid in
each month. In the second, third and fourth columns, show a breakdown of
the amount reported in the first column by the year incurred.

**Part B: Number of Claims Paid**

Self-explanatory.

**Part C: Types of Claims Paid**

If possible, separate claims paid into hospitalization, physicians,
drugs, and other claims.

**Part D: Reconciliation of Health Benefit Charges Paid**

Self-explanatory**.**

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

Carrier
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_

+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| SUPP |      |      |      |      |      |      |      |        |
| LEME |      |      |      |      |      |      |      |        |
| NTAL |      |      |      |      |      |      |      |        |
| SCHE |      |      |      |      |      |      |      |        |
| DULE |      |      |      |      |      |      |      |        |
| OF   |      |      |      |      |      |      |      |        |
| MON  |      |      |      |      |      |      |      |        |
| THLY |      |      |      |      |      |      |      |        |
| CASH |      |      |      |      |      |      |      |        |
| FLO  |      |      |      |      |      |      |      |        |
| WS** |      |      |      |      |      |      |      |        |
|      |      |      |      |      |      |      |      |        |
| *    |      |      |      |      |      |      |      |        |
| *FOR |      |      |      |      |      |      |      |        |
| THE  |      |      |      |      |      |      |      |        |
| YEAR |      |      |      |      |      |      |      |        |
| EN   |      |      |      |      |      |      |      |        |
| DING |      |      |      |      |      |      |      |        |
| DECE |      |      |      |      |      |      |      |        |
| MBER |      |      |      |      |      |      |      |        |
| 31,  |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
|      |      |      |      |      |      |      |      |        |
| SOU  |      |      |      |      |      |      |      |        |
| RCES |      |      |      |      |      |      |      |        |
| OF   |      |      |      |      |      |      |      |        |
| CASH |      |      |      |      |      |      |      |        |
| APPL |      |      |      |      |      |      |      |        |
| ICAT |      |      |      |      |      |      |      |        |
| IONS |      |      |      |      |      |      |      |        |
| OF   |      |      |      |      |      |      |      |        |
| CASH |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| *    | **(  | **(  | **(  | **(  | **(  | **(  | **(  | *      |
| *Mon | 1)** | 2)** | 3)** | 4)** | 5)** | 6)** | 7)** | *(8)** |
| th** |      |      |      |      |      |      |      |        |
|      | *    | **In | *    | **   | **   | *    | *    | **Cash |
|      | *LOC | tere | *Oth | Clai | Admi | *Oth | *Net | and    |
|      | Dra  | st** | er** | ms** | n.** | er** | Infl | Cash   |
|      | wdow |      |      |      |      |      | ow** | E      |
|      | ns** | **   | *    | **Pa | **E  | *    |      | quival |
|      |      | Inco | *(ex | id** | xpen | *(ex | *    | ents** |
|      |      | me** | plai |      | se** | plai | *(Ou |        |
|      |      |      | n)** |      |      | n)** | tflo | **Mon  |
|      |      |      |      |      |      |      | w)** | thly** |
+------+------+------+------+------+------+------+------+--------+
| *    |      |      |      |      |      |      |      |        |
| *Bal |      |      |      |      |      |      |      |        |
| ance |      |      |      |      |      |      |      |        |
| --   |      |      |      |      |      |      |      |        |
| 12   |      |      |      |      |      |      |      |        |
| /31/ |      |      |      |      |      |      |      |        |
| 00** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Jan. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Feb. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Mar. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Apr. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| *    |      |      |      |      |      |      |      |        |
| *May |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| June |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| July |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Aug. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Sep. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Oct. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Nov. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+
| **   |      |      |      |      |      |      |      |        |
| Dec. |      |      |      |      |      |      |      |        |
| 20   |      |      |      |      |      |      |      |        |
| 01** |      |      |      |      |      |      |      |        |
+------+------+------+------+------+------+------+------+--------+

**Instructions for Preparing 2001**

**FEHBP SUPPLEMENTAL SCHEDULE OF MONTHLY CASH FLOWS**

This schedule must be prepared on a monthly basis for the period January
1, 2001 through December 31, 2001.

[Cash Balance:]{.underline} The total of ending cash balance and total
value of investments held by carrier as shown on your 2000 annual
accounting statement, and as of the end of each month through December
31, 2001.

**[Sources of Cash (all by month received):]{.underline}**

[LOC Drawdowns:]{.underline} Withdrawals made from your Letter of Credit
(LOC) account as shown on line 4b. of Enclosure A.

[Interest Income:]{.underline} Interest earned on funds held during the
contract year, other than the LOC account.

[Other:]{.underline} Explain via footnote or attached sheet of paper,
all entries shown on this line.

**[Applications of Cash (all by month incurred):]{.underline}**

[Claims Paid:]{.underline} The total health benefits charges paid during
the period January 1, 2001, through December 31, 2001.

[Administrative Expenses Paid:]{.underline} The amount of cash paid for
allowable administrative expenses during 2001.

[Other:]{.underline} Explain, via footnote or attached sheet of paper,
all entries shown on this line.

[Net Inflow (Outflow):]{.underline} The net of total Sources of Cash
minus total Applications of Cash.

[Cash and Cash Equivalents Monthly Balance:]{.underline} Previous
month\'s balance of cash, cash equivalents, and investments plus the
month\'s net inflow (outflow).

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**SUPPLEMENTAL SCHEDULE OF AUDIT FINDINGS**

**FOR THE YEAR ENDED DECEMBER 31, 2001**

**AUDIT NUMBER, DOLLAR AMOUNT AND ASSOCIATED YEAR:**

#\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> #\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**TOTAL** \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

Additional Required Financial and Statistical Information:

a.  The detailed method for developing the estimate of the accrued but
    unpaid Health Benefits Charges.

b.  Statistical data used for allocating administrative expenses by line
    item.

c.  Statistical data used for prorating expenses between options
    (high/standard option plans only).

d.  Development of the investment income earned and credited to the
    FEHBP including an explanation of the allocation method used.

e.  Calculation of the State Statutory Reserve payment.

f.  Development of the reinsurance expenses factor.

ALL FINANCIAL REPORTS MUST BE SUPPORTED BY YOUR PLAN\'S ACCOUNTING
RECORDS

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**Carrier Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Code \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**CHECKLIST OF DOCUMENTS TO BE SUBMITTED**

**BY EXPERIENCE RATED CARRIERS**

**FOR THE 2001 ANNUAL ACCOUNTING STATEMENT REPORT**

> *(due no later than March 29, 2002)*
>
> Certification of Annual Accounting Statement - Carrier
>
> Certification of Annual Accounting Statement - Underwriter (if
> applicable)
>
> Independent Accountant\'s Report (if applicable)
>
> Summary Statement of Financial Operations
>
> FEHBP Balance Sheet
>
> Statement of Operations
>
> Statement of Cash Flows
>
> Notes to the Financial Statements
>
> Supplemental Schedule of Administrative Expenses
>
> Supplemental Schedule of \"Other\" Administrative Expenses
>
> Supplemental Schedule of Vendor Cost Containment Expenses (if
> applicable)
>
> Supplemental Schedule of Status of Reserves
>
> Supplemental Schedule of Health Charges Paid
>
> Supplemental Schedule of Monthly Cash Flows
>
> Supplemental Schedule of Audit Findings
>
> Additional Required Financial and Statistical Information