**CERTIFICATION OF ANNUAL**

**ACCOUNTING STATEMENT**

**(Carrier)**

This is to certify that I have reviewed this accounting

statement and to the best of my knowledge and belief:

1\. The statement was prepared in conformity with guidelines

issued by the Office of Personnel Management and fairly presents the
financial results of this reporting period in conformity with those
guidelines.

2\. The costs included in the statement are actual, allowable, allocable
and reasonable in accordance with the terms of the contract and with the
cost principles of the Federal Employees Health Benefits Acquisition
Regulation and the Federal Acquisition Regulation;

3\. Income, rebates, allowances, refunds and other credits

made or owed in accordance with the terms of the contract and applicable
cost principles have been included in the statement;

4\. If applicable, the letter of credit account was managed in
accordance with 5 CFR part 890, 48 CFR chapter 16, and OPM guidelines;

CARRIER
NAME\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

NAME OF CHIEF EXECUTIVE NAME OF CHIEF FINANCIAL

OFFICER (TYPE OF PRINT) OFFICER (TYPE OR PRINT)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

### SIGNATURE OF CHIEF SIGNATURE OF CHIEF FINANCIAL

### EXECUTIVE OFFICER OFFICER

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

### DATE SIGNED DATE SIGNED

**CERTIFICATION OF ANNUAL**

**ACCOUNTING STATEMENT**

**(Underwriter)**

This is to certify that I have reviewed this accounting

statement and to the best of my knowledge and belief:

1\. The statement was prepared in conformity with guidelines

issued by the Office of Personnel Management and fairly presents the
financial results of this reporting period in conformity with those
guidelines.

2\. The costs included in the statement are actual, allowable, allocable
and reasonable in accordance with the terms of the contract and with the
cost principles of the Federal Employees Health Benefits Acquisition
Regulation and the Federal Acquisition Regulation;

3\. Income, rebates, allowances, refunds and other credits

made or owed in accordance with the terms of the contract and applicable
cost principles have been included in the statement;

4\. If applicable, the letter of credit account was managed in
accordance with 5 CFR part 890, 48 CFR chapter 16, and

OPM guidelines;

CARRIER
NAME\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

NAME AND TITLE OF RESPONSIBLE CORPORATE OFFICIAL

(TYPE OF PRINT)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

SIGNATURE OF RESPONSIBLE CORPORATE OFFICAL

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DATE SIGNED

**ENCLOSURE B**

**FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM**

**ANNUAL REPORTING PACKAGE**

#### FOR THE

**EXPERIENCE RATED CARRIERS**

**2000**

**[2000 ANNUAL REPORTING PACKAGE]{.underline}**

**Section One** contains the guidelines for your **ANNUAL ACCOUNTING
STATEMENT** **REPORTING,** which is due by [March 31, 2001]{.underline}.
As in prior periods, the accounting reports and supporting schedules
must be on the accrual basis of accounting. The information in Enclosure
A must be used in the preparation of your financial reports and its
accuracy is essential. Please review this information as soon as
possible and contact Zaffar Shaffi on (202) 606-4189 if you feel it is
inaccurate.

**REPORTING REQUIREMENTS**

All 1999 financial reporting requirements are required for 2000. You
should ensure that [all]{.underline} required statements and supporting
schedules are included before submitting your completed 2000 annual
accounting statement. The last page of your reporting package 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 claim history for each contract year. This tape(s) must support the claims paid amount shown on Supplemental Schedule of Health Benefits Charges Paid, Part A before the reconciliation performed in Part B. These tapes must be maintained as a part of each carriers financial records. The Office of the Inspector General (OIG) will request this information as a part of their periodic audits.

**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.

**2000 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 on page I-3 of the Audit
Guide.

The Audit Guide can be obtained from the contact listed below or from
the internet at WWW.OPM.GOV/OIG. If your carrier activity consists of
claims expense less 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 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 expenses incurred during 2000 should be reported separately
from FEHBP operations. These expenses should be shown on the Summary
Statement, Supplemental Schedule of Administrative Expenses and the
Supplemental Schedule of Health Benefits Charges Paid.

Your financial reports should be mailed to:

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

**Financial Management Division**

**1900 E Street, N.W., Room 3H25**

**Attention: Samuel Arsers**

**Washington, D.C. 20415-0001**

**If you have any questions concerning your FINANCIAL** reporting,
please call Zaffar Shaffi of the Benefits Accounting Branch on (202)
606-4189.

**CONTENTS**

**INTRODUCTION**

**FINANCIAL REPORTING**

**. SUMMARY STATEMENT**

**. FEHBP BALANCE SHEET**

**. STATEMENT OF OPERATIONS**

**. STATEMENT OF CASH FLOWS**

**. NOTES TO FINANCIAL STATEMENTS**

**. SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**

**. SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES**

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

**. SUPPLEMENTAL SCHEDULE OF AUDIT FINDINGS**

**. SUPPLEMENTAL DATA**

**Carrier Cost Containment Expenses**

**Supplemental Schedule -- Other Expenses**

**. CHECKLIST OF DOCUMENTS TO BE SUBMITTED**

+------------+-----+-----+----+-----------+-------------+----------+
| **SUMMARY  |     |     |    |           |             |          |
| STATEMENT  |     |     |    |           |             |          |
| OF FEHBP   |     |     |    |           |             |          |
| OP         |     |     |    |           |             |          |
| ERATIONS** |     |     |    |           |             |          |
|            |     |     |    |           |             |          |
| **FOR THE  |     |     |    |           |             |          |
| YEAR ENDED |     |     |    |           |             |          |
| DECEMBER   |     |     |    |           |             |          |
| 31, 2000** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| **CARRIER  |     |     |    |           |             |          |
| NAME:      |     |     |    |           |             |          |
| CODE:**    |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| **[1.      |     |     |    | **TOTAL** | **HIGH      | **LOW    |
| PROGRAM    |     |     |    |           | OPTION**    | OPTION** |
| IN         |     |     |    |           |             |          |
| COME:]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| a\. Letter |     |     |    |           |             |          |
| of Credit  |     |     |    |           |             |          |
| Auth       |     |     |    |           |             |          |
| orizations |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           |             |          |
|            | 1\) |     |    |           |             |          |
|            | Se  |     |    |           |             |          |
|            | mim |     |    |           |             |          |
|            | ont |     |    |           |             |          |
|            | hly |     |    |           |             |          |
|            | Pr  |     |    |           |             |          |
|            | emi |     |    |           |             |          |
|            | ums |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           |             |          |
|            | 2\) |     |    |           |             |          |
|            | In  |     |    |           |             |          |
|            | ter |     |    |           |             |          |
|            | est |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| b\.        |     |     |    |           |             |          |
| Accrued    |     |     |    |           |             |          |
| Income     |     |     |    |           |             |          |
| 12/31/98   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           | ( )         | ( )      |
|            | 1\) |     |    |           |             |          |
|            | Se  |     |    |           |             |          |
|            | mim |     |    |           |             |          |
|            | ont |     |    |           |             |          |
|            | hly |     |    |           |             |          |
|            | Pr  |     |    |           |             |          |
|            | emi |     |    |           |             |          |
|            | ums |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    | ( )       | ( )         | ( )      |
|            | 2\) |     |    |           |             |          |
|            | In  |     |    |           |             |          |
|            | ter |     |    |           |             |          |
|            | est |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| c\.        |     |     |    |           |             |          |
| Accrued    |     |     |    |           |             |          |
| Income     |     |     |    |           |             |          |
| 12/31/99   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           |             |          |
|            | 1\) |     |    |           |             |          |
|            | Se  |     |    |           |             |          |
|            | mim |     |    |           |             |          |
|            | ont |     |    |           |             |          |
|            | hly |     |    |           |             |          |
|            | Pr  |     |    |           |             |          |
|            | emi |     |    |           |             |          |
|            | ums |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           |             |          |
|            | 2\) |     |    |           |             |          |
|            | In  |     |    |           |             |          |
|            | ter |     |    |           |             |          |
|            | est |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| d\. Total  |     |     |    |           | \$          | \$       |
| Program    |     |     |    |           |             |          |
| Income     |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| e\.        |     |     |    |           |             |          |
| Carrier    |     |     |    |           |             |          |
| Interest   |     |     |    |           |             |          |
| Income     |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| f\. Total  |     |     |    |           | \$          | \$       |
| Carrier    |     |     |    |           |             |          |
| Income     |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| **[2.      |     |     |    |           |             |          |
| HEALTH     |     |     |    |           |             |          |
| BENEFITS   |     |     |    |           |             |          |
| CHA        |     |     |    |           |             |          |
| RGES:]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| a\. Paid   |     |     |    | \$        | \$          | \$       |
+------------+-----+-----+----+-----------+-------------+----------+
| b\.        |     |     |    |           |             |          |
| Accrued    |     |     |    |           |             |          |
| but        |     |     |    |           |             |          |
| Unpaid:    |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           | ( )         | ( )      |
|            | 1\) |     |    |           |             |          |
|            | Beg |     |    |           |             |          |
|            | inn |     |    |           |             |          |
|            | ing |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
|            | \(  |     |    |           |             |          |
|            | 2\) |     |    |           |             |          |
|            | End |     |    |           |             |          |
|            | ing |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| c\. Total  |     |     |    | \$        | \$          | \$       |
+------------+-----+-----+----+-----------+-------------+----------+
| **[3.ADMI  |     |     |    |           |             |          |
| NISTRATIVE |     |     |    |           |             |          |
| EXP        |     |     |    |           |             |          |
| ENSES]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| a\. Paid   |     |     |    | \$        | \$          | \$       |
+------------+-----+-----+----+-----------+-------------+----------+
| b\.        |     |     |    |           |             |          |
| Accrued    |     |     |    |           |             |          |
| but Unpaid |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| \(1\)      |     |     |    |           | ( )         | ( )      |
| Beginning  |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| \(2\)      |     |     |    |           |             |          |
| Ending     |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| c\. Total  |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| **[4.OTHER |     |     |    |           |             |          |
| EXPENSES   |     |     |    |           |             |          |
| AND        |     |     |    |           |             |          |
| RETEN      |     |     |    |           |             |          |
| TIONS]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| a\. State  |     |     |    |           |             |          |
| Statutory  |     |     |    |           |             |          |
| Reserve    |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| b\.        |     |     |    |           |             |          |
| R          |     |     |    |           |             |          |
| einsurance |     |     |    |           |             |          |
| Expenses   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| c\.        |     |     |    |           |             |          |
| Service    |     |     |    |           |             |          |
| Charge     |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| d\. Other  |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| e\. Total  |     |     |    | \$        | \$          | \$       |
+------------+-----+-----+----+-----------+-------------+----------+
| **[5.      |     |     |    |           |             |          |
| CHANGES TO |     |     |    |           |             |          |
| SPECIAL    |     |     |    |           |             |          |
| RES        |     |     |    |           |             |          |
| ERVE:]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| a\.        |     |     |    |           | \$          | \$       |
| Special    |     |     |    |           |             |          |
| Reserve -  |     |     |    |           |             |          |
| 12/31/98   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| b\. Gain   |     |     |    |           |             |          |
| (Loss) on  |     |     |    |           |             |          |
| Operations |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| c\. Prior  |     |     |    |           |             |          |
| Period     |     |     |    |           |             |          |
| A          |     |     |    |           |             |          |
| djustments |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| d\.        |     |     |    |           |             |          |
| C          |     |     |    |           |             |          |
| ontingency |     |     |    |           |             |          |
| Reserve    |     |     |    |           |             |          |
| Payments   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| e\. Return |     |     |    |           | ( )         | ( )      |
| of Excess  |     |     |    |           |             |          |
| Reserves   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| f\. Other  |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| g\.        |     |     |    |           |             | \$       |
| Special    |     |     |    |           |             |          |
| Reserve -  |     |     |    |           |             |          |
| 12/31/99   |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| **[6.      |     |     |    |           |             |          |
| STATUS OF  |     |     |    |           |             |          |
| RESE       |     |     |    |           |             |          |
| RVES:]{.un |     |     |    |           |             |          |
| derline}** |     |     |    |           |             |          |
+------------+-----+-----+----+-----------+-------------+----------+
| Excess     |     |     |    | \$\_\_    | \$\_\_\_    | \$\_\_\_ |
| -(Deficit) |     |     |    | \_\_\_\_\ | \_\_\_\_\_\ | \_\_\_\_ |
|            |     |     |    | _\_\_\_\_ | _\_\_\_\_\_ | \_\_\_\_ |
+------------+-----+-----+----+-----------+-------------+----------+

Instructions for Preparing:

**[SUMMARY STATEMENT OF FEHBP FINANCIAL OPERATIONS]{.underline}**

**Round all amounts to the nearest whole dollar, and assure that they
add to the totals. If your plan has an underwriter, please provide
separate summary statements for the carrier and the underwriter.**

Enclosure A of the covering letter shows the Letter of Credit (LOC)
authorizations and reductions recorded by OPM for your plan during 2000.
This information [must]{.underline} be used to prepare your report.
Please compare this information and your records and notify Zaffar
Shaffi of the Benefits Accounting Branch on (202) 606-4189 of any
differences.

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

a.  **[Program Income (LOC) Authorizations):]{.underline}**

```{=html}
<!-- -->
```
(1) **[Semimonthly premiums:]{.underline}** Show the total 2000
    semimonthly premium authorizations to your LOC account as stated on
    Enclosure A.

(2) **[Interest:]{.underline}** Show the 2000 interest credited to your

> LOC account as stated on Enclosure A.

b.  **[Accrued Program Income 12/31/99:]{.underline}**

```{=html}
<!-- -->
```
(1) **[Semimonthly Premiums:]{.underline}** Show the accrued
    subscription income as of December 31, 1999 as stated on Enclosure
    A.

(2) **[Interest:]{.underline}** Show the accrued interest in your LOC
    account as of December 31, 1999 as stated on Enclosure A.

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

```{=html}
<!-- -->
```
(1) **[Semimonthly premiums:]{.underline}** Show the accrued
    subscription income not transferred to your LOC account as stated on
    Enclosure A.

(2) **[Interest:]{.underline}** Show the accrued interest not
    transferred to your LOC account as of December 31, 2000.

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

e.  **[Carrier Interest Income]{.underline}**: Show on line 1e the
    amount of interest earned with FEHBP funds held other than the (LOC)
    account for the current period. Attach a detailed schedule showing
    the development of interest earned. [Do not]{.underline} include
    interest earned on the Letter of Credit (LOC)account.

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

Instructions for Preparing:

**[SUMMARY STATEMENT continued:]{.underline}**

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

a.  **[Paid]{.underline}:** This amoount 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 charges accrual reported on your December 31, 1999
    report. These amounts should be the beginning accrual for the
    current reporting period shown on line 2b (1).

(2) **[Ending]{.underline}**: Show on line 2b(2) the health benefits
    charges incurred but unpaid as of December 31, 2000.

```{=html}
<!-- -->
```
c.  **[Total]{.underline}**: The sum of lines 2a, 2b(1) and 2b(2).

```{=html}
<!-- -->
```
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.

```{=html}
<!-- -->
```
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 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, 1999.

```{=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.

```{=html}
<!-- -->
```
4.  **[OTHER EXPENSES AND RETENTIONS]{.underline}**:

```{=html}
<!-- -->
```
a.  **[State Stutory 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.

Instructions for Preparing:

**[SUMMARY STATEMENT continured:]{.underline}**

b.  [Reinsurance Expenses]{.underline} Report the amount of reinsurance
    expenses, if applicable, incurred in contract year 2000. 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 2000 contract.

d.  [Other expenses not listed above]{.underline} If this item totals to
    a material amount, the composition of this charge must be explained
    in a footnote.

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

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

```{=html}
<!-- -->
```
a.  [Special Reserve -- Beginning]{.underline} Show on line 5a the
    amount of the prior year ending Special Reserve balance (line 3,
    Enclosure A).

b.  [Gain (Loss) on Operations]{.underline} Show the 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 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. The total shown on the consolidated schedule, should
    agree with line 5c, of the Summary Statement. 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 Payments]{.underline} Show on line 5d the
    amount transferred from the contingency reserve to the
    Letter-of-Credit (LOC) during 2000 as show on Enclosure A.

e.  [Return of Excess Reserves]{.underline} Show on line 5e the amount
    of excess reserves withdrawn from your LO account and transferred to
    the contingency reserve during 2000 as shown on Enclosure A.

f.  [Other]{.underline} Show on line 5f any transfers or other additions
    or subtractions to the special reserve during 2000.

g.  [Special Reserve -- Ending]{.underline} Show the total of lines 5a,
    b, c, d, e f.

```{=html}
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```
6.  **[STATUS OF RESERVES:]{.underline}** Show on this line the excess
    or (deficiency) of your total reserves as of December 31, 1999.

> **All reports and schedules must be supported by your plans\'
> accounting and statistical records.**

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

**FEHBP BALANCE SHEET**

**DECEMBER 31, 2000 AND 1999**

**[2000]{.underline} [1999]{.underline}**

**ASSETS**

**Cash and Cash Equivalents**

**Balance in Letter of Credit (LOC) Account**

**Interest Income Receivable**

**Program Income Receivable**

**Prepaid Expenses**

**Other Expenses**

**TOTAL ASSETS \_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_**

##### LIABILITIES 

**Health Benefits Accrued but Unpaid**

**Accrued Administrative Expenses and Retentions**

**Other Accrued Liabilities**

**Special Reserve**

**TOTAL LIABILITIES WITH SPECIAL RESERVE \_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_**

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

**Instructions for Preparing:**

**[The FEHBP BALANCE SHEET]{.underline}**

# ASSETS

**[Cash and Cash Equivalents.]{.underline}** The ending cash and cash
equivalents balance as of December 31, 2000.

**[Balance in Letter of Credit Account.]{.underline}** The balance in
the LOC account as of December 31, 2000.

**[Interest Income Receivable.]{.underline}** All accrued interest
income from bank accounts or short-term investments maintained for
payment of FEHBP expenses as of December 31, 2000. [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 as shown on Enclosure A.

**[Prepaid Expenses.]{.underline}** The prepaid expenses as of December
31, 2000.

**[Other Assets.]{.underline}** All other assets not previously
classified. If

this line item aggregates to an amount that is material, its composition
must be disclosed in a footnote.

**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.]{.underline}** The total accrued
administrative expenses as of December 31, 2000.

**[Other Accrued Expense and Retentions.]{.underline}** Please List
separately all other liabilities not previously classified. If the total
of this item is material, its composition must be disclosed by a
footnote.

**[Special Reserve.]{.underline}** The ending Special Reserve from the
Statement of Operations.

**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.**

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

**STATEMENT OF OPERATIONS**

**FOR THE YEARS ENDED**

**DECEMBER 31, 2000 and 1999**

**2000 [1999]{.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:

**[STATEMENT OF OPERATIONS]{.underline}**

Enclosure A of the covering letter shows the letter of Credit (LOC)
authorizations and reductions recorded by OPM for your plan during 2000.
This information [must]{.underline} be used to prepare your report.
Please compare this information and your records and notify Zaffar
Shaffi of the Benefits Accounting Branch on (202) 606-4189)

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

**[Letter of Credit Authorizations:]{.underline}**

Show the total 2000 semimonthly premium authorizations as stated on
Enclosure A.

**[Net Investment Income:]{.underline}**

Show the 2000 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:**

**[Health Benefits Charges:]{.underline}** Show the amount paid for
health benefit charges during contract year 2000.

**[Administrative Expenses:]{.underline}** Your contract with OPM
provides for allowable charges to the Federal Employee Health Benefits
Program based on an administrative expense formula for contract year
2000. This formula is stated in Appendix B of your 2000 contract
amendment.

**[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}** Reports the amount of
reinsurance expenses, if applicable, incurred in contract year 2000.
Attach a schedule showing the development of your reinsurance expenses
and the basis for this charge.

Instructions for Preparing

[**STATEMENT OF OPERATIONS** continued]{.underline}

**[Service Charges]{.underline}** Show the 2000 allowable service charge
as stated on Appendix B of the 2000 contract amendment.

**[Other]{.underline}** Show all other expenses not previously listed.
It this item totals to an amount that is material, its composition must
be disclosed by a footnote.

**[Total Benefits and Expenses]{.underline}**

**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 2000 as shown on Enclosure A.

**[Contingency Reserve Payments]{.underline}** Show the contingency
reserve payment(s) authorized to the LOC account during 2000 as shown on
Enclosure A.

**[Other]{.underline}** Show all other additions or subtractions not
classified. If this item totals to an amount that is material, its
composition must be disclosed by a footnote.

**[Special Reserve at End of Year]{.underline}** The beginning Special
Reserve plus or minus adjustments made during contract year 2000.

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

**STATEMENT OF CASH FLOWS**

**FOR THE YEARS ENDED**

**DECEMBER 31, 2000 and 1999**

**CASH FLOWS FROM OPERATIONS ACTIVITIES [2000]{.underline}
[1999]{.underline}**

**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 Eexpenses**

**Other Assets**

**Increase (Decrease) in Liabilities: \$ \$**

**\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_**

**Health Benefits Charges Accrued but Unpaid**

**Accrued Administrative Expenses**

**Accrued Service Charge**

**Other Acrrued Liabilities**

**Total Adjustments**

**Net cash provided by operating activities
\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--**

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

**STATEMENT OF CASH FLOWS** (Continued from previous page)

**CASH FLOWS FROM INVESTMENT ACTIVITIES**

Proceeds from Sale Investments \$ \$

Payments for Purchase of Investments \$ \$

Net Cash Provided by Investing Activities \$ \$

\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_

**NET INCREASE IN CASH AND CASH EQUIVALENTS**

Cash and Cash Equivalents at the Beginning of Year \$ \$

Cash and Cash Equivalents at the End of Year \$ \$

\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_

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

Instructions for Preparing:

**STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000**

**AND 1999**

**CASH FLOWS FROM OPERATIONS ACTIVITES:**

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

**[Adjustments to Reconcile Net Gain (Loss) to Net Cash 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
>
> Other Assets

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

> Health Benefits Charges Accrued but Unpaid
>
> Accrued Administrative Expenses
>
> Accrued Service Charge
>
> Other Accrued Liabilities

**[TOTAL ADJUSTMENTS:]{.underline}**

**[Net Cash Provided by Operating Activities]{.underline}:**

> The total net gain or (loss) plus total adjustments

**CASH FLOWS FROM INVESTMENT ACTIVITES**

**[Proceeds from Sale of Investments]{.underline}** Present the sum of
the proceeds received from the redemption of financial assets such as
Treasury Bills, Repurchase Agreements, Certificates of Deposit, and
Money Market Securities.

Instructions for Preparing:

**STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000 AND
2000** continued:

**[Payments for Purchase of Investments:]{.underline}** Present the sum
of disbursements made to acquire Treasury Bills, Repurchase Agreements,
Certificates of Deposit, and Money Market Securities.

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

**NET INCREASE IN CASH AND CASH EQUIVALENTS**

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 1998 FEHBP Balance Sheet.

**[Cash and Cash Equivalents at end of Year:]{.underline}** Net increase
(decrease) in cash and cash equivalents plus or minus cash and cash
equivalents at the beginning of the year.

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

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED**

**DECEMBER 31, 1999 AND 1998**

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

**SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**

**FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999**

**ADMINISTRATIVE EXPENSES 2000 1999**

> Rent
>
> Salaries
>
> Employee Benefits
>
> Furniture and Equipment
>
> Maintenance
>
> Equipment Rental
>
> Printing, Stationery and Supplies
>
> Travel
>
> Postage
>
> Telephone & Telegraph
>
> Auditing Services
>
> Legal Services
>
> Consulting & Professional
>
> Payroll Taxes
>
> Utilities
>
> Insurance
>
> LOC Bank Charges
>
> Internal Cost Containment
>
> Other \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Total
>
> Contract Limitation \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Vendor Cost Containment \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> IPA Audit Fees \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

**TOTAL CHARGED TO CONTRACT
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

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

**DOD PROJECT**

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

**SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**

**FOR THE YEAR ENDING DECEMBER 31, 2000**

**ADMINISTRATIVE EXPENSES 2000 1999**

> Rent
>
> Salaries
>
> Employee Benefits
>
> Furniture and Equipment
>
> Maintenance
>
> Equipment Rental
>
> Printing, Stationery and Supplies
>
> Travel
>
> Postage
>
> Telephone & Telegraph
>
> Auditing Services
>
> Legal Services
>
> Consulting & Professional
>
> Payroll Taxes
>
> Utilities
>
> Insurance
>
> LOC Bank Charges
>
> Internal Cost Containment
>
> Other \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> Total

Instructions for Preparing:

**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 to Contract
> should be shown on the Statement of Operations.
>
> 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.
>
> Carrier\'s that are participating the Department of Defense
> Demonstrration Project must report the administrative expenses
> incurred during 2000 on a separate schedule.
>
> **[NOTE]{.underline}**
>
> A supplemental schedule is provided for a detailed break-down of the
> item \"other expenses\".
>
> A supplemental schedule is provided for a detailed break-down of the
> item \"Vendor Cost Containment Expenses\". The total vendor cost
> containment expenses charged should be carried forward to the
> Supplemental Schedule of Administrative Expenses.

**[This requirement is for Fee FEE FOR SERVICE PLANS
only.]{.underline}**

**OTHER EXPENSES**

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

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

VENDOR COST CONTAINMENT EXPENSES

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

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

[HIGH OPTION]{.underline} [STANDARD OPTION]{.underline}

ITEM

[PPO\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Pre-certification\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Second Surgical
Option\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Case
Management\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Prescription Benefit
Manager\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Other
(list)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Total
Expenses\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[Total Charged to
Contract\*\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

-   Total charges should be carried forward to Supplemental Schedule of
    Administrative

> Expenses.

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

**SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES**

**AS OF DECEMBER 31, 2000 High Option\_\_\_\_\_**

**Stan Option\_\_\_\_\_**

1.  **Reserves Held by Carrier**

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

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

c.  Total. (line la, plus line lb) \$\_\_\_\_\_\_

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

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a.  One Month\'s Average Claims Paid:

> Claims paid-last six months of 2000:
>
> July \$\_\_\_\_\_\_\_\_\_
>
> August \_\_\_\_\_\_\_\_\_
>
> September \_\_\_\_\_\_\_\_\_
>
> October \_\_\_\_\_\_\_\_\_
>
> November \_\_\_\_\_\_\_\_\_
>
> December \_\_\_\_\_\_\_\_\_
>
> Total \$\_\_\_\_\_\_\_\_\_ x 1/6 \$\_\_\_\_\_\_

b.  One Month\'s Average Administrative Expenses and Retentions

> (Statement of Operations x ½) \$\_\_\_\_\_\_

c.  Total One Month\'s Average Expenses. (Line 2a, plus line 2b)
    \$\_\_\_\_\_\_

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```
3.  **Target Level of Carrier-Hels Reserves.** (line 2c x 3.5)
    \$\_\_\_\_\_\_

4.  **Status of Reserves:**

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d.  Excess Reserve (If the amount on line lc is greater that the amount
    in line3,

> enter the difference here) \$\_\_\_\_\_\_

b.  Deficiency of Reserves (iIf the amount on line 3 is greater than
    line 1c

> enter the difference here) \$\_\_\_\_\_\_

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

Instructions for preparing:

**SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES**

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

be prepared for each option.

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

1.  **[Target Level of Carrier-Held Reserves]{.underline}** -- 305 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 (line 3c.
    plus line 4e. of the summary statement 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 1999. 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 plus Line 4e
divided by 12).

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

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

Instructions for preparing:

**SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES (continued):**

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

a.  Enter the amount by which line 1c exceeds line 3. This is the amount
    of \"excess reserves\" reported by your plan on the annual
    accounting statement that will be withdrawn from your
    Letter-of-Credit (LOC) account and transferred to the contigency
    reserve. If the annual accounting statemtnt is not filed by March
    31, 2000 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, payments
    may be made available to your LOC account based on a preliminary
    review of your 1999 annual accounting statement.

**Carrier\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Code\_\_\_\_\_\_\_\_**

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

**Stan Option\_\_\_\_\_\_\_**

**SUPPLEMENTAL SCHEDULE OF HEALTH BENEFIT CHARGES PAID**

**FOR THE YEAR ENDED DECEMBER 31, 2000**

**PART A** -- Monthly Claims Paid

+-------------+-------------+----------+----------------+-------------+
| **MONTH**   | **AMOUNT    | **YEAR   | **1999**       | **1998 -    |
|             | PAID**      | IN       |                | PRIOR**     |
|             |             | CURRED** |                |             |
|             | **DUTING    |          |                |             |
|             | 1999**      | **2000** |                |             |
+-------------+-------------+----------+----------------+-------------+

+-------------+-------------+-------------+-------------+-------------+
| January     | \$          | \$          | \$          | \$          |
|             |             |             |             |             |
| February    | \$          | \$          | \$          | \$          |
|             |             |             |             |             |
| March       |             |             |             |             |
|             |             |             |             |             |
| April       |             |             |             |             |
|             |             |             |             |             |
| May         |             |             |             |             |
|             |             |             |             |             |
| June        |             |             |             |             |
|             |             |             |             |             |
| July        |             |             |             |             |
|             |             |             |             |             |
| August      |             |             |             |             |
|             |             |             |             |             |
| September   |             |             |             |             |
|             |             |             |             |             |
| October     |             |             |             |             |
|             |             |             |             |             |
| November    |             |             |             |             |
|             |             |             |             |             |
| December    |             |             |             |             |
|             |             |             |             |             |
| Total       |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+

PART B -- Number of Claims Paid

  ----------------- ----------------- ----------------- -----------------
  Paid in 2000      YEAR INCURRED                       

  ----------------- ----------------- ----------------- -----------------

  ----------------- ----------------- ----------------- -----------------
                    2000              1999              1998-- PRIOR

  ----------------- ----------------- ----------------- -----------------

  ----------------- ----------------- ----------------- -----------------
  TOTAL                                                 

  ----------------- ----------------- ----------------- -----------------

**(Continued Next Page)**

**SUPPLEMENTAL SCHEDULE OF HEALTH BENEFIT CHARGES PAID FOR THE YEAR
ENDED DECEMBER 31, 2000** (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:

**[SUPPLEMENTAL SCHEDULE OF HEALTH BENEFIT CHARGES PAID]{.underline}**

**[Part A: Monthly Claims Paid]{.underline}**

> Report in the first column the amount of health benefit 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]{.underline}**

> Self explanatory. You may show the number of claim checks issued if
> you are unable to provide the number of claims paid. Please explain in
> detail your methodology for tabulating the number of claims paid.

**[Part C: Types of Claims Paid]{.underline}**

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

**[Part D: Reconciliation of Health Benefit Charges Paid]{.underline}**

> Self explanatory.

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

With the year-end balancing and reconcilation process, the Office of the
Inspector General (OIG) requires that each carrier prepare a computer
tape (s) with back-up of their paid claim history for contract year
2000. This tape (s) must support the claims paid figure on the annual
accounting statemtnt Schedule 1, Part A before the reconciliation
performed in Part D. Each carrier will maintain the computer tape (s) as
a part of their financial records. The Office of the Inspector General
will request these tapes as a part of their periodic audits.

**SUPPLEMENTAL SCHEDULE OF AUDIT FINDINGS**

**FOR THE YEAR ENDED DECEMBER 31, 2000**

**AUDIT NUMBER AND ASSOCIATED YEAR:**

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

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

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

> EXPERIENCE -- RATED CARRIERS
>
> **CHECKLIST OF DOCUMENTS TO BE SUBMITTED**
>
> **FINANCIAL REPORTING (due no later than March 31, 2001)**
>
> **SUMMARY STATEMENT**
>
> **FEHBP BALANCE SHEET**
>
> **STATEMENT OF OPERATIONS**
>
> **STATEMENT OF CASH FLOWS**
>
> **NOTES TO FINANCIAL STATEMENTS**
>
> **SUPPLEMENTAL SCHEDULE OF ADMINISTRATIVE EXPENSES**
>
> **SUPPLEMENTAL SCHEDULE OF STATUS OF RESERVES**
>
> **SUPPLEMENTAL SCHEDULE OF HEALTH BENEFITS CHARGES PAID**
>
> **SUPLEMENTAL SCHEDULE OF AUDIT FINDINGS**
>
> **SUPPORTING SCHEDULES:**
>
> Other Expenses
>
> Cost Containment Expenses (Fee-for-Service Plans only)

**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**