EXHIBIT 10.2

July 1, 1997

Mr. Joseph Singer, M.D.
c/o First Option Health Plan
2 Bridge Avenue
Red Bank, New Jersey  07701

Dear Joseph:

We are pleased to extend to you an offer of employment  with  Foundation  Health
Systems  International  ("FHS") in the exempt  position of Chief Medical Officer
for First Option Health Plan, with a monthly salary of $20,000.00 effective July
1, 1997. You are also eligible to receive a monthly auto allowance of $1,000.00.
You will receive a $28,000.00 sign on bonus.  You will report to Roger Birnbaum,
President/CEO, First Option Health Plan.

You will be eligible to participate in the FHS Management Bonus Plan. Under this
Plan you can earn a  percentage  of your base  salary as a bonus,  which will be
equivalent with peers in similar  positions.  The FHS Management Bonus Plan will
be subject to the discretion of the FHS Compensation and Stock Option Committee,
if  certain  goals  based  upon  FHS's,  First  Option  Health  Plan's  and your
individual  performance are achieved.  You must also be actively employed and on
FHS's payroll at the time any such bonus is to be paid.

By signing this offer letter all previous employment contracts with FOHP are now
null and void.

It is company  policy that FHS  associates  are  required to maintain all salary
related matters in a strictly confidential manner.

You will be eligible to receive four months of  severance  pay upon your leaving
the employ of the company as long as you are not terminated by the company for a
reason of "just  cause".  "Just  cause  includes,  without  limitation,  acts of
dishonesty,  insubordination or moral turpitude,  conviction or arraignment of a
felony,  habitual  drunkenness,  narcotic  drug  addiction,  or  other  material
misconduct of any kind.

You will be eligible for  consideration  to receive  and/or  participate  in the
fringe  benefits  set  forth  in  FHS's  applicable  Plan  Documents,  Associate
Handbooks and/or Policy Statements, subject to FHS's right to enhance, increase,
reduce, eliminate or otherwise modify at any time these or other fringe benefits
(including the bonus plan reference above). FHS benefits include:

         Associate 401(k) Savings Plan.

         Employee Stock Purchase Plan.

         Group medical coverage for you and your eligible  dependents at current
         monthly rates applicable to FHS's employees.

         Group dental  coverage for you and your eligible  dependents at current
         monthly rates applicable to FHS's employees.

         Short-term and long-term disability benefits.


<PAGE>


         Company paid holidays and paid time off plan.

         Education assistance program.

         Pre-tax spending accounts.

You will also  receive  reimbursement  for one CME  program per year which would
include 5 company paid days and reasonable  costs for travel,  meals and lodging
to attend this program.

We are jointly agreeing,  through this letter,  that your employment with FHS is
voluntary, on both our parts. While we both hope that our relationship will be a
continuing  one, we also agree that your employment is not for a fixed term, but
is subject to  termination  by you or by FHS at any time with or without  notice
and for reasons which either party believes sufficient in its discretion.

The foregoing  constitutes  all of our agreements and  understandings  regarding
your employment.  There are no other oral or written  agreements  regarding your
employment  and no one else is authorized to make other  agreements.  Nothing in
this  offer of  employment,  or in any oral or  written  policy  of FHS,  may be
construed  to  create  an  express  or  implied  contact  or to  impose  further
contractual obligations in connection with your employment.

Please  acknowledge  your acceptance of this employment  confirmation by signing
the duplicate  copy of this letter.  The attached  forms should be completed and
returned along with the signed duplicate letter to our Corporate Human Resources
Department  at your  earliest  convenience,  but,  in any  event,  prior to your
employment start date.

Joseph,  this is an exciting  time for FHS and we know you can make  significant
contributions to our success.  If you have any questions or wish to discuss this
confirmation, please feel free to contact either of us.

Sincerely,


FOHP                                                 FHS

/s/ ROGER BIRNBAUM                                   /s/ SHARON MAGUIRE
---------------------                                -------------------------
Roger Birnbaum                                       Sharon Maguire
President & CEO                                      Vice President of
                                                     Human Resources



Acknowledgment:



/s/ JOSEPH SINGER 
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Signature                                             Date