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                                EXHIBIT 10.1

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TEXT OF THIS EXHIBIT HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL 
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.  SUCH OMITTED 
TEXT HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

                                                                         071497

                       SUPPLEMENTAL COMPENSATION AGREEMENT

This Supplemental Compensation Agreement (the "Agreement") between United 
Wisconsin Services, Inc., a Wisconsin corporation (the "Company"), and Thomas 
R. Hefty ("Employee") is made this 22nd day of September, 1997.

                               P R E M I S E S:

    WHEREAS, Employee, during his employment with Company, has consistently 
demonstrated outstanding skills as a chief executive officer.

    WHEREAS, the Company has consulted with Hewitt Associates regarding, 
among other things, Employee's compensation and the comparison of Employee's 
compensation against a peer group with which the Company competes for 
executive talent.

    WHEREAS, the Company believes it is in its best interest to continue to 
retain the services of Employee.

    WHEREAS, the Company believes it is in the Company's best interests to 
provide an incentive arrangement for Employee whereby Employee is recognized 
and compensated for any increase in shareholder value created as a result of  
the Company's ownership of American Medical Security Holdings, Inc. ("AMS").

    WHEREAS, the Company desires to provide such compensation by providing 
Employee with phantom shares ("Phantom Shares"), the value of which is based 
on the value of Company common stock, no par value ("UWS Shares").

                                   AGREEMENT

    Now, therefore, the Company and Employee agree, for the consideration 
identified herein and in consideration of Employee's continued employment 
with the Company, as follows:

    1.   PHANTOM SHARE AWARD.

         (a)  AWARD OF PHANTOM SHARES.  Upon a Triggering Event (as defined 
in Section 1(b) hereof) Employee shall be awarded


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Phantom Shares, subject to the terms and conditions herein in the following 
amounts:

Transaction Value                        Phantom Shares Awarded
-----------------                        ----------------------

Less than $***********                        0

$***********-$***********      35,000 - .01($*********** - TRANSACTION VALUE)
                                        ------------------------------------
                                                       $28

More than $***********         35,000 + .02(TRANSACTION VALUE - $***********)(1)
                                        ---------------------------------------
                                                       $28

         (b)  TRIGGERING EVENTS.  Phantom Shares shall be awarded pursuant to 
Section 1(a) hereof on the occurrence of one or more of the following events 
("Triggering Events") prior to the termination of the Agreement pursuant to 
Section 7 hereof:

              (i)  the sale of some or all of any capital stock of AMS;

             (ii) the sale of some or all of the assets of AMS;

            (iii) an initial public offering ("IPO") of the stock of AMS;

             (iv) the merger of AMS and an unrelated party in which UWS 
                  receives cash or stock in a publicly traded corporation;

              (v)  a spinoff of some or all of the outstanding stock of AMS;

             (vi) a dividend of AMS stock to shareholders of the Company;

            (vii) Employee's attainment of age 55; or

           (viii) any other transaction which the Board determines to be 
                  similar to the transactions identified in (i) through (vii) 
                  above.

         (c)  TRANSACTION VALUE.  The value to the Company resulting from a 
Triggering Event (the "Transaction Value") shall be:

              (i)  in the event that cash or other property is received by 
                   the Company, the fair market value

-----------------------------
    (1) "*" Indicates text which has been omitted pursuant to a confidential
treatment request.


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                   thereof as determined by the Board of Directors
                   in good faith;

              (ii) in the event of an IPO, spinoff or other public 
                   distribution of AMS stock to Company shareholders, the value 
                   of AMS stock determined by multiplying the average closing 
                   price of AMS stock for the 30 days following such spinoff 
                   or distribution times the total number of shares of AMS 
                   stock outstanding;

             (iii) in the event of Employee's attainment of age 55 prior to 
                   any other Triggering Event, the value of AMS, as determined 
                   by the Board of Directors in good faith.

The Transaction Value shall be reduced by the fair market value (as 
determined by the Board of Directors in good faith) of any AMS liabilities 
transferred to or assumed by the Company in connection with the Triggering 
Event.  The Transaction Value shall be determined before any income taxes 
payable by the Company or its shareholders.

    2.   RIGHTS WITH RESPECT TO PHANTOM SHARES.  Each Phantom Share awarded 
shall entitle Employee to a cash payment equal to the value of one UWS Share 
plus any dividends which are declared with respect to a UWS Share from the 
date of the Triggering Event until the date Employee receives payment of the 
Phantom Share award.  Such dividends shall also accrue interest from and 
after their payment date at 60% of the prime rate as reported in THE WALL 
STREET JOURNAL and shall be held in the United Wisconsin Services, Inc. 
Deferred Compensation Trust.  All such dividends and interest shall be 
subject to the vesting schedule of Section 3 hereof and shall be distributed 
in accordance with Section 5 hereof.  Employee shall not be entitled to any 
voting rights with respect to the Phantom Shares.

    3.   VESTING.  If Employee's employment terminates prior to the date he 
attains age 55, the number of Phantom Shares  to which Employee is entitled 
(and the dividends and interest payable with respect to such Shares) shall be 
reduced by 7% for each full or partial year between Employee's termination 
date and the date he would have attained age 55.

    4.   TERMINATION PRIOR TO TRIGGERING EVENT.  If Employee is terminated 
because of death, Disability or following a Change in Control of the Company, 
Employee (or his beneficiary) shall be entitled, if a Triggering Event occurs 
in the two year period from the date of such termination, to receive the 
Phantom Shares, if any, which he would have received if he had remained an 
employee of the Company during such two year period.  For purposes of this 
Agreement, Disability means the complete inability, due to injury


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or illness, of Employee to perform with reasonable continuity any of his 
material and substantial duties as President and Chief Executive Officer.

    A "Change in Control" shall be deemed to occur on the earlier of (A) the 
acquisition by any entity, person or group, as that term is defined in Rule 
13d-3 under the Securities Exchange Act of 1934, other than Blue Cross & Blue 
Shield United of Wisconsin ("BCBSU") of more than 30% of the outstanding 
capital stock of the Company; (B) the commencement by any entity, person or 
group (other than the Company or BCBSU) of a tender offer or an exchange 
offer for more than 20% of the outstanding stock of the Company; (C) the 
effective time of (i) a merger or consolidation of the Company with one or 
more other corporations as a result of which the holders of the outstanding 
stock of the Company immediately prior to such merger or consolidation hold 
less than 50% of the voting stock of the surviving or resulting corporation 
or (ii) a transfer of substantially all of the property of the Company other 
than to an entity of which the Company owns at least 80% of the voting stock; 
or (D) the election to the Board of Directors of the Company, without the 
recommendation or approval of the incumbent Board of Directors of the 
Company, of directors constituting a majority of the number of directors of 
the Company then in office.

    5.   DISTRIBUTION OF PHANTOM SHARES, DIVIDENDS AND INTEREST.  The value 
of any Phantom Shares awarded to Employee pursuant to this Agreement, any 
dividends payable with respect to such Phantom Shares and any interest 
payable with respect to such dividends shall be paid to Employee (or his 
beneficiary in the event of his death) as soon as practicable after the date 
Employee ceases to be a Covered Employee under Section 162(m) of the Internal 
Revenue Code (or, if later, as soon as practicable after the date of the 
Triggering Event if the Triggering Event occurs after Employee's termination 
of employment and Employee or his beneficiary remains entitled to payments 
pursuant to Section 4 hereof). The value of Phantom Shares, dividends and 
interest shall be paid in cash.

    6.   FORFEITURE FOR CAUSE.    If Employee is terminated for Cause, all 
Phantom Shares granted to him pursuant to this Plan, dividends and interest 
(whether or not such Phantom Shares, dividends and interest are vested) shall 
be forfeited.  Cause shall mean (A) a criminal violation involving personal 
dishonesty or fraud; (B) breach of fiduciary duty involving personal profit; 
or (C) willful misconduct in the performance of his duties which materially 
injures the Company.

    7.   TERMINATION AND AMENDMENT.    This Agreement may be terminated by 
the Board in its sole discretion, after December 31, 1999 on one year's 
written notice to Employee, provided however, this Agreement may not be 
terminated either: (A) following a Triggering Event; or (B) less than two 
years after Employee's termination following a Change in Control (as defined 
in Section 4


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hereof) or his death or Disability.  This Agreement may also be terminated or 
amended in writing on the mutual consent of Employee and the Company.

    8.   MISCELLANEOUS.

         (a)  NO EMPLOYMENT CONTRACT.  Nothing contained herein should be 
interpreted as an employment contract or to confer upon Employee the right to 
be retained in the service of the Company or to limit the right of the 
Company to terminate Employee.

         (b)  ADJUSTMENT FOR CAPITAL CHANGES.    In the event of any change 
in the outstanding UWS Shares by reason of any stock dividend or split, 
recapitalization, merger, consolidation, spin-off, reorganization, 
combination or exchange of UWS Shares or any similar corporate change, or 
other increase or decrease in such UWS Shares effected without the payment or 
receipt of consideration by the Company, the Phantom Shares granted pursuant 
to Section 1(a) hereof shall be adjusted by the Company to prevent dilution 
or enlargement of the rights granted to Employee.

         (c)  NONTRANSFER AND NONASSIGNMENT.     Except as set forth in 
Section 8(d) herein, Employee may not transfer, assign or encumber his rights 
under this Agreement.

         (d)  BENEFICIARY DESIGNATION. Employee may designate any person to 
be the beneficiary of his rights under this Agreement in the event of his 
death. Such person or persons shall be designated in writing.  In the absence 
of such a designation Employee's beneficiary shall be his surviving spouse, 
if any, or if none, his estate.

         (e)  WITHHOLDING.   The Company may withhold from any payment or 
distribution made under this Plan a sufficient amount of cash  to cover any 
applicable withholding or employment taxes.

    Dated at Milwaukee, Wisconsin this 22nd day of September, 1997.

                                       ON BEHALF OF UNITED WISCONSIN 
                                       SERVICES, INC.


                                       By: /s/ James L. Forbes
                                           -------------------------------


                                       /s/ Thomas R. Hefty
                                       -----------------------------------
                                       Thomas R. Hefty


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