EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

                  This Agreement is made this 1st day of , by and between SIERRA
HEALTH SERVICES,  Inc., a Nevada Corporation,  of Las Vegas, Nevada (hereinafter
referred to as "Employer"), AND JONATHON W. BUNKER , (hereinafter referred to as
"Employee").

                                   WITNESSETH
                  WHEREAS,  Employer is a publicly traded company engaged in the
business of providing managed health care services through subsidiary companies;
                  WHEREAS,  Employee has expertise  and  experience in providing
                  Managed Health Care Services;  and, WHEREAS,  the Employee has
                  made and is expected to continue to make a major  contribution
                  to the
profitability, growth and financial strength of the Employer;
                  NOW,  THEREFORE,  in  consideration of the mutual promises and
agreements hereinafter set forth, Employer and Employee agree as follows:

                                    ARTICLE I
                          EMPLOYMENT/DUTIES AND POWERS
         1.  Employer  hereby  employs,  engages  and  hires  Employee  as  VICE
PRESIDENT,  HMO INSURANCE  OPERATIONS FOR SIERRA HEALTH  SERVICES;  PRESIDENT OF
HEALTH  PLAN OF NEVADA,  INC.;  PRESIDENT  OF SIERRA  HEALTH AND LIFE  INSURANCE
COMPANY, INC.; PRESIDENT OF SIERRA HEALTHCARE OPTIONS, INC., and Employee hereby
accepts and agrees to such hiring,  engagement  and  employment,  subject to the
general supervision and direction of Employer.
         2. Employee  shall perform such duties as are assigned by the President
of Employer or his/her  designee,  and shall at all times  faithfully and to the
best of his/her ability, perform all the duties that may be required of Employee
to the reasonable  satisfaction of Employer.  Employee shall exercise only those
powers for signing  contracts and conveyances in the ordinary course of business
as are expressly authorized by the Employer's President or the appropriate Board
of  Directors.  Employee  further  agrees to  participate  in and  assist in the
development of quality improvement programs offered by the Employer.

     ARTICLE II TERM OF EMPLOYMENT 1. The term of this Agreement  shall be for a
TWO (2) year period  starting MAY 20, 1996 and terminating MAY 19, 1998 subject,
however, to prior termination as hereinafter provided in Article VII.

     ARTICLE III  COMPENSATION  AND REVIEW 1.  Employer  shall pay  Employee and
Employee  shall  accept from  Employer as full payment for  Employee's  services
hereunder,  compensation  in the  amount  as set forth in  Attachment  A of this
Agreement,  payable at such times as are deemed appropriate by Employer, but not
less than  twice a month.  2. (a)  Employer  shall  reimburse  Employee  for all
necessary and reasonable business expenses incurred by Employee while performing
services pursuant to Employer's  direction.  (b) The Employee agrees to maintain
adequate  records of expenses,  in such detail as the  Employer  may  reasonably
request.  3. (a)  Employee  shall also be  eligible  for those  Employee  fringe
benefit  programs,  bonus plans, and stock option plans as are made available to
other  employees of the  corporation at the same  organizational  level,  and as
approved by the Board of Directors. (b) It is expressly understood that Employer
may, at any time and at its sole discretion,  amend any fringe benefit programs,
bonus programs,  or stock option  programs  without prior notice to the Employee
even though such an amendment  may decrease  the benefits  available  under said
programs. 4. Employee's performance shall be reviewed at least annually based on
established job duties,  goals and objectives and other reasonable  standards as
deemed necessary and appropriate by the Employer.

                                   ARTICLE IV
                                OTHER EMPLOYMENT
         Employee shall devote all of his time, attention, knowledge, and skills
solely to the business and interest of Employer,  unless otherwise authorized by
the Employer, and Employer shall be entitled to all of the income,  benefits, or
profits arising from or incident to all work, work  associations,  services,  or
advice of Employee,  unless  otherwise  authorized  in writing by the  Employer.
Employee  shall not,  during the term hereof,  be interested  in any manner,  as
partner,  officer,  director,  advisor, employee or in any other capacity in any
other business similar to Employer's business or any allied trade, or obtain any
interest  adverse to  Employer;  provided,  however,  that  Employee may provide
advice and consultation to other entities with the written approval of Employer,
and further provided,  however, that nothing herein contained shall be deemed to
prevent or limit the right of Employee to invest any of his/her surplus funds in
the  capital  stock  or  other  securities  of any  corporation  whose  stock or
securities  are publicly owned or are regularly  traded on any public  exchange,
nor shall anything herein contained be deemed to prevent Employee from investing
or limit  Employee's  right to  invest  his/her  surplus  funds in real  estate.
Employee  shall  complete a Conflict  of  Interest  form by  February 15 of each
calendar  year and  submit it to the  Employer  for  review.  All  conflicts  of
interest or any potential conflicts of interest which arise during the year must
be immediately reported to the Employer.  All conflict of interest concerns must
be resolved to the  reasonable  satisfaction  of the  Employer as a condition of
continuation of employment.
                                    ARTICLE V
                                BUSINESS SECRETS
         1. Employee shall not at any time or in any manner,  either directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation,
in any manner whatsoever, any proprietary or confidential information concerning
any  matter   affecting   or  relating  to  the  business  of  Employer  or  its
subsidiaries, including without limiting the generality of the foregoing, any of
their customers, the prices they obtain from providers or have obtained from the
sale of,  or at  which  they  sell or have  sold,  its  services,  or any  other
information  concerning  the  business of Employer  or its  subsidiaries,  their
manner of operation,  or their plans, if such a disclosure  would be detrimental
to the business interests of the Employer or its subsidiaries.
         2.  If this  Agreement  is  terminated  by  either  party  at any  time
hereafter,  then the  Employee  agrees to turn over to the  Employer all papers,
documents, working papers, correspondence, memos and any and all other documents
in  Employee's  possession  relating to or  concerning  any matter  affecting or
relating to the business of the Employer or its subsidiaries.
                                   ARTICLE VI
                            NONCOMPETITION AGREEMENT
         1. The Employee  acknowledges that in Employee's  employment hereunder,
Employee will have continual  contacts with the groups,  members,  and providers
who are covered by or associated  with the managed health care programs  offered
by the  Employer  or its  subsidiaries  in Nevada  and other  states.  In all of
Employee's activities, the Employee, through the nature of Employee's work, will
have access to and will acquire confidential information related to the business
and operations of the Employer and its subsidiaries, including, without limiting
the  generality  of the  foregoing,  member and group  lists,  and  confidential
information relating to processes,  plans, methods of doing business and special
needs of doctors,  hospitals,  members, groups, pharmacies, or other health care
providers  who  contract  with the  Employer or its  subsidiaries.  The Employee
acknowledges  that all such  information  is the property of the Employer or its
subsidiaries  solely and constitutes  confidential  information of such parties;
that the disclosure  thereof would cause substantial loss to the goodwill of the
Employer and its subsidiaries;  that disclosure thereof to the Employee is being
made only because of the position of trust and  confidence  which  Employee will
occupy and because of Employee's agreement to the restrictions herein contained;
that his  knowledge of these matters  would enable him, on  termination  of this
Agreement,  to compete with the Employer or its  subsidiaries in a manner likely
to cause the Employer and its subsidiaries  irreparable  harm, and disclosure of
such matters would, likewise, cause such harm; and that the restrictions imposed
upon the Employee herein would not prohibit the Employee in earning a living.
         2. It is  understood  and agreed by the Employee and the Employer  that
the essence of this Employment  Agreement is the mutual covenants of the parties
herein made that the present  and future  members and groups of the  Employer or
its  subsidiaries  will remain the Employer's or its  subsidiaries'  members and
groups during the term of this Agreement and in the event of its termination for
any reason by either party.  In  consideration  for the employment and continued
employment of the Employee by the Employer,  and also for the amount received by
the  Employee  as  compensation,   the  Employee  hereby  irrevocably  warrants,
covenants, and agrees as follows:
                  (a) during the term of Employee's employment and after leaving
the employment of the Employer for any reason, whether involuntary or voluntary,
the Employee will not take any action  whatsoever which may or might disturb any
existing  business  relationship  of the Employer or its  subsidiaries  with any
doctors, groups, members,  hospitals,  pharmacies or other health care providers
in Nevada who contract with the Employer or its subsidiaries;
                  (b) for a period of one (1) year after leaving the  employment
of the Employer,  Employee will not solicit  business from the members or groups
of the  Employer or its  subsidiaries  in Nevada,  or in any manner  disrupt any
business  relationship  the Employer or its subsidiaries has with any contracted
health care provider in Nevada with whom Employee came in contact as an employee
of the Employer.
                  (c) for a period of one (1) year after leaving the  employment
of the Employer,  Employee will not, either directly or indirectly, work for any
present or future  competitors of Employer  operating in the state of Nevada who
in any manner offer any managed health care  programs,  insurance  coverage,  or
administer health care claims for employers. Such competitors shall include, but
are not limited to, HMOs,  PPOs,  insurance  companies,  utilization  management
companies, or third party administrators.
         3. The one (1) year period  specified  in this  Article  will be tolled
during any period of breach of any of the terms of Article VII by the Employee.
         4. The  Employee  agrees  that in the  event of a breach of any term of
this Agreement,  and more  particularly,  in the event of a breach of any of the
terms and provisions of Article VII, the Employer shall be entitled to secure an
order in any suit brought for that purpose to enjoin the Employee from violating
any of the  provisions of the  Agreement  and that,  pending the hearing and the
decision on the application for such order,  the Employer shall be entitled to a
temporary  restraining  order without prejudice to any other remedy available to
the Employer,  all at the expense of the Employee should the Employer prevail in
such action. The Employee understands that the covenants of this Article are the
essence of this Employment Agreement,  and without which no Employment Agreement
with the Employee would be entered into by the Employer.
         5. The  provisions  of Article VII shall in no event be construed to be
an exclusive remedy and such remedy shall be held and construed to be cumulative
and not exclusive of any rights or remedies, whether in law or equity, otherwise
available  under the  terms of this  Agreement  or under the laws of the  United
States or the state of Nevada.
         6. The  covenants and  agreements  made by the Employee in this Article
VII shall be construed as an agreement independent of any other provision in the
Agreement  and the  existence  of any claim or cause of  action by the  Employee
against the Employer,  whether predicated on this Agreement or otherwise,  shall
not  constitute a defense to the  enforcement  by the  Employer,  by  injunctive
relief or otherwise,  of the provisions of Article VII. The invalidity of all or
any part of any  section  or  paragraph  of this  Article  VII shall not  render
invalid the remainder of this Article or any section hereof.
         7. No failure or  failures  on the part of the  Employer to enforce any
violation by the Employee of this Noncompetition  agreement,  shall constitute a
waiver  of the  Employer's  rights  thereafter  to  enforce  all  of the  terms,
covenants, provisions and agreements herein contained.
                                   ARTICLE VII
                            TERMINATION OF EMPLOYMENT
         1.  Termination  of  employment  by either  Employer or Employee  shall
follow  established  Sierra Health  Services  Policies and Procedures  including
appropriate notice, except as otherwise specifically set forth in this Article.
         2. The Employee may terminate this  Agreement and employment  hereunder
with  sixty  (60) days prior  written  notice.  If  Employee  shall  voluntarily
terminate the Agreement all eligible separation compensation and benefits as are
routinely  made  available  to  other  employees  of the  Employer  at the  same
organizational level, shall be paid or made available to the Employee.
         3. If Employer shall terminate this Agreement without cause,  except as
otherwise set forth in Paragraph 7 of this Article,  Employee  shall be entitled
to SIX (6) MONTH'S salary and all other separation  compensation and benefits as
are  routinely  made  available  to other  employees of the Employer at the same
organizational level.
         4.  Notwithstanding  any  other  provision  in  this  Agreement  to the
contrary,  Employee  hereby agrees that any separation  compensation  due to the
Employee,  other than accrued vacation, shall be paid out 25% after the first 90
days, 37 1/2% after the first 180 days,  and the remaining 37 1/2% at the end of
365 days.  Payment of such amounts shall fully release the Employer from any and
all  liability of the  Employer  relating to this  Agreement  or the  employment
hereunder.
         5. If Employer shall terminate the Agreement for Employee  conduct that
is materially detrimental to the Company's reputation,  business  relationships,
or for misappropriation of Employer's funds, Employee shall be eligible for four
(4) weeks'  salary and any other  separation  compensation  and  benefits as are
routinely  made  available  to  other  employees  of the  Employer  at the  same
organizational level, as full and final payment under this Agreement. Payment of
such amounts  shall fully release the Employer from any and all liability of the
Employer relating to this Agreement or the employment  hereunder.  6. (a) If the
Employee is unable to perform Employee's duties hereunder,  by reason of illness
or incapacity of any kind,  for a period of more than THREE (3) MONTHS in excess
of accrued sick leave,  this  Agreement,  and the  employment  hereunder  may be
terminated  by the  Employer at its absolute  discretion  with one week of prior
written notice.  (b) If the Employee's  illness or incapacity  shall have ended,
and the Employee shall have assumed  Employee's duties  hereunder,  prior to the
date  specified  in the notice of  termination,  Employee  shall be  entitled to
resume Employee's employment hereunder as if such notice had not been given.
                  (c) In the event of the death of the Employee  during the term
of this Agreement, the Employer shall be required to pay the Employee's personal
representative or the executor or administrator of the Employee's estate,  THREE
(3) MONTHS of the Employee's  total prior year's annual  compensation  including
both salary and bonus. Such payment shall be in addition to any other payment to
which the Employee or their estate is otherwise  eligible for under the terms of
this Agreement.
         7. In the event of a change in control  of the  Employer,  whereby  any
"person"  (as  such  term  is used  in  Sections  3(a)(9)  and  13(d)(3)  of the
Securities Exchange Act of 1934) is or becomes the beneficial owner, directly or
indirectly,  of securities of Employer  representing 51% or more of the combined
voting power of the then outstanding  securities of Employer, and such change in
control was not  approved by a majority of the Board of  Directors  of Employer,
Employee,  at his/her sole option, shall be entitled to terminate this Agreement
and will be  entitled  to TWELVE (12)  MONTH'S  salary and any other  separation
compensation  and benefits as are routinely made available to other employees of
the Employer at the same  organizational  level.  Payment of such amounts  shall
fully release the Employer  from any and all liability of the Employer  relating
to this Agreement or the employment hereunder.
         8. In the event of a change in control  of the  Employer,  whereby  any
"person"  (as  such  term  is used  in  Sections  3(a)(9)  and  13(d)(3)  of the
Securities Exchange Act of 1934) is or becomes the beneficial owner, directly or
indirectly,  of securities of Employer  representing 51% or more of the combined
voting power of the then outstanding  securities of Employer, and such change in
control  is  approved  by a  majority  of the Board of  Directors  of  Employer,
Employee,  at his/her sole option, shall be entitled to terminate this Agreement
and  will be  entitled  to one  (l)  year's  salary  and  any  other  separation
compensation  and benefits as are routinely made available to other employees of
the Employer at the same organizational  level if, within one (l) year after the
effective  date of the  change in control  the  Employee's  principal  duties or
compensation, including salary and bonus, is materially changed. It is expressly
understood  that a change in who the Employee  reports to shall not constitute a
material change in duties. In addition,  if the Employee's  employment hereunder
is  terminated  for  reasons  other than those set forth in  Paragraph 4 of this
Article  within one year after the  effective  date of a change in control which
was approved by a majority of the Employer's Board of Directors,  Employee shall
be entitled to TWELVE (12) MONTH'S salary and all other separation  compensation
and benefits as are routinely made available to other  employees of the Employer
at the same  organizational  level.  Payment of such amounts shall fully release
the  Employer  from  any and all  liability  of the  Employer  relating  to this
Agreement or the employment hereunder.
         9. Anything  contained  herein to the contrary  notwithstanding  in the
event that  Employer  shall  discontinue  operation of Employer  other than as a
result of a merger,  consolidation  or  acquisition,  then this Agreement  shall
terminate  as of the last day of the month in which  Employer  ceases  operation
with the same force and effect as if such last day of the month were  originally
set as the termination date hereof.

                                  ARTICLE VIII
                                EFFECT OF WAIVER
         The  waiver  by  either  party of a  breach  of any  provision  of this
agreement shall not operate or be construed as a waiver of any subsequent breach
thereof.

                                   ARTICLE IX
                         ACTUAL ATTORNEY'S FEES EXPENDED
         Employer and Employee  agree that all attorneys fees expended by either
party in any dispute,  arbitration or litigation  concerning this Agreement will
be paid by the losing party in that dispute, arbitration or litigation.

                                    ARTICLE X
                                     NOTICE
         Any and all notices referred to herein shall be sufficient if furnished
in  writing,  sent by  registered  mail  to the  representative  parties  at the
addresses subscribed below their signatures to this Agreement.

                                   ARTICLE XI
                                   ASSIGNMENT
         The  rights,  benefits  and  obligations  of the  Employee  under  this
Agreement shall be assignable,  and all covenants and agreements hereunder shall
inure  to the  benefit  of and  be  enforceable  by or  against  the  Employer's
successors or assigns.

                                   ARTICLE XII
                                ENTIRE AGREEMENT
         This Agreement  contains the entire Agreement between the parties,  and
the parties hereby agree that no other oral  representations  or agreements have
been entered into in connection with this transaction.

                                  ARTICLE XIII
                                    AMENDMENT
         No  amendment  or  modification  of  this  Agreement  shall  be  deemed
effective, unless or until, it is executed in writing by the parties hereto.

                                   ARTICLE XIV
                                    VALIDITY
         This  Agreement,  having been  executed  and  delivered in the State of
Nevada,  its  validity,  interpretation,  performance  and  enforcement  will be
governed by the laws of that state.

                                   ARTICLE XV
                                  SEVERABILITY
         It is mutually agreed that all of the terms, covenants, provisions, and
agreements  contained  herein are  severable  and that, in the event any of them
shall be held to be invalid by any  competent  court,  this  Agreement  shall be
interpreted as if such invalid term, covenant,  provision, or agreement were not
contained herein.

                                   ARTICLE XVI
                                      FORUM
         The parties  hereto  consent and agree that any action to enforce  this
Agreement  or any  provision  therein  or any  rights  hereunder  or any  action
relating to the employment of the Employee with the Employer shall be brought in
the State of Nevada.



<PAGE>


         IN       WITNESS  WHEREOF,  the parties have executed this Agreement at
                  Las Vegas, Nevada, on the day of , 19 .


SIERRA HEALTH SERVICES, INC.


By:
               Chief Executive Officer
               P. O. Box 15645
               Las Vegas, NV 89114-5645



EMPLOYEE


By:
               Jonathon W. Bunker










<PAGE>


                                  ATTACHMENT A






<PAGE>


                                 AMENDMENT NO. 1

                                       TO

                              EMPLOYMENT AGREEMENT


     This Amendment No. 1 (the  "Amendment")  to Employment  Agreement is hereby
made and entered  into as of this 1st day of May,  1997,  by and between  Sierra
Health  Services,  Inc.,  a  Nevada  corporation  (hereinafter  referred  to  as
"Employer") and JONATHON W. BUNKER (hereinafter referred to as "Employee").

     WHEREAS,  the Employer and Employee are parties to that certain  Employment
Agreement dated as of JULY 1, 1996 ; and

     WHEREAS,  the parties  hereto  desire to amend certain terms thereof on the
terms and conditions hereinafter set forth; and

         WHEREAS,  the  Compensation  Committee  of the  Board of  Directors  of
Employer have reviewed and approved this Amendment.

         NOW,  THEREFORE,  in consideration of the foregoing  premises,  and for
other  good and  valuable  consideration,  the  sufficiency  of which is  hereby
acknowledged, the parties hereto agree as follows:

     1. SENTENCE 1 OF PARAGRAPH 7 OF ARTICLE VII, TERMINATION OF EMPLOYMENT,  IS
HEREBY AMENDED TO READ AS FOLLOWS:

                  In the event of a change in control of the  Employer,  whereby
                  any  "person"  (as such term is used in  Sections  3(a)(9) and
                  13(d)(3) of the Securities Exchange Act of 1934) is or becomes
                  the beneficial owner, directly or indirectly, of securities of
                  Employer representing 51% or more of the combined voting power
                  of the  then  outstanding  securities  of  Employer,  and such
                  change in control was not  approved by a majority of the Board
                  of Directors of  Employer,  Employee,  at his/her sole option,
                  shall be  entitled to  terminate  this  Agreement  and will be
                  entitled to twelve (12) months salary,  WHICH SHALL BE GROSSED
                  UP FOR TAXES IN AN AMOUNT NOT TO EXCEED FIFTY PERCENT (50%) OF
                  THE  TWELVE  (12)  MONTHS  SALARY,  and any  other  separation
                  compensation  and benefits as are routinely  made available to
                  other  employees  of the  Employer at the same  organizational
                  level.

2.       SENTENCE 1 OF PARAGRAPH 8 OF ARTICLE VII, TERMINATION OF EMPLOYMENT, 
         IS HEREBY AMENDED TO READ AS FOLLOWS:

                  In the event of a change in control of the  Employer,  whereby
                  any  "person"  (as such term is used in  Sections  3(a)(9) and
                  13(d)(3) of the Securities Exchange Act of 1934) is or becomes
                  the beneficial owner, directly or indirectly, of securities of
                  Employer representing 51% or more of the combined voting power
                  of the  then  outstanding  securities  of  Employer,  and such
                  change in control is  approved  by a majority  of the Board of
                  Directors of Employer, Employee, at his/her sole option, shall
                  be entitled to terminate  this  Agreement and will be entitled
                  to twelve  (12) months  salary,  WHICH SHALL BE GROSSED UP FOR
                  TAXES IN AN AMOUNT NOT TO EXCEED  FIFTY  PERCENT  (50%) OF THE
                  TWELVE  (12)   MONTHS   SALARY,   and  any  other   separation
                  compensation  and benefits as are routinely  made available to
                  other  employees  of the  Employer at the same  organizational
                  level if, within one (l) year after the effective  date of the
                  change  in  control  the   Employee's   principal   duties  or
                  compensation,   including  salary  and  bonus,  is  materially
                  changed.

     3. SENTENCE 3 OF PARAGRAPH 8 OF ARTICLE VII, TERMINATION OF EMPLOYMENT,  IS
HEREBY                     AMENDED                    TO                    READ
-------------------------------------------------------------------------------
AS FOLLOWS: ----------

                  In  addition,   if  the  Employee's  employment  hereunder  is
                  terminated for reasons other than those set forth in Paragraph
                  4 of this Article  within one year after the effective date of
                  a change in control  which was  approved  by a majority of the
                  Employer's  Board of Directors,  Employee shall be entitled to
                  twelve (12) months salary, WHICH SHALL BE GROSSED UP FOR TAXES
                  IN AN AMOUNT NOT TO EXCEED FIFTY  PERCENT  (50%) OF THE TWELVE
                  (12) MONTHS SALARY, and all other separation  compensation and
                  benefits as are routinely made available to other employees of
                  the Employer at the same organizational level.

     4. EFFECTIVE DATE. This Amendment shall be effective as of May 1, 1997.

     5. CONTINUED  EFFECT.  Except as otherwise  modified hereby,  the Agreement
shall continue in full force and effect.

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment as of
the date first above written.


SIERRA HEALTH SERVICES, INC.


BY:________________________________
         Erin E. MacDonald, President


EMPLOYEE


BY:    /S/ JONATHON W. BUNKER