Exhibit 10.1


                    SETTLEMENT AGREEMENT AND GENERAL RELEASE

     This  settlement  agreement and release (the  "Agreement')  is entered into
this 29th day of September, 2004 among the following:

      "Horizon"           Horizon Blue Cross Blue Shield of New Jersey ("HBCBS")
                          and its affiliates, parents, subsidiaries,  successors
                          and  predecessors,  and all of its  past  and  current
                          employees,  agents, attorneys,  officers and directors
                          (collectively,  "HBCBS-Related  Entities"),  except in
                          each case to the extent that any such person's  status
                          as  a   HBCBS-Related   Entity   arises   directly  or
                          indirectly  from any  affiliation  between  HBCBS  and
                          CareAdvantage, Inc.;

      "CareAdvantage"     CareAdvantage,   Inc.   ("CAI"),   its   affiliates,
                          parents,  subsidiaries,  successors, and predecessors,
                          and all of its past  and  current  employees,  agents,
                          attorneys,   officers  and  directors,   (collectively
                          "CAI-Related  Entities"),  except  in each case to the
                          extent that any such person's  status as a CAI-Related
                          Entity  arises   directly  or   indirectly   from  any
                          affiliation  between HBCBS and CAI,  together with the
                          following  persons in their individual  capacities and
                          as officers,  directors and holders of equity or other
                          interests  in CAI or any  CAI-Related  entity:  Dennis
                          Mouras, David Noone and David McDonnell.

     Horizon and  CareAdvantage may be referred to herein singly as "a Party" or
jointly as "the Parties."

     WHEREAS,  CAI  instituted  an  action  in the New  Jersey  Superior  Court,
Middlesex  County,  captioned  CareAdvantage,  Inc. v.  Horizon  Blue Cross Blue
Shield of New Jersey, Docket No. MID-L-1690-03 (the "Action");

     WHEREAS, the Parties have agreed to settle and resolve the claims described
herein pursuant to the terms of the Agreement;

     WHEREAS,  the  Parties  having  weighed  the  risks,  burdens  and costs of
continued  litigation,   and  without  making  or  implying  any  admissions  or
concessions  as to  their  relative  positions  in the  Action  or  any  alleged
liability or wrongdoing or breach of contract,  have determined that full, final
and amicable settlement and resolution of their differences on the

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terms and conditions set forth herein is in the best interests of all parties;

     WHEREAS,  CareAdvantage  agrees  that it will  not  seek  anything  further
including but not limited to any other payment from Horizon;

     NOW,  THEREFORE,  in  consideration of the mutual promises set forth below,
the parties agree and intend to be legally bound as follows:

     1.  Cash  Payment.  HBSBC  agrees  to pay to CAI the  sum of  Five  Hundred
Thousand Dollars  ($500,000.00) within five (5) days of receiving fully executed
copies of this Agreement and the Waiver and Consent  executed by CW Ventures II,
L.P.

     2. Stock Transfer.  Horizon agrees to assign and transfer to CAI all right,
title and interest in and to all  53,394,820  shares of common stock,  par value
$0.001 per share,  of CAI (the  "Stock"),  such shares  representing  all of the
outstanding  shares of common  stock of CAI owned by Horizon  or any  affiliated
entity,  by delivering  fully-endorsed  certificates for all of the Stock to CAI
within five (5) days of receiving  fully  executed  copies of this Agreement and
the Waiver and Consent executed by CW Ventures II, L.P.

     3. Resignation of  HBCBS-Nominated  CAI Board Members.  HBCBS shall procure
and deliver to CAI the  resignations of the  HBCBS-nominated  members of the CAI
Board of Directors, Patrick J. Geraghty and Christine L. Nelson, within five (5)
days of receiving  fully  executed  copies of this  Agreement and the Waiver and
Consent executed by CW Ventures II, L.P.

     4. Mutual  Release and Waiver of Claims.  For and in  consideration  of the
obligations  assumed  by the  Parties  in this  Agreement,  the  Parties  hereby
release,  relinquish  and  forever  discharge  the  Parties,  their  affiliates,
parents,  subsidiaries,  successors, and predecessors, and all of their past and

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current employees,  agents,  attorneys,  officers and directors,  as well as any
other persons, from any and all claims, liens,  demands,  obligations,  actions,
causes  of  actions,  counts,  damages,  liabilities,  losses,  fees,  costs  or
expenses,   of  any  nature  whatsoever,   known  or  unknown,   ascertained  or
unascertained,  suspected or unsuspected, existing or claimed to exist, from the
beginning of time to the date of the signing of this Agreement,  including,  but
not limited to, all claims  and/or  potential  causes of action  arising out of,
asserted  in, or in any way related to the Action.  This  includes any claims or
potential causes of action from the beginning of time to the date of the signing
of this  Agreement that may or may not be deemed to be encompassed by the entire
controversy  doctrine.  Notwithstanding  anything  herein to the contrary,  this
Release shall not apply to any claims or potential  causes of action  related to
health  insurance  coverage or other  employee  benefits  provided by Horizon to
CareAdvantage employees. CAI acknowledges and agrees that the payment made to it
represents  settlement of and  extinguishes all of CAI's claims against Horizon,
including,  but not limited to, compensatory and punitive damages, and any claim
for  costs or  attorney's  fees.  Nothing  herein  shall be  deemed to limit any
party's right to seek enforcement of the terms of this Agreement.

     5.  Contingent   Reimbursement  of   HBCBS-Nominated   CAI  Board  Members'
Attorneys' Fees. To the extent that an  HBCBS-nominated  CAI Board Member is not
covered by CAI's Directors and Officers liability  insurance coverage for his or
her acts and omissions as a member of the CAI Board,  and only in the event that
(i) a claim, or suit or proceeding is brought as a shareholder derivative action
or  otherwise,  against CAI or any  HBCBS-nominated  CAI Board  Member based on,
related to or arising out of any claim,  alleging that any  HBCBS-nominated  CAI
Board  Member  in  any  manner   whatsoever   breached  his  or  her   fiduciary
responsibilities as a director of the CAI Board and (ii) the HBCBS-nominated CAI
Board  Member  is a  prevailing  party in such a claim,  suit or  proceeding  by

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obtaining a judgment,  order or ruling that his/her actions as a director of the
CAI Board were proper,  then CAI agrees to reimburse  such  HBCBS-nominated  CAI
Board Member for the reasonable  attorneys' fees incurred by the HBCBS-nominated
CAI Board Member in defending against such claim, suit or proceeding.

     6. Binding  Effect.  This Agreement and the releases  contained  herein are
binding  upon and shall  inure to the  benefit  of anyone  who  succeeds  to the
rights, interests or responsibilities of the Parties.

     7. Confidentiality of Agreement. To the extent provided by law, the Parties
shall not directly or indirectly  disseminate the terms of this Agreement to any
person or entity not a Party to this Agreement,  except (a) by written agreement
of the  Parties,  (b)  pursuant to a valid court order or  subpoena,  and (c) as
required by law as determined in the reasonable  judgment of a Party's  counsel.

     8. Enforceability. If a court rules that any provision of this Agreement is
not enforceable in the manner set forth in this Agreement, that provision should
be enforceable to the maximum extent possible under applicable law and should be
reformed  accordingly.  If a court rules that any provision of this Agreement is
invalid  or  unenforceable,  that  ruling  shall  not  affect  the  validity  or
enforceability  of the other portions of this Agreement.

     9.  Non-waiver.  In the event either Party  violates any  provision of this
Agreement,  the  failure of the other Party to enforce any of its rights at that
time shall not  constitute  a waiver by the other  Party of the right to enforce
any  provision  of this  Agreement  at any  time.

     10. Entire Agreement. This Agreement constitutes the complete agreement and
understanding of the Parties,  supersedes any prior agreements or understandings
of the Parties  (whether  oral or written)  and may be amended only in a writing
signed by the Parties.


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     11.  Amendment.  This  Agreement  cannot  be  amended,  except by a written
document  signed by the Party against whom  enforcement of any such amendment is
sought.

     12. Full  Understanding.  The Parties acknowledge that they have thoroughly
reviewed and discussed all aspects of this Agreement with their attorneys,  that
they have  carefully  read and fully  understand  all of the  provisions of this
Settlement  Agreement,   and  that  they  are  voluntarily  entering  into  this
agreement.

     13.  Governing Law. This Agreement  shall be interpreted in accordance with
the  laws of the  State of New  Jersey,  without  regard  to its  principles  of
conflicts of law. This Agreement has been jointly drafted and no provision shall
be construed  against a Party because that Party or its  attorneys  drafted that
provision.  Any action  relating to this Agreement shall be filed in New Jersey.

     14.  Counterparts.  This  Agreement  may  be  executed  in  more  than  one
counterpart,  each of which shall be deemed an original,  but all of which shall
constitute one and the same instrument.

     15.  Construction  of  Agreement.  Should any  provision of this  Agreement
require  interpretation  or  construction,  it is agreed by the Parties that the
entity  interpreting  or construing this Agreement shall not apply a presumption
that the provisions hereof shall be more strictly construed against one Party by
reason of the rule of  construction  that a  document  is to be  construed  more
strictly against the Party who prepared the Agreement,  it being agreed that the
Parties  have  participated  in  the  preparation  of  all  provisions  of  this
Agreement.

     16.   Representations.   Each  individual   signing  this  Agreement  in  a
representative  capacity  represents  and  warrants  that  (a)  he or  she is an
authorized  representative  of the entity for which he or she has signed and (b)

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has the power and  authority to bind the entity they  represent  and (c) is duly
authorized to enter into and execute this  Agreement.

     17.  Dismissal of Claims.  The Parties shall dismiss with prejudice any and
all claims,  cases,  or charges related to the Action within five (5) days after
the  execution of this  Agreement.  Each Party will bear its own costs and legal
fees for the Action.

     18. No Admission of Liability. Nothing in this Agreement shall be construed
as an  admission  of  liability on behalf of any Party as it was entered for the
sole purpose of avoiding further costs of litigation.

     The Parties signify their entry into this Agreement by signing below.


                                                CareAdvantage, Inc.



Dated:   Sept. 29, 2004                     By: /s/ Dennis J. Mouras
         --------------                         --------------------------------
                                                Dennis Mouras
                                                President and CEO


STATE OF NEW JERSEY                 )
                                      :SS.:
COUNTY OF MIDDLESEX                 )


     On September 29, 2004, before me personally came Dennis Mouras,  who, by me
duly  sworn,  did  depose  and say that  deponent  is the  President  and CEO of
CareAdvantage,  Inc.,  the company  described  herein,  and which  executed  the
foregoing  Agreement,  and that he is duly  authorized  to execute the foregoing
Agreement on behalf of CareAdvantage, Inc.


                                 /s/ Glenda Cooper
                                 ------------------
                                     Notary Public




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Dated:   Sept. 29, 2004                     By: /s/ Dennis J. Mouras
         --------------                         --------------------------------
                                                Dennis Mouras



STATE OF NEW JERSEY                 )
                                       :SS.:
COUNTY OF MIDDLESEX                 )

     On September 29, 2004,  before me personally  came Dennis Mouras who, by me
duly sworn,  did depose and say and  acknowledge  to my  satisfaction  that that
deponent is named in and personally signed this document and signed,  sealed and
delivered this document as his act and deed.


                               /s/ Glenda Cooper
                               ------------------
                                  Notary Public



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Dated:   9/28/2004                          By: /s/ David Noone
         ---------                              --------------------------------
                                                David Noone


STATE OF CONNECTICUT                )
                                       :SS.:Bethel
COUNTY OF FAIRFIELD                 )

     On September  28, 2004,  before me  personally  came David Noone who, by me
duly sworn,  did depose and say and  acknowledge  to my  satisfaction  that that
deponent is named in and personally signed this document and signed,  sealed and
delivered this document as his act and deed.


                               /s/
                               ---------------------------------------
                               Notary Public



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Dated:   9-28-2004                          By: /s/ David McDonnell
         ---------                              --------------------------------
                                                David McDonnell



STATE OF PENNSYLVANIA      )
                               :SS.:
COUNTY OF MONTGOMERY       )

     On September 28, 2004, before me personally came David McDonnell who, by me
duly sworn,  did depose and say and  acknowledge  to my  satisfaction  that that
deponent is named in and personally signed this document and signed,  sealed and
delivered this document as his act and deed.


                                  /s/ Linda Blum Kahn
                                  --------------------------------
                                  Notary Public



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                                                  Horizon Blue Cross Blue Shield
                                                  of New Jersey



Dated:   9/29/2004                          By: /s/ John W. Campbell
         ---------                              --------------------------------
                                                John W. Campbell,
                                                Senior Vice President,
                                                  General Counsel and Secretary


STATE OF NEW JERSEY        )
                              :SS.:
COUNTY OF ESSEX            )


     On September 29, 2004, before me personally came John W. Campbell,  who, by
me duly sworn,  did depose and say that  deponent is the Senior Vice  President,
General  Counsel and  Secretary of Horizon Blue Cross Blue Shield of New Jersey,
the company described herein,  and which executed the foregoing  Agreement,  and
that he is duly  authorized  to execute  the  foregoing  Agreement  on behalf of
Horizon Blue Cross Blue Shield of New Jersey


                                  /s/ Begona B. Cubeiro   2/29/04
                                  -------------------------------
                                  Notary Public