1999 MANAGEMENT BONUS PLAN

Participants  in the 1999  Management  Bonus Plan shall  include  all  full-time
non-sales  positions  from  Level  10 up to Level  16.  Bonuses  will be  solely
predicated on the  consolidated  earnings  performance  of Mid Atlantic  Medical
Services, Inc. (MAMSI).

Bonuses shall be paid according to the following guidelines:

1.  Minimum  Bonus-  Minimum  bonuses  shall  be  paid  if  the  MAMSI  and  its
consolidated subsidiaries (the "Company") achieve a profit of $36,000,000 before
income taxes,  expansion or acquisition  costs,  one time charges or credits not
related  to  current  year  operations,  and prior to any  physicians'return  of
withhold and payment of physicians' bonuses.

2. Maximum Bonus- Maximum bonuses shall be paid if the Company achieves a profit
of $42,000,000  before income taxes,  expansion or acquisition  costs,  one time
charges or credits  not  related to current  year  operations,  and prior to any
physician's return of withhold and payment of physicians' bonuses.

3.  Pro-ration-  In the event that the Company  earns  between  $36,000,000  and
$42,000,000, bonus payments will be pro-rated accordingly.

4. Bonus Base- In general,  bonus  payments  will be calculated on cash payments
made  during the year for base  salary,  which  would take into  account  salary
increases due to promotion or merit increases (other than those to employees who
are Level 17 or  higher).  Pro-rated  calculations  will be made at each  salary
level  for the  portion  of the year  that  the new  level  is in  effect.  If a
participant  is demoted to under a Level 10  position,  and  remains in an under
Level 10 position  until December 31, 1998, the employee will receive a pro-rata
bonus payment based upon the time the participant  was in a full-time  non-sales
Level 10 or higher position  during 1999. If, however,  the employee is promoted
or re-promoted to a Level 10 or higher,  the employee is eligible to participate
in the Bonus Plan on a pro-rata  basis for all the time periods during which the
participant  was in a full-time  non-sales  Level 10 or higher  position  during
1999.  If an employee is promoted to a Level 17 or higher,  his or her bonus for
the  portion of the year when he or she was  promoted  is  governed  by the 1999
Senior Management Bonus Plan.

5. New Employees- New full-time  non-sales employees are eligible to participate
in the Bonus Plan.  The bonus  payment  will be  pro-rated  accordingly  for the
portion of the year that the  employee  was  employed at a  full-time  non-sales
Level 10 or higher  position  or upon any other  reasonable  method  designed to
fairly compensate and recruit a new employee,  with the approval of the CFO, CEO
or Chairman.

6.  Termination-  No bonus  shall be paid to bonus  participants  who  terminate
employment  with the Company or are  terminated by the Company prior to the year
end. In the event of  retirement or death,  the employee or his/her  beneficiary
will receive a pro- rated portion of the bonus.

7. Time of Payment- Bonus payments shall be distributed following the completion
of the audit of the financial statement(s) for the Company for the year 1999.

8. Bonus  Percentages-  The  distribution  of the bonus payments to participants
shall be limited according to the following percentage ranges:

         Level 16                                                      5.0 - 23%
         Level 15                                                      4.5 - 20%
         Level 14                                                      4.0 - 15%
         Level 12 & 13                                                 3.5 - 10%
         Level 10 & 11                                                 2.5 -  5%

9. Relationship to Other Bonus Plan- This Bonus Plan is substantially similar to
the 1999 Senior Management Bonus Plan for full-time  employees Level 17 to Level
25.  The  primary  differences  between  the  Bonus  Plan  and the  1999  Senior
Management Bonus Plan are the percentage payments available to personnel and the
personnel covered.

10. Interpretation of the Bonus Plan by the Board of Directors- If a question as
to the the  interpretation of the Bonus Plan arises,  the Board of Directors may
interpret the Bonus Plan. The decision of the Board is final.

11.  Amendment-  The Board of Directors  may amend the Bonus Plan to  materially
increase the amounts payable thereunder to participants or for any other reason.