EMPLOYMENT AGREEMENT

         THIS  AGREEMENT,  made and entered as of this 8th day of January,  1999
("Effective  Date"),  by and between Mid  Atlantic  Medical  Services,  Inc.,  a
Delaware  corporation  with its  principal  executive  offices at 4 Taft  Court,
Rockville,  Maryland 20850 ("Company"), and Thomas P. Barbera,  "Executive") and
supercedes  and  replaces the  employment  agreement  between the parties  dated
December 4, 1998;
         WHEREAS,  the  Company  wishes to  assure  itself  of the  services  of
Executive for the period provided in this Agreement, and Executive is willing to
serve in the employ of the Company on a full-time basis for said period;
         WHEREAS,  the  Company  and  Executive  desire to set forth the amounts
payable and  benefits to be provided by the Company to Executive in the event of
a termination of Executive's employment with the Company under the circumstances
set forth herein;

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
the parties hereto hereby agree as follows: 

     1. Employment.  The Company agrees to continue Executive in its employ, and
Executive  agrees  to remain in the full  time  employ of the  Company,  for the
period stated in Section 3 hereof and upon the other terms and conditions herein
provided.

     2.  Position  and  Responsibilities.  The Company  employs  Executive,  and
Executive agrees to serve, as interim  President and Chief Executive  Officer of
the Company on the conditions hereinafter set forth. Executive agrees to perform
such  services  consistent  with  his  position  as shall  from  time to time be
assigned  to him by the  Company's  Board of  Directors  ("Board"),  or  another
executive  designated by the Board.  Such duties may include the  appointment of
Executive as an officer and/or  director of any present or future  subsidiary or
affiliate  of  the  Company  without  any  additional  remuneration  under  this
Agreement.  Executive shall devote all of his business time,  attention,  skill,
and efforts to the faithful performance of the duties hereunder.

         3. Term. The period of Executive's employment under this Agreement with
the Company (i) shall commence as of the Effective Date and remain in effect for
one year after the date of the approval by the Board of Directors of a permanent
Chairman of the Board and a permanent  Chief  Executive  Officer and  President,
whichever  date is later.  In the event  Executive is approved as the  permanent
President  and Chief  Executive  Officer,  the parties  agree to terminate  this
agreement and enter into a new employment agreement.

         4.  Compensation  and  Reimbursement  of  Expenses.  For  all  services
rendered by Executive in any capacity  during  employment  under this  Agreement
(including,  without limitation,  services as an executive, officer, or director
of the Company, or any subsidiary or affiliate of the Company, or as a member of
any  committee  of the Board of Directors  of the Company or any  subsidiary  or
affiliate of the Company),  the Company shall pay Executive as compensation  (A)
an annual salary ("Base Salary"); (B) such bonus for such period, if any, as may
be awarded to Executive  from time to time pursuant to any Bonus Plan adopted by
the Company for its senior  management or otherwise awarded by the Board or by a
committee  designated by the Board;  and (C) stock options at the  discretion of
the Board or the  appropriate  Committee of the Board. By action of the Board on
February 25, 1999, the Company will grant Executive 85,000 shares of MAMSI stock
options as of that date. Such options will vest on the date of the February 2000
Board meeting on the  following  prorata basis over a period to be determined by
the percentage  increase of 1999 earnings per share over 1998 earnings per share
as adjusted  for one time items and as  determined  by the Board at its February
2000 meeting at which 1999 audited earnings are announced:

                 1999 EPS     % Increase   Vesting    Dates of Vesting 
                   up to          0-16%    5 years     1/5 in  2/2000;  1/5 in 
                   $0.51                               2/2001;  1/5 in 2/2002;
                                                       1/5 in 2/2003; 
                                                       1/5 in 2/2004
                   $0.54           23%     4 years     1/4 in 2/2000;  1/4 in 
                                                       2001; 1/4 in 2/2002; 
                                                       1/4 in 2/2003 
                   $0.57           30%     3 years     1/3 in  2/2000;  1/3 in 
                                                       2/2001; 1/3 in 2002
                   $0.60           36%     2 years     1/2 in 2/2000; 1/2 in 
                                                       2/2001

                   0.63            43%     1 year      All in 2/2000
                   or more
     For the purposes of the above  calculation,  the 1998 earnings per share is
established  at $.44 per share.  Base Salary  shall be not less than the rate at
which  Executive is  compensated  on the Effective  Date which is $475,000.  The
Company shall also  reimburse  Executive,  in accordance  with such policies and
procedures  as the Board may  establish  from time to time,  for all  reasonable
travel and other  expenses  incurred  by  Executive  in the  performance  of his
obligations   under  this  Agreement.   Executive  shall  also  be  entitled  to
participate  in any benefit plans  established  by the Company for which Company
executives are or shall become eligible.
         5.  Termination  of  Employment.   Executive's  employment  under  this
Agreement may be terminated by the Company or Executive as follows:
                  (a)  Disability.  (i) If Executive fails to perform his duties
         under this Agreement on account of Disability (as hereinafter defined),
         the Company may give notice to Executive to terminate this Agreement on
         a date not less than thirty (30) days thereafter ("Notice Period") and,
         if Executive has not resumed full  performance of his duties under this
         Agreement within such Notice Period, then Executive's  employment under
         this  Agreement  will  terminate  on the date  provided  in the  notice
         ("Disability Termination Date").
                  (ii)  During  any  period of  Disability,  the  Company  shall
         maintain and pay for health and other insurance  benefits for Executive
         at least equal to those he had at the commencement of such Disability.
                  (iii) As used in this Agreement,  the term "Disability"  shall
         mean the  inability  of  Executive  to perform  his  duties  under this
         Agreement  by reason of his medical  disability,  as  determined  by an
         independent  physician  selected  with the  approval  of the  Board and
         Executive. 

          (b) Death. If Executive dies while employed under this Agreement,  his
     employment  under this Agreement will terminate as of the date of his death
     ("Date of Death").  Within  thirty  (30) days after the Date of Death,  the
     Company shall pay to  Executive's  legal  representative  Executive's  Base
     Salary as then in effect  that has  accrued to the last day of the month in
     which the Date of Death  occurs.  If the  Executive  dies  while  receiving
     payments  pursuant to Section 5(c) below,  said payment shall  continue for
     the period remaining and shall be paid to the estate of the Executive.

          (c) Certain  Other  Events of  Termination.  In the event that (i) the
     Company  terminates  Executive's  employment  for any  reason  (other  than
     because of death,  Disability,  or "just cause" (as  hereinafter  defined),
     (ii) Executive terminates his or her employment with the Company because of
     the Company's material breach of this Agreement, (iii) Executive terminates
     his employment with the Company because the Company  requires  Executive to
     be based  anywhere  other  than  Executive's  current  location  or  within
     seventy-five  (75) miles round trip of the  Company's  principal  executive
     offices  (except for required  travel on the Company's  business),  or (iv)
     Executive   terminates  his  employment  with  the  Company  because  of  a
     substantial  reassignment of duties and responsibilities,  then the Company
     shall pay  Executive an amount equal to 12 months Base Salary paid in equal
     bi-weekly  payments  over a period of one year  commencing on the Executive
     Termination  Date and in accordance with the regular  payroll  practices of
     the Company.  The Company shall also pay Executive any pro-rata  bonus that
     the Executive  would have been  entitled to had he been employed  until the
     end of the year.  Such bonus  payment shall occur when bonuses are normally
     paid by the Company.  In addition,  all stock options  which  Executive has
     been granted shall immediately vest and become  exercisable under the terms
     of the applicable  plan. For the purposes of the time period  available for
     exercising such stock options, Executive shall be considered an employee of
     the Company unless  terminated  pursuant to subsection  (e) below.  Payment
     made pursuant to this paragraph  shall be the exclusive  remedy provided to
     Executive  and  Executive  shall not be  entitled  to any  other  severance
     benefit that the Company may provide or adopt unless  approved by the Board
     of the Directors of the Company.

          (d)   Retirement.   Executive  shall  be  entitled  to  terminate  his
     employment with the Company on, or at any date after, a date on which he is
     at least  sixty-five (65) years old. Any date on which Executive  elects to
     retire  shall be  referred  to as the  "Retirement  Termination  Date." The
     Company  shall pay to Executive  his Base Salary as then in effect that has
     accrued  to the last day of the month in which the  Retirement  Termination
     Date occurs.

         (e)      Termination by the Company for Just Cause.
                  (i) The Company may terminate Executive's employment for "just
         cause" at any time by  giving  written  notice  thereof  to  Executive.
         (Except as provided  below,  the date of such notice is the "Just Cause
         Termination  Date" unless  otherwise  provided in the  notice).  Within
         thirty  (30) days after the Just Cause  Termination  Date,  the Company
         shall pay to  Executive  his Base  Salary  as then in  effect  that has
         accrued to the Just Cause  Termination  Date.  For the purposes of this
         subparagraph,   "just   cause"  shall  mean   termination   because  of
         Executive's   personal  dishonesty,   willful  misconduct,   breach  of
         fiduciary duty,  intentional failure to perform stated duties,  willful
         violation of any law, rule or regulation (other than traffic violations
         or similar  offenses),  or  material  breach of any  provision  of this
         Agreement.  Unless otherwise  determined by the Board,  Executive shall
         have no right to  receive  compensation  or other  benefits  under this
         Agreement after a termination for just cause.

               (ii) Notwithstanding the foregoing, Executive shall not be deemed
         to have been  terminated  for just cause  pursuant to this Section 5(e)
         unless and until he shall have  received  a copy of a  resolution  duly
         adopted  by the  affirmative  vote of a  majority  of the  Board,  at a
         meeting held for that purpose, declaring that in the good faith opinion
         of the Board one or more of the  conditions  set forth in clause (i) of
         this Section 5(e) has occurred and specifying the particulars  thereof.

         (f)  Termination by Executive  Without  Cause.  Executive may terminate
         this  Agreement  without  cause upon the  provision of two weeks' prior
         written notice to the Company.  Upon such a termination,  the following
         payments will be made by the Company to the Executive:

                    1.  If  Executive  elects  such a  termination  between  the
                    Effective  Date of this Agreement and the first date of work
                    of either the permanent Chairman of the Board, the permanent
                    Chief  Executive or the permanent  President,  the Executive
                    would receive no benefits under this Agreement.

                    2. If the  Executive  elects  such a  termination  after the
                    first  date  of  work  of  either  the  permanent  Chairman,
                    permanent   Chief   Executive   Officer  or  the   permanent
                    President, the Executive would receive the same payment as a
                    termination pursuant to Section 5(c) above.

6. Change in Control.  Notwithstanding any other provision to the contrary,  the
following  provisions will govern in the event of a change in control as defined
herein.

               a. A change in control  shall be deemed to have  occurred  if, at
          any time, (I)  substantially  all the assets of the Company shall have
          been  sold or  transferred  by sale,  merger or  otherwise,  or if any
          "person"  (as  such  term is used in  Sections  13(d)  or 14(d) of the
          Exchange  Act)  is  or  becomes  the  beneficial  owner,  directly  or
          indirectly,  of securities of the Company  representing 50% or more of
          the combined voting power of the then-existing  outstanding securities
          of the  Company;  and (ii) the  Executive  is  reassigned  without his
          concurrence to another position in the Company within 6 months of such
          sale,  merger or other event.  No change in control shall be deemed to
          have  occurred  if the  reassignment  is on a  temporary  basis and is
          attributable to the Executive's  illness or other physical,  mental or
          emotional disability or incapacity.

               b. In the event of a change in control as defined in Section 6(a)
          above, Executive shall be entitled to the compensation as set forth in
          Section 5(c) above except for the  provision  regarding  stock options
          which will be compensated in accordance with subsection 6(c) below.

               c. In the event of a change in control  as defined in  subsection
          6(a),  all stock  options to which  Executive  has been granted  shall
          immediately  vest and become  exercisable.  Such  acceleration  of the
          vesting of stock  options  shall be in addition  to, and shall have no
          affect on, any payments accrued pursuant to subsection 6(b).

               d. The value of all  payments,  benefits and other  consideration
          received  pursuant to subsections  6(b) and 6(c) and contingent upon a
          change  in  control,  and any  additional  payments  in the  nature of
          compensation  described by Section  280G(b)(2) of the Internal Revenue
          Code,  shall not  exceed an amount  which is equal to three  times the
          average taxable compensation from the Company for the "base period" as
          that term is defined in Section  280G(d)(2)  of the  Internal  Revenue
          Code. The parties agree to review the impact of the termination of the
          Agreement  pursuant to Section 6, and to negotiate  modifications,  if
          mutually acceptable,  in situations where the results to the Executive
          and to the Company are not compatible. 

     7.  Selection of Permanent  Chief  Executive  Officer or President.  If the
Board of Directors elects a permanent Chief Executive Officer or President other
than Executive during the term of this Agreement, Executive will become a Senior
Executive Vice President of the Company.

     8. Confidential Information. Executive shall fully comply with and abide by
the provisions of the Company's  Employee Manual and other announced policies in
effect from time to time,  including those provisions relating to the protection
of the Company's confidential information.  The Company and Executive agree that
the foregoing  provision shall survive the termination of this Agreement for any
reason whatsoever.

     9.  Indemnification.  Employee shall be entitled to  indemnification to the
full extent allowed by the Company's Certificate of Incorporation and Bylaws for
third  party  claims and to advances  for  expenses in  defending  against  such
claims.

          10. General Provisions.

     (a) Entire  Agreement.  This  Agreement  contains the entire  understanding
between the parties hereto and supersedes any prior employment agreement between
the Company and Executive.

     (b) No Duty to  Mitigate.  Executive  shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise,  nor shall any amounts received from other employment or otherwise
by Executive offset in any manner the obligations of the Company hereunder.

     (c)  Nonassignability.  Neither  this  Agreement  nor  any  right,  remedy,
obligation or liability  arising  hereunder or by reason hereof is assignable by
Executive,  his beneficiaries,  or legal  representatives  without the Company's
prior written  consent;  provided,  however,  that nothing in this Section 11(d)
shall  preclude (i) Executive  from  designating  a  beneficiary  to receive any
benefit payable hereunder upon his death, or (ii) the executors, administrators,
or other legal  representatives  of Executive or his estate from  assigning  any
rights hereunder to the person or persons entitled thereto.

     (d) Notices. All notices and other communications  required or permitted to
be given  under this  Agreement  shall be in writing and shall be deemed to have
been duly  given if  delivered  personally  or sent by  certified  mail,  return
receipt requested, first-class postage prepaid, to the parties to this Agreement
at the  following  addresses:
                   (i) if to the  Company at: 
                       Mid  Atlantic  MedicalService,  Inc. 
                       4 Taft Court Rockville,  MD 20850

                       and  

                  (ii) if to Executive at the address  set forth on the 
                       signature  page. 

or to such  other  address  as either  party to this  Agreement  shall have last
designated  by notice to the other party.  All such  notices and  communications
shall be deemed to have been  received  on the earlier of the date of receipt or
the third business day after the date of mailing thereof.

     (e) Binding  Effect;  Benefits.  This  Agreement  shall be binding upon and
inure to the  benefit of the  parties  to this  Agreement  and their  respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended or shall be construed to give any person,  other than the parties to
this Agreement or their respective successors or permitted assigns, any legal or
equitable  right,  remedy,  or claim under or in respect of any agreement or any
provision contained herein.

     (f)  Waiver.  No  provision  of  this  Agreement  may be  amended,  waived,
discharged,  or  terminated  except by an  instrument in writing and executed by
each party.  Any waiver of enforcement of any provision of this Agreement  shall
not  operate or be  construed  as a  continuing  waiver or a waiver of any other
provisions unless expressly stated in such instrument.

     (g)  Amendment.  This Agreement may be terminated,  amended,  modified,  or
supplemented only by a written instrument executed by Executive and the Company.

     (h)  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the law of the State of  Delaware,  regardless  of the law that
might be applied under principles of conflict of laws.

     (i)  Severability.  If, for any reason,  any provision of this Agreement is
held  invalid,  such  invalidity  shall not affect any other  provision  of this
Agreement not held so invalid,  and each such other provision shall, to the full
extent  consistent with law, continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect  the rest of such  provision  not held so  invalid,  and the rest of such
provision,  together with all other  provisions of this Agreement,  shall to the
full extent consistent with law continue in full force and effect.+

     IN WITNESS  WHEREOF,  the Company has caused this  Agreement to be executed
and its seal to be affixed  hereunto by its officers  thereunto duly authorized,
and Executive has signed this Agreement, all as of the Effective Date.
Date.
ATTEST:                                     MID ATLANTIC MEDICAL SERVICES, INC.
                                             By:/s/Sharon C. Pavlos
(Corporate Seal)                              Name:Sharon C. Pavlos
                                              Title:Exec VP and General Counsel
WITNESS                                       EXECUTIVE:

Teresa Penland                                  /s/ Thomas P. Barbera
      
                                           Address: 4 Taft Ct.
                                                    Rockville, MD 20850