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                           1996 MANAGEMENT BONUS PLAN

     Participants  in the 1996 Management  Bonus Plan shall  include all full-
     time  non-sales  positions from  Level 10  up  to Level  20 and  the CEO.
     Other  than  with  respect  to  Mr.  Jochum's special  bonus,  individual
     performance bonuses are not  included in the 1996 Management  Bonus Plan.
     Bonuses  will be solely predicated on the consolidated performance of Mid
     Atlantic Medical Services,  Inc. (MAMSI) and will be accrued  on at least
     a  quarterly  basis  as documented  by  the  year  end audited  financial
     statements.

     Bonuses shall be paid according to the following guidelines:

     1.  MINIMUM BONUS - Minimum bonuses shall be paid if  the Company (MAMSI)
     achieves  a  profit of  $106 million  before  income taxes,  expansion or
     acquisition  costs, and prior to  the physicians' return  of withhold and
     payment of physicians' bonuses.

     2.  MAXIMUM BONUS - Maximum bonuses shall be paid  if the Company (MAMSI)
     achieves  a  profit of  $115 million  before  income taxes,  expansion or
     acquisition  costs, and prior to  the physicians' return  of withhold and
     payment of physicians' bonuses.

     3.   PRO-RATION  -  In the  event  that the  Company  earns between  $106
     million and $115 million, bonus 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.  Pro-rated
     calculations will  be made at  each salary level  for the portion  of the
     year  that  the  new  level  is in  effect.    However,  with  respect to
     executive  officers hired  prior to  March 1,  1996, bonus  payments will
     disregard salary and grade level changes made after March 1, 1996.

     5.   NEW EMPLOYEES - New full-time employees  are eligible to participate
     in the  plan during their  first year of  employment.  The  bonus payment
     will  be  pro-rated accordingly  for  the portion  of the  year  that the
     employee was employed.

     6.    TERMINATION -  No bonus  shall  be paid  to bonus  participants who
     terminate 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 immediately
     following  the receipt of  the audited  financial statement(s)  for MAMSI
     for the year 1996.

     8.   BONUS PERCENTAGES  - The distribution  of the bonus  payments to the
     Management  personnel  shall  be   limited  according  to  the  following
     percentage  ranges.   These  allocations will  be  reviewed annually  and
     adjusted if necessary.

       CEO                                      25 - 50%
       Grade 18 and above (excluding CEO)       12 - 35%
       Grade 17                                 11 - 30%
       Grade 16                                 10 - 28%
       Grade 15                                  9 - 21%<PAGE>


       Grade 14                                  8 - 16%
       Grades 12 & 13                            7 - 12%
       Grades 10 & 11                            5 -  7%

     9.   CEO'S SPECIAL BONUS  - In addition  to the above bonus,  in 1996 the
     CEO, Mr. Jochum, will  receive an additional bonus of up to  a maximum of
     50 percent of his salary in  effect on March 1, 1996 ("1996 base salary")
     in the  following circumstances:  he  will earn 20 percent  of that bonus
     if actual membership growth is 300,000 members, 40 percent  of that bonus
     if actual membership growth is 325,000 members, 60 percent of that  bonus
     if actual  membership growth is 350,000 members, 80 percent of that bonus
     if actual membership  growth is 375,000 members, and  100 percent of that
     bonus  (or  50 percent  of  his 1996  base  salary) if  actual membership
     growth for 1996 exceeds 400,000 members.

     10.  AMENDMENT  - The Board  of Directors may  amend the 1996  Management
     Bonus  Plan to  materially  increase the  amounts  payable thereunder  to
     participants, other than executive officers, or for any other reason.<PAGE>