i llllllllllljlllljllll !llll llllljllll 11111 jllll ...€¦ · i llllllllllljlllljllll !llll...

I lllllllllllJllllJllll !llll lllllJllll 11111 jllll ~lllJllll 11111 jllll lllll lllll jllll lllll jlll llll QUARTERLY STATEMENT

AS OF MARCH 31, 2017 OF THE CONDITION AND AFFAIRS OF THE

KAISER FOUNDATION HEALTH PLAN OF THE NORTHWEST NAIC Group Code 0601 0601 NAIC Company Code ___ 9_554_ 0 __ Employer's ID Number __ 9_3-0_ 7_98_0_3_9 __

(Prior Period) (Cunent Period)

Organized under the laws of --------=0-'-reg"""'o""n'------~ State of Domicile or Port of Enb'y Oregon

Counb'y of Domicile

Licensed as business type: Life, Accident & Health [ ) Dental Service Corporation [

Other I J

United States

Property/Casualty [ ) Vision Service Corporation [

Hospital, Medical & Dental Service or Indemnity [ Health Maintenance Organization [ X )

Incorporated/Organized Statutory Home Office

10/19/1981 Commenced Business Is HMO Federally Qualified? Yes [ ) No [ X )

05/01/1942 500 N.E. Multnomah Street, Suite 100 Portland, OR, US 97232-2099

(SbeelandN-) (City or Town. State. Ctuiby and Zip Code)

Main Administrative Office __ -=5-=00"-'-N"'.E"'.'"'M""u"'l"'tn"'o""m""a""h'"'S°'tr°'e'"'e"'t,'"'S°'u"'it"'e_1-=0-=0-- Portland, OR, US 97232-2099 503-813-2800

STATEMENT AS OF MARCH 31, 2017 OF THE KAISER FOUNDATION HEALTH PLAN OF THE NORTHWEST

ASSETS Current Statement Date

2 3 December31

Net Admitted Assets Prior Year Net Assets Nonadmitted Assets ICols. 1 - 2\ Admitted Assets

1. Bond•·········-··········-·········-··········-··········-·········-······ _ ...... --998,988 ,792 ······--······-- .... -----998 .988,792 ·--·.999 ,088,271 2. Stocks:

2.1 Preferred stocks -······--······--······--······--······--······--······- ······--······-- ····--······___J) ·--······--··D 2.2 Common stocks ....... ·--··········--·········--··········--··········--··-······--······- ······--······-- ····--······___J) ·--······--··D

3. Mortgage loans on real estate:

3.1 Flrstliens .... --··········--··········--·········--··········--··········- -······--······- ······--······-- ····--······____o ·--······--··D 3.2 Other than first liens _··········--··········--·········--··········--······-······--······- ······--······-- ····--······___J) ·--······--··D

4. Real estate:

4 .1 Properties occupied by the company {less

$ -······-6,925 ,655 encumbrances)·--······--······--······-······--219,320 ,158 ······--······-- .... -----219,320,158 ·--·216,741,001 4.2 Properties held for the production of ilcome

(less $ -··········--··947 , 145 encumbrances) ·······--··········--········· -······--7 ,556,950 ······--······-- ····--·..? ,556,950 ·--·····5,692,973 4.3 Properties held tor sale (less

$ -······--······- encumbrances) ...... ·--··········--·········--···-······--······- ······--······-- ····--······___J) ·--······--··D 5. Cash($ -··········-(4,364 ,326) ).

cash equivalents ($ --······--····D ) and short-term investments($ ····--·.32,644,:307 i ·········--··········- -······-28,279 ,981 ······--······-- ····--·28 ,279,981 ·--···20 ,'201 ,418

6. Contract loans {ilcluding S -·········--··········- premium notesL ...... -······--······- ······--······-- ····--······___J) ·--······--··D 7. Derivatives --······--······--······--······--······--······ -······--······---1) ······--······-- ····--······_____!) ·--······--··D 8. Other invested assets ·--··········--·········--··········--··········--······ -······--······---1) ······--······-- ····--······_____!) ·--······--··D 9. Receivables for securities _······--······--······--······--··-······--······- ······--······-- ····--······___J) ·--······-336,288

10. Securities lending reinvested collateral assets __ ······--······--···-······--······- ······--······-- ····--······___J) ·--······--··D 11. Aggregate write-ins for invested assets -··········--·········--··········--·· -······--······__j) ······--······___j) ····--······___J) ·--······--··D 12. Subtotals, cash and invested assets (Lines 1 to 11 >-··········--··········- -······-1,254, 145,881 ······--······___j) .... _ 1,254 , 145,881 . __ 1,242, 125,951 13. Title plants less$ -·········--··········- charged off {for TJUe insurers

onlyL·····--··········--·········--··········--··········--·········--·········· -······--······- ······--······-- ····--······___J) ·--······--··D 14. Investment income due and accrued ··--··········--·········--··········- -······--3.783,432 ······--······-- ····--···3,783,432 ·--·····3,906,868 15. Premiums and con~derations:

15.1 Uncollected premiums and agents' balances il the course of

collection _··········--··········--·········--··········--··········--·········- -······-17 ,068 ,991 ...... __ 1,350,799 ····--·15,718, 192 ·--···16,814,209 15.2 Deferred premiums, agents' balances and installments booked but

deferred and not yet due {including$ ···--······--····earned

but unbiled premiums>-······--······--······--······--······-······--······- ······--······-- ····--······___J) ·--······--··D 15.3 Accrued retrospective premiums {$ -··········--·········--· ) and

contracts subject to redetermination ($ ..... __ 46 ,286,735 >--······- -······-46,286 ,735 ······--······-- ····--·46 ,286,735 ·--···35 ,227 ,263 16. Reinsurance:

16.1 Amounts recoverable from reinsurers ···········--·········--··········- -······--6,561,042 ······--······-- ····--···6 ,561,042 ·--·····6• 716,728 16.2 Funds held by or deposited with reinsured companies __ ······--······--······- ······--······-- ····--······_____!) ·--······--··D 16.3 Other amounts receivable under reilsurance contracts ···········--······-······--······- ······--······-- ····--······___J) ·--······--··D

17. Amounts receivable relating to uninsured plans _······--······--······ -······--······- ······--······-- ····--······___J) ·--······--··D 18.1 Current federal and foreign income tax recoverable and interest thereon -···-······--······- ······--······-- ····--······___J) ·--······--··D 182Net deferred tax asseL_······--······--······--······--······- -······--······- ······--······-- ····--······_____!) ·--······--··D 19. Guaranty funds receivable or on deposit ·······--··········--·········--······ -······--······- ······--······-- ····--······___J) ·--······--··D 20. Electronic data processing equipment and software __ ······--······- -······--1,383, 101 ······--····566,723 ····--·······816,378 ·--······-765,505 21 . Furniture and equipment, including heatth care delivery assets

($ ····-····.75 ,375,953 >······--······--······--······--······ -······-76,:309 ,967 ······--····934,014 .... __ .75 ,375,953 ·--··.78 ,079,773 22. Net adjustment in assets and liabilities due to foreign exchange rates .......... -······--······- ······--······-- ····--······___J) ·--······--··D 23. Receivables from parent, subsidiaries and affi liates __ ······--······- -······--1,317,004 ······--······-- ····--···1,317,004 ·--·····1,938,061 24. Healthcare($ -······--16,735 ,614 )andother amounts receivable __ ...... _ 19,366 ,064 ...... __ 2,630,450 ····--·16,735,614 ·--···13,799,903

25. Aggregate write-ins for other-than-invested assets _··········--··········- -······-27 ,736 ,462 ······--27 ,736,462 ····--······___J) ·--······--··D 26. Total assets excluding Separate Accounts, Segregated Accounts and

Protected Cell Accounts (Lines 12 to 25~···--·········--··········--··········1---1......,4.-53.....,958...,.6.-7 ... 9-+-__ _.33-..2 ... 1-.8._448--.+-_ _.1._4 ... 20-....7_.4 .... 0 ... 2-.31-+--.-1.,.399....,..,.3._74.....,26 ... 1"-i 27. From Separate Accounts, Segregated Accounts and Protected

Cell Accounts......_··········--··········--·········--··········--··········--······-······--······- ······--······-- ····--······___J) ·--······--··D 28. Total llines 26 and 27\ 1 453 958 679 33 218 448 1 420 740 231 1 399 374 261

DETAILS OF WRITE-INS

1101. -······--······--······--······--······--······--······--······--······- ······--······-- ····--······--··· ·--······--······ 1102.

1103. 1198.

1199.

2501 .

2502. 2503.

Summary of remaining write-ins for Line 11 from overftow page ·--······ -······--······__j) Totals (Lines 1101throuah 1103 olus 1198l (Line 11 abovel 0

Ot her Noo -Mm il ted Assets__ ......... ·--··········--·········--··········- -······-27,736 ,462

······--······___j) ····--······___J) ·--······--··D 0 0 0

...... __ 27 ,736,462 ····--······___J) ·--······--··D -······--······--······--······--······--······--······--······--······- ······--······-- ····--······--··· ·--······--······

2598. Summary of remaining write-ins for Line 25 from overftow page ·--······ -······--······---1) ······--······___j) ····--······_____!) ·--······--··D 2599. Totals (Lines 2501throuah 2503 olus 2598! (Line 25 abovel 27,736 ,462 27,736,462

2


LIABILITIES, CAPITAL AND SURPLUS Current Period

2 Covered Uncovered

3 Total

Prior Year 4

Total

1. Clams unpaid Oess $ ·······--·······.112, 114 reinsurance ceded)__ ...... -··········-45,489 ,212 ··········--··········-- ·······--·45 ,489,212 ·····--···60,725,481

2. Accrued medical ilcentive pool and bonus amounts ·--······--······-··········--·········- ··········--··········-- ·······--··········_____!} ·····--·········--··D 3. Unpaid claimsadjustmentexpenses ........ ·--··········--··········--··········-··········-1,319,843 ··········--··········-- ·······--···1,319,843 ·····--·····1,319,843 4. Aggregate heatth policy reserves ilcluding the liability of

$ ...... ·--··········--····· for medical loss ratio rebate per the Public Health

Service AcL-..... ·--······--······--······--······--······- -··········-10,020 ,044 ··········--··········-- ·······--·10,020,044 ·····--···10,635,505 5. Aggregate ife policy reserves ··--······--······--······--······-··········--·········- ··········--··········-- ·······--··········___j) ·····--·········--··D 6. Property/casualty unearned premium reserve ·····--··········--·········- -··········--·········- ··········--··········-- ·······--··········_____!} ·····--·········--··D 7. Aggregate health claim reserves _······--······--······--······--··········--·········- ··········--··········-- ·······--··········____j) ·····--·········--··D 8. Premiums received in advance --·········--··········--··········--··········-··········-122,585 ,319 ··········--··········-- ....... __ 122 ,585,319 ·····--···35 ,854,955

9. Generalexpensesdueoraccrued_······--······--······--······-··········-87 ,298 ,519 ··········--··········-- ·······--·87 ,298,519 ·····--·.119 ,962,322 10.1 c ....... t federal and foreign income tax payable and interest thereon (including

$ ······--·········--· oorealized gains(losses))_ ...... --······--······-··········--·········- ··········--··········-- ·······--··········___o ·····--·········--··D 10.2 Net deferred tax liabii1Y-······--······--······--······--······- -··········--·········- ··········--··········-- ·······--··········___o ·····--·········--··D 11. Ceded reinsurance premiums payable-······--······--······--·· -··········--·········- ··········--··········-- ·······--··········____j) ·····--········.752.868

12. Amounts withheld or retained for the account of others ········--··········- -··········-1,600 ,015 ··········--··········-- ·······--··· 1,600 ,015 ·····--····· 1,584,926

13. Remittances and items not allocated-·········--··········--··········--·· -··········-1, 720 ,600 ··········--··········-- ·······--··· 1,720 ,600 ·····--·········--··D 14. Borrowed money {including S -·········--········· current) and

interest thereon $ ···········--··········- {including

$ ······--·········--· current>-··········--·········--··········--··········--··········--·········- ··········--··········-- ·······--··········___o ·····--·········--··D 15. Amounts due to parent, subsidiaries and affiliates-······--······--··· -··········-165,239 ,449 ··········--··········-- ·······--165 ,239 ,449 ·····--·.160 ,300, 713

16. Derivatives.... ..... ·--······--······--······--······--······--··········--·········- ··········--··········__j) ·······--··········___o ·····--·········--··D 17. Payable forsecurities ..... --······--······--······--······---··········-5,491,558 ··········--··········-- ·······--···5 ,491,558 ·····--·········--··D

18. Payable for securities lending ··········--·········--··········--··········--·· -··········--·········- ··········--··········-- ·······--··········_____!} ·····--·········--··D 19. Funds held under reinsurance treaties {with S ····--··········--········

authorized reinsurers, $ -······--······- unauthorized reinsure-rs

and S -··········--········· certified reinsure-rsL·-········--··········--······ -···---··- -···--··········-- ·······--··········____j) ·····--·········--··D 20. Reinsurance in unauthorized and certified {$ ·······--·········-- )

companies ········--··········--·········--··········--··········--·········--··········--·········- ··········--··········-- ·······--··········____j) ·····--·········--··D 21. Net adjustments il assets and liabilities due to foreign exchange rates _ -··········--·········- ··········--··········-- ·······--··········_____!} ·····--·········--··D 22. Liability for amounts held under uninsured plans ········--·········--·········· -··········--·········- ··········--··········-- ·······--··········____j) ·····--·········--··D 23. Aggregate write-ins for other liabii ties (including $ -··········-16, 689 , 889

current) ......... ·--·········--··········--··········--·········--··········--···-··········-474,442 ,978 ··········--··········_j) ....... __ 474 ,442,978 ·····--·528 ,322,417 24. Total liabii ties (Lines 1 to23~···--······--······--······--·······-··········....915,207 , 537 ··········--··········__j) ....... ---915,207,537 ·····--·919,459,030 25. Aggregate write-ins for special surplus funds··········--··········--·········- -··········-XXX ....... _ .......... _ XXX .... __ ·······--···9 ,000 .000 ·····--·········--··D 26. Common capital stock _··········--·········--··········--··········--··········-··········-XXX ....... _ .......... _ XXX .... __ ·······--··········--··· ·····--·········--··D 27. Preferred capital stock--······--······--······--······--·· -··········-XXX ....... _ .......... _ XXX .... __ ·······--··········--··· ·····--·········--··D 28. Gross paid in and contributed surplus --·········--··········--··········- -··········-XXX. ....... _ .......... _ xxx. .... __ ....... __ 177,753,051 ·····--··177,753,051 29. Surplus notes __ ······--······--······--······--······- -··········-XXX. ....... _ .......... _ XXX. .... __ ·······--··········--··· ·····--·········--··D 30. Aggregate write-ins for other-than-special surplus funds-······--······ -··········-XXX ....... _ .......... _ XXX .... __ ·······--··········_____!} ·····--·········--··D 31. Unassigned funds (surplus>-······--······--······--······--···-··········-)()()

STATEMENT AS OF MARCH 31 , 2017 OF THE KAISER FOUNDATION HEALTH PLAN OF THE NORTHWEST

STATEMENT OF REVENUE AND EXPENSES

Current Year To Date

Uncovered

1. Member Month._······--······--······--······--······--······--······ ...... _xxx... ..... . 2. Net premium income (including$ non-health premium income ...... _xxx... ..... . 3. Change in unearned premium reserves and reserve for rate credits -·········--·········· ...... _xxx... ..... . 4. Fee-for-service (net of$ -··········--·········-medical expenses>--······--··· ...... _xxx... ..... . 5. Risk revenue __ ······--······--······--······--······--······--······ ...... _ XX>ss) from agents• or premium balances charged off [{amount recovered

$ ····--·········-10 ,208 )(amount cllargedoff $ -··········--··224 ,418 )].. ____ _

29. Aggregate write-ins for other income or expenses ·········--··········--·········--··········

30. Net iloome or {loss) after capital gains tax and before all other federal income taxes (Liles 24 plus 27 plus 28 plus 29) ······--·········--··········--··········--·········

31. Federal and foreign income taxes incurred--······--······--······--······ 32. Net ilcome (loss) (Lines 30 minus 31)

DETAILS OF WRITE-INS

······--······-0

······--······_J)

······--······-0

······--······-0 ...... _xxx... ..... .

······--······_J)

······--······-0

...... _xxx... ..... .

...... _xxx... ..... . xxx

0601. Other Health Care ReventJe.__·········--··········--··········--·········--··········--··· ...... _xxx... ..... . 0602. Meaningfu l Use Grant Revenue__·········--··········--··········--·········--·········· ...... _xxx... ..... . 0603. -··········--··········--·········--··········--··········--·········--··········--·········· ...... _xxx... ..... . 0698. Summary of remaililg write-ins for Line 6 from overflow page -··········--··········--·· ...... _ XX>


STATEMENT OF REVENUE AND EXPENSES Continued)

CAPITAL & SURPLUS ACCOUNT


2

Prior Year To Date

3

Prior Year Ended

Oecember31

33. Capital and surplus prior reporting year.. ...... ----------------------·----------------------------------· ··--····~79,915,231 .......... _ 419,324,870 ........ ___!119,324,870

34. Net income or(loss) from Line 32 ··--······--······--······--······--······--· __________ 36 ,022,010 .......... _ (4,725,714) ........ __ 40 ,363,259

35. Change in valuation bas.is of aggregate policy and claim reserves ·······--·········--··········--·· ··--··········--········ ··········--·········___D ········--··········____j)

36. Change in net unrealized capital gains (losses) less capital gains tax of$ ······--··········--····· ··--··········--········ ··········--·········___!) ········--··········___j)

37. Change in net unrealized fore;gn exchange capital gain or (loss) ·--······--······--······ ··--··········--········ ··········--·········___!) ········--··········___j)

38. Change in net deferred income tax ···········--·········--··········--··········--·········--··········- ··--··········--········ ··········--·········___!) ········--··········___j)

39. Change in nonadmitted assets·······--······--······--······--······--······--· ··--····!18,411,569) .......... _(19,211 ,395) ········--····(945,813)

40. Change in unauthorized and certified reinsurance ····--··········--·········--··········--··········- ··--··········--····D ··········--·········___!) ········--··········___j)

41 . Change in treasury stock ·--··········--··········--·········--··········--··········--·········--·· ··--··········--········ ··········--·········___D ········--··········____j)

42. Change in surplus notes ··--··········--··········--·········--··········--··········--·········--·· ··--··········--····D ··········--·········___D ········--··········____j)

43. Cumulative effect of changes in accounting principles --······--······--······--······- ··--··········--····D ··········--·········___D ········--·····201. 153

44. Capital Changes:

44.1 Paid in _______________________________________________________________ ------------------------ .......... ___________ __JJ ........ ____________ __J)

44.2 Transferred from surplus (Stock Dividend) ·--·········--··········--··········--·········--·· ··--··········--········ ··········--·········__JJ ········--··········__J)

44.3 Transferred to surplus ·····--··········--·········--··········--··········--·········--··········- ··--··········--········ ··········--·········___D ········--··········____j)

45. Surplus adjustments:

45.1 Paid in _______________________________________________________________ ··--··········--········ ··········--·········__JJ ········--··········__J)

45.2 Transferred to capital (Stock Dividend)---------------------------------------- ___________________ .!) .......... ___________ __JJ ........ ____________ __J)

45.3 Transferred from capital _ ...... --······--······--······--······--······- ··--··········--········ ··········--·········__JJ ········--··········__J)

46. Dividends to stockholders ····--·········--··········--··········--·········--··········--··········- ··--··········--········ ··········--·········___!) ········--··········___j)

47. Aggregate wrtte-ins for gains or (losses) in surplus······--······--······--······--····· ··--········8 ,007 ,022 .......... _ 7 ,902 ,973 ........ __ 20 ,971,762

48. Net change in capttal and surplus (Lines 34 to 47) --------------------------------- __________ 25 ,617 ,463 .......... _(16,034, 136) ........ __ 60 ,590 ,361

49. Capital and surplus end of reporlilg period (Line 33 plus 48) 505 ,532. 694 403,290 ,734 479 ,915,231

DETAILS OF WRrTE~NS

4701. Pens ion - SS.IP 10L-...... ------------------------------------------------- ____ ........ 5 ,015,005 .......... _ 4,225 ,000 ........ __(33 ,683,092)

4702. Post Ret i rement Benef i t • SS.IP 92 .. ----------------------------------------- ____ ........ 2 ,992,017 .......... -3,677 ,973 ........ __ 54 ,654,854

4703.

4798. Summary of remaining write-ins for Line 47 from overflow page ···········--·········--··········--·· ··--··········--····D ··········--·········___D ········--··········____j)

4799. Totals llines 4701 throuah 4703 olus 4798\ l line 47 abovel 8,007 ,022 7 ,902 ,973 20 ,971,762

5


CASH FLOW

Cash from Operations


2 Prior Year To Date

1. Premiums collected net of reinsurance. ..... ·--······--······--······--······--······- ...... ----969 ,366,695 ______ 810 ,645 ,358 2. Net investment income ·······--·········--··········--··········--·········--··········--··········--····· ······--4,857 ,414 ····---10,0:33 ,263 3. Miscellaneous income ········--··········--·········--··········--··········--·········--··········--····· 52 390 908 58 191 543 4. Total (Lines 1to 3) ___________________________________________________________ 1,026 ,615,017 878,870 ,164

5. Benefit and loss related payments ···--·········--··········--··········--·········--··········--········· ...... ------870,543,993 .... __ 824,915,967 6. Net transfers to Separate Ac.counts, Segregated Ac.counts and Protected Cell Acoounts_··········- ······--······-- ····--······--0 7. Commissions, expenses paid and aggregate write-ils fe


EXHIBIT OF PREMIUMS, ENROLLMENT AND UTILIZATION Co111>rehensive

(Hospital& Medical) I

2

I 3

I Total I Individual Grouo 4 I 5

Medicare I Vision Sooolement Onlv I 6

I Dental Onlv Federal Employees Health Benefits Plan

8

H ie XVIII Medicare

9

Title XIX Medicaid

10

Other

To~I ::::;e~-~-: ······-······-······~·····-·····498,474 L ...... _ 38,655 r··········-···356 ,064 ·····-·········-··D t··········-········D r··········-·········__() ·-······-19,621 t··········-84 ,126 r······-······___J) -······-··0 2. Fi1$t0uarter_ ...... --······--······--······ ·····--·····f:il0 ,707 ...... _ 55,007 ··········-···3.59 ,208 ·····-·········-··D ··········-········D ··········-·········____() ·--······-19,566 .......... _ 8.5,026 ······--······_____() --······--··D

3. Second Quarter··--······--······--······ ·····--······___J) ······--····!) ··········-··········_J) ·····-·········-··!) ··········-········!) ··········-·········____() ·--······--··!) ··········-········!) ······--······_____() --······--··!)

4. Third Quarter······--······--······--······ ·····--······___J) ······--····D ··········-··········_J) ·····-·········-··D ··········-········D ··········-·········____() ·--······--··D ··········-········D ······--······_____() --······--··D 5. Current Year 0 0 0 0 0 0 0 0 0 0

6. Current Year Member Months 1.551.454 162,666 1.075,806 0 0 0 58,821 254 .153 0

Total Member Arrbulatory Encounter$ for Period:

7. Physidan __ ······--······--······--······---l·····--·····493 ,893 ~ ...... _ 33 ,680 ~-·········-···256 ,1 73 84 ,590

·····-·········-··!) 1---··········-········J) ~-·········-·····58 ,1 38 ol ol 53 ,535

·--...... _1:::: t .......... _1::: ······-······_____() 1-······-··J) 0 0 8. Non-Physidan _ .. ········-·········-··········-·········· 192,300 9,432

-..J 9. Total 686 ,262 43 , 112 I

10. Hosoital Patient Oavs Incurred 32,901 1,645

340,763 0 0 111 ,673 23,245 I 167 , 469 0 0 12,672 0 0 0 1,458 17 ,126 0 0

11. Number of lnoatient Pdmissions 8,749 463 3,915 345 4.026

12. Health Premiums Written (a)._ ......... ·-··········-············----894,259 ,374 1--...... 57 ,100,328 ~ .......... _ 497,458 ,229 l ..... -·········-··J) 1--·········-········J) ~ .......... ----36,957 ,833 l·--····36 ,940,378 1-........ 265,802,6'.)6 L... .. ·--······___J) l--······--··J) ::. ~::::::::~;~.~;·~~·==::.... m•t::::=::::::~ c::::::=:::::: 15. HealthPremiums Earned .... ·--······--······ ..... -----894 ,259,374 ...... 57,100,328 .......... _ 497,458,229 ·····-·········-··D ··········-········D .......... ---36,957 ,833 ·--····36 ,940,378 ........ a35,802,W6 ······--······_____() --······--··D

16. Property/Casualty Premiums Earned_······--······ ·····--······___J) ······--······ ··········-·········· ·····-·········-······ ··········-·········· ··········-·········- ·--······--······ ··········-········· ······--······-- --······--······• 17. AmountPaidforProvisionofHealthCareServlces ........... -----874 ,972,9'.JJ ...... ~7 .288,454 .......... _ 436,643.413 ·····-·········-··!) ··········-········!) .......... ---32,637,701 _______ .32,341 ,991 ........ 112,732,510 ······--······-(196) ______ 53,328,987

18. Amount Incurred for Provision of Health Care Services 800 848 765 47 075 239 432 075 268 0 0 32 008 572 32 100 605 264 127 227 0 51 661 854

(a) For health premiums written: amount o f Medicare TitleXVl ll e>C8111>t from stateta>C8sor fees $ 265,802,6'.)6

OErltal mentlers are cOtll ted as Medical mentlers .

The membe rsh ip roove does not i ncluded the COO (Canmmi ty Care Orgooization) and self- funded mentlers . Menber mon ths for the CCO and self- fmded groops are 125,774 ood 37,650, respectively.

co


CLAIMS UNPAID AND INCENTIVE POOL, WITHHOLD AND BONUS (Reported and Unreported) Aaing Analyoio of Unpaid Clalmo

1 I 2 I 3 I 4 I s I 6 i>«:count 1 - 30 Davs 31 - 60 Davs 61 - 90 Davs 91 - 120 Davs Oller 120 Davs

7 Total

Claims urc>aid (Reported)

=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=t::::::::::=::::::::::=::::t=::::::::::=::::::::::=t:::::::::=::::::::::=::::::::t=:::::::::=::::::::::=t::::::::=:::::::::=::::::::::t::::::::::=:::::::::=:::I

=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=t::::::::::=::::::::::=::::t=::::::::::=::::::::::=t:::::::::=::::::::::=::::::::t=:::::::::=::::::::::=t::::::::=:::::::::=::::::::::t::::::::::=:::::::::=:::I

=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=::::::::::=::::::::::=:::::::::=t::::::::::=::::::::::=::::t=::::::::::=::::::::::=t:::::::::=::::::::::=::::::::t=:::::::::=::::::::::=t::::::::=:::::::::=::::::::::t::::::::::=:::::::::=:::I

=:::::::::: :::::::::: ::::::::: :::::::::: :::::::::: ::::::::: :::::::::: :::::::::: ::::::::: :::::::::: :::::::::: :::::::::1:::::::::: :::::::::: ::::r :::::::::: ::::::::::3::::::::: :::::::::: :::::J ::::::::: :::::::::: r::::: ::::::::: ::::::::::E:::::::::: ::::::::: J ~-=: ~f,~~ =~~i: i:~;~:-~un..;~~~~---::::::---- .... ::::::---- ... :::::::--- ... ::::::---- .... ::::::---- ... :::::::---f :::::::::: :::::::::: :~f :::::::::: ::::::::::_n 0399999 l'Qgregate accounts not individually listed-oovered (1,4ll2,880) (1,00ll,024

::::::::: :::::::::: ::::~:f ::::::::: ::::::::::_n v::::: ::::::::: :::::::~F:::::::::: :::::::::==1·· (7ai ,8Ul (621,003) (5, 118.784) (8,937 ,579

0499999 Subtotals I (1,482,880!1 (1,00li,024 1700,a&il I


UNDERWRITING AND INVESTMENT EXHIBIT ANALYSIS OF CLAIMS UNPAID-PRIOR YEAR-NET OF REINSURANCE

Claims Liability Paid Year to Date End of Current Quarter 5 6

2 3 4 Estimated Claim

On I On Reserve and Claim Claims Incurred Prior On Claims Urc>aid On Claims Incurred Liability to January 1 of Claims Incurred Dec. 31 Claims Incurred in Prior Years Dec. 31 of Current Year Ourill!l the Year of Prior Year During the Year (Columns 1 + 3) Prior Year Line of Business

1. Corrc>rehensive (hospital and medical) .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... - .. 1 ...... _ .. 29, 178 ,849 l ... _.A57, 149 ,815 l-.......... 4,498 ,847 !--.......... aJ,f.62,649 ~ .......... _33,677,696 L .......... ---29 ,954,971

2. Medicare Supplement.. ...... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... -1 ...... - ......... - ..... 1 ... - .......... - ....... 1-.......... - .......... 1--......... - .......... -1-.......... - ......... .Jl L .......... - .......... _o

3. Oentalonly_ ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... 1 ...... _ .... 4,3-02,()4() 1 ... - ..... 28,335,661 1-.......... - .......... !--......... _4,472,911 ~ .......... _ 4,3()2,0«l L .......... _ 4,3()2,0«l

4. Visiononly_ .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... - .......... - ......... - .......... 1 ...... - ......... - ..... 1 ... - .......... - ....... 1-.......... - .......... j__ ......... - .......... _J_ .......... - ......... .Jl L ......... - .......... _o

5. Federal Errc>loyees Health Benefits Plan .. ___ ...... --...... --...... --...... --...... --...... --...... --...... --...... --.. 1 ...... - .... 1,755,418 1 ... - ..... 3(),471,790 1-.......... _ 134,951 l--......... _1,385,688 ~ .......... _ 1,890,363 L .......... _ 1,762,025

6. TitleXVlll - Medicare _ ...... --...... --...... --...... --...... --...... --...... --...... --...... --...... --...... --...... -l ...... _ .. 14,4Zl,744 1 ... - ... 258,499 ,787 l-........ (1,«J0,978) j__ .......... 13,349 ,100 ~ .......... _13,022,766 L .......... ---20,553,516 des $ ___ ,, .... __ loonsoradvonoes toP'

STATEiMENT AS OF MARCH 31, 2017 OF THE KAISER FOUNDATION HEALTH PLAN OF THE NORTHWEST

NOTES TO FINANCIAL STATEMENTS

1) Summary of Significant Accom1ting Policies

A . Acconnting Practices

The statutory financial statements of Kaiser Foundation Health Plan of the Northwest (Health Plan) have been prepared in conformity with the National Association of Insm·ance Commissioners' (NAIC) Accounting Practices and Procedm·es Manual (NAIC SAP), the NAIC Annual Statement Instmctions, and other accounting practices, as prescribed or permitted by the Oregon Department of Consumer and Business Services Division of Financial Regulation (State of Oregon). For the quarter ended March 31, 2017 and year ended December 31, 2016, there were no differences between the NAIC SAP and the practices prescribed by or pennitted by the State of Oregon that impacted Health Plan's statuto1y net income or capital and surplus. As noted in the schedule below (in thousands):

NET INCOME ( 1) Health Plan state basis (Page 4, Line 32, Columns 2 &4)

(2) State PrescnOed Practices that are an increase/( decrease) NAlC SAP

(3) State Permitted Practices that are an inaease/{decrease) NAIC SAP (4) NAlC SAP(l-2-3=4)

~ (5) Health Plan state basis (Page 3, Line 33, Columns 3 & 4)

(6) State PrescnOed Practices that are an increase/( decrease) NAlC SAP

(7) State Permitted Practices that are an inaease/{decrease) NAIC SAP (&)Statutory Surplus, NAIC SAP (5-6-7=8)

F/S FIS Quarter Ended SS..\P# Pa;• Line# 2017

36,022

36022

505,533

505,533

B. Use of Estimates in the Preparation of the Financial Statements

No significant changes from the 2016 annual statement.

C. Acconnting Policies

Recently Issued Accounting Standards

Year Ended 2016

40,363

40.363

479,915

479,915

In August 2016, the NAIC adopted revisions to Statement of Statuto1y Accounting Principles No. 55, Unpaid Clainis, Losses, and Loss Adjustment Expenses. The guidance was adopted prospectively by Health Plan for the period ended September 30, 2016. The revisions clarify accotu1ting treatment of costs associated with salvage and subrogation. The adoption of this standard did not have a significant effect on the financial statements and related disclosures.

Loan-Backed Stmcttu·ed Securities

Health Plan does have investments in loan-backed and/or stmctured securities and collateralized m01tgage obligations. These securities are stated on the amo1tized cost basis and adjustments are made prospectively.

2) Accounting Changes and Co!1'ections ofEffors

For the quarter ended March 31, 2017, Health Plan reclassified certain accounts between lines within the Statement of Revenue and Expenses. The changes continue to comply with statuto1y accotu1ting guidance, align the Health Plan with other Kaiser Health Plans, and bring consistency across the program. The changes did not have impact on capital and stuplus.

3) Business Combinations and Goodwill


4) Discontinued Operations


10

STATEiMENT AS OF MAR CH 31, 2017 OF THE KAISER FOUNDATION HEALTH PLAN OF THE NORTHWEST


5) Investments

A - C.

Health Plan has no investments in mortgage loans, restructtU'ed debt or reverse mortgages.

D. Loan-Backed Securities

(1) Health Plan does have investments in loan-backed and/or stmctmed securities and collateralized m01tgage obligations. Prepayment assumptions are obtained from a third-party vendor data source.

(2) During the three months ended March 31, 2017, the aggregate other than tempora1y impaiiment (OTII) recognized for certain loan backed and/or stmctllred sectu'ities was as follows (iii thousands):

(1) (2) (3) Amo11ized Cost Othe r-than- Fair Value (1)-{2)

B a5 is B e ftn-e Othe r- T e mporar y

om recognized 1st Quarter a . Intent to sell $

b. Inability or lack of intent to retain the investment in the security for a period of time sufficient to recover the amortized

cost basis

than-T e mporary Impairme nt Impairme nt R ecognize d in Loss

- $ - $

55,921 124 55,797

c . Total 1st Quarter _s._ ____ 55 ..... 92_1_ .. s ______ 1_2_4_ $.._ ____ 55.;,7_9_7_

(3) Each impaiiment of loan-backed and /or structtu·ed sectu'ities recognized dtu'ing the three months ended March 31, 2017 was as follows (in thousands):

(1) (2) (3) (4) (5) (6) (7) Book/Adjus ted Amo1·tized Cos t Date of

CatT)ing Value Recognized After Other- Financial Amortized Cos t Present Valne Other-Than- Than- Statement Befo1·e Current of P1·ojected Temporai·y Tempo1·a1·y Fair Value a t W he1·e

CUSIP Per iodOTTI Cash Flom Impail'ment lmpafrment timeofOTTI Repor ted 02007IAC6 $ 3,200 $ 3,195 $ 5 $ 3,195 $ 3,195 3/31/2017 05582XAD4 $ 6,914 $ 6,892 $ 22 $ 6,892 $ 6,892 3/31/2017 3128MFAH1 $ 3,849 $ 3,845 $ 4 $ 3,845 $ 3,845 3/31/2017 3128QOQK6 $ 3,243 $ 3,230 $ 13 $ 3,230 $ 3,230 3/31/2017 3137AEIT2 $ $ 1 $ - $ $ 3/31/2017 3137B9SJ5 $ 1,634 $ 1,634 $ - $ 1,634 $ 1,634 3/31/2017 3137BDY67 $ 2,466 $ 2,463 $ 3 $ 2,463 $ 2,463 3/31/2017 3137BDY67 $ 1,129 $ 1,128 $ $ 1,128 $ 1,128 3/31/2017 3138ENTP4 $ 1,583 $ 1,580 $ 3 $ 1,580 $ 1,580 3/31/2017 38375BVN9 $ 5,614 $ 5,602 $ 12 $ 5,602 $ 5,602 3/31/2017 38375BVN9 $ 9 $ 9 $ - $ 9 $ 9 3/31/2017 38375BVN9 $ 9 $ 9 $ - $ 9 $ 9 3/31/2017 38375BVN9 $ - $ - $ - $ - $ 3/31/2017 38375BVN9 $ - $ - $ - $ - $ 3/31/2017 38376R.QL3 $ 5,493 $ 5,483 $ 10 $ 5,483 $ 5,483 3/31/2017 38378WZG1 $ 2,887 $ 2,887 $ - $ 2,887 $ 2,887 3/31/2017 65478WAD7 $ 3,020 $ 3,017 $ 3 $ 3,0 17 $ 3,017 3/31/2017 98161FAD7 $ 4,320 $ 4,307 $ 13 $ 4,307 $ 4,307 3/31/2017 03764HAAO $ 1,620 $ 1,614 $ 6 $ 1,614 $ 1,614 3/31/2017 14311FAA9 $ 3,215 $ 3,200 $ 15 $ 3,200 $ 3,200 3/31/2017

15136R.AC9 $ 1,002 $ 999 $ 3 $ 999 $ 999 3/31/2017 46648CAE4 $ 1,363 $ 1,362 $ $ 1,362 $ 1,362 3/31/2017 67590WAE4 $ 842 $ 840 $ 2 $ 840 $ 840 3/31/2017 92329YAA4 $ 2,508 $ 2,500 $ 8 $ 2,500 $ 2,500 3/31/2017

Total $ 124

(4) - (5)

For the three months ended March 31 , 2017, there were no impaii·ed loan-backed sectu'ities for which an other-than-tempora1y impairment has not been recognized iii earnings as a realized loss.

10.1


NOTES TO FINANCIAL STATEMENTS E - G.

For the three months ended March 31 , 2017, Health Plan had no investments in repurchase agreements and/or securities lending transactions, real estate or low-income housing tax credits.

H. Restricted Assets

(1) Restl'icted assets (including pledged) as of March 31 , 2017 were as follows (in thousands) :

... ~uotkor•~-...... -• to Hll>·~ftl1Bc;;tpb1Uoc:ok

JWpdu~toRnB~ $~ b«kiDg 6mdiag .....,,.)

(2) - (3)

T« al c.r..n'll AtllllHt (GfA) (MllliaedA --

175

(MllliuelA :...~

T•ll Sc....-MHli•I CSIA>

llaldtle4AIHU "cai•efA NM.-.'*">

$/A Anm

S•lf*C•ICfA ld~ry(')

CAUilll1fA NM.-;•edl

175 s - s - s - $

(1 plH J ) (4Uil1td&

NM..-i.i•e4

2r.

215 $

27

- $ 275 s

There were neither assets pledged as collateral nor other restricted assets .

I. Working Capital Finance Investments

Health Plan does not have Working Capital Finance Investments.

J. Offsetting and Netting of Assets and Liabilities

Not applicable to the Health Plan.

K. Stmctured Notes

Stmctured notes held at March 31, 2017 were as follows (in thousands):

·--, ...... .., (S•O.a T)

- $

T .... C'11t1at YcM'~ llau~C'kd.

($ .... , )

215

l'75

%

0.02%

0.02%

%

0.02%

0.02%

CUSIP Book/ A!!:jus ted l\Jorti:;a i:;e-Refe1·enc.ed Identification Ac.tual Cost Fait- Value Cat'tJini:; Value S ecuri!l' (Xes/No}

30711XAA2 $ 312 $ 315 $ 312 Yes

30711XAC8 349 352 350 Yes

30711XAE4 336 344 339 Yes

30711XAJ3 4 4 4 Yes

30711XBJ2 2,303 2,330 2,303 Yes

30711XBZ6 817 828 817 Yes

3137G>AC3 155 156 155 Yes

3137G>EQ8 152 153 153 Yes

3137GOJQ3 536 538 537 Yes

Totals $ 4,964 $ 5,020 $ 4,970

L. 5 • Secm-ities

Health Plan does not have 5* Secm-ities.

M. Short Sales

There were no sho1t sales as of March 31 , 2017 or December 31, 2016.

10.2



N. Prepayment Penalty and Acceleration Fees

Securities sold, redeemed or otherwise disposed because of a callable feature (including make whole call provisions) as of March 31, 2017 were as follows (in thousands):

Aggregate Amount of

Number of Jn~-es tment Category CUSIPs Income

Make Whole I $ 23

Traditional 2 -

6) Joint Ventures, Partnerships & Limited Liability Companies


7) Investment Income


8) Derivative Instnunents


9) Income Taxes


10) Information Conceming Parent, Subsidiaries and Affiliates


11) Debt

As of March 31, 2017 and December 31 , 2016 Health Plan has no bo1l'Owings.

12) Retirement Plans, Defell'ed Compensation, Postemployment Benefits and Compensated Absences and other Postretirement Benefit Plans

( 4) Components of net period benefit cost:

Pension:

Health Plan pa1t icipates with affiliated organizations in a defined benefit pension plan covering substantially all its employees. Benefits are based on age at retirement, years of credited se1v ice, and average compensation for a specified period prior to retirement. Contributions are intended to prnvide not only for benefits attributed to service to date but also for those expected to be eamed in the foture.

The pension plan is administered by KFHP. Plan assets for Health Plan are not segregated and, accordingly, are not disclosed below. However, KFHP separately accotu1ts for Health Plan liability and expense, and KFHP allocates pension expense and related prepaid or accrued benefit costs to Health Plan based on pa1t icipant demographics and plan prnvisions.

10.3


NOTES TO FINANCIAL STATEMENTS Health Plan Allocations

The accrued pension plan liability allocated to Health Plan at December 31, 2016 and the change through March 31, 2017 are as follows (in thousands) :

Allocated pension plan liability at December 31 , 2016 Provision Contributions Allocated pension plan liability at March 31 , 2017 Unrecognized transition liability GAAP provision adjustment Allocated GAAP basis pension obligation at March 31, 2017

$

$

385,61 l 12,647

{66,728) 33 1,530

(587) 330,943

For the three months ended March 31, pension expense allocated to Health Plan was as follows (in thousands):

Service cost Interest cost Expected return on plan assets Amortization of net actuarial loss Amortization of prior service cost

Net pension expense

Other changes in plan assets and benefit obligations recognized in capital and surplus:

Amortization of net actuarial loss Amortization of prior service cost

Total recognized in surplus

$

2017

15,739 9,222

(12,314) 4,787

228

17,662

(4,787) (228)

(5,015)

Total recognized in net periodic benefit cost and surplus $ 12,647 ------

Plan assets and actuarial assmnptions are materially consistent with the 2016 annual statement.

Postretirement:

Certain employees may become eligible for postretirement health care and life insm·ance benefits while working for Health Plan. Benefits available to retirees, through both affiliated and unaffiliated provider networks, va1y by employee group. Postretirement health care benefits available to retirees include subsidized Medicare premiums, medical and prescription dmg benefits, dental benefits, and vision benefits.

The accmed liability for postretirement benefits at December 31, 2016 and the change through March 31 , 2017 are as follows (in thousands):

Accrued benefit liability at December 31, 2016

before liability transfer to KFHP

Liability transferred to KFHP

Accrued benefit liability at December 31, 2016 Provision

Contributions Benefits paid or provided

Accrued benefit liability at March 31, 201 7

GAAP provision adjustment

GAAP basis accumulated postretirement

obligation at March 31, 2017

10.4

$ 205,198

(83,064)

122,134

2,691

(4,365) 120,460

(62)

$ 120,398



For the three months ended March 31 , postretirement benefits expense was as follows (in thousands):

Service cost Interes t cost Expected renun on plan a ssets Ainortization of prior service cos t Ainortization of net actuarial loss

P ostretire1nent benefits e:>q>ense Other changes in plan assets and benefit obligations

recognized in capital and Sl.l!phlS : Ainortization of prior s ervice cos t Ainortization of net actuarial loss

Total recognized in surphlS

$ 2017

1,992 4,768

(4 ,069) 2,837

155 5,683

(2,837) (155)

(2,992) Total recognized in net periodic benefit cos t and

Sl.l!phlS $ ____ 2 .... 69_1_

Actuarial assumptions are consistent with the 2016 annual statement asstunptions.

13) Capital and Surplus, Shareholders' Dividend Restrictions and Quasi-Reorganizations


14) Contingencies


15) Leases


16) Information about Financial Instnunents with Off-Balance Sheet Risk and Financial Instrtunents with Concentrations of Credit Risk.


17) Sale, Transfer and Servicing of Financial Assets and Extinguislunents of Liabilities

A - B. Transfer of Receivables Repo1t ed as Sales & Transfer and Servicing of Financial Assets

Health Plan has no transaction subject to the disclosure requirements of this footnote during the reporting period.

C. Wash Sales

SSAP No. 103 Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (SSAP No. 103), paragraph 28 requires a repo1ting entity to disclose any wash sales involving securities with a NAIC designation of 3 or below. Health Plan's investment strategy does not include purchasing any sectu'ities with a NAIC designation of 3 or below, two secm'ities were held at March 31, 2017 with a NAIC designation of 3. Dmmg 2017 and 2016, Health Plan did not pa1ticipate in any wash sale as defined by SSAP No. 103.

18) Gain or Loss to the Repo1ting Entity from Uninsm·ed A&H Plans and the Uninsured Portion of Partially Insured Plans


19) Direct Premium Written/Produced by Managing General Agents/ Third Pa1ty Administrators


20) Fair Value Meastu·ements

A - B.

Health Plan has no assets or liabilities that are measm·ed and reported at fair value in the statement of financial position after initial recognition.

10.5



c.

Investments are reported at lower of amortized cost or fair value, with impaitment recorded if amortized cost is greater than fail· value. The fail· values of investments are based on quoted market prices, if available, or estimated usit1g quoted market prices for sinlllar investments. Iflisted prices or quotes are not available, fail· value is based upon other observable inputs or models that primarily use market based or independently sourced market parameters as inputs. In addition to market information, models also incorporate transaction details such as maturity. Fait· value adjustments, including credit, liquidity, and other factors, are included, as appropriate, to arrive at a fail· value measm·ement.

Health Plan utilizes a three level valuation hierarchy for fail· value measm·ements. An illstnunent's categorization within the hierarchy is based upon the lowest level of input that is significant to the fail· value measm·ement. For illstnunents classified in level 1 of the hierarchy, valuation inputs are quoted prices for identical instnunents it1 active markets at the measurement date. For illstmments classified in level 2 of the hierarchy, valuation inputs are directly observable but do not qualify as level 1 inputs. Examples oflevel 2 inputs include: quoted prices for sitnilar instnunents it1 active markets; quoted prices for identical or sitnilar instnunents in inactive markets; other observable inputs such as interest rates and yield ctuves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates; and market co1Telated it1puts that are derived principally from or co1Toborated by obse1vable market data. For instnunents classified it1 level 3 of the hierarchy, valuation inputs are tu1obse1vable inputs for the it1stnunent. Level 3 it1puts incorporate asstunptions about the factors that market participants would use in pricit1g the it1stnunent.

At March 31 , 2017, bonds and sho1t -term iii vestments at statement value and estitnated fa it· value, derived usit1g level 2 inputs, were as follows (it1 thousands):

Z017 Aggregate Acbitted Le,"e] 1 Le'"el l 1..e,~13 Type o!Fmancial Instrument Fair Value .;.\a.sets

Sb.ort~enninvestments:

Money muket funds $ 27,665 27,665 $ $ 27,665 Industrial and niscellaneous bonds 4~3 4,222 4983

Total short-tenn investments 3~648 32644 32648

Bonds and other invested assets: U.S. govemment bonds 317,310 316,824 317,310 All other govemment bonds 21,612 21,584 21,612 U .S. states, tenitories and possessions 963 961 963 U .S. special revenue bonds 16,257 16,227 16,257 l.oan-b.aclced and/or structured securities 195,707 194,917 195,707 Industrial and niscellaneous bonds 452047 448476 45~047

Total bonds and other invested assets UX>3,896 998.989 1.003 896

Total investments $ 1.036544 1.031.633 $ $ 1.036544

Z016 Aggregate Acbitted Le,"e] 1 Le'"el l 1..e,~13 T'J!! o!Fmancial Instrument Fair Value • .:.\ssets

Sb.ort~enninvestments: Money muket funds $ 14,733 14,733 $ $ 14,733 Industrial and niscellaneous bonds 6~17 6~10 6217

Total short-tenn investments 20950 20.943 20.950

Bonds and other invested assets: U.S. govemment bonds 329,244 328,781 329,244 All other govemment bonds 15,020 15,019 15,020 U .S. states, tenitories and possessions 967 965 967 U .S. special revenue bonds 18,584 18,579 18,584 Loan-backed and/or structured securities 201,834 200,993 201,834 Industrial and niscellaneous bonds 437.2!!!! 434 751 437.966

Total bonds and other invested assets 1.003,615 999088 1.003 615

Total investments $ 1.0247565 11020m1 $ $ 1.0247565

D.

There were no investments at March 31 , 2017 for which it was not practicable to estimate fail· value.

21) Other Items

Health Plan had no other items for the repo1ting periods.

22) Events Subsequent


10.6

$

$

$

$

Kot P rac-ti


NOTES TO FINANCIAL STATEMENTS 23) Reinsurance


24) Retrospectively Rated Contracts and Contract Subject to Redetennination

E. Risk Sharing Provisions of the Affordable Care Act

(1) Health Plan wrote health it1stu·ance premitun which is subject to the Affordable Care Act risk sharing provisions.

(2) Risk sharing provisions relating to the Affordable Care Act (ACA) were as follows:

a. Peimanent ACA Risk Adjustmi!nt Program

~ I. Premiumadjustmi!nts receivable due to ACA Risk Adjus tment

I Jahilities

2. Risk adjus tm!nt us er fees payable for ACA Risk Adju.stment 3. Premiumadju.stm!nts payable due to ACA RiskAdju.stm!nt

Operations (Revenue & Expense) 4. Reported as revenue in premium for accident and health contracts

(written/collected) due to ACA Risk Adjustment

5. Reported in e"l'enses as ACA risk adjustment user fees (incurred/paid)

b . Transitional ACA Reinsurance Program and OTRP

~

$

I. Amounts recoverable for claims paid due to ACA Reinsurance and OTRP $

2. Amounts recoverable for claims unpaid due to ACA Reinsurance (Contra Liability)

3. Amounts receivable relating to uninsured plans for contributions for ACA Reins urance

I jahiljtitrn

4. Liabilities for contributions payable due to ACA Reinsurance - not reported as ceded premium

5. Ceded reins urance premium; payable due to ACA Reinsurance

6. Liabilities for amounts held under uninsured plans contributions for ACA Reins urance

Operations ffieyenne & Emense)

7. Ceded reins urance premium; due to ACA Reinsurance

8. Reins urance recoveries (income statement) due to ACA Reinsurance and OTRP payments or e"l'ected payments

9. ACA Reinsurance contributions - not reported as ceded premium

c. Te~orary ACA Risk Corridors Program

~ I. Accrued retros pective premium due to ACA Risk Corridors

Liabilities

2. Reserve for rate credits or policy e"l'erience rating refunds due to ACA Risk Corridors

Operations (Revenue & Expense) 3. Effect of ACA Risk Corridors on net premium income (paid/received)

4. Effect of ACA Risk Corridors on change in reserves for rate credits

10.7

$

March 31. 2017

9,066,647

117,238 5,000,000

1,000,000

28,652

6,561,042

112,114

2,136,326

(251,891)



(3) Roll-forward of prior year ACA risk-sharing provisions for the following asset (gross of any nonadmisstion) and Liability balances, along with the reasons for adjustments to prior year balance:

UnsettJed&larasasofthe Dif&noces u """'' ""°"' n ...

Recm-edorPaida:>oftbt Prior Year Prior Year Q.mu&tiw Q.mulati\te AcauedD.migtbePriorYear Ozrmt Year oo. Business AccruedLess Accrued Less Balloce from Bal&«fl:om

oo 9Jsioess Written Befort Written Befort Deambe:r 31 of Pa)u:ien.tS Pa)u:iellls (Col ToPri«Ytar ToPri«Yur PriorYean PriorYun(Col December 31 of tht Prior y NI' the Prior Year (Col 1-ll 2-4\ lWloces Balallces (Col l -3+7\ 2-«tl

l 2 3 4 s 6 7 a 9 10 Riaiv .... R.eamble Riaiv .... Rec.eit•ata ... F.iceit•able

a. Permanem ACARS Proi.'am l . Prmlilm mmrsreceivabe $ 9.111569 s 744.922 9,066,647 s s 9.066.641 l. PremilmaCllUStmems 6,000,000 6,000,000 1.000. A S.000.000 3. SillotalACAPetmaDelllRi.sk """'Pto 9.111569 6,000,000 744.912 9,066,647 6,000,000 1.000. 9.066.641 S.000.000

b. TransitioD&I. ACA IWmtnrn Proeram wl OTRP } . AmolZll:SfKO'Wfabte for claims O.aid 6.116.n1 1.010.939 S.705.788 &SS.2SS 6561.043 - ............... tsrecO\lni ,_ , .... _. . .. ,~·· ........ , . " "'"'" "·-- '

UIUSfKtl\'I to 4. LilitililiiK forcoo.ttt1ttioo.spayable lie to ACA 9,928.764 7.792,438 2.136.326 2.136,326 ReiD.uatx:e - oot .........redu aded........n ... S. C.ededre.iml.nnce Ulmna\'lbie 7Sl,86S 752.SISI 6. 1.ia •forUDOUD!:s beldl.rldel"miDslnd 7. &aotalACA TransitiooalReia.slraoceProgram 7.93S.93S 10.681.632 1.010.939 l .S4S.306 6,924.996 2.136.326 (251.139) 6,673.157 2.136,326 illdOTRP

I . Accrued retro .,. l. Reserve forrateaeditsorpolicynpe:rierlc.eratiD.g 3. Silotll M:A Rist Coaidors Pro !Diil

d ToWforACARisl - $ 17,747.504 s 16.611.632 1.755.SOil l .S4S.306 $ IS.991.643 S S.136.326 s tl'il ,339' s 1.000. 15.739,$04 7.136,326 Explanation of Adjuslmems A (SIM) Decnase in lia'tility based.on Amarial information recemd Muth 2017 B. CMSretisedmiisedfmal 2015 RI ls;r;erReport oo 03J3 lfl017. 2016 amoum bis been t.pB!:td11ith tbe latest daimsdat1.

(4) Roll-Forward of Risk Corridors Asset and Liability Balances by Program Benefit Year:

A.outd as ofn...mber31 Rtt.iwdor Paid as oflbe Dif!moces A~

.nogram ear.

Afoued~··

2014 R.esen·e for nte mdin or policy_....ratiog relulld;



T •lal t.r Risk Ccirriion

of lhe prior )'W rtpOrting Cwnat Period on Bu.sines$ YV11 Written For the Risk

Conidots Ptogram Y W'

Receinble o•n•able Reeeinble rY~Table

Accrued ws

P~---$

ReoeivabJ.

(5) ACA Risk Con-idors Receivable as ofRepo1ti11g Date:

Estimated Amoonl to be Non-Accrued Amounts for

Ac=ed l..m P~-·$ B.ta.c.s

bit Reelll or Other Amounts reOO\oed from (Gross ofNon-

Bal.uices 1ble

Unsettled Balaoces as of the R.portmg Da"

Cumuhtin C1llDlllalm BaiJo« &hace

Ref ReoeivabJ. rt1'2,•ablt'.

Program Year: Filed with CMS Reasons CMS admissiom) Non4dmitted AmoUD! Nel Admitted Asset

2014 $ s $ $ $ $

2015 9,821,230 9,821,230

2016 9,197,149 9,197,149

Tot>I $ 19,018,379 s 19,018,379 $ $ $ $

10.8



25) Change in InctUTed Claims and Claim Adjustment Expenses

Unpaid claims and claims adjustment expense includes both repo1ted and Ulll'epo1ted medical claims, which have been paitially reduced by estimated recoverables for salvage and subrogation and estimated reii.1sm·ance recoveries under the PP A CA. Unpaid claii.ns ii.1c1u1·ed but not repo1ted represent an estimate of claims ii.1c1u1·ed for or on behalf of Health Plan's members that had not yet been reported to the Health Plan in the statuto1y statements of admitted assets, liabilities, capital, and stuplus. Unpaid claims are based on a munber of factors ii.1cluding hospital admission data and prior claims experience, as well as claims processing pattems; adjustments, if necessa1y, are made to medical expense in the period the actual claims costs are ultimately detennined. At March 31, 2017 and December 31 , 2016, the estimated salvage and subrogation included as a reduction to tuipaid claims and claii.ns adjustment expense was $8.9 million and $7.9 million, respectively. At March 31, 2017 and December 31 , 2016, the estimated reinsurance recoveries under the PPACA included as an (increase)/reduction to reserves for 1mpaid claims and claims adjustment expense was ($0 .1) million and $1 . 2 million, respectively.

Claims adjustment expense represents costs incuffed related to the claii.n settlement process such as costs to record, process, and adjust claims. TI1ese expenses are calculated usii.1g a percentage of cm1·ent medical costs, which is based on historical cost experience.

Activity ii.1 the reserves for tuipaid claims and claims adjustment expense was as follows (in thousands):

3/3112017 12/31/2016 Balances at Janua1y 1 $ 62,045 $ 59,278

Inctlll'ed related to Cm1·ent year 851 ,310 3,274,871 Prior years 8,791 1,556

Total incm1·ed 860,101 3,276,427

Paid related to Cm1·ent year 809,034 3,212,344 Prior years 66,303 60,316

Total paid 875,337 3,272,660

Balance at end of period $ 46,809 $ 62,045

Amotuits inctUTed related to prior years va1y from previously estii.nated liabilities as the claims are ultiniately adjudicated and paid. Liabilities are reviewed and revised as ii.1follllation regarding actual claims payments becomes known . Positive (negative) amotuits repoited for incm1·ed related to prior years result from claims beii.1g adjudicated and paid for amounts more (less) than originally estiniated.

26) Intercompany Pooling Affangements


27) Structured Settlements

Not applicable for Health Entities.

28) Health Care Receivables


29) Paiticipating Policies


30) Premi1un Deficiency Reserves


31) Anticipated Salvage and Subrogation


10.9


GENERAL INTERROGATORIES

PART 1 · COMMON INTERROGATORIES GENERAL

1.1 o;,i the repog entity? -···- - ·········--··········--··········--·········--··········--··········- - ·········-------·······--·········--········

Yes I I No [X)

Yes I l No I l

Yes [ X) No I I

2.2 If yea, date of cllange:--······- - ······- - ······--······--······--······- -······--······--······--······--··- ··········- ·····D3/17/2017

3.1 la the reporting entity a member of an Insurance Holding Company System consisting of two or m0te e tftlated persona. one or more of which i. an insure!'? -······--······--······- - ·····--······--······--······--······--······--······- -······--

"yea, complete Scl1edule Y, Parts 1 and 1A.

3.2 Have there been any substantiaJ changes in the organizational chart since the prior quarter end?-·········--··········--··········--·········-

3.3 If the response to 3.2 is yes, provide a brie f desat>tion of those changes.

Kfif' of Washington becaae so le corpora te mellber of Group Hea l t h Coopera t ive . Kfif' of Washington was renanevide the name of e ntity, NAIC Company Code , and state of domicile (use two letter s tate abbreviation) for any entity lhat has ceased to exiat a.s a result o f the merger or consolidation.

NameofEntitv

5. If the reporting entity is sullject to a management agreement, including lhird-party adminisllator(a), managing general "90flt(s ), attorney~

Yes [ X) No I I

Yes [X) No I I

Yes I I No [X)

fact, or aimilar ~ how there _, any signi:licant changes regarding lhe tenns of the agreement or principala involved?·--·-· Yes [ I No [X] HA [ I If yea, attach an explanation.

6.1 S tale as of what date the lalest financial examination of lhe reporting entity was made or it being made. ------- , ___ _ _ _ 12/31/2016

6.2 S tale Ille aa of dale that Ille latest financial examination report became avabble from either the SlalO of domicile or lhe reporling entity. Thia dale allould be Ille dale of the examined balance sheet and not the date lhe report was completed or released. --- ······----··········- - ·····.12/31/2013

6.3 State as of what dale the latest financial examination report became avaiable to olher slates or the public from ether the state of domid e or lhe reporting entity. Tm is the release date or oornpletion date of the examination report and not the date of the examination (balanoe oheetdate ). --······- - ······-- ······--······--······--······--······- -······--······--······--······--···- ··········- - ·····D3/24/2015

6.4 By What department or departments?

Sta le of Oregon Depar tment of Consumer & Bus iness Services_·········--··········--··········--·········--··········--··········--·········-

6.5 Have all financial statement adjustments within the latest financial examination report been accounted for In a aubsequent &iancial statement ftled wilh Departments? -······--······--······--······- -······-- ······--······--······--······--······- Yes [ I No [ I NA [X)

6.6 Have all of Ille recomme ndations wilhin the latest financial examination report been complied with?·······--··········--.......... __ ,. Yes [ ) No [ ] NA [X) 7 .1 Hae this reporting entity had any Certificates of Authority, licenses or registrations (including corporate reglatration, if applicable)

suspended or revoked by any governmental entity during the reporting period? __ ...... _ _ ...... --...... --...... - -. Yes [ ) No [X)

7.2 If yea, give f\JI infonnation:

8.1 la the company a subsidiary of a bank holding company regulated by the Federal Reserve Board? .......... --··········--··········--·········-

8.2 If reaponae to 8.1 is yes, ptea.se identify the name of the bank holding company .

8.3 la the company aftiiated with one or more banks. thrifts or securities firms?--······- - ······--······--······--······--······-

8.4 If reaponae to 8.3 is yea, please provide below the names and location (city and slate of the main office) of any affiliates regulated by a fedenll regulatory aervices agency p.e . the Federal Resenoe Board (FRB), Ille Df!ice of the ComP4J'Qller of the Currency (OCC), lhe Federal ~ Insurance Co


GENERAL INTERROGATORIES 9.1 Are the senior officers (principal executive officer, principal financial officer, principal acoounting officer or controller, or persons performing

similar functions) of the reporting entity subject to a oode of ethics, which includes the following standards? ·········--··········--·········--

{a) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of in terest between personal and professional relationsh~s;

{b) Full, fair, accurate, timely and understandable disck>sure in the periodic reports requi"ed to be filed by the reporting entity;

{c) Compliance with applicable governmental laws, rules and regulations;

{d) The prompt internal reporting of violations to an appropriate person or persons identified in the code; and

{e) Acoountability for adherence to the code.

9.11 If the response to 9.1 is No, please explain:

9.2 Has the oode of ethics for senior managers been amended? ···--······--······--······--······--······--······--·······

9.21 If the response to 9.2 is Yes, provide information related to amendment(s).

9.3 Have any provisions of the code of ethics been waived for any of the specified officers? -·········--··········--··········--·········--········

9.31 If the response to 9.3 is Yes, provide the nature of anywaiver(s).

FINANCIAL 10.1 Does the reporting entity report any amounts due from parent, subsidiaries or affiiates on Page 2 of this statement?_··········--··········-

Yes (XJ No ( I

Yes ( I No (XJ

Yes ( I No (XJ

Yes (XJ No ( I

102 If yes, indicate any amounts receivable from parent included in the Page 2 amount:_·········--··········--··········--·········--··········-$ -······--······--·D

INVESTMENT 11.1 Were any of the stocks, bonds, or other assets of the reporting entity loaned, placed under option agreement, or otherwise made available

for use by another person? (Exclude securities under securities lending agreements.) __ ······--······--······--······--·······

112 If yes, give ful and complete information relating thereto:

Yes ( I No (XJ

12. Amount of real estate and mortgages hekt in other invested assets in Schedule BA: -······--······--······--······--······~ -······--······--······

13. Amount of real estate and mortgages held in short-temi investments: ·······--·········--··········--··········--·········--··········--······$ -······--······--······

14.1 Does the reporting entity have any investments in parent, subsidiaries and affi liates? -··········--·········--··········--··········--·········-

142 If yes, please complete the following:

14.21 Bonds ·····--··········--·········--··········--··········--14.22 Preferred Stock ········--·········--··········--··········--14.23 Common Stock ·--······--······--······--···· 14.24 Short-Term lnvestments __ ······--······--······-14.25 Mortgage Loans on Real Estate ··--··········--··········-14.26 All Other·····--······--······--······--······-14.27 Total Investment in Parent, Subsidiaries and Affiliates

(Subtotal Lines 1421 to14.26)-...... --······--······-14.28 Total Investment in Parent included in Lines 1421 to14.26

above ··--·········--··········--··········--·········--····

Prior Year-End Book/Adjusted Carrying Value

-······--······_JJ

2 Current Quarter Book/Adjusted Carrying Value

$ ··--······--······· $ $ $ $ $

$ ··--······--·.!)

$ ··--······--·······

15.1 Has the reportilg entity entered into any hedging transactions reported on Schedule OB? ······--······--······--······--······-

152 If yes, has a comprehensive description of the hedging program been made available to the domiciiary state? ····--······--······--

If no, attach a description with this statement

11 .1

res I J No [XJ

Yes ( I No (XJ

Yes f I No f I


GENERAL INTERROGATORIES

16 For the reporting entity's security lending program, state the amount of the fol owing as of the current statement date: 16.1 Total fair value of reinvested collateral assets reported on Schedule OL, Parts 1 and 2 $ ..... ·--······--······J 16.2 Total book adjusted/carryilg value of rei w ested co l a teral assets reported on Schedule Ol, Parts 1 and 2 $ ..... ·--······--······J 16.3 Total payable for securities lendilg reported on the liabi ity page $ ..... ·--······--······J

17. Excluding items in Schedule E - Part 3-Special Deposits, real estate, mortgage loans and investments held physicalty in the reporting entity's offices, vaults or safety deposit boxes, were all stocks, bonds and other securities, owned throughout the current year held pursuant to a custodial agreement with a quai fied bank or trust company in accordance with Section 1, Ill - General Examilation Considerations, F. outsourcing of Critical Functions, Custodial or Safekeeping Agreements of the NAIC Financial Condition Examiners

HandbooK'--······--······--······--······--······--······--······--······--······--······--······--····

17 .1 For all agreements that comply with the requirements of the NAIC Financial Condition Examiners Handbook, complete the followilg:

1 2 Name of Custodianls) Custodian Address

U.S. Bank Nat ional Associa t ion__ ......... --··········- !ll(JU Nico l le t Mat I , Minneapol is , !fl 55402-70200 __ .. Sta te St reet Bank and Trust COOl)any ..... --··········- 2 Ave de Lafayet te , Boston, MA 02111-.. ... ·--······-

17 2 For all agreements that do not comply with the requirements of the NA IC Financial Condition Examiners Handbook, provide the name, location and a complete explanation:

3 Name(sl Location(s) Complete ExP'anation(s)

17.3 Have there been any changes, including name changes, in the custodian(s) identified il 17.1 during the current quarter? -······--······-

17.4 If yes, give ful and complete information relating thereto:

Old Custodian New Custodian 3

Date of Chan e 4

Reason

17.5 Investment management- Identify all investment advisors, investment managers, broker/dealers, including individuals that have the authority to make investment decisions on behaH of the reporting entity. For assets that are managed intemalty by empk>yees of the reporting entity, note as such. r ... that have access to the investment accounts•; • ... handle securitiesJ

Name of Firm or Individual 2

Affiliation

We i Is cap; ta l Management···--··········--··········--·········- U ..... ·--··········--·········--··········--··········--·········--· Payden & Rygel_······--······--······--······--···· U ..... ·-··········-·········-··········-··········-·········-·

17 .5097 For those firmsflldividuals listed in the table for Question 17.5, do any firms/individuals unaffiliated with the reporting entity (i.e., designated with a •u; manage more than 10% of the reporting entity's assets?

17 .5098 For &ms/individuals unaffiiated with the reporting entity (i.e., designated with a •u •) listed in the table for Question 17 .5, does the total assets under management aggregate to more than 50% of the reporting entity's assets?

Yes (XJ No ( J

Yes ( J No (XJ

Yes I X J No [

Yes I No [ x J

17.6 For those firms or individuals listed in the table for 17.5 with an affiliation code of •A• (affiliated) or •u • (unaffiiated). provide the ilformation for the table below.

Central Registration Oeoositorv Number

2 Name of Firm or

Individual

3 Legal Entity

Identifier (LEI\

4

Reoistered With

Secur i ti es & Exchange

5 Investment Management Aoreement CIMA) Filed

104973_······--······--······ le ll s Capi ta l ManagemenL. ...... 54930063H21002L85190 ....... --·· Conniss iOIL_ ...... --······- l«L. .... --······--······-Secur i t i es & Exchange

107160_······--······--······ Payden & Ryge J.. __ ······- NIA. ..... --······--······- Conniss iOIL_ ...... --······- l«L. .... --······--······-

18.1 Have all the fi'ing requirements of the Purposes and Procedures Manual of the NAIC Investment Analysis OfflCe been fol owed? -··········-18.2 If no, list exceptions:

11 .2

Yes [XJ No ( J


1. Openitlng Percentages:

GENERAL INTERROGATORIES PART 2 - HEALTH

1.1 A&H loaapemont.._ .......... - ·········--·--···- ··········- ·········-·······------··-··········- ··········-

1.2 A&H cost containment percent _ ....... - - - --- - --······-··········-------··········--······-

1.3 A&H expense percent excluding cost contaimtent expenses•- ------------·······---

2.1 Oo you act aa a custocfian tor healh aavings accounts?·- - - -··--- ··········-······------··········-·- ·-········

2.2 II yea, please provide the amooot ol custodial funds held as of lhe repor&>g dale--······--······--······--······--······-

2.3 Oo you act aa an admilistrator for heat1h savings accounts? ..... --······--······--······--······--······--······--···

2.4 II yea, please provide the balance ol lhe funds admilislered as of the reporting date- .......... - .......... - ......... - .......... -··········-

12

Yes I I $

Yes I I

96 .9 'l

0.7 'l

5.9 'l

It> [XI

It> (X)

2

Co1

w

3

Effectiw Date


SCHEDULE S - CEDED REINSURANCE

NameofReinsurer

Showlna All New Relnsuran .. Treatlee -Current Year to Date 5

Domiciliary Jurisdiction

6 Type of

Reinsurance ~d

7 I 8 Certified

Re insurer Rating TW>eofReinsurer I (1 throuah 61

9 Effective Date of Certified

Re insurer Ratin

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