10-K

QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

/x/	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
/ /	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM         TO

Commission file number: 1-10864

UNITEDHEALTH GROUP INCORPORATED
(Exact name of registrant as specified in its charter)

MINNESOTA (State or other jurisdiction of incorporation or organization)	41-1321939 (I.R.S. Employer Identification No.)
UNITEDHEALTH GROUP CENTER 9900 BREN ROAD EAST MINNETONKA, MINNESOTA (Address of principal executive offices)	55343 (Zip Code)

Registrant's telephone number, including area code: (952) 936-1300

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.01 PAR VALUE
(Title of each class) NEW YORK STOCK EXCHANGE, INC.
(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: NONE

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES /x/ NO / /

    The aggregate market value of voting stock held by non-affiliates of the registrant as of March 12, 2001, was approximately $18,972,661,725 (based on the last reported sale price of $59.66 per share on March 12, 2001, on the New York Stock Exchange).*

    As of March 12, 2001, 322,060,002 shares of the registrant's Common Stock, $.01 par value per share, were issued and outstanding.

    Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / /

DOCUMENTS INCORPORATED BY REFERENCE

    Annual Report to Shareholders of Registrant for the fiscal year ended December 31, 2000. Certain information therein is incorporated by reference into Part II hereof.

    Proxy Statement for the Annual Meeting of Shareholders of Registrant to be held on May 9, 2001. Certain information therein is incorporated by reference into Part III hereof.

*Only shares of common stock held beneficially by directors, executive officers and subsidiaries of the Company have been excluded in determining this number.

PART I

ITEM 1. BUSINESS

INTRODUCTION

UnitedHealth Group Incorporated is a national leader in forming and operating markets for the exchange of health and well-being services. In our five primary businesses, we provide a broad spectrum of resources to help people improve their health and well-being through all stages of life.

Our Health Care Services segment consists of our UnitedHealthcare and Ovations businesses. UnitedHealthcare coordinates network-based health and well-being services on behalf of local employers and consumers nationwide. Ovations is a business dedicated to advancing the health and well-being goals of Americans age 50 and older.

Our Uniprise business is devoted to serving the needs of large organizations. Its services include network-based health and well-being services on both an insured and a self-funded basis, business-to-business transactional infrastructure services and consumer connectivity, and technology support services.

Our Specialized Care Services business is an expanding portfolio of health and well-being companies, each serving a specialized market need with a unique blend of benefits, provider networks, services and resources. These specialty businesses offer products that address consumers' needs for mental health and chemical dependency services, employee assistance, organ transplants, vision and dental services, health related information and other health and well-being services.

Our Ingenix business is a leader in the field of health care data and information, research, analysis and application. Ingenix serves multiple health care market segments on a business-to-business basis, including pharmaceutical companies, health insurers and other payers, care providers, large employers and government agencies.

While separate, our businesses remain interrelated as part of our health and well-being enterprise. Our businesses share customers, and in some instances, use common information systems and have access to shared administrative services.

UnitedHealth Group Incorporated is a Minnesota corporation incorporated in January 1977. The terms "we," "our" or the "Company" refer to UnitedHealth Group Incorporated and its subsidiaries. Our executive offices are located at UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343; telephone (952) 936-1300.

HEALTH CARE SERVICES

Our Health Care Services segment consists of our UnitedHealthcare and Ovations businesses.

UnitedHealthcare

UnitedHealthcare coordinates network-based health and well-being services on behalf of local employers and consumers nationwide. UnitedHealthcare provides commercial, Medicare and Medicaid health benefit products. The commercial product is primarily marketed to employers and other groups with less than 5,000 individuals. As of December 31, 2000, this business served approximately 7.4 million individuals. UnitedHealthcare also serves approximately 406,000 Medicare and 549,000 Medicaid eligible individuals. In some cases, UnitedHealthcare assumes the risk of both medical and administrative costs for its members in return for premium revenue. It accomplishes this through subsidiaries that are usually licensed

2

as health maintenance organizations ("HMOs"), preferred provider organizations ("PPOs") or insurers, depending upon state regulations. It also provides administrative and other management services to health plans and self-funded customers for which UnitedHealthcare receives a fee, as it does not assume the risk of health care costs.

UnitedHealthcare arranges access to care through more than 350,000 network physicians and 3,500 network hospitals across the United States. The consolidated purchasing power represented by the individuals we serve makes it possible for us to contract for cost-effective access to broad, convenient networks of care providers.

We believe that UnitedHealthcare's history of innovation distinguishes its product offerings from the competition. We design consumer-oriented health benefits and services that value individual choice and control in accessing health care. With our comprehensive Care Coordination™ philosophy, one of our goals is to make it easier for people to get the care they need, when they need it. We have programs that provide health education; admission counseling before hospital stays; care advocacy to help avoid delays in patients' stays in the hospital; assistance with a safe transition from the hospital; support for individuals at risk of needing intensive treatment; continuous coordination for people with chronic conditions; and pharmacy management, which promotes safe use of medications. We want consumers to be engaged and active participants in managing their own health and well-being. For example, UnitedHealthcare's multi-layered pharmacy benefit program provides access to a wide range of generic and brand-name drugs. Individuals who choose to use generic drugs pay less, while those who prefer to use brand-name drugs pay more. UnitedHealthcare's agreement with Merck Medco Managed Care L.L.C. is an important part of this program. In addition, UnitedHealthcare was an early leader in offering open access products, which allow individuals to schedule appointments directly with specialists without a referral from a primary care physician. Further, UnitedHealthcare offers Web sites that enable access to a variety of information, including a directory of network physicians and hospitals, reports on thousands of health topics and a health profile tailored to individual interests.

Ovations

Ovations is a business dedicated to advancing the health and well-being goals of Americans age 50 and older. Ovations is one of the few companies fully dedicated to this market segment. As a part of this business, in January 1998, we began a 10-year partnership with AARP, currently providing Medicare Supplement and Hospital Indemnity insurance to more than 3.5 million AARP members. Recently, Ovations introduced AARP Eye Health Services to offer affordable eye exams, complimentary glaucoma screenings and discounts on eyewear. Ovations' Medicare Supplement Pharmacy Service addresses one of the most significant cost problems facing older Americans – prescription drug costs. Ovations also developed an offering with lower cost Medicare supplement coverage that provides a hospital network and 24-hour access to health care information from nurses.

The EverCare® unit of Ovations provides a broad spectrum of health care services to older Americans. EverCare has innovative programs to detect and treat common conditions – such as pneumonia and other infections, congestive heart failure, hip fractures and medication side effects – which are among the top reasons for hospital admissions among older individuals. These services are provided to individuals living in long-term care settings, primarily through nurse practitioners. As of December 31, 2000, EverCare was available in ten markets in nine states, with expansion into additional markets and new service offerings anticipated. Effective February 2001, EverCare merged its operations with those of Lifemark Corporation to become the nation's largest enterprise dedicated exclusively to the health and well-being needs of the frail, vulnerable and chronically ill.

3

UNIPRISE

Uniprise is a business devoted to serving the needs of large organizations. We offer consumers access to the full spectrum of health and well-being products and services available anywhere in the marketplace, through one efficient and unified source. Our core competencies are in health care, large volume transaction management, large-scale benefit design and administration for large organizations, and innovative technology solutions designed to transform complex administrative processes into efficient, high quality automated processes. We design and market leading-edge health and well-being services, enabling large organizations to offer custom health benefit programs to their employees. Uniprise is the business through which large employers can access not only our services, but also all of UnitedHealth Group's network-based medical, insurance and specialty services, with a large variety of funding arrangements. As of December 31, 2000, Uniprise provided services to over 260 clients, representing approximately 6.7 million individuals, including more than one-fourth of the Fortune 500 companies.

Uniprise also offers human resources and benefit administration outsourcing services to large organizations, including but not limited to call center services, enrollment services, and defined benefit and contribution plan support services. Uniprise also provides claim and customer services and technological solutions for seven non-UnitedHealthcare health plans, which serve approximately 1.2 million individuals.

SPECIALIZED CARE SERVICES

Specialized Care Services is a portfolio of specialized health and well-being companies, each serving a specific market need with a unique blend of benefits, provider networks, services and resources. We are uniquely positioned to provide comprehensive offerings that are focused on highly specialized health care needs. These offerings are sold to and through other UnitedHealth Group businesses as well as to unrelated entities, including HMOs, PPOs, insurers, reinsurers, third-party administrators ("TPAs"), labor unions, employers and state and federal government customers. We are generally compensated on an administrative service fee basis although for certain managed behavioral health, dental, vision and stop loss products we assume risk for health care expenses.

Through United Behavioral Health ("UBH") and its affiliated companies, we provide behavioral health care management services, employee assistance programs and psychiatric disability management services. UBH's care management staff and extensive network of contracted mental health professionals represent the core of its product offerings. UBH's services and products reach almost 19 million individuals.

Optum® provides health information assistance, support and related services all designed to improve the health and well-being of the approximately 20 million individuals it serves. Through multiple access points, including the Internet, telephone, audio tapes, print and in-person consultations, we help consumers address daily living concerns, make informed health care decisions and become more effective health care consumers.

Acquired in June 1999, Dental Benefit Providers ("DBP"), provides management services for dental care benefits. Through an extensive network of contracted dental providers, DBP and its affiliates manage dental benefit offerings for more than 2.4 million individuals. DBP's products are distributed primarily through unaffiliated HMOs and insurers to commercial, Medicare and Medicaid populations. DBP also offers its products and services to and through UnitedHealth Group affiliates and has expanded its offering of both network based and indemnity dental care plan designs.

United Resource Networks ("URN") is the gateway to leading critical care and chronic care programs at more than 55 of the most widely recognized medical centers in the United States. URN negotiates fixed, competitive rates for high-cost, complex health care services. Access to URN's programs and services is available to over 2,200 payers representing approximately 44 million individuals.

4

National Benefit Resources ("NBR") is a managing general underwriter that originates and administers medical stop loss insurance provided to employers with self-funded employee benefit plans. Acquired in November 1999, NBR markets stop loss coverage primarily through 269 TPAs located throughout the United States. NBR distributes to its customer base certain products and services of other Specialized Care Services' businesses, including those of URN and Optum.

Coordinated Vision Care ("CVC") represents Specialized Care Services' platform for entry into the vision care market. Founded in August 1998, CVC has developed a business model that will enhance the value of existing vision benefits through coordinating the delivery of vision care services and ophthalmic materials. CVC's immediate focus is to manage vision benefits for UnitedHealthcare members, but it also plans to market its services to our other businesses and unaffiliated managed health care organizations in the future. We hold a controlling interest in CVC.

INGENIX

Our Ingenix business is a leader in the field of health care data and information, research, analysis and application. Ingenix serves multiple health care market segments on a business-to-business basis, including pharmaceutical companies, health insurers and other payers, care providers, large employers and government agencies. Early in 2000, Ingenix was aligned into two primary operating divisions: Ingenix Health Information and Ingenix Pharmaceutical Services.

Ingenix Health Information offers three broad types of products and services: data and software products and services, consulting services and publications. Our consulting services focus on actuarial and financial disciplines, product development, provider contracting and medical policy and management. We publish print and electronic media products that provide information regarding coding, reimbursement, billing, compliance and other general health care issues. We also provide a wide variety of data and software services and products, including databases for benchmarking and fee schedule creation, software to analyze and report cost and utilization of services, data management services, HEDIS reporting, fraud and abuse detection services, claims editing software and reimbursement systems audits.

Ingenix Pharmaceutical Services provides product development and marketing-related services for pharmaceutical, biotechnology and medical device manufacturers on a global basis. Services include finding and training investigators and recruiting patients, developing research protocols, providing regulatory assistance, data collection and management, biostatistical analysis, pharmacoeconomic and safety research, medical education programs, medical writings and general project management.

EXPANSION AND DIVESTITURE OF OPERATIONS

We continually evaluate expansion and divestiture opportunities and, in the normal course of business, often consider whether to sell certain businesses or stop offering certain products or services. Expansion opportunities may include acquiring businesses that are complementary to our existing operations. During 2000, we completed several acquisitions and also sold or terminated certain lines of business and ceased offering some products, all as part of our ongoing emphasis on our strategic focus. Further, we devote significant attention to developing new products and services in the health and well-being sector as we have broadly defined it.

If we were to make any particular acquisition, it may affect our ability to integrate and manage our overall business effectively. Integration activities relating to acquisitions may increase costs, affect membership, affect revenue and earnings growth and adversely affect our financial results.

5

GOVERNMENT REGULATION

Most of our health and well-being services are heavily regulated. This regulation can vary significantly from jurisdiction to jurisdiction. Federal and state regulatory agencies generally have discretion to issue regulations and interpret and enforce laws and rules. Changes in applicable laws and regulations are continually being considered, and the interpretation of existing laws and rules also may change periodically. These revisions could affect our operations and financial results. Enactment of federal and state managed care laws and regulations can also affect our businesses. Examples of such laws and regulations include: health plan liability laws; physician prompt pay laws; restrictions on the use and disclosure of individually identifiable medical and claims data; mandated benefits; limits on contractual terms with providers, including audit, payment and termination provisions; implementation of a mandatory third party review process for coverage denials; and other laws and limits on utilization management. Further, as our businesses continue to implement their e-commerce initiatives, uncertainty surrounding the regulatory authority and requirements in this area will make compliance an important focus.

Federal Programs

UnitedHealthcare's health plans that have Medicare+Choice contracts are regulated by the Health Care Financing Administration ("HCFA"). HCFA has the right to audit such health plans in order to determine each plan's compliance with HCFA's contracts and regulations and the quality of care being given to members. The law enforcement environment with respect to health care issues make compliance in this product line a continuing challenge. Some of UnitedHealthcare's health plans also have Medicaid and State Children's Health Insurance Program contracts that are subject to federal and state regulation regarding services to be provided to Medicaid enrollees, payment for those services, and other aspects of these programs. Further, some of UnitedHealthcare's health plans have contracts to participate in the federal employees health benefits program ("FEHBP"). These contracts are subject to extensive regulation, including complex rules regarding premiums charged. FEHBP is authorized to audit, retroactively, the rates charged and seek premium refunds or institute other sanctions against health plans that participate in the program, depending on the outcome of such audits. We believe we are in compliance in all material respects with these regulations.

State Regulation

All of the states in which our subsidiaries offer insurance and HMO products regulate the activities of those products and operations. Most states require periodic financial reports and impose minimum capital or restricted cash reserve requirements. Many of UnitedHealthcare's health plans and each of our insurance subsidiaries are regulated under state insurance holding company regulations. Such regulations generally require registration with the state department of insurance and the filing of certain reports that describe capital structure, ownership, financial condition, certain inter-company transactions and general business operations. Some state insurance holding company laws and regulations require prior regulatory approval or, in certain circumstances, prior notice of acquisitions and certain material inter-company transfers of assets, as well as certain transactions between the regulated companies and their parent holding companies or affiliates. In addition, some of our subsidiaries or products may by subject to PPO, managed care organization ("MCO") or TPA regulations and licensure requirements. These regulations differ greatly from state to state, but generally contain network, contracting, financial and reporting requirements. Many states also have enacted laws and/or adopted regulations governing utilization review activities, and these laws may apply to some of our operations. Generally, these laws and regulations set specific standards for delivery of services, confidentiality of member health information, staffing and policies and procedures of private review entities, including the credentials required of personnel. To date, these various laws and regulations have not materially affected our financial position or results of operations.

6

HIPAA

The standards of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") apply to both the group and individual health insurance markets, including self-funded employee benefit plans. HIPAA's administrative simplification provisions, establishing new standards for electronic transactions, as well as for the privacy and the security of protected health information, and standardizing national provider and employer identifiers, are in the process of regulatory completion. It is uncertain when these new rules will become effective. HIPAA's coverage-related provisions have been implemented through regulation and include guarantees of the availability and renewability of health insurance for certain employees and individuals; limits on termination options and on the use of preexisting condition exclusions; prohibitions against discriminating on the basis of health status; and requirements which make it easier to continue coverage in cases where an employee is terminated or changes employers.

We do not believe that compliance with those aspects of HIPAA currently in effect and those in the process of regulatory completion, if adopted as currently proposed, will have a material adverse effect on our financial condition or results of operations. The law is far-reaching and complex, however, and proper interpretation and practice under the law continue to evolve. Consequently, our efforts to measure, monitor and adjust our business practices to comply with HIPAA are ongoing. Significant enforcement responsibilities for HIPAA's provisions have been given to the states, and it is unclear how HIPAA's administrative simplification rules, particularly those regarding data privacy, will interact with existing or emerging state law. Different approaches to HIPAA's provisions and varying enforcement philosophies in the different states may adversely affect our ability to standardize our products and services across state lines.

ERISA

The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), regulates how goods and services are provided to or through certain types of employer sponsored health benefit plans. ERISA is a complex set of laws and regulations that is subject to periodic interpretation by the United States Department of Labor ("DOL") as well as the federal courts. ERISA places controls on how our business units may do business with employers who sponsor employee benefit health plans, particularly those that maintain self-funded plans. For example, the DOL has issued a complex set of claim regulations which will require changes to operations and may lead to increased litigation activity.

Fraud and Abuse

Investigating and prosecuting health care fraud and abuse is a top priority for the nation's law enforcement entities. The funding of such law enforcement efforts has increased dramatically in the past few years and is expected to continue. The focus of these efforts has been directed at participants in federal government health care programs such as Medicare, Medicaid and the FEHBP. We participate in these programs. The regulations and contractual requirements applicable to participants in these programs are complex and changing. We have re-emphasized our regulatory compliance efforts for these programs, but ongoing vigorous law enforcement and the highly technical regulatory scheme mean that compliance efforts in this area will continue to require significant resources.

Audits and Investigations

We are regularly subject to governmental audits, investigations and enforcement actions. Any such government actions can result in assessment of damages, civil or criminal fines or penalties, or other sanctions, including loss of licensure or exclusion from participation in government programs. In addition, a state department of insurance or other state or federal authority (including HCFA and the Office of the Inspector General) may from time to time begin a special audit of one of our health plans, our insurance

7

plans and products or one of our other operations regarding issues such as utilization management; financial, eligibility or other data reporting; prompt claims payment; or coverage of medically necessary care, including emergency room care. We are currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by HCFA, state insurance departments and state attorneys general, the Office of Personnel Management, the Office of the Inspector General and U.S. Attorneys. We do not believe the results of any of the current investigations, audits or reviews, individually or in the aggregate, will have a material adverse effect on our financial position or results of operations.

International Regulation

Our Ingenix and UnitedHealthcare segments both have limited international operations. As of December 31, 2000, Ingenix had operations in 22 countries principally related to its pharmaceutical services business, and UnitedHealthcare's international division operated health companies or offered consulting services in eight markets around the world. These international operations are subject to different legal and regulatory requirements in local jurisdictions, including various tax, tariff and trade regulations as well as employment, intellectual property and investment rules and laws.

MARKETING

Our marketing strategy is defined and coordinated by each segment's dedicated marketing staff. Within these segments, primary marketing responsibility generally resides with a marketing leader and a direct sales force. In addition, several of the segments also rely upon independent insurance agents and brokers to sell some of their products. Marketing efforts also include public relations efforts and advertising programs that may use television, radio, newspapers, magazines, billboards, direct mail and telemarketing.

COMPETITION

As a diversified health and well-being services company with a scope that extends far beyond the traditional boundaries of managed health care companies, we operate in highly competitive markets. Our competitors include managed health care companies, insurance companies, employer groups which have elected to self-insure, health care providers which have formed networks to directly contract with employers and various information and consulting companies. New entrants into the markets in which we compete as well as consolidation within these markets also contribute to this competitive environment. We believe that the principal competitive factors affecting us and our products and services include the offering of innovative products, consumer satisfaction, the level and quality of products and services, network capabilities, price, market share, product distribution systems, efficient administration operations, financial strength and marketplace reputation.

We currently believe that our competitive strengths include the customer focus resulting from our operational realignment. Each UnitedHealth Group business represents a strategic platform from which we can grow vertically, within specific markets. These businesses are anchored in a common pursuit of improved health and well being, exploiting three core competencies: network management, knowledge and information and service infrastructure. Other strengths include the breadth and quality of our products, our geographic scope and diversity, our Care Coordination program, our disciplined underwriting and pricing practices and staff, our significant market position in certain geographic areas, the strength of our distribution network, our financial strength, our generally large provider networks that provide more consumer choice, our point-of-service products, our experience and our generally favorable marketplace reputation. However, in some markets we may be at a disadvantage for a number of reasons, including competitors with more resources, longer operating histories, larger market shares, broader networks, narrower networks (which may allow greater cost control and lower prices) or more established names and reputations. These competitive factors could adversely affect our business and operating results.

8

EMPLOYEES

As of December 31, 2000, we employed approximately 30,000 individuals. The Company believes its employee relations are good.

CAUTIONARY STATEMENTS

The statements contained in this Annual Report on Form 10-K and the Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of our Annual Report to Shareholders incorporated by reference in this document, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). When used in this Annual Report on Form 10-K and in future filings by the Company with the Securities and Exchange Commission, in our press releases, presentations to securities analysts or investors, and in oral statements made by or with the approval of one of our executive officers, the words or phrases "believes," "anticipates," "intends," "will likely result," "estimates," "projects" or similar expressions are intended to identify such forward-looking statements. Any of these forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements.

The following discussion contains certain cautionary statements regarding our business that investors and others should consider. This discussion is intended to take advantage of the "safe harbor" provisions of the PSLRA. In making these cautionary statements, we are not undertaking to address or update each factor in future filings or communications regarding our business or results, and are not undertaking to address how any of these factors may have caused results to differ from discussions or information contained in previous filings or communications. In addition, any of the matters discussed below may have affected our past, as well as current, forward-looking statements about future results. Our actual results in the future may differ materially from those expressed in prior communications.

Health Care Costs

We use a large portion of our revenue to pay the costs of health care services or supplies delivered to our members. Total health care costs are affected by the number of individual services rendered and the cost of each service. Much of our premium revenue is priced before services are delivered and the related costs are incurred, usually on a prospective annual basis. Although we base the premiums we charge on our estimate of future health care costs over the fixed premium period, competition, regulations and other factors may and often do cause actual health care costs to exceed what was estimated and reflected in premiums. These factors may include increased use of services, increased cost of individual services, catastrophes, epidemics, the introduction of new or costly treatments, medical cost inflation, new mandated benefits or other regulatory changes, insured population characteristics and seasonal changes in the level of health care use. In addition, the financial results we report for any particular period include estimates of claims incurred that have not yet been received or processed. Because of these estimates, our earnings may be adjusted later to reflect the actual costs. Relatively insignificant changes in medical costs as a percentage of premium revenues, because of the narrow margins of our health plan business, can create significant changes in its financial results.

Industry Factors

The managed care industry receives significant negative publicity and has been the subject of large jury awards. This publicity has been accompanied by increased litigation, legislative activity, regulation and governmental review of industry practices. These factors may adversely affect our ability to market our products or services, may require us to change our products and services, and may increase the regulatory

9

burdens under which we operate, further increasing our costs of doing business and adversely affecting our profitability.

Competition

In many of our geographic or product markets, we compete with a number of other entities, some of which may have certain characteristics or capabilities that give them a competitive advantage. We believe the barriers to entry in these markets are not substantial, so the addition of new competitors can occur relatively easily, and consumers enjoy significant flexibility in moving to new providers of health and well being services. Certain of our customers may decide to perform for themselves functions or services we provide, which would decrease our revenues. Certain of our contracted providers may decide to market products and services to our customers in competition with us. In addition, significant merger and acquisition activity has occurred in the industry in which we operate as well as in industries that act as suppliers to us, such as the hospital, physician, pharmaceutical, medical device and health information systems industries. To the extent that there is strong competition or that competition intensifies in any market, our ability to retain or increase customers or providers, or maintain or increase our revenue growth, pricing flexibility, control over medical cost trends and marketing expenses may be adversely affected.

AARP Contract

Under our long-term contract with AARP, we provide Medicare Supplement and Hospital Indemnity health insurance and other products to AARP members. As of December 31, 2000, our portion of AARP's insurance program represents approximately $3.5 billion in annual net premium revenue from approximately 3.5 million AARP members. The success of the AARP arrangement will depend, in part, on our ability to service these members, develop additional products and services, price the products and services competitively, and respond effectively to federal and state regulatory changes. Additionally, events that adversely affect AARP or one of its other business partners for its member insurance program could have an adverse effect on the success of our arrangement with AARP.

Medicare Operations

In the second quarter of 1998, we experienced a significant rise in the medical care ratio for our Medicare operations. The increase in medical costs was primarily due to the business growth in new markets with higher and more volatile medical cost trends, coupled with lower reimbursement rates. In response, we have withdrawn our Medicare product offerings from a number of counties and filed significant benefit adjustments. These and other actions have reduced Medicare enrollment and may result in further withdrawals of Medicare product offerings, when and as permitted by our contracts with HCFA. We are precluded from re-entering the counties from which we have withdrawn our Medicare product offerings until 5 years after the respective effective date of withdrawal.

We will continue to offer Medicare products in strong and economically viable markets. However, our ability to improve the financial results of our Medicare operations will depend on a number of factors, including future premium increases, growth in markets where we have achieved sufficient size to operate efficiently, benefit design, provider contracting and other factors. There can be no assurance that we will be able to successfully prevent future losses on our Medicare operations.

Government Programs and Regulation

Our business is heavily regulated at federal, state and local levels. The laws and rules governing our business and interpretations of those laws and rules are subject to frequent change. Broad latitude is given to the agencies administering those regulations. Existing or future laws and rules could force us to change

10

how we do business, restrict revenue and enrollment growth, increase our health care and administrative costs and capital requirements, and increase our liability for medical malpractice or other actions. We must obtain and maintain regulatory approvals to market many of our products. Delays in obtaining or failure to obtain or maintain these approvals could adversely affect our revenue or could increase our costs. We participate in federal, state and local government health care coverage programs. These programs generally are subject to frequent change, including changes that may reduce the number of persons enrolled or eligible, reduce the amount of reimbursement or payment levels, or reduce or increase our administrative or health care costs under such programs. Such changes have adversely affected our financial results and willingness to participate in such programs in the past and may also do so in the future.

State legislatures and Congress continue to focus on health care issues. Congress is considering various forms of Patients' Bill of Rights legislation which, if adopted, could fundamentally alter ERISA's treatment of liability for noncompliance, fiduciary breach of contract and improper coverage denials. Additionally, there recently have been federal and state legislative attempts to limit ERISA's preemptive effect on state laws. If adopted, such limitations could increase our liability exposure and could permit greater state regulation of our operations. Other proposed bills and regulations at state and federal levels may impact certain aspects of our business including provider contracting, claims payments and processing, confidentiality of health information and government-funded programs. Further, tax code changes considered from time to time by Congress may make it easier and more cost effective for employers to establish defined contribution plans. While we cannot predict if any of these initiatives will ultimately become binding law or regulation, or if enacted, what their terms will be, their enactment could increase our costs, expose us to expanded liability, require us to revise the ways in which we conduct business or put us at risk for a loss of business to new health care funding arrangements. Further, as our businesses continue to implement their e-commerce initiatives, uncertainty surrounding the regulatory authority and requirements in this area will make it difficult to ensure compliance.

We are also subject to various governmental reviews, audits and investigations. Such oversight could result in the loss of licensure or the right to participate in certain programs, or the imposition of civil or criminal fines, penalties and other sanctions. In addition, disclosure of any adverse investigation or audit results or sanctions could damage our reputation in various markets and make it more difficult for us to sell our products and services. We are currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by HCFA, state insurance departments and state attorneys general, the Office of Personnel Management, the Office of the Inspector General and U.S. Attorneys.

Our operations are conducted through our wholly owned subsidiaries, which include HMOs and insurance companies. These companies are subject to state regulations that, among other things, may require the maintenance of minimum levels of statutory capital, as defined by each state, and may restrict the timing and amount of dividends and other distributions that may be paid to their respective parent companies. Generally, the amount of dividend distributions that may be paid by our regulated subsidiaries, without prior approval by state regulatory authorities, is limited based on the entity's level of statutory net income and statutory capital and surplus.

Provider Relations

One of the significant techniques we use to manage health care costs and facilitate care delivery is contracting with physicians, hospitals and other providers. Because our health plans are geographically diverse and most of those health plans contract with a large number of providers, we currently believe our aggregate exposure to provider relations issues is limited. A number of organizations are advocating for legislation that would exempt certain providers from federal and state antitrust laws, the adoption of which could impact this assessment. In any particular market, providers could refuse to contract, demand higher

11

payments, or take other actions that could result in higher health care costs, less desirable products for customers and members, or difficulty meeting regulatory or accreditation requirements. In some markets, certain providers, particularly hospitals, physician/hospital organizations or multi-specialty physician groups, may have significant market positions or near monopolies. In addition, physician or practice management companies, which aggregate physician practices for administrative efficiency and marketing leverage, continue to expand. These providers may compete directly with us. If these providers refuse to contract with us, use their market position to negotiate favorable contracts, or place us at a competitive disadvantage, those activities could adversely affect our ability to market products or to be profitable in those areas.

Litigation and Insurance

We may be a party to a variety of legal actions that affect any business, such as employment and employment discrimination-related suits, employee benefit claims, breach of contract actions, tort claims, shareholder suits, including securities fraud, and intellectual property related litigation. In addition, because of the nature of our business, we are subject to a variety of legal actions relating to our business operations, including the design, management and offering of our products and services. These could include: claims relating to the denial of health care benefits; medical malpractice actions; allegations of anti-competition and unfair business activities; provider disputes over compensation and termination of provider contracts; disputes related to self-funded business, including actions alleging claim administration errors and the failure to disclose network rate discounts and other fee and rebate arrangements; disputes over copayment calculations; claims related to the failure to disclose certain business practices; and claims relating to customer audits and contract performance. A number of class action lawsuits have been filed against us and certain of our competitors in the managed care business. The suits are purported class actions on behalf of all of our managed care members and network providers for alleged breaches of federal statutes, including ERISA and the Racketeer Influenced Corrupt Organization Act ("RICO"). While we believe these suits against us are without merit and we intend to defend our position vigorously, we will incur expenses in the defense of these matters and we cannot predict their outcome.

Recent court decisions and legislative activity may increase our exposure for any of these types of claims. In some cases, substantial non-economic, treble or punitive damages may be sought. We currently have insurance coverage for some of these potential liabilities. Other potential liabilities may not be covered by insurance, insurers may dispute coverage, or the amount of insurance may not be enough to cover the damages awarded. In addition, certain types of damages, such as punitive damages, may not be covered by insurance and insurance coverage for all or certain forms of liability may become unavailable or prohibitively expensive in the future.

Information Systems

Our businesses depend significantly on effective information systems, and we have many different information systems for our various businesses. Our information systems require an ongoing commitment of significant resources to maintain and enhance existing systems and develop new systems in order to keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, and changing customer preferences. For example, HIPAA's administrative simplification provisions and the DOL's claim processing regulations may ultimately require significant changes to current systems. In addition, we may from time to time obtain significant portions of our systems-related or other services or facilities from independent third parties, which may make our operations vulnerable to such third parties' failure to perform adequately. As a result of our acquisition activities, we have acquired additional systems and have been taking steps to reduce the number of systems and have upgraded and expanded our information systems capabilities. Failure to maintain effective and efficient information systems could cause the loss of existing customers, difficulty in attracting new customers, issues in

12

determining medical cost estimates, customer and provider disputes, regulatory problems, increases in administrative expenses or other adverse consequences.

Administration and Management

Efficient and cost-effective administration of our operations is essential to our profitability and competitive positioning. While we attempt to effectively manage expenses, staff-related and other administrative expenses may arise from time to time due to business or product start-ups or expansions, growth or changes in business, acquisitions, regulatory requirements or other reasons. These expense increases are not clearly predictable and may adversely affect results. Further, we believe we currently have an experienced, capable management and technical staff. The market for management and technical personnel, including information systems professionals, in the health care industry is very competitive. Loss of certain key employees or a number of managers or technical staff could adversely affect our ability to administer and manage our business.

Marketing

We market our products and services through both employed sales people and independent sales agents. Although we have many sales employees and agents, the departure of certain key sales employees or agents or a large subset of these individuals could impair our ability to retain existing customers and members. In addition, certain of our customers or potential customers consider rating, accreditation or certification of us by various private or governmental bodies or rating agencies necessary or important. Certain of our health plans or other business units may not have obtained or maintained, or may not desire or be able to obtain or maintain, such rating accreditation or certification, which could adversely affect our ability to obtain or retain business with these customers.

Acquisitions and Dispositions

We have an active ongoing acquisition and disposition program under which we may engage in transactions involving the acquisition or disposition of assets, products or businesses, some or all of which may be material. These transactions may entail certain risks and uncertainties and may affect ongoing business operations because of unknown liabilities, unforeseen administrative needs or increased efforts to integrate the acquired operations. Failure to identify liabilities, anticipate additional administrative needs or effectively integrate acquired operations could result in reduced revenues, increased administrative and other costs or customer confusion or dissatisfaction.

Data and Proprietary Information

Many of the products that are part of our knowledge and information-related business depend significantly on the integrity of the data on which they are based. If the information contained in our databases were found or perceived to be inaccurate, or if such information were generally perceived to be unreliable, commercial acceptance of our database-related products would be adversely and materially affected. Furthermore, the use of individually identifiable data by our businesses is regulated at federal, state and local levels. These laws and rules are changed frequently by legislation or administrative interpretation. These restrictions could adversely affect revenues from certain of our products or services and, more generally, affect our business, financial condition and results of operations.

There are various legislative and regulatory proposals currently under consideration that address the use and maintenance of individually identifiable health data, including regulations promulgated pursuant to HIPAA. Compliance with these proposals could result in cost increases due to necessary systems changes and the development of new administrative processes. Additionally, if enacted, some of these proposals may impose restrictions on our use of patient data.

13

The success of our knowledge and information-related business also depends significantly on our ability to maintain proprietary rights to our products. We rely on our agreements with customers, confidentiality agreements with employees, and our trade secrets, copyrights and patents to protect our proprietary rights. We cannot assure that these legal protections and precautions will prevent misappropriation of our proprietary information. In addition, substantial litigation regarding intellectual property rights exists in the software industry, and we expect software products to be increasingly subject to third-party infringement claims as the number of products and competitors in this industry segment grows. Such litigation could have an adverse effect on the ability of our knowledge and information-related business to market and sell its products and on our business, financial condition and results of operations.

Financial Outlook

From time to time in press releases and otherwise, we may publish forecasts or other forward-looking statements regarding our future results, including estimated revenues or net earnings. Any forecast of our future performance reflects various assumptions. These assumptions are subject to significant uncertainties, and as a matter of course, any number of them may prove to be incorrect. Further, the achievement of any forecast depends on numerous risk and other factors (including those described in this discussion), many of which are beyond our control. As a result, we cannot assure that our performance will be consistent with any management forecasts or that the variation from such forecasts will not be material and adverse. Current and potential shareholders are cautioned not to base their entire analysis of our business and prospects upon isolated predictions, but instead are encouraged to utilize our entire publicly available mix of historical and forward-looking information, as well as other available information affecting us and our services, when evaluating our prospective results of operations.

Stock Market

The market prices of the securities of the publicly-held companies in the industry in which we operate have shown volatility and sensitivity in response to many factors, including general market trends, public communications regarding managed care, litigation and judicial decisions, legislative or regulatory actions, health care cost trends, pricing trends, competition, earnings, membership reports of particular industry participants and acquisition activity. We cannot assure the level or stability of the price of our securities at any time or the impact of the foregoing or any other factors on such prices.

14

EXECUTIVE OFFICERS OF THE REGISTRANT

Name	Age	Position	First Elected as Executive Officer
William W. McGuire, M.D	52	Chairman, Chief Executive Officer and Director	1988
Stephen J. Hemsley	48	President, Chief Operating Officer and Director	1997
Patrick J. Erlandson	41	Chief Financial Officer and Chief Accounting Officer	2001
David J. Lubben	49	General Counsel and Secretary	1996
Lois E. Quam	39	Chief Executive Officer, Ovations	1998
Jeannine M. Rivet	52	Executive Vice President and Chief Executive Officer, Ingenix	1998
Robert J. Sheehy	43	Chief Executive Officer, UnitedHealthcare	2001
R. Channing Wheeler	49	Chief Executive Officer, Uniprise	1998

The Company's Board of Directors elects executive officers annually. The Company's executive officers serve until their successors are duly elected and qualified.

Dr. McGuire is the Chairman of the Board of Directors and Chief Executive Officer of UnitedHealth Group. Dr. McGuire joined UnitedHealth Group as Executive Vice President in November 1988 and became its Chief Executive Officer in February 1991. Dr. McGuire also served as UnitedHealth Group's Chief Operating Officer from May 1989 to June 1995 and as its President from November 1989 until May 1999.

Mr. Hemsley is the President and Chief Operating Officer of UnitedHealth Group and has been a member of the Board of Directors since February 2000. Mr. Hemsley joined UnitedHealth Group in May 1997 as Senior Executive Vice President. He became Chief Operating Officer in September 1998 and was named President in May 1999. Prior to joining UnitedHealth Group, Mr. Hemsley was with Arthur Andersen LLP where he served since 1974 in various capacities, including Chief Financial Officer and Managing Partner, Strategy and Planning. Mr. Hemsley is also a director of Damark International, Inc.

Mr. Erlandson joined UnitedHealth Group in 1997. He became Chief Accounting Officer in September 1998 and was named Chief Financial Officer in January 2001. Prior to joining UnitedHealth Group, Mr. Erlandson was a partner with Arthur Andersen LLP where he served in various capacities from 1981 to 1997.

Mr. Lubben became UnitedHealth Group's General Counsel and Secretary in October 1996. Prior to joining UnitedHealth Group, he was a partner in the law firm of Dorsey & Whitney LLP. Mr. Lubben first became associated with Dorsey & Whitney in 1977.

Ms. Quam joined UnitedHealth Group in 1989 and became the Chief Executive Officer of Ovations in April 1998. Prior to April 1998, Ms. Quam served in various capacities including Chief Executive Officer, AARP Division; Vice President, Public Sector Services; and Director, Research. Prior to joining UnitedHealth Group, Ms. Quam served as Research Director from 1987-1989 for Partners National Health Plan.

Ms. Rivet joined UnitedHealth Group in June 1990 and became Executive Vice President and Chief Executive Officer of Ingenix in January 2001. Ms. Rivet was an Executive Vice President of UnitedHealthcare from October 1994 to March 1998 and served as the Chief Executive Officer of UnitedHealthcare from April 1998 to December 2000. She served as UnitedHealth Group's Senior Vice President, Health

15

Plan Operations from September 1993 to September 1994 and its Vice President of Health Service Operations from June 1990 to September 1993.

Mr. Sheehy joined UnitedHealth Group in 1992 and became Chief Executive Officer of UnitedHealthcare in January 2001. From April 1998 to December 2000, he was President of UnitedHealthcare. Prior to April 1998, Mr. Sheehy served in various capacities with UnitedHealth Group, including Chief Executive Officer of United HealthCare of Ohio.

Mr. Wheeler joined UnitedHealth Group in March 1995 and became Chief Executive Officer of Uniprise in May 1998. Prior to May 1998, he served in various capacities with UnitedHealth Group including Chief Executive Officer, Northeast Health Plans.

ITEM 2. PROPERTIES

As of December 31, 2000, the Company leased approximately 1.7 million aggregate square feet of space for its principal administrative offices in the greater Minneapolis/St. Paul, Minnesota area and in Hartford, Connecticut. Excluding these areas, as of December 31, 2000, the Company leased approximately 5.6 million aggregate square feet in the United States and Europe. Such space accommodates health plans, managed care services, specialty programs or satellite administrative offices. The Company's leases expire at various dates through May 31, 2025. As of December 31, 2000, the Company owned approximately 121,500 aggregate square feet of space for administrative offices in various states.

ITEM 3. LEGAL PROCEEDINGS

In September 1999, a group of plaintiffs' trial lawyers publicly announced that they were targeting the managed care industry by way of class action litigation. Since that time, like other managed care companies, we have received several purported class action matters that generally challenge managed care practices including cost containment mechanisms, disclosure obligations and payment methodologies. We intend to defend vigorously all of these cases.

In Re: Managed Care Litigation: MDL No. 1334. The multi-district litigation panel has consolidated several litigation matters involving UnitedHealth Group and its affiliates in the Southern District of Florida, Miami division. The UnitedHealth Group matters have been consolidated with litigation involving other managed care industry members for the coordination of pre-trial proceedings. The litigation has been divided into two tracks, with one track comprising member claims and the other health care provider claims. Generally, the claims made in this consolidated litigation allege violations of ERISA and RICO in connection with alleged undisclosed policies intended to maximize profits. The litigation also asserts breach of state prompt payment laws and breach of contract claims based on the denial or delay of claim reimbursement. The consolidated suits seek declaratory, injunctive, compensatory and equitable relief as well as restitution, costs, fees and interest payments. In the provider track litigation, the judge dismissed, with prejudice, the federal prompt pay claims and, without prejudice, all RICO and state prompt pay claims. On March 26, 2001, the plaintiffs in the provider track litigation filed an amended complaint which repled the RICO and state prompt pay claims.

The American Medical Association et al. v. Metropolitan Life Insurance Company, United HealthCare Services, Inc. and UnitedHealth Group was filed on March 15, 2000 in the Supreme Court of the State of New York, County of New York. On April 13, 2000, we removed this case to federal court. The suit alleges breach of contract and the implied covenant of good faith and fair dealing, deceptive acts and practices, and trade libel in connection with the calculation of reasonable and customary reimbursement rates for out-of-network providers. The suit seeks declaratory, injunctive, exemplary and compensatory relief as well as costs, fees and interest payments. An amended complaint was filed on August 25, 2000, which alleged

16

two classes of plaintiffs, an ERISA class and a non-ERISA class. We filed a motion to dismiss on October 4, 2000.

Because of the nature of our business, we are routinely subject to suits alleging various causes of action. Some of these suits may include claims for substantial non-economic or punitive damages. Although the results of pending litigation are always uncertain, we do not believe that any such actions, including those described above, or any other types of actions, currently threatened or pending will, individually or in the aggregate, have a material adverse effect on our financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information contained under the heading "Investor Information" in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 is incorporated herein by reference. As of March 12, 2001, the Company had 13,279 shareholders of record.

ITEM 6. SELECTED FINANCIAL DATA

The information contained under the heading "Results of Operations" in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The information contained under the heading "Results of Operations" in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained under the heading "Quantitative and Qualitative Disclosures About Market Risk" in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's consolidated financial statements together with the Report of Independent Public Accountants thereon appearing on pages 30 through 49 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

17

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information included under the headings "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's definitive Proxy Statement for its Annual Meeting of Shareholders to be held May 9, 2001 is incorporated herein by reference.

Pursuant to General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K, information regarding executive officers of the Company is provided in Part I of this Annual Report on Form 10-K under the caption "Executive Officers of the Registrant."

ITEM 11. EXECUTIVE COMPENSATION

The information included under the heading "Executive Compensation" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 9, 2001 is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information included under the heading "Security Ownership of Certain Beneficial Owners and Management" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 9, 2001 is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information regarding certain relationships and related transactions that appears under the heading "Certain Relationships and Transactions" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 9, 2001 is incorporated herein by reference.

18

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

The following consolidated financial statements of the Company are included in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 and are incorporated herein by reference:

Consolidated Statements of Operations for the years ended December 31, 2000, 1999 and 1998.

Consolidated Balance Sheets as of December 31, 2000 and 1999.

Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2000, 1999 and 1998.

Consolidated Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998.

Notes to Consolidated Financial Statements.

Report of Independent Public Accountants.

(a) 2. Financial Statement Schedules

None

(a) 3. Exhibits

3(a)	Second Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999)
3(b)	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 (SEC File No. 333-55666))
4(a)	Senior Indenture, dated as of November 15, 1998, between the Company and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 (SEC File No.  333-44569))
4(b)	Amendment to Senior Indenture, dated as of November 6, 2000, between the Company and The Bank of New York (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed November  17, 2000)
4(c)	Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of certain holders of long-term debt are not filed. The Company agrees to furnish copies thereof to the Securities and Exchange Commission upon request.
*10(a)	United HealthCare Corporation 1998 Broad-Based Stock Incentive Plan, as amended
*10(b)	United HealthCare Corporation Amended and Restated 1991 Stock and Incentive Plan, Amended and Restated Effective May 14, 1997 (incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report on Form  10-Q for the quarter ended June 30, 1997)
*10(c)	United HealthCare Corporation Non-employee Director Stock Option Plan, as amended
*10(d)	UnitedHealth Group Incorporated Leadership Results Plan
*10(e)	UnitedHealth Group Incorporated's 2001 Executive Savings Plan Brochure
*10(f)	Supplemental Long Term Executive Compensation Plan

19

*10(g)	Employment Agreement, dated as of October 13, 1999, between United HealthCare Corporation and William W. McGuire, M.D. (incorporated by reference to Exhibit 10(f) to the Company's Annual Report on Form  10-K for the year ended December 31, 1999)
*10(h)	Letter to William W. McGuire, M.D., dated as of February 13, 2001, regarding Employment Agreement
*10(i)	Employment Agreement dated as of October 13, 1999, between United HealthCare Corporation and Stephen J. Hemsley (incorporated by reference to Exhibit 10(g) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999)
*10(j)	Letter to Stephen J. Hemsley, dated as of February 13, 2001, regarding Employment Agreement
*10(k)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Robert J. Sheehy
*10(l)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Lois E. Quam, as amended, and Memorandum of Understanding, effective as of October 11, 1999, between Lois E. Quam and United HealthCare Services, Inc.
*10(m)	Employment Agreement, dated as of October 1, 1998, between United HealthCare Services, Inc. and Patrick J. Erlandson
*10(n)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Jeannine Rivet (incorporated by reference to Exhibit 10(f) to the Company's Annual Report on Form 10-K for the year ended December 31, 1998)
*10(o)	Employment Agreement, dated as of May 20, 1998, between United HealthCare Services, Inc. and R. Channing Wheeler (incorporated by reference to Exhibit 10(c) to the Company's Quarterly Report on Form  10-Q for the quarter ended June 30, 1998)
*10(p)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and David J. Lubben, as amended
†10(q)	Information Technology Services Agreement between The MetraHealth Companies, Inc. and Integrated Systems Solutions Corporation dated as of November 1, 1995 (incorporated by reference to Exhibit 10(t) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995)
†10(r)	AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company dated as of February 26, 1997 (incorporated by reference to Exhibit 10(p) to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996)
†10(s)	First Amendment to the AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company effective January 1, 1998 (incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
†10(t)	Second Amendment to the AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company effective January 1, 1998 (incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
†10(u)	Information Technology Services Agreement between United HealthCare Services, Inc., a wholly owned subsidiary of the Company, and Unisys Corporation dated June 1, 1996 (incorporated by reference to Exhibit  10 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998)
†10(v)	Pharmacy Benefit Management Agreement between United HealthCare Services, Inc. and Merck Medco Managed Care, L.L.C.

20

11	Statement regarding computation of per share earnings (incorporated by reference to the information contained under the heading "Net Earnings (Loss) Per Common Share" in Note 2 to the Notes to Consolidated Financial Statements included in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 and which is included as part of Exhibit 13 hereto)
13	Portions of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000
21	Subsidiaries of the Company
23	Consent of Independent Public Accountants
24	Power of Attorney
†	Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, confidential portions of these Exhibits have been deleted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.
*	Denotes management contracts and compensation plans in which certain directors and named executive officers participate and which are being filed pursuant to Item 601(b)(10)(iii)(A) of Regulation  S-K.

(b) Reports on Form 8-K

The Company filed one Current Report on Form 8-K during the quarter ended December 31, 2000. This Current Report, which was filed on November 17, 2000, reported the sale by the Company of $400,000,000 principal amount of its 7.50% Notes due November 15, 2005.

21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 29, 2001
	UNITEDHEALTH GROUP INCORPORATED
	By:	/s/ William W. McGuire, M.D.
		William W. McGuire, M.D. Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ William W. McGuire, M.D. William W. McGuire, M.D.	Director, Chief Executive Officer (principal executive officer)	March 29, 2001
/s/ Patrick J. Erlandson Patrick J. Erlandson	Chief Financial Officer and Chief Accounting Officer (principal financial and accounting officer)	March 29, 2001
* William C. Ballard, Jr.	Director	March 29, 2001
* Richard T. Burke, Sr.	Director	March 29, 2001
* Stephen J. Hemsley	Director	March 29, 2001
* James A. Johnson	Director	March 29, 2001
* Thomas H. Kean	Director	March 29, 2001
* Douglas W. Leatherdale	Director	March 29, 2001
* Walter F. Mondale	Director	March 29, 2001
* Mary O. Mundinger	Director	March 29, 2001

22

* Robert L. Ryan	Director	March 29, 2001
* William G. Spears	Director	March 29, 2001
* Gail R. Wilensky	Director	March 29, 2001

*By	/s/ David J. Lubben
	David J. Lubben As Attorney-in-Fact

23

EXHIBIT INDEX

Number	Description
3(a)	Second Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999)
3(b)	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 (SEC File No. 333-55666))
4(a)	Senior Indenture, dated as of November 15, 1998, between the Company and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-3 (SEC File No.  333-44569))
4(b)	Amendment to Senior Indenture, dated as of November 6, 2000, between the Company and The Bank of New York (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed November  17, 2000)
4(c)	Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of certain holders of long-term debt are not filed. The Company agrees to furnish copies thereof to the Securities and Exchange Commission upon request.
10(a)	United HealthCare Corporation 1998 Broad-Based Stock Incentive Plan, as amended
10(b)	United HealthCare Corporation Amended and Restated 1991 Stock and Incentive Plan, Amended and Restated Effective May 14, 1997 (incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report on Form  10-Q for the quarter ended June 30, 1997)
10(c)	United HealthCare Corporation Non-employee Director Stock Option Plan, as amended
10(d)	UnitedHealth Group Incorporated Leadership Results Plan
10(e)	UnitedHealth Group Incorporated's 2001 Executive Savings Plan Brochure
10(f)	Supplemental Long Term Executive Compensation Plan
10(g)	Employment Agreement, dated as of October 13, 1999, between United HealthCare Corporation and William W. McGuire, M.D. (incorporated by reference to Exhibit 10(f) to the Company's Annual Report on Form  10-K for the year ended December 31, 1999)
10(h)	Letter to William W. McGuire, M.D., dated as of February 13, 2001, regarding Employment Agreement
10(i)	Employment Agreement dated as of October 13, 1999, between United HealthCare Corporation and Stephen J. Hemsley (incorporated by reference to Exhibit 10(g) to the Company's Annual Report on Form 10-K for the year ended December 31, 1999)
10(j)	Letter to Stephen J. Hemsley, dated as of February 13, 2001, regarding Employment Agreement
10(k)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Robert J. Sheehy
10(l)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Lois E. Quam, as amended, and Memorandum of Understanding, effective as of October 11, 1999, between Lois E. Quam and United HealthCare Services, Inc.
10(m)	Employment Agreement, dated as of October 1, 1998, between United HealthCare Services, Inc. and Patrick J. Erlandson
10(n)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and Jeannine Rivet (incorporated by reference to Exhibit 10(f) to the Company's Annual Report on Form 10-K for the year ended December 31, 1998)
10(o)	Employment Agreement, dated as of May 20, 1998, between United HealthCare Services, Inc. and R. Channing Wheeler (incorporated by reference to Exhibit 10(c) to the Company's Quarterly Report on Form  10-Q for the quarter ended June 30, 1998)

24

10(p)	Employment Agreement, dated as of October 16, 1998, between United HealthCare Services, Inc. and David J. Lubben, as amended
†10(q)	Information Technology Services Agreement between The MetraHealth Companies, Inc. and Integrated Systems Solutions Corporation dated as of November 1, 1995 (incorporated by reference to Exhibit 10(t) to the Company's Annual Report on Form 10-K for the year ended December 31, 1995)
†10(r)	AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company dated as of February 26, 1997 (incorporated by reference to Exhibit 10(p) to the Company's Annual Report on Form 10-K/A for the year ended December 31, 1996)
†10(s)	First Amendment to the AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company effective January 1, 1998 (incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
†10(t)	Second Amendment to the AARP Health Insurance Agreement by and among American Association of Retired Persons, Trustees of the AARP Insurance Plan and United HealthCare Insurance Company effective January 1, 1998 (incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
†10(u)	Information Technology Services Agreement between United HealthCare Services, Inc., a wholly owned subsidiary of the Company, and Unisys Corporation dated June 1, 1996 (incorporated by reference to Exhibit  10 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998)
†10(v)	Pharmacy Benefit Management Agreement between United HealthCare Services, Inc. and Merck Medco Managed Care, L.L.C.
11	Statement regarding computation of per share earnings (incorporated by reference to the information contained under the heading "Net Earnings (Loss) Per Common Share" in Note 2 to the Notes to Consolidated Financial Statements included in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 and which is included as part of Exhibit 13 hereto)
13	Portions of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000
21	Subsidiaries of the Company
23	Consent of Independent Public Accountants
24	Power of Attorney
†	Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, confidential portions of these Exhibits have been deleted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

25

QuickLinks

PART I
EXPANSION AND DIVESTITURE OF OPERATIONS
GOVERNMENT REGULATION
PART II
PART III
PART IV
EXHIBIT INDEX

EX-10.A

                         UNITED HEALTHCARE CORPORATION

                             1998 BROAD-BASED STOCK
                                 INCENTIVE PLAN

1. PURPOSE OF PLAN.

This Plan shall be known as the "United HealthCare Corporation 1998
Broad-Based Stock Incentive Plan" (the "Plan").  The purpose of the Plan is
to aid in maintaining and developing personnel capable of contributing to the
future success of United HealthCare Corporation, a Minnesota corporation (the
"Company"), to offer such personnel additional incentives to put forth
maximum efforts for the success of the business, and to afford them an
opportunity to acquire a proprietary interest in the Company through stock
options and other awards as provided herein. The Plan is intended to be a
"broadly-based plan" within the meaning of the New York Stock Exchange
Shareholder Approval Policy. Options granted under this Plan are NOT intended
to be incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Other awards granted
under this Plan shall be in the form of stock appreciation rights ("SARs"),
restricted stock awards or performance awards as hereinafter described.

2. STOCK SUBJECT TO PLAN.

Subject to adjustment as provided in Section 14 hereof and the provisions of
this Section 2, the stock to be subject to options or other awards under the
Plan shall be the Company's authorized shares of common stock, par value $.01
per share (the "Common Shares"). The Common Shares may be either authorized
but unissued shares, or issued shares which have been reacquired by the
Company. Subject to adjustment as provided in Section 14 hereof, the number
of Common Shares as to which options may be granted or awards may be issued
hereunder shall be 5,781,349 Common Shares (the "Initial Common Shares").
Each fiscal quarter 0.75% of the number of Common Shares which were issued
and outstanding as of the end of the fiscal quarter immediately preceding the
then-current fiscal quarter shall be added to the number of Initial Common
Shares that were available for grant in any preceding fiscal quarter but were
not otherwise granted. If grants or awards lapse, expire, terminate or are
canceled prior to the issuance of Common Shares, or if Common Shares are
reacquired by the Company pursuant to this Plan in connection with payment of
the exercise price of options or awards or satisfaction of tax obligations,
such Common Shares will be available for new grants or awards.

3. ADMINISTRATION OF PLAN.

(a) ADMINISTRATION OF PLAN BY COMMITTEE. The Plan shall be administered by a
committee (the "Committee") of two or more directors of the Company, none of
whom shall be officers or employees of the Company and all of whom shall be
"Non-Employee Directors" with respect to the Plan within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any successor rule. The members of the Committee shall be appointed
by and serve at the pleasure of the Board of Directors.

(b) AUTHORITY OF COMMITTEE. Subject to the express provisions of the Plan, the
Committee shall have the plenary authority and discretion to: (i) determine the
purchase price of the Common Shares covered by each option, (ii) determine the
employees to whom and the time or times at which options and awards shall be
granted and the number of shares to be subject to each, (iii) determine the form
of payment to be made upon the exercise of an SAR or in connection with
performance awards, either cash, Common Shares or a combination thereof, (iv)
determine the terms of exercise of each option and award, (v) accelerate or
defer the time at which all or any part of an option or award may be exercised,
(vi) amend or modify the terms of any option or award with the consent of the
holder of the optionee or grantee, (vii) interpret the Plan, (viii) prescribe,
amend and rescind rules and regulations relating to the Plan, (ix) determine the
terms and provisions of each option or award agreement under the Plan (any of
which agreements need not be identical), (x) delegate such of its authority
granted herein as it deems is in the best interests of the Company, and (xi)
make all other determinations necessary or advisable for the administration of
the Plan, subject to the exclusive authority of the Board of Directors under
Section 16 herein to amend or terminate the Plan. The Committee's determinations
on the foregoing matters, unless otherwise disapproved by the Board of Directors
of the Company, shall be final and conclusive; provided, however, that the
Committee's determinations with respect to the matters set forth in clauses (ii)
and (iii) above, unless delegated as provided in subsection 3(C) below, shall be
final and conclusive without any right of disapproval by the Board of Directors
of the Company.

(c) GRANTS TO CERTAIN OFFICERS AND DIRECTORS. The Chief Executive Officer of
the Company shall, have the authority, as granted by the Committee pursuant
to clause (x) of the preceding subsection to grant, pursuant to the Plan,
options or other awards to eligible persons who are not considered by the
Company as its officers or directors for purposes of Section 16 of the
Exchange Act. The Chief Executive Officer of the Company shall provide
information as to any grants made pursuant to this subsection to the
Committee at its next meeting.

(d) ACTION OF THE COMMITTEE. The Committee shall select one of its members as
its Chairperson and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by not less than a majority of its
members. Any decision or determination reduced to writing and signed by all of
the members of the Committee shall be fully effective as if it had been made by
a majority vote at a meeting duly called and held. The grant of an option or
award shall be effective only if a written agreement or certificate shall have
been duly executed and delivered by and on behalf of the Company following such
grant. The Committee may appoint a secretary and may make such rules and
regulations for the conduct of its business as it shall deem advisable.

4. ELIGIBILITY; GRANTING OF OPTIONS AND AWARDS.

(a) GENERALLY. Subject to the provisions of Section 4(b) below, all full-time
and part-time employees of, and consultants and independent contractors to, the
Company or its subsidiaries shall be eligible to receive options and awards
under this Plan.



(b) GRANTS OF OPTIONS AND AWARDS. In determining the persons to whom options
and awards shall be granted and the number of shares subject to each, the
Committee may take into account any factors as the Committee in its discretion
shall deem relevant. A person who has been granted an option or award under this
Plan may be granted additional options or awards under the Plan if the Committee
shall so determine

(c) NO RIGHT TO EMPLOYMENT. Nothing in the Plan or in any agreement thereunder
shall confer on any employee any right to continue in the employ of the Company
or any of its subsidiaries or affect in any way the right of the Company or any
of its subsidiaries to terminate his or her employment at any time.

5. PRICE.

The Committee shall determine the option price for options and awards. For
purposes of the preceding sentence and for all other valuation purposes under
the Plan, the fair market value of the Common Shares shall be as reasonably
determined by the Committee, but shall not be less than the closing price of
the stock on the date for which fair market value is being determined, as
reported on any national securities exchange on which the Common Shares are
then traded. If on the date of grant of any option or award hereunder the
Common Shares are not traded on an established securities market, the
Committee shall make a good faith attempt to satisfy the requirements of this
Section 5 and in connection therewith shall take such action as it deems
necessary or advisable.

6. TERM.

Each option and award and all rights and obligations thereunder shall expire on
the date determined by the Committee and specified in the option or award
agreement. The Committee shall be under no duty to provide terms of like
duration for options or awards granted under the Plan. Notwithstanding the
foregoing, the term of options granted under the Plan may not extend more than
fifteen (15) years from the date of grant of such option.

7. EXERCISE OF OPTION OR AWARD.

(a) VESTING. The Committee shall have full and complete authority to determine
whether an option or award will be exercisable in full at any time or from time
to time during the term thereof, or to provide for the exercise thereof in
installments and upon the occurrence of certain events, such as termination of
employment for any reason, and at such times during the term of the option or
award as the Committee may determine and specify in the option or award
agreement.

(b) COMPLIANCE WITH SECURITIES LAWS. The exercise of any option or award granted
hereunder shall be effective only at such time as the sale of Common Shares
pursuant to such exercise will not violate any state or federal securities or
other laws.

(c) NOTICE OF EXERCISE; PAYMENT OF EXERCISE PRICE. An optionee or grantee
electing to exercise an option or award shall give written notice to the
Company of such election and of the number of shares subject to such
exercise. The Company will verify the appropriateness of the election and
determine the compensation and related withholding tax amounts. The exercise
amount and applicable taxes must be tendered by the employee prior to the
issuance of shares pursuant to the exercise. Payment shall be made to the
Company in cash (including wire transfer, bank check, certified check,
personal check, or money order), or, at the discretion of the Committee and
as specified by the Committee, by delivering either (i) stock certificates
for Common Shares already owned by the optionee or grantee having a fair
market value as of such date equal to the full purchase price of the shares,
together with any applicable withholding taxes, or (ii) a combination of cash
and such shares; provided, however, that an optionee shall not be entitled to
tender Common Shares pursuant to successive, substantially simultaneous
exercises of options granted under this or any other stock option plan of the
Company. The fair market value of such tendered shares shall be determined as
provided in Section 5 herein. Until such person has been issued the shares
subject to such exercise, he or she shall possess no rights as a shareholder
with respect to such shares.

8. ALTERNATIVE STOCK APPRECIATION RIGHTS.

(a) GRANT. At the time of grant of an option or award under the Plan (or at
any other time), the Committee, in its discretion, may grant a SAR evidenced
by an agreement in such form as the Committee shall from time to time
approve. Any such SAR may be subject to restrictions on the exercise thereof
as may be set forth in the agreement representing such SAR, which agreement
shall comply with and be subject to the following terms and conditions and
any additional terms and conditions established by the Committee that are
consistent with the terms of the Plan.

(b) EXERCISE. An SAR shall be exercised by the delivery to the Company of a
written notice which shall state that the holder thereof elects to exercise his
or her SAR as to the number of shares specified in the notice and which shall
further state what portion, if any, of the SAR exercise amount (hereinafter
defined) the holder thereof requests be paid to him or her in cash and what
portion, if any, is to be paid in Common Shares of the Company. The Committee
promptly shall cause to be paid to such holder the SAR exercise amount, less any
applicable withholding taxes, either in cash, in Common Shares of the Company,
or in any combination of cash and shares as the Committee may determine. Such
determination may be either in accordance with the request made by the holder of
the SAR or in the sole and absolute discretion of the Committee. The SAR
exercise amount is the excess of the fair market value of one share of the
Company's Common Shares on the date of exercise over the per share exercise
price in respect of which the SAR was granted, multiplied by the number of
shares as to which the SAR is exercised. For the purposes, hereof, the fair
market value of the Common Shares shall be determined as provided in



Section 5 herein.

9. RESTRICTED STOCK AWARDS.

The Committee may grant awards of Common Shares subject to forfeiture and
transfer restrictions. Any restricted stock award shall be evidenced by an
agreement in such form as the Committee shall from time to time approve, which
agreement shall comply with and be subject to the following terms and conditions
and any additional terms and conditions established by the Committee that are
consistent with the terms of the Plan:

(a) GRANT OF RESTRICTED STOCK AWARDS. Each restricted stock award made under the
Plan shall be for such number of Common Shares as shall be determined by the
Committee and set forth in the agreement containing the terms of such restricted
stock award. Such agreement shall set forth a period of time during which the
grantee must remain in the continuous employment of the Company in order for the
forfeiture and transfer restrictions to lapse. If the Committee so determines,
the restrictions may lapse during such restricted period in installments with
respect to specified portions of the shares covered by the restricted stock
award. The agreement may also, in the discretion of the Committee, set forth
performance or other conditions that will subject the Common Shares to
forfeiture and transfer restrictions. The Committee may, at its discretion,
waive all or any part of the restrictions applicable to any or all outstanding
restricted stock awards.

(b) DELIVERY OF COMMON SHARES AND RESTRICTIONS. At the time of a restricted
stock award, a certificate representing the number of Common Shares awarded
thereunder shall be registered in the name of the grantee. Such certificate
shall be held by the Company or any custodian appointed by the Company for the
account of the grantee subject to the terms and conditions of the Plan, and
shall bear such a legend setting forth the restrictions imposed thereon as the
Committee, in its discretion, may determine. The grantee shall have all rights
of a shareholder with respect to the Common Shares, including the right to
receive dividends and the right to vote such shares, subject to the following
restrictions: (i) the grantee shall not be entitled to delivery of the stock
certificate until the expiration of the restricted period and the fulfillment of
any other restrictive conditions set forth in the restricted stock agreement
with respect to such Common Shares; (ii) none of the Common Shares may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of during such restricted period or until after the fulfillment of any such
other restrictive conditions; and (iii) except as otherwise determined by the
Committee, all of the shares shall be forfeited and all rights of the grantee to
such shares shall terminate, without further obligation on the part of the
Company, unless the grantee remains in the continuous employment of the Company
for the entire restricted period in relation to which such Common Shares were
granted and unless any other restrictive conditions relating to the restricted
stock award are met. Any Common Shares, any other securities of the Company and
any other property (except for cash dividends) distributed with respect to the
Common Shares subject to restricted stock awards shall be subject to the same
restrictions, terms and conditions as such restricted Common Shares.

(c) TERMINATION OF RESTRICTIONS. At the end of the restricted period and
provided that any other restrictive conditions of the restricted stock award are
met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the agreement relating to the restricted stock award
or in the Plan shall lapse as to the restricted Common Shares subject thereto.
Upon payment by the grantee to the Company of any withholding tax required to be
paid, a stock certificate for the appropriate number of Common Shares, free of
the restrictions and the restricted stock legend, shall be delivered to the
grantee or his or her beneficiary or estate, as the case may be.

10. PERFORMANCE AWARDS.

The Committee is further authorized to grant performance awards. Subject to
the terms of this Plan and any applicable award agreement, a performance
award granted under the Plan (i) may be denominated or payable in cash,
Common Shares (including, without limitation, restricted stock), other
securities, other awards, or other property and (ii) shall confer on the
holder thereof rights valued as determined by the Committee, in its
discretion, and payable to, or exercisable by, the holder of the performance
awards, in whole or in part, upon achievement of such performance goals
during such performance periods as the Committee, in its discretion, shall
establish. Subject to the terms of this Plan and any applicable award
agreement, the Committee shall determine the performance goals to be achieved
during any performance period, the length of any performance period, the
amount of any performance award granted, and the amount of any payment or
transfer to be made by the grantee and by the Company under any performance
award.

11. INCOME TAX WITHHOLDING AND TAX BONUSES.

(a) INCOME TAX WITHHOLDING. In order to comply with all applicable federal,
state or local income tax laws or regulations, the Company may take such action
as it deems appropriate to ensure that all applicable federal, state or local
payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of an optionee or grantee under the Plan, are withheld or
collected from such optionee or grantee prior to his or her receipt of Common
Shares pursuant to the exercise of an option or the satisfaction of the
conditions of any other award. In order to assist an optionee or grantee in
paying all federal and state taxes to be withheld or collected upon exercise of
an option or award, the Committee may, in its absolute discretion, permit the
optionee or grantee to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Common Shares otherwise to be delivered upon
exercise of such option or award with a fair market value, determined in
accordance with Section 5 herein, equal to such taxes or (ii) delivering to the
Company Common Shares other than the shares issuable upon exercise of such
option or award with a fair market value, determined in accordance with Section
5, equal to such taxes. The election must be made on or before the date that the
amount of tax to be withheld is



determined.

(b) TAX BONUSES. The Committee shall have the authority, at the time of grant of
an option under the Plan or at any time thereafter, to approve tax bonuses to
designated optionees or grantees to be paid upon their exercise of options or
awards granted hereunder. The amount of any such payments shall be determined by
the Committee but shall not exceed one hundred percent (100%) of the excess of
the fair market value of the shares received upon exercise of an option or award
over the price paid therefor. The Committee shall have full authority in its
absolute discretion to determine the amount of any such tax bonus and the terms
and conditions affecting the vesting and payment thereof.

12. ADDITIONAL RESTRICTIONS.

The Committee shall have full and complete authority to determine whether all or
any part of the Common Shares of the Company acquired upon exercise of any of
the options or awards granted under the Plan shall be subject to restrictions on
the transferability thereof or any other restrictions affecting in any manner
the optionee's or grantee's rights with respect thereto, but any such
restriction shall be contained in the agreement relating to such options or
awards.

13. NONTRANSFERABILITY.

No option or award granted under the Plan shall be transferable by an optionee
or grantee, otherwise than by will or the laws of descent or distribution.
Except as otherwise provided in an option or award agreement, during the
lifetime of an optionee or grantee, the option or award shall be exercisable
only by such optionee or grantee. The Committee shall have the authority to
waive the provisions of this Section with respect to any grant of options under
the Plan subject to such terms, conditions or limitations as they may, in their
discretion impose.

14. DILUTION OR OTHER ADJUSTMENTS.

If there shall be any change in the Common Shares through merger, consolidation,
reorganization, recapitalization, dividend in the form of stock (of whatever
amount), stock split or other change in the corporate structure, appropriate
adjustments in the Plan and outstanding options and awards shall be made by the
Committee. In the event of any such changes, adjustments shall include, where
appropriate, changes in the aggregate number of shares subject to the Plan, the
number of shares and the price per share subject to outstanding options and
awards and the amount payable upon exercise of outstanding awards, in order to
prevent dilution or enlargement of option or award rights.

15. AMENDMENT OR DISCONTINUANCE OF PLAN.



The Board of Directors may amend or discontinue the Plan at any time. The
Committee, or the Company's Chief Executive Officer as authorized hereunder or
by the Committee, may grant options and awards for the number of shares
authorized by Section 2 herein without further amendment to the Plan increasing
the number of shares authorized for distribution. The Board of Directors shall
not alter or impair any option or award theretofore granted under the Plan
without the consent of the holder of the option or award.

16. TIME OF GRANTING.

Nothing contained in the Plan or in any resolution adopted or to be adopted by
the Board of Directors or by the shareholders of the Company, and no action
taken by the Committee the Chief Executive Officer or the Board of Directors
(other than the execution and delivery of an option or award agreement), shall
constitute the granting of an option or award hereunder.

17. EFFECTIVE DATE AND TERMINATION OF PLAN.

(a) EFFECTIVE DATE OF PLAN. The Board of Directors approved the Plan on May 13,
1998, which shall be the effective date of the Plan.

(b) TERMINATION OF PLAN. Unless the Plan shall have been discontinued as
provided in Section 15 hereof, the Plan shall terminate on May 13, 2008. No
option or award may be granted after such termination, but termination of the
Plan shall not, without the consent of the optionee or grantee, alter or impair
any rights or obligations under any option or award theretofore granted.

EX-10.C

                          UNITED HEALTHCARE CORPORATION
                     NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
                   AMENDED AND RESTATED EFFECTIVE MAY 12, 1999

SECTION 1.        PURPOSE.

         This plan shall be known as the "United HealthCare Corporation
Nonemployee Director Stock Option Plan, Amended and Restated Effective May 12,
1999" and is hereinafter referred to as the "Plan." The purpose of the Plan is
to promote the interests of United HealthCare Corporation, a Minnesota
corporation (the "Company"), by enhancing its ability to attract and retain the
services of experienced and knowledgeable independent directors and by providing
additional incentive for these directors to increase their interest in the
Company's long-term success and progress. Nonqualified stock options or
restricted stock may be granted under the Plan.

SECTION 2.        ADMINISTRATION.

         The Plan shall be administered by a committee (the "Committee") of two
or more persons appointed by the Board of Directors of the Company. Grants of
stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic as described in Section 6. Grants of restricted stock
under the Plan and the amount and nature of restricted stock to be granted shall
be at the discretion of the Committee. All questions of interpretation of the
Plan or of any options or restricted stock granted under it shall be determined
by the Committee and such determination shall be final and binding upon all
persons having an interest in the Plan.

SECTION 3.        PARTICIPATION IN THE PLAN.

         Each director of the Company shall be eligible to participate in the
Plan unless such director is also an employee of the Company or any subsidiary
or affiliate of the Company. Notwithstanding the foregoing, no single director
shall be eligible to acquire under the Plan more than 1% of the shares of the
Company's common stock outstanding as of May 12, 1999.

SECTION 4.        STOCK SUBJECT TO THE PLAN.

         Subject to the provisions of Section 11 hereof, the stock to be subject
to grants under the Plan shall be authorized but unissued shares of the
Company's common stock, par value $.01 per share (the "Common Stock"). Subject
to adjustment as provided in Section 11 hereof, the maximum number of shares
with respect to which grants may be authorized under this Plan shall be 850,000
shares of Common Stock. If a grant under the Plan expires or for any reason is
terminated prior to the exercise of an option or the lapse of a restriction on
the shares



underlying a restricted stock grant, the shares underlying such grant shall
again be available for grants thereafter during the term of the Plan.

SECTION 5.        NONQUALIFIED STOCK OPTIONS.

         All options granted under the Plan shall be nonqualified stock options
that do not qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended.

SECTION 6.        TERMS AND CONDITIONS OF OPTIONS.

         Each option granted under this plan shall be evidenced by a written
agreement or certificate in such form as the Committee shall from time to time
approve, which agreements or certificates shall comply with and be subject to
the following terms and conditions:

     A)   ANNUAL OPTION GRANTS. Each eligible director of the Company in office
          on the first business day immediately following each annual meeting of
          the Company's shareholders (the "Annual Option Grant Date") held
          during the term of the Plan shall be granted automatically an option
          to purchase 5,000 shares of Common Stock (the "Annual Option Grant"),
          granted in 4 installments of 1,250 each on the first business day of
          each fiscal quarter following the Annual Option Grant Date. A director
          must be in office on the day of each installment of the Annual Option
          Grant or that installment will be forfeited. Notwithstanding the
          foregoing, no director shall be granted an Annual Option Grant if such
          director has been granted an option under Section 6(b) hereof within
          12 months of such Annual Option Grant Date. Each option granted
          pursuant to this Section 6(a) shall have an exercise price as
          determined pursuant to Section 7 hereof.

     B)   INITIAL OPTION GRANTS. Each eligible director of the Company that is
          elected to the Board of Directors shall be granted automatically on
          the date that the director is elected to the Board of Directors an
          option to purchase 9,000 shares of Common Stock. Notwithstanding
          Section 6(e), the options granted pursuant to this Section 6(b) shall
          not be exercisable for a period of one year after the date on which
          they were granted, but thereafter will become exercisable as to
          one-third of the shares covered by the option on each anniversary date
          of the option grant. Each option granted pursuant to this Section 6(b)
          shall have an exercise price as determined pursuant to Section 7
          hereof.

     C)   OPTIONS NON-TRANSFERABLE. No option granted under the Plan shall be
          transferable by the optionee otherwise than by will or by the laws of
          descent and distribution as provided in Section 6(f) hereof. During
          the lifetime of the optionee, the options shall be exercisable only by
          such optionee. No option or interest therein may be transferred,
          assigned, pledged or hypothecated by



          the optionee during such optionee's lifetime, whether by operation of
          law or otherwise, or be made subject to execution, attachment or
          similar process. The Committee shall have the authority to waive the
          provisions of this Section with respect to any grant of options under
          the Plan subject to such terms, conditions or limitations as they may,
          in their discretion, impose.

     D)   PERIOD OF OPTIONS. Options shall terminate upon the expiration of 10
          years from the date on which they were granted.

E)       EXERCISE OF OPTIONS.

          i.   Options granted under the Plan shall not be exercisable for a
               period of six months after the date on which they were granted,
               but thereafter will be exercisable in full at any time or from
               time to time during the term of the option, provided that options
               granted under the Plan may become fully exercisable upon a
               director's resignation from the Board of Directors or the death
               of the optionee.

          ii.  The exercise of any option granted hereunder shall only be
               effective at such time as counsel to the Company shall have
               determined that the issuance and delivery of Common Stock
               pursuant to such exercise will not violate any federal or state
               securities or other laws. An optionee desiring to exercise an
               option may be required by the Company, as a condition of the
               effectiveness of any exercise of an option granted hereunder, to
               agree in writing that all Common Stock to be acquired pursuant to
               such exercise shall be held for his or her own account without a
               view to any distribution thereof, that the certificates for such
               shares shall bear an appropriate legend to that effect and that
               such shares will not be transferred or disposed of except in
               compliance with applicable federal and state securities laws.

          iii. An optionee electing to exercise an option shall give written
               notice to the Company of such election and of the number of
               shares subject to such exercise. The full purchase price of such
               shares shall be tendered with such notice of exercise. Payment
               shall be made to the Company in cash (including check, bank draft
               or money order).

     F)   EFFECT OF DEATH. If the optionee shall die prior to the time the
          option is fully exercised, such option may be exercised at any time
          within one year after his or her death by the personal representatives
          or administrators of the optionee or by any person or persons to whom
          the option is transferred by will or the applicable laws of descent
          and distribution, to the extent of the full number of shares the
          optionee was entitled to purchase under the option on



          the date of death and subject to the condition that no option shall be
          exercisable after the expiration of the term of the option.

SECTION 7.        OPTION EXERCISE PRICE.

         The option exercise price per share for the shares covered by each
option shall be equal to the "fair market value" of a share of Common Stock as
of the date on which the option is granted. For purposes of Section 6(a), the
date on which the option is granted shall be the date of each quarterly
installment. For the purposes of the Plan, the fair market value of the Common
Stock on a given date shall be the closing price of the Common Stock on such
date on the New York Stock Exchange, Inc. (the "NYSE") Composite Tape, if the
Common Stock is then being traded on the NYSE. If on the date as of which the
fair market value is being determined the Common Stock is not publicly traded,
the Committee shall make a good faith attempt to determine such fair market
value and, in connection therewith, shall take such actions and consider such
factors as it deems necessary or advisable.

SECTION 8.        GRANTS OF RESTRICTED STOCK

         The Committee may grant restricted stock to eligible directors from
time to time in its discretion. Any grant of restricted stock shall be evidenced
by an agreement in such form as the Committee shall from time to time approve,
which agreement shall comply with and be subject to the following terms and
conditions and any additional terms and conditions established by the Committee
that are consistent with the terms of the Plan:

          A)   GRANT OF RESTRICTED STOCK. Each grant of restricted stock under
               the Plan shall be for such number of shares of Common Stock as
               shall be determined by the Committee and set forth in an
               agreement containing the terms of the restricted stock grant.
               Each agreement shall set forth the restrictions which apply to
               the grant of restricted stock and the circumstances under which
               such restrictions lapse. The Committee may, in its discretion,
               waive any or all of the restrictions applicable to any or all
               outstanding grants of restricted stock, provided that for
               purposes of Section 16 of the Securities Exchange Act of 1934, as
               amended (the "Exchange Act"), restricted stock may not be
               transferable for a period of at least six months from the date of
               the grant.

          B)   DELIVERY OF COMMON SHARES AND RESTRICTIONS. At the time of a
               restricted stock grant, a certificate representing the number of
               shares of Common Stock granted thereunder shall be registered in
               the name of the grantee and shall bear a legend referencing the
               restrictions imposed thereon as the Committee, in its discretion,
               may determine. The grantee shall have all rights of a shareholder
               with respect to the restricted stock granted, including the right
               to receive dividends and the right to vote such shares, provided,
               however, that none of the shares of restricted stock may be sold,
               assigned, transferred, pledged, hypothecated or otherwise
               encumbered or disposed of during such restricted period or until
               after the fulfillment of any such other restrictive conditions.
               Any other securities of the Company and any other property
               (except for cash dividends) distributed with respect to the
               restricted stock shall be subject to the same restrictions, terms
               and conditions as the restricted stock.

          C)   TERMINATION OF RESTRICTIONS. At the end of the restricted period
               and provided that any other restrictive conditions of the
               restricted stock are met, or at such earlier time as otherwise
               determined by the Committee, all restrictions set forth in the
               agreement relating to the restricted stock award or in the Plan
               shall lapse as to the restricted stock subject thereto.



SECTION 9.        TIME FOR GRANTING OPTIONS.

         Unless the Plan shall have been discontinued as provided in Section 12
hereof, the Plan shall terminate upon the expiration of 10 years from the date
upon which it takes effect as provided in Section 12 hereof. No grants shall be
made after such termination, but termination of the Plan shall not, without the
consent of the grantee, alter or impair any rights or obligations under any
option or restricted stock theretofore granted.

SECTION 10.       LIMITATION OF RIGHTS.

          A)   NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
               granting of an option or restricted stock nor any other action
               taken pursuant to the Plan, shall constitute, or be evidence of,
               any agreement or understanding, express or implied, that the
               Company will retain a director for any period of time, or at any
               particular rate of compensation.

          B)   NO SHAREHOLDER RIGHTS FOR OPTIONS. An optionee shall have no
               rights as a shareholder with respect to the shares covered by
               options until the date of the issuance to such optionee of a
               stock certificate therefor, and no adjustment will be made for
               cash dividends or other rights for which the record date is prior
               to the date such certificate is issued.

SECTION 11.       ADJUSTMENTS TO COMMON STOCK.

         If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, stock dividend (of whatever
amount), stock split or other change in the corporate structure, appropriate
adjustments in the Plan and outstanding options shall be made. In the event of
any such changes, adjustments shall include, where appropriate, changes in the
aggregate number of shares subject to the Plan, the number of shares subject to
outstanding grants and the option exercise prices thereof in order to prevent
dilution or enlargement of rights previously granted.

SECTION 12.       EFFECTIVE DATE OF THE PLAN.

         The Plan shall take effect immediately upon its approval by the
affirmative vote of the holders of a majority of the shares present in person or
by proxy and voted at a duly held meeting of shareholders of the Company.

SECTION 13.       AMENDMENT OF THE PLAN.

         The Board may suspend or discontinue the Plan or revise or amend it in
any respect whatsoever; provided, however, that without approval of the
shareholders of the Company no revision or amendment shall be made that (a)
absent such



shareholder approval, would cause Rule 16b-3 of the Exchange Act, or any
successor rule or regulation thereto, to become unavailable with respect to the
Plan, or (b) requires the approval of the Company's shareholders under any rules
or regulations of the NYSE that are applicable to the Company. The Board shall
not alter or impair any grant previously granted under the Plan without the
consent of the grantee.

SECTION 14.       GOVERNING LAW.

         The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Minnesota and construed
accordingly.

SECTION 15.       COMPLIANCE WITH EXCHANGE ACT.

         Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, such
provision or action shall be deemed null and void to the extent permitted by law
and deemed advisable by the Committee.

EX-10.D

                                REWARDING RESULTS

[GRAPHIC]

                           The Leadership Results Plan

        AN OVERVIEW OF YOUR PERFORMANCE-BASED INCENTIVE COMPENSATION PLAN





LEADING THE WAY

- --------------------------------------------------------------------------------

At UnitedHealth Group, we are dedicated to helping facilitate the exchange of
high quality health and well-being services by providing products and services
that offer value. As a leader, your individual performance affects the success
and continued growth of UnitedHealth Group and its businesses. To recognize the
contributions and commitment of our key people, we reward outstanding
performance through the Leadership Results Plan, our incentive compensation
plan.

The Leadership Results Plan supports our organizational structure by linking
incentive awards to the performance of each business segment or Corporate and
Enterprise Services unit and to your individual performance. In addition, the
Leadership Results Plan supports our overall incentive program framework for all
EMPLOYEES-REWARDING RESULTS-WHICH offers a competitive approach to total
compensation and the potential for significant incentive pools. The REWARDING
RESULTS incentive program reflects our values and how we operate as a
business-aligning with our commitment to integrity and our Principles of
Integrity and Compliance (formerly known as the Code of Conduct).

Incentive program funding for the Leadership Results Plan is determined by the
performance of each business segment and Corporate and Enterprise Services unit.
This incentive funding is enhanced or decreased by the aggregate Key Goal
accomplishments-in other words, it focuses on HOW we get the job done as part of
the end financial result.

While our company is regarded as an industry leader, we have yet to realize our
full potential. I am confident, however, that we have the talent, services and
most importantly, the leadership in place to move us forward. Your leadership
clearly affects how we create value for our stakeholders and our customers. As a
result, it affects your total compensation.

This brochure describes the Leadership Results Plan in more detail. Specific
information about the Key Goals and financial measures for your business segment
or Corporate and Enterprise Services unit will be published and forwarded to you
by your senior leadership team. Your support of REWARDING RESULTS is
important-and critical to driving our performance-so I encourage you to review
this information carefully.

I value your continued commitment and loyalty to UnitedHealth Group and its
businesses. Together, we can reach our full potential and achieve great success.

Sincerely,


/s/ William W. McGuire
WILLIAM W. MCGUIRE, M.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER




THE LEADERSHIP RESULTS PLAN:
HOW RESULTS BECOME REWARDS
- --------------------------------------------------------------------------------
Our Leadership Results Plan is driven by the financial and Key Goal performance
of each business segment and Corporate and Enterprise Services unit as well as
the contribution of each leader. Generally, if you are in salary grade 29 or
above, you are eligible for the Leadership Results Plan.

HOW IT WORKS
Each business segment and Corporate and Enterprise Services unit has a pool of
incentive dollars based on eligible employees' base earnings, targets and
financial performance.

- -    Your individual range of opportunity for an incentive award is based on
     your salary, grade level, overall level of responsibility within the
     organization and the market. This range is expressed as a percentage of
     your base earnings.

- -    Your actual incentive award is based on your individual performance.

HOW INCENTIVE POOLS AND AWARDS ARE DETERMINED
Here are the performance measures that are used to determine incentive pools and
incentive awards:

- -    Your business segment's or Corporate and Enterprise Services unit's
     performance;

- -    Overall UnitedHealth Group performance, including Corporate earnings per
     share (for members of the Executive Leadership Team only); and

- -    Your individual performance as compared to the goals and objectives
     established during the internal business planning process.

This blend of performance measurements helps ensure that UnitedHealth Group and
its businesses are working together toward common goals and allows us the
greatest opportunities for success.

Keep in mind, our internal targeted goals and measures always exceed the
externally anticipated results held by the investment community.

[SIDEBAR]

INCENTIVE POOLS

Incentive pools for 2000 will be closely aligned with the internal operating
income results of the business segments to reflect the operational alignment of
the organization. The Coporate and Enterprise Services unit will be aligned with
company-wide performance, including Corporate earnings per share.




BUSINESS SEGMENT AND CORPORATE AND ENTERPRISE SERVICES' PERFORMANCE
Funding for the Leadership Results Plan is based on the performance of your
business segment or Corporate and Enterprise Services unit as follows:

- -    The financial measure for business segments is internal operating income,
     or IOI (see below for definition);

          MORE ABOUT INTERNAL OPERATING INCOME (IOI)
          Each business segment is held accountable for achieving (and
          exceeding) internal operating income (IOI) goals. The year-end
          IOI results is a significant measure for establishing incentive
          levels under the REWARDING RESULTS program.

          IOI includes revenues, directly incurred expenditures, negotiated
          charges from other operating segments for services received (e.g.,
          claims processing support and IT usage) and amortization and
          depreciation related to the segment's capital investments.

          IOI excludes investment income, interest expense and Corporate
          allocations. However, IOI is a migratory concept and as our financial
          accounting segmentation processes progress, it is likely that certain,
          if not all, of these items will eventually be moved within the
          business segment accountability calculation in future years. This
          means that how we define IOI may change over time.

- -    The financial measure for Corporate and Enterprise Services is Company-wide
     performance, including Corporate earnings per share;

- -    If we achieve a specific operating income threshold (earnings per share for
     Corporate and Enterprise Services), 50 percent of payout target will be
     funded. This funding for incentive pools may reach as much as 125 percent
     of payout target. Opportunities for funding beyond 125 percent exist only
     at the discretion of the Office of the Chairman and Board; and

- -    Key Goal performance is measured by how well your business segment or
     Corporate and Enterprise Services unit achieves strategic initiatives
     specific to your business (such as the following items which will be shared
     by all business segments: receivables management, salary increases and
     headcount management, non-payroll costs reduction targets, capital
     expenditure management, business and risk management, and operational
     quality and Human Capital metrics). The funding for incentive awards (as
     determined by financial measures) may be enhanced or decreased up to 30
     percent based on the Office of the Chair interpretation in aggregate of Key
     Goal accomplishments.

The strategic and financial initiatives for your business segment or Corporate
and Enterprise Services unit are determined jointly by senior leaders and the
Office of the Chairman.

INDIVIDUAL PERFORMANCE
Your individual performance and accomplishment of individual goals and
objectives are also considered in determining the actual amount of your
incentive award.

UNITEDHEALTH GROUP PERFORMANCE
If you are a member of the Executive Leadership Team, your incentive award may
be adjusted by up to 50 percent based on Company-wide performance, including
corporate earnings per share, as determined by the Office of the Chairman.


[SIDEBAR]

TIMING OF INCENTIVE AWARDS
Incentive awards generally are paid during the first quarter following the close
of the Corporate and Enterprise Services unit and business segment books for the
fiscal year.



INCENTIVE OPPORTUNITY
Incentive awards are an important part of your total compensation package. Each
participant has a target and a range of opportunity (expressed in percentages)
for receiving an incentive award. This range is determined by your grade,
salary, overall level of responsibility within the organization, and market
competitiveness. Your individual award could range from 0 to 200% of your
target.

The diagram below provides an example of how the Leadership Results Plan for a
business segment might be funded based on your segment's internal operating
income results. For this example, let's assume an IOI of $200 million. The
Corporate and Enterprise Services unit will use Company-wide performance
including Corporate earnings per share, and will operate similarly to the IOI
diagram illustrated below.

[CHART]

OPPORTUNITY EXAMPLE
In the example below, assume the IOI goal of $200 million is met and Key Goal
accomplishments, as assessed by the Office of the Chairman of the Board, result
in an additional 10 percent. (Remember, evaluation of Key Goals may impact total
funding by +/- 30 percent.)

                                
Result of IOI Funding              100%

ASSESSMENT OF KEY GOALS             10%
- ---------------------------------------

TOTAL INCENTIVE PLAN FUNDING       110%






LEADERSHIP RESULTS PLAN GUIDELINES



- --------------------------------------------------------------------------------
HOW INCENTIVE AWARDS AFFECT BENEFIT PLAN CONTRIBUTIONS

Leadership Results Plan incentive awards are considered compensation under the
Employee Stock Ownership Plan and 401(k) Savings Plan unless you are eligible
for the Executive Savings Plans (ESPs). Due to the IRS limits imposed on the
401(k) Savings Plan and ESOP, employees eligible for the ESPs may only
contribute their incentive awards to the ESPs rather than the 401(k) Savings
Plan. See your EXECUTIVE SAVINGS PLAN ENROLLMENT BROCHURE for more information.

Following are specific guidelines for the Leadership Results Plan.

ELIGIBILITY
Generally, regular employees grade 29 and above are eligible for the Leadership
Results Plan. At this level, positions are directly accountable for achieving
key Corporate and Enterprise Services' or business segment results (generally to
manage staff) and determine and manage financial resources and budgets. Certain
positions are not eligible for the Leadership Results Plan due to participation
in other incentive plans, even if they meet the eligibility criteria.

PAYMENTS
Payment of year-end incentive awards will be made on regularly scheduled
bi-weekly paychecks. All payments will be taxed at the current flat supplemental
federal rate of 28 percent plus applicable state, local and Social Security
taxes. Incentive checks or pay advices (if you are enrolled in direct deposit)
are generally paid in first quarter following the plan year.

NEW HIRES AND PROMOTIONS

- -    New hires are eligible for the plan for the current year, depending upon
     their date of hire. New hires and promotions to salary grade 29 or above IN
     THE FOURTH QUARTER of a plan year are eligible for the Leadership Results
     Plan in the following year but are not eligible to participate in the plan
     for the current year. However, employees who were eligible for the
     Performance Results Plan or Business Results Plan prior to their promotion
     in the fourth quarter are eligible for a year-end award under these plans.
     This award will be considered by the management staff in the division in
     which you are employed as of December 31 of the plan year.

- -    If you are promoted to salary grade 29 or above during the year BEFORE THE
     FOURTH QUARTER, you will be eligible for the Leadership Results Plan at
     that time. The incentive funding will be based on a 5 percent target for
     the time you participated in the Performance Results Plan or Business
     Results Plan and your new target under the Leadership Results Plan for the
     remainder of the year. If you participated in a Sales Incentive Plan prior
     to your promotion, the incentive funding will be based solely on your
     Leadership Results Plan target from the date of promotion forward.

- -    Participants eligible for a full- or partial-year Leadership Results Plan
     incentive award are not eligible for an award under the Performance Results
     Plan or Business Results Plan.

- -    If you have multiple targets during the year, the incentive funding would
     be based on a combination of both your existing and new incentive targets.
     The targets are weighted according to the time you held each position.


                                       5



LEAVES OF ABSENCE

- -    If you are on a leave of absence during the performance measurement period,
     any pay received during the leave (e.g., short-term disability) will not be
     included in your eligible base earnings for purposes of funding the
     incentive pool.

- -    If you are on a leave of absence and are scheduled to receive an incentive
     award, you will receive that award in a regularly scheduled paycheck
     shortly after your return to work. EMPLOYEES WHO DO NOT RETURN TO WORK FROM
     LEAVE ARE NOT ELIGIBLE TO RECEIVE AN INCENTIVE AWARD.

TRANSFERS
If a participant transfers during the year from a position that is eligible for
the Leadership Results Plan to a non-eligible position (e.g., sales), he or she
will not be eligible for a partial Leadership Results Plan incentive award.
EMPLOYEES MUST BE CLASSIFIED AS ELIGIBLE AT YEAR-END TO RECEIVE A LEADERSHIP
RESULTS PLAN AWARD.

TEMPORARY STATUS
If a participant is reclassified to temporary status, he or she is eligible for
an incentive award under the Leadership Results Plan award in the current year
if the reclassification occurs AFTER year-end.

REHIRES

- -    Incentive funding for rehired employees will be based on eligible base
     earnings from the employee's date of rehire. Earnings from service prior to
     their rehire date will not be considered. This does not apply to rehired
     employees who were previously laid off during the plan year.

- -    If you are rehired during the fourth quarter, you are not eligible to
     participate in the Leadership Results Plan. This does not apply to rehired
     employees who were previously laid off during the plan year.

TERMINATION AND DISCIPLINARY ACTION
To be eligible for an incentive award, you must be an active employee at the
time such payments are made (the check date). Employees who terminate employment
prior to the date incentive awards are paid out are not eligible for any awards.
Employees who have been on formal written disciplinary action anytime during the
performance year, including time of payout, are not generally eligible for
payment.

[SIDEBAR]

HOW INCENTIVE AWARDS AFFECT BENEFIT PLAN CONTRIBUTIONS

Leadership  Results Plan incentive awards are considered  compensation under the
Employee  Stock  Ownership  Plan and 401(k) Savings Plan unless you are eligible
for the Executive  Savings Plans  (ESPs).  Due to the IRS limits  imposed on the
401(k)  Savings  Plan  and  ESOP,  employees  eligible  for the  ESPs  may  only
contribute  their  incentive  awards to the ESPs rather than the 401(k)  Savings
Plan. See your EXECUTIVE SAVINGS PLAN ENROLLMENT BROCHURE for more information.

Incentive payments are included in benefits  compensation for employees enrolled
in the health and well-being benefit plans.

However,  incentive  awards are not  eligible as  contributions  to the Employee
Stock Purchase Plan.


                                       6


TO SUM IT UP





- --------------------------------------------------------------------------------
As a leader within your business segment or Corporate and Enterprise Services,
you directly influence business performance in a variety of ways--both through
your own actions and decisions and through leadership you provide to others.

REWARDING RESULTS illustrates our strong commitment to rewarding your high
performance. The Leadership Results Plan supports our organizational structure
by giving business segments control over setting targets, funding and
distributing incentive payments. And the plan offers you the opportunity to earn
incentive pay in addition to competitive base salary.

If you have questions after reading this material, contact your senior business
leader, your manager, or your Human Resources Generalist.







THERE IS NO GUARANTEE THAT ANY INCENTIVE PLAN PAYOUTS WILL BE MADE. UNITEDHEALTH
GROUP HAS THE EXCLUSIVE AND BINDING DISCRETION TO AMEND, TERMINATE OR INTERPRET
THE TERMS OR CONDITIONS OF THE INCENTIVE PLANS AT ANY TIME AND WITHOUT NOTICE.
CHANGES OR EXCEPTIONS TO THIS PLAN MUST BE MADE IN WRITING BY THE SENIOR VICE
PRESIDENT OF HUMAN RESOURCES OR THE CHIEF EXECUTIVE OFFICER OF THE COMPANY.
UNITEDHEALTH GROUP ALSO HAS THE DISCRETION TO UNILATERALLY MAKE BOTH LEGAL AND
FACTUAL DETERMINATIONS REGARDING THE PLAN. THE INCENTIVE PLANS ARE NOT AND SHALL
NOT BE DEEMED TO BE AN ENFORCEABLE CONTRACT OR AN EMPLOYEE BENEFIT PLAN WITHIN
THE MEANING OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT.

                                                                            3/00
                                       7

EX-10.E

                                                     [LOGO]
                                                     UNITEDHEALTH GROUP



[GRAPHIC]



LEADING THE                             Executive

WAY TO                                  Savings

FINANCIAL                               Plans

SUCCESS                                 Enrollment

                                        Guide for

                                        2001





                                                                                                      
C o n t e n t s

Leading the Way to Financial Success ................................................................... 1

   An Overview ......................................................................................... 1

   Who Is Eligible ..................................................................................... 1

   Executive Savings Plans' Features ................................................................... 2

   Participation ....................................................................................... 2

   Funds Held in a Trust ............................................................................... 2

Your Deferral Options .................................................................................. 3

   Automatic Restoration Option ........................................................................ 3

   Incentive Deferral Option ........................................................................... 4

   Salary Deferral Option .............................................................................. 4

   Consult Your Tax or Financial Advisor ............................................................... 4


Investing Your Account ................................................................................. 5

   Understanding Your Investment Choices ............................................................... 5

   Your Investment Options ............................................................................. 5

   Making Your Initial Investment Election and Changing Your Investment Elections ...................... 8

   Tracking Your Account Balance ....................................................................... 9

How And When Your ESP Account Is Distributed ........................................................... 10

   Your Distribution Options ........................................................................... 10

   Post-Employment Distributions ....................................................................... 10

   In-Service Distributions ............................................................................ 11

   Choosing Distribution Options ....................................................................... 12

   Changing Your Post-Employment Distribution Election While You Are Employed .......................... 12

   Changing Your Post-Employment Distribution Election After Installment Payments Have Begun ........... 12

How to Enroll .......................................................................................... 13

   What You Need to Do by the Enrollment Deadline ...................................................... 13

   Using the 401(k)/ESOP/ESP Web Site for Investment Election Changes .................................. 14

   Using the Retirement Plans Service Center ........................................................... 14

Questions & Answers About The Executive Savings Plan ................................................... 15






LEADING THE
WAY TO
FINANCIAL
SUCCESS

AS A MEMBER OF A SELECT MANAGEMENT GROUP, YOU ARE ELIGIBLE TO PARTICIPATE IN
UNITEDHEALTH GROUP'S EXECUTIVE SAVINGS PLANS (ESP), WHICH PROVIDE OPPORTUNITIES
FOR YOU TO SAVE FOR YOUR FINANCIAL FUTURE THROUGH SEVERAL DEFERRAL OPTIONS. TO
DEFER SALARY OR INCENTIVE PAY FOR THE 2001 PLAN YEAR OR TO OPT OUT OF THE
AUTOMATIC RESTORATION OPTION, YOU MUST TAKE ACTION BY THE ENROLLMENT DEADLINE.

AN OVERVIEW

As an important component of UnitedHealth Group's total compensation program,
the Executive Savings Plans (ESP) offer you a tremendous opportunity to save on
a tax-deferred basis for your future needs. As in past years, the ESP offers
three deferral options that include:

- - Automatic Restoration Option
- - Incentive Deferral Option (deferral of your Leadership Results Plan award)
- - Salary Deferral Option

WHO IS ELIGIBLE

Eligibility to participate in the ESP is determined by grade level and
compensation level. To participate in the Automatic Restoration Option, the
Incentive Deferral Option and the Salary Deferral Option for 2001, an employee
must meet the following selection criteria:

     -    Be employed by UnitedHealth Group on or before December 31, 2000

     -    Be a regular full- or part-time employee who is a member of one of the
          following grade levels:

          --   Executive Leadership Team

          --   Grades 31 and 32 (and meet certain compensation criteria)

          --   Medical Director in grades M2, M3 and M4 (and meet certain
               compensation criteria)

If you are a Medical Director or an employee who is a grade 31 or 32, generally
you may participate in the Plans beginning January 1 after you meet the
eligibility criteria. If you are a member of the Executive Leadership Team, you
may participate in the Plans as soon as you meet the eligibility criteria.




EXECUTIVE SAVINGS PLANS'
FEATURES

     -    Enable you to postpone paying income taxes by deferring the payment of
          your compensation until a later date.

     -    Allow you, by participation in the Automatic Restoration Option, to
          enjoy the tax advantages of the 401(k) Savings Plan that are otherwise
          limited by the Internal Revenue Code. These advantages include maximum
          income deferral and fully vested Company matching contributions. You
          are automatically enrolled in the Automatic Restoration Option unless
          you elect not to participate by the Enrollment Deadline.


     -    Allow you to defer, through the Incentive Deferral Option, any
          Leadership Results Plan incentive award for which you are eligible,
          and receive fully vested Company matching contributions on the first
          6 percent of your incentive award.

     -    Allow you to defer additional compensation through the Salary
          Deferral Option. Company matching contributions are not made on these
          salary deferrals.

PARTICIPATION

To participate in the Incentive Deferral or Salary Deferral Options for 2001,
you must elect to participate by the Enrollment Deadline. You will automatically
participate in the Automatic Restoration Option in 2001 unless you elect to opt
out by the Enrollment Deadline. Your elections will apply for the 2001 plan year
only.

Each year, you can decide whether or not you want to participate. This choice
allows you to develop an individual savings strategy to meet your personal
financial needs.

FUNDS HELD IN A TRUST

The ESP provides a valuable opportunity to defer income for the future, but it
is not without risks. To give you the best available protection, the assets used
to pay benefits from the ESP are now held in a trust which ensures that funds
will be available to pay your benefits in the unlikely event of a hostile
takeover, change in control or sale of the Company. The trust does not protect
your benefits in the unlikely event that UnitedHealth Group becomes insolvent.

EXECUTIVE SAVINGS PLANS
To obtain favorable state tax treatment for eligible distributions, the
non-qualified deferral options are established in two separate Plans. One Plan
consists of the Automatic Restoration Option, and the other includes the
Incentive Deferral Option and the Salary Deferral Option. The Plan Administrator
and most election procedures are the same for all three options.


2


YOUR DEFERRAL OPTIONS

WHETHER YOU ARE NEWLY ELIGIBLE FOR THE ESP OR HAVE PARTICIPATED IN PRIOR YEARS,
YOU MUST ENROLL (OR OPT OUT OF THE AUTOMATIC RESTORATION OPTION) FOR THE 2001
PLAN YEAR BY THE ENROLLMENT DEADLINE. YOUR ENROLLMENT AND OPT OUT ELECTIONS FOR
ALL ESP OPTIONS WILL APPLY ONLY FOR THE 2001 PLAN YEAR.

AUTOMATIC RESTORATION OPTION

If you participate in UnitedHealth Group's 401(k) Savings Plan at any time
during the 2001 plan year, you will automatically be enrolled in the Automatic
Restoration Option when the first of these two events occurs:


     -    Your pre-tax contributions to the 401(k) Savings Plan reach the annual
          IRS limit (expected to be $10,500 for 2001), or

     -    Your annual earnings exceed a certain amount (expected to be $170,000
          for 2001).

If you do not actively participate in the 401(k) Savings Plan as of January 1,
2001, but elect later in 2001 to make contributions to it, you will also be
automatically enrolled in this Option once you reach the limits described above,
unless you elect not to participate by the Enrollment Deadline.

Your deferral amount will be the same percentage of eligible pay that you are
contributing to the 401(k) Savings Plan when you reach one of the IRS limits.
Once your deferrals under the Automatic Restoration Option begin, your deferral
percentage cannot be changed for the rest of the 2001 plan year.

Your account will be credited with fully vested matching contributions, which
are 50 cents for each dollar, up to the first six percent of your eligible
pay that you defer under this option.

If you do not wish to participate in the Automatic Restoration Option for the
2001 plan year, you must "opt out" by the Enrollment Deadline.

[SIDEBAR]

HOW TO ELECT INCENTIVE AND SALARY DEFERRALS OR OPT OUT OF THE AUTOMATIC
RESTORATION OPTION

Call the Retirement Plans Service Center:

- -    You must have your Social Security Number and PIN when you call.

- -    If this is your first call, your PIN is the last four digits of your Social
     Security Number. If you have lost your PIN, follow the instructions on the
     phone to request that a new PIN be mailed to you.


Representatives are available to assist you from 8 a.m. to 8 p.m. Eastern time,
Monday through Friday.


                                                                              3


INCENTIVE DEFERRAL OPTION

This Option allows you to defer all or a portion of any Leadership Results Plan
incentive award (awards for 2000 performance, payable in 2001) into the ESP.
This is the only way to defer Leadership Results Plan incentive awards. You
cannot make 401(k) Savings Plan contributions from your incentive pay.

Your ESP account will be credited with UnitedHealth Group matching
contributions, which are 50 cents for each dollar, up to the first six percent
of your Leadership Results Plan award that you contribute under this Option.

Enrollment in this Option is not automatic. If you wish to defer any portion of
the Leadership Results Plan award that you may receive in 2001, you must make
this election by the Enrollment Deadline. You cannot change your incentive
deferral election after the Enrollment Deadline.

SALARY DEFERRAL OPTION

Under this Option, you can defer all or any portion of your 2001 eligible pay.
Salary Deferral Option contributions begin with your first eligible pay period
in 2001. You are not credited with a Company match on deferrals you make under
this Option.

Enrollment in this Option is not automatic. If you wish to defer any portion of
your 2001 eligible pay, you must make your election by the Enrollment Deadline.
You cannot change your salary deferral election after the Enrollment Deadline.


CONSULT YOUR TAX OR FINANCIAL ADVISOR

Participating in these non-qualified Plans reduces your taxable income and your
current take-home pay by deferring your receipt of income to a future point in
time. Before deciding whether or not to enroll in the Executive Savings Plans
for 2001, you may want to consult your personal tax or financial advisor.

[SIDEBAR]

100% VESTING

You are always 100 percent vested in your deferrals, matching Company
contributions, and the investment earnings and losses on both of them.

WHAT IS ELIGIBLE PAY?

For purposes of the Automatic Restoration Option and the Salary Deferral Option,
eligible pay is base salary plus any non-stock periodic incentives (other than
long-term incentive awards and awards under the Leadership Results Plan).


4


INVESTING YOUR ACCOUNT

YOUR ESP DEFERRALS AND UNITEDHEALTH GROUP MATCHING CONTRIBUTIONS ARE CREDITED
WITH INVESTMENT EARNINGS THAT ARE BASED ON ONE OR MORE OF THE INVESTMENT CREDIT
FUNDS THAT ARE OFFERED UNDER THE PLANS. YOUR INVESTMENT ELECTION APPLIES TO ALL
DEFERRALS UNDER THE ESP OPTIONS IN WHICH YOU PARTICIPATE. KEEP IN MIND, THE
INVESTMENT CREDIT FUNDS ARE MERELY MEASURING TOOLS TO DETERMINE THE VALUE OF
YOUR ACCOUNT UNDER THE PLANS, AND UNITEDHEALTH GROUP IS NOT REQUIRED TO PURCHASE
THESE INVESTMENTS.

UNDERSTANDING YOUR INVESTMENT CHOICES

Effective November 13, 2000, we added new funds to meet a broad range of
financial goals and offer you a wider variety of investment funds from which to
choose. The four funds available prior to November 13 are marked with an [*]
asterisk in the following pages.

You can elect that your account can be credited with the investment performance
of one or any combination of the following funds in one-percent increments. Your
investment elections must add up to 100 percent.

The investment objectives and types of investments for each fund are
described briefly in the following pages. You can find more information about
each fund and request a prospectus on the 401(k)/ESOP/ESP Web site or by
calling the Retirement Plans Service Center.

As you select or change your investment credit fund(s), keep in mind that your
elections are subject to investment risk. As with any investment, if the returns
credited on the fund(s) you choose are positive, your account balance will
increase. If the returns credited are negative, your account balance will
decrease. Please review the fund information available on the 401(k)/ESOP/ESP
Web site before making your investment election.

YOUR INVESTMENT OPTIONS

INVESTMENT PATH I: ONE-CHOICE FUNDS

Pre-mixed funds that provide complete account diversification with a single
selection. Designed for investors who are more comfortable letting investment
professionals create their portfolio.

ONE-CHOICE CONSERVATIVE - AMERICAN CENTURY STRATEGIC ALLOCATION: CONSERVATIVE

The managers seek to obtain as high a level of total return--capital
appreciation and income--as is consistent with its conservative risk profile.
The fund seeks to provide regular income through its emphasis on bonds and money
market securities, combined with the potential for moderate long-term total
return as a result of its stake in equity securities.


                                                                              5


ONE-CHOICE MODERATE - AMERICAN CENTURY STRATEGIC ALLOCATION: MODERATE

The managers seek to obtain as high a level of total return--capital
appreciation and income--as is consistent with its moderate risk profile. The
fund emphasizes investments in equity securities, while maintaining a sizable
stake in bonds and money market securities.

ONE-CHOICE AGGRESSIVE - AMERICAN CENTURY STRATEGIC ALLOCATION: AGGRESSIVE

The managers seek to obtain as high a level of total return--capital
appreciation and income--as is consistent with its aggressive risk profile. The
fund emphasizes investments in equity securities (currently 70%), with the
remainder of its assets in bonds and money market securities.

INVESTMENT PATH II: INDEX FUNDS

Low-cost, passively managed funds that seek to match the performance of stock or
bond indexes. Generally, these funds appeal to investors who want solid,
low-cost investments that reflect market returns.

BOND INDEX - VANGUARD TOTAL BOND MARKET INDEX

The fund seeks to match the performance of the Lehman Brothers Aggregate Bond
Index, which is a measure of the total U.S. bond market. Although the fund
does not contain every security in the Index, it strives to match the
characteristics of the Index.

S&P 500 INDEX - FIRST AMERICAN EQUITY INDEX*

The fund seeks to match the performance of the S&P 500 Index. The manager
invests 90% of its total assets in common stocks included in the Index.
Although the fund does not contain every security in the Index, it strives to
match the characteristics of the Index.

WILSHIRE 4500 INDEX - VANGUARD EXTENDED MARKET INDEX

The fund seeks to match the performance of the Wilshire 4500 Index. Although the
fund does not contain every security in the Index, it strives to match the
characteristics of the Index.

INVESTMENT PATH III: ACTIVELY-MANAGED FUNDS

Actively-managed funds allow you to create a customized investment portfolio.
For investors who prefer to select and control their own investments.

MONEY MARKET - FIRST AMERICAN PRIME OBLIGATIONS FUND*

The fund seeks maximum current income, preservation of capital, and liquidity.
The managers invest in short-term fixed income securities.

STABLE VALUE - WELLS FARGO STABLE INCOME FUND

The fund seeks higher yields than available on money market funds while limiting
the volatility associated with traditional short/intermediate maturity bond
funds. Holdings include government obligations, mortgage/asset backed
securities, corporate bonds and taxable municipal bonds of shorter duration.
NOTE: This fund is similar to the Norwest Stable Return Fund which is offered
under the 401(k) Savings Plan. Federal regulations


6


prohibit it from being offered in a non-qualified plan such as the ESP.

BOND - LOOMIS SAYLES BOND FUND*

The managers seek superior total return-- income and capital appreciation. The
fund invests primarily in investment-grade bonds and may also invest a smaller
portion in high-yield (below investment-grade) bonds, convertibles, and
preferred stock. The managers may invest in foreign securities.

LARGE-CAP VALUE - DODGE & COX STOCK FUND

The managers seek capital appreciation and income through dividends. The fund
invests predominantly in stocks, targeting those that are undervalued and
financially strong. The managers may also invest in preferred stocks,
convertibles, and American Depository Receipts.

LARGE-CAP GROWTH - ALLIANCE PREMIER GROWTH FUND

The manager seeks capital appreciation. The fund combines in-depth fundamental
research and opportunistic trading. The managers invest in a limited number of
large high-quality U.S. companies. The fund may also invest in foreign
securities.

MID-CAP VALUE - SOUND SHORE FUND

The managers seek capital appreciation; income (dividends) is secondary. The
fund invests primarily in equity securities selected on the basis of fundamental
value. Factors such as price, earnings expectations, earnings and price
histories, balance-sheet strength and perceived management skills play a large
role in security selection.

MID-CAP GROWTH - WARBURG PINCUS EMERGING GROWTH FUND

The managers seek capital appreciation. The fund invests most of its assets in
small- and medium-sized companies that show positive earnings and offer the
potential for accelerated earnings growth. The fund may also invest in
investment-grade bonds and foreign securities.

INTERNATIONAL VALUE - TEMPLETON FOREIGN FUND

The fund seeks capital appreciation. The manager invests in companies located
outside the U.S., including emerging markets. The fund has a long-term
investment horizon that focuses on finding undervalued companies. The fund may
also invest in international bonds.

INTERNATIONAL GROWTH - AMERICAN CENTURY INTERNATIONAL GROWTH FUND

The managers seek capital appreciation. The manager invests in companies located
outside the U.S., including emerging markets. The team invests primarily in
large companies with accelerating earnings and revenues.

SMALL-CAP VALUE - LOOMIS SAYLES SMALL-CAP VALUE FUND

The managers seek capital appreciation. The fund managers
look for undervalued companies with strong potential for growth. Most of the
fund's assets are invested in small companies, though a smaller percentage may
be held in larger companies. The managers may invest in foreign securities.


                                                                              7


SMALL-CAP GROWTH - LOOMIS SAYLES SMALL-CAP GROWTH FUND

The managers seek capital appreciation. The fund invests primarily in small
companies that have the potential for accelerating earnings growth, with
distinctive products or services, and strong management. Though most of the
fund's assets are in small-cap companies, they may also hold a smaller amount in
larger companies. The managers may invest in foreign companies.

MID-CAP GROWTH - PBHG GROWTH FUND - ONLY AVAILABLE IN THE ESP*

The managers seek capital appreciation. The fund invests most of its assets in
small- and medium-sized companies that show potential for significant earnings
growth. The fund may also invest in investment-grade bonds and foreign
securities.

MAKING YOUR INITIAL INVESTMENT ELECTION AND CHANGING YOUR INVESTMENT ELECTIONS

If you are a new participant for the 2001 plan year, you need to make your
investment election by the Enrollment Deadline. If you don't, you will be deemed
to have elected to receive credits under the American Century Strategic
Allocation Conservative Fund, and that election will continue until you make a
change.

The investment choices you make or are deemed to have made will apply to all the
Options in which you participate (Automatic Restoration, Salary Deferral and
Incentive Deferral).

If you participated in 2000 or a prior year and previously made or were deemed
to have made an investment election, that election will remain in effect until
you change it.


8


                                                                                 
IF YOU WANT TO...                        YOU NEED TO...                                WHEN YOU CAN
                                                                                       MAKE THIS CHANGE
Make your initial investment choices   Call the Retirement Plans Service               Before the Enrollment Deadline
                                       Center or go to the 401(k)/ESOP/ESP
                                       website

Change your investment choices for                                                     Anytime,but not more than once each
future deferrals                                                                       calendar month


Change the allocation of your current                                                  Anytime,but not more than once each
account balance                                                                        calendar month



Investment elections are effective on business days on which the New York Stock
Exchange is open. If your elections are confirmed by 4 p.m. Eastern time, they
will become effective on the same business day.

TRACKING YOUR ACCOUNT
BALANCE

For your convenience, you can obtain ESP account information three ways:

     -    INTERNET ACCESS. You can review your ESP account information and
          change your investments via the Internet. You can also print any of
          the screens you access.

     -    VOICE RESPONSE SYSTEM. You have daily access to your account
          information through the Retirement Plans Service Center. When you call
          toll-free, you can use the voice response system or speak to a
          Customer Service Representative (CSR) to obtain information
          about your account or to initiate transactions. CSRs are available
          from 8 a.m. until 8 p.m. Eastern time, Monday through Friday.

     -    QUARTERLY STATEMENT. You will receive a statement, currently on a
          quarterly basis, at your home address. Your statement provides a
          summary of your fund credit activity since the end of the last
          quarter, and how each transaction affects your total account credits.


                                                                              9


HOW AND WHEN YOUR ESP ACCOUNT IS DISTRIBUTED

IN ADDITION TO CHOOSING HOW YOUR ACCOUNT BALANCE WILL BE DISTRIBUTED WHEN YOUR
EMPLOYMENT ENDS, EFFECTIVE JANUARY 1, 2001, YOU CAN ELECT IN-SERVICE
DISTRIBUTIONS THAT ARE MADE TO YOU WHILE YOU ARE STILL EMPLOYED.

YOUR DISTRIBUTION OPTIONS

To give you more flexibility in planning for your financial future, we are
introducing several new distribution options. For the first time, the ESP
offers two types of distributions:

     -    POST-EMPLOYMENT DISTRIBUTIONS. Four options that determine how funds
          will be paid after your employment ends or if you become totally and
          permanently disabled.

     -    IN-SERVICE DISTRIBUTIONS. Three new options that allow you to receive
          funds from your account while you are employed by UnitedHealth Group.

POST-EMPLOYMENT DISTRIBUTIONS The post-employment distribution options include:

     -    LUMP SUM: A single payment of your entire account balance is paid to
          you in February of the year following the year in which your
          employment ends. For exam-ple, if your employment ends on January 14,
          2005, a single lump sum distribution will be made to you in February
          2006.

     -    FIVE ANNUAL INSTALLMENTS: Five substantially equal annual installments
          will be paid beginning in February of the year following the year in
          which your employment ends. For example, if your employment ends on
          April 25, 2005, your annual installment will be paid to you each
          February from 2006 through 2010.

     -    TEN ANNUAL INSTALLMENTS: Ten substantially equal annual installments
          will be paid beginning in February of the year following the year in
          which your employment ends. For example, if your employment ends on
          November 1, 2005, you will receive an installment each year starting
          in February 2006 and ending in February 2015.

     -    TEN-YEAR DELAY, THEN LUMP SUM: A single payment of your entire account
          balance is paid in February of the 10th year following the year your
          employment ends. For example, if your employment ends on March 15,
          2005, your lump sum distribution will be paid in February 2015.

See Question 2 on page 15 for things to consider in choosing a post-employment
distribution option.

Note: The "three annual installments" distribution option is no longer available
to new participants. If you participated in ESP in 2000 or a prior year and
selected three annual installments, that choice will remain in effect unless you
make a change under the new distribution election change rules that are
described on page 12.

10


IN-SERVICE DISTRIBUTIONS:
THREE OPTIONS

Effective January 1, 2001, three types of in-service distributions will be
available from the ESP.

     -    PRE-SELECTED IN-SERVICE DISTRIBUTIONS. New participants can choose
          this option only when they initially enroll in the Plan. Because this
          option is new for 2001, current participants have a one-time
          opportunity to elect this option during this year's enrollment period.

          You can elect to have all or part of your account distributed to you
          on one or more specific dates while you are still employed. You might
          choose this option to cover your child's college tuition or other
          future planned expenses. If you elect this option, the distribution
          date(s) you select must be at least three years in the future. New
          participants cannot choose a distribution date that occurs before the
          January 1 following the third full Plan year after initial enrollment
          in the ESP, which is January 1, 2004. Existing participants must also
          choose a distribution date(s) that begins no earlier than January 1,
          2004. You can choose multiple distribution dates, but only one
          distribution date in any calendar year.

          If your financial needs change, you can cancel a planned distribution
          or extend it to a future date. However, you can only extend the
          distribution date once, and you must request both extensions and
          cancellations at least 12 months before the scheduled distribution
          date.

     -    FINANCIAL HARDSHIP DISTRIBUTIONS: You can request a distribution of
          all or part of your account while you are still employed if you
          experience a severe financial hardship as defined by the Plan. A
          severe financial hardship occurs as a result of a sudden and
          unexpected illness or accident involving you or your dependent, your
          loss of property due to an accident or disaster, or other similar
          extraordinary and unforeseeable emergency that is clearly beyond your
          control.

     -    ON DEMAND DISTRIBUTIONS: You can request a distribution of all or part
          of your account balance at any time for any reason while you are
          employed. To prevent your "constructive receipt" of your entire
          account, you must forfeit 10% of the amount that you request.

SPECIAL SUSPENSION RULE: Once you take an in-service distribution (either
financial hardship or on demand) your deferral contributions will
automatically cease and you cannot contribute salary or incentive deferrals
to the ESP until at least 12 months have passed. For example, if you took an
in-service distribution in March 2004, you could not begin deferring income
again until March 2005. You would need to re-enroll in the Fall of 2004 for
salary and incentive deferrals to start again in March 2005.

You can obtain more information and request a distribution by contacting the
Professional Services Group Representative.

                                                                             11


CHOOSING DISTRIBUTION OPTIONS: NEW PARTICIPANTS MUST ELECT DISTRIBUTION OPTION

When you first become eligible to participate in the ESP, you must choose a
post-employment distribution form. If you do not elect a distribution option by
the Enrollment Deadline, your account balance will auto-matically be paid in a
lump sum in February of the year following the year in which your employment
ends unless you change your deemed post-employment distribution election in
accordance with the next section.

If you die, your account balance will be paid to your beneficiary. If you have
not designated a beneficiary, your account balance will be paid in accordance
with the Plans' provisions.

During your first enrollment period, you also have a one-time opportunity to
elect to a "pre-selected" in-service distribution as described on page 11. If
you do not make this election by the Enrollment Deadline, you will not be able
to select this option at a later date.

CHANGING YOUR POST-EMPLOYMENT DISTRIBUTION ELECTION WHILE YOU ARE EMPLOYED

Effective January 1, 2001, you will be able to change your post-employment
distribution election as often as once every 12 months, within certain
limitations. This new feature is designed to offer you greater flexibility,
while still complying with IRS requirements that you not have unlimited access
to your ESP account. To be effective, your election to change your
post-employment form of distribution must be made at least 12 months before a
post-employment distribution would otherwise be made to you.

To make a change, complete a Periodic Distribution Re-Election Form, which is
available by contacting a Professional Services Group Representative on or
after January 1, 2001.

CHANGING YOUR POST-EMPLOYMENT DISTRIBUTION ELECTION AFTER INSTALLMENT PAYMENTS
HAVE BEGUN

Once your employment has ended and you have begun receiving installment
payments, you can accelerate your payout at any time by requesting that the
remainder of your account be paid in one lump sum payment. As with any "on
demand" in-service distributions, Federal law requires that you forfeit 10% of
the value of your remaining ESP account when you elect to accelerate installment
payments.

[SIDEBAR]

TAXATION OF YOUR DISTRIBUTION

Income Tax: Whether you elect that your distribution be paid to you in a lump
sum or in installments, the payments will be subject to income tax in the year
you receive them.

FICA TAX: The payments you eventually receive will not, however, be subject
to FICA taxation in the year you receive them. This is because the amounts
that you defer to the ESP are subject to FICA taxation in the year in which
you contribute them to the ESP.

STATE INCOME TAX: Choosing 10 annual installments as a distribution option may
have tax advantages to you. See question 2 on page 15 for more information.

OTHER SPECIAL TAX RULES: Special tax treatment, such as five year averaging,
does not apply to distributions from the ESP. Also, distributions from the ESP
are not eligible for rollover into an Individual Retirement Account (IRA) or
another employer's retirement plan. The IRS 10% premature distribution penalty
does not apply to amounts distributed from the ESP because the Executive Savings
Plans are nonqualified plans.


12



HOW TO ENROLL

IF YOU WANT TO PARTICIPATE IN THE ESP FOR 2001, YOU MUST MAKE YOUR ELECTIONS BY
THE ENROLLMENT DEADLINE. CALL THE RETIREMENT PLANS SERVICE CENTER, MONDAY
THROUGH FRIDAY FROM 8:00 A.M. - 8 P.M. EASTERN TIME.

HERE'S WHAT YOU NEED TO DO BY THE ENROLLMENT DEADLINE

                                                                          
IF YOU WANT TO...                        YOU NEED TO...                         WHAT HAPPENS NEXT
Participate in the Automatic             Do nothing.You are automatically       You will participate in the Automatic
Restoration Option                       enrolled.                              Restoration Option for 2001.

Opt out of the Automatic Restoration     Call the Retirement Plans Service      You will not participate in the
Option                                   Center by the Enrollment Deadline.     Automatic Restoration Option for
                                                                                2001.

Defer eligible salary or Leadership      Call the Retirement Plans Service      You will defer salary for the entire
Results Plan incentive pay in 2001       Center by the Enrollment Deadline.     2001 calendar year and the
                                                                                Leadership Results Plan award that
                                                                                becomes payable in 2001.

Choose the way your funds will be        Complete the enclosed Distribution     If you are newly eligible and don't
distributed after your employment        Election Form by the Enrollment        make an election,your account bal-
ends                                     Deadline.                              ance will be paid in one lump-sum
                                                                                payment in February of the year after
                                                                                your employment ends.

Choose a "pre-selected"in-service-       Complete the enclosed Distribution     You willnot have another opportunity
distribution                              Election Form by the Enrollment       to choose this option.
(ONE-TIME OPPORTUNITY)                   Deadline.



Make or change investment choices        Go to the 401(k)/ESOP/ESP Web site     If you do not initially make investment at
                                         or call the Retirement Plans           choices,your account will be credited
                                         Center.                                with investment earnings as if
                                                                                you had selected the American
                                                                                Century Strategic Allocation
                                                                                Conservative Fund.
                                                                                You can change your investment
                                                                                choices anytime,but not more than
                                                                                once each calendar month.

Designate a beneficiary                  Complete the enclosed Beneficiary      You can change your beneficiary
                                         Form by the Enrollment Deadline        anytime.
                                         and return to the address stated on
                                         the form.




                                                                              13


USING THE 401(K)/ESOP/ESP WEB SITE FOR INVESTMENT ELECTION CHANGES

1.   You can access the 401(k)/ESOP/ESP Web site.

2.   Enter your Social Security Number and password.

3.   Select Executive Savings Plan from the list of plans.

4.   To make investment changes, select "Initiate Transaction" on the left menu.

5.   To change how future deferrals are invested, select "Investment Direction."

6.   To transfer existing account balances among different investments, select
     "Fund Transfers."

A NOTE ABOUT PASSWORDS. If you have not visited this Web site before, you will
need to enter your Social Security Number and home ZIP code to generate a
password. Your password will be mailed to your home address within one week of
your request. When you use this password to enter the site for the first time,
you will be asked to choose a new password for future use.

USING THE RETIREMENT PLANS SERVICE CENTER

1.   DIAL to access the Service Center.

2.   ENTER YOUR SOCIAL SECURITY NUMBER AND YOUR PERSONAL IDENTIFICATION NUMBER
     (PIN). If you are a new participant and have never called the Retirement
     Plans Service Center regarding the ESP, the 401(k) Savings Plan or the
     Employee Stock Ownership Plan, your temporary PIN will be the last four
     digits of your Social Security Number. You will be asked to select a new
     PIN. If you've forgotten your PIN, follow the instructions on the phone to
     have a new PIN mailed to you.

3.   SELECT EXECUTIVE SAVINGS PLAN FROM THE MENU and follow the voice prompts to
     make your enrollment elections or to access ESP information.

4.   REVIEW YOUR CONFIRMATION STATEMENT FOR ACCURACY. A confirmation of your
     elections will be mailed to your home address on record within two business
     days.

[SIDEBAR]

TO SPEAK WITH A CUSTOMER SERVICE REPRESENTATIVE (CSR) Call between 8 a.m. and 8
p.m. Eastern time, Monday through Friday.


14


Q AND A

Q U E S T I O N S  &  A N S W E R S  A B O U T
T H E  E X E C U T I V E  S A V I N G S  P L A N S

1. Why do I have to make a deferral election before I know what I will be paid?

In exchange for the opportunity to defer taxation on unearned income under the
ESP, which is a non-qualified deferred compensation plan, the IRS requires that
an irrevocable election to defer income be made before the income is actually
earned. Since your election will remain in effect for an entire year, you will
want to carefully plan your deferral elections.

2. How can I decide if one of the new post-employment distribution options is a
good choice for me?

Two new post-employment distribution options have been added to the Plan. Here
are some things to think about as you decide if these options may be right for
you.

     -    TEN INSTALLMENTS. This option offers certain state tax advantages.
          Some states impose state income tax on retirement distributions
          received by former residents that are based on income that the former
          resident earned while working in that state. Under current tax laws
          distributions from the ESP are not subject to state tax in the state
          of former residence if the ESP account is distributed in
          sub-stantially equal annual installments over a period of at least 10
          years.

     -    TEN-YEAR DELAY, THEN LUMP SUM. You might choose this option if you
          won't need the money immediately after your employment ends. This
          option might also appeal to you if you expect to have another job
          after your employment with UnitedHealth Group ends or if you have
          other retirement income that you prefer to use before withdrawing
          money from this account.

3. Are my deferral contributions and any Company matching contributions made to
the ESP subject to income taxes and/or Social Security taxes at the time that
they are contributed to the ESP?

     -    FEDERAL AND STATE INCOME TAXES: The contributions that you make to the
          ESP, and any Company matching contributions, are not subject to
          federal income taxation in the year in which they are contributed to
          the ESP. Under the laws of most states, these contributions are also
          generally not subject to state income taxation in the year of
          contribution; however, some states have special rules that may cause a
          portion of your deferrals to be subject to tax.

     -    SOCIAL SECURITY TAXES (FICA): Your deferral contributions and any
          Company matching contributions are subject to FICA taxation in the
          year in which they


                                                                             15


          are contributed to the ESP. Whether these contributions are actually
          taxed depends on the timing of the deferral contribution and the
          element of the FICA tax addressed.

          The FICA tax has two elements: the OASDI portion, for which an annual
          wage limit applies; and the Medicare hospital portion, for which no
          wage limit applies. The wage base for 2001 for the OASDI portion of
          the tax is $80,400. If at the time deferral and matching contributions
          are contributed to the ESP, you have not exceeded the OASDI wage base,
          the OASDI tax will bewithheld before the contributions are made. Once
          you reach the 2001 wage base, the OASDI tax will not be withheld from
          subsequent deferrals and Company matching contributions.

          On the other hand, since the Medicare hospital portion of the FICA tax
          is applied without limit to all of your compensation, this tax will be
          withheld from all of your deferrals and any matching contributions
          for 2001, before they are contributed to the ESP.

ESP INFORMATION AVAILABLE ONLINE IN 2001

ESP information will be available via HRdirect early next year. To access from
the Intranet, select "HRdirect" from the top navigation bar then click on
"Knowledge Base." From the Internet, select "Knowledge Base."

16



This brochure  provides  highlights of the UnitedHealth  Group Executive Savings
Plans.  If there is a conflict  between the information in this brochure and the
Plan document,  the Plan document will govern.  UnitedHealth  Group reserves the
right to amend, modify or terminate the Plans at any time.  Participation in the
Executive  Savings  Plans  is  provided  as a  benefit  to  eligible  employees.
Participation does not guarantee employment.

11/00

EX-10.F

                                                                       EXHIBIT A

                         UNITEDHEALTH GROUP INCORPORATED
               SUPPLEMENTAL LONG TERM EXECUTIVE COMPENSATION PLAN


1.      ESTABLISHMENT AND PURPOSE. This Supplemental Long Term Executive
        Compensation Plan (the "Plan") was approved and adopted by the
        Compensation and Human Resources Committee of the Board of Directors of
        UnitedHealth Group Incorporated (together with its subsidiaries, the
        "Company"). The purpose of this Plan is to advance the interests of the
        Company and its shareholders by attracting and retaining key Company
        employees and by stimulating the efforts of such employees to contribute
        to the continued success and growth of the Company's business.

2.      PLAN DESIGN.  (a) The  Compensation  and Human  Resources  Committee of
        the Board or any successor committee (the "Committee") may, in its
        discretion, from time to time establish one or more Performance Cycles
        as set forth in Section 3.

        (b)     At the beginning of each Performance Cycle (or, in the case of
                the Performance Cycles set forth in Sections 3(a)(i), (ii) and
                (iii), on the effective date), the Chief Executive Officer of
                the Company shall recommend, and the Committee shall approve,
                with or without modification, in its discretion:

                (i)     the Company Performance Goals for such Performance Cycle
                        as set forth in Section 4; and

                (ii)    the target aggregate amount to be awarded under this
                        Plan for such Performance Cycle (the "Target Pool" for
                        such Performance Cycle) and the maximum aggregate amount
                        available to be awarded under this Plan for such
                        Performance Cycle (the "Maximum Pool" for such
                        Performance Cycle).

        (c)     At the beginning of each Performance Cycle (or, in the case of
                the Performance Cycles set forth in Sections 3(a)(i), (ii) and
                (iii), on the effective date), the Chief Executive Officer of
                the Company shall designate the persons who shall participate in
                this Plan with respect to such Performance Cycle as set forth in
                Section 5 (each, a "Participant" with respect to such
                Performance Cycle).

        (d)     At the beginning of each Performance Cycle (or, in the case of
                the Performance Cycles set forth in Sections 3(a)(i), (ii) and
                (iii), on the effective date), the Office of the Chair of the
                Company or any successor office or officer (the "Office of the
                Chair") shall:


                                       1



                (i)     establish each Participant's  Individual Performance
                        Goals for such Performance Cycle as set forth in Section
                        6; and

                (ii)    establish the target and range of each Participant's
                        possible award under this Plan for such Performance
                        Cycle as set forth in Section 7.

        (e)     Promptly after the end of each Performance Cycle, the Chief
                Executive Officer of the Company shall:

                (i)     prepare and present to the Committee a review and
                        evaluation of the Company's actual performance during
                        such Performance Cycle in comparison to the Company
                        Performance Goals for such Performance Cycle; and

                (ii)    recommend, and the Committee shall approve, with or
                        without modification, in its discretion, the actual
                        aggregate amount to be awarded under this Plan for such
                        Performance Cycle (the "Actual Pool" for such
                        Performance Cycle) as set forth in Section 8.

        (f)     Promptly after the Committee  determines the Actual Pool for a
                Performance  Cycle, the Office of the Chair shall:

                (i)     review and evaluate the performance of each  Participant
                        with respect to such  Performance  Cycle and
                        such Participant's Individual Performance Goals; and

                (ii)    determine the amount to be awarded to such Participant
                        with respect to such Performance Cycle under this Plan.

The aggregate amount awarded to all Participants with respect to a Performance
Cycle shall not exceed the amount of the Actual Pool for such Performance Cycle.

        (g)     Promptly after the Office of the Chair makes the determinations
                referred to in (e) above, the Company shall pay the amounts so
                awarded to Participants as set forth in Section 9.

3.      ESTABLISHMENT OF PERFORMANCE CYCLES; MAXIMUM POOLS FOR PERFORMANCE
        CYCLES. (a) The Committee has determined that the Performance Cycles
        under this Plan shall be (i) the period comprising calendar years 1999
        and 2000; (ii) the period comprising calendar years 1999, 2000, and
        2001; (iii) the period comprising calendar years 2000, 2001, and 2002;
        and (iv) the period comprising calendar years 2001, 2002, and 2003.

        (b)     It is anticipated that any future Performance Cycle approved by
                the Committee will comprise a period of three calendar years
                which overlaps with


                                       2



                prior Performance Cycles in the same manner as the Performance
                Cycles specified in (a)(ii), (iii) and (iv) above.

        (c)     The Committee has determined that the Target Pools for the
                Performance Cycles specified in (a)(i) through (iv) above shall
                be $4.5 million, $4.9 million, $5.6 million and $5.9 million
                respectively, and that the Maximum Pools for such Performance
                Cycles shall be $9.1 million, $9.8 million, $11.2 million and
                $11.8 million, respectively.

4.      ESTABLISHMENT OF COMPANY PERFORMANCE GOALS. (a) It is expected that
        Company Performance Goals will be quantifiable goals for the Company's
        performance, measured on an absolute basis, in comparison to selected
        indices or groups of other companies, or on other objective bases. To
        the extent practicable, the Company's performance in comparison to the
        Company Performance Goals shall be subject to independent verification.
        The Committee may, in its discretion, cause such independent
        verification to be carried out.

        (b)     With respect to the Performance Cycles specified in Sections
                3(a), the Committee has established the Company Performance
                Goals set forth in Exhibit A to this Agreement.

5.      DESIGNATION OF PARTICIPANTS. (a) Participants shall be selected from key
        senior level executives of the Company. Participants may include the
        Chief Executive Officer of the Company and members of the Office of the
        Chair. A person's designation as a Participant for any one or more
        Performance Cycles does not assure or create any presumption that such
        person will be designated as a Participant for any other Performance
        Cycles. Reference also is made to Section 17 below with respect to the
        effect of a person's designation as a Participant.

        (b)     A Participant may be selected to participate in this Plan with
                respect to a portion of a Performance Cycle. In such event, the
                Participant's award under this Plan with respect to that
                Performance Cycle will be pro rated based upon the proportion of
                the Performance Cycle in which the Participant participates. The
                Chief Executive Officer may, at any time, modify who is eligible
                to participate in the Plan during a Performance Cycle and the
                duration of participation in a Performance Cycle.

        (c)     With respect to the respective Performance Cycles specified in
                Section 3(a), the persons identified in Exhibit B to this
                Agreement have been designated as Participants.

6.      ESTABLISHMENT OF INDIVIDUAL PERFORMANCE GOALS. (a) Individual
        Performance Goals may relate to financial, operating, organizational
        development, or other goals deemed important to the Company's success
        and may be modified at any time by the Office of the Chair. Individual
        Performance Goals may include both


                                       3



        quantifiable and non-quantifiable goals. A Participant's Individual
        Performance Goals shall be communicated to the Participant promptly
        after they have been established, and, if applicable, modified.

        (b)     The Office of the Chair's establishment of Individual
                Performance Goals, and its review and evaluation of a
                Participant's performance with respect to the Participant's
                Individual Performance Goals, shall be final.

7.      ESTABLISHMENT OF RANGE OF PARTICIPANTS' POSSIBLE AWARDS. (a) The target
        and range of a Participant's possible awards established by the Office
        of the Chair shall be between zero and 100% of the Participant's average
        base compensation during the applicable Performance Cycle. For purposes
        of this Section 7, "average base compensation" means the sum of the
        Participant's base earnings during the applicable Performance Cycle,
        divided by the number of years in the Performance Cycle.

        (b)     With respect to each Performance Cycle specified in Section
                3(a), the target amount established by the Office of the Chair
                for each Participant for each such Performance Cycle is 50% of
                such Participant's average base compensation during the
                Performance Cycle. The range of possible awards for each such
                Performance Cycle and Participant is between zero and 100% of
                each Participant's average base compensation during the
                applicable Performance Cycle.

8.      DETERMINATION OF ACTUAL POOL. The Committee shall have discretion to
        accept or to modify the Chief Executive Officer's recommendation as to
        the amount of the Actual Pool for a Performance Cycle, provided that the
        Actual Pool shall not exceed the Maximum Pool for such Performance
        Cycle. The Committee's determination in this respect shall be final.

9.      PAYMENT OF AMOUNTS AWARDED TO PARTICIPANTS. (a) Subject to the other
        provisions of this Section 9, the payment of the awards provided for in
        Section 2(g) ("Awards") shall be made in cash no later than six months
        after the end of the Performance Cycle to which they relate. All such
        payments are subject to required withholding of federal, state, and
        local taxes.

        (b)     If permitted by applicable law, Participants may elect to (i)
                defer the payment of Awards under the Company's Executive
                Savings Plan in accordance with rules and procedures established
                by the Office of the Chair or (ii) receive Awards in the form of
                Company stock or stock options if permitted by the Office of the
                Chair.

        (c)     No Award shall be paid to a Participant who is on formal
                disciplinary action or performance probation at the time the
                Award otherwise would be paid.


                                       4



        (d)     No Award shall be paid to a Participant who is not actively
                employed by the Company at the time the Award otherwise would be
                paid except in the case of retirement as provided for in (e)
                below, or death or disability as provided for in (f) below.

        (e)     If a Participant retires before the end of a Performance Cycle
                or after the end of a Performance Cycle but before an Award is
                paid, the Committee may, in its discretion, determine that the
                Participant shall be paid a pro rated portion of the Award that
                the Participant would have received but for such retirement. In
                such event, (i) the pro rationing shall be based on the portion
                of such Performance Cycle prior to the Participant's retirement,
                and (ii) the measurement of Company and Participant performance
                shall be based on performance through the end of the fiscal year
                of the Company which ends closest to the Participant's date of
                retirement. The Committee shall determine the Participant's date
                of retirement in a manner consistent with Company practices. Any
                such pro rated Award shall be paid at the same time as other
                Awards with respect to the applicable Performance Cycle.

        (f)     If a Participant dies or becomes permanently and totally
                disabled before the end of a Performance Cycle or after the end
                of a Performance Cycle but before an Award is paid, the
                Committee may, in its discretion, determine that the Participant
                (or, in the case of death, the Participant's estate) shall be
                paid a pro rated portion of the Award that the Participant would
                have received but for such death or disability. In such event,
                (i) the pro rationing shall be based on the portion of such
                Performance Cycle prior to the Participant's date of death or
                disability, and (ii) the measurement of Company and Participant
                performance shall be based on performance through the end of the
                fiscal year of the Company which ends closest to such date. The
                Committee shall determine the Participant's date of retirement
                in a manner consistent with Company practices. Any such pro
                rated Award shall be paid at the same time as other Awards with
                respect to the applicable Performance Cycle.

        (g)     If a Change in Control (as defined in Section 10 below) occurs
                during a Performance Cycle, the Company or its successor shall
                pay each Participant a pro rated portion of the maximum Award
                for which such Participant is eligible with respect to each such
                Performance Cycle. Such pro rationing shall be based on the
                proportion of each such Performance Cycle through the end of the
                fiscal year of the Company which ends closest to the date of
                such Change in Control. Any such Awards shall be paid within 90
                days of the occurrence of the event constituting such Change in
                Control, or, if a timely deferral election is then in effect,
                shall be deferred into the Company's Executive Savings Plan.


                                       5



10.     DEFINITION OF CHANGE IN CONTROL.  "Change in Control" means the
        occurrence of any of the following events:

        (a)     The acquisition by any person, entity or "group," within the
                meaning of Section 13(d)(3) or 14(d)(2) of the Securities
                Exchange Act of 1934, other than the Company or any of its
                affiliates, or any employee benefit plan of the Company and/or
                one or more of its affiliates, of beneficial ownership (within
                the meaning of Rule 13d-3 promulgated under the Securities
                Exchange Act of 1934) of 20% or more of either the then
                outstanding shares of the Company's Common Stock or the combined
                voting power of the Company's then outstanding voting securities
                in a transaction or series of transactions not approved in
                advance by a vote of at least three-quarters of the Continuing
                Directors (as hereinafter defined).

        (b)     Individuals who, as of January 1, 2000 constitute the Board of
                Directors of the Company (generally the "Directors" and, as of
                January 1, 2000, the "Continuing Directors") cease for any
                reason to constitute at least a majority thereof, provided that
                any person becoming a Director subsequent to January 1, 2000
                whose nomination for election was approved in advance by a vote
                of at least three-quarters of the Continuing Directors (other
                than a nomination of an individual whose initial assumption of
                office is in connection with an actual or threatened
                solicitation with respect to the election or removal of the
                Directors of the Company, as such terms are used in Rule 14a-11
                of Regulation 14A under the Securities Exchange Act of 1934)
                shall be deemed to be a Continuing Director.

        (c)     The approval by the shareholders of the Company of a
                reorganization, merger, consolidation, liquidation or
                dissolution of the Company or of the sale (in one transaction or
                a series of related transactions) of all or substantially all of
                the assets of the Company other than a reorganization, merger,
                consolidation, liquidation, dissolution or sale approved in
                advance by a vote of at least three-quarters of the Continuing
                Directors.

        (d)     The first purchase under any tender offer or exchange offer
                (other than an offer by the Company or any of its affiliates)
                pursuant to which shares of the Company's Common Stock are
                purchased.

        (e)     At least a majority of the Continuing Directors determine in
                their sole discretion that there has been a change of control of
                the Company.


11.     ADMINISTRATION OF PLAN. Except as otherwise provided herein, this Plan
        shall be administered by the Office of the Chair. The Office of the
        Chair shall have full power and authority, subject to all the applicable
        provisions of this Plan and applicable law, to (a) establish, amend,
        suspend or waive such rules and regulations and appoint such agents as
        it deems necessary or advisable for the


                                       6



        proper administration of this Plan, (b) construe, interpret and
        administer this Plan and any instrument or agreement relating to this
        Plan, and (c) make all other determinations and take all other actions
        necessary or advisable for the administration of this Plan. The Office
        of the Chair shall have the full power and authority, subject to the
        approval of the Committee, to amend and/or terminate the Plan at any
        time, for any reason, with or without notice. Unless otherwise expressly
        provided in this Plan, each determination made and each action taken by
        the Office of the Chair pursuant to this Plan or any instrument or
        agreement relating to this Plan (i) shall be within the sole discretion
        of the Office of the Chair, (ii) may be made at any time, and (iii)
        shall be final, binding and conclusive for all purposes on all persons,
        including, but not limited to, Participants and their legal
        representatives and beneficiaries, and employees of the Company.

12.     NONTRANSFERABILITY. Participants and beneficiaries shall not have the
        right to assign, encumber or otherwise anticipate the Awards to be made
        under this Plan, and the benefits provided hereunder shall not be
        subject to seizure for payment of any debts or judgments against any
        Participant or any beneficiary.

13.     AMENDMENT AND TERMINATION; ADJUSTMENTS. Except to the extent prohibited
        by applicable law and unless otherwise expressly provided in this Plan:

        (a)     The Committee may amend this Plan prospectively at any time and
                for any reason deemed sufficient by it without notice to any
                person affected by this Plan.

        (b)     The Committee may correct any defect, supply any omission or
                reconcile any inconsistency in this Plan in the manner and to
                the extent it shall deem desirable to carry this Plan into
                effect.

14.     EFFECTIVE DATE. This Plan shall be deemed effective as of May 10, 2000.

15.     HEADINGS. Headings are given to the Sections of this Plan solely as a
        convenience to facilitate reference. Such headings shall not be deemed
        in any way material or relevant to the construction or interpretation of
        this Plan or any provision thereof.

16.     APPLICABILITY TO SUCCESSORS. This Plan shall be binding upon and inure
        to the benefit of the Company and each Participant, the successors and
        assigns of the Company, and the beneficiaries, personal representatives
        and heirs of each Participant. If the Company becomes a party to any
        merger, consolidation or reorganization, this Plan shall remain in full
        force and effect as an obligation of the Company or its successors in
        interest.

17.     EMPLOYMENT RIGHTS AND OTHER BENEFIT PROGRAMS. The provisions of this
        Plan shall not give any Participant any right to be retained in the
        employment of the


                                       7



        Company. In the absence of any specific agreement to the contrary, this
        Plan shall not affect any right of the Company, or of any affiliate of
        the Company, to terminate, with or without cause, any Participant's
        employment at any time. This Plan shall not replace any contract of
        employment, whether oral or written, between the Company and any
        Participant, but shall be considered a supplement thereto. This Plan is
        in addition to, and not in lieu of, any other employee benefit plan or
        program in which any Participant may be or become eligible to
        participate by reason of employment with the Company. No compensation or
        benefit awarded to or realized by any Participant under this Plan shall
        be included for the purpose of computing such Participant's compensation
        under any compensation-based retirement, disability, or similar plan of
        the Company unless required by law or otherwise provided by such other
        plan.

18.     NO TRUST OR FUND CREATED. This Plan shall not create or be construed to
        create a trust or separate fund of any kind or a fiduciary relationship
        between the Company and a Participant or any other person. To the extent
        that any person acquires a right to receive payments from the Company
        pursuant to this Plan, such right shall be no greater than the right of
        any unsecured general creditor of the Company.

19.     GOVERNING LAW. The validity, construction and effect of this Plan or any
        Award payable under this Plan shall be determined in accordance with the
        laws of the State of Minnesota.

20.     SEVERABILITY. If any provision of this Plan is or becomes or is deemed
        to be invalid, illegal or unenforceable in any jurisdiction, such
        provision shall be construed or deemed amended to conform to applicable
        laws, or if it cannot be so construed or deemed amended without, in the
        determination of the Committee, materially altering the purpose or
        intent of this Plan, such provision shall be stricken as to such
        jurisdiction, and the remainder of this Plan shall remain in full force
        and effect.

21.     AWARDS NOT QUALIFIED PERFORMANCE-BASED COMPENSATION. Awards made under
        this Plan are not intended to qualify as "qualified performance-based
        compensation" within the meaning of Section 162(m) of the Internal
        Revenue Code of 1986, as amended.


                                       8

EX-10.H

February 13, 2001

William W. McGuire, M.D.
Chairman and CEO
UnitedHealth Group Incorporated
9900 Bren Road East
Minnetonka, Minnesota 55343

Re: Employment Agreement

Dear Bill:

I am writing to confirm the intent and understanding of the Compensation and
Human Resources Committee of the Board of Directors (the "Committee") of
UnitedHealth Group Incorporated (the "Company") as it relates to the annual
stock option grant you are entitled to receive pursuant to Section 2(b) of your
employment agreement with the Company. It is the Committee's intent and
understanding that the minimum option grant set forth in such section shall be
adjusted to reflect any stock splits, consolidations or stock dividends in the
Company's common stock occurring after the effective date of your employment
agreement. Therefore, as a result of the Company's two-for-one stock split that
was payable December 22, 2000, you are currently entitled to receive options to
purchase a minimum of 650,000 shares of the Company's common stock annually.

Sincerely,

William G. Spears
Chairman
Compensation and Human Resources Committee
UnitedHealth Group Incorporated

EX-10.J

February 13, 2001

Mr. Stephen J. Hemsley
President and COO
UnitedHealth Group Incorporated
9900 Bren Road East
Minnetonka, Minnesota 55343

Re: Employment Agreement

Dear Steve:

I am writing to confirm the intent and understanding of the Compensation and
Human Resources Committee of the Board of Directors (the "Committee") of
UnitedHealth Group Incorporated (the "Company") as it relates to the annual
stock option grant you are entitled to receive pursuant to Section 2(b) of your
employment agreement with the Company. It is the Committee's intent and
understanding that the minimum option grant set forth in such section shall be
adjusted to reflect any stock splits, consolidations or stock dividends in the
Company's common stock occurring after the effective date of your employment
agreement. Therefore, as a result of the Company's two-for-one stock split that
was payable December 22, 2000, you are currently entitled to receive options to
purchase a minimum of 300,000 shares of the Company's common stock annually.

Sincerely,


William G. Spears
Chairman
Compensation and Human Resources Committee
UnitedHealth Group Incorporated

EX-10.K

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of October 16, 1998 (the "Effective
Date"), is made by and between Robert J. Sheehy ("Executive") and United
HealthCare Services, Inc. ("United HealthCare") for the purpose of setting forth
the terms and conditions of Executive's employment by United HealthCare, or an
affiliate or subsidiary of United HealthCare, and to protect United HealthCare's
knowledge, expertise, customer relationships and the confidential information
United HealthCare has developed about its customers, products, operations and
services. Unless the context otherwise requires, when used in this Agreement
"United HealthCare" includes any entity affiliated with United HealthCare.

         WHEREAS, as additional consideration for entering into this Agreement
Executive shall receive, upon execution of this Agreement, a nonqualified stock
option to purchase 60,000 shares of United HealthCare Corporation ("UHC") common
stock with a grant date the same as the Effective Date pursuant to the terms of
the UHC Amended and Restated 1991 Stock and Incentive Plan.

         WHEREAS, Executive and United HealthCare desire to enter into this
Agreement, which shall supersede any and all other prior employment-related
agreements between Executive and United HealthCare.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:

1. EMPLOYMENT AND DUTIES; TERMINATION OF PRIOR AGREEMENTS.

         A. EMPLOYMENT. United HealthCare hereby employs Executive, either
         directly or through an affiliate or subsidiary of United HealthCare,
         and Executive hereby accepts such employment on the terms and
         conditions set forth in this Agreement. Except as specifically
         superseded by this Agreement, Executive's employment hereunder shall be
         subject to all of United HealthCare's policies and procedures in regard
         to its employees. Executive's employment hereunder shall begin on the
         Effective Date and shall continue until terminated as set forth in
         Section 3 hereof.

         B. DUTIES. Executive shall initially hold the executive level position
         of COO, Health Plans and perform the duties associated therewith.
         Executive shall perform such other executive level responsibilities as
         are reasonably assigned Executive from time to time. Executive agrees
         to devote substantially all of Executive's business time and energy to
         the performance of Executive's duties in a diligent and proper manner.

         C. TERMINATION OF PRIOR AGREEMENTS. As of the Effective Date all other
         prior employment related agreements between Executive and United
         HealthCare will terminate in their entirety and no longer be of any
         force or effect.



 2. COMPENSATION.

         A. BASE SALARY. Executive shall initially be paid a base annual salary
         in the amount of $350,000, payable bi-weekly, less all applicable
         withholdings and deductions (the "Initial Base Salary"). Executive
         shall receive a periodic performance review and consideration for an
         increase in the Initial Base Salary.

         B. BONUS AND STOCK PLANS. Executive shall be eligible to participate in
         the incentive compensation plans and the stock option and grant plans
         maintained by United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

         C. EMPLOYEE BENEFITS. Executive shall be eligible to participate in the
         employee benefit plans maintained by either United HealthCare or an
         affiliate or subsidiary of United HealthCare, including without
         limitation, any life, health, dental, short-term and long-term
         disability insurance coverages and any retirement plans, in the sole
         discretion of United HealthCare and in accordance with the terms and
         conditions of those plans and applicable laws and regulations.

         D. VACATION; ILLNESS. Executive shall be eligible for paid vacation and
         sick leave each year in accordance with the then-current policies of
         either United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

3. TERM AND TERMINATION.

         A. TERM. The term of this Agreement shall begin on the Effective Date
         and shall continue until terminated as set forth in Section 3B.

         B. TERMINATION OF AGREEMENT.

                  1. BY MUTUAL AGREEMENT. This Agreement and Executive's
                  employment hereunder may be terminated at any time by the
                  mutual written agreement of the parties.

                  2. BY UNITED HEALTHCARE. United HealthCare may terminate this
                  Agreement and Executive's employment hereunder on 30 days'
                  written notice.

                  3. BY EXECUTIVE. Executive may terminate this Agreement and
                  Executive's employment hereunder on 30 days' written notice.

                  4. DEATH, DISABILITY, ETC. This Agreement and Executive's
                  employment by United HealthCare shall terminate immediately
                  upon Executive's death. This Agreement and Executive's
                  employment hereunder shall automatically terminate in the
                  event of a permanent and total disability which renders
                  Executive incapable of


                                      -2-


                  performing Executive's duties, with or without reasonable
                  accommodation. United HealthCare has the sole discretion to
                  determine whether Executive is permanently or totally disabled
                  with the meaning of this Section 3B4, and the effective date
                  on which Executive was rendered so disabled.

         C. EMPLOYEE BENEFITS. On the effective date of the termination of this
         Agreement and Executive's employment by United HealthCare, Executive
         shall cease to be eligible for all employee benefit plans maintained by
         United HealthCare, except as required by federal or state continuation
         of coverage laws ("COBRA Benefits"). If Executive elects COBRA
         Benefits, Executive shall pay the entire cost of such benefits either
         through after-tax payroll deductions from the cash component of any
         severance compensation Executive receives or directly if Executive does
         not receive such severance compensation or if such severance
         compensation ceases.

         D. SEVERANCE EVENTS AND BENEFITS. If a Severance Event, as hereinafter
         defined, occurs, Executive shall receive the severance benefits set
         forth in this Section 3D for a period of 12 months from the effective
         date of the applicable Severance Event (the "Severance Period"). For
         purposes of this Agreement a Severance Event shall occur if and when:

         (i)      United HealthCare (a) terminates this Agreement and
                  Executive's employment without Cause, as hereinafter defined,
                  or (b) terminates this Agreement without terminating
                  Executive's employment and Executive elects to treat such
                  termination of this Agreement as a Change in Employment, as
                  hereinafter defined (collectively a "Termination without
                  Cause"), or

         (ii)     Within two years following a Change in Control, as hereinafter
                  defined, either (a) United HealthCare terminates this
                  Agreement and Executive's employment without Cause, or (b) a
                  Change in Employment occurs and Executive elects to treat such
                  Change in Employment as a termination of Executive's
                  employment (collectively a "Termination following a Change in
                  Control").

         1. SEVERANCE COMPENSATION. Executive shall receive the following
         severance compensation (the "Severance Compensation"):

                  a) TERMINATION WITHOUT CAUSE. Subject to Section 3D(1)(b)
                  below, upon a Termination without Cause Executive shall
                  receive biweekly payments equal to 1/26 of the sum of (1) two
                  times Executive's annualized base salary as of the date of the
                  Severance Event, less all applicable withholdings or
                  deductions required by law and Executive's COBRA Benefit
                  payments, if any, plus (2) one-half of the total of any bonus
                  or incentive compensation paid or payable to Executive for the
                  two most recent calendar years (excluding any special or
                  one-time bonus or incentive compensation payments), or if
                  Executive has been eligible for such bonus or incentive
                  compensation payments for less than two such periods, the last
                  such payment paid or payable to Executive (excluding any
                  special or one-time bonus or incentive compensation payments).


                                      -3-


                  b) TERMINATION FOLLOWING A CHANGE IN CONTROL. Upon a
                  Termination following a Change in Control, Executive shall
                  receive biweekly payments equal to 1/26 of the sum of (1)
                  three times Executive's highest annualized base salary during
                  the 2 year period immediately preceding the Severance Event,
                  less all applicable withholdings or deductions required by law
                  and Executive's COBRA Benefit payments, if any, plus (2) the
                  greater of (i) all bonuses that would be payable to Executive
                  under any incentive compensation plans in which Executive then
                  participates at Executive's then-current target level, or (ii)
                  one-half of the total of any bonus or incentive compensation
                  paid or payable to Executive for the two most recent calendar
                  years (excluding any special or one-time bonus or incentive
                  compensation payments), or if Executive has been eligible for
                  such bonus or incentive compensation payments for less than
                  two such periods, the last such payment paid or payable to
                  Executive (excluding any special or one-time bonus or
                  incentive compensation payments.

         2. CASH PAYMENT. Executive shall receive a one-time cash payment within
         a reasonable time following commencement of the Severance Period in an
         amount equal to the portion of the premiums that United HealthCare, or
         its affiliate or subsidiary, as applicable, subsidizes for
         employee-only health, dental and group term life benefit coverages (the
         "Cash Payment"). The Cash Payment shall cover the Severance Period and
         shall be determined as of the effective date of the applicable
         Severance Event.

         3. JOB SEARCH FEES. For a period not to exceed the Severance Period,
         United HealthCare shall pay to an outplacement firm selected by United
         HealthCare an amount deemed reasonable by United HealthCare for
         outplacement and job search services for Executive.

         4. EXCISE TAX PAYMENT. If any portion of the Severance Compensation
         payable upon a Termination following a Change in Control constitutes an
         Excess Parachute Payment, as hereinafter defined, such that an Excise
         Tax, as hereinafter defined, is due, Executive shall receive a one-time
         cash payment in an amount sufficient to cover (a) the full cost of the
         Excise Tax plus (b) Executive's federal, state and city income,
         employment and Excise Tax on this one-time cash payment and on all such
         iterative payments so that Executive is made entirely whole for the
         impact of the Excise Tax (collectively the "Gross-Up Payment"). United
         HealthCare shall calculate these amounts on a timely and accurate
         basis, and for this purpose Executive shall be deemed to be in the
         highest marginal rate of federal, state and city taxes. The Gross-Up
         Payment shall be made within 30 days following the effective date of
         Executive's employment termination. For purposes of this Agreement the
         term "Excess Parachute Payment" shall have the meaning set forth in
         Section 28OG of the Internal Revenue Code of 1986, as amended (the
         "Code"). For purposes of this Agreement the term "Excise Tax" shall
         mean the tax imposed on an Excess Parachute Payment pursuant to
         Sections 28OG and 4999 of the Code.


                                      -4-


This Section 3D shall be the sole liability of United HealthCare to Executive
upon the termination of this Agreement and Executive's employment hereunder, and
shall replace and be in lieu of any payments or benefits which otherwise might
be owed Executive under any other severance plan or program maintained by United
HealthCare. Such compensation and benefits shall be conditioned on receipt by
United HealthCare of a separation agreement and a release of claims by Executive
on terms and conditions acceptable to United HealthCare in its sole discretion.

         E. DEFINITIONS AND PROCEDURES.

                  1. CAUSE. For purposes of this Agreement "Cause" shall mean
                  (a) the refusal of Executive to follow the reasonable
                  direction of the Board of Directors of United HealthCare or
                  Executive's supervisor or to perform any duties reasonably
                  required on material matters by United HealthCare, (b)
                  material violations of United HealthCare's Code of Conduct or
                  (c) the commission of any criminal act or act of fraud or
                  dishonesty by Executive in connection with Executive's
                  employment by United HealthCare. Prior to the termination of
                  Executive's employment under subsection (a) of this definition
                  of Cause, United HealthCare shall provide Executive with a 30
                  day notice specifying the basis for Cause. If the Cause
                  described in the notice is cured to United HealthCare's
                  reasonable satisfaction prior to the end of the 30 day notice
                  period, Executive's employment hereunder shall not be
                  terminated on that basis.

                  2. CHANGE IN CONTROL. For purposes of this Agreement "Change
                  in Control" shall mean (a) the acquisition by any person,
                  entity or "group," within the meaning of Section 13(d)(3) or
                  14(d)(2) of the Securities Exchange Act of 1934 (the 'Exchange
                  Act"), other than United HealthCare or any employee benefit
                  plan of United HealthCare, of beneficial ownership (as defined
                  in the Exchange Act) of 20% or more of the common stock of UHC
                  or the combined voting power of UHC's then-outstanding voting
                  securities in a transaction or series of transactions not
                  approved in advanced by a vote of at least three-quarters of
                  the directors of UHC; (b) a change in 50% or more of the
                  directors of UHC in any 12 month period; (c) the approval by
                  the shareholders of UHC of a reorganization, merger,
                  consolidation, liquidation or dissolution of UHC or of the
                  sale (in one transaction or a series of related transactions)
                  of all or substantially all of the assets of UHC other than a
                  reorganization, merger, consolidation, liquidation,
                  dissolution or sale approved in advance by a vote of at least
                  three-quarters of the directors; (d) the first purchase under
                  any tender offer or exchange offer (other than an offer by
                  UHC) pursuant to which shares of UHC common stock are
                  purchased; or (e) at least a majority of the directors of UHC
                  determine in their sole discretion that there has been a
                  change of control of UHC.

                  3. CHANGE IN EMPLOYMENT. For purposes of this Agreement a
                  "Change in Employment" shall be deemed to have occurred (a) if
                  (i) Executive's duties are materially and adversely changed
                  without Executive's prior consent, (ii) Executive's salary or
                  benefits are reduced other than as a general reduction of
                  salaries and


                                      -5-


                  benefits by United HealthCare, (iii) without terminating
                  Executive's employment United HealthCare terminates this
                  Agreement, or (iv) the geographic location for the performance
                  of Executive's duties hereunder is moved more than 50 miles
                  from the geographic location at the Effective Date without
                  Executive's prior consent, and (b) if in each case under
                  subsections (a) (i), (ii), (iii) and (iv), in the period
                  beginning 90 days before the time the Change in Employment
                  occurs, Cause does not exist or if Cause does exist United
                  HealthCare has not given Executive written notice that Cause
                  exists. Notwithstanding the foregoing, an isolated,
                  insubstantial or inadvertent action by United HealthCare,
                  which is remedied by United HealthCare within 30 days after
                  receipt of notice thereof by Executive, shall not constitute a
                  Change in Employment. Executive may elect to treat a Change in
                  Employment as a termination of this Agreement and Executive's
                  employment hereunder. To do so Executive shall send written
                  notice of such election to United HealthCare within 90 days
                  after the date Executive receives notice from United
                  HealthCare or otherwise is definitively informed of the events
                  constituting the Change in Employment. No Change in Employment
                  shall be deemed to have occurred if Executive fails to send
                  the notice of election within the 90 day period. Executive's
                  failure to treat a particular Change in Employment as a
                  termination of employment shall not preclude Executive from
                  treating a subsequent Change in Employment as a termination of
                  employment. The effective date of a Change in Employment
                  termination shall be the date 30 days after United HealthCare
                  receives the written notice of election.

4. PROPERTY RIGHTS, CONFIDENTIALITY. NON-DISPARAGEMENT, NON-SOLICIT AND
NON-COMPETE PROVISIONS.

         A. UNITED HEALTHCARE'S PROPERTY.

                  1. ASSIGNMENT OF PROPERTY RIGHTS. Executive shall promptly
                  disclose to United HealthCare in writing all inventions,
                  discoveries and works of authorship, whether or not patentable
                  or copyrightable, which are conceived, made, discovered,
                  written or created by Executive alone or jointly with another
                  person, group or entity, whether during the normal hours of
                  employment at United HealthCare or on Executive's own time,
                  during the term of this Agreement. Executive assigns, all
                  rights to all such inventions and works of authorship to
                  United HealthCare. Executive shall give United HealthCare any
                  assistance it reasonably requires in order for United
                  HealthCare to perfect, protect, and use its rights to
                  inventions and works of authorship.

                  This provision shall not apply to an invention for which no
                  equipment, supplies, facility or trade secret information of
                  United HealthCare was used and which was developed entirely on
                  the Executive's own time and which (1) does not relate to the
                  business of United HealthCare or to United HealthCare's
                  anticipated research or development, or (2) does not result
                  from any work performed by the Executive for United
                  HealthCare.


                                      -6-


                  2. NO REMOVAL OF PROPERTY. Executive shall not remove any
                  records, documents, or any other tangible items (excluding
                  Executive's personal property) from the premises of United
                  HealthCare in either original or duplicate form, except as is
                  needed in the ordinary course of conducting business for
                  United HealthCare.

                  3. RETURN OF PROPERTY. Executive shall immediately deliver to
                  United HealthCare, upon termination of employment with United
                  HealthCare, or at any other time upon United HealthCare's
                  request, any property, records, documents, and other tangible
                  items (excluding Executive's personal property) in Executive's
                  possession or control, including data incorporated in word
                  processing, computer and other data storage media, and all
                  copies of such records, documents and information, including
                  all Confidential Information, as defined below.

         B. CONFIDENTIAL INFORMATION. During the course of employment Executive
         will develop, become aware of and accumulate expertise, knowledge and
         information regarding United HealthCare's organization, strategies,
         business and operations and United HealthCare's past, current or
         potential customers and suppliers. United HealthCare considers such
         expertise, knowledge and information to be valuable, confidential and
         proprietary and it shall be considered Confidential Information for
         purposes of this Agreement. During this Agreement and at all times
         thereafter Executive shall not use such Confidential Information or
         disclose it to other persons or entities except as is necessary for
         the performance of Executive's duties for United HealthCare or as has
         been expressly permitted in writing by United HealthCare. This Section
         4B shall survive the termination of this Agreement.

         C. NON-DISPARAGEMENT. Executive agrees that he will not criticize,
         make any negative comments or otherwise disparage or put in disrepute
         United HealthCare, or those associated with United HealthCare, in any
         way, whether orally, in writing or otherwise, directly or by
         implication in communication with any person, including but not limited
         to customers or agents of United HealthCare. This Section 4C shall
         survive the termination of this Agreement.

         D. NON-SOLICITATION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under Section 4E,
         as applicable (iii) any period following the termination or expiration
         of this Agreement during which Executive remains employed by United
         HealthCare and (iv) for a period of one year after the last day of the
         latest of any period described in (i), (ii) or (iii), Executive shall
         not (y) directly or indirectly attempt to hire away any then-current
         employee of United HealthCare or a subsidiary of United HealthCare or
         to persuade any such employee to leave employment with United
         HealthCare, or (z) directly or indirectly solicit, divert, or take
         away, or attempt to solicit, divert, or take away, the business of any
         person, partnership, company or corporation with whom United HealthCare
         (including any subsidiary or affiliated company in which United
         HealthCare has a more than 20% equity interest) has established or is
         actively seeking to establish a business or customer relationship. This
         Section 4D shall survive the termination of this Agreement.


                                      -7-


         E. NON-COMPETITION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under this Section
         4E, as applicable, and (iii) any period following the termination or
         expiration of this Agreement during which Executive remains employed by
         United HealthCare, Executive shall not, without United HealthCare's
         prior written consent, engage or participate, either individually or as
         an employee, consultant or principal, partner, agent, trustee, officer
         or director of a corporation, partnership or other business entity, in
         any business in which United HealthCare (including any subsidiary or
         affiliated company in which United HealthCare has more than a 20%
         equity interest) is engaged. If Executive terminates this Agreement,
         and as of such termination or within 90 days of such termination
         Executive also terminates Executive's employment by United HealthCare,
         United HealthCare may elect to have the provisions of this Section 4E
         be in effect for up to 24 months following the effective date of
         Executive's employment termination if, during the period up to 24
         months specified by United HealthCare, United HealthCare pays Executive
         severance compensation equal to biweekly payments of 1/26 of the
         Severance Compensation and the Cash Payment. United HealthCare must
         send written notice of such election within 10 days after it receives
         written notice of Executive's termination of employment. This Section
         4E shall survive the termination of this Agreement.

5. MISCELLANEOUS.

         A. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
         the benefit of the parties and their successors and assigns, but may
         not be assigned by either party without the prior written consent of
         the other party, except that United HealthCare in its sole discretion
         may assign this Agreement to an entity controlled by United HealthCare
         at the time of the assignment. If United HealthCare subsequently loses
         or gives up control of the entity to which this Agreement is assigned,
         such entity shall become United HealthCare for all purposes under this
         Agreement, beginning on the date on which United HealthCare loses or
         gives up control of the entity. Any successor to United HealthCare
         shall be deemed to be United HealthCare for all purposes of this
         Agreement.

         B. NOTICES. All notices under this Agreement shall be in writing and
         shall be deemed to have been duly given if delivered by hand or mailed
         by registered or certified mail, return receipt requested, postage
         prepaid, to the party to receive the same at the address set forth
         below or at such other address as may have been furnished by proper
         notice.

United HealthCare:             300 Opus Center
                               9900 Bren Road East
                               Minnetonka, MN 55343
                               Attn: General Counsel
   Executive:


                                      -8-


         C. ENTIRE AGREEMENT. This Agreement contains the entire understanding
         of the parties with respect to its subject matter and may be amended or
         modified only by a subsequent written amendment executed by the
         parties. This Agreement replaces and supersedes any and all prior
         employment or employment related agreements and understandings,
         including any letters or memos which may have been construed as
         agreements, between the Executive and United HealthCare.

         D. CHOICE OF LAW. This Agreement shall be construed and interpreted
         under the applicable laws and decisions of the State of Minnesota.

         E. WAIVERS. No failure on the part of either party to exercise, and no
         delay in exercising, any right or remedy under this Agreement shall
         operate as a waiver; nor shall any single or partial exercise of any
         right or remedy preclude any other or further exercise of any right or
         remedy.

         F. ADEQUACY OF CONSIDERATION. Executive acknowledges and agrees that
         Executive has received adequate consideration from United HealthCare to
         enter into this Agreement.

         G. DISPUTE RESOLUTION AND REMEDIES. Any dispute arising between the
         parties relating to this Agreement or to Executive's employment by
         United HealthCare shall be resolved by binding arbitration pursuant to
         United HealthCare' Employment Arbitration Policy. The arbitrators shall
         not ignore or vary the terms of this Agreement and shall be bound by
         and apply controlling law. The parties acknowledge that Executive's
         failure to comply with the Confidential Information, Non-Solicitation
         and Non-Competition provisions of this Agreement will cause immediate
         and irreparable injury to United HealthCare and that therefore the
         arbitrators, or a court of competent jurisdiction if an arbitration
         panel cannot be immediately convened, will be empowered to provide
         injunctive relief, including temporary or preliminary relief, to
         restrain any such failure to comply.

         H. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer or be
         deemed or construed to confer any rights or benefits upon any person
         other than the parties.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.

IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as of
the Effective Date set forth above.

United HealthCare Services, Inc.             Executive

By /s/ Robert J. Backes                      /s/ Robert J. Sheehy
   ---------------------------------         ------------------------------

Its  Senior Vice President
     Human Resources
   ---------------------------------

                                      -9-

EX-10.L

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of October 16, 1998 (the "Effective
Date"), is made by and between Lois E. Quam ("Executive") and United HealthCare
Services, Inc. ("United HealthCare") for the purpose of setting forth the terms
and conditions of Executive's employment by United HealthCare, or an affiliate
or subsidiary of United HealthCare, and to protect United HealthCare's
knowledge, expertise, customer relationships and the confidential information
United HealthCare has developed about its customers, products, operations and
services. Unless the context otherwise requires, when used in this Agreement
"United HealthCare" includes any entity affiliated with United HealthCare.

         WHEREAS, as additional consideration for entering into this Agreement
Executive shall receive, upon execution of this Agreement, a nonqualified stock
option to purchase 40,000 shares of United HealthCare Corporation ("UHC") common
stock with a grant date the same as the Effective Date pursuant to the terms of
the UHC Amended and Restated 1991 Stock and Incentive Plan.

         WHEREAS, Executive and United HealthCare desire to enter into this
Agreement, which shall supersede any and all other prior employment-related
agreements between Executive and United HealthCare.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:

1. EMPLOYMENT AND DUTIES, TERMINATION OF PRIOR AGREEMENTS.

         A. EMPLOYMENT. United HealthCare hereby employs Executive, either
         directly or through an affiliate or subsidiary of United HealthCare,
         and Executive hereby accepts such employment on the terms and
         conditions set forth in this Agreement. Except as specifically
         superseded by this Agreement, Executive's employment hereunder shall be
         subject to all of United HealthCare's policies and procedures in regard
         to its employees. Executive's employment hereunder shall begin on the
         Effective Date and shall continue until terminated as set forth in
         Section 3 hereof.

         B. DUTIES. Executive shall initially hold the executive level position
         of CEO, Ovations and perform the duties associated therewith. Executive
         shall perform such other executive level responsibilities as are
         reasonably assigned Executive from time to time. Executive agrees to
         devote substantially all of Executive's business time and energy to the
         performance of Executive's duties in a diligent and proper manner.

         C. TERMINATION OF PRIOR AGREEMENTS. As of the Effective Date all other
         prior employment related agreements between Executive and United
         HealthCare will terminate in their entirety and no longer be of any
         force or effect.



2. COMPENSATION.

         A. BASE SALARY. Executive shall initially be paid a base annual salary,
         payable biweekly, less all applicable withholdings and deductions (the
         "Initial Base Salary") Executive shall receive a periodic performance
         review and consideration for an increase in the Initial Base Salary.

         B. BONUS AND STOCK PLANS. Executive shall be eligible to participate in
         the incentive compensation plans and the stock option and grant plans
         maintained by United HealthCare or an affiliate or subsidiary of
         United HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

         C. EMPLOYEE BENEFITS. Executive shall be eligible to participate in the
         employee benefit plans maintained by either United HealthCare or an
         affiliate or subsidiary of United HealthCare, including without
         limitation, any life, health, dental, short-term and long-term
         disability insurance coverages and any retirement plans, in the sole
         discretion of United HealthCare and in accordance with the terms and
         conditions of those plans and applicable laws and regulations.

         D. VACATION; ILLNESS. Executive shall be eligible for paid vacation and
         sick leave each year in accordance with the then-current policies of
         either United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

3. TERM AND TERMINATION.

         A. TERM. The term of this Agreement shall begin on the Effective Date
         and shall continue until terminated as set forth in Section 3B.

         B. TERMINATION OF AGREEMENT.

                  1. BY MUTUAL AGREEMENT. This Agreement and Executive's
                  employment hereunder may be terminated at any time by the
                  mutual written agreement of the parties.

                  2. BY UNITED HEALTHCARE. United HealthCare may terminate this
                  Agreement and Executive's employment hereunder on 30 days'
                  written notice.

                  3. BY EXECUTIVE, Executive may terminate this Agreement and
                  Executive's employment hereunder on 30 days' written notice.

                  4. DEATH, DISABILITY, ETC. This Agreement and Executive's
                  employment by United HealthCare shall terminate immediately
                  upon Executive's death. This Agreement



                  and Executive's employment hereunder shall automatically
                  terminate in the event of a permanent and total disability
                  which renders Executive incapable of performing Executive's
                  duties, with or without reasonable accommodation. United
                  HealthCare has the sole discretion to determine whether
                  Executive is permanently or totally disabled with the meaning
                  of this Section 3B4 and the effective date on which Executive
                  was rendered so disabled.

         C. EMPLOYEE BENEFITS. On the effective date of the termination of this
         Agreement and Executive's employment by United HealthCare, Executive
         shall cease to be eligible for all employee benefit plans maintained by
         United HealthCare, except as required by federal or state continuation
         of coverage laws ("COBRA Benefits"). If Executive elects COBRA
         Benefits, Executive shall pay the entire cost of such benefits either
         through after-tax payroll deductions from the cash component of any
         severance compensation Executive receives or directly if Executive does
         not receive such severance compensation or if such severance
         compensation ceases.

         D. SEVERANCE EVENTS AND BENEFITS. If a Severance Event, as hereinafter
         defined, occurs, Executive shall receive the severance benefits set
         forth in this Section 3D for a period of 12 months from the effective
         date of the applicable Severance Event (the "Severance Period"). For
         purposes of this Agreement a Severance Event shall occur if and when:

         (i)      United HealthCare (a) terminates this Agreement and
                  Executive's employment without Cause, as hereinafter defined,
                  or (b) terminates this Agreement without terminating
                  Executive's employment and Executive elects to treat such
                  termination of this Agreement as a Change in Employment, as
                  hereinafter defined (collectively a "Termination without
                  Cause"), or;

         (ii)     Within two years following a Change in Control, as hereinafter
                  defined, either (a) United HealthCare terminates this
                  Agreement and Executive's employment without Cause, or (b) a
                  Change in Employment occurs and Executive elects to treat such
                  Change in Employment as a termination of Executive's
                  employment (collectively a "Termination following a Change in
                  Control").

         1. SEVERANCE COMPENSATION. Executive shall receive the following
         severance compensation (the "Severance Compensation"):

                  a) TERMINATION WITHOUT CAUSE. Subject to Section 3D(1)(b)
                  below, upon a Termination without Cause Executive shall
                  receive biweekly payments equal to 1/26 of two times the sum
                  of (1) Executive's annualized base salary as of the date of
                  the Severance Event, less all applicable withholdings or
                  deductions required by law and Executive's COBRA Benefit
                  payments, if any, plus (2) one-half of the total of any bonus
                  or incentive compensation paid or payable to Executive for the
                  two most recent calendar years (excluding any special or
                  one-time bonus or incentive compensation payments), or if
                  Executive has been eligible for such bonus



                  or incentive compensation payments for less than two such
                  periods, the last such payment paid or payable to Executive
                  (excluding any special or one-time bonus or incentive
                  compensation payments).

                  b) TERMINATION FOLLOWING A CHANGE IN CONTROL. Upon a
                  Termination following a Change in Control, Executive shall
                  receive biweekly payments equal to 1/26 of three times the sum
                  of (1) Executive's highest annualized base salary during the 2
                  year period immediately preceding the Severance Event, less
                  all applicable withholdings or deductions required by law and
                  Executive's COBRA Benefit payments, if any, plus (2) the
                  greater of (i) all bonuses that would be payable to Executive
                  under any incentive compensation plans in which Executive then
                  participates at Executive's then-current target level, or (ii)
                  one-half of the total of any bonus or incentive compensation
                  paid or payable to Executive for the two most recent calendar
                  years (excluding any special or one-time bonus or incentive
                  compensation payments), or if Executive has been eligible for
                  such bonus or incentive compensation payments for less than
                  two such periods, the last such payment paid or payable to
                  Executive (excluding any special or one-time bonus or
                  incentive compensation payments.

         2. CASH PAYMENT. Executive shall receive a one-time cash payment within
         a reasonable time following commencement of the Severance Period in an
         amount equal to the portion of the premiums that United HealthCare, or
         its affiliate or subsidiary, as applicable, subsidizes for
         employee-only health, dental and group term life benefit coverages (the
         "Cash Payment"). The Cash Payment shall cover the Severance Period and
         shall be determined as of the effective date of the applicable
         Severance Event.

         3. JOB SEARCH FEES. For a period not to exceed the Severance Period,
         United HealthCare shall pay to an outplacement firm selected by United
         HealthCare an amount deemed reasonable by United HealthCare for
         outplacement and job search services for Executive.

         4. EXCISE TAX PAYMENT. If any portion of the Severance Compensation
         payable upon a Termination following a Change in Control constitutes an
         Excess Parachute Payment, as hereinafter defined, such that an Excise
         Tax, as hereinafter defined, is due, Executive shall receive a one-time
         cash payment in an amount sufficient to cover (a) the full cost of the
         Excise Tax plus (b) Executive's federal, state and city income,
         employment and Excise Tax on this one-time cash payment and on all such
         iterative payments so that Executive is made entirely whole for the
         impact of the Excise Tax (collectively the "Gross-Up Payment"). United
         HealthCare shall calculate these amounts on a timely and accurate
         basis, and for this purpose Executive shall be deemed to be in the
         highest marginal rate of federal, state and city taxes. The Gross-Up
         Payment shall be made within 30 days following the effective date of
         Executive's employment termination. For purposes of this Agreement the
         term "Excess Parachute Payment" shall have the



         meaning set forth in Section 28OG of the Internal Revenue Code of 1986,
         as amended (the "Code"). For purposes of this Agreement the term
         "Excise Tax" shall mean the tax imposed on an Excess Parachute Payment
         pursuant to Sections 280G and 4999 of the Code.

This Section 3D shall be the sole liability of United HealthCare to Executive
upon the termination of this Agreement and Executive's employment hereunder, and
shall replace and be in lieu of any payments or benefits which otherwise might
be owed Executive under any other severance plan or program maintained by United
HealthCare. Such compensation and benefits shall be conditioned on receipt by
United HealthCare of a separation agreement and a release of claims by Executive
on terms and conditions acceptable to United HealthCare in its sole discretion.

         E. DEFINITIONS AND PROCEDURES.

                  1. CAUSE. For purposes of this Agreement "Cause" shall mean
                  (a) the refusal of Executive to follow the reasonable
                  direction of the Board of Directors of United HealthCare or
                  Executive's supervisor or to perform any duties reasonably
                  required on material matters by United HealthCare, (b)
                  material violations of United HealthCare's Code of Conduct or
                  (c) the commission of any criminal act or act of fraud or
                  dishonesty by Executive in connection with Executive's
                  employment by United HealthCare. Prior to the termination of
                  Executive's employment under subsection (a) of this definition
                  of Cause, United HealthCare shall provide Executive with a 30
                  day notice specifying the basis for Cause. If the Cause
                  described in the notice is cured to United HealthCare's
                  reasonable satisfaction prior to the end of the 30 day notice
                  period, Executive's employment hereunder shall not be
                  terminated on that basis.

                  2. CHANGE IN CONTROL. For purposes of this Agreement "Change
                  in Control" shall mean (a) the acquisition by any person,
                  entity or "group," within the meaning of Section 13(d)(3) or
                  14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
                  Act"), other than United HealthCare or any employee benefit
                  plan of United HealthCare, of beneficial ownership (as defined
                  in the Exchange Act) of 20% or more of the common stock of
                  UHC or the combined voting power of UHC's then-outstanding
                  voting securities in a transaction or series of transactions
                  not approved in advanced by a vote of at least three-quarters
                  of the directors of UHC; (b) a change in 50% or more of the
                  directors of UHC in any 12 month period; (c) the approval by
                  the shareholders of UHC of a reorganization, merger,
                  consolidation, liquidation or dissolution of UHC or of the
                  sale (in one transaction or a series of related transactions)
                  of all or substantially all of the assets of UHC other than a
                  reorganization, merger, consolidation, liquidation,
                  dissolution or sale approved in advance by a vote of at least
                  three-quarters of the directors; (d) the first purchase under
                  any tender offer or exchange offer (other than an offer by
                  UHC) pursuant to which shares of UHC common stock are
                  purchased; or (e) at least a majority of the directors of UHC
                  determine in their sole discretion that there has been a
                  change of control of UHC.



                  3. CHANGE IN EMPLOYMENT. For purposes of this Agreement a
                  "Change in Employment" shall be deemed to have occurred (a) if
                  (i) Executive's duties are materially and adversely changed
                  without Executive's prior consent, (ii) Executive's salary or
                  benefits are reduced other than as a general reduction of
                  salaries and benefits by United HealthCare, (iii) without
                  terminating Executive's employment United HealthCare
                  terminates this Agreement, or (iv) the geographic location for
                  the performance of Executive's duties hereunder is moved more
                  than 50 miles from the geographic location at the Effective
                  Date without Executive's prior consent, and (b) if in each
                  case under subsections (a) (i), (ii), (iii) and (iv), in the
                  period beginning 90 days before the time the Change in
                  Employment occurs, Cause does not exist or if Cause does exist
                  United HealthCare has not given Executive written notice that
                  Cause exists. Notwithstanding the foregoing, an isolated,
                  insubstantial or inadvertent action by United HealthCare,
                  which is remedied by United HealthCare within 30 days after
                  receipt of notice thereof by Executive, shall not constitute a
                  Change in Employment. Executive may elect to treat a Change in
                  Employment as a termination of this Agreement and Executive's
                  employment hereunder. To do so Executive shall send written
                  notice of such election to United HealthCare within 90 days
                  after the date Executive receives notice from United
                  HealthCare or otherwise is definitively informed of the events
                  constituting the Change in Employment. No Change in Employment
                  shall be deemed to have occurred if Executive fails to send
                  the notice of election within the 90 day period. Executive's
                  failure to treat a particular Change in Employment as a
                  termination of employment shall not preclude Executive from
                  treating a subsequent Change in Employment as a termination of
                  employment. The effective date of a Change in Employment
                  termination shall be the date 30 days after United HealthCare
                  receives the written notice of election.

4. PROPERTY RIGHTS, CONFIDENTIALITY, NON-DISPARAGEMENT, NON-SOLICIT AND
NON-COMPETE PROVISIONS.

         A. UNITED HEALTHCARE'S PROPERTY.

                  1. ASSIGNMENT OF PROPERTY RIGHTS. Executive shall promptly
                  disclose to United HealthCare in writing all inventions,
                  discoveries and works of authorship, whether or not patentable
                  or copyrightable, which are conceived, made, discovered,
                  written or created by Executive alone or jointly with another
                  person, group or entity, whether during the normal hours of
                  employment at United HealthCare or on Executive's own time,
                  during the term of this Agreement. Executive assigns all
                  rights to all such inventions and works of authorship to
                  United HealthCare. Executive shall give United HealthCare any
                  assistance it reasonably requires in order for United
                  HealthCare to perfect, protect, and use its rights to
                  inventions and works of authorship.

                  This provision shall not apply to an invention for which no
                  equipment, supplies, facility or trade secret information of
                  United HealthCare was used and which was



                  developed entirely on the Executive's own time and which (1)
                  does not relate to the business of United HealthCare or to
                  United HealthCare's anticipated research or development, or
                  (2) does not result from any work performed by the Executive
                  for United HealthCare.

                  2. NO REMOVAL OF PROPERTY. Executive shall not remove any
                  records, documents, or any other tangible items (excluding
                  Executive's personal property) from the premises of United
                  HealthCare in either original or duplicate form, except as is
                  needed in the ordinary course of conducting business for
                  United HealthCare.

                  3. RETURN OF PROPERTY. Executive shall immediately deliver to
                  United HealthCare, upon termination of employment with United
                  HealthCare; or at any other time upon United HealthCare's
                  request, any property, records, documents, and other tangible
                  items (excluding Executive's personal property) in Executive's
                  possession or control, including data incorporated in word
                  processing, computer and other data storage media, and all
                  copies of such records, documents and information, including
                  all Confidential Information, as defined below.

         B. CONFIDENTIAL INFORMATION. During the course of employment Executive
         will develop, become aware of and accumulate expertise, knowledge and
         information regarding United HealthCare's organization, strategies,
         business and operations and United HealthCare's past, current or
         potential customers and suppliers. United HealthCare considers such
         expertise, knowledge and information to be valuable, confidential and
         proprietary and it shall be considered Confidential Information for
         purposes of this Agreement. During this Agreement and at all times
         thereafter Executive shall not use such Confidential Information or
         disclose it to other persons or entities except as is necessary for the
         performance of Executive's duties for United HealthCare or as has been
         expressly permitted in writing by United HealthCare. This Section 4B
         shall survive the termination of this Agreement.

         C. NON-DISPARAGEMENT. Executive agrees that he will not criticize, make
         any negative comments or otherwise disparage or put in disrepute United
         HealthCare, or those associated with United HealthCare, in any way,
         whether orally, in writing or otherwise, directly or by implication in
         communication with any person, including but not limited to customers
         or agents of United HealthCare. This Section 4C shall survive the
         termination of this Agreement.

         D. NON-SOLICITATION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under Section 4E,
         as applicable (iii) any period following the termination or expiration
         of this Agreement during which Executive remains employed by United
         HealthCare and (iv) for a period of one year after the last day of the
         latest of any period described in (i), (ii) or (iii), Executive shall
         not (y) directly or indirectly attempt to hire away any then-current
         employee of United HealthCare or a subsidiary of United HealthCare or
         to persuade any such employee to leave employment with United
         HealthCare, or (z) directly or indirectly solicit, divert, or take
         away, or attempt



         to solicit, divert, or take away, the business of any person,
         partnership, company or corporation with whom United HealthCare
         (including any subsidiary or affiliated company in which United
         HealthCare has a more than 20% equity interest) has established or is
         actively seeking to establish a business or customer relationship. This
         Section 4D shall survive the termination of this Agreement.

         E. NON-COMPETITION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period. in which Executive receives severance
         compensation pursuant to United HealthCare' election under this Section
         4E as applicable, and (iii) any period following the termination or
         expiration of this Agreement during which Executive remains employed by
         United HealthCare, Executive shall not, without United HealthCare's
         prior written consent, engage or participate, either individually or as
         an employee, consultant or principal, partner, agent, trustee, officer
         or director of a corporation, partnership or other business entity, in
         any business in which United HealthCare (including any subsidiary or
         affiliated company in which United HealthCare has more than a 20%
         equity interest) is engaged. If Executive terminates this Agreement,
         and as of such termination or within 90 days of such termination
         Executive also terminates Executive's employment by United HealthCare,
         United HealthCare may elect to have the provisions of this Section 4E
         be in effect for up to 24 months following the effective date of
         Executive's employment termination if, during the period up to 24
         months specified by United HealthCare, United HealthCare pays Executive
         severance compensation equal to biweekly payments of 1/26 of the
         Severance Compensation and the Cash Payment. United HealthCare must
         send written notice of such election within 10 days after it receives
         written notice of Executive's termination of employment. This Section
         4E shall survive the termination of this Agreement.

5. MISCELLANEOUS.

         A. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
         the benefit of the parties and their successors and assigns, but may
         not be assigned by either party without the prior written consent of
         the other party, except that United HealthCare in its sole discretion
         may assign this Agreement to an entity controlled by United HealthCare
         at the time of the assignment. If United HealthCare subsequently loses
         or gives up control of the entity to which this Agreement is assigned,
         such entity shall become United HealthCare for all purposes under this
         Agreement, beginning on the date on which United HealthCare loses or
         gives up control of the entity. Any successor to United HealthCare
         shall be deemed to be United HealthCare for all purposes of this
         Agreement.

         B. NOTICES. All notices under this Agreement shall be in writing and
         shall be deemed to have been duly given if delivered by hand or mailed
         by registered or certified mail, return receipt requested, postage
         prepaid, to the party to receive the same at the address set forth
         below or at such other address as may have been furnished by proper
         notice.

                       United HealthCare:   300 Opus Center



                                            9900 Bren Road East
                                            Minnetonka, MN 55343
                                            Attn: General Counsel

                       Executive:

         C. ENTIRE AGREEMENT. This Agreement contains the entire understanding
         of the parties with respect to its subject matter and may be amended or
         modified only by a subsequent written amendment executed by the
         parties. This Agreement replaces and supersedes any and all prior
         employment or employment related agreements and understandings,
         including any letters or memos which may have been construed as
         agreements, between the Executive and United HealthCare.

         D. CHOICE OF LAW. This Agreement shall be construed and interpreted
         under the applicable laws and decisions of the State of Minnesota.

         E. WAIVERS. No failure on the part of either party to exercise, and no
         delay in exercising any right or remedy under this Agreement shall
         operate as a waiver; nor shall any single or partial exercise of any
         right or remedy preclude any other or further exercise of any right or
         remedy.

         F. ADEQUACY OF CONSIDERATION. Executive acknowledges and agrees that
         Executive has received adequate consideration from United HealthCare to
         enter into this Agreement.

         G. DISPUTE RESOLUTION AND REMEDIES. Any dispute arising between the
         parties relating to this Agreement or to Executive's employment by
         United HealthCare shall be resolved by binding arbitration pursuant to
         United HealthCare' Employment Arbitration Policy. The arbitrators shall
         not ignore or vary the terms of this Agreement and shall be bound by
         and apply controlling law. The parties acknowledge that Executive's
         failure to comply with the Confidential Information, Non-Solicitation
         and Non-Competition provisions of this Agreement will cause immediate
         and irreparable injury to United HealthCare and that therefore the
         arbitrators, or a court of competent jurisdiction if an arbitration
         panel cannot be immediately convened, will be empowered to provide
         injunctive relief, including temporary or preliminary relief, to
         restrain any such failure to comply.

         H. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer or be
         deemed or construed to confer any rights or benefits upon any person
         other than the parties.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.



         IN WITNESS WHEREOF, this Agreement has been signed by the parties
hereto as of the Effective Date set forth above.

United HealthCare Services, Inc.                      Executive

By /s/ Robert J. Backes                              /s/ Lois E. Quam
   ---------------------------------                 --------------------------
                                                         Lois E. Quam
Its  Senior Vice President
     Human Resources
   ---------------------------------

     Robert J. Backes
     Senior Vice President
     Human Resources




                           MEMORANDUM OF UNDERSTANDING

         This memorandum of understanding, effective as of October 11, 1999,
supplements and amends the employment agreement, effective October 16, 1998,
between Lois E. Quam and United HealthCare Services, Inc. as set forth below.

         1.       Executive's compensation under Paragraph 3A is confirmed as of
                  the date of this memorandum at the annual level set forth in
                  Executive's most recent pay period.

         2.       For purposes of the non-competition provisions of Section
                  4(E), the parties concur that employment in the health and
                  well being industry is not absolutely prohibited by Section
                  4(E), it being the intent of the parties in Section 4(E) to
                  limit Executive's future employment by businesses that compete
                  with the segment of UnitedHealth Group for which Executive is
                  responsible or was responsible within 12 months of termination
                  of this agreement.

         3.       For a business to be competitive with the business of a
                  UnitedHealth Group segment for which Executive was responsible
                  as provided above, the UnitedHealth Group segment must be
                  actively involved in such business and be generating revenue
                  from such activities or have realistic prospects for
                  imminently generating revenue from such activity.

         4.       The references in Section 4(E) to "24 months" are amended to
                  read "12 months."

In all other respects the parties reaffirm and agree to be bound by the
provisions of the Employment Agreement, effective as of the date set forth
above.

United HealthCare Services, Inc.                   Executive


By /s/ Robert J. Backes                         By /s/ Lois E. Quam
   ------------------------------                  ----------------------------
   Robert J. Backes                                Lois E. Quam
   Senior Vice President,
   Human Resources

EX-10.M

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of October 1, 1998 (the "Effective Date"),
is made by and between Patrick J. Erlandson ("Executive") and United HealthCare
Services, Inc. ("United HealthCare") for the purpose of setting forth the terms
and conditions of Executive's employment by United HealthCare, or an affiliate
or subsidiary of United HealthCare, and to protect United HealthCare's
knowledge, expertise, customer relationships and the confidential information
United HealthCare has developed about its customers, products, operations and
services. Unless the context otherwise requires, when used in this Agreement
"United HealthCare" includes any entity affiliated with United HealthCare.

         WHEREAS, as additional consideration for entering into this Agreement
Executive shall receive, upon execution of this Agreement, a nonqualified stock
option to purchase 25,000 shares of United HealthCare Corporation ("UHC") common
stock with a grant date the same as the Effective Date pursuant to the terms of
the UHC Amended and Restated 1991 Stock and Incentive Plan.

         WHEREAS, Executive and United HealthCare desire to enter into this
Agreement, which shall supersede any and all other prior employment-related
agreements between Executive and United HealthCare.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:

1. EMPLOYMENT AND DUTIES; TERMINATION OF PRIOR AGREEMENTS.

         A. EMPLOYMENT. United HealthCare hereby employs Executive, either
         directly or through an affiliate or subsidiary of United HealthCare,
         and Executive hereby accepts such employment on the terms and
         conditions set forth in this Agreement. Except as specifically
         superseded by this Agreement, Executive's employment hereunder shall be
         subject to all of United HealthCare's policies and procedures in regard
         to its employees. Executive's employment hereunder shall begin on the
         Effective Date and shall continue until terminated as set forth in
         Section 3 hereof.

         B. DUTIES. Executive shall initially hold the executive level position
         of Vice President, Corporate Controller & Chief Accounting Officer and
         perform the duties associated therewith. Executive shall perform such
         other executive level responsibilities as are reasonably assigned
         Executive from time to time. Executive agrees to devote substantially
         all of Executive's business time and energy to the performance of
         Executive's duties in a diligent and proper manner.

         C. TERMINATION OF PRIOR AGREEMENTS. As of the Effective Date all other
         prior employment related agreements between Executive and United
         HealthCare will terminate in their entirety and no longer be of any
         force or effect.



 2. COMPENSATION.

         A. BASE SALARY. Executive shall initially be paid a base annual salary
         in the amount of $250,000, payable bi-weekly, less all applicable
         withholdings and deductions (the "Initial Base Salary"). Executive
         shall receive a periodic performance review and consideration for an
         increase in the Initial Base Salary.

         B. BONUS AND STOCK PLANS. Executive shall be eligible to participate in
         the incentive compensation plans and the stock option and grant plans
         maintained by United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

         C. EMPLOYEE BENEFITS. Executive shall be eligible to participate in the
         employee benefit plans maintained by either United HealthCare or an
         affiliate or subsidiary of United HealthCare, including without
         limitation, any life, health, dental, short-term and long-term
         disability insurance coverages and any retirement plans, in the sole
         discretion of United HealthCare and in accordance with the terms and
         conditions of those plans and applicable laws and regulations.

         D. VACATION; ILLNESS. Executive shall be eligible for paid vacation and
         sick leave each year in accordance with the then-current policies of
         either United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

3. TERM AND TERMINATION.

         A. TERM. The term of this Agreement shall begin on the Effective Date
         and shall continue until terminated as set forth in Section 3B.

         B. TERMINATION OF AGREEMENT.

                  1. BY MUTUAL AGREEMENT: This Agreement and Executive's
                  employment hereunder may be terminated at any time by the
                  mutual written agreement of the parties.

                  2. BY UNITED HEALTHCARE: United HealthCare may terminate this
                  Agreement and Executive's employment hereunder on 30 days'
                  written notice.

                  3. BY EXECUTIVE: Executive may terminate this Agreement and
                  Executive's employment hereunder on 30 days' written notice.

                  4. DEATH, DISABILITY, ETC.: This Agreement and Executive's
                  employment by United HealthCare shall terminate immediately
                  upon Executive's death. This Agreement


                                      -2-


                  of a permanent and total disability which renders Executive
                  incapable of performing Executive's duties, with or without
                  reasonable accommodation. United HealthCare has the sole
                  discretion to determine whether Executive is permanently or
                  totally disabled with the meaning of this Section 3B4, and the
                  effective date on which Executive was rendered so disabled.

         C. EMPLOYEE BENEFITS: On the effective date of the termination of this
         Agreement and Executive's employment by United HealthCare, Executive
         shall cease to be eligible for all employee benefit plans maintained by
         United HealthCare, except as required by federal or state continuation
         of coverage laws ("COBRA Benefits"). If Executive elects COBRA
         Benefits, Executive shall pay the entire cost of such benefits either
         through after-tax payroll deductions from the cash component of any
         severance compensation Executive receives or directly if Executive does
         not receive such severance compensation or if such severance
         compensation ceases.

         D. SEVERANCE EVENTS AND BENEFITS: If a Severance Event, as hereinafter
         defined, occurs, Executive shall receive the severance benefits set
         forth in this Section 3D for a period of 12 months from the effective
         date of the applicable Severance Event (the "Severance Period"). For
         purposes of this Agreement a Severance Event shall occur if and when:

         (i)      United HealthCare (a) terminates this Agreement and
                  Executive's employment without Cause, as hereinafter defined,
                  or (b) terminates this Agreement without terminating
                  Executive's employment and Executive elects to treat such
                  termination of this Agreement as a Change in Employment, as
                  hereinafter defined (collectively a "Termination without
                  Cause"), or

         (ii)     Within two years following a Change in Control, as hereinafter
                  defined, either (a) United HealthCare terminates this
                  Agreement and Executive's employment without Cause, or (b) a
                  Change in Employment occurs and Executive elects to treat such
                  Change in Employment as a termination of Executive's
                  employment (a "Termination following a Change in Control").

         1. SEVERANCE COMPENSATION: Executive shall receive the following
         severance compensation (the "Severance Compensation"):

                  a) TERMINATION WITHOUT CAUSE. Subject to Section 3D(1)(b)
                  below, upon a Termination without Cause Executive shall
                  receive biweekly payments equal to 1/26 of the sum of (1)
                  Executive's annualized base salary as of the date of the
                  Severance Event, less all applicable withholdings or
                  deductions required by law and Executive's COBRA Benefit
                  payments, if any, plus (2) one-half of the total of any bonus
                  or incentive compensation paid or payable to Executive for
                  the two most recent calendar years (excluding any special or
                  one-time bonus or incentive compensation payments), or if
                  Executive has been eligible for such bonus or incentive
                  compensation payments for less than two such periods, the last
                  such payment paid or payable to


                                      -3-


                  Executive (excluding any special or one-time bonus or
                  incentive compensation payments).

                  b) TERMINATION FOLLOWING A CHANGE IN CONTROL: Upon a
                  Termination following a Change in Control, Executive shall
                  receive biweekly payments equal to 1/26 of two times the sum
                  of (1) Executive's highest annualized base salary during the 2
                  year period immediately preceding the Severance Event, less
                  all applicable withholdings or deductions required by law and
                  Executive's COBRA Benefit payments, if any, plus (2) the
                  greater of (i) all bonuses that would be payable to Executive
                  under any incentive compensation plans in which Executive then
                  participates at Executive's then-current target level, or (ii)
                  one-half of the total of any bonus or incentive compensation
                  paid or payable to Executive for the two most recent calendar
                  years (excluding any special or one-time bonus or incentive
                  compensation payments), or if Executive has been eligible for
                  such bonus or incentive compensation payments for less than
                  two such periods, the last such payment paid or payable to
                  Executive (excluding any special or one-time bonus or
                  incentive compensation payments.

         2. CASH PAYMENT: Executive shall receive a one-time cash payment within
         a reasonable time following commencement of the Severance Period in an
         amount equal to the portion of the premiums that United HealthCare,
         or its affiliate or subsidiary, as applicable, subsidizes for
         employee-only health, dental and group term life benefit coverages (the
         "Cash Payment"). The Cash Payment shall cover the Severance Period and
         shall be determined as of the effective date of the applicable
         Severance Event.

         3. JOB SEARCH FEES. For a period not to exceed the Severance Period,
         United HealthCare shall pay to an outplacement firm selected by United
         HealthCare an amount deemed reasonable by United HealthCare for
         outplacement and job search services for Executive.

This Section 3D shall be the sole liability of United HealthCare to Executive
upon the termination of this Agreement and Executive's employment hereunder,
and shall replace and be in lieu of any payments or benefits which otherwise
might be owed Executive under any other severance plan or program maintained
by United HealthCare. Such compensation and benefits shall be conditioned on
receipt by United HealthCare of a separation agreement and a release of
claims by Executive on terms and conditions acceptable to United HealthCare
in its sole discretion.

         E. DEFINITIONS AND PROCEDURES.

         1. CAUSE. For purposes of this Agreement "Cause" shall mean (a) the
         refusal of Executive to follow the reasonable direction of the Board of
         Directors of United HealthCare or Executive's supervisor or to perform
         any duties reasonably required on material matters by United
         HealthCare, (b) material violations of United



                                      -4-




         on material matters by United HealthCare, (b) material violations of
         United HealthCare's Code of Conduct or (c) the commission of any
         criminal act or act of fraud or dishonesty by Executive in connection
         with Executive's employment by United HealthCare. Prior to the
         termination of Executive's employment under subsection (a) of this
         definition of Cause, United HealthCare shall provide Executive with a
         30 day notice specifying the basis for Cause. If the Cause described in
         the notice is cured to United HealthCare's reasonable satisfaction
         prior to the end of the 30 day notice period, Executive's employment
         hereunder shall not be terminated on that basis.

         2. CHANGE IN CONTROL. For purposes of this Agreement "Change in
         Control" shall mean (a) the acquisition by any person, entity or
         "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
         Securities Exchange Act of 1934 (the "Exchange Act"), other than United
         HealthCare or any employee benefit plan of United HealthCare, of
         beneficial ownership (as defined in the Exchange Act) of 20% or more of
         the common stock of UHC or the combined voting power of UHC's
         then-outstanding voting securities in a transaction or series of
         transactions not approved in advanced by a vote of at least
         three-quarters of the directors of UHC; (b) a change in 50% or more of
         the directors of UHC in any 12 month period; (c) the approval by the
         shareholders of UHC of a reorganization, merger, consolidation,
         liquidation or dissolution of UHC or of the sale (in one transaction or
         a series of related transactions) of all or substantially all of the
         assets of UHC other than a reorganization, merger, consolidation,
         liquidation, dissolution or sale approved in advance by a vote of at
         least three-quarters of the directors; (d) the first purchase under any
         tender offer or exchange offer (other than an offer by UHC) pursuant to
         which shares of UHC common stock are purchased; or (e) at least a
         majority of the directors of UHC determine in their sole discretion
         that there has been a change of control of UHC.

         3. CHANGE IN EMPLOYMENT. For purposes of this Agreement a "Change in
         Employment" shall be deemed to have occurred (a) if (i) Executive's
         duties are materially and adversely changed without Executive's prior
         consent, (ii) Executive's salary or benefits are reduced other than as
         a general reduction of salaries and benefits by United HealthCare,
         (iii) without terminating Executive's employment United HealthCare
         terminates this Agreement, or (iv) the geographic location for the
         performance of Executive's duties hereunder is moved more than 50 miles
         from the geographic location at the Effective Date without Executive's
         prior consent, and (b) if in each case under subsections (a) (i), (ii),
         (iii) and (iv), in the period beginning 90 days before the time the
         Change in Employment occurs, Cause does not exist or if Cause does
         exist United HealthCare has not given Executive written notice that
         Cause exists. Notwithstanding the foregoing, an isolated, insubstantial
         or inadvertent action by United HealthCare, which is remedied by
         United HealthCare within 30 days after receipt of notice thereof by
         Executive, shall not constitute a Change in Employment. Executive may
         elect to treat a Change in Employment as a termination of this
         Agreement and Executive's employment hereunder. To do so Executive
         shall send written notice of such


                                      -5-


         election to United HealthCare within 90 days after the date Executive
         receives notice from United HealthCare or otherwise is definitively
         informed of the events constituting the Change in Employment. No Change
         in Employment shall be deemed to have occurred if Executive fails to
         send the notice of election within the 90 day period. Executive's
         failure to treat a particular Change in Employment as a termination of
         employment shall not preclude Executive from treating a subsequent
         Change in Employment as a termination of employment. The effective date
         of a Change in Employment termination shall be the date 30 days after
         United HealthCare receives the written notice of election.

4. PROPERTY RIGHTS, CONFIDENTIALITY, NON-DISPARAGEMENT, NON-SOLICIT AND
NON-COMPETE PROVISIONS.

         A. UNITED HEALTHCARE'S PROPERTY.

                  1. ASSIGNMENT OF PROPERTY RIGHTS. Executive shall promptly
                  disclose to United HealthCare in writing all inventions,
                  discoveries and works of authorship, whether or not patentable
                  or copyrightable, which are conceived, made, discovered,
                  written or created by Executive alone or jointly with another
                  person, group or entity, whether during the normal hours of
                  employment at United HealthCare or on Executive's own time,
                  during the term of this Agreement. Executive assigns all
                  rights to all such inventions and works of authorship to
                  United HealthCare. Executive shall give United HealthCare any
                  assistance it reasonably requires in order for United
                  HealthCare to perfect, protect, and use its rights to
                  inventions and works of authorship.

                  This provision shall not apply to an invention for which no
                  equipment, supplies, facility or trade secret information of
                  United HealthCare was used and which was developed entirely on
                  the Executive's own time and which (1) does not relate to the
                  business of United HealthCare or to United HealthCare's
                  anticipated research or development, or (2) does not result
                  from any work performed by the Executive for United
                  HealthCare.

                  2. NO REMOVAL OF PROPERTY. Executive shall not remove any
                  records, documents, or any other tangible items (excluding
                  Executive's personal property) from the premises of United
                  HealthCare in either original or duplicate form, except as is
                  needed in the ordinary course of conducting business for
                  United HealthCare.

                  3. RETURN OF PROPERTY. Executive shall immediately deliver to
                  United HealthCare, upon termination of employment with United
                  HealthCare, or at any other time upon United HealthCare's
                  request, any property, records, documents, and other tangible
                  items (excluding Executive's personal property) in Executive's
                  possession or control, including data incorporated in word
                  processing, computer and other data storage media, and all
                  copies of such records, documents and information, including
                  all Confidential Information, as defined below.


                                      -6-


         B. CONFIDENTIAL INFORMATION. During the course of employment Executive
         will develop, become aware of and accumulate expertise, knowledge and
         information regarding United HealthCare's organization, strategies,
         business and operations and United HealthCare's past, current or
         potential customers and suppliers. United HealthCare considers such
         expertise, knowledge and information to be valuable, confidential and
         proprietary and it shall be considered Confidential Information for
         purposes of this Agreement. During this Agreement and at all times
         thereafter Executive shall not use such Confidential Information or
         disclose it to other persons or entities except as is necessary for the
         performance of Executive's duties for United HealthCare or as has been
         expressly permitted in writing by United HealthCare. This Section 4B
         shall survive the termination of this Agreement.

         C. NON-DISPARAGEMENT. Executive agrees that he will not criticize, make
         any negative comments or otherwise disparage or put in disrepute United
         HealthCare, or those associated with United HealthCare, in any way,
         whether orally, in writing or otherwise, directly or by implication in
         communication with any person, including but not limited to customers
         or agents of United HealthCare. This Section 4C shall survive the
         termination of this Agreement.

         D. NON-SOLICITATION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under Section 4E,
         as applicable (iii) any period following the termination or expiration
         of this Agreement during which Executive remains employed by United
         HealthCare and (iv) for a period of one year after the last day of the
         latest of any period described in (i), (ii) or (iii), Executive shall
         not (y) directly or indirectly attempt to hire away any then-current
         employee of United HealthCare or a subsidiary of United HealthCare or
         to persuade any such employee to leave employment with United
         HealthCare, or (z) directly or indirectly solicit, divert, or take
         away, or attempt to solicit, divert, or take away, the business of any
         person, partnership, company or corporation with whom United HealthCare
         (including any subsidiary or affiliated company in which United
         HealthCare has a more than 20% equity interest) has established or is
         actively seeking to establish a business or customer relationship. This
         Section 4D shall survive the termination of this Agreement.

         E. NON-COMPETITION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under this Section
         4E, as applicable, and (iii) any period following the termination or
         expiration of this Agreement during which Executive remains employed by
         United HealthCare, Executive shall not, without United HealthCare's
         prior written consent, engage or participate, either individually or as
         an employee, consultant or principal, partner, agent, trustee, officer
         or director of a corporation, partnership or other business entity, in
         any business in which United HealthCare (including any subsidiary or
         affiliated company in which United HealthCare has more than a 20%
         equity interest) is engaged. If Executive terminates this Agreement,
         and as of such termination or within 90 days of such termination
         Executive also terminates Executive's employment by United HealthCare,
         United HealthCare may elect to have


                                      -7-


         the provisions of this Section 4E be in effect for up to 24 months
         following the effective date of Executive's employment termination if,
         during the period up to 24 months specified by United HealthCare,
         United HealthCare pays Executive severance compensation equal to
         biweekly payments of 1/26 of the Severance Compensation and the Cash
         Payment. United HealthCare must send written notice of such election
         within 10 days after it receives written notice of Executive's
         termination of employment. This Section 4E shall survive the
         termination of this Agreement.

5. MISCELLANEOUS.

         A. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
         the benefit of the parties and their successors and assigns, but may
         not be assigned by either party without the prior written consent of
         the other party, except that United HealthCare in its sole discretion
         may assign this Agreement to an entity controlled by United HealthCare
         at the time of the assignment. If United HealthCare subsequently loses
         or gives up control of the entity to which this Agreement is assigned,
         such entity shall become United HealthCare for all purposes under this
         Agreement, beginning on the date on which United HealthCare loses or
         gives up control of the entity. Any successor to United HealthCare
         shall be deemed to be United HealthCare for all purposes of this
         Agreement.

         B. NOTICES. All notices under this Agreement shall be in writing and
         shall be deemed to have been duly given if delivered by hand or mailed
         by registered or certified mail, return receipt requested, postage
         prepaid, to the party to receive the same at the address set forth
         below or at such other address as may have been furnished by proper
         notice.

                 United HealthCare:             300 Opus Center
                                                9900 Bren Road East
                                                Minnetonka, MN 55343
                                                Attn: General Counsel
                   Executive:

         C. ENTIRE AGREEMENT. This Agreement contains the entire understanding
         of the parties with respect to its subject matter and may be amended or
         modified only by a subsequent written amendment executed by the
         parties. This Agreement replaces and supersedes any and all prior
         employment or employment related agreements and understandings,
         including any letters or memos which may have been construed as
         agreements, between the Executive and United HealthCare.

         D. CHOICE OF LAW. This Agreement shall be construed and interpreted
         under the applicable laws and decisions of the State of Minnesota.


                                      -8-


         E. WAIVERS. No failure on the part of either party to exercise, and no
         delay in exercising, any right or remedy under this Agreement shall
         operate as a waiver; nor shall any single or partial exercise of any
         right or remedy preclude any other or further exercise of any right or
         remedy.

         F. ADEQUACY OF CONSIDERATION. Executive acknowledges and agrees that
         Executive has received adequate consideration from United HealthCare to
         enter into this Agreement.

         G. DISPUTE RESOLUTION AND REMEDIES. Any dispute arising between the
         parties relating to this Agreement or to Executive's employment by
         United HealthCare shall be resolved by binding arbitration pursuant to
         United HealthCare' Employment Arbitration Policy. The arbitrators shall
         not ignore or vary the terms of this Agreement and shall be bound by
         and apply controlling law. The parties acknowledge that Executive's
         failure to comply with the Confidential Information, Non-Solicitation
         and Non-Competition provisions of this Agreement will cause immediate
         and irreparable injury to United HealthCare and that therefore the
         arbitrators, or a court of competent jurisdiction if an arbitration
         panel cannot be immediately convened, will be empowered to provide
         injunctive relief, including temporary or preliminary relief, to
         restrain any such failure to comply.

         H. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer or be
         deemed or construed to confer any rights or benefits upon any person
         other than the parties.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.

         IN WITNESS WHEREOF, this Agreement has been signed by the parties
hereto as of the Effective Date set forth above.

United HealthCare Services, Inc.                   Executive

By /s/ Robert J. Backes                            /s/ Patrick J. Erlandson
   ---------------------------------               ----------------------------
                                                       Patrick J. Erlandson
Its  Senior Vice President
   ---------------------------------

     Robert J. Backes
     Senior Vice President
     Human Resources


                                      -9-

EX-10.P

                              EMPLOYMENT AGREEMENT

         This Agreement, effective as of October 16, 1998 (the "Effective
Date"), is made by and between David J. Lubben ("Executive") and United
HealthCare Services, Inc. ("United HealthCare") for the purpose of setting forth
the terms and conditions of Executive's employment by United HealthCare, or an
affiliate or subsidiary of United HealthCare, and to protect United HealthCare's
knowledge, expertise, customer relationships and the confidential information
United HealthCare has developed about its customers, products, operations and
services. Unless the context otherwise requires, when used in this Agreement
"United HealthCare" includes any entity affiliated with United HealthCare.

         WHEREAS, as additional consideration for entering into this Agreement
Executive shall receive, upon execution of this Agreement, a nonqualified stock
option to purchase 50,000 shares of United HealthCare Corporation ("UHC") common
stock with a grant date the same as the Effective Date pursuant to the terms of
the UHC Amended and Restated 1991 Stock and Incentive Plan.

         WHEREAS, Executive and United HealthCare desire to enter into this
Agreement, which shall supersede any and all other prior employment-related
agreements between Executive and United HealthCare.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:

1. EMPLOYMENT AND DUTIES; TERMINATION OF PRIOR AGREEMENTS.

         A. EMPLOYMENT. United HealthCare hereby employs Executive, either
         directly or through an affiliate or subsidiary of United HealthCare,
         and Executive hereby accepts such employment on the terms and
         conditions set forth in this Agreement. Except as specifically
         superseded by this Agreement, Executive's employment hereunder shall be
         subject to all of United HealthCare's policies and procedures in regard
         to its employees. Executive's employment hereunder shall begin on the
         Effective Date and shall continue until terminated as set forth in
         Section 3 hereof.

         B. DUTIES. Executive shall initially hold the executive level position
         of General Counsel and perform the duties associated therewith.
         Executive shall perform such other executive level responsibilities as
         are reasonably assigned Executive from time to time. Executive agrees
         to devote substantially all of Executive's business time and energy to
         the performance of Executive's duties in a diligent and proper manner.

         C. TERMINATION OF PRIOR AGREEMENTS. As of the Effective Date all other
         prior employment related agreements between Executive and United
         HealthCare will terminate in their entirety and no longer be of any
         force or effect.








2. COMPENSATION.

         A. BASE SALARY. Executive shall initially be paid a base annual salary
         in the amount of $300,000, payable bi-weekly, less all applicable
         withholdings and deductions (the "Initial Base Salary"). Executive
         shall receive a periodic performance review and consideration for an
         increase in the Initial Base Salary.

         B. BONUS AND STOCK PLANS. Executive shall be eligible to participate in
         the incentive compensation plans and the stock option and grant plans
         maintained by United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

         C. EMPLOYEE BENEFITS. Executive shall be eligible to participate in the
         employee benefit plans maintained by either United HealthCare or an
         affiliate or subsidiary of United HealthCare, including without
         limitation, any life, health, dental, short-term and long-term
         disability insurance coverages and any retirement plans, in the sole
         discretion of United HealthCare and in accordance with the terms and
         conditions of those plans and applicable laws and regulations.

         D. VACATION; ILLNESS. Executive shall be eligible for paid vacation and
         sick leave each year in accordance with the then-current policies of
         either United HealthCare or an affiliate or subsidiary of United
         HealthCare, in the sole discretion of United HealthCare and in
         accordance with the terms and conditions of those plans and applicable
         laws and regulations.

3. TERM AND TERMINATION.

         A. TERM. The term of this Agreement shall begin on the Effective Date
         and shall continue until terminated as set forth in Section 3B.

         B. TERMINATION OF AGREEMENT.

                  1. BY MUTUAL AGREEMENT. This Agreement and Executive's
                  employment hereunder may be terminated at any time by the
                  mutual written agreement of the parties.

                  2. BY UNITED HEALTHCARE. United HealthCare may terminate this
                  Agreement and Executive's employment hereunder on 30 days'
                  written notice.

                  3. BY EXECUTIVE. Executive may terminate this Agreement and
                  Executive's employment hereunder on 30 days' written notice.

                  4. DEATH, DISABILITY, ETC. This Agreement and Executive's
                  employment by United HealthCare shall terminate immediately
                  upon Executive's death. This Agreement and Executive's
                  employment hereunder shall automatically terminate in the
                  event of a permanent and total disability which renders
                  Executive incapable of







                  performing Executive's duties, with or without reasonable
                  accommodation. United HealthCare has the sole discretion to
                  determine whether Executive is permanently or totally disabled
                  with the meaning of this Section 3B4, and the effective date
                  on which Executive was rendered so disabled.

         C. EMPLOYEE BENEFITS. On the effective date of the termination of this
         Agreement and Executive's employment by United HealthCare, Executive
         shall cease to be eligible for all employee benefit plans maintained by
         United HealthCare, except as required by federal or state continuation
         of coverage laws ("COBRA Benefits"). If Executive elects COBRA
         Benefits, Executive shall pay the entire cost of such benefits either
         through after-tax payroll deductions from the cash component of any
         severance compensation Executive receives or directly if Executive does
         not receive such severance compensation or if such severance
         compensation ceases.

         D. SEVERANCE EVENTS AND BENEFITS. If a Severance Event, as hereinafter
         defined, occurs, Executive shall receive the severance benefits set
         forth in this Section 3D for a period of 12 months from the effective
         date of the applicable Severance Event (the "Severance Period"). For
         purposes of this Agreement a Severance Event shall occur if and when:

         (i)      United HealthCare (a) terminates this Agreement and
                  Executive's employment without Cause, as hereinafter defined,
                  or (b) terminates this Agreement without terminating
                  Executive's employment and Executive elects to treat such
                  termination of this Agreement as a Change in Employment, as
                  hereinafter defined (collectively a "Termination without
                  Cause"), or

         (ii)     Within two years following a Change in Control, as hereinafter
                  defined, either (a) United HealthCare terminates this
                  Agreement and Executive's employment without Cause, or (b) a
                  Change in Employment occurs and Executive elects to treat such
                  Change in Employment as a termination of Executive's
                  employment (collectively a "Termination following a Change in
                  Control").

         1. SEVERANCE COMPENSATION. Executive shall receive the following
         severance compensation (the "Severance Compensation"):

                  a) TERMINATION WITHOUT CAUSE. Subject to Section 3D(1)(b)
                  below, upon a Termination without Cause Executive shall
                  receive biweekly payments equal to 1/26 of two times the sum
                  of (1) Executive's annualized base salary as of the date of
                  the Severance Event, less all applicable withholdings or
                  deductions required by law and Executive's COBRA Benefit
                  payments, if any, plus (2) one-half of the total of any bonus
                  or incentive compensation paid or payable to Executive for the
                  two most recent calendar years (excluding any special or
                  one-time bonus or incentive compensation payments), or if
                  Executive has been eligible for such bonus or incentive
                  compensation payments for less than two such periods, the last
                  such payment paid or payable to Executive (excluding any
                  special or one-time bonus or incentive compensation payments).



                                      -3-




                  b) TERMINATION FOLLOWING A CHANGE IN CONTROL. Upon a
                  Termination following a Change in Control, Executive shall
                  receive biweekly payments equal to 1/26 of three times the sum
                  of (1) Executive's highest annualized base salary during the 2
                  year period immediately preceding the Severance Event, less
                  all applicable withholdings or deductions required by law and
                  Executive's COBRA Benefit payments, if any, plus (2) the
                  greater of (i) all bonuses that would be payable to Executive
                  under any incentive compensation plans in which Executive then
                  participates at Executive's then-current target level, or (ii)
                  one-half of the total of any bonus or incentive compensation
                  paid or payable to Executive for the two most recent calendar
                  years (excluding any special or one-time bonus or incentive
                  compensation payments), or if Executive has been eligible for
                  such bonus or incentive compensation payments for less than
                  two such periods, the last such payment paid or payable to
                  Executive (excluding any special or one-time bonus or
                  incentive compensation payments.

         2. CASH PAYMENT. Executive shall receive a one-time cash payment within
         a reasonable time following commencement of the Severance Period in an
         amount equal to the portion of the premiums that United HealthCare, or
         its affiliate or subsidiary, as applicable, subsidizes for
         employee-only health, dental and group term life benefit coverages (the
         "Cash Payment"). The Cash Payment shall cover the Severance Period and
         shall be determined as of the effective date of the applicable
         Severance Event.

         3. JOB SEARCH FEES. For a period not to exceed the Severance Period,
         United HealthCare shall pay to an outplacement firm selected by United
         HealthCare an amount deemed reasonable by United HealthCare for
         outplacement and job search services for Executive.

         4. EXCISE TAX PAYMENT. If any portion of the Severance Compensation
         payable upon a Termination following a Change in Control constitutes an
         Excess Parachute Payment, as hereinafter defined, such that an Excise
         Tax, as hereinafter defined, is due, Executive shall receive a one-time
         cash payment in an amount sufficient to cover (a) the full cost of the
         Excise Tax plus (b) Executive's federal, state and city income,
         employment and Excise Tax on this one-time cash payment and on all such
         iterative payments so that Executive is made entirely whole for the
         impact of the Excise Tax (collectively the "Gross-Up Payment"). United
         HealthCare shall calculate these amounts on a timely and accurate
         basis, and for this purpose Executive shall be deemed to be in the
         highest marginal rate of federal, state and city taxes. The Gross-Up
         Payment shall be made within 30 days following the effective date of
         Executive's employment termination. For purposes of this Agreement the
         term "Excess Parachute Payment" shall have the meaning set forth in
         Section 28OG of the Internal Revenue Code of 1986, as amended (the
         "Code"). For purposes of this Agreement the term "Excise Tax" shall
         mean the tax imposed on an Excess Parachute Payment pursuant to
         Sections 280G and 4999 of the Code.



                                      -4-




         This Section 3D shall be the sole liability of United HealthCare to
         Executive upon the termination of this Agreement and Executive's
         employment hereunder, and shall replace and be in lieu of any payments
         or benefits which otherwise might be owed Executive under any other
         severance plan or program maintained by United HealthCare. Such
         compensation and benefits shall be conditioned on receipt by United
         HealthCare of a separation agreement and a release of claims by
         Executive on terms and conditions acceptable to United HealthCare in
         its sole discretion.

                  E. DEFINITIONS AND PROCEDURES.

                           1. CAUSE. For purposes of this Agreement "Cause"
                           shall mean (a) the refusal of Executive to follow the
                           reasonable direction of the Board of Directors of
                           United HealthCare or Executive's supervisor or to
                           perform any duties reasonably required on material
                           matters by United HealthCare, (b) material violations
                           of United HealthCare's Code of Conduct or (c) the
                           commission of any criminal act or act of fraud or
                           dishonesty by Executive in connection with
                           Executive's employment by United HealthCare. Prior to
                           the termination of Executive's employment under
                           subsection (a) of this definition of Cause, United
                           HealthCare shall provide Executive with a 30 day
                           notice specifying the basis for Cause. If the Cause
                           described in the notice is cured to United
                           HealthCare's reasonable satisfaction prior to the end
                           of the 30 day notice period, Executive's employment
                           hereunder shall not be terminated on that basis.

                           2. CHANGE IN CONTROL. For purposes of this Agreement
                           "Change in Control" shall mean (a) the acquisition by
                           any person, entity or "group," within the meaning of
                           Section 13(d)(3) or 14(d)(2) of the Securities
                           Exchange Act of 1934 (the "Exchange Act"), other than
                           United HealthCare or any employee benefit plan of
                           United HealthCare, of beneficial ownership (as
                           defined in the Exchange Act) of 20% or more of the
                           common stock of UHC or the combined voting power of
                           UHC's then-outstanding voting securities in a
                           transaction or series of transactions not approved in
                           advanced by a vote of at least three-quarters of the
                           directors of UHC; (b) a change in 50% or more of the
                           directors of UHC in any 12 month period; (c) the
                           approval by the shareholders of UHC of a
                           reorganization, merger, consolidation, liquidation or
                           dissolution of UHC or of the sale (in one transaction
                           or a series of related transactions) of all or
                           substantially all of the assets of UHC other than a
                           reorganization, merger, consolidation, liquidation,
                           dissolution or sale approved in advance by a vote of
                           at least three-quarters of the directors; (d) the
                           first purchase under any tender offer or exchange
                           offer (other than an offer by UHC) pursuant to which
                           shares of UHC common stock are purchased; or (e) at
                           least a majority of the directors of UHC determine in
                           their sole discretion that there has been a change of
                           control of UHC.

                           3. CHANGE IN EMPLOYMENT. For purposes of this
                           Agreement a "Change in Employment" shall be deemed to
                           have occurred (a) if (i) Executive's duties are
                           materially and adversely changed without Executive's
                           prior consent, (ii) Executive's salary or benefits
                           are reduced other than as a general reduction of
                           salaries and



                                      -5-




                           benefits by United HealthCare, (iii) without
                           terminating Executive's employment United HealthCare
                           terminates this Agreement, or (iv) the geographic
                           location for the performance of Executive's duties
                           hereunder is moved more than 50 miles from the
                           geographic location at the Effective Date without
                           Executive's prior consent, and (b) if in each case
                           under subsections (a) (i), (ii), (iii) and (iv), in
                           the period beginning 90 days before the time the
                           Change in Employment occurs, Cause does not exist or
                           if Cause does exist United HealthCare has not given
                           Executive written notice that Cause exists.
                           Notwithstanding the foregoing, an isolated,
                           insubstantial or inadvertent action by United
                           HealthCare, which is remedied by United HealthCare
                           within 30 days after receipt of notice thereof by
                           Executive, shall not constitute a Change in
                           Employment. Executive may elect to treat a Change in
                           Employment as a termination of this Agreement and
                           Executive's employment hereunder. To do so Executive
                           shall send written notice of such election to United
                           HealthCare within 90 days after the date Executive
                           receives notice from United HealthCare or otherwise
                           is definitively informed of the events constituting
                           the Change in Employment. No Change in Employment
                           shall be deemed to have occurred if Executive fails
                           to send the notice of election within the 90 day
                           period. Executive's failure to treat a particular
                           Change in Employment as a termination of employment
                           shall not preclude Executive from treating a
                           subsequent Change in Employment as a termination of
                           employment. The effective date of a Change in
                           Employment termination shall be the date 30 days
                           after United HealthCare receives the written notice
                           of election.


4. PROPERTY RIGHTS, CONFIDENTIALITY, NON-DISPARAGEMENT, NON-SOLICIT AND
NON-COMPETE PROVISIONS.

         A. UNITED HEALTHCARE'S PROPERTY.

                  1. ASSIGNMENT OF PROPERTY RIGHTS. Executive shall promptly
                  disclose to United HealthCare in writing all inventions,
                  discoveries and works of authorship, whether or not patentable
                  or copyrightable, which are conceived, made, discovered,
                  written or created by Executive alone or jointly with another
                  person, group or entity, whether during the normal hours of
                  employment at United HealthCare or on Executive's own time,
                  during the term of this Agreement. Executive assigns all
                  rights to all such inventions and works of authorship to
                  United HealthCare. Executive shall give United HealthCare any
                  assistance it reasonably requires in order for United
                  HealthCare to perfect, protect, and use its rights to
                  inventions and works of authorship.

                  This provision shall not apply to an invention for which no
                  equipment, supplies, facility or trade secret information of
                  United HealthCare was used and which was developed entirely on
                  the Executive's own time and which (1) does not relate to the
                  business of United HealthCare or to United HealthCare's
                  anticipated research or development, or (2) does not result
                  from any work performed by the Executive for United
                  HealthCare.



                                      -6-




                  2. NO REMOVAL OF PROPERTY. Executive shall not remove any
                  records, documents, or any other tangible items (excluding
                  Executive's personal property) from the premises of United
                  HealthCare in either original or duplicate form, except as is
                  needed in the ordinary course of conducting business for
                  United HealthCare.

                  3. RETURN OF PROPERTY. Executive shall immediately deliver to
                  United HealthCare, upon termination of employment with United
                  HealthCare, or at any other time upon United HealthCare's
                  request, any property, records, documents, and other tangible
                  items (excluding Executive's personal property) in Executive's
                  possession or control, including data incorporated in word
                  processing, computer and other data storage media, and all
                  copies of such records, documents and information, including
                  all Confidential Information, as defined below.

         B. CONFIDENTIAL INFORMATION. During the course of employment Executive
         will develop, become aware of and accumulate expertise, knowledge and
         information regarding United HealthCare's organization, strategies,
         business and operations and United HealthCare's past, current or
         potential customers and suppliers. United HealthCare considers such
         expertise, knowledge and information to be valuable, confidential and
         proprietary and it shall be considered Confidential Information for
         purposes of this Agreement. During this Agreement and at all times
         thereafter Executive shall not use such Confidential Information or
         disclose it to other persons or entities except as is necessary for the
         performance of Executive's duties for United HealthCare or as has been
         expressly permitted in writing by United HealthCare. This Section 4B
         shall survive the termination of this Agreement.

         C. NON-DISPARAGEMENT. Executive agrees that he will not criticize,
         make any negative comments or otherwise disparage or put in disrepute
         United HealthCare, or those associated with United HealthCare, in any
         way, whether orally, in writing or otherwise, directly or by
         implication in communication with any person, including but not limited
         to customers or agents of United HealthCare. This Section 4C shall
         survive the termination of this Agreement.

         D. NON-SOLICITATION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under Section 4E,
         as applicable (iii) any period following the termination or expiration
         of this Agreement during which Executive remains employed by United
         HealthCare and (iv) for a period of one year after the last day of the
         latest of any period described in (i), (ii) or (iii), Executive shall
         not (y) directly or indirectly attempt to hire away any then-current
         employee of United HealthCare or a subsidiary of United HealthCare or
         to persuade any such employee to leave employment with United
         HealthCare, or (z) directly or indirectly solicit, divert, or take
         away, or attempt to solicit, divert, or take away, the business of any
         person, partnership, company or corporation with whom United HealthCare
         (including any subsidiary or affiliated company in which United
         HealthCare has a more than 20% equity interest) has established or is
         actively seeking to establish a business or customer relationship. This
         Section 4D shall survive the termination of this Agreement.



                                      -7-




         E. NON-COMPETITION. During (i) the term of this Agreement, (ii) the
         Severance Period or any period in which Executive receives severance
         compensation pursuant to United HealthCare' election under this
         Section 4E, as applicable, and (iii) any period following the
         termination or expiration of this Agreement during which Executive
         remains employed by United HealthCare, Executive shall not, without
         United HealthCare's prior written consent, engage or participate,
         either individually or as an employee, consultant or principal,
         partner, agent, trustee, officer or director of a corporation,
         partnership or other business entity, in any business in which United
         HealthCare (including any subsidiary or affiliated company in which
         United HealthCare has more than a 20% equity interest) is engaged. If
         Executive terminates this Agreement, and as of such termination or
         within 90 days of such termination Executive also terminates
         Executive's employment by United HealthCare, United HealthCare may
         elect to have the provisions of this Section 4E be in effect for up to
         24 months following the effective date of Executive's employment
         termination if, during the period up to 24 months specified by United
         HealthCare, United HealthCare pays Executive severance compensation
         equal to biweekly payments of 1/26 of the Severance Compensation and
         the Cash Payment. United HealthCare must send written notice of such
         election within 10 days after it receives written notice of
         Executive's termination of employment. This Section 4E shall survive
         the termination of this Agreement.

5. MISCELLANEOUS.

         A. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
         the benefit of the parties and their successors and assigns, but may
         not be assigned by either party without the prior written consent of
         the other party, except that United HealthCare in its sole discretion
         may assign this Agreement to an entity controlled by United HealthCare
         at the time of the assignment. If United HealthCare subsequently loses
         or gives up control of the entity to which this Agreement is assigned,
         such entity shall become United HealthCare for all purposes under this
         Agreement, beginning on the date on which United HealthCare loses or
         gives up control of the entity. Any successor to United HealthCare
         shall be deemed to be United HealthCare for all purposes of this
         Agreement.

         B. NOTICES. All notices under this Agreement shall be in writing and
         shall be deemed to have been duly given if delivered by hand or mailed
         by registered or certified mail, return receipt requested, postage
         prepaid, to the party to receive the same at the address set forth
         below or at such other address as may have been furnished by proper
         notice.

                      United HealthCare:      300 Opus Center
                                              9900 Bren Road East
                                              Minnetonka, MN 55343
                                              Attn: General Counsel


                             Executive:



                                      -8-




         C. ENTIRE AGREEMENT. This Agreement contains the entire understanding
         of the parties with respect to its subject matter and may be amended or
         modified only by a subsequent written amendment executed by the
         parties. This Agreement replaces and supersedes any and all prior
         employment or employment related agreements and understandings,
         including any letters or memos which may have been construed as
         agreements, between the Executive and United HealthCare.

         D. CHOICE OF LAW. This Agreement shall be construed and interpreted
         under the applicable laws and decisions of the State of Minnesota.

         E. WAIVERS. No failure on the part of either party to exercise, and no
         delay in exercising, any right or remedy under this Agreement shall
         operate as a waiver; nor shall any single or partial exercise of any
         right or remedy preclude any other or further exercise of any right or
         remedy.

         F. ADEQUACY OF CONSIDERATION. Executive acknowledges and agrees that
         Executive has received adequate consideration from United HealthCare to
         enter into this Agreement.

         G. DISPUTE RESOLUTION AND REMEDIES. Any dispute arising between the
         parties relating to this Agreement or to Executive's employment by
         United HealthCare shall be resolved by binding arbitration pursuant to
         United HealthCare' Employment Arbitration Policy. The arbitrators shall
         not ignore or vary the terms of this Agreement and shall be bound by
         and apply controlling law. The parties acknowledge that Executive's
         failure to comply with the Confidential Information, Non-Solicitation
         and Non-Competition provisions of this Agreement will cause immediate
         and irreparable injury to United HealthCare and that therefore the
         arbitrators, or a court of competent jurisdiction if an arbitration
         panel cannot be immediately convened, will be empowered to provide
         injunctive relief, including temporary or preliminary relief, to
         restrain any such failure to comply.

         H. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer or be
         deemed or construed to confer any rights or benefits upon any person
         other than the parties.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.

         IN WITNESS WHEREOF, this Agreement has been signed by the parties
hereto as of the Effective Date set forth above.

United HealthCare Services, Inc.            Executive



By /s/ Robert J. Buckes                      /s/ David J. Lubben
  ------------------------------------      ------------------------------------
Its  Senior Vice President                       David J. Lubben
   -----------------------------------
     Robert J. Buckes
     Senior Vice President
     Human Resources



                                      -9-

EX-10.V

                      PHARMACY BENEFIT MANAGEMENT AGREEMENT


         This PHARMACY BENEFIT MANAGEMENT AGREEMENT (this "Agreement") is
between UNITED HEALTHCARE SERVICES, INC., on behalf of itself and its affiliates
from time to time, located at 9900 Bren Road East, Minnetonka, Minnesota 55343
(hereinafter "United HealthCare"), and MERCK MEDCO MANAGED CARE, L.L.C. located
at 100 Summit Avenue, Montvale, New Jersey 07645-1753 (hereinafter "PBM"). This
Agreement is effective on the date the parties have each executed it (the
"Effective Date"). It concerns services provided as of the "Commencement Date,"
as hereinafter defined. This Agreement supersedes and replaces any existing
agreements between the parties related to the same subject matter.

                              W I T N E S S E T H:

         WHEREAS, United HealthCare desires to contract with a pharmaceutical
benefits management entity for pharmaceutical benefit management and related
services that United HealthCare will make available, together with other United
HealthCare services, to Health Plans, as hereinafter defined, and other
non-Health Plan business (affiliated with United HealthCare or to which United
HealthCare provides services) through contracts with United HealthCare; and

         WHEREAS, PBM provides pharmaceutical benefits management and related
services and desires to contract with United HealthCare to provide such
management and services.

         NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Agreement, the undersigned parties agree as follows:


SECTION 1. DEFINITIONS

         1.1.     DEFINITIONS. In addition to the capitalized terms defined
elsewhere in this Agreement, the following terms shall have the following
meanings:

         (a)      "AVERAGE WHOLESALE PRICE" or "AWP" means the average wholesale
         price of the Covered Prescription Drug Services dispensed, utilizing
         the current price list in the Blue Book and its supplements. If PBM
         ceases to use the Blue Book and its supplements, PBM shall use such
         other nationally recognized pricing source as PBM uses for all of its
         remaining customers; or, if PBM uses more than one source, then the
         source used for United HealthCare shall be the source mutually agreed
         to by the parties. Under the Retail Pharmacy Program, AWP is based on
         the package size submitted. Under the Mail Service Program, AWP is
         based on package sizes of 100 units or 16 oz. quantities, or smaller
         quantities if such quantities are not commercially available.

         (b)      "BENEFIT CONTRACT" means a benefit plan that: (i) is
         sponsored, purchased, issued or administered by Payor and (ii) contains
         the terms and conditions of a Covered Person's coverage. A Benefit
         Contract is also known as




         a certificate of coverage, summary plan description, evidence of
         coverage, or group services agreement.

         (c)      "COMMENCEMENT DATE" means June 1, 2000 or such earlier date on
         which PBM begins to provide services under this Agreement in accordance
         with SECTION 3.24.

         (d)      "COPAYMENT OR COINSURANCE OR DEDUCTIBLE OR OTHER CHARGE"
         collectively known as "Copayment" means the charge, in addition to the
         premium, which a Covered Person is required to pay for certain covered
         services provided under the Benefit Contract and Pharmacy Rider.
         Copayment or Coinsurance or Deductible or Other Charge may be either a
         defined dollar amount or a percentage of eligible expenses. A Covered
         Person is responsible for the payment of any Copayment directly to the
         pharmacy at the time the prescription is dispensed.

         (e)      "COVERED PERSON" means an individual eligible to receive
         coverage for outpatient prescription pharmacy benefits who is currently
         enrolled under a United HealthCare or Payor Benefit Contract that
         includes a Pharmacy Rider.

         (f)      "COVERED PRESCRIPTION DRUG SERVICES" means those covered
         outpatient prescription drugs and covered pharmacy products, services
         and supplies pursuant to a Covered Person's Benefit Contract and/or
         Pharmacy Rider.

g)       "HEALTH PLAN" means a licensed health maintenance organization
("HMO") or other similar organization that is either (i) owned by United
HealthCare where "Owned" means that United HealthCare owns not less than a
majority of the voting securities; or (ii) managed by United HealthCare,
where "Managed" means that United HealthCare manages the pharmacy program or
provides other management or administrative services such as claims
processing services, where the local managed health plan assumes medical risk
other than as defined below. Health Plan includes an HMO or other similar
organization Owned or Managed that offers an array of products including but
not limited to fully-insured, self-insured products (where such self-insured
products use the provider networks, medical management and other similar
services used by the HMO or similar organization), commercial HMO products,
Medicare risk products (Medicare+ Choice), Medicaid, EPO products, PPO
products, and all combination products that include an in-network and
out-of-network component such as point-of-service ("POS") products. When such
organization is Managed by United HealthCare, not Owned by United HealthCare,
Health Plan includes such organization only to the extent it has elected to
receive services pursuant to this Agreement. The term Health Plan is not
intended to include: (i) United HealthCare Insurance Company (UHI) products
unless: (A) such products use provider networks, medical management and other
similar services in a manner comparable to the HMOs or similar organization;
and (B) United HealthCare is responsible for medical underwriting risk; or
(ii) fully insured or self-funded products sold through United HealthCare's
Strategic Business Services division; or (iii) Medicare supplemental products
(MediGap); or (iv) *** of this Agreement.

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



         (h)      "INTELLECTUAL PROPERTY" means all patents, patents pending,
         trademarks, service marks, trade names, service names, slogans,
         registered copyrights, commercially significant unregistered
         copyrights, technology rights and licenses, computer software
         (including, without limitation, any source or object codes or
         related documentation), trade secrets, franchises, know-how, and
         inventions and all improvements to such intellectual property.

         (i)      "MAIL SERVICE PROGRAM" means a program contemplated by this
         Agreement in which Covered Persons may mail a prescription together
         with the applicable Copayment to PBM for dispensing of a 90 day
         maximum supply of a covered drug via mail service.

         (j)      "MAXIMUM ALLOWABLE COST" or "MAC" means a list established
         by PBM for its book of business showing the maximum allowable cost
         for a list of prescription drug ingredients. Any generic or branded
         generic drug on the MAC list dispensed at retail will be reimbursed
         at the maximum allowed by such list.

         (k)      "PARTICIPATING PHARMACY" means a pharmacy, including a
         retail or mail service pharmacy, which has entered into an agreement
         with PBM under which pharmacy has agreed to provide Covered
         Prescription Drug Services to Covered Persons and to comply with (i)
         contractual requirements pursuant to this Agreement; and (ii)
         regulatory requirements.

         (l)      "PAYOR" means United HealthCare or the entity or person
         that has the financial responsibility to United HealthCare for
         payment for services covered by a Benefit Contract and/or Pharmacy
         Rider.

         (m)      "PHARMACY RIDER" means that rider to the Covered Person's
         Benefit Contract that in addition to the Benefit Contract, states
         the details of Covered Person's prescription drug coverage. The
         Benefit Contract and Pharmacy Rider are used by PBM in processing
         outpatient prescription drug claims in connection with this
         Agreement.

         (n)      "PHARMACY & THERAPEUTICS COMMITTEE" or "P&T Committee"
         means that United HealthCare committee that: (i) reviews a
         prescription drug for inclusion on the United HealthCare Preferred
         Drug List or other comparable formularies; and, (ii) develops other
         criteria, procedures and rules for the Program including but not
         limited to quantity level and prior authorization.

         (o)      "PREFERRED DRUG LIST" or "PDL" means a list that identifies
         those Federal Drug Administration ("FDA") approved prescription drug
         products that are preferred by United HealthCare for dispensing to
         Covered Persons.

         (p)      "PROGRAM" means all pharmacy services provided under the
         Benefit Contract and Pharmacy Rider to Covered Persons, including
         days supply limitation, Copayment, Preferred Drug List and other
         program specifications set forth in this Agreement or otherwise
         agreed to, in writing, between or among the parties.



         (q)      "PDL REBATE(S)" means ***

         (r)      "RETAIL PHARMACY PROGRAM" means that part of the pharmacy
         program where Covered Persons may purchase a maximum of a 34 day
         supply (except as otherwise mutually agreed) of Covered Prescription
         Drug Services from a retail Participating Pharmacy upon providing
         verification of eligibility and payment of the applicable Copayment.

         (s)      "SUBSTANTIAL CHANGE" means a change in law or regulation
         applicable to a party to this Agreement that materially adversely
         affects the benefits such party reasonably expected to receive under
         this Agreement.

         (t)      "UNITED HEALTHCARE" means the party to this Agreement or
         another wholly owned affiliate, subsidiary or business division to
         whom United HealthCare may assign this Agreement.

SECTION 2.  REPRESENTATIONS AND WARRANTIES

         2.1.     REPRESENTATIONS AND WARRANTIES OF PBM.

                  2.1.1.   ORGANIZATION AND QUALIFICATION. PBM represents and
                  warrants to United HealthCare that it is a limited liability
                  company duly organized, validly existing and in good standing
                  under the laws of New Jersey. PBM has the corporate power and
                  authority necessary to own and operate its properties and to
                  carry on its business as now conducted. PBM is qualified to do
                  business as a foreign corporation in every jurisdiction in
                  which the nature of its business and/or its ownership of
                  property requires it to be so qualified.

                  2.1.2.   CORPORATE AUTHORIZATION. PBM represents and warrants
                  to United HealthCare that the execution, delivery, and
                  performance of this Agreement and the provision of the
                  services contemplated hereby are within its corporate powers.
                  All requisite authority necessary to enter into this Agreement
                  has been obtained, and PBM has duly and validly executed and
                  delivered this Agreement. Assuming this Agreement constitutes
                  the valid and binding agreement of United HealthCare, this
                  Agreement constitutes a valid and binding agreement of PBM
                  enforceable against PBM in accordance with its terms.

                  2.1.3.   NO CONFLICT; REQUIRED FILINGS AND CONSENTS. PBM
                  represents and warrants to United HealthCare that the
                  execution, delivery and performance of this Agreement does
                  not, and the provision of the services contemplated hereby
                  will not: (a) conflict with the Articles of Organization or
                  Bylaws of PBM; (b) conflict with or violate any laws
                  applicable to PBM or by which any of its properties is bound
                  or affected; or (c) result in any breach of or constitute a
                  default (or an event that with

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



                  notice or lapse of time or both would become a default)
                  under, or give to others any rights of termination,
                  amendment, acceleration or cancellation of, or result in
                  the creation of a lien or encumbrance on any of the
                  properties or assets of PBM pursuant to any note, bond,
                  mortgage, indenture, contract, agreement, lease, license,
                  permit, franchise or other instrument or obligation to
                  which PBM is a party, or by which PBM or any of its
                  properties is bound or affected. The execution and delivery
                  of this Agreement by PBM does not, and the performance of
                  this Agreement by PBM and the provision of the services
                  contemplated hereby by PBM will not, require any consent,
                  approval, authorization or permit of, or filing with or
                  notification to, any third party, except for certain
                  filings required by certain state governmental entities.

         2.2.     REPRESENTATIONS AND WARRANTIES OF UNITED HEALTHCARE.

                  2.2.1.   ORGANIZATION AND QUALIFICATION. United HealthCare
                  represents and warrants to PBM that it is a corporation duly
                  incorporated, validly existing and in good standing under the
                  laws of Minnesota. United HealthCare has the corporate power
                  and authority necessary to own and operate its properties and
                  to carry on its business as now conducted. United HealthCare
                  is qualified to do business as a foreign corporation in every
                  jurisdiction in which the nature of its business or its
                  ownership of property requires it to be so qualified.

                  2.2.2.   CORPORATE AUTHORIZATION. United HealthCare represents
                  and warrants to PBM that the execution, delivery, and
                  performance of this Agreement are within its corporate powers.
                  All requisite authority necessary to enter into this Agreement
                  has been obtained, and United HealthCare has duly and validly
                  executed and delivered this Agreement. Assuming this Agreement
                  constitutes the valid and binding agreement of PBM, this
                  Agreement constitutes a valid and binding agreement of United
                  HealthCare enforceable against United HealthCare in accordance
                  with its terms.

                  2.2.3.   NO CONFLICT; REQUIRED FILINGS AND CONSENTS. United
                  HealthCare represents and warrants to PBM that the execution,
                  delivery and performance of this Agreement does not, and the
                  performance of this Agreement by United HealthCare will not:
                  (a) conflict with the Articles of Incorporation or Bylaws of
                  United HealthCare; (b) conflict with or violate any laws
                  applicable to United HealthCare or by which any of its
                  properties is bound or affected; or (c) result in any breach
                  of or constitute a default (or an event that with notice or
                  lapse of time or both would become a default) under, or give
                  to others any rights of termination, amendment, acceleration
                  or cancellation of, or result in the creation of a lien or
                  encumbrance on any of the properties or assets of United
                  HealthCare pursuant to any note, bond, mortgage, indenture,
                  contract, agreement, lease, license, permit, franchise or
                  other instrument or obligation to which United HealthCare is a
                  party, or by which United HealthCare or any of its properties
                  is bound or affected. The execution and delivery of this
                  Agreement by United HealthCare does not, and the



                  performance of this Agreement by United HealthCare will
                  not, require any consent, approval, authorization or permit
                  of, or filing with or notification to any third party,
                  except for certain filings required by certain state
                  governmental entities.

SECTION 3.        OBLIGATIONS OF PBM: PHARMACY MANAGEMENT AND SERVICES

         3.1.     GENERAL PBM SERVICES. PBM shall provide to United HealthCare
         the services described in this Agreement and in EXHIBIT A. PBM
         acknowledges that its position as a premier company capable and
         desirous of providing industry leading products and services is an
         inducement on which United HealthCare is relying in entering into this
         Agreement.

         3.2.     LAWS, REGULATIONS AND LICENSES. PBM, at its own cost, shall:
         (a) maintain all federal, state, and local licenses that are materially
         necessary to provide services under this Agreement and the lack of
         which could adversely affect United HealthCare; (b) shall comply with
         all applicable statutes and regulations in providing all services
         pursuant to this Agreement; and (c) require all Participating
         Pharmacies employed by or under contract with PBM to comply with (a)
         and (b).

         3.3.     PERSONNEL AND OTHER RESOURCES. PBM shall provide sufficient,
         dedicated personnel, information systems support and other resources,
         as reasonably required to successfully administer a high quality,
         cost-effective Program for United HealthCare pursuant to this
         Agreement. PBM and United HealthCare shall review the appropriateness
         of resource allocation on a regular basis, no less often than
         quarterly. United HealthCare has the right to interview and approve of
         any recommended new hires for the Dedicated Pharmacy Management Unit
         discussed below. United HealthCare also has the right to have a PBM
         employee removed from providing services for United HealthCare. PBM
         shall be responsible for all compensation, benefits and taxes of PBM's
         employees. If the parties agree to locate any PBM employees at a United
         HealthCare location, United HealthCare shall be responsible to provide
         workspace, supplies and equipment to PBM within a mutually agreed upon
         reasonable time frame and at a mutually agreed upon cost.

                  3.3.1.   PBM agrees to have a Dedicated Pharmacy Management
                  Unit located in Minneapolis as part of the pharmacy management
                  services provided for United HealthCare. PBM agrees to have
                  this unit fully operational prior to the Commencement Date.
                  United HealthCare will designate the name of this dedicated
                  unit, subject to the approval of PBM.

                  3.3.2.   PBM agrees that the senior management team dedicated
                  to United HealthCare shall be located in Minneapolis and shall
                  consist of a senior level employee who has decision-making
                  authority. In addition to general PBM management expertise,
                  PBM shall have individuals located in the Dedicated Pharmacy
                  Management Unit with expertise in: (a) clinical and analytical
                  services, (b) customer account services, (c) marketing and
                  sales support, (d) pharmacists to work with the Health



                  Plans, and (e) account management for Health Plan and
                  non-Health Plan business. PBM shall also provide the
                  following support to the Dedicated Pharmacy Management
                  Unit's activities for United HealthCare from PBM's
                  corporate or other offices: customer service, legal and
                  regulatory compliance, information systems, network
                  management, operational support, underwriting, manufacturer
                  activity and clinical programs.

                  3.3.3.   PBM agrees that the services provided by PBM's
                  dedicated pharmacy management services include: (a) work with
                  United HealthCare to position United HealthCare's prescription
                  drug Programs for economic and service success in a changing
                  competitive market place; (b) formulate appropriate pharmacy
                  goals with and for United HealthCare; (c) develop and execute
                  a pharmacy marketing plan that will enable United HealthCare
                  to meet its sales and growth goals; and (d) help with pharmacy
                  cost management including United HealthCare's trend management
                  and per member per month (pmpm) cost management.

                  3.3.4.   PBM agrees to provide dedicated management and sales
                  support as reasonably requested to optimize the value of
                  United HealthCare's Program and to attain United HealthCare's
                  identified goals. PBM's marketing and sales support shall
                  include but not be limited as the market changes from time to
                  time, to the following: (a) strategic consultation, training
                  and education; (b) advanced training modules for sales
                  representatives; (c) continuing education programs; (d) site
                  visits and video presentations; (e) focus groups and related
                  consulting; (f) press release development and recommendations;
                  (g) strategies to successfully market against competitors; (h)
                  presentation and reference materials for use by sales
                  representatives; (i) client sales support during finalist
                  presentations; (j) professionally designed marketing
                  literature that effectively positions United HealthCare and
                  communicates the clients' prescription benefit programs; and
                  (k) customized communication programs to motivate and inform
                  selected audiences.

                  3.3.5.   PBM agrees that different marketing strategies will
                  be provided to United HealthCare for growth goals based on
                  revenue, profit, and membership.

         3.4.     RETAIL PARTICIPATING PHARMACY NETWORK. PBM agrees to provide
         national networks of retail Participating Pharmacies under contract
         with PBM to provide dispensing services to Covered Persons under the
         Retail Pharmacy Program. PBM agrees that United HealthCare may require
         the termination of a specific retail pharmacy for good cause including
         quality of care issues. PBM shall notify United HealthCare of any
         terminations in the Participating Pharmacy network. PBM shall send
         letters to Covered Persons, who have utilized a Participating Pharmacy
         in the prior twelve months, notifying them of the termination of such
         Participating Pharmacy, after receiving from United HealthCare: (a) the
         addresses of the affected Covered Persons; and (b) the approval of the
         letters by United HealthCare. United HealthCare shall be responsible
         for the postage costs of any mailings to Covered Persons when a
         Participating Pharmacy is terminated at United HealthCare's request.
         PBM shall be responsible for the postage costs of



         any mailings to Covered Persons when Participating Pharmacy is
         terminated at PBM's request.

                  3.4.1.   PBM will provide United HealthCare with at least
                  three network alternatives by the Commencement Date as
                  described in the FINANCIAL APPENDIX:

                           3.4.1.1. PBM shall provide and maintain a
                           Participating Provider network that is taken as a
                           whole no less favorable in terms of number, location,
                           and quality of providers than the network available
                           to United HealthCare as of the period just prior to
                           the Commencement Date and PBM shall guarantee no
                           deterioration in reimbursement during the term of
                           this Agreement as compared to the period just prior
                           to the Commence Date. This network may upon parties'
                           mutual written consent be contracted through United
                           HealthCare.

                           3.4.1.2. PBM shall make available its CCNIII network.

                           3.4.1.3. PBM shall make available its CCN+ network.

                  3.4.2.   PBM agrees to use reasonable commercial efforts to
                  create alternative retail networks for any new products or
                  other offerings that may be developed by United HealthCare
                  from time to time.

                  3.4.3.   For the network described in SECTION 3.4.1.1, PBM
                  agrees that during the term of this Agreement all PBM
                  customized pharmacy provider agreements for such retail
                  pharmacy network shall be assignable to United HealthCare.
                  Such assignment shall be made at United HealthCare's sole
                  discretion and at a time determined by United HealthCare.

         3.5.     MAIL SERVICE. PBM shall provide to United HealthCare and
         Health Plans shall use PBM's mail service program as its exclusive mail
         service program, as more fully described in the FINANCIAL APPENDIX.
         United HealthCare shall use its reasonable commercial efforts to
         encourage non-Health Plan business to use PBM's mail service. PBM
         agrees to interface with other mail service vendors utilized by
         non-Health Plan business as reasonably requested using PBM's
         specifications.

         3.6.     CUSTOMIZED INSTALLATION MATERIALS. PBM agrees to provide to
         United HealthCare customized installation materials for United
         HealthCare that are accurate and support the specific language in the
         Benefit Contract and Pharmacy Rider. PBM is responsible for
         administering the Benefit Contract and Pharmacy Rider accurately and in
         accordance with all regulatory requirements. At United HealthCare's
         option and approval, PBM shall produce brochures, and other Covered
         Person materials for Covered Persons specific to Covered Prescription
         Drug Services. PBM agrees to provide an accompanying explanatory
         brochure and direct reimbursement claim forms for use by Covered
         Persons who have not received or who have lost their Identification
         Cards. PBM agrees that any Covered Person materials must be approved by
         United HealthCare. United HealthCare



         shall be responsible for all postage costs related to mailings to
         Covered Persons except as otherwise provided in this Agreement.

         3.7.     ELIGIBILITY. PBM agrees to administer eligibility of Covered
         Persons according to eligibility information provided by United
         HealthCare via tape or telecommunication or such other reasonably
         practicable method in a mutually agreeable acceptable format. PBM
         agrees to provide toll-free access for Covered Persons to PBM's
         Customer Service Department for eligibility and claims processing
         assistance. PBM may rely on eligibility information provided by United
         HealthCare for all purposes related to this Agreement.

         3.8.     COVERED PERSON PROTECTION PROVISION. PBM hereby agrees that it
         shall not seek payment, other than Copayments, from any Covered Person
         for Covered Prescription Drug Services under any circumstances. This
         Section shall survive the Agreement.

         3.9.     COMMUNICATIONS. PBM agrees that all written communications
         sent to United HealthCare Covered Persons, participating providers or
         facilities that relate in any way to United HealthCare's Benefit
         Contract or Pharmacy Rider must be reviewed and approved by United
         HealthCare before such communications are sent out to any such
         individuals or groups. PBM agrees that all program communication
         protocols to be used with United HealthCare participating physician
         providers will be reviewed and approved by United HealthCare prior to
         use. United HealthCare shall approve or disapprove all such materials
         within a reasonable time after submission by PBM.

         3.10.    CLAIMS PROCESSING.

                  3.10.1.  PBM shall process Covered Persons' Covered
                  Prescription Drug Services claims in accordance with
                  regulatory requirements, the Benefit Contract and Pharmacy
                  Rider, and PBM'S standard operating procedure.

                  3.10.2.  At the end of each bi-weekly claims cycle, or other
                  processing time period as mutually agreed to by the parties,
                  PBM shall provide claims reports and written notice to United
                  HealthCare of the amount necessary to pay claims processed and
                  fees due to PBM for claims processed.

                  3.10.3.  Any disputes over claims shall be resolved prior to
                  payment by PBM. If PBM makes an error or omission in claims
                  processing, PBM shall be solely responsible for any related
                  costs.

                  3.10.4.  All postage costs related to payment or denial of
                  direct reimbursement claims is the responsibility of PBM.

         3.11.    CLAIM APPEALS. In the event of a claim denial by PBM, PBM
         shall promptly communicate to the Covered Person the right to appeal
         according to the Covered Person's Benefit Contract and Pharmacy Rider
         and applicable law.

         3.12.    CLAIMS AND PHARMACY AUDITING. PBM shall regularly audit its
         electronic and on-site claim processing activities and shall regularly
         audit its retail



         pharmacies, in accordance with PBM's standard audit procedures. PBM
         shall provide United HealthCare with a report on such audits
         containing specific audit information and containing such other
         information as United HealthCare reasonably requests. United
         HealthCare shall receive one hundred percent of any such audit
         recoveries that were incorrectly paid pursuant to the United
         HealthCare Program. When any such overpayment was the result of
         errors or omissions by PBM, payment of such audit recovery shall
         include interest at the prevailing prime rate of interest as
         determined by the WALL STREET JOURNAL for the period of time from
         the payment of the claim to receiving recovery from PBM.

         3.13.    REPORTS. PBM agrees to provide aggregate reports and
         Payor-specific reports in a format and containing such information as
         United HealthCare reasonably requests; provided in no event shall PBM
         be required to incur costs substantially in excess of expenses incurred
         by the PBM industry generally to provide such reports. This reporting
         shall include PBM's EXPERxT and Standard PLUS Reports and reports
         pursuant to EXHIBIT A.

         3.14.    COORDINATION OF BENEFITS. When United HealthCare provides
         required information, PBM agrees to process Level I and II coordination
         of benefits in accordance with PBM's coordination of benefits rules.

         3.15.    HEALTH MANAGEMENT PROGRAM. PBM agrees to provide Health
         Management Programs to Covered Persons at United HealthCare's option.
         Health Management Programs developed during the term of this Agreement
         by PBM shall be made available to United HealthCare. ***

         3.16.    PHYSICIAN-BASED PHARMACEUTICAL CARE APPLICATION INFORMATION
         SYSTEM. *** This systems program shall be a knowledge-based system
         for physicians which includes but is not limited to PDL compliance
         and drug compatibility capabilities.

         3.17.    DEMAND MANAGEMENT SERVICES. PBM agrees to utilize reasonable
         efforts to contract exclusively with United HealthCare for Demand
         Management Services by the Commencement Date. ***

         3.18.    ***

         3.19.    NATIONAL ACCOUNTS. The parties agree to use reasonable
         commercial efforts to work together to increase joint pharmacy National
         Account business. United HealthCare agrees to utilize PBM as United
         HealthCare's exclusive PBM for National Accounts to the extent required
         under SECTION 9. ***

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



         3.20.    SERVICE PERFORMANCE STANDARDS. United HealthCare and PBM shall
         each use good faith and reasonable commercial efforts to perform their
         respective duties and obligations in a diligent, professionally
         responsible and efficient manner. The parties agree to cooperate with
         and assist each other as reasonably necessary in the performance of
         their respective duties and in developing timely responses to the needs
         of United HealthCare's business. Notwithstanding the general and
         specific Service Performance Standards and Guarantees applicable to PBM
         identified in EXHIBIT B, PBM shall perform the services for which it is
         responsible under this Agreement using the same degree of skill and
         care in such performance as a prudent person engaged in pharmacy
         benefit management services would use under substantially similar
         circumstances in the management of a similar pharmacy benefit
         management business of United HealthCare's magnitude. PBM agrees to
         accept the Service Performance Standards and Guarantees set forth in
         EXHIBIT B, including the dollars which shall be at risk should PBM's
         aggregate performance or guarantees be below the indicated targets. PBM
         shall provide to United HealthCare: (a) monthly or quarterly reports as
         applicable of PBM's performance; and (b) annual statistics, within
         ninety (90) days of the end of the calendar year, demonstrating whether
         PBM met the Service Performance Standards and Guarantees described in
         EXHIBIT B. At the same time PBM provides such statistics to United
         HealthCare, PBM shall reimburse United HealthCare any monies owed
         because of PBM's failure to meet such Service Performance Standards and
         Guarantees.

         3.21.    INSURANCE. PBM shall procure by the Effective Date and shall
         maintain, at its own expense: (a) professional liability insurance in
         the amount of $5,000,000.00 per occurrence and $10,000,000.00 annual
         aggregate including coverage for errors and omissions; (b) general
         liability insurance in the amount of $1,000,000.00 per each occurrence
         and $3,000,000.00 annual aggregate; and (c) umbrella/excess liability
         insurance in the amount of $10,000,000.00 each occurrence and
         aggregate. United HealthCare must be named as an "additional insured"
         on the policies referenced above for claims affecting United
         HealthCare's interests.

         3.22.    GUARANTY. PBM's and United HealthCare's parent corporations
         will guaranty the fulfillment of all of the parties' financial and
         other obligations by the delivery of a fully executed Guaranty
         Agreement in the form set forth at ATTACHMENT 1 and ATTACHMENT 2.

         3.23.    CLAIMS AND REGULATORY INQUIRIES. PBM shall promptly, within
         ten (10) days, provide information to United HealthCare about all
         non-routine inquiries by regulatory departments, pharmaceutical
         manufacturers, attorneys, Covered Persons, or other individuals or
         entities with respect to PBM's services pursuant to this Agreement
         including but not limited to the denial of any claims or any causes of
         action.



         3.24.    ***

SECTION 4.        OBLIGATIONS OF UNITED HEALTHCARE

         4.1.     OBLIGATIONS OF UNITED HEALTHCARE.

                  4.1.1.   United HealthCare will be the entity that contracts
                  with Health Plans and non-Health Plans related to the services
                  provided under this Agreement. Non-Health Plans include but
                  are not limited to entities, groups, competitors and
                  individuals. Such agreements between United HealthCare and
                  Health Plans and non-HealthPlans may provide for additional
                  services by United HealthCare and shall make provision for
                  fees and other terms that United HealthCare, in its
                  discretion, determines to establish.

                  4.1.2.   United HealthCare agrees to provide information
                  reasonably needed by PBM to administer its responsibilities
                  under this Agreement including (a) Benefit Contract and
                  Pharmacy Rider documents; (b) timely eligibility and
                  enrollment data on Covered Persons; (c) specific United
                  HealthCare customer information and needs; (d) participating
                  pharmacy information when PBM's pharmacy network is not
                  utilized or is used in addition to another participating
                  pharmacy network; (e) patient identifiable prescription drug
                  claims (including prescription drug claims from prior pharmacy
                  benefit management vendors); and (f) patient identifiable
                  medical claims reasonably necessary for PBM to implement and
                  operate its clinical management programs for United
                  HealthCare. Information shall be provided in a mutually
                  agreeable format.

                  4.1.3.   United HealthCare or Payor shall be solely
                  responsible for drafting United HealthCare's Benefit Contract
                  and Pharmacy Rider.

                  4.1.4.   United HealthCare shall identify its targeted
                  pharmacy growth and benefit objectives on at least an annual
                  basis and provide such objectives to PBM.

         4.2.     CLAIMS PAYMENT. United HealthCare shall establish a bank
         account(s) (the "Program Account") from which PBM will make claims
         payments as set forth below, using United HealthCare check stock.
         United HealthCare will pay PBM Administrative Fee payments, as set
         forth below through Automated Clearing House transfer. Banking
         arrangements may change from time to time subject to the mutual
         agreement of the parties.

                  4.2.1.   CLAIMS. PBM shall provide United HealthCare with a
                  bi-weekly consolidated statement of expected payments to be
                  made from the Program Account for services provided by PBM
                  under the Program during such claim cycle ***

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



                  4.2.2.   ADMINISTRATIVE FEES. PBM will provide United
                  HealthCare with an Administrative Fee statement in accordance
                  with PBM's four (4) week administrative fee cycle  ***
                  Within two (2) days after receipt of each statement from PBM
                  as set forth in this SECTION 4.2.2 above, United HealthCare
                  shall transfer such funds via Automated Clearing House
                  transfer.

         4.3.     REGULATORY COMPLIANCE. United HealthCare shall (a) maintain
         all material federal, state, and local licenses that are reasonably
         required to operate its business; (b) comply with all material
         applicable statutes and regulations; and, (c) make reasonable
         commercial efforts to cause Health Plans to comply with (a) and (b).

         4.4.     INSURANCE. United HealthCare agrees to maintain adequate
         insurance related to the operation of its business and its obligations
         under the Agreement.

         4.5.     CLAIMS AND REGULATORY INQUIRIES. United HealthCare shall
         promptly provide information to PBM within ten days about all
         non-routine inquiries by regulatory departments, pharmaceutical
         manufacturers, Covered Persons, or other individuals or entities with
         respect to the services provided by PBM under this Agreement.

         4.6.     MINIMUM PDL ENROLLMENT. United HealthCare agrees that it
         shall maintain a minimum of *** Health Plan Covered Persons and ***
         non-Health Plan Covered Persons receiving services under this
         Agreement including participating in United HealthCare's PDL by
         January 1, 2001 and throughout the term of this Agreement. ***

SECTION 5.        MUTUAL OBLIGATIONS

         5.1.     PHARMACY STRATEGIC COUNCIL. United HealthCare and PBM shall
         create a Pharmacy Strategic Council ("Strategic Council"), the members
         of which shall be three or four representatives from and designated by
         each of United HealthCare and PBM. The Strategic Council shall meet no
         less frequently than quarterly throughout the term of this Agreement
         and shall be responsible for (a) overseeing the performance of the
         parties under this Agreement; (b) enhancing communication of decisions
         made by the parties or the Strategic Council, (c) resolving disputes as
         directed by this Agreement; and (d) establishing a forum for

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



         the discussion of common strategic objectives of United HealthCare
         and PBM. United HealthCare shall be responsible to convene meetings
         of the Strategic Council.

         5.2.     EXPENSES. Except as expressly set forth in this Agreement,
         each of the parties shall bear the expenses incurred by it in
         connection with its performance under this Agreement.

         5.3.     AUDITS.

                  5.3.1.   United HealthCare shall keep reasonable documentation
                  of all Covered Persons related to this Agreement. PBM shall
                  have the right to review such data at reasonable times upon
                  reasonable notice

                  5.3.2.   PBM shall maintain adequate medical, financial and
                  administrative records related to Program services in a manner
                  consistent with the standards of the community and in
                  accordance with all applicable statutes and regulations
                  including, but not limited to, reasonable documentation of all
                  the data of Covered Persons related to PBM's services under
                  this Agreement to determine that PBM is performing its
                  obligation under the Agreement and correctly billing United
                  HealthCare. United HealthCare shall have the right to review
                  such data at reasonable times and upon reasonable notice. If
                  any audit reveals an underpayment or overpayment by United
                  HealthCare to PBM such discrepancy will be reported to PBM and
                  PBM will respond within forty-five (45) days. Any amounts PBM
                  deemed payable as a result thereof shall be promptly repaid to
                  the appropriate party with accrued interest (whether or not
                  this Agreement has terminated). If the parties disagree on the
                  amount to be repaid, the matter shall be sent to the Strategic
                  Council. This obligation shall survive the expiration or
                  earlier termination of this Agreement.

                  5.3.3.   PBM's agreements with pharmaceutical manufacturers
                  are subject to confidentiality agreements. Any audit of PBM's
                  agreements with pharmaceutical manufacturers conducted
                  pursuant to this Agreement, shall be conducted by a third
                  party public accounting firm reasonably acceptable to PBM
                  whose audit department is a separate stand alone function of
                  its business, subject to execution of a confidentiality
                  agreement, and shall include only those portions of such
                  pharmaceutical manufacturer agreements as necessary to
                  determine PBM's compliance with SECTION 5.5.2 in respect to
                  PDL Rebates.

         5.4.     PREFERRED DRUG LIST. Beginning on the Commencement Date and
         continuing through the term of this Agreement, PBM shall administer the
         United HealthCare PDL or other formularies as developed by United
         HealthCare from time to time pursuant to the Benefit Contract, Pharmacy
         Rider and this Agreement. All Health Plans shall participate in the PDL
         unless otherwise agreed, in writing, by United HealthCare and PBM.
         United HealthCare agrees to make reasonable commercial efforts to have
         non-Health Plan business utilize this PDL.



                  5.4.1.   UNITED HEALTHCARE PREFERRED DRUG LIST. The Preferred
                  Drug List ("PDL") is a list that identifies those Federal Drug
                  Administration ("FDA") approved prescription drug products
                  that are preferred by United HealthCare for dispensing to
                  Covered Persons.

                           5.4.1.1. United HealthCare and its P&T Committee have
                           complete control in deciding what prescription drugs
                           are placed on the PDL from time to time.

                           5.4.1.2  . PBM shall have the right to present
                           clinical data and rationale to the P&T Committee in
                           conjunction with its evaluation of prescription
                           drugs, but shall not be a voting member of the P&T
                           Committee.

                  5.4.2.   PREFERRED DRUG LIST COMPLIANCE. United HealthCare has
                  in effect certain Program features designed to promote
                  prescribing of PDL drugs by participating providers,
                  dispensing of PDL drugs by Participating Pharmacies, and
                  awareness of the advantages of the PDL by Covered Persons.
                  Such features include, but are not limited to, incented
                  benefit plan designs and corresponding levels of Copayments.
                  United HealthCare shall notify PBM, in advance, of any
                  proposed Program modifications that are reasonably anticipated
                  to have a material effect on PDL compliance. Additionally,
                  United HealthCare shall participate in PBM's formulary
                  communications programs, which may include communications with
                  United HealthCare Covered Persons, Participating Pharmacies
                  and/or physicians, and financial incentives to Participating
                  Pharmacies for their participation in the PDL. PBM shall
                  notify United HealthCare, in advance, of all PDL
                  communications programs. United HealthCare shall approve and
                  may make reasonable changes to the content of such PDL
                  communication programs before they are provided to the above
                  United HealthCare groups and individuals.

                  5.4.3.   EXCLUSIVE PDL ADMINISTRATION. Beginning on the
                  Commencement Date, United HealthCare agrees that PBM will be
                  the exclusive administrator of the United HealthCare PDL for
                  those entities covered by the exclusivity requirements of
                  SECTION 9 of this Agreement. After the Commencement Date,
                  United HealthCare agrees not to accept any funds the receipt
                  of which would influence the selection of prescription drugs
                  for inclusion on United HealthCare's PDL without the express
                  written consent of PBM.

         5.5.     PDL REBATE PROGRAM. Pursuant to agreements entered into
         between PBM and certain pharmaceutical manufacturers ("Manufacturer
         Agreements"), PBM receives PDL Rebates from certain drug
         manufacturers as a result of the inclusion of such manufacturer's
         branded products on the PDL ("PDL Rebates"). *** United HealthCare
         acknowledges that PBM also receives and retains additional rebates
         and/or fees from certain manufacturers which may take into account
         various factors including the utilization of certain drugs within
         their respective

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



         therapeutic categories for PBM's book of business in aggregate as a
         result of various commitments, services and programs including, but
         not limited to, formularies, e.g. cost effective, incentive, volume,
         and market-share rebates.

                  5.5.1.   ***

                  5.5.2.   GOOD FAITH REBATE NEGOTIATIONS AND DISTRIBUTION.
                  ***

                  5.5.3.   CUSTOMER ERISA REQUIREMENTS. As part of the standard
                  Administrative Fee, PBM agrees to provide a report to United
                  HealthCare, which discloses ERISA required information about
                  rebates for United HealthCare customers. PBM agrees to assist
                  United HealthCare as reasonably requested in providing
                  disclosure information to each of its self-insured customers.
                  PBM acknowledges that as required by ERISA, United
                  HealthCare's self-insured customers retain the right to
                  terminate use of the PDL if customer does not agree with a PDL
                  selection.

                  5.5.4.   DRUG FORMULARY ONLY ADMINISTRATION. PBM shall, at
                  United HealthCare's request, provide drug formulary only
                  rebate administration for no additional fee for pharmacy
                  claims processed by other entities, if such business qualifies
                  for PDL Rebates. Such entities shall comply with PBM's data
                  format requirements and processes. The PDL Rebate Guarantee
                  shall not apply to Drug Formulary Only accounts.

                  5.5.5.   GOVERNMENT AND OTHER ACTIONS. In the event any
                  government action, including a change in statute or
                  regulation or a change in the interpretation of statute or
                  regulation that has a material adverse affect on the
                  availability of PDL Rebates, parties shall negotiate in
                  good faith *** to reflect the effect of such event.

         5.6.     CONVERSION COSTS AND SERVICES. It is the intent of this
         Agreement that PBM shall provide the majority of services required to
         convert United HealthCare's present pharmacy benefit management service
         from its current vendor to PBM. The parties agree that such costs for
         conversion services are included in the Administrative Fee. The
         conversion services provided by PBM shall include, but are not limited
         to: (a) communications to Covered Persons, physicians, pharmacies; (b)
         group training of United HealthCare pharmacy, sales and other staff;
         (c) development of Covered Person materials; (d) required modification
         of PBM's information systems; (e) development of the Minnesota
         Dedicated Pharmacy Management Unit; (f) analytical support for the
         conversion of models and tools for rebates, networks and guarantees;
         and (g) printing of physician and Covered Person PDLs. United
         HealthCare's only responsibility for conversion costs and services is
         limited to postage, pharmacy management

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



         implementation leadership, internal United HealthCare
         communications, limited internal United HealthCare information
         system programming, state filings, and servicing of customer calls
         coming directly into United HealthCare. The parties agree that if
         the conversion to PBM services results in unanticipated problems,
         the parties shall commit such additional resources, as mutually
         agreed, in order to implement this program in accordance with the
         terms of this Agreement.

SECTION 6.        CONFIDENTIALITY

         6.1.     CONFIDENTIAL AND PROPRIETARY INFORMATION. In fulfilling the
         objectives of this Agreement, United HealthCare and PBM may provide to
         each other or learn (directly or indirectly) certain information which
         a party considers to be confidential or proprietary ("Confidential
         Information"). Confidential Information shall include, without
         limitation, information relating to Covered Person and provider
         identities; reimbursement procedures; claims adjudication procedures;
         software and financial systems; the specific financial sections and
         provisions, specific operational aspects, financial guarantees
         contained in this Agreement, and other information relating to each
         party's business which is not generally available to the public. Each
         party's Confidential Information shall also include confidential,
         proprietary information which a third party has disclosed to a party,
         and which such party is obligated to maintain as confidential.
         Notwithstanding the foregoing, PBM and United HealthCare acknowledge
         the other party's obligation to provide its pharmaceutical
         manufacturers and customers with information generally regarding this
         Agreement and consistent with the foregoing agrees that such parties
         may disclose generally the terms of this Agreement.

                  6.1.1.   Neither party shall have any obligation to disclose
                  its Confidential Information to the other party, unless such
                  an obligation is set forth elsewhere in this Agreement.

                  6.1.2.   Each party agrees to maintain the secrecy of and not
                  to use or disclose the other party's Confidential Information,
                  except as required in order for a party to perform under this
                  Agreement. A party may disclose the other party's Confidential
                  Information only to the receiving party's directors, officer,
                  employees, agents and representatives (collectively, the
                  "Representatives"), but only if a Representative needs to know
                  the Confidential Information in order for the receiving party
                  to perform under this Agreement. The parties agree to inform
                  their Representatives of the confidential nature of the
                  disclosing party's Confidential Information, and each party
                  shall require any Representative, who is not an employee of
                  the receiving party to sign an appropriate confidentiality
                  agreement to protect the disclosing party's Confidential
                  Information from unauthorized use or disclosure. Each party
                  shall direct its Representatives to treat the other party's
                  Confidential Information confidentially, and not to use it,
                  other than to perform under this Agreement. Each party shall
                  be responsible for its Representatives' use and disclosure of
                  the other party's Confidential Information.



                  6.1.3.   The restrictions in this SECTION 6.1 shall not apply
                  to: (a) information which is or becomes generally available to
                  the public, other than as a result of a disclosure by the
                  receiving party; (b) information a party obtains from a third
                  party which has no obligation to keep the information
                  confidential; (c) information which a party had in its
                  possession prior to receiving Confidential Information from
                  the disclosing party; (d) information which is independently
                  developed by a party without reference to the Confidential
                  Information disclosed by the other party; or (e) information
                  required to be disclosed by law, subject to compliance with
                  SECTION 6.1.4.

                  6.1.4.   The parties agree that if a party is required (by
                  subpoena, civil investigative demand or similar process) to
                  disclose the other party's Confidential Information, the
                  disclosing party shall notify the other party of the request
                  or requirement so that the other party may seek an appropriate
                  protective order or waive compliance with the sections or
                  provisions of this Agreement. The parties agree to exercise
                  their commercially reasonable efforts to assist each other in
                  obtaining a protective order or other reliable assurance that
                  confidential treatment will be accorded the Confidential
                  Information.

                  6.1.5.   Upon termination of this Agreement each party will
                  immediately discontinue use of the other party's Confidential
                  Information, and shall return the other party's Confidential
                  Information to it, or destroy the other party's Confidential
                  Information in its possession or control. However, each party
                  may retain the other party's Confidential Information to the
                  extent such Confidential Information has been used in or
                  integrated into reports, studies, analyses, compilations or
                  other documents in the receiving party's possession or
                  control. Any oral Information will continue to be subject to
                  the terms of this letter agreement. The parties agree that the
                  Confidentiality obligations of this SECTION 6 shall survive
                  termination of this Agreement.

         6.2.     PRIVACY OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.
         United HealthCare and PBM will maintain the privacy and confidentiality
         of all individually identifiable information regarding Covered Persons
         and non-Covered Persons in accordance with all applicable statutes and
         regulations. PBM and United HealthCare shall require all employees to
         comply with this section. PBM agrees that all Covered Person
         information provided to PBM by United HealthCare belongs exclusively to
         United HealthCare.

         6.3.     UNITED HEALTHCARE'S DATABASE. Subject to SECTION 6.4 below,
         PBM agrees that all data of United HealthCare and its affiliates,
         including but not limited to Covered Person, customer, and provider
         related data, which is in PBM's possession, whether obtained by PBM in
         the course of providing services for United HealthCare or as a result
         of a data transfer between United HealthCare and PBM, belongs solely to
         United HealthCare. PBM has the right to possess and use such data only
         to the extent permitted by contracts between the parties or as
         otherwise provided in this Agreement subject to applicable legal
         restrictions. All information contained in United HealthCare's database
         and



         systems belongs exclusively to United HealthCare. PBM shall not
         have direct access to United HealthCare's database and systems without
         signing a separate agreement with United HealthCare. PBM and United
         HealthCare recognize and agree that only information necessary for PBM
         performance under the Agreement shall be supplied by United HealthCare
         to PBM and PBM agrees that such data belongs exclusively to United
         HealthCare.

         6.4      PBM USE OF DATA. Notwithstanding the foregoing provisions of
         this SECTION 6, PBM may incorporate prescription data into PBM's
         prescription database when that database is used by PBM or provided to
         others for research, statistical, marketing, sales tracking or similar
         purposes. PBM agrees that if such prescription data is identifiable as
         to (a) Covered Persons, (b) employers and/or customers, and/or (d)
         United HealthCare, such identifiable information will be deleted or
         encrypted before it is provided to others. This section only applies to
         PBM's use of prescription data and does not apply to medical data.


SECTION 7.        INTELLECTUAL PROPERTY

         7.1.     Any Intellectual Property developed solely by PBM without
         using United HealthCare's Confidential Information shall remain the
         property of PBM. United HealthCare's right to use such PBM Intellectual
         Property shall be limited to those permitted by this Agreement or as
         otherwise agreed to in writing by the parties.

         7.2.     Any Intellectual Property developed solely by United
         HealthCare, without utilizing PBM's Confidential Information shall
         remain the property of United HealthCare. PBM's right to use such
         Intellectual Property shall be limited to those permitted by this
         Agreement or as otherwise agreed to in writing by the parties.

         7.3.     The parties agree that any Intellectual Property or work
         product: (a) created jointly by the parties; or (b) created by PBM
         under this Agreement; or (c) created by PBM upon United HealthCare's
         request (the "Work Product"), shall be the joint property of PBM and
         United HealthCare.


SECTION 8.        YEAR 2000 WARRANTY

PBM and United HealthCare warrant that (a) the goods and services to be provided
under this Agreement are in a state of Year 2000 Compliance, (b) the delivery of
the goods or services provided under this Agreement to parties will not be
adversely affected by Year 2000 Compliance (including without limitation the
Year 2000 Compliance of parties' information and/or operating systems or those
of any third parties that assist parties in the fulfillment of its obligations
under this Agreement); (c) the goods or services provided under this Agreement
to the parties will not affect or impair the Year 2000 Compliance of the parties
or any third party that has a business relationship with parties; and (d) The
parties have taken all necessary or appropriate steps to insure that it is in
compliance with the foregoing warranties. "Year 2000 Compliance" means the
ability of information or other systems to: (x) record, store, process, provide,
and insert true and accurate dates and calculations for dates including and
following January



1, 2000; and (y) process records containing dates after January 1, 2000; and
(z) be interoperable in such respects with other systems used by the parties
PBM, the PBM's parties' vendors of any kind, or the parties, including
without limitation those which may deliver records to, receive records from
or otherwise interact with the goods or services provided by the parties.

SECTION 9.        EXCLUSIVITY

         9.1      Except as defined in SECTION 9 and its subparts, United
         HealthCare Services, Inc. agrees that it shall not enter into a
         contract, or any other similar arrangement, for pharmacy benefit
         management services with a third party other than PBM with respect to
         services beginning with the Commencement Date and continuing until the
         term of this Agreement expires or until the Agreement is terminated.

         9.2      This exclusivity section does not apply to any entities who:
         (a) are acquired by or merged with United HealthCare Services, Inc. and
         its affiliates and subsidiaries after this Agreement is executed; and
         (b) have a contractual relationship with another pharmacy benefit
         management company, at the time this Agreement is executed. The parties
         agree that in no event will United HealthCare be required to terminate
         another pharmacy benefit management vendor prior to the expiration of
         such vendor's contract. United HealthCare agrees to convert any such
         entity to coverage under this Agreement as soon as said entity's
         contract with such other pharmacy benefit manager expires or can be
         reasonably terminated without the payment of any additional fees,
         fines, penalties, or damages. United HealthCare shall use its
         reasonable commercial efforts to include such entities under this
         Agreement. Within sixty (60) days after execution of this Agreement,
         United HealthCare shall provide PBM with the name of any such entity
         that has a contractual relationship in effect with another pharmacy
         benefit manager, the termination date of said contract and the
         approximate number of persons covered under such contract.

         9.3      Notwithstanding the foregoing, United HealthCare shall not be
         required to include government-defined benefit programs or any entity
         for which United HealthCare provides management or administrative
         services but does not own a controlling interest unless such entity
         agrees to utilize the services contemplated by this Agreement.

         9.4      The parties acknowledge and agree that United HealthCare may
         not be able to transition all Covered Persons and participating Health
         Plans to PBM: (a) on the Commencement Date; and/or (b) immediately in
         the event of an acquisition, merger or similar transaction that occurs
         prior to or during the term of this Agreement. The parties agree that a
         reasonable transition of Covered Persons and participating Health Plans
         related to (a) and (b) of this section shall not be considered a breach
         of this SECTION 9 or of this Agreement. Notwithstanding the foregoing,
         United HealthCare shall transition all existing Health Plans that will
         be covered under this Agreement within a six (6) month period of the
         Commencement Date unless otherwise mutually agreed to by the parties.
         This is



         not meant to restrict United HealthCare's ability to add other
         Health Plans and non-Health Plans during the term of this Agreement.


SECTION 10.         RENEGOTIATION DUE TO SUBSTANTIAL CHANGE

In the event of a Substantial Change the parties agree to renegotiate in good
faith so as to reflect as nearly as possible the economic factors that were the
basis for this Agreement prior to the Substantial Change. In the event such
renegotiations do not result in a mutually agreeable economic solution or the
parties are not able to agree as to whether a Substantial Change has occurred,
such issue shall be submitted pursuant to the dispute resolution procedure set
forth in SECTION 13. 6.


SECTION 11.       INDEMNIFICATION

         11.1.    United HealthCare agrees to indemnify and hold PBM, its
         subsidiaries and affiliates, and their respective officers, directors,
         agents and employees harmless from and against any and all liabilities,
         losses, proceedings, actions, damages, claims or expenses of any kind,
         including reasonable attorneys' fees, which result from (a) a breach by
         United HealthCare of any of its obligations under this Agreement or (b)
         the negligence or willful acts or omissions by United HealthCare, its
         agents, directors, officers, or employees, in connection with the
         representations, duties and obligations of United HealthCare under this
         Agreement.

         11.2.    PBM agrees to indemnify and hold United HealthCare, its
         subsidiaries and affiliates, and their respective officers, directors,
         agents and employees harmless from and against any and all liabilities,
         losses, proceedings, actions, damages, claims or expenses of any kind,
         including reasonable attorneys' fees, which result from (a) a breach by
         PBM of any of its obligations under this Agreement or (b) the
         negligence or willful acts or omissions by PBM, its agents, directors,
         officers, or employees, in connection with the representations, duties
         and obligations of PBM under this Agreement.


SECTION 12.       TERM AND TERMINATION

         12.1.    TERM. The term of this Agreement is for the period commencing
         on the Effective Date and ending December 31, 2005, with performance
         beginning on the Commencement Date, unless terminated earlier as
         outlined in SECTION 12.2.

         12.2.    TERMINATION. This Agreement may be terminated as follows:

                  12.2.1.  By either party, after a ten day notice period, in
                  the event of a payment default, unless such default is cured
                  within such notice period, unless the defaulting party is able
                  to give assurances to the other party's reasonable
                  satisfaction.



                  12.2.2.  By either party, effective 30 days after not less
                  than 60 days written notice and cure period in the event of a
                  material breach other than a payment default of this Agreement
                  by the other party.

                  12.2.3.  By either party, effective immediately upon provision
                  of written notice to the other party, if the other party has
                  become insolvent or has been dissolved or liquidated, or makes
                  a general assignment for the benefit of creditors or has a
                  receiver appointed for a substantial portion of its assets.

                  12.2.4.  Automatically and without any notice or other action
                  on the part of either party if either party files, or has
                  filed against it, a petition in bankruptcy and such petition
                  is not dismissed within 60 days of the filing unless the party
                  which is not subject to such petition elects to waive such
                  termination prior to the expiration of such 60 day period.

                  12.2.5.  By either party immediately due to loss of insurance
                  or inability to self-insure as required under this Agreement.

                  12.2.6.  By United HealthCare, effective at a time reasonable
                  to transferring the pharmacy management services to a new
                  vendor but no later than 180 days after notice to PBM, if a
                  change of control of PBM occurs. For purposes of this Section,
                  "Change of Control" means: (a) any transaction or series of
                  transactions that cause 50% or more of the stock of PBM or
                  United HealthCare, as the case may be, to be held by
                  individuals or entities who are not stockholders of PBM or
                  United HealthCare, as the case may be, on the date hereof; or
                  (b) any sale of PBM assets or United HealthCare, as the case
                  may be, that are essential to the business of PBM or United
                  HealthCare, as the case may be; or (c) any merger where PBM or
                  United HealthCare, as the case may be, is not the surviving
                  entity.

         12.3.    UNITED HEALTHCARE CHANGE OF CONTROL. If during the term of the
         Agreement, there is a Change of Control of United HealthCare, as
         defined above, United HealthCare has the option to terminate the
         Agreement by providing PBM with ninety (90) days prior written notice
         and by paying to PBM within sixty days of termination date an amount
         equal to the aggregate payments that have been made to United
         HealthCare by PBM under Trend Guarantee and PDL Rebate Guarantee as
         addressed in the Financial Appendix. If any such termination occurs
         prior to payment by PBM of any Trend Guarantee or PDL Rebate Guarantee,
         United HealthCare shall pay to PBM within 60 days after such
         termination date an amount equal to the transition costs paid by PBM to
         United HealthCare pursuant to PROVISION 8 of the Financial Appendix.

         12.4.    INFORMATION TO COVERED PERSONS. PBM acknowledges the right of
         United HealthCare to inform Covered Persons of PBM's termination.

         12.5.    END OF TERM OR TERMINATION. In the event this Agreement is
         terminated for any reason prior to its expiration or upon the end of
         the term, PBM and United HealthCare shall cooperate reasonably with
         each other for up to a six



         month period following such termination or expiration to effect a
         quality, cost-effective and smooth transition of United HealthCare's
         business previously operated or managed by PBM to United HealthCare
         or United HealthCare's designee. ***

                  12.5.1.  ***

                  12.5.2.  ***

                           12.5.2.1 ***

                           12.5.2.2. ***

                           12.5.2.3. ***

                           12.5.2.4. ***

                  12.5.3.  ***

SECTION 13.       GENERAL PROVISIONS

         13.1.    NOTICES. All notices or other communications required or
         permitted hereunder shall be in writing and shall be delivered
         personally, by commercial overnight delivery service, by facsimile or
         sent by certified, registered or express air mail, postage prepaid, and
         shall be deemed given when so delivered personally, by overnight
         delivery service or by facsimile, or if mailed, five days after the
         date of mailing, addressed as follows:

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission pursuant to Rule 24b-2
     under the Securities Exchange Act of 1934, as amended.



                                      
        ---------------------------------------- -------------------------------------
        IF TO PBM:                               IF TO UNITED HEALTHCARE:
        ---------------------------------------- -------------------------------------
        Merck Medco Managed Care, L.L.C.         United HealthCare Services, Inc.
        100 Summit Avenue                        9900 Bren Road East, P.O. Box 1459
        Montvale, New Jersey  07645-1753         Minnetonka, Minnesota 55343
        Attention: Jim Cooper, Esq.              Attention:  David Lubben, Esq.
        General Counsel                          General Counsel
        Facsimile No. (201) 782-7878             Facsimile No. (612) 936-0044
        ---------------------------------------- -------------------------------------

        

         or to such other address or to such other person as may be designated
         by written notice given from time to time during the term of the
         Agreement by one party to the other.

         13.2.    RIGHT OF FIRST OFFER. Subject to such confidentiality
         arrangements as PBM may reasonably propose, PBM agrees to provide
         United HealthCare with reasonable prior notice of any event that might
         lead to a change of control of PBM (which shall include any sale of
         more than 10% of the voting securities to an entity not wholly owned by
         Parent. Any notice herein contemplated shall be given to the Chief
         Executive Officer or General Counsel of United HealthCare. Such advance
         notification shall be maintained strictly confidential to the Chief
         Executive Officer and General Counsel, except with the written consent
         of the person giving notification.

         13.3.    FORCE MAJEURE. Noncompliance with the obligations of this
         Agreement due to force majeure, laws or regulations of any government,
         war, civil commotion, destruction of production facilities and
         materials, fire, earthquake or storm, labor disturbances, shortage of
         materials, failure of public utilities or common carriers, and any
         other causes beyond the reasonable control of the applicable party,
         shall not constitute breach of contract.

         13.4.    ASSIGNMENT. United HealthCare may assign all or any of its
         rights and responsibilities under this Agreement to any entity
         controlling, controlled by or under common control with United
         HealthCare. United HealthCare may make such an assignment that is
         effective only after the party to which such rights or responsibilities
         are assigned (the "Assignee") no longer controls, is controlled by or
         is under common control of such party; provided, however, that any such
         entity is reasonably able to perform any responsibilities which it
         assumes. United HealthCare may assign its rights and responsibilities
         in such a way that both United HealthCare and Assignee share in the
         rights and responsibilities that, prior to such assignment, were solely
         those of United HealthCare. PBM may assign all or any of its rights and
         responsibilities under this Agreement to any entity controlling,
         controlled by, or under common control with such party. PBM and United
         HealthCare each acknowledge that persons and entities under contract
         with such party or in the case of United HealthCare, a Participating
         Plan, may perform certain administrative services under this Agreement.
         Other than above, United HealthCare and PBM agree that they shall not
         assign any of the rights and responsibilities under this Agreement
         without the prior written consent of the other party.



         13.5.    AMENDMENT. Any amendments to this Agreement shall require
         written approval of the parties.

         13.6.    DISPUTE RESOLUTION. Any controversy or claim arising out of or
         relating to this Agreement or a breach of the Agreement shall initially
         be submitted to the Strategic Council for resolution. The Strategic
         Council shall have the authority to: (a) waive the controversy, claim
         or breach; (b) designate specific corrective or alternative action; (c)
         set a time period for certain performance; (d) submit the matter to
         mediation; or (e) allow a party to litigate the issue. Any action taken
         by the Strategic Council shall be evidenced by a written notice to both
         parties. During the period of time in which such issues are being
         examined by the Strategic Council or are under mediation or litigation,
         the parties shall proceed diligently with the performance of their
         duties under this Agreement in a businesslike and efficient manner. In
         the event the Strategic Council cannot resolve the matter within sixty
         days or the matter is not one which must be submitted to the Strategic
         Council, then within a reasonable time, a party or the Strategic
         Council may submit the matter to mediation or litigation in
         Minneapolis, Minnesota.

         13.7.    RELATIONSHIP BETWEEN UNITED HEALTHCARE AND PBM. The
         relationship between United HealthCare and PBM is solely that of
         independent contractors and nothing in this Agreement or otherwise will
         be construed or deemed to create any other relationship, including one
         of employment, agency or joint venture.

         13.8.    INVALIDITY/GOVERNING LAW. If any section or provision of this
         Agreement is finally declared or found to be illegal or unenforceable
         by a court of competent jurisdiction, both parties shall be relieved of
         all obligations arising under such section or provision, but if capable
         of performance, the remainder of this Agreement shall not be affected
         by such declaration or finding.

         13.9.    ACCREDITATION COMPLIANCE. PBM agrees to provide United
         HealthCare with reasonable assistance and cooperation in meeting all
         accreditation standards, including but not limited to National
         Committee for Quality Assurance and Joint Commission, applicable to the
         services provided pursuant to this Agreement.

         13.10.   NAME, SYMBOL AND SERVICE MARK. During the term of this
         Agreement, PBM and United HealthCare agree that they shall not use each
         other's name, symbol or logo, or service mark for any purpose
         whatsoever including without limitation in connection with marketing or
         publications describing, explaining, or otherwise discussing the
         Program without the prior approval of the other party.

         13.11.   HEADINGS. The headings of the various sections herein are for
         convenience of reference only and shall not define, limit or otherwise
         affect any of the terms or sections or provisions hereof.

         13.12.   ORIGINAL AGREEMENT. The parties agree that they shall execute
         two identical originals of this Agreement. Each party shall retain one
         of the originals. Each identical original shall serve as an original of
         the Agreement but all such originals together shall constitute a single
         original contract.



         13.13.   GOVERNING LAW. This Agreement shall be governed by and
         construed in accordance with applicable Minnesota law without giving
         effect to conflict of law principle.

         13.14.   ENTIRE AGREEMENT. This Agreement and its Financial Appendix,
         Exhibits A and B, and Attachments 1 and 2 constitute the entire
         Agreement between the parties in regard to its subject matter.

         13.15.   REGULATORY APPROVAL. The parties agree and acknowledge that
         the terms of this Agreement may be subject to review by state
         regulators.

         13.16.   APPROVALS. Approvals required under this agreement shall not
         be unreasonably delayed or withheld.

         13.17.   ADDITIONAL AGREEMENTS. Upon request, PBM agrees to enter into
         an additional separate agreement with any United HealthCare affiliate
         receiving services hereunder reflecting the services received and
         obligations of such affiliate.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.


                                                     
UNITED HEALTHCARE SERVICES, INC.                        MERCK MEDCO MANAGED CARE, L.L.C.
9900 Bren Road East                                     100 Summit Avenue
Minnetonka, Minnesota  55343                            Montvale, New Jersey  07645-1753

By:________________________________                     By:________________________________

Date: ______________________________                    Date: ______________________________

EX-13

RESULTS OF OPERATIONS  UnitedHealth Group

2000 FINANCIAL PERFORMANCE HIGHLIGHTS

2000 was the strongest year in the history of UnitedHealth Group, resulting from
diversified business growth and continued productivity improvements. Financial
performance highlights include(1):
o    Record revenues of $21.1 billion, a 12% increase in continuing markets over
     1999.
o    Record operating earnings of $1.2 billion, up 27% over 1999, with each
     segment delivering strong year-over-year revenue and operating earnings
     advances.
o    Record net earnings applicable to common shareholders of $705 million, and
     diluted net earnings per common share of $2.10, representing increases over
     1999 of 25% and 32%, respectively.
o    Record cash flows of more than $1.5 billion generated from operating
     activities, an increase of 28% over 1999.
o    Return on shareholders' equity of 19.0%, up from 14.1% in 1999.

(1)Where applicable, 2000 and 1999 results exclude the effects of separate
   dispositions of UnitedHealth Capital investments.

Following is a five-year summary of selected financial data:



                                                            For the Year Ended December 31,
(in millions, except per share data)       2000         1999          1998         1997          1996
- ---------------------------------------------------------------------------------------------------------------------------
                                                                               
CONSOLIDATED OPERATING RESULTS

Revenues                                $21,122       $19,562       $17,355      $11,794      $ 10,074
Earnings (Loss) From Operations         $ 1,200       $   943       $ (42)(3)    $   742      $   581(4)
- ---------------------------------------------------------------------------------------------------------------------------
Net Earnings (Loss)                     $   736(1)    $   568(2)    $  (166)     $   460      $   356(4)
Net Earnings (Loss) Applicable
    to Common Shareholders              $   736       $   568       $  (214)(3)  $   431      $   327
- ---------------------------------------------------------------------------------------------------------------------------
Basic Net Earnings (Loss)
    per Common Share                    $   2.27      $  1.63       $ (0.56)     $  1.15      $  0.90
Diluted Net Earnings (Loss)
    per Common Share                    $   2.19(1)   $  1.60(2)    $ (0.56)(3)  $  1.13      $  0.88(4)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock Dividends per Share        $   0.02      $  0.02  $       0.02      $  0.02      $  0.02
- ---------------------------------------------------------------------------------------------------------------------------
Consolidated Cash Flows
    From Operating Activities           $  1,521      $ 1,189       $ 1,071      $   683      $  562
- ---------------------------------------------------------------------------------------------------------------------------


Consolidated Financial Condition
(As of December 31)
- ---------------------------------------------------------------------------------------------------------------------------
Cash and Investments                    $  5,053      $ 4,719       $ 4,424      $ 4,041      $3,453
Total Assets                            $ 11,053      $10,273       $ 9,675      $ 7,623      $6,997
Debt                                    $  1,209      $   991       $   708(5)   $     -      $    -
Convertible Preferred Stock             $      -      $     -       $    -5      $   500      $ 500
Shareholders' Equity                    $  3,688      $ 3,863       $ 4,038      $ 4,534      $3,823
Return on Shareholders' Equity              19.0      %  14.1%           na(3)      10.4%        9.2%(4)
- ---------------------------------------------------------------------------------------------------------------------------


Results of Operations should be read together with the accompanying Consolidated
Financial Statements and Notes.

(1) 2000 results include a $14 million net permanent tax benefit related to the
contribution of UnitedHealth Capital investments to the UnitedHealth Foundation
and a $27 million gain ($17 million after tax) related to a separate disposition
of UnitedHealth Capital investments. Excluding these items, net earnings and
diluted net earnings per common share were $705 million and $2.10 per share for
the year ended December 31, 2000.

(2) 1999 results include a net permanent tax benefit primarily related to the
contribution of UnitedHealth Capital investments to the UnitedHealth Foundation.
Excluding this benefit, net earnings and diluted net earnings per common share
were $563 million and $1.59 per share.

(3) Excluding the operational realignment and other charges of $725 million,
$175 million of charges related to contract losses associated with certain
Medicare markets and other increases to commercial and Medicare medical costs
payable estimates, and the $20 million convertible preferred stock redemption
premium from 1998 results, earnings from operations and net earnings applicable
to common shareholders would have been $858 million and $509 million, or $1.31
diluted net earnings per common share, and return on shareholders' equity would
have been 11.9%.

(4) Excluding the merger costs associated with the acquisition of HealthWise of
America, Inc. of $15 million ($9 million after tax) and the provision for future
losses on two multi-year contracts of $45 million ($27 million after tax), 1996
earnings from operations and net earnings would have been $641 million and $392
million, or $0.98 diluted net earnings per common share, and return on
shareholders' equity would have been 10.2%.

(5) During 1998, we issued debt totaling $708 million and redeemed $500 million
of convertible preferred stock. na-- not applicable



                                       19



2000 RESULTS COMPARED TO 1999 RESULTS

CONSOLIDATED FINANCIAL RESULTS

REVENUES
Revenues are comprised of premium revenue associated with insured products, fees
associated with management, administrative and consulting services, and
investment and other income.
    Consolidated revenues increased in 2000 to $21.1 billion. Strong and
balanced growth across all business segments was partially offset by transitions
in certain geographic and Medicare markets. Adjusted for the effects of these
market transitions, consolidated revenues increased approximately $2.2 billion,
or 12%, over 1999. Following is a discussion of 2000 consolidated revenue trends
for each of our three revenue components.

PREMIUM REVENUES Consolidated premium revenues in 2000 totaled $18.9 billion, an
increase of $1.4 billion, or 8%, compared with 1999. This increase was driven by
two primary factors: premium yield increases on UnitedHealthcare's commercial
insured business, and growth in individuals served. These increases were
partially offset by transitions in certain geographic and Medicare markets.
Adjusted for the effect of these market transitions, premium revenues increased
12% over 1999.

MANAGEMENT SERVICES FEE REVENUES Fee revenues in 2000 totaled $2.0 billion,
representing an increase of $171 million, or 10%, over 1999. The overall
increase in fee revenues is primarily the result of record growth in Uniprise's
multi-site customer base, growth in UnitedHealthcare's fee-based business,
modest price increases, and acquisitions and growth from our Specialized Care
Services and Ingenix businesses.

INVESTMENT AND OTHER INCOME Investment and other income during the year ended
December 31, 2000, totaled $232 million, representing an increase of $13 million
over 1999. Higher interest yields on investments in 2000 compared with 1999 were
largely offset by $34 million of net realized capital losses in 2000. Net
realized capital losses were $6 million in 1999.

MEDICAL COSTS
The combination of pricing and care coordination efforts is reflected in the
medical care ratio (medical costs as a percentage of premium revenues).
    Our consolidated medical care ratio decreased from 85.7% in 1999 to 85.4% in
2000. Excluding AARP business, on a year-over-year basis, the medical care ratio
decreased 30 basis points to 83.9%. Decreases in our year-over-year medical care
ratios are attributable to commercial net premium yield increases exceeding the
underlying increase in total benefit costs.
    On an absolute dollar basis, the increase in medical costs of $1.1 billion,
or 7%, over 1999 was driven by a combination of growth in individuals served
with insured products, medical cost inflation, benefit changes and product mix
changes.


                                       20




OPERATING COSTS
Operating costs as a percentage of total revenues (the operating cost ratio) was
16.7% in 2000, compared with 17.1% in 1999. This decrease was primarily driven
by productivity increases achieved through process improvement, technology
deployment and cost reduction initiatives, and by further leveraging the fixed
cost components of our infrastructure.
    Changes in revenue mix also affect the operating cost ratio. For our
fastest-growing businesses (Uniprise, Specialized Care Services and Ingenix),
most direct costs of revenue are included in operating costs, not medical costs.
Using a revenue mix comparable to 1999, the 2000 operating cost ratio would have
decreased 80 basis points to 16.3%.
    On an absolute dollar basis, operating costs increased by $177 million, or
5%, over 1999. This increase reflects the additional costs to support product
and technology development initiatives, and to support the 8% increase in
consolidated revenues in 2000, partially offset by the benefit of productivity
and technology improvements discussed above.

DEPRECIATION AND AMORTIZATION
Depreciation and amortization was $247 million in 2000 and $233 million in 1999.
This increase resulted primarily from increased levels of capital expenditures
to support business growth and technology enhancements, and the amortization of
goodwill and other intangible assets related to acquisitions.

INCOME TAXES
Our 2000 income tax provision includes nonrecurring tax benefits primarily
related to the contribution of UnitedHealth Capital investments to the
UnitedHealth Foundation. Excluding nonrecurring tax benefits, our effective
income tax rate was 37.5% in 2000 and 37.0% in 1999.

BUSINESS SEGMENTS

The following summarizes the operating results of our business segments for the
years ended December 31 (in millions):

REVENUES


                                                                                               Percent
                                                               2000              1999           Change
- ---------------------------------------------------------------------------------------------------------------------------

                                                                                          
Health Care Services                                       $ 18,696          $ 17,581                6%
Uniprise                                                      2,140             1,865               15%
Specialized Care Services                                       974               726               34%
Ingenix                                                         375               258               45%
Corporate and Eliminations                                   (1,063)             (868)              nm
- ---------------------------------------------------------------------------------------------------------------------------
  Consolidated Revenues                                    $ 21,122          $ 19,562                8%
- ---------------------------------------------------------------------------------------------------------------------------


EARNINGS FROM OPERATIONS

                                                                                               Percent
                                                               2000              1999           Change
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                          
Health Care Services                                       $    739          $    578               28%
Uniprise                                                        289               222               30%
Specialized Care Services                                       174               128               36%
Ingenix                                                          32                25               28%
- ---------------------------------------------------------------------------------------------------------------------------
  Total Operating Segments                                    1,234               953               29%
Corporate                                                       (34)              (10)              nm
- ---------------------------------------------------------------------------------------------------------------------------
  Consolidated Earnings from Operations                    $  1,200          $    943               27%
- ---------------------------------------------------------------------------------------------------------------------------


nm-- not meaningful



                                       21




HEALTH CARE SERVICES
The Health Care Services segment consists of the UnitedHealthcare and Ovations
businesses. UnitedHealthcare coordinates network-based health and well-being
services on behalf of local employers and consumers nationwide. Ovations, which
administers Medicare Supplement benefits on behalf of AARP, offers health and
well-being services for Americans age 50 and older.
    The Health Care Services segment posted record revenues of $18.7 billion,
representing an increase of $1.1 billion, or 6%, over 1999. This increase is
primarily attributable to premium yield increases on UnitedHealthcare's
commercial business and growth in individuals served in continuing markets,
partially offset by targeted pullbacks in certain geographic and Medicare
markets. Adjusted for the effects of these market transitions, Health Care
Services' revenues increased by 10% on a year-over-year basis.
    The Health Care Services segment contributed earnings from operations of
$739 million in 2000, an increase of $161 million, or 28%, over 1999. This
increase is primarily the result of improved margins on UnitedHealthcare's
commercial business and reduced operating costs as a percentage of revenues,
driven by process improvement, technology deployment and cost reduction
initiatives. Health Care Services' operating margin increased to 4.0% in 2000
from 3.3% in 1999.
    UnitedHealthcare's commercial medical care ratio improved to 84.1% in 2000
from 84.6% in 1999, driven by net premium yield increases in excess of
underlying medical costs. Commercial health plan premium rates are established
based on anticipated benefit costs, including the effects of medical cost
inflation, benefit changes and product mix.
    UnitedHealthcare's year-over-year Medicare enrollment decreased 7% as a
result of actions taken to better position this program for long-term success.
Effective January 1, 2000 and 2001, UnitedHealthcare withdrew its
Medicare+Choice product from targeted counties affecting 40,000 individuals and
56,000 individuals, respectively. These actions reduce Medicare enrollment, but
improve profitability in the long term relative to the cost of capital and
required resource management.
    The following table summarizes individuals served by UnitedHealthcare, by
major market segment and funding arrangement, as of December 31 (in thousands):



                                                                                 2000             1999
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                           
Commercial
  Insured                                                                       5,495            5,150
  Fee-based                                                                     1,927            1,745
- ---------------------------------------------------------------------------------------------------------------------------
    Total Commercial                                                            7,422            6,895(1)
Medicare                                                                          406              437
Medicaid                                                                          549              479
- ---------------------------------------------------------------------------------------------------------------------------
    Total UnitedHealthcare                                                      8,377            7,811
- ---------------------------------------------------------------------------------------------------------------------------


(1) Excludes individuals served through UnitedHealthcare platforms located in
Puerto Rico and Pacific Coast regions. As of December 31, 2000, UnitedHealthcare
had substantially transitioned from these markets. Including these markets,
individuals served at December 31, 1999 were:


- --------------------------------------------------------------------------------
                                         
Commercial
   Insured                                  5,650
   Fee-based                                1,887
- --------------------------------------------------------------------------------
      Total Commercial                      7,537



                                       22


UNIPRISE
Uniprise provides network-based health and well-being services,
business-to-business transactional infrastructure services, consumer
connectivity, and technology support for large employers and health plans.
Uniprise revenues of $2.1 billion increased by $275 million, or 15%, over 1999.
This increase was driven primarily by continued growth in Uniprise's large
multi-site customer base, which had an 11% increase in individuals served, as
well as changes in funding arrangements selected by certain customers and price
increases on fee-based business. Uniprise served 6.7 million and 6.0 million
individuals as of December 31, 2000 and 1999, respectively. Uniprise's earnings
from operations grew by $67 million, or 30%, over 1999 as a result of the
increased revenues, and operating margin improved to 13.5% in 2000 from 11.9% in
1999. As revenues have increased, Uniprise has expanded its operating margin by
improving productivity through process improvement initiatives, increased
deployment of technology and by further leveraging the fixed cost components of
its infrastructure.

SPECIALIZED CARE SERVICES
Specialized Care Services is an expanding portfolio of health and well-being
companies, each serving a specialized market need with a unique blend of
benefits, provider networks, services and resources. Specialized Care Services'
revenues of $974 million increased by $248 million, or 34%, over 1999. This
increase was driven primarily by an increase in the number of individuals served
by United Behavioral Health, its mental health and substance abuse services
business, and the acquisitions of Dental Benefit Providers, Inc. in June 1999
and National Benefit Resources, Inc. in November 1999. Earnings from operations
of $174 million increased by 36% compared with 1999, commensurate with 2000
revenue growth. Specialized Care Services' operating margin improved from 17.6%
in 1999 to 17.9% in 2000.

INGENIX
Ingenix is a leader in the field of health care data and information, research
analysis and application, serving pharmaceutical companies, health insurers and
payers, care providers, large employers and governments. Revenues of $375
million increased by $117 million, or 45%, over 1999 driven by organic growth of
$54 million and 1999 acquisitions that broadened the business franchise in
clinical research and development, clinical marketing and data mining. Earnings
from operations of $32 million increased 28% over 1999. Operating margin
decreased to 8.5% in 2000 from 9.7% in 1999, principally as a result of
increased goodwill amortization expense associated with acquisitions.

CORPORATE
Corporate includes investment income derived from cash and investments not
assigned to operating segments and the company-wide costs associated with
process improvement initiatives. The decrease of $24 million in 2000 earnings
reflects a decline in the level of unassigned cash and investments and
associated investment income, primarily resulting from share repurchases and
incremental 2000 process improvement costs.




                                       23



1999 RESULTS COMPARED TO 1998 RESULTS

CONSOLIDATED FINANCIAL RESULTS

REVENUES
Consolidated revenues increased 13% in 1999 to $19.6 billion, reflecting
balanced growth across all business segments. Following is a discussion of 1999
consolidated revenue trends for each of our three revenue components.

PREMIUM REVENUES Consolidated premium revenues in 1999 totaled $17.6 billion, an
increase of $2.0 billion, or 13%, compared to 1998. This increase was primarily
driven by premium yield increases on UnitedHealthcare's commercial insured
business, growth in the number of individuals served by United Behavioral Health
and the acquisitions of HealthPartners of Arizona, Inc. and Dental Benefit
Providers, Inc.

MANAGEMENT SERVICES FEE REVENUES Management services fee revenues in 1999
totaled $1.8 billion, representing an increase of $203 million, or 13%, over
1998. The overall increase in management services fee revenues was primarily the
result of strong growth in Uniprise's multi-site customer base, price increases
in fee business, and acquisitions and growth from our Ingenix business.

INVESTMENT AND OTHER INCOME Investment and other income during the year ended
December 31, 1999, totaled $219 million, representing a decrease of $30 million
from 1998. This decrease is primarily the result of net realized capital losses
from the sale of investments in 1999 in contrast to net realized capital gains
in 1998, along with decreases in cash and investments and associated investment
income resulting from our stock repurchase activities and business acquisitions.
Rising interest rates during 1999 resulted in declines in the fair value of
fixed income investments, and we realized net capital losses of $6 million
during 1999. For the year ended December 31, 1998, realized net capital gains
were $26 million.

MEDICAL COSTS
The consolidated medical care ratio decreased to 85.7% in 1999 from 87.2% in
1998. Excluding the AARP business and the effects of 1998 special charges, on a
year-over-year basis, the medical care ratio decreased 10 basis points to 84.2%.
    On an absolute dollar basis, the increase in medical costs of $1.5 billion,
or 11%, over 1998 was driven by a combination of growth in individuals served
with insured products, medical cost inflation, benefit changes and product mix
changes.

OPERATING COSTS
Operating costs as a percentage of total revenues (the operating cost ratio) was
17.1% in 1999, consistent with 1998. Operating cost reductions in 1999 were
partially offset by $39 million of incremental expenses in 1999 related to
process improvement initiatives and platform system conversions. On a comparable
revenue mix basis, the operating cost ratio would have decreased 30 basis points
to 16.8%.
    On an absolute dollar basis, operating costs increased by $379 million, or
13%, over 1998. This increase reflects the additional costs to support the
corresponding 13% increase in consolidated revenues in 1999, and the incremental
process improvement expenses described above.

DEPRECIATION AND AMORTIZATION
Depreciation and amortization was $233 million in 1999 and $185 million in 1998.
The increase in 1999 resulted from increased levels of capital expenditures in
1998 and 1999 to support business growth and technology enhancements and
amortization of goodwill and other intangible assets.



                                       24


BUSINESS SEGMENTS

The following summarizes the operating results of our business segments for the
years ended December 31 (in millions):


REVENUES                                                                                     PERCENT
                                                              1999              1998          CHANGE
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                         
Health Care Services                                       $17,581           $15,612              13%
Uniprise                                                     1,865             1,624              15%
Specialized Care Services                                      726               618              17%
Ingenix                                                        258               184              40%
Corporate and Eliminations                                    (868)             (683)             nm
- ---------------------------------------------------------------------------------------------------------------------------
  Consolidated Revenues                                    $19,562           $17,355              13%
- ---------------------------------------------------------------------------------------------------------------------------


EARNINGS FROM OPERATIONS                                                                     PERCENT
                                                              1999              1998(1)       CHANGE
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                         
Health Care Services                                       $  578             $  503              15%
Uniprise                                                      222                161              38%
Specialized Care Services                                     128                109              17%
Ingenix                                                        25                 20              25%
- ---------------------------------------------------------------------------------------------------------------------------
  Total Operating Segments                                    953                793              20%
Corporate                                                     (10)                65              nm
- ---------------------------------------------------------------------------------------------------------------------------
  Consolidated Earnings from Operations                    $  943             $  858              10%
- ---------------------------------------------------------------------------------------------------------------------------


(1) Excludes $725 million of operational realignment and other charges and $175
million of charges related to contract losses associated with certain Medicare
markets and other increases to commercial and Medicare medical costs payable
estimates.

nm--not meaningful

HEALTH CARE SERVICES
The Health Care Services segment posted revenues of $17.6 billion, representing
an increase of $2.0 billion, or 13%, over 1998. This increase was primarily
attributable to UnitedHealthcare's net premium yield increases on commercial
business and the acquisition of HealthPartners of Arizona, Inc.
    The Health Care Services segment contributed earnings from operations of
$578 million in 1999, an increase of $75 million, or 15%, over 1998. This
increase is primarily due to growth in the average number of individuals served
by UnitedHealthcare during 1999 and reduced operating costs as a percentage of
revenues driven by our process improvement initiatives.
    UnitedHealthcare's commercial medical care ratio improved to 84.6% in 1999
from 84.9% in 1998 (excluding 1998 special operating charges), driven by net
premium yield increases in excess of underlying medical costs.



                                       25



     The following table summarizes individuals served by UnitedHealthcare, by
major market segment and funding arrangement, as of December 31 (in
thousands)(1):


                                                                                1999            1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                         
Commercial
  Insured                                                                      5,150           5,141
  Fee-based                                                                    1,745           1,616
- ---------------------------------------------------------------------------------------------------------------------------
    Total Commercial                                                           6,895           6,757
  Medicare                                                                       437             482
  Medicaid                                                                       479             430
- ---------------------------------------------------------------------------------------------------------------------------
    Total UnitedHealthcare                                                     7,811           7,669
- ---------------------------------------------------------------------------------------------------------------------------



(1) Excludes individuals served through UnitedHealthcare platforms in Puerto
Rico and Pacific Coast regions. The company has transitioned these markets.

Uniprise

Uniprise's revenues increased by $241 million, or 15%, over 1998 driven
primarily by continued growth in its large multi-site customer base, which had
an 11% increase in individuals served, and price increases on fee-based
business. Uniprise served 6.0 million individuals as of December 31, 1999, and
5.4 million individuals as of December 31, 1998. Uniprise's earnings from
operations grew by $61 million, or 38%, over 1998 as a result of the increased
revenues, ongoing process improvement initiatives and improved operating margins
on insured business.

SPECIALIZED CARE SERVICES
Specialized Care Services' revenues increased by $108 million, or 17%, over
1998. This increase was driven primarily by an increase in the number of
individuals served by United Behavioral Health, and the acquisition of Dental
Benefit Providers, Inc. in June 1999. Earnings from operations of $128 million
increased by 17% compared with 1998, commensurate with 1999 revenue growth.

INGENIX
Revenues increased by $74 million, or 40%, over 1998 primarily as a result of
acquisitions during the last half of 1998 and during 1999. Earnings from
operations of $25 million represented an increase of 25% over 1998.

CORPORATE
The decrease of $75 million in 1999 Corporate earnings was attributable to $39
million of incremental process improvement costs over 1998 levels, and a decline
in the level of unassigned cash and investments and associated investment
income, which resulted primarily from share repurchases and business
acquisitions.

OPERATIONAL REALIGNMENT AND OTHER CHARGES

In conjunction with our operational realignment initiatives, we developed and,
in the second quarter of 1998, approved a comprehensive plan (the Plan) to
implement our operational realignment. We recognized corresponding charges to
operations of $725 million in the second quarter of 1998, which reflected the
estimated costs to be incurred under the Plan. The charges included costs
associated with asset impairments; employee terminations; disposing of or
discontinuing business units, product lines and contracts; and consolidating and
eliminating certain claim processing operations and associated real estate
obligations.



                                       26



    Our accompanying financial statements include the operating results of
businesses and markets disposed of or discontinued, and markets we have exited
in connection with the operational realignment. The accompanying Consolidated
Statements of Operations include revenues and operating earnings (losses) from
businesses disposed of and markets exited for the years ended December 31, as
follows (in millions):



                                                               2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                       
Revenues                                                     $  312            $  689           $  964
Earnings (Loss) From Operations                              $    9            $  (41)          $  (52)
- ---------------------------------------------------------------------------------------------------------------------------


The table above does not include operating results from the counties where
UnitedHealthcare withdrew its Medicare product offerings effective January 1,
2000, and January 1, 2001. Annual revenues for 1999 from the counties exited
effective January 1, 2000, were approximately $230 million. Annual revenues for
2000 from the counties exited effective January 1, 2001, were approximately $320
million.
    During 2000, we finalized our agreement with Blue Shield of California to
transition approximately 210,000 individuals served by our California health
plan. Additionally, we transitioned approximately 75,000 individuals served by
our Oregon and Washington health plans to Premera BlueCross and LifeWise. These
actions conclude our planned transition to concentrate resources in the Pacific
Coast region on Uniprise national, multi-site customers and Specialized Care
Services customers. We have also transitioned out of the market in Puerto Rico.
The balances accrued in our operational realignment and other charges were
sufficient to cover expenses incurred in the sale and exit of our operations in
these markets.
    The operational realignment and other charges do not cover certain aspects
of the Plan, including new information systems, data conversions, process
re-engineering, temporary duplicate staffing costs as we consolidate processing
centers, and employee relocation and training. These costs are expensed as
incurred or capitalized, as appropriate. During 2000, 1999 and 1998, we incurred
expenses of approximately $57 million, $52 million and $13 million,
respectively, related to these activities.
    We expect to complete our realignment initiatives during 2001. Based on
current facts and circumstances, we believe our remaining accrued liability for
realignment initiatives of $65 million will be adequate to cover the costs to be
incurred in executing the remainder of the Plan.

FINANCIAL CONDITION AND LIQUIDITY AT DECEMBER 31, 2000

During 2000, we generated cash from operations of more than $1.5 billion, an
increase of $332 million, or 28%, over 1999. The increase in operating cash
flows resulted from an increase of $182 million in net income excluding
depreciation and amortization expense, working capital improvements of
approximately $57 million, and $93 million related to income tax benefits
resulting from employee stock option exercises.
    We maintained a strong financial condition and liquidity position, with cash
and investments of $5.1 billion at December 31, 2000. Total cash and investments
increased by $334 million since December 31, 1999, primarily resulting from
strong cash flows from operations partially offset by common stock repurchases.
    As further described under "Regulatory Capital and Dividend Restrictions,"
many of our subsidiaries are subject to various government regulations. At
December 31, 2000, approximately $327 million of our $5.1 billion of cash and
investments was held by non-regulated subsidiaries. Of this amount,
approximately $65 million was available for general corporate use, including
acquisitions and share repurchases. The remaining $262 million consists of
public and non-public equity securities primarily held by UnitedHealth Capital,
our venture and development capital business. Our operating cash flows and
financing capability also provide us with funds, as needed, for general
corporate use.
    As of December 31, 2000, we had $409 million of commercial paper
outstanding, with interest rates ranging from 6.6% to 6.9%. In July 2000, we
executed new credit arrangements supporting our commercial paper program for an
aggregate of $900 million. These credit arrangements are composed of a $450
million revolving facility expiring in July 2005, and a $450 million, 364-day
facility expiring in July 2001. We also have the capacity to issue approximately
$200 million of extendible commercial notes (ECNs). During 2000, we had no
amounts outstanding under our credit facilities or ECNs. During 2000, we also
issued $400 million of five-year 7.5% senior unsecured notes.


                                       27


    Our debt arrangements and credit facilities contain various covenants, the
most restrictive of which place limitations on secured and unsecured borrowings
and require us to exceed minimum interest coverage levels. We are in compliance
with the requirements of all debt covenants. Our senior debt is rated "A" by
Standard & Poor's and Fitch (formerly known as Duff & Phelps), and "A3" by
Moody's. Our commercial paper and ECN programs are rated "A-1" by Standard &
Poor's, "F-1" by Fitch, and "P-2" by Moody's.
    The remaining aggregate issuing capacity of all securities covered by shelf
registration statements for common stock, preferred stock, debt securities and
other securities is $850 million. We may publicly offer such securities from
time to time at prices and terms to be determined at the time of offering.
    Under the board of directors' authorization, we are operating a common stock
repurchase program. Repurchases may be made from time to time at prevailing
prices, subject to certain restrictions on volume, pricing and timing. During
the 12 months ended December 31, 2000, we repurchased 31.0 million shares at an
aggregate cost of $1.2 billion. Through December 31, 2000, we had repurchased
approximately 92.9 million shares for an aggregate cost of $2.6 billion since
the inception of the program in November of 1997. In December of 1998, we also
repurchased $500 million of preferred stock that was convertible into 20.2
million shares of common stock. As of December 31, 2000, we have board of
directors' authorization to purchase up to an additional 28.4 million shares of
our common stock.
    In October 2000, the board of directors declared a two-for-one split of the
company's common stock in the form of a 100 percent common stock dividend. This
dividend was issued on December 22, 2000, to shareholders of record as of
December 1, 2000. The accompanying consolidated financial statements have been
restated to reflect the share and per share effects of the common stock split.
    We expect our available cash and investment resources, operating cash flows
and financing capability will be sufficient to meet our current operating
requirements and other corporate development initiatives. A substantial portion
of our long-term investments (approximately $3.3 billion as of December 31,
2000) is classified as available for sale. Subject to the previously described
regulations, these investments may be used to fund working capital or for other
purposes.
    Currently, we do not have any other material definitive commitments that
require cash resources; however, we continually evaluate opportunities to expand
our operations. This includes internal development of new products and programs
and may include acquisitions.
    During 1999, we formed and initiated funding of the UnitedHealth Foundation.
Through December 31, 2000, we made contributions to the UnitedHealth Foundation
using a portion of our UnitedHealth Capital investments valued at approximately
$100 million on the dates contributed. The UnitedHealth Foundation is dedicated
to improving Americans' health and well-being by supporting consumer and
physician education and awareness programs, generating objective information
that will contribute to improving health care delivery, and sponsoring
community-based health and well-being activities.

REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS

Our operations are conducted through our wholly-owned subsidiaries, which
include health maintenance organizations and insurance companies. These
companies are subject to state regulations that, among other things, may require
the maintenance of minimum levels of statutory capital, as defined by each
state, and restrict the timing and amount of dividends and other distributions
that may be paid to their respective parent companies. Generally, the amount of
dividend distributions that may be paid by our regulated subsidiaries, without
prior approval by state regulatory authorities, is limited based on the entity's
level of statutory net income and statutory capital and surplus.

    The National Association of Insurance Commissioners has developed minimum
capitalization guidelines for health maintenance organizations, subject to
state-by-state adoption. Many states have adopted and other states will likely
adopt some form of these rules. We do not expect that further state adoptions or
implementations will require us to make significant incremental investments of
general corporate resources into regulated subsidiaries.




                                       28


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a financial instrument
caused by fluctuations in interest rates and equity prices.
    Approximately $4.8 billion of our cash and investments at December 31, 2000,
was invested in fixed income securities. We manage our investment portfolio
within risk parameters approved by our board of directors; however, our fixed
income securities are subject to the effects of market fluctuations in interest
rates. Assuming a hypothetical and immediate 1% increase or decrease in interest
rates applicable to our fixed income portfolio at December 31, 2000, the fair
value of our fixed income investments would decrease or increase by
approximately $140 million.

INFLATION

The national health care cost inflation rate exceeds the general inflation rate.
We use various strategies to mitigate the negative effects of health care cost
inflation, including setting commercial premiums based on anticipated health
care costs, coordinating care with various health care providers, and using
various health care cost containment measures. Specifically, health plans try to
control medical and hospital costs through contracts with independent providers
of health care services. Through these contracted care providers, our health
plans emphasize preventive health care, appropriate use of specialty and
hospital services, education and closing gaps in care.
    We believe our strategies to mitigate the impact of health care cost
inflation will be successful. However, other factors such as competitive
pressures, new health care and pharmaceutical product introductions, demands
from health care providers and consumers, applicable regulations or other
factors may affect our ability to control the impact of health care cost
increases.

LEGAL MATTERS

Because of the nature of our business, we are routinely subject to suits
alleging various causes of action. Some of these suits may include claims for
substantial non-economic or punitive damages. We do not believe that any such
actions, or any other types of actions, currently threatened or pending will,
individually or in the aggregate, have a material adverse effect on our
financial position or results of operations.

CAUTIONARY STATEMENT REGARDING "FORWARD-LOOKING" STATEMENTS

The statements contained in Results of Operations, and other sections of this
annual report to shareholders, include forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (the PSLRA).
When used herein, the words or phrases "believes," "expects," "anticipates,"
"intends," "will likely result," "estimates," "projects" or similar expressions
are intended to identify such forward-looking statements. Any of these
forward-looking statements involve risks and uncertainties that may cause the
company's actual results to differ materially from the results discussed in the
forward-looking statements. Statements that are not strictly historical are
"forward-looking" statements under the safe harbor provisions of the PSLRA.
Forward-looking statements involve known and unknown risks, which may cause
actual results and corporate developments to differ materially from those
expected. Factors that could cause results and developments to differ materially
from expectations include, without limitation: the effects of state and federal
regulations, the effects of acquisitions and divestitures, and other risks
described from time to time in each of UnitedHealth Group's SEC reports,
including quarterly reports on Form 10-Q, annual reports on Form 10-K and
reports on Form 8-K.


                                       29


CONSOLIDATED STATEMENTS OF OPERATIONS  United Health Group



                                                                 For the Year Ended December 31,
(in millions, except per share data)                         2000              1999             1998
- ------------------------------------------------------------------------------------------------------
                                                                                     
REVENUES
  Premiums                                                 $ 18,926          $ 17,550         $ 15,516
  Management Services Fees                                    1,964             1,793            1,590
  Investment and Other Income                                   232               219              249
- ---------------------------------------------------------------------------------------------------------------------------
  Total Revenues                                             21,122            19,562           17,355
- ---------------------------------------------------------------------------------------------------------------------------

MEDICAL AND OPERATING COSTS

  Medical Costs                                              16,155            15,043           13,523
  Operating Costs                                             3,520             3,343            2,964
  Depreciation and Amortization                                 247               233              185
  Operational Realignment and Other Charges                       -                 -              725
- ---------------------------------------------------------------------------------------------------------------------------
  Total Medical and Operating Costs                          19,922            18,619           17,397
- ---------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) FROM OPERATIONS                               1,200               943              (42)
  Gain on Disposition of UnitedHealth Capital Investments        27                 -                -
  Interest Expense                                              (72)              (49)              (4)
- ---------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) BEFORE TAXES                                  1,155               894              (46)
  Provision for Income Taxes                                   (419)             (326)            (120)
- ---------------------------------------------------------------------------------------------------------------------------
Net Earnings (Loss)                                             736               568             (166)

Convertible Preferred Stock Dividends
  and Redemption Premium                                          -                 -              (48)
- ---------------------------------------------------------------------------------------------------------------------------
NET EARNINGS (LOSS) APPLICABLE TO COMMON SHAREHOLDERS      $    736          $    568         $   (214)
- ---------------------------------------------------------------------------------------------------------------------------

BASIC NET EARNINGS (LOSS) PER COMMON SHARE                 $   2.27          $   1.63         $  (0.56)
- ---------------------------------------------------------------------------------------------------------------------------
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE               $   2.19          $   1.60         $  (0.56)
- ---------------------------------------------------------------------------------------------------------------------------
BASIC WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING                                                 324.2             348.2            381.2
DILUTIVE EFFECT OF OUTSTANDING STOCK OPTIONS                   12.3               6.8                -
- ---------------------------------------------------------------------------------------------------------------------------

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
  ASSUMING DILUTION                                           336.5             355.0            381.2


See notes to consolidated financial statements.



                                       30


CONSOLIDATED BALANCE SHEETS  United Health Group





                                                                                As of December 31,
(in millions, except share and per share data)                                1999              2000
- ---------------------------------------------------------------------------------------------------------------------
                                                                                      
ASSETS
  Current Assets
    Cash and Cash Equivalents                                                $  1,419         $  1,605
    Short-Term Investments                                                        200              546
    Accounts Receivable, net of allowances of $118 and $117                       867              912
    Assets Under Management                                                     1,646            1,328
    Other Current Assets                                                          273              177
- ---------------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT ASSETS                                                      4,405            4,568
Long-Term Investments                                                           3,434            2,568
Property and Equipment, net of accumulated
    depreciation of $513 and $482                                                 303              278
Goodwill and Other Intangible Assets, net of accumulated
    amortization of $501 and $376                                               2,911            2,859
- ---------------------------------------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                           $ 11,053         $ 10,273
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities
    Medical Costs Payable                                                    $  3,266         $  2,915
    Accounts Payable and Accrued Liabilities                                    1,050            1,003
    Other Policy Liabilities                                                    1,216              910
    Commercial Paper and Current Maturities of Long-Term Debt                     559              591
    Unearned Premiums                                                             479              473
- ---------------------------------------------------------------------------------------------------------------------------
      Total Current Liabilities                                                 6,570            5,892
Long-Term Debt                                                                    650              400
Deferred Income Taxes and Other Liabilities                                       145              118
Commitments and Contingencies (Note 11)
- ---------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity
    Common Stock, $0.01 par value - 500,000,000 shares authorized;
317,235,000 and 334,941,000 shares outstanding                                      3                3
    Additional Paid-In Capital                                                      -              250
    Retained Earnings                                                           3,595            3,445
    Accumulated Other Comprehensive Income:
      Net Unrealized Holding Gains on Investments Available for Sale,
        net of income tax effects                                                  90              165
- ---------------------------------------------------------------------------------------------------------------------------
      TOTAL SHAREHOLDERS' EQUITY                                                3,688            3,863
- ---------------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             $ 11,053         $ 10,273
- ---------------------------------------------------------------------------------------------------------------------------


See notes to consolidated financial statements.



                                       31


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY  United Health Group




                                                                                       Net Unrealized
                                                 Common Stock    Additional            Holding Gains      Total
                                                ---------------   Paid-in    Retained  on Investments  Shareholders'  Comprehensive
(in millions)                                   Shares  Amount    Capital    Earnings  Available for   Sale Equity     Income (Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
BALANCE AT DECEMBER 31, 1997                      382     $ 4     $ 1,398    $ 3,103     $    29      $ 4,534
   Issuances of Common Stock                        8      --         145         --          --          145
   Common Stock Repurchases                       (22)     --        (436)        --          --         (436)
   Comprehensive Income (Loss)
    Net Loss                                       --      --          --       (166)         --         (166)         $ (166)
     Other Comprehensive Income Adjustments
      Change in Net Unrealized Holding Gains
       on Investments Availablefor Sale,
       net of income tax effects                   --      --          --         --          15           15              15
                                                                                                                       -------
               Comprehensive Loss                  --      --          --         --          --           --          $ (151)
                                                                                                                       -------

   Cash Dividends
     Common Stock                                  --      --          --         (6)         --            (6)
      Convertible Preferred Stock                  --      --          --        (28)         --           (28)
   Convertible Preferred Stock
      Redemption Premium                           --      --          --        (20)         --           (20)
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998                      368       4       1,107      2,883          44         4,038
   Issuances of Common Stock                        6      --         125         --          --           125
   Common Stock Repurchases                       (39)     (1)       (982)        --          --          (983)
   Comprehensive Income
    Net Earnings                                   --      --          --        568          --           568         $  568
      Other Comprehensive Income Adjustments
       Change in Net Unrealized Holding Gains
        on Investments Available for Sale,
        net of income tax effects                  --      --          --        --          121           121            121
                                                                                                                       -------
               Comprehensive Income                --      --          --        --           --            --         $  689
                                                                                                                       -------
   Common Stock Dividend                           --      --          --        (6)          --            (6)
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999                      335       3         250      3,445         165         3,863
   Issuances of Common Stock                       13      --         349         --          --           349
   Common Stock Repurchases                       (31)     --        (599)      (581)         --        (1,180)
   Comprehensive Income
    Net Earnings                                   --      --          --        736          --           736         $  736
    Other Comprehensive Income Adjustments
     Change in Net Unrealized Holding Gains
        on Investments Available for Sale,
        net of income tax effects                  --      --          --         --         (75)         (75)            (75)
                                                                                                                       -------
               Comprehensive Income                --      --          --         --          --           --          $  661
                                                                                                                       -------
   Common Stock Dividend                           --      --          --         (5)         --           (5)

- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000                      317     $ 3       $  --     $ 3,595    $    90       $3,688
- ------------------------------------------------------------------------------------------------------------------------------------



See notes to consolidated financial statements.


                                       32


CONSOLIDATED STATEMENTS OF CASH FLOWS  United Health Group



                                                                               For the Year Ended December 31,
(in millions)                                                                    2000        1999        1998
- ----------------------------------------------------------------------------------------------------------------
                                                                                              
OPERATING ACTIVITIES
   Net Earnings (Loss)                                                         $   736     $   568     $  (166)
   Noncash Items
     Depreciation and Amortization                                                 247         233         185
     Deferred Income Taxes and Other                                                73          35        (184)
     Asset Impairments                                                              --          --         451
   Net Change in Other Operating Items, net of effects
   from acquisitions, sales of subsidiaries and changes
         in AARP balances
     Accounts Receivable and Other Current Assets                                   26          84          67
     Medical Costs Payable                                                         288         165         269
     Accounts Payable and Other Current Liabilities                                162          60         347
     Unearned Premiums                                                             (11)         44         102
- ------------------------------------------------------------------------------------------------------------------------------------
     CASH FLOWS FROM OPERATING ACTIVITIES                                        1,521       1,189       1,071
- ------------------------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
   Cash Paid for Acquisitions, net of cash assumed
 and other effects                                                                 (76)       (334)       (464)
   Purchases of Property and Equipment and Capitalized Software                   (245)       (196)       (210)
   Proceeds from Sales of Property and Equipment and
   Disposition of Businesses                                                        12          51          59
   Purchases of Investments                                                     (3,022)     (2,208)     (2,799)
   Maturities and Sales of Investments                                           2,363       2,064       3,435
- ------------------------------------------------------------------------------------------------------------------------------------
      CASH FLOWS (USED FOR) FROM INVESTING ACTIVITIES                             (968)       (623)         21
- ------------------------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
   Proceeds from Common Stock Issuances                                            228         102          84
   (Payments of) Proceeds from Commercial Paper, net                              (182)        132         459
   Proceeds from Issuance of Long-Term Debt                                        400         150         249
   Common Stock Repurchases                                                     (1,180)       (983)       (436)
   Redemption of Convertible Preferred Stock                                        --          --        (520)
   Dividends Paid                                                                   (5)         (6)        (34)
- ------------------------------------------------------------------------------------------------------------------------------------
   CASH FLOWS USED FOR FINANCING ACTIVITIES                                       (739)       (605)       (198)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  (186)        (39)        894
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   1,605       1,644         750
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $ 1,419     $ 1,605     $ 1,644
- ------------------------------------------------------------------------------------------------------------------------------------


See notes to consolidated financial statements



                                       33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  United Health Group

(1) DESCRIPTION OF BUSINESS

UnitedHealth Group Incorporated (also referred to as "UnitedHealth Group," "the
company," "we," "us," "our") is a national leader in forming and operating
orderly, efficient markets for the exchange of high quality health and
well-being services. Through independent but strategically aligned,
market-defined businesses, we offer health care coverage and related services
designed to enable, facilitate and advance optimal health.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION
We have prepared the consolidated financial statements in accordance with
generally accepted accounting principles and have included the accounts of
UnitedHealth Group and its subsidiaries. We have eliminated all significant
intercompany balances and transactions.

USE OF ESTIMATES
These financial statements include some amounts that are based on our best
estimates and judgments. The most significant estimates relate to medical costs,
medical costs payable, other policy liabilities and intangible asset valuations
relating to acquisitions. These estimates may be adjusted as more current
information becomes available, and any adjustment could be significant. The
impact of any changes in estimates is included in the determination of earnings
in the period of change.

REVENUE RECOGNITION
Premium revenues are recognized in the period enrolled members are entitled to
receive health care services. Premium payments received from our customers prior
to such period are recorded as unearned premiums. Management services fee
revenues are recognized in the period the related services are performed.
Premium revenues related to Medicare and Medicaid programs as a percentage of
total premium revenues were 17% in 2000, 21% in 1999 and 20% in 1998.

MEDICAL COSTS AND MEDICAL COSTS PAYABLE
Medical costs include claims paid, claims adjudicated but not yet paid,
estimates for claims received but not yet adjudicated, and estimates for claims
incurred but not yet received.
    The estimates of medical costs and medical costs payable are developed using
actuarial methods based upon historical data for payment patterns, cost trends,
product mix, seasonality, utilization of health care services and other relevant
factors including product changes. The estimates are subject to change as
actuarial methods change or as underlying facts upon which estimates are based
change. We did not change our actuarial methods during 2000, 1999 and 1998.
Management believes that the amount of medical costs payable is adequate to
cover the company's liability for unpaid claims as of December 31, 2000.

CASH, CASH EQUIVALENTS AND INVESTMENTS
Cash and cash equivalents are highly liquid investments with an original
maturity of three months or less. The fair value of cash and cash equivalents
approximates their carrying value because of the short maturity of the
instruments. Investments with a maturity of less than one year are classified as
short-term.
    Investments held by trustees or agencies according to state regulatory
requirements are classified as held-to-maturity based on our ability and intent
to hold these investments to maturity. Such investments are reported at
amortized cost and, because of regulatory restrictions, are included in
long-term investments regardless of their maturity date. All other investments
are classified as available for sale and reported at fair value based on quoted
market prices. Investments are classified as short-term or long-term depending
on their maturity term. Periodically, we sell investments classified as
long-term prior to their maturity to fund working capital or for other purposes.


                                       34


    Unrealized gains and losses on investments available for sale are excluded
from earnings and reported as a separate component of shareholders' equity, net
of income tax effects. To calculate realized gains and losses on the sale of
investments, we use the specific cost of each investment sold. We have no
investments classified as trading securities.

ASSETS UNDER MANAGEMENT
Under our 10-year agreement with AARP, we are administering certain aspects of
AARP's insurance program that were transferred from the program's previous
carrier (see Note 5). Pursuant to our agreement with AARP, the associated assets
are managed separately from our general investment portfolio and are used to
fund expenditures associated with the AARP program. These assets are invested at
our discretion, within certain investment guidelines approved by AARP. At
December 31, 2000, the assets were invested in marketable debt securities.
Interest earnings and realized investment gains and losses on these assets
accrue to AARP policyholders and, as such, are not included in our determination
of earnings. Assets under management are reported at their fair value.
Unrealized gains and losses are included in the rate stabilization fund
associated with the AARP program. As of December 31, 2000, the AARP investment
portfolio included net unrealized gains of $19 million compared with net
unrealized losses of $34 million as of December 31, 1999.

OTHER POLICY LIABILITIES
Other policy liabilities include the rate stabilization fund associated with the
AARP program (see Note 5) and retrospective rate credit liabilities and customer
balances related to experience-rated indemnity products.
    Retrospective rate credit liabilities represent premiums we received in
excess of amounts contractually owed by customers based on actual claim
experience. Liabilities established for closed policy years are based on actual
experience, while liabilities for open years are based on estimates of premiums,
claims and expenses incurred.
    Customer balances consist principally of deposit accounts and reserves that
have accumulated under certain experience-rated contracts. At the customer's
option, these balances may be returned to the customer or used to pay future
premiums or claims under eligible contracts.

PROPERTY AND EQUIPMENT
Property and equipment is stated at cost, net of accumulated depreciation.
Depreciation is calculated using the straight-line method over the estimated
useful life of the respective assets, ranging from three years to 30 years. The
weighted-average useful life of property and equipment at December 31, 2000, was
approximately four years.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill represents the purchase price and transaction costs associated with
businesses we have acquired in excess of the estimated fair value of the net
assets of these businesses. To the extent possible, a portion of the excess
purchase price and transaction costs is assigned to identifiable intangible
assets. Goodwill and other intangible assets are being amortized on a
straight-line basis over useful lives ranging from three years to 40 years, with
a weighted-average useful life of 32 years at December 31, 2000.
    The most significant components of goodwill and other intangible assets are
composed of goodwill of $2.1 billion at December 31, 2000 and 1999, and employer
group contracts, supporting infrastructure, distribution networks and
institutional knowledge of $530 million at December 31, 2000, and $550 million
at December 31, 1999, net of accumulated amortization.

LONG-LIVED ASSETS
We review long-lived assets, including goodwill and other intangible assets, for
events or changes in circumstances that would indicate we might not recover
their carrying value. We consider a number of factors, including estimated
future undiscounted cash flows associated with the long-lived asset, to make
this decision. We record assets held for sale at the lower of their carrying
amount or fair value, less any costs associated with the final settlement.



                                       35


INCOME TAXES
Deferred income tax assets and liabilities are recognized for the differences
between the financial and income tax reporting bases of assets and liabilities
based on enacted tax rates and laws. The deferred income tax provision or
benefit generally reflects the net change in deferred income tax assets and
liabilities during the year. The current income tax provision reflects the tax
consequences of revenues and expenses currently taxable or deductible on various
income tax returns for the year reported.

STOCK-BASED COMPENSATION
We use the intrinsic value method for determining stock-based compensation
expenses. Under the intrinsic value method, we do not recognize compensation
expense when the exercise price of an employee stock option equals or exceeds
the fair market value of the stock on the date the option is granted.
Information on what our stock-based compensation expenses would have been had we
calculated those expenses using the fair market values of outstanding stock
options is included in Note 9.

NET EARNINGS (LOSS) PER COMMON SHARE
Basic net earnings (loss) per common share is computed by dividing net earnings
(loss) applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options. In periods where losses are reported, the weighted-average number
of common shares outstanding excludes common stock equivalents, since their
inclusion would be anti-dilutive.

RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 133 regarding accounting for derivative
instruments and hedging activities. SFAS No. 133, as amended by SFAS No. 137 and
No. 138, establishes accounting and reporting standards requiring that
derivative instruments (including certain derivative instruments embedded in
other contracts) and hedging activity be recorded in the balance sheet either as
an asset or liability measured at its fair value. The statement requires changes
in the derivative's fair value to be recognized in earnings or, for derivatives
that hedge market risk related to future cash flows, in accumulated other
comprehensive income, unless specific hedge accounting criteria are met. The
company adopted SFAS No. 133 within its financial statements effective January
1, 2001, which did not result in a material effect on its financial position,
results of operations or cash flows.

(3) ACQUISITIONS

In September 1999, our Ingenix business segment acquired Worldwide Clinical
Trials, Inc. (WCT), a leading contract research organization. We paid $214
million in cash in exchange for all outstanding shares of WCT. We accounted for
the purchase using the purchase method of accounting, which means the purchase
price was allocated to assets and liabilities acquired based on their estimated
fair values at the date of acquisition. Only the post-acquisition results of WCT
are included in our consolidated financial statements. The purchase price and
costs associated with the acquisition exceeded the preliminary estimated fair
value of net assets acquired by $214 million, which has been assigned to
goodwill and is being amortized over its estimated useful life of 30 years. The
pro forma effects of the WCT acquisition on our consolidated financial
statements were not material.
    In June 1999, our Specialized Care Services business segment acquired Dental
Benefit Providers, Inc. (DBP), one of the largest dental benefit management
companies in the United States. We paid $105 million in cash, and we accounted
for the acquisition using the purchase method of accounting. The purchase price
and costs associated with the acquisition exceeded the preliminary estimated
fair value of net assets acquired by



                                       36


$105 million, which has been assigned to goodwill and is being amortized over
its estimated useful life of 40 years. The pro forma effects of the DBP
acquisition on our consolidated financial statements were not material.
     In October 1998, our Health Care Services segment acquired HealthPartners
of Arizona, Inc. (HPA), with 509,000 members as of the acquisition date. We paid
$235 million in cash in exchange for all outstanding shares of HPA. We accounted
for the acquisition using the purchase method of accounting. The purchase price
and costs associated with the acquisition exceeded the estimated fair value of
net assets acquired by $223 million, which has been assigned to goodwill and is
being amortized over its estimated useful life of 40 years. The pro forma
effects of the HPA acquisition on our consolidated financial statements were not
material.
    During 1998, our Ingenix segment acquired Kern McNeill International, Inc.
(KMI), a leading contract research organization, and St. Anthony Publishing,
Inc. (St. Anthony), a leader in the health care coding and reimbursement
publications market. In the aggregate, we paid $188 million in cash and assumed
liabilities of $17 million in exchange for all of the common stock of KMI and
St. Anthony. We accounted for these acquisitions using the purchase method of
accounting. The purchase price and costs associated with these acquisitions
exceeded the preliminary fair value of net assets acquired by $205 million,
which has been assigned to trade names and goodwill and is being amortized over
their estimated useful lives ranging from 15 to 40 years. The pro forma effects
of these acquisitions on our consolidated financial statements were not
material.

(4) SPECIAL OPERATING CHARGES

OPERATIONAL REALIGNMENT AND OTHER CHARGES
In conjunction with our operational realignment initiatives, we developed and,
in the second quarter of 1998, approved a comprehensive plan (the Plan) to
implement our operational realignment. We recognized corresponding charges to
operations of $725 million in the second quarter of 1998, which reflected the
estimated costs to be incurred under the Plan. The charges included costs
associated with asset impairments; employee terminations; disposing of or
discontinuing business units, product lines and contracts; and consolidating and
eliminating certain claim processing operations and associated real estate
obligations. Activities associated with the Plan will result in the reduction of
approximately 5,200 positions, affecting approximately 6,400 people in various
locations. Through December 31, 2000, we have eliminated approximately 4,900
positions, affecting approximately 5,000 people, pursuant to the Plan. The
remaining positions are expected to be eliminated during 2001.
    Our accompanying financial statements include the operating results of
businesses and markets disposed of or discontinued, and markets we have exited
in connection with the operational realignment. The accompanying Consolidated
Statements of Operations include revenues and operating earnings (losses) from
businesses disposed of and markets we exited for the years ended December 31, as
follows (in millions):



                                                               2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                        
Revenues                                                      $ 312            $  689            $ 964
Earnings (Loss) From Operations                               $   9            $  (41)           $ (52)
- ---------------------------------------------------------------------------------------------------------------------------


The table above does not include operating results from the counties where
UnitedHealthcare withdrew its Medicare product offerings effective January 1,
2000, and January 1, 2001. Annual revenues for 1999 from the counties exited
effective January 1, 2000, were approximately $230 million. Annual revenues for
2000 from the counties exited effective January 1, 2001, were approximately $320
million.
    During 2000, we finalized our agreement with Blue Shield of California to
transition approximately 210,000 individuals served by our California health
plan. Additionally, we transitioned approximately 75,000 individuals served by
our Oregon and Washington health plans to Premera BlueCross and LifeWise. These
actions conclude our planned transition to concentrate resources in the Pacific
Coast region on Uniprise national, multi-site customers and Specialized Care
Services customers. We have also transitioned out of the market in Puerto Rico.


                                       37


The balances accrued in our operational realignment and other charges were
sufficient to cover expenses incurred in the sale and exit of our operations in
these markets.
    The operational realignment and other charges do not cover certain aspects
of the Plan, including new information systems, data conversions, process
re-engineering, temporary duplicate staffing costs as we consolidate processing
centers, and employee relocation and training. These costs are expensed as
incurred or capitalized, as appropriate. During 2000, 1999 and 1998, we incurred
expenses of approximately $57 million, $52 million and $13 million,
respectively, related to these activities.
    The Plan anticipated substantial completion in 1999. However, some
initiatives, including the consolidation of certain claim and administrative
processing functions and certain divestitures and market realignment activities
are requiring additional time to complete in the most effective manner. These
activities will extend through the middle of 2001. Based on current facts and
circumstances, we believe the remaining realignment reserve is adequate to cover
the costs to be incurred in executing the remainder of the Plan. However, as we
proceed with the execution of the Plan and more current information becomes
available, it may be necessary to adjust our estimates for severance and lease
obligations on exited facilities.
    The table below is a roll-forward of accrued operational realignment and
other charges, which are included in Accounts Payable and Accrued Liabilities in
the accompanying Consolidated Balance Sheets, through December 31, 2000 (in
millions):



                                                           Severance and     Noncancelable     Disposition of
                                            Asset          Outplacement        Lease          Businesses and
                                         Impairments         Costs           Obligations       Other Costs        Total
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                
Balance at December 31, 1997              $   -             $   -            $  -             $  -              $   -
  Provision for Operational Realignment
    and Other Charges                       430               142              82               71                725
  Additional Charges (Credits)               21               (20)             (9)               8                  -
  Cash Payments                               -               (19)             (6)             (13)               (38)
  Noncash Charges                          (451)                -               -                -               (451)
- ---------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                  -               103              67               66                236
  Additional Charges (Credits)                -               (22)             13                9                  -
  Cash Payments                               -               (46)            (18)             (45)              (109)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                  -                35              62               30                127
  Cash Payments                               -               (24)            (20)             (18)               (62)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000               $  -             $  11            $ 42             $ 12              $  65
- ------------------------------------------------------------------------------------------------------------------------------------




MEDICAL COSTS
During the second quarter of 1998, we recorded $175 million of
medical cost charges. Of this amount, $120 million related to Medicare contract
losses and increases to Medicare medical costs payable estimates, and $55
million related to increases to commercial medical costs payable estimates.



                                       38


(5) AARP CONTRACT

In February 1997, we entered into a 10-year contract to provide insurance
products and services to members of AARP. Under the terms of the contract, we
are compensated for claim administration and other services as well as for
assuming underwriting risk. We are also engaged in product development
activities to complement the insurance offerings under this program. Premium
revenues from our portion of the AARP insurance offerings were approximately
$3.5 billion during 2000, 1999 and 1998.
    The underwriting results related to the AARP business are recorded as an
increase or decrease to a rate stabilization fund (RSF). The primary components
of the underwriting results are premium revenue, medical costs, investment
income, administrative expenses, member service expenses, marketing expenses and
premium taxes. To the extent underwriting losses exceed the balance in the RSF,
we would be required to fund the deficit. Any deficit we fund could be recovered
by underwriting gains in future periods of the contract. The RSF balance is
reported in Other Policy Liabilities in the accompanying Consolidated Balance
Sheets. We believe the RSF balance is sufficient to cover potential future
underwriting or other risks associated with the contract.
    We assumed the policy and other policy liabilities related to the AARP
program and received cash and premium receivables from the previous insurance
carrier equal to the carrying value of the liabilities assumed as of January 1,
1998. The following AARP program-related assets and liabilities are included in
our Consolidated Balance Sheets (in millions):



                                                                               Balance as of December 31,
                                                                                2000             1999
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                          
Assets Under Management                                                        $1,625           $1,307
Accounts Receivable                                                            $  277           $  276
Medical Costs Payable                                                          $  855           $  791
Other Policy Liabilities                                                       $  932           $  713
Accounts Payable and Accrued Liabilities                                       $  115           $   79
- ---------------------------------------------------------------------------------------------------------------------------


The effects of changes in balance sheet amounts associated with the AARP program
accrue to AARP policyholders through the RSF balance. Accordingly, we do not
include the effect of such changes in our Consolidated Statements of Cash Flows.




                                       39


(6) CASH, CASH EQUIVALENTS AND INVESTMENTS

As of December 31, the amortized cost, gross unrealized holding gains and
losses, and fair value of cash, cash equivalents and investments were as follows
(in millions):



                                        Amortized         Gross Unrealized Gross Unrealized     Fair
2000                                       Cost             Holding Gains   Holding Losses      Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                  
Cash and Cash Equivalents                 $1,419            $     -            $    -          $1,419
Debt Securities--Available for Sale        3,198                 89                (6)          3,281
Equity Securities--Available for Sale        201                 61                 -             262
Debt Securities--Held to Maturity             91                  -                 -              91
- ---------------------------------------------------------------------------------------------------------------------------
      Total Cash and Investments          $4,909            $   150            $   (6)         $5,053
- ---------------------------------------------------------------------------------------------------------------------------

1999
- ---------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents                 $1,605            $     -            $    -          $1,605
Debt Securities--Available for Sale        2,605                  4               (58)          2,551
Equity Securities--Available for Sale        166                318                 -             484
Debt Securities--Held to Maturity             79                  -                 -              79
- ---------------------------------------------------------------------------------------------------------------------------
      Total Cash and Investments          $4,455            $   322            $  (58)         $4,719
- ---------------------------------------------------------------------------------------------------------------------------



As of December 31, 2000, debt securities consisted of $855 million in U.S.
Government obligations, $1,386 million in state and municipal obligations, and
$1,131 million in corporate obligations. At December 31, 2000, we held $209
million in debt securities with maturities less than one year, $1,227 million in
debt securities maturing in one to five years, and $1,936 million in debt
securities with maturities of more than five years.

    We recorded realized gains and losses on the sale of investments, excluding
UnitedHealth Capital investments, as follows (in millions):


                                                                    For the Year Ended December 31,
                                                               2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                        
Gross Realized Gains                                          $  12             $   9            $  31
Gross Realized Losses                                           (46)              (15)              (5)
- ---------------------------------------------------------------------------------------------------------------------------
  Net Realized Gains (Losses)                                 $ (34)            $  (6)           $  26
- ---------------------------------------------------------------------------------------------------------------------------


During 2000 and 1999, respectively, we contributed UnitedHealth Capital
investments valued at approximately $52 million and $50 million to the
UnitedHealth Foundation. The realized gain of approximately $51 million in 2000
and $49 million in 1999 was offset by the related contribution expense of $52
million in 2000 and $50 million in 1999. The $1 million net expense of these
transactions in both 2000 and 1999 is included in Investment and Other Income in
the accompanying Consolidated Statements of Operations.
    In a separate disposition of UnitedHealth Capital investments during 2000,
we realized a gain of $27 million.

                                       40



(7) COMMERCIAL PAPER AND DEBT

Commercial paper and debt consisted of the following as of December 31 (in
millions):



                                                    2000                  1999
                                           ------------------     --------------------
                                           Carrying      Fair      Carrying     Fair
                                             Value      Value       Value      Value
- --------------------------------------------------------------------------------------
                                                                  
Commercial Paper                           $  409       $ 409      $  591     $ 591
Floating Rate Notes
  due November 2001                           150         150         150       150
6.6% Senior Unsecured Notes
  due December 2003                           250         250         250       238
7.5% Senior Unsecured Notes
  due November 2005                           400         413           -         -
- -------------------------------------------------------------------------------------
Total Commercial Paper and Debt             1,209       1,222         991       979
Less Current Maturities                      (559)       (559)       (591)     (591)
- -------------------------------------------------------------------------------------
Total Long-Term Debt                       $  650      $  663      $  400     $ 388
- -------------------------------------------------------------------------------------


As of December 31, 2000, our outstanding commercial paper had interest rates
ranging from 6.6% to 6.9%. In November 1999, we issued $150 million of two-year
floating-rate notes. The interest rate is adjusted quarterly to the three-month
LIBOR (London Interbank Offered Rate) plus 0.5%. As of December 31, 2000, the
applicable rate was 7.25%.
    In July 2000, we executed new credit arrangements supporting our commercial
paper program for an aggregate of $900 million. These credit arrangements are
composed of a $450 million revolving credit facility expiring in July 2005, and
a $450 million, 364-day facility expiring in July 2001. We also have the
capacity to issue approximately $200 million of extendible commercial notes
(ECNs). During 2000, we had no amounts outstanding under our credit facilities
or ECNs.
    Our debt agreements and credit facilities contain various covenants, the
most restrictive of which place limitations on secured and unsecured borrowings
and require us to exceed minimum interest coverage levels. We are in compliance
with the requirements of all debt covenants.
    Maturities of commercial paper and debt for the years ending December 31 are
as follows (in millions):


        2001                 2002                     2003                 2004                    2005
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                    
      $  559                    -                   $  250                    -                  $  400
- ---------------------------------------------------------------------------------------------------------------------------


We made cash payments for interest of $68 million and $43 million in 2000 and
1999, respectively. We made no cash payments for interest in 1998.



                                       41


(8) SHAREHOLDERS' EQUITY

REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS
Our operations are conducted through our wholly-owned subsidiaries, which
include health maintenance organizations and insurance companies. These
companies are subject to state regulations that, among other things, may require
the maintenance of minimum levels of statutory capital, as defined by each
state, and restrict the timing and amount of dividends and other distributions
that may be paid to their respective parent companies. Generally, the amount of
dividend distributions that may be paid by our regulated subsidiaries, without
prior approval by state regulatory authorities, is limited based on the entity's
level of statutory net income and statutory capital and surplus. Approximately
$4.7 billion of our $5.1 billion of cash and investments at December 31, 2000,
was held by regulated subsidiaries.
    The National Association of Insurance Commissioners has developed minimum
capitalization guidelines for health maintenance organizations, subject to
state-by-state adoption. Many states have adopted and other states will likely
adopt some form of these rules. We do not expect that further state adoptions or
implementations will require us to make significant incremental investments of
general corporate resources into regulated subsidiaries.

STOCK REPURCHASE PROGRAM
Under the board of directors' authorization, we are operating a common stock
repurchase program. Repurchases may be made from time to time at prevailing
prices, subject to certain restrictions on volume, pricing and timing. During
2000, we repurchased 31.0 million shares for an aggregate of $1.2 billion. Since
inception of our stock repurchase activities in November 1997 through December
31, 2000, we have repurchased 92.9 million shares for an aggregate of $2.6
billion. As of December 31, 2000, we have board of directors' authorization to
purchase up to an additional 28.4 million shares of our common stock.
    As a component of our share repurchase activities, we have entered into
agreements to purchase shares of our common stock, where the number of shares we
purchase, if any, is dependent upon market conditions and other contractual
terms. As of December 31, 2000, we have agreements to purchase up to 8.9 million
shares of our common stock at various times through 2003, at an average cost of
approximately $40 per share.

COMMON STOCK SPLIT
In October 2000, our board of directors declared a two-for-one split of the
company's common stock in the form of a 100 percent common stock dividend. The
dividend was issued on December 22, 2000, to shareholders of record as of
December 1, 2000. The accompanying consolidated financial statements have been
restated to reflect the share and per share effects of the common stock split.

DIVIDENDS
On February 13, 2001, the board of directors approved an annual dividend for
2001 of $0.03 per share. The dividend will be paid on April 18, 2001, to
shareholders of record at the close of business on April 2, 2001.

PREFERRED STOCK
In December 1998, the company redeemed all 500,000 outstanding shares of 5.75%
Series A Convertible Preferred Stock. At December 31, 2000, we have 10 million
shares of $0.001 par value preferred stock authorized for issuance, and no
preferred shares issued and outstanding.


                                       42


(9) STOCK-BASED COMPENSATION PLANS
The company maintains various stock and incentive plans for the benefit of
eligible employees and directors. As of December 31, 2000, employee stock and
incentive plans allowed for the future granting of up to 22.4 million shares as
incentive or non-qualified stock options, stock appreciation rights, restricted
stock awards and performance awards. Our non-employee director stock option plan
allowed for future granting of 825,000 non-qualified stock options as of
December 31, 2000.
    Stock options are granted at an exercise price not less than the fair market
value of the common stock at the date of grant. They may be exercised over
varying periods and up to 10 years from the date of grant. A summary of activity
under our various stock plans is presented in the table below (shares in
thousands):



                                                  2000                       1999                        1998
                                        ------------------------   ------------------------     ---------------------------
                                            Weighted-Average          Weighted-Average             Weighted-Average
                                         Shares   Exercise Price   Shares    Exercise Price     Shares     Exercise Price

- ---------------------------------------------------------------------------------------------------------------------------
                                                                                            
Outstanding at Beginning of Year         44,080      $  19          36,748       $  19           34,226       $  17
Granted                                   8,516      $  30          14,406       $  20           11,694       $  20
Exercised                               (12,331)     $  17          (4,666)      $  17           (6,758)      $  12
Forfeited                                (1,455)     $  20          (2,408)      $  20           (2,414)      $  20
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding at End of Year               38,810      $  22          44,080       $  19           36,748       $  19
- ---------------------------------------------------------------------------------------------------------------------------
Exercisable at End of Year               17,367      $  20          15,558       $  17           13,450       $  17
- ---------------------------------------------------------------------------------------------------------------------------




                                                Options Outstanding                       Options Exercisable
                                     -----------------------------------------------------------------------------------------------
                                                     Weighted-Average
                                      Number           Remaining             Weighted-Average        Number        Weighted-Average
Range of Exercise Prices             Outstanding     Option Term (years)      Exercise Price       Exercisable       Exercise Price
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
$ 0-$20                                9,723               6.0                    $  17                 6,755          $  16
$21-$30                               25,611               8.1                    $  22                10,482          $  22
$31-$40                                3,269               9.5                    $  39                   130          $  34
$41-$50                                  207               9.6                    $  44                     -          $   -
- ------------------------------------------------------------------------------------------------------------------------------------
$ 0-$50                             38,810               7.7                      $  22                17,367          $  20
- ------------------------------------------------------------------------------------------------------------------------------------



We do not recognize compensation expense in connection with stock option grants
because we grant stock options at exercise prices that equal or exceed the fair
market value of the stock at the time options are granted. If we had determined
compensation expense using fair market values for the stock options, net
earnings (loss) per common share would have been reduced to the following pro
forma amounts:



                                                               2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                       
Net Earnings (Loss) (in millions)
  As Reported                                                $  736            $  568           $ (166)
  Pro Forma                                                  $  660            $  531           $ (206)
- ---------------------------------------------------------------------------------------------------------------------------
Diluted Net Earnings (Loss) Per
Common Share
  As Reported                                                $ 2.19            $ 1.60           $(0.56)
  Pro Forma                                                  $ 2.04            $ 1.50           $(0.67)
- ---------------------------------------------------------------------------------------------------------------------------
Weighted-Average Fair Value Per Share of
  Options Granted                                            $   14            $   12           $    8
- ---------------------------------------------------------------------------------------------------------------------------





                                       43


To determine compensation cost under the fair value method, the fair value of
each option grant is estimated on the date of grant using the Black-Scholes
option-pricing model. Principal assumptions used in applying the Black-Scholes
model were as follows:



                                                               2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                         
Risk-Free Interest Rate                                          5.0%             6.7%             5.2%
Expected Volatility                                             49.0%            50.0%            46.0%
Expected Dividend Yield                                          0.1%             0.1%             0.1%
Expected Life in Years                                           4.5              5.0              5.8
- ---------------------------------------------------------------------------------------------------------------------------


We also maintain a non-leveraged employee stock ownership plan and an employee
stock purchase plan. Activity related to these plans was not material in
relation to our consolidated financial results in 2000, 1999 and 1998.

(10) INCOME TAXES

Components of the Provision (Benefit) for Income Taxes


Year Ended December 31, (in millions)                          2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                       
Current
  Federal                                                    $  330            $  264           $  273
  State                                                          38                36               31
- ---------------------------------------------------------------------------------------------------------------------------
    Total Current                                               368               300              304
Deferred                                                         51                26             (184)
- ---------------------------------------------------------------------------------------------------------------------------
    Total Provision                                          $  419            $  326           $  120
- ---------------------------------------------------------------------------------------------------------------------------


Reconciliation of the Tax Provision at the U.S. Federal Statutory Rate to the
Provision for Income Taxes


Year Ended December 31, (in millions)                          2000              1999             1998
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                       
Tax Provision (Benefit) at the
  U.S. Federal Statutory Rate                                $  404            $  313           $  (16)
State Income Taxes, net of federal benefit                       29                24               19
Tax-Exempt Investment Income                                    (17)              (16)             (25)
Non-Deductible Amortization                                      27                25               24
Non-Deductible Asset Impairments                                  -                 -              100
Charitable Contributions                                        (18)              (16)               -
Other, net                                                       (6)               (4)              18
- ---------------------------------------------------------------------------------------------------------------------------
  Provision for Income Taxes                                 $  419            $  326           $  120
- ---------------------------------------------------------------------------------------------------------------------------




                                       44


Components of Deferred Income Tax Assets and Liabilities


December 31, (in millions)                                                       2000             1999
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                          
Deferred Income Tax Assets
  Accrued Expenses and Allowances                                              $  126           $  101
  Unearned Premiums                                                                74               87
  Medical Costs Payable and
    Other Policy Liabilities                                                       84               62
  Net Operating Loss Carryforwards                                                 42               43
  Other                                                                            10               10
- ---------------------------------------------------------------------------------------------------------------------------
Subtotal                                                                          336              303
  Less: Valuation Allowances                                                      (56)             (52)
- ---------------------------------------------------------------------------------------------------------------------------
Total Deferred Income Tax Assets                                                  280              251
- ---------------------------------------------------------------------------------------------------------------------------

Deferred Income Tax Liabilities
  Capitalized Software Development                                                (80)             (54)
  Net Unrealized Gains on Investments
    Available for Sale                                                            (59)             (97)
  Depreciation & Amortization                                                     (12)              (4)
- ---------------------------------------------------------------------------------------------------------------------------
Total Deferred Income Tax Liabilities                                            (151)            (155)
- ---------------------------------------------------------------------------------------------------------------------------
      Net Deferred Income Tax Assets                                           $  129           $   96
- ---------------------------------------------------------------------------------------------------------------------------


Valuation allowances are provided when it is considered unlikely that deferred
tax assets will be realized. The valuation allowance primarily relates to future
tax benefits on certain purchased domestic and foreign net operating losses.
    We made cash payments for income taxes of $352 million in 2000, $214 million
in 1999 and $245 million in 1998. We increased additional paid-in capital by
$116 million in 2000, $23 million in 1999 and $47 million in 1998 to reflect the
tax benefit we received upon the exercise of non-qualified stock options.
    Consolidated income tax returns for fiscal years 1996 through 1999 are
currently being examined by the Internal Revenue Service. We do not believe any
adjustments that may result will have a significant impact on our consolidated
operating results or financial position.

(11) COMMITMENTS AND CONTINGENCIES

LEASES
We lease facilities, computer hardware and other equipment under long-term
operating leases that are non-cancelable and expire on various dates through
2011. Rent expense under all operating leases was $132 million in 2000, $129
million in 1999 and $119 million in 1998.
    At December 31, 2000, future minimum annual lease payments under all
non-cancelable operating leases were as follows (in millions):



         2001              2002             2003              2004             2005          Thereafter
- ---------------------------------------------------------------------------------------------------------------------------
                                                                              
      $  121            $  108            $   95            $   84           $   74            $  340
- ---------------------------------------------------------------------------------------------------------------------------



SERVICE AGREEMENTS
In 1995 and 1996, we entered into three separate contracts for certain data
center operations and support, and network and voice communication services,
each with an approximate term of 10 years. Expenses incurred in connection with
these agreements were $182 million in 2000, $172 million in 1999 and $162
million in 1998.



                                       45


LEGAL MATTERS
Because of the nature of our business, we are routinely subject to suits
alleging various causes of action. Some of these suits may include claims for
substantial non-economic or punitive damages. We do not believe that any such
actions, or any other types of actions, currently threatened or pending will,
individually or in the aggregate, have a material adverse effect on our
financial position or results of operations.

GOVERNMENT REGULATION
Our business is regulated at federal, state and local levels. The laws and rules
governing our business are subject to frequent change and broad latitude is
given to the agencies administering those regulations. State legislatures and
Congress continue to focus on health care issues as the subject of proposed
legislation. Existing or future laws and rules could force us to change how we
do business, restrict revenue and enrollment growth, increase our health care
and administrative costs and capital requirements, and increase our liability
for medical malpractice or other actions. Further, we must obtain and maintain
regulatory approvals to market many of our products.
    We are also subject to various governmental reviews, audits and
investigations. However, we do not believe the results of any of the current
audits, individually or in the aggregate, will have a material adverse effect on
our financial position or results of operations.

(12) SEGMENT FINANCIAL INFORMATION

Our accounting policies for business segment operations are the same as those
described in the Summary of Significant Accounting Policies (see Note 2).
Transactions between business segments are recorded at their estimated fair
value, as if they were purchased from or sold to third parties. All intersegment
transactions are eliminated in consolidation. In accordance with generally
accepted accounting principles, segments with similar economic characteristics
may be combined. The financial results of UnitedHealthcare and Ovations have
been combined in the Health Care Services segment column in the tables presented
on the next page (in millions):




                                       46





                                    Health Care                 Specialized                   Corporate
2000                                 Services       Uniprise   Care Services   Ingenix      and Eliminations    Consolidated
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                
Revenues-- External Customers         $ 18,502        $ 1,595     $   503      $   290         $     -            $ 20,890
Revenues-- Intersegment                      -            520         461           85          (1,066)                  -
Investment and Other Income                194             25          10            -               3                 232
- ------------------------------------------------------------------------------------------------------------------------------------
Total Revenues                        $ 18,696        $ 2,140     $   974      $   375          $(1,063)          $ 21,122
- ------------------------------------------------------------------------------------------------------------------------------------

Earnings (Loss) From Operations       $   739         $   289     $   174      $    32          $   (34)          $  1,200
Total Assets(1)                       $ 8,118         $ 1,578     $   525      $   730          $  (133)          $ 10,818
Net Assets(1)                         $ 3,085         $   978     $   276      $   617          $  (113)          $  4,843

Purchases of Property and Equipment
   and Capitalized Software           $    88         $    94     $    28      $    35          $     -           $    245
Depreciation and Amortization         $   100         $    75     $    25      $    47          $     -           $    247
- ------------------------------------------------------------------------------------------------------------------------------------

1999
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues-- External Customers         $ 17,419        $ 1,398     $   328      $   198          $     -           $ 19,343
Revenues-- Intersegment                      -            445         393           59             (897)                 -
Investment and Other Income                162             22           5            1               29                219
- ------------------------------------------------------------------------------------------------------------------------------------
Total Revenues                         $ 17,581        $ 1,865     $   726      $   258         $  (868)          $ 19,562
- ------------------------------------------------------------------------------------------------------------------------------------

Earnings (Loss) From Operations        $   578        $   222     $   128      $    25          $   (10)          $    943
Total Assets(1)                        $ 7,364        $ 1,411     $   446      $   683          $   206           $ 10,110
Net Assets(1)                          $ 2,892        $   953     $   230      $   573          $   221           $  4,869
- ------------------------------------------------------------------------------------------------------------------------------------

Purchases of Property and Equipment
   and Capitalized Software            $    69        $    71     $    28      $    28          $     -           $    196
Depreciation and Amortization          $    97        $    76     $    23      $    37          $     -           $    233
- ------------------------------------------------------------------------------------------------------------------------------------

1998
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues-- External Customers          $15,463        $ 1,238     $   274      $   131          $     -           $ 17,106
Revenues-- Intersegment                      -            357         339           52             (748)                 -
Investment and Other Income                149             29           5            1               65                249
- ------------------------------------------------------------------------------------------------------------------------------------
Total Revenues                         $15,612        $ 1,624     $   618      $   184          $  (683)          $ 17,355
- ------------------------------------------------------------------------------------------------------------------------------------

Earnings (Loss) From Operations(2)     $   503        $   161     $   109      $    20          $    65           $    858
Total Assets(1)                        $ 6,652        $ 1,499     $   231      $   472          $   555           $  9,409
Net Assets(1)                          $ 2,512        $   940     $    89      $   388          $   555           $  4,484
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases of Property and Equipment
   and Capitalized Software            $    80        $    93     $    27      $    10          $     -           $    210
Depreciation and Amortization          $    90        $    59     $    14      $    22          $     -           $    185
- ------------------------------------------------------------------------------------------------------------------------------------



(1) Total Assets and Net Assets exclude, where applicable, debt and accrued
interest of $1,222 million, $1,002 million and $708 million, income tax-related
assets of $235 million, $163 million and $266 million, and income tax-related
liabilities of $168 million, $167 million and $4 million as of December 31,
2000, 1999 and 1998, respectively.

(2) For comparability purposes, 1998 results are adjusted to exclude $725
million of operational realignment and other charges and $175 million of charges
related to contract losses associated with certain Medicare markets and other
increases to commercial and Medicare medical costs payable estimates. Including
these charges, 1998 segment operating earnings (loss) from operations were as
follows:



                          Year Ended December 31, 1998
- ---------------------------------------------------------------
                                 
Health Care Services                $   (46)
Uniprise                                 10
Specialized Care Services                14
Ingenix                                 (66)
- ---------------------------------------------------------------
   Total Operating Segments             (88)
Corporate                                46
- ---------------------------------------------------------------
   Total Consolidated               $   (42)
- ---------------------------------------------------------------



                                       47


(13) QUARTERLY FINANCIAL DATA (UNAUDITED)



                                                                               Quarter Ended
                                                     -------------------------------------------------------------
(in millions, except per share data)                 March 31      June 30      September 30 December 31
- -------------------------------------------------------------------------------------------------------------------
                                                                                 
2000
REVENUES                                             $ 5,099       $ 5,220      $ 5,369      $  5,434
MEDICAL AND OPERATING COSTS                          $ 4,826       $ 4,932      $ 5,060      $  5,104
NET EARNINGS APPLICABLE TO
  COMMON SHAREHOLDERS                                $   174(1)    $   170      $   182      $    210(2)
BASIC NET EARNINGS PER COMMON SHARE                  $  0.53       $  0.52      $  0.56      $   0.66
DILUTED NET EARNINGS PER COMMON SHARE                $  0.52(1)    $  0.50      $  0.54      $   0.63(2)
- ---------------------------------------------------------------------------------------------------------------------------

1999
Revenues                                             $ 4,809       $ 4,858      $ 4,903      $  4,992
Medical and Operating Costs                          $ 4,588       $ 4,633      $ 4,664      $  4,734
Net Earnings Applicable to
  Common Shareholders                                $   132       $   135      $   144      $   1573
Basic Net Earnings per Common Share                  $  0.36       $  0.39      $  0.41      $   0.47
Diluted Net Earnings per Common Share                $  0.36       $  0.38      $  0.40      $   0.46(3)
- ---------------------------------------------------------------------------------------------------------------------------


(1) Includes a $14 million, net permanent tax benefit related to the
contribution of UnitedHealth Capital investments to the UnitedHealth Foundation.
Excluding this benefit, Net Earnings Applicable to Common Shareholders and
Diluted Net Earnings Per Common Share were $160 million or $0.48 per share,
respectively.

(2) Includes a $27 million gain ($17 million after-tax) related to the
disposition of UnitedHealth Capital investments. Excluding this gain, Net
Earnings and Diluted Net Earnings per Common Share were $193 million and $0.58
per share, respectively.

(3) Includes a net permanent tax benefit primarily related to the contribution
of UnitedHealth Capital investments to the UnitedHealth Foundation. Excluding
this benefit, Net Earnings Applicable to Common Shareholders and Diluted Net
Earnings per Common Share were $152 million and $0.44 per share, respectively.



                                       48


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and
Directors of UnitedHealth Group Incorporated:

We have audited the accompanying consolidated balance sheets of UnitedHealth
Group Incorporated (a Minnesota Corporation) and Subsidiaries as of December 31,
2000 and 1999, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of UnitedHealth Group
Incorporated and its Subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
February  2, 2001

REPORT OF MANAGEMENT

The management of UnitedHealth Group is responsible for the integrity and
objectivity of the consolidated financial information contained in this annual
report. The consolidated financial statements and related information were
prepared according to generally accepted accounting principles and include some
amounts that are based on management's best estimates and judgments.
    To meet its responsibility, management depends on its accounting systems and
related internal accounting controls. These systems are designed to provide
reasonable assurance, at an appropriate cost, that financial records are
reliable for use in preparing financial statements and that assets are
safeguarded. Qualified personnel throughout the organization maintain and
monitor these internal accounting controls on an ongoing basis.
    The Audit Committee of the board of directors, composed entirely of
directors who are not employees of the company, meets periodically and privately
with the company's independent public accountants and management to review
accounting, auditing, internal control, financial reporting and other matters.

William W. McGuire, M.D.
Chairman and Chief Executive Officer

Stephen J. Hemsley
President and Chief Operating Officer

Patrick J. Erlandson
Chief Financial Officer



                                       49


CORPORATE AND BUSINESS LEADERS

UNITEDHEALTH GROUP

William W McGuire, M.D.
Chairman and
Chief Exectutive Officer


Stephen J. Hemsley
President and
Chief Operating Officer

Patrick J. Erlandson
Chief Financial Officer

David J. Luben
General Counsel

Jeannine M. Rivet
Executive Vice President

James B. Hudak
Chief Executive Officer
UnitedHealth Technologies

Reed V. Tuckson, M.D.
Senior Vice President
Consumer Health and Medical
Care Advancement

L.Robert Dapper
Senior Vice President
Human Capital

John S. Penshorn
Director of Capital Markets
Communications and Strategy

UNITEDHEALTHCARE

Robert J. Sheehy
Chief Executive Officer

OVATIONS
Lois Quam
Chief Executive Officer

UNIPRISE
R. Channing Wheeler
Chief Executive Officer

SPECIALIZED CARE SERVICES
Ronald B. Colby
Chief Executive Officer

INGENIX
Jeannine M. Rivet
Chief Executive Officer



                                       50

BOARD OF DIRECTORS

William C. Ballard, Jr.
Of Counsel
Greenbaum, Doll & McDonald
Louisville, Kentucky, law firm

Richard T. Burke
Former Chairman and
Chief Executive Officer
United HealthCare
Corporation

Stephen J. Hemsley
President and
Chief Operating Officer
UnitedHealth Group

James A. Johnson
Chairman and
Chief Executive Officer
Johnson Capital Partners
Private investment company

Thomas H. Kean
President
Drew University

Douglas W. Leatherdale
Chairman and
Chief Executive Officer
The Saint Paul Companies Inc.
Insurance and related services

William W. McGuire, M.D.
Chairman and
Chief Executive Officer
UnitedHealth Group


Walter F. Mondale
Partner
Dorsey & Whitney LLP
Minneapolis, Minnesota, law firm

Mary O. Mundinger
Dean and Professor, School of Nursing,
and Associate Dean,
Faculty of Medicine
Columbia University

Robert L. Ryan
Senior Vice President and
Chief Financial Officer
Medtronic, Inc.
Medical devices company

William G. Spears
Managing Partner
W. G. Spears Grisant &
Brown LLC
New York City-based investment
counseling and management firm

Gail R. Wilensky
Senior Fellow
Project HOPE
International health foundation


AUDIT COMMITTEE
William C. Ballard, Jr.
James A. Johnson
Douglas W. Leatherdale
Robert L. Ryan

COMPENSATION AND HUMAN RESOURCES COMMITTEE
Thomas H. Kean
Mary O. Mundinger
William G. Spears

COMPLIANCE AND GOVERNMENT AFFAIRS COMMITTEE
Richard T. Burke
Walter F. Mondale
Gail R. Wilensky

EXECUTIVE COMMITTEE
William C. Ballard, Jr.
Douglas W. Leatherdale
William W. McGuire, M.D.
William G. Spears

NOMINATING COMMITTEE
William C. Ballard, Jr.
Thomas H. Kean
Douglas W. Leatherdale
William W. McGuire, M.D.
William G. Spears




                                       51


FINANCIAL PERFORMANCE AT A GLANCE  United Health Group


Growth & Profits - Consolidated(1)
(in millions, except per share data)                                1998              1999            2000
- -------------------------------------------------------------------------------------------------------------
                                                                                             

Revenues                                                        $17,355              $19,562          $21,122
Continuing Markets Revenue Growth Rate                               12%                  13%              12%

Earnings from Operation                                         $   858              $   943           $1,200
Operationg Margin                                                   4.9%                 4.8%             5.7%
Return of Net Assets                                               17.7%                19.8%            25.5%

Net Earnings                                                    $   509              $   563           $  705
Net Margin                                                          2.9%                 2.9%             3.3%

Diluted Net Earnings Per Share                                  $  1.31              $  1.59           $ 2.10

- --------------------------------------------------------------------------------------------------------------
GROWTH & PROFITS - BY SEGMENT' (IN MILLIONS)                        1998              1999            2000
- --------------------------------------------------------------------------------------------------------------
HEALTH CARE SERVICES
                                                                                             
   Revenues                                                     $15,612              $17,581          $18,696
   Earnings from Operations                                     $   503              $   578          $   739
   Operating margin                                                 3.2%                 3.3%             4.0%
   Return on Net Assets                                            20.0%                20.6%            24.6%
UNIPRISE
   Revenues                                                     $ 1,624              $ 1,865          $ 2,140
   Earnings from Operations                                     $   161              $   222          $   269
   Operating Margin                                                 9.9%                11.9%            13.5%
   Return on Net Assets                                            16.7%                22.6%            30.6%
SPECALIZED CARE SERVICES
   Revenues                                                     $   618               $  726           $  974
   Earnings from Operations                                     $   109               $  128           $  174
   Operating Margin                                                17.6%                17.6%            17.9%
   Return on Net Assets                                           105.8%                80.0%            68.6%
INGENIX
   Revenues                                                     $   184               $  258           $  376
   Earnings from Operations                                     $    20               $   25           $   32
   Operating Margin                                                10.9%                 9.7%             6.5%
   Return on Net Assets                                             7.3%                 5.4%             5.2%
- --------------------------------------------------------------------------------------------------------------



CAPITAL ITEMS(1)
(IN MILLIONS, EXCEPT PER SHARE DATA)                               1998                 1999             2000
- --------------------------------------------------------------------------------------------------------------

                                                                                             
Cash Flows from Operations                                      $ 1,071              $ 1,189           $ 1,521

Captial Expenditures                                            $   210              $   196           $   245

Cash Paid for Acquistions                                       $   464              $   334           $    76

Debt to Total Capital                                                nm                 20.4%             24.7%

Return on Shareholders' Equity                                     11.9%                14.1%             19.0%

Year-End Market Capitalization                                  $ 7,920              $ 8,896           $19,470

Year-End Common Share Price                                     $ 21.53              $ 26.56           $ 61.38



(1)Excludes nonrecurring items and special operating charges.
nm - not meaningful



                                       52


INVESTOR INFORMATION United Health Group

MARKET PRICE OF COMMON STOCK
The following table shows the range of high and low sales prices for the
company's stock as reported on the New York Stock Exchange Composite Tape for
the calendar periods shown through February 26, 2001. These prices do not
include commissions or fees associated with purchasing or selling this security.


                               High           Low
- -----------------------------------------------------------
                                    
2001
First Quarter 2001
 Through February 26, 2001   $62.41        $51.56
- -----------------------------------------------------------

2000
First Quarter 2000           $32.33        $23.18
Second Quarter 2000          $44.50        $28.88
Third Quarter 2000           $50.56        $39.06
Fourth Quarter 2000          $63.44        $48.63
- -----------------------------------------------------------

1999
First Quarter 1999           $27.34        $19.72
Second Quarter 1999          $35.00        $22.35
Third Quarter 1999           $33.35        $24.03
Fourth Quarter 1999          $29.25        $19.69
- -----------------------------------------------------------


Account Questions

Our transfer agent, Wells Fargo, National Association, can help you with a
variety of shareholder-related services, including:

    Change of address
    Lost stock certificates
    Transfer of stock to another person
    Additional administrative services

You can call our transfer agent at (800) 468-9716 or locally at (651) 450-4064.

You can write them at:
    Wells Fargo Shareowner Services
    P.O. Box 64854
    Saint Paul, Minnesota 55164-0854

Or you can e-mail our transfer agent at:
    stocktransfer@wellsfargo.com

INVESTOR RELATIONS
You can contact UnitedHealth Group's Investor Relations group any time to order,
without charge, financial documents, such as the annual report and Form 10-K.
You can write to us at:

    Investor Relations, MN008-T930
    UnitedHealth Group
    P.O. Box 1459
    Minneapolis, Minnesota 55440-1459

ANNUAL MEETING
We invite UnitedHealth Group shareholders to attend our annual meeting, which
will be held on Wednesday, May 9, 2001, at 10 a.m., at UnitedHealth Group
Center, 9900 Bren Road East, Minnetonka, Minnesota.

DIVIDEND POLICY
UnitedHealth Group's dividend policy was established by the board of directors
in August 1990. The policy requires the board to review the company's audited
financial statements following the end of each fiscal year and decide whether it
is advisable to declare a dividend on the outstanding shares of common stock.

    Shareholders of record on April 1, 2000, received an annual dividend for
2000 of $0.015 per share. On October 24, 2000, UnitedHealth Group's board
of directors declared a two-for-one stock split. On February 13, 2001, the
company's board of directors approved an annual dividend for 2001 of $0.03 per
share. The dividend will be paid on April 18, 2001, to shareholders of record at
the close of business on April 2, 2001.

STOCK LISTING
The company's common stock is traded on the New York Stock Exchange under the
symbol UNH.

INFORMATION ONLINE
You can view our annual report and obtain more information about UnitedHealth
Group and its businesses via the Internet at:

    www.unitedhealthgroup.com


                                       53

EX-21

                                                         EXHIBIT 21
                                               SUBSIDIARIES OF THE REGISTRANT


==============================================================================
                  NAME OF ENTITY                             STATE OF
                                                           INCORPORATION
==============================================================================
                                                        
Ingenix, Inc.                                                 Delaware
- ------------------------------------------------------------------------------
Ingenix Pharmaceutical Services, Inc.                         Delaware
- ------------------------------------------------------------------------------
Worldwide Clinical Trials, Inc.                               California
- ------------------------------------------------------------------------------
UnitedHealthcare International, Inc.                          Delaware
- ------------------------------------------------------------------------------
UnitedHealth Group Finance Company, Inc.                      Delaware
- ------------------------------------------------------------------------------
United HealthCare Services, Inc.                              Minnesota
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Dental Benefit Providers, Inc.                                Delaware
- ------------------------------------------------------------------------------
Dental Benefit Providers of California, Inc.                  California
- ------------------------------------------------------------------------------
Dental Benefit Providers of Illinois, Inc.                    Illinois
- ------------------------------------------------------------------------------
Dental Benefit Providers of New Jersey, Inc.                  New Jersey
- ------------------------------------------------------------------------------
Dental Insurance Company of America, Inc.                     Maryland
- ------------------------------------------------------------------------------
Dental Insurance Company of America                           New York
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Ovations, Inc.                                                Delaware
- ------------------------------------------------------------------------------
The Ovations Press, Inc.                                      Delaware
- ------------------------------------------------------------------------------
Lifemark Corporation                                          Delaware
- ------------------------------------------------------------------------------
Arizona Health Concepts, Inc.                                 Arizona
- ------------------------------------------------------------------------------
Lifemark at Home, Inc.                                        Arizona
- ------------------------------------------------------------------------------
Lifemark Care Connection, Inc.                                Delaware
- ------------------------------------------------------------------------------
Lifemark Care Management, Inc.                                Delaware
- ------------------------------------------------------------------------------
Lifemark Government Services, LLC                             Indiana
- ------------------------------------------------------------------------------
Lifemark Healthplans of Delaware, Inc.                        Delaware
- ------------------------------------------------------------------------------
Lifemark New York, Inc.                                       Delaware
- ------------------------------------------------------------------------------
Lifemark at Home New York, Inc.                               New York
- ------------------------------------------------------------------------------
Lifemark Health Plan of Texas, LLC                            Texas
- ------------------------------------------------------------------------------
Lifemark of Texas, Inc.                                       Texas
- ------------------------------------------------------------------------------
MCS HP New York, LLC                                          New York
- ------------------------------------------------------------------------------
Ventana Health Systems, Inc.                                  Arizona
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Specialized Care Services, Inc.                               Delaware
- ------------------------------------------------------------------------------
Coordinated Vision Care, Inc.                                 Delaware
- ------------------------------------------------------------------------------
National Benefit Resources, Inc.                              Minnesota
- ------------------------------------------------------------------------------
Optum Group, LLC                                              Delaware
- ------------------------------------------------------------------------------
Specialty Resource Services, Inc.                             Delaware
- ------------------------------------------------------------------------------
United Resource Networks, Inc.                                Delaware
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Unimerica, Inc.                                               Delaware
- ------------------------------------------------------------------------------
United HealthCare Insurance Company                           Connecticut
- ------------------------------------------------------------------------------
Clarite, LLC                                                  Delaware
- ------------------------------------------------------------------------------
MetraHealth Care Management Corporation                       Delaware
- ------------------------------------------------------------------------------
The MetraHealth Employee Benefits Company, Inc.               Connecticut
- ------------------------------------------------------------------------------
United HealthCare Insurance Company of Illinois               Illinois
- ------------------------------------------------------------------------------
United HealthCare Insurance Company of New York               New York
- ------------------------------------------------------------------------------
United HealthCare Insurance Company of Ohio                   Ohio
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Uniprise, Inc.                                                Delaware
- ------------------------------------------------------------------------------
United HealthCare Service Corp.                               New York
- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------






==============================================================================
                  NAME OF ENTITY                             STATE OF
                                                           INCORPORATION
==============================================================================
                                                     
United Behavioral Health                                      California
- ------------------------------------------------------------------------------
U.S. Behavioral Health Plan, California
(Knox Keene)                                                  California
- ------------------------------------------------------------------------------
Behavioral Health Administrators                              California
- ------------------------------------------------------------------------------
United Behavioral Health of New York, I.P.A., Inc.            New York
- ------------------------------------------------------------------------------
Working Solutions, Inc.                                       Oregon
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
UnitedHealth Capital, LLC                                     Delaware
- ------------------------------------------------------------------------------
UnitedHealth Networks, Inc.                                   Delaware
- ------------------------------------------------------------------------------
UnitedHealthcare, Inc.                                        Delaware
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
United HealthCare of Alabama, Inc.                            Alabama
- ------------------------------------------------------------------------------
United HealthCare of Arizona, Inc.                            Arizona
- ------------------------------------------------------------------------------
United HealthCare of Arkansas, Inc.                           Arkansas
- ------------------------------------------------------------------------------

United HealthCare of California, Inc.                         California
- ------------------------------------------------------------------------------
United HealthCare of Colorado, Inc.                           Colorado
- ------------------------------------------------------------------------------
United HealthCare of Florida, Inc.                            Florida
- ------------------------------------------------------------------------------
United HealthCare of Georgia, Inc.                            Georgia
- ------------------------------------------------------------------------------
United HealthCare of Illinois, Inc.                           Delaware
- ------------------------------------------------------------------------------
United HealthCare of Kentucky, Ltd.                           Kentucky
- ------------------------------------------------------------------------------
United HealthCare of Louisiana, Inc.                          Louisiana
- ------------------------------------------------------------------------------
United HealthCare of Mississippi, Inc.                        Mississippi
- ------------------------------------------------------------------------------
United HealthCare of Nevada, Inc.                             Nevada
- ------------------------------------------------------------------------------
United HealthCare of New England, Inc.                        Rhode Island
- ------------------------------------------------------------------------------
UnitedHealthcare of New Jersey, Inc.                          New Jersey
- ------------------------------------------------------------------------------

UnitedHealthcare of New York, Inc.                            New York
- ------------------------------------------------------------------------------
UnitedHealthcare of North Carolina, Inc.                      North Carolina
- ------------------------------------------------------------------------------
United HealthCare of Ohio, Inc.                               Ohio
- ------------------------------------------------------------------------------
United HealthCare of Oregon, Inc.                             Oregon
- ------------------------------------------------------------------------------
United HealthCare of Tennessee, Inc.                          Tennessee
- ------------------------------------------------------------------------------
United HealthCare of Texas, Inc.                              Texas
- ------------------------------------------------------------------------------
United HealthCare of Utah                                     Utah
- ------------------------------------------------------------------------------
United HealthCare of Virginia, Inc.                           Virginia
- ------------------------------------------------------------------------------
United HealthCare of Washington, Inc.                         Washington
- ------------------------------------------------------------------------------
UnitedHealthcare of Wisconsin, Inc.                           Wisconsin
- ------------------------------------------------------------------------------
United HealthCare of the Mid-Atlantic, Inc.                   Maryland
- ------------------------------------------------------------------------------
United HealthCare of the Midlands Network, Inc.               Nebraska
- ------------------------------------------------------------------------------
United HealthCare of the Midlands, Inc.                       Nebraska
- ------------------------------------------------------------------------------
United HealthCare of the Midwest, Inc.                        Missouri
- ------------------------------------------------------------------------------
UnitedHealthCare Plans of Puerto Rico, Inc.                   Puerto Rico
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

EX-23

                                                                 EXHIBIT 23


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation of our
report dated February 2, 2001, incorporated by reference in this Form 10-K, into
the Company's previously filed Registration Statement File Nos. 2-95342,
33-3558, 33-22310, 33-27208, 33-36579, 33-50282, 33-59083, 33-59623, 33-63885,
33-67918, 33-68300, 33-75846, 33-79632, 33-79634, 33-79636, 33-79638, 333-01517,
333-01915, 333-02525, 333-04401, 333-04875, 333-05291, 333-05717, 333-06533,
333-25923, 333-27277, 333-41661, 333-44569, 333-44613, 333-45289, 333-45319,
333-50461, 333-55777, 333-66013, 333-71007, 333-81337, 333-87243, 333-90247,
333-46284 and 333-55666.


/s/ ARTHUR ANDERSEN LLP


Minneapolis, Minnesota,
March 30, 2001

EX-24

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William W. McGuire, M.D. Stephen J.
Hemsley, and David J. Lubben, and each of them, his or her true and lawful
attorneys-in-fact and agents, each acting alone, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign an Annual Report on Form 10-K for the year ended
December 31, 2000 for United Health Group Incorporated, and any and all
amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
or her substitute or substitutes may lawfully do or cause to be done by virtue
hereof.

Dated:  March 29, 2001



/s/ William C. Ballard Jr.                       /s/ William W. McGuire, M.D.
- ----------------------------                     ----------------------------
William C. Ballard Jr.                           William W. McGuire, M.D.



/s/ Richard T. Burke Sr.                         /s/ Walter F. Mondale
- ----------------------------                     ----------------------------
Richard T. Burke Sr.                             Walter F. Mondale



/s/ Stephen J. Hemsley                           /s/ Mary O'Neil Mundinger
- ----------------------------                     ----------------------------
Stephen J. Hemsley                               Mary O'Neil Mundinger



/s/ James A. Johnson                             /s/ Robert L. Ryan
- ----------------------------                     ----------------------------
James A. Johnson                                 Robert L. Ryan



/s/ Thomas H. Kean                               /s/ William G. Spears
- ----------------------------                     ----------------------------
Thomas H. Kean                                   William G. Spears



/s/ Douglas W. Leatherdale                       /s/ Gail R. Wilensky
- ----------------------------                     ----------------------------
Douglas W. Leatherdale                           Gail R. Wilensky