EXHIBIT 10.5


[FHS LETTERHEAD]


                                  March 2, 2000


Mr. Jay M. Gellert
440 Davis Street, Unit 913
San Francisco, CA 94111

Dear Jay:

Reference is made to your current employment letter agreement (the "Current
Letter Agreement") with Foundation Health Systems, Inc. (the "Company") dated
August 22, 1997.

The purpose of this letter is to amend the severance payment and related
provisions contained in the Current Letter Agreement as follows:

     -    You shall serve the Company as its President and Chief Executive
          Officer. In this capacity you shall report to the Board of Directors
          of the Company, and your annual base salary shall be $600,000
          (effective as of February 14, 2000).

     -    If during a two-year period following a "change-of-control"
          transaction you are terminated by the Company or voluntarily resign
          for "good reason" (each as defined in the Current Letter Agreement),
          you will be entitled to a $5 million severance payment instead of the
          three year salary/bonus severance payment set forth in the Current
          Letter Agreement.

     -    If you are terminated by the Company for a reason other than cause at
          any time, you will be entitled to a $5 million severance payment
          instead of the three year salary, one year bonus and two year bonus
          consulting payments set forth in the Current Letter Agreement.

     -    Your non-compete will continue in force for a period of one year
          post-termination of your employment in the event you receive severance
          payments under either of the two previous paragraphs.

     -    Your options will continue to remain exercisable for a period of two
          years post-termination of your employment by the Company without cause
          or by you for good reason within two years after a change-of-control
          transaction provided you continue to adhere to the non-compete
          restrictions contained in the Current Letter Agreement for such
          period.

     -    The Board of Directors of the Company may, at any time in its sole
          discretion, upon one year prior notice to you, rescind this amendment
          and cause the provisions set forth above to revert back to the
          provisions contained in the Current Letter Agreement (in other words,
          such rescission/reversion may only take place if you are provided at
          least one year prior notice of such change).



Mr. Jay M. Gellert
March 2, 2000
Page 2



     -    The provisions of the Current Letter Agreement that limit your
          aggregate severance benefit to the 280G limitations shall be replaced
          with the "modified cap" provisions contained in the Company's standard
          Severance Payment Agreement for Tier 1 officers.

All other terms and conditions of the Current Letter Agreement not amended above
shall remain in full force and effect.

Please countersign this letter agreement in the space provided below which will
evidence our agreement to the foregoing.

                                                     Very truly yours,


                                                 /s/ J. Thomas Bouchard
                                                 ------------------------------
                                                 J. Thomas Bouchard
                                                 Chairman, Compensation & Stock
                                                 Option Committee




ACCEPTED AND AGREED TO BY:


/s/ Jay M. Gellert
------------------------
Jay M. Gellert