FORM 10-Q
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
56-2357876
(I.R.S Employer
Identification No)
|
Large accelerated filer
☐
|
|
Accelerated filer
☒
|
Non-accelerated filer
☐
|
|
Smaller reporting company
☐
|
|
PART I FINANCIAL INFORMATION
|
PAGE
|
|||
Item 1.
|
|||||
|
|||||
|
|||||
|
|||||
|
|||||
Item 2.
|
|||||
Item 3.
|
|||||
Item 4.
|
|||||
|
PART II OTHER
INFORMATION
|
|
|||
Item 1.
|
|||||
Item 1A.
|
|||||
Item 5.
|
|||||
Item 6.
|
|||||
|
|
December 31, 2015
|
|
June 30, 2016
|
||||
Assets
|
(Note 1)
|
|
(unaudited)
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
62,710
|
|
|
$
|
66,714
|
|
Accounts receivable
|
9,647
|
|
|
13,931
|
|
||
Prepaid expenses and other current assets
|
5,185
|
|
|
5,401
|
|
||
Total current assets
|
77,542
|
|
|
86,046
|
|
||
Property and equipment, net
|
7,364
|
|
|
6,687
|
|
||
Other assets
|
4,697
|
|
|
4,024
|
|
||
Intangible assets, net
|
9,620
|
|
|
9,100
|
|
||
Goodwill
|
14,096
|
|
|
14,096
|
|
||
Total assets
|
$
|
113,319
|
|
|
$
|
119,953
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,012
|
|
|
$
|
2,344
|
|
Accrued compensation and benefits
|
14,386
|
|
|
8,499
|
|
||
Accrued marketing expenses
|
10,698
|
|
|
1,676
|
|
||
Deferred revenue
|
392
|
|
|
507
|
|
||
Accrued restructuring charges
|
223
|
|
|
68
|
|
||
Other current liabilities
|
3,225
|
|
|
5,058
|
|
||
Total current liabilities
|
31,936
|
|
|
18,152
|
|
||
Non-current liabilities
|
4,962
|
|
|
4,704
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock
|
29
|
|
|
29
|
|
||
Additional paid-in capital
|
266,699
|
|
|
269,824
|
|
||
Treasury stock, at cost
|
(199,998
|
)
|
|
(199,998
|
)
|
||
Retained earnings
|
9,498
|
|
|
27,056
|
|
||
Accumulated other comprehensive income
|
193
|
|
|
186
|
|
||
Total stockholders’ equity
|
76,421
|
|
|
97,097
|
|
||
Total liabilities and stockholders’ equity
|
$
|
113,319
|
|
|
$
|
119,953
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Commission
|
$
|
37,396
|
|
|
$
|
34,649
|
|
|
$
|
95,215
|
|
|
$
|
104,036
|
|
Other
|
2,498
|
|
|
2,628
|
|
|
5,967
|
|
|
7,085
|
|
||||
Total revenue
|
39,894
|
|
|
37,277
|
|
|
101,182
|
|
|
111,121
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
670
|
|
|
533
|
|
|
3,084
|
|
|
2,717
|
|
||||
Marketing and advertising
|
9,285
|
|
|
12,936
|
|
|
34,736
|
|
|
33,818
|
|
||||
Customer care and enrollment
|
7,658
|
|
|
10,411
|
|
|
19,519
|
|
|
20,610
|
|
||||
Technology and content
|
8,591
|
|
|
8,289
|
|
|
19,364
|
|
|
16,796
|
|
||||
General and administrative
|
7,516
|
|
|
10,815
|
|
|
15,489
|
|
|
18,944
|
|
||||
Restructuring charges (benefit)
|
58
|
|
|
(158
|
)
|
|
4,541
|
|
|
(158
|
)
|
||||
Amortization of intangible assets
|
288
|
|
|
260
|
|
|
633
|
|
|
520
|
|
||||
Total operating costs and expenses
|
34,066
|
|
|
43,086
|
|
|
97,366
|
|
|
93,247
|
|
||||
Income (loss) from operations
|
5,828
|
|
|
(5,809
|
)
|
|
3,816
|
|
|
17,874
|
|
||||
Other expense, net
|
(9
|
)
|
|
(21
|
)
|
|
(23
|
)
|
|
(32
|
)
|
||||
Income (loss) before provision (benefit) for income taxes
|
5,819
|
|
|
(5,830
|
)
|
|
3,793
|
|
|
17,842
|
|
||||
Provision (benefit) for income taxes
|
69
|
|
|
(5,354
|
)
|
|
125
|
|
|
284
|
|
||||
Net income (loss)
|
$
|
5,750
|
|
|
$
|
(476
|
)
|
|
$
|
3,668
|
|
|
$
|
17,558
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.32
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.20
|
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.20
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares used in per share amounts:
|
|
|
|
|
|
|
|
||||||||
Basic
|
17,967
|
|
|
18,258
|
|
|
17,906
|
|
|
18,206
|
|
||||
Diluted
|
18,035
|
|
|
18,258
|
|
|
17,998
|
|
|
18,296
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
5,750
|
|
|
$
|
(476
|
)
|
|
$
|
3,668
|
|
|
$
|
17,558
|
|
Foreign currency translation adjustment
|
4
|
|
|
4
|
|
|
5
|
|
|
(7
|
)
|
||||
Comprehensive income (loss)
|
$
|
5,754
|
|
|
$
|
(472
|
)
|
|
$
|
3,673
|
|
|
$
|
17,551
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2015
|
|
2016
|
||||
Operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
3,668
|
|
|
$
|
17,558
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
2,108
|
|
|
1,934
|
|
||
Amortization of internally-developed software
|
|
318
|
|
|
435
|
|
||
Amortization of book-of-business consideration
|
|
1,991
|
|
|
1,603
|
|
||
Amortization of intangible assets
|
|
633
|
|
|
520
|
|
||
Stock-based compensation expense
|
|
3,858
|
|
|
4,009
|
|
||
Deferred rent and other
|
|
28
|
|
|
(53
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(1,955
|
)
|
|
(4,284
|
)
|
||
Prepaid expenses and other assets
|
|
(243
|
)
|
|
(568
|
)
|
||
Accounts payable
|
|
(3,895
|
)
|
|
(630
|
)
|
||
Accrued compensation and benefits
|
|
159
|
|
|
(5,887
|
)
|
||
Accrued marketing expenses
|
|
(6,996
|
)
|
|
(9,022
|
)
|
||
Deferred revenue
|
|
(432
|
)
|
|
115
|
|
||
Accrued restructuring charges
|
|
569
|
|
|
(287
|
)
|
||
Other liabilities
|
|
1,736
|
|
|
1,813
|
|
||
Net cash provided by operating activities
|
|
1,547
|
|
|
7,256
|
|
||
Investing activities
|
|
|
|
|
||||
Purchases of property and equipment and other assets
|
|
(1,432
|
)
|
|
(2,318
|
)
|
||
Net cash used in investing activities
|
|
(1,432
|
)
|
|
(2,318
|
)
|
||
Financing activities
|
|
|
|
|
||||
Net proceeds from exercise of common stock options
|
|
1,049
|
|
|
60
|
|
||
Cash used to net-share settle equity awards
|
|
(736
|
)
|
|
(944
|
)
|
||
Principal payments in connection with capital leases
|
|
(40
|
)
|
|
(43
|
)
|
||
Net cash provided by (used in) financing activities
|
|
273
|
|
|
(927
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
9
|
|
|
(7
|
)
|
||
|
|
|
|
|
||||
Net increase in cash and cash equivalents
|
|
397
|
|
|
4,004
|
|
||
Cash and cash equivalents at beginning of period
|
|
51,415
|
|
|
62,710
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
51,812
|
|
|
$
|
66,714
|
|
|
December 31, 2015
|
|
June 30, 2016
|
||||
Cash
|
$
|
8,086
|
|
|
$
|
7,066
|
|
Money market funds
|
54,624
|
|
|
59,648
|
|
||
Total cash and cash equivalents
|
$
|
62,710
|
|
|
$
|
66,714
|
|
|
December 31, 2015
|
|
June 30, 2016
|
||||
Commission receivable
|
$
|
6,136
|
|
|
$
|
1,520
|
|
Accounts receivable
—
from other revenues
|
3,511
|
|
|
1,192
|
|
||
Commissions receivable
—
from Medicare renewals
|
—
|
|
|
11,219
|
|
||
Total accounts receivable
|
$
|
9,647
|
|
|
$
|
13,931
|
|
|
Shares Available for Grant
|
|
Shares available for grant December 31, 2015
|
3,542
|
|
Restricted stock units granted
|
(354
|
)
|
Options granted
|
(326
|
)
|
Restricted stock units cancelled (1)
|
137
|
|
Options cancelled (2)
|
3
|
|
Shares available for grant June 30, 2016
|
3,002
|
|
(1)
|
Restricted stock units cancelled does not include restricted stock units cancelled under the 2006 Equity Incentive Plan, as our 2006 Equity Incentive Plan has been terminated with respect to the grant of additional awards.
|
(2)
|
Options cancelled does not include stock options cancelled under the 2006 Equity Incentive Plan, as our 2006 Equity Incentive Plan has been terminated with respect to the grant of additional awards.
|
|
Number of Stock Options
(1)
|
|
Weighted- Average Exercise Price
|
|
Weighted-Average Remaining Contractual Life (years)
|
|
Aggregate Intrinsic Value
(2)
|
|||||
Balance outstanding at December 31, 2015
|
1,275
|
|
|
$
|
18.79
|
|
|
2.79
|
|
$
|
—
|
|
Granted
|
326
|
|
|
$
|
13.21
|
|
|
|
|
|
|
|
Exercised
|
(5
|
)
|
|
$
|
12.98
|
|
|
|
|
|
||
Cancelled
|
(175
|
)
|
|
$
|
16.61
|
|
|
|
|
|
|
|
Balance outstanding at June 30, 2016
|
1,421
|
|
|
$
|
17.80
|
|
|
2.91
|
|
$
|
527
|
|
Vested and expected to vest at June 30, 2016
|
1,366
|
|
|
$
|
17.95
|
|
|
2.77
|
|
$
|
485
|
|
Exercisable at June 30, 2016
|
963
|
|
|
$
|
18.95
|
|
|
1.56
|
|
$
|
183
|
|
(1)
|
Includes certain stock options with both service and market-based vesting criteria granted to our executive officers.
|
(2)
|
The aggregate intrinsic value is calculated as the difference between eHealth’s closing stock price as of December 31, 2015 and
June 30, 2016
and the exercise price of in-the-money options as of those dates.
|
|
Number of Restricted Stock Units
(1)
|
|
Weighted-Average Grant Date Fair Value
|
|
Weighted-Average Remaining Contractual Life (years)
|
|
Aggregate Intrinsic Value
(2)
|
|||||
Balance outstanding as of December 31, 2015
|
966
|
|
|
$
|
15.62
|
|
|
2.83
|
|
$
|
9,636
|
|
Granted
|
354
|
|
|
$
|
11.21
|
|
|
|
|
|
|
|
Vested
|
(262
|
)
|
|
$
|
19.12
|
|
|
|
|
|
|
|
Cancelled
|
(139
|
)
|
|
$
|
10.75
|
|
|
|
|
|
|
|
Balance outstanding as of June 30, 2016
|
919
|
|
|
$
|
14.41
|
|
|
3.02
|
|
$
|
12,888
|
|
(1)
|
Includes certain restricted stock units with both service and performance-based or market-based vesting criteria granted to our executive officers.
|
(2)
|
The aggregate intrinsic value is calculated as eHealth’s closing stock price as of
December 31, 2015
and
June 30, 2016
multiplied by the number of restricted stock units outstanding as of
December 31, 2015
and
June 30, 2016
, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Stock options
|
$
|
371
|
|
|
$
|
308
|
|
|
$
|
833
|
|
|
$
|
634
|
|
Restricted stock units
|
1,456
|
|
|
1,869
|
|
|
3,025
|
|
|
3,375
|
|
||||
Total stock-based compensation expense
|
$
|
1,827
|
|
|
$
|
2,177
|
|
|
$
|
3,858
|
|
|
$
|
4,009
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Marketing and advertising
|
$
|
446
|
|
|
$
|
417
|
|
|
$
|
1,037
|
|
|
$
|
972
|
|
Customer care and enrollment
|
139
|
|
|
147
|
|
|
256
|
|
|
270
|
|
||||
Technology and content
|
511
|
|
|
473
|
|
|
946
|
|
|
908
|
|
||||
General and administrative
|
731
|
|
|
1,140
|
|
|
1,506
|
|
|
1,859
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
||||
Total stock-based compensation expense
|
$
|
1,827
|
|
|
$
|
2,177
|
|
|
$
|
3,858
|
|
|
$
|
4,009
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Income before provision (benefit) for income taxes
|
$
|
5,819
|
|
|
$
|
(5,830
|
)
|
|
$
|
3,793
|
|
|
$
|
17,842
|
|
Provision (benefit) for income taxes
|
$
|
69
|
|
|
$
|
(5,354
|
)
|
|
$
|
125
|
|
|
$
|
284
|
|
Effective tax rate
|
1.2
|
%
|
|
91.8
|
%
|
|
3.3
|
%
|
|
1.6
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
5,750
|
|
|
$
|
(476
|
)
|
|
$
|
3,668
|
|
|
$
|
17,558
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common stock shares outstanding
|
17,967
|
|
|
18,258
|
|
|
17,906
|
|
|
18,206
|
|
||||
Net income (loss) per share—basic:
|
$
|
0.32
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.20
|
|
|
$
|
0.96
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
5,750
|
|
|
$
|
(476
|
)
|
|
$
|
3,668
|
|
|
$
|
17,558
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average number of common stock shares outstanding
|
17,967
|
|
|
18,258
|
|
|
17,906
|
|
|
18,206
|
|
||||
Weighted-average number of options
|
20
|
|
|
—
|
|
|
22
|
|
|
17
|
|
||||
Weighted-average number of restricted stock units
|
48
|
|
|
—
|
|
|
70
|
|
|
73
|
|
||||
Total common stock shares used in diluted per share calculation (1)
|
18,035
|
|
|
18,258
|
|
|
17,998
|
|
|
18,296
|
|
||||
Net income (loss) per share—diluted:
|
$
|
0.32
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.20
|
|
|
$
|
0.96
|
|
(1)
|
Total common stock shares used in the diluted per share calculation excludes market-based stock unit awards for which the related contingency had not been met as of June 30, 2016.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||
Common stock options
|
1,450
|
|
|
1,281
|
|
|
1,507
|
|
|
1,255
|
|
Restricted stock units
|
492
|
|
|
869
|
|
|
447
|
|
|
235
|
|
Total
|
1,942
|
|
|
2,150
|
|
|
1,954
|
|
|
1,490
|
|
|
As of
|
|
As of
|
||||
|
December 31, 2015
|
|
June 30, 2016
|
||||
United States
|
$
|
35,341
|
|
|
$
|
33,495
|
|
China
|
436
|
|
|
412
|
|
||
Total
|
$
|
35,777
|
|
|
$
|
33,907
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||
Humana
|
13
|
%
|
|
16
|
%
|
|
26
|
%
|
|
27
|
%
|
Anthem
(1)
|
11
|
%
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
UnitedHealthcare
(2)
|
11
|
%
|
|
13
|
%
|
|
10
|
%
|
|
11
|
%
|
Aetna
(3)
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Employee termination costs
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
3,791
|
|
|
$
|
—
|
|
Non-cash employee termination costs - stock-based compensation
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
||||
Facility and other termination costs
|
1
|
|
|
(158
|
)
|
|
637
|
|
|
(158
|
)
|
||||
Total restructuring charges
|
$
|
58
|
|
|
$
|
(158
|
)
|
|
$
|
4,541
|
|
|
$
|
(158
|
)
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Beginning balance
|
|
Charges
|
|
Payments
|
|
Benefits
|
|
Ending balance
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Employee termination costs
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Facility and other termination costs
|
421
|
|
|
—
|
|
|
(117
|
)
|
|
(158
|
)
|
|
146
|
|
|||||
Total restructuring liability
|
$
|
433
|
|
|
$
|
—
|
|
|
$
|
(129
|
)
|
|
$
|
(158
|
)
|
|
$
|
146
|
|
Less: non-current restructuring charges associated with facilities
|
|
|
|
|
|
|
|
|
(78
|
)
|
|||||||||
Restructuring charges liability - current
|
|
|
|
|
|
|
|
|
$
|
68
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the number of applications for Medicare-related, individual and family, small business and ancillary health insurance we submit to health insurance carriers;
|
•
|
the number of members on submitted applications;
|
•
|
the rate at which the individuals on those applications turn into paying members;
|
•
|
the commission rates we receive for the health insurance plans that we sell; and
|
•
|
our membership retention.
|
|
Three Months Ended June 30,
|
||||
|
2015
|
|
2016
|
||
Source of total submitted applications (as a percentage of total submitted applications for the period):
|
|
|
|
||
Direct
|
61
|
%
|
|
63
|
%
|
Marketing partners
|
33
|
%
|
|
31
|
%
|
Online advertising
|
6
|
%
|
|
6
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended June 30,
|
|
|||||||
|
2015
|
|
2016
|
Percentage Change
|
|||||
|
|
|
|
|
|||||
Submitted applications:
|
|
|
|
|
|||||
Medicare submitted applications (1)
|
18,600
|
|
|
32,700
|
|
76
|
%
|
||
IFP submitted applications (2)
|
23,900
|
|
|
9,800
|
|
(59
|
)%
|
||
Other submitted applications (3)
|
67,100
|
|
|
60,600
|
|
(10
|
)%
|
||
Total submitted applications (4)
|
109,600
|
|
|
103,100
|
|
(6
|
)%
|
||
|
|
|
|
|
|||||
Medicare Advantage submitted applications (5)
|
13,705
|
|
|
24,923
|
|
82
|
%
|
||
|
|
|
|
|
|||||
Commission revenue (in thousands):
|
|
|
|
|
|||||
Medicare commission revenue (6)
|
$
|
6,851
|
|
|
$
|
9,008
|
|
31
|
%
|
IFP commission revenue (7)
|
24,046
|
|
|
19,595
|
|
(19
|
)%
|
||
Other commission revenue (8)
|
6,499
|
|
|
6,046
|
|
(7
|
)%
|
||
Total commission revenue (9)
|
$
|
37,396
|
|
|
$
|
34,649
|
|
(7
|
)%
|
|
|
|
|
|
|||||
|
As of June 30,
|
|
|||||||
|
2015
|
|
2016
|
Percentage Change
|
|||||
Estimated membership:
|
|
|
|
|
|||||
Medicare estimated membership (10)
|
169,100
|
|
|
239,000
|
|
41
|
%
|
||
IFP estimated membership (11)
|
568,400
|
|
|
481,300
|
|
(15
|
)%
|
||
Other estimated membership (12)
|
404,900
|
|
|
380,000
|
|
(6
|
)%
|
||
Total estimated membership (13)
|
1,142,400
|
|
|
1,100,300
|
|
(4
|
)%
|
||
|
|
|
|
|
Notes:
|
||
(1)
|
|
Medicare-related health insurance applications submitted on our website or through our customer care center during the period, including Medicare Advantage, Medicare Part D Prescription drug and Medicare Supplement plans. Applications are counted as submitted when the applicant completes the application and either clicks the submit button on our website or provides verbal authorization to submit the application. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information. In addition, an applicant may submit more than one application.
|
(2)
|
|
Major medical Individual and Family plan ("IFP") health insurance applications submitted on our website during the period. Applications are counted as submitted when the applicant completes the application, clicks the submit button on our website and submits the application to us. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information and providing an electronic signature. In addition, an applicant may submit more than one application. We define our “IFP” offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans (primarily consisting of short-term, dental, life, vision, and accident insurance plans).
|
(3)
|
|
Applications for health insurance plans other than Medicare and IFP submitted on our website during the period. Applications for ancillary plans are counted as submitted when the applicant completes the application, clicks the submit button on our website and submits the application to us. Applications for small business plans are counted as submitted when the applicant completes the application, the employees complete their applications, the applicant submits the application to us and we submit the application to the carrier. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information. In addition, an applicant may submit more than one application.
|
(4)
|
|
Applications for all health insurance plans submitted on our website or through our customer care center during the period. See notes (1), (2) and (3) above for further information as to what constitutes a submitted application.
|
(5)
|
|
Medicare Advantage plan health insurance applications submitted on our website or through our customer care center during the period. Applications are counted as submitted when the applicant completes the application and either clicks the submit button on our website or provides verbal authorization to submit the application. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information. In addition, an applicant may submit more than one application. Medicare Advantage submitted applications are included in Medicare submitted applications - See note (2) above.
|
(6)
|
|
Commission revenue recognized on all Medicare-related health insurance during the period.
|
(7)
|
|
Commission revenue recognized on all IFP health insurance plans during the period, including commission overrides.
|
(8)
|
|
Commission revenue recognized on all insurance other than Medicare-related health insurance and IFP health insurance plans during the period.
|
(9)
|
|
Total commission revenue recognized on all insurance plans during the period.
|
(10)
|
|
Estimated number of members active on Medicare-related health insurance as of the date indicated. See the note below for additional information regarding our calculation of Medicare estimated membership.
|
(11)
|
|
Estimated number of members active on IFP health insurance plans as of the date indicated. See the note below for additional information regarding our calculation of IFP estimated membership.
|
(12)
|
|
Estimated number of members active on insurance plans other than Medicare-related health insurance and IFP health insurance plans as of the date indicated. See the note below for additional information regarding our calculation of other estimated membership.
|
(13)
|
|
Estimated number of members active on all insurance plans as of the date indicated. See the note below for additional information regarding our calculation of total estimated membership.
|
•
|
For Medicare-related health insurance plans, we take the number of members for whom we have received or applied a commission payment during the month of estimation.
|
•
|
For IFP health insurance plans, we take the sum of (i) the number of IFP members for whom we have received or applied a commission payment for the month that is six months prior to the date of estimation after reducing that number using historical experience for assumed member cancellations over the six-month period; and (ii) the number of approved members over the six-month period prior to the date of estimation after reducing that number by the percentage of members who do not accept their approved policy from the same month of the previous year for each of the six months prior to the date of estimation and for estimated member cancellations through the date of the estimate.
|
•
|
For ancillary health insurance plans (such as short-term, dental, vision, accident and student), we take the sum of (i) the number of members for whom we have received or applied a commission payment for the month that is one to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the one to three-month period); and (ii) the number of approved members over the one to three-month period prior to the date of estimation (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and
|
•
|
Revenue Recognition;
|
•
|
Stock-Based Compensation;
|
•
|
Realizability of Long-Lived Assets; and
|
•
|
Accounting for Income Taxes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commission
|
$
|
37,396
|
|
|
94
|
%
|
|
$
|
34,649
|
|
|
93
|
%
|
|
$
|
95,215
|
|
|
94
|
%
|
|
$
|
104,036
|
|
|
94
|
%
|
Other
|
2,498
|
|
|
6
|
|
|
2,628
|
|
|
7
|
|
|
5,967
|
|
|
6
|
|
|
7,085
|
|
|
6
|
|
||||
Total revenue
|
39,894
|
|
|
100
|
|
|
37,277
|
|
|
100
|
|
|
101,182
|
|
|
100
|
|
|
111,121
|
|
|
100
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue
|
670
|
|
|
2
|
|
|
533
|
|
|
1
|
|
|
3,084
|
|
|
3
|
|
|
2,717
|
|
|
2
|
|
||||
Marketing and advertising
|
9,285
|
|
|
23
|
|
|
12,936
|
|
|
35
|
|
|
34,736
|
|
|
34
|
|
|
33,818
|
|
|
30
|
|
||||
Customer care and enrollment
|
7,658
|
|
|
19
|
|
|
10,411
|
|
|
28
|
|
|
19,519
|
|
|
19
|
|
|
20,610
|
|
|
19
|
|
||||
Technology and content
|
8,591
|
|
|
22
|
|
|
8,289
|
|
|
22
|
|
|
19,364
|
|
|
19
|
|
|
16,796
|
|
|
15
|
|
||||
General and administrative
|
7,516
|
|
|
19
|
|
|
10,815
|
|
|
29
|
|
|
15,489
|
|
|
15
|
|
|
18,944
|
|
|
17
|
|
||||
Restructuring charges
|
58
|
|
|
—
|
|
|
(158
|
)
|
|
—
|
|
|
4,541
|
|
|
4
|
|
|
(158
|
)
|
|
—
|
|
||||
Amortization of intangible assets
|
288
|
|
|
1
|
|
|
260
|
|
|
1
|
|
|
633
|
|
|
1
|
|
|
520
|
|
|
—
|
|
||||
Total operating costs and expenses
|
34,066
|
|
|
85
|
|
|
43,086
|
|
|
116
|
|
|
97,366
|
|
|
96
|
|
|
93,247
|
|
|
84
|
|
||||
Income (loss) from operations
|
5,828
|
|
|
15
|
|
|
(5,809
|
)
|
|
(16
|
)
|
|
3,816
|
|
|
4
|
|
|
17,874
|
|
|
16
|
|
||||
Other expense, net
|
(9
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
||||
Income (loss) before provision (benefit) for income taxes
|
5,819
|
|
|
15
|
|
|
(5,830
|
)
|
|
(16
|
)
|
|
3,793
|
|
|
4
|
|
|
17,842
|
|
|
16
|
|
||||
Provision (benefit) for income taxes
|
69
|
|
|
—
|
|
|
(5,354
|
)
|
|
(14
|
)
|
|
125
|
|
|
—
|
|
|
284
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
5,750
|
|
|
14
|
%
|
|
$
|
(476
|
)
|
|
(1
|
)%
|
|
$
|
3,668
|
|
|
4
|
%
|
|
$
|
17,558
|
|
|
16
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||||||
Marketing and advertising
|
$
|
446
|
|
|
$
|
417
|
|
|
$
|
1,037
|
|
|
$
|
972
|
|
Customer care and enrollment
|
139
|
|
|
147
|
|
|
256
|
|
|
270
|
|
||||
Technology and content
|
511
|
|
|
473
|
|
|
946
|
|
|
908
|
|
||||
General and administrative
|
731
|
|
|
1,140
|
|
|
1,506
|
|
|
1,859
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
113
|
|
|
—
|
|
||||
Total stock-based compensation expense
|
$
|
1,827
|
|
|
$
|
2,177
|
|
|
$
|
3,858
|
|
|
$
|
4,009
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Commission
|
$
|
37,396
|
|
|
$
|
34,649
|
|
|
$
|
(2,747
|
)
|
|
(7
|
)%
|
|
$
|
95,215
|
|
|
$
|
104,036
|
|
|
$
|
8,821
|
|
|
9
|
%
|
Percentage of total revenue
|
94
|
%
|
|
93
|
%
|
|
|
|
|
|
|
|
94
|
%
|
|
94
|
%
|
|
|
|
|
|
|
||||||
Other
|
$
|
2,498
|
|
|
$
|
2,628
|
|
|
$
|
130
|
|
|
5
|
%
|
|
$
|
5,967
|
|
|
$
|
7,085
|
|
|
$
|
1,118
|
|
|
19
|
%
|
Percentage of total revenue
|
6
|
%
|
|
7
|
%
|
|
|
|
|
|
|
6
|
%
|
|
6
|
%
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
39,894
|
|
|
$
|
37,277
|
|
|
$
|
(2,617
|
)
|
|
(7
|
)%
|
|
$
|
101,182
|
|
|
$
|
111,121
|
|
|
$
|
9,939
|
|
|
10
|
%
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Cost of revenue
|
$
|
670
|
|
|
$
|
533
|
|
|
$
|
(137
|
)
|
|
(20
|
)%
|
|
$
|
3,084
|
|
|
$
|
2,717
|
|
|
$
|
(367
|
)
|
|
(12
|
)%
|
Percentage of total revenue
|
2
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
3
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Marketing and advertising
|
$
|
9,285
|
|
|
$
|
12,936
|
|
|
$
|
3,651
|
|
|
39
|
%
|
|
$
|
34,736
|
|
|
$
|
33,818
|
|
|
$
|
(918
|
)
|
|
(3
|
)%
|
Percentage of total revenue
|
23
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
34
|
%
|
|
30
|
%
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Customer care and enrollment
|
$
|
7,658
|
|
|
$
|
10,411
|
|
|
$
|
2,753
|
|
|
36
|
%
|
|
$
|
19,519
|
|
|
$
|
20,610
|
|
|
$
|
1,091
|
|
|
6
|
%
|
Percentage of total revenue
|
19
|
%
|
|
28
|
%
|
|
|
|
|
|
|
|
19
|
%
|
|
19
|
%
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Technology and content
|
$
|
8,591
|
|
|
$
|
8,289
|
|
|
$
|
(302
|
)
|
|
(4
|
)%
|
|
$
|
19,364
|
|
|
$
|
16,796
|
|
|
$
|
(2,568
|
)
|
|
(13
|
)%
|
Percentage of total revenue
|
22
|
%
|
|
22
|
%
|
|
|
|
|
|
|
|
19
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
General and administrative
|
$
|
7,516
|
|
|
$
|
10,815
|
|
|
$
|
3,299
|
|
|
44
|
%
|
|
$
|
15,489
|
|
|
$
|
18,944
|
|
|
$
|
3,455
|
|
|
22
|
%
|
Percentage of total revenue
|
19
|
%
|
|
29
|
%
|
|
|
|
|
|
|
|
15
|
%
|
|
17
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Restructuring charges
|
$
|
58
|
|
|
$
|
(158
|
)
|
|
$
|
(216
|
)
|
|
(372
|
)%
|
|
$
|
4,541
|
|
|
$
|
(158
|
)
|
|
$
|
(4,699
|
)
|
|
(103
|
)%
|
Percentage of total revenue
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
4
|
%
|
|
—
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Amortization of intangible assets
|
$
|
288
|
|
|
$
|
260
|
|
|
$
|
(28
|
)
|
|
(10
|
)%
|
|
$
|
633
|
|
|
$
|
520
|
|
|
$
|
(113
|
)
|
|
(18
|
)%
|
Percentage of total revenue
|
1
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Other expense, net
|
$
|
(9
|
)
|
|
$
|
(21
|
)
|
|
$
|
(12
|
)
|
|
133
|
%
|
|
$
|
(23
|
)
|
|
$
|
(32
|
)
|
|
$
|
(9
|
)
|
|
39
|
%
|
Percentage of total revenue
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2015
|
|
2016
|
|
$
|
|
%
|
|
2015
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Provision (benefit) for income taxes
|
$
|
69
|
|
|
$
|
(5,354
|
)
|
|
$
|
(5,423
|
)
|
|
(7,859
|
)%
|
|
$
|
125
|
|
|
$
|
284
|
|
|
$
|
159
|
|
|
127
|
%
|
Percentage of total revenue
|
—
|
%
|
|
(14
|
)%
|
|
|
|
|
|
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2016
|
||||
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
1,547
|
|
|
$
|
7,256
|
|
Net cash used in investing activities
|
$
|
(1,432
|
)
|
|
$
|
(2,318
|
)
|
Net cash provided by (used in) financing activities
|
$
|
273
|
|
|
$
|
(927
|
)
|
Years Ending December 31,
|
Operating Lease Obligations
|
|
Service and Licensing Obligations
|
|
Total Obligations
|
||||||
|
|
|
|
|
|
||||||
2016 (six months)
|
$
|
2,340
|
|
|
$
|
1,197
|
|
|
$
|
3,537
|
|
2017
|
4,419
|
|
|
2,051
|
|
|
6,470
|
|
|||
2018
|
3,222
|
|
|
646
|
|
|
3,868
|
|
|||
2019
|
1,046
|
|
|
—
|
|
|
1,046
|
|
|||
2020
|
1,075
|
|
|
—
|
|
|
1,075
|
|
|||
Thereafter
|
2,445
|
|
|
—
|
|
|
2,445
|
|
|||
Total
|
$
|
14,547
|
|
|
$
|
3,894
|
|
|
$
|
18,441
|
|
|
December 31, 2015
|
|
June 30, 2016
|
||||
Cash
(1)
|
$
|
8,086
|
|
|
$
|
7,066
|
|
Money market funds
(2)
|
54,624
|
|
|
59,648
|
|
||
Total cash and cash equivalents
|
$
|
62,710
|
|
|
$
|
66,714
|
|
(1)
|
We deposit our cash and cash equivalents in accounts with major banks and financial institutions and such deposits are in excess of federally insured limits. We also have deposits with major banks in China that are denominated in both U.S. dollars and Chinese Yuan Renminbi and are not insured by the U.S. federal government.
|
(2)
|
At December 31, 2015 and
June 30, 2016
money market funds consisted of U.S. government-sponsored enterprise bonds and discount notes, U.S. government treasury bills and notes and repurchase agreements collateralized by U.S. government obligations.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2015
|
|
2016
|
|
2015
|
|
2016
|
||||
Humana
|
13
|
%
|
|
16
|
%
|
|
26
|
%
|
|
27
|
%
|
Anthem
(1)
|
11
|
%
|
|
9
|
%
|
|
9
|
%
|
|
8
|
%
|
UnitedHealthcare
(2)
|
11
|
%
|
|
13
|
%
|
|
10
|
%
|
|
11
|
%
|
Aetna
(3)
|
8
|
%
|
|
9
|
%
|
|
9
|
%
|
|
10
|
%
|
(1)
|
Anthem includes other carriers owned by Anthem.
|
(2)
|
UnitedHealthcare includes other carriers owned by UnitedHealthcare.
|
(3)
|
Aetna includes other carriers owned by Aetna.
|
•
|
our ability to continue to adapt our ecommerce platforms to market Medicare plans, including our development or acquisition of marketing tools and features important in the sale of Medicare plans online and the effective modification of our user experience;
|
•
|
our success in marketing to Medicare-eligible individuals and in entering into marketing partner relationships to drive Medicare-eligible individuals to our ecommerce platforms;
|
•
|
our effectiveness in entering into and maintaining relationships with marketing partners that refer Medicare-eligible individuals to us;
|
•
|
our ability to hire and retain additional employees with experience in Medicare, including our ability to timely implement Medicare sales expertise into our customer care centers;
|
•
|
our ability to implement and maintain an effective information technology infrastructure for the sale of Medicare plans, including the infrastructure and systems that support our websites, call centers and call recording;
|
•
|
our ability to leverage technology in order to sell, and otherwise become more efficient at selling, Medicare-related plans over the telephone;
|
•
|
our ability to comply with the numerous, complex and changing laws and regulations and CMS guidelines relating to the marketing and sale of Medicare plans, including continuing to conform our online and offline sales processes to those laws and regulations; and
|
•
|
the effectiveness with which our competitors market the availability of Medicare plans from sources other than our ecommerce platforms.
|
•
|
undertake more extensive marketing campaigns for their brands and services;
|
•
|
devote more resources to website and systems development;
|
•
|
negotiate more favorable commission rates and commission override payments; and
|
•
|
make more attractive offers to potential employees, marketing partners and third-party service providers.
|
•
|
changes in consumer shopping behavior due to circumstances outside of our control, such as economic conditions, consumers’ ability or willingness to pay for health insurance, availability of unemployment benefits or proposed or enacted legislative or regulatory changes impacting our business, including health care reform;
|
•
|
the quality of and changes to the consumer experience on our ecommerce platform or with our customer care center;
|
•
|
regulatory requirements, including those that make the experience on our online platforms cumbersome or difficult to navigate;
|
•
|
the variety, competitiveness and affordability of the health insurance plans that we offer;
|
•
|
system failures or interruptions in the operation of our ecommerce platform or call center operations;
|
•
|
changes in the mix of consumers who are referred to us through our direct, marketing partner and online advertising member acquisition channels;
|
•
|
health insurance carriers offering the health insurance plans for which consumers have expressed interest, and the degree to which our technology is integrated with those carriers;
|
•
|
health insurance carrier guidelines applicable to applications submitted by consumers, the amount of time a carrier takes to make a decision on that application and the percentage of submitted applications approved by health insurance carriers;
|
•
|
the percentage of our members who did not accept their approved policies and from whom we do not receive commission payments; and
|
•
|
our ability to enroll subsidy-eligible individuals in qualified health plans through government-run health insurance exchanges.
|
•
|
the growth of the Internet as a commerce medium generally, and as a market for consumer financial plans and services specifically;
|
•
|
consumers’ willingness to conduct their own health insurance research;
|
•
|
our ability to make the process of purchasing health insurance online an attractive alternative to traditional and new means of purchasing health insurance;
|
•
|
our ability to develop an effective process for purchasing health insurance over the Internet on smartphones, tablets and devices other than desktop or laptop computers;
|
•
|
our ability to successfully and cost-effectively market our services as superior to traditional or alternative sources for health insurance to a sufficiently large number of consumers; and
|
•
|
health insurance carriers’ willingness to use us and the Internet as a distribution channel for health insurance plans.
|
•
|
the continued positive market presence, reputation and growth of the marketing partner;
|
•
|
the effectiveness of the marketing partner in marketing our website and services, including whether the marketing partner is successful in maintaining the prominence of its website in algorithmic search result listings and paid Internet advertisements;
|
•
|
the compliance of our marketing partners, and of the manner marketing partners refer consumers to our platforms, with applicable laws, regulations and guidelines;
|
•
|
the interest of the marketing partner’s customers in the health insurance plans that we offer on our ecommerce platform;
|
•
|
the contractual terms we negotiate with the marketing partner, including the marketing fees we agree to pay a marketing partner;
|
•
|
the percentage of the marketing partner’s customers that submit applications or purchase health insurance policies through our ecommerce platform;
|
•
|
the ability of a marketing partner to maintain efficient and uninterrupted operation of its website; and
|
•
|
our ability to work with the marketing partner to implement website changes, launch marketing campaigns and pursue other initiatives necessary to maintain positive consumer experiences and acceptable traffic volumes.
|
•
|
if we are unable to maintain successful relationships with our existing marketing partners, particularly marketing partners responsible for a significant number of our submitted applications;
|
•
|
if we fail to establish successful relationships with new marketing partners;
|
•
|
if we experience competition in our receipt of referrals from our high volume marketing partners; and
|
•
|
if we are required to pay increased amounts to our marketing partners.
|
•
|
an acquisition may negatively impact our results of operations because it will require us to incur transaction expenses, and after the transaction, may require us to incur charges and substantial debt or liabilities, may require the amortization, write down or impairment of amounts related to deferred compensation, goodwill and other intangible assets, or may cause adverse tax consequences, substantial depreciation or deferred compensation charges;
|
•
|
an acquisition undertaken for strategic business purposes may negatively impact our results of operations;
|
•
|
we may encounter difficulties in assimilating and integrating the business, technologies, products, personnel or operations of companies that we acquire, particularly if key personnel of the acquired company decide not to work for us;
|
•
|
an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;
|
•
|
we may be required to implement or improve internal controls, procedures and policies appropriate for a public company at a business that prior to the acquisition lacked these controls, procedures and policies;
|
•
|
the acquired businesses, products or technologies may not generate sufficient revenue to offset acquisition costs or to maintain our financial results;
|
•
|
we may have to issue equity securities to complete an acquisition, which would dilute our stockholders’ ownership and could adversely affect the market price of our common stock; and
|
•
|
acquisitions may involve the entry into geographic or business markets in which we have little or no prior experience.
|
•
|
grant and revoke licenses to transact insurance business;
|
•
|
conduct inquiries into the insurance-related activities and conduct of agents and agencies;
|
•
|
require and regulate disclosure in connection with the sale and solicitation of health insurance;
|
•
|
authorize how, by which personnel and under what circumstances insurance premiums can be quoted and published and an insurance policy sold;
|
•
|
approve which entities can be paid commissions from carriers and the circumstances under which they may be paid;
|
•
|
regulate the content of insurance-related advertisements, including web pages, and other marketing practices;
|
•
|
approve policy forms, require specific benefits and benefit levels and regulate premium rates;
|
•
|
impose fines and other penalties; and
|
•
|
impose continuing education requirements.
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general, and companies in our industry;
|
•
|
actual or anticipated changes in our results of operations or fluctuations in our operating results;
|
•
|
actual or anticipated changes in the expectations of investors or securities analysts, including changes in financial estimates or investment recommendations by securities analysts who follow our business and changes in perceptions relating to the economy;
|
•
|
speculation in the press or investment community;
|
•
|
technological advances or introduction of new products by us or our competitors;
|
•
|
actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;
|
•
|
litigation involving us, our industry or both;
|
•
|
actual or anticipated regulatory developments in the United States or foreign countries, including health care reform legislation in the United States;
|
•
|
major catastrophic events;
|
•
|
announcements or developments relating to the economy;
|
•
|
our sale of common stock or other securities in the future;
|
•
|
the trading volume of our common stock, as well as sales of large blocks of our stock; or
|
•
|
departures of key personnel.
|
•
|
a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
|
cumulative voting in the election of directors is prohibited, which limits the ability of minority stockholders to elect director candidates;
|
•
|
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
|
the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
|
•
|
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
|
the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and
|
•
|
advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
|
|
|
|
Incorporation by Reference Herein
|
|
Exhibit
Number
|
|
Description of Exhibit
|
Form
|
Date
|
10.1
|
†*
|
Separation Agreement and Release, dated May 31, 2016, between Gary Lauer L. and eHealth, Inc.
|
|
|
10.2
|
†*
|
Employment Agreement, dated May 31, 2016, between Scott N. Flanders and eHealth, Inc.
|
|
|
10.3
|
†*
|
Separation Agreement and Release, dated June 27, 2016, between William T. Shaughnessy and eHealth, Inc.
|
|
|
10.4
|
†*
|
Transition Agreement and Release, dated July 11, 2016, between Stuart Huizinga and eHealth, Inc.
|
|
|
10.5
|
†*
|
Employment Agreement, dated July 11 2016, between David Francis and eHealth, Inc.
|
|
|
10.6
|
†*
|
2016 Chief Executive Officer Bonus Plan
|
|
|
10.7
|
†*
|
Form of Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) under the 2014 Equity Incentive Plan of eHealth, Inc.
|
|
|
10.8
|
†*
|
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based Vesting) under the 2014 Equity Incentive Plan of eHealth, Inc.
|
|
|
10.9
|
†*
|
Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) granted to Scott N. Flanders on June 3, 2016
|
|
|
10.10
|
†*
|
Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based Vesting) granted to Scott N. Flanders on June 3, 2016
|
|
|
10.11
|
†*
|
Form of Severance Letter
|
|
|
10.12
|
|
Eighth Amendment to Standard Lease Agreement (Office) and Partial Termination of Lease dated June 23, 2016
|
Form 8-K
|
June 28, 2016
|
31.1
|
†
|
Certification of Scott N. Flanders, Chief Executive Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
†
|
Certification of Stuart M. Huizinga, Principal Financial Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
‡
|
Certification of Scott N. Flanders, Chief Executive Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
‡
|
Certification of Stuart M. Huizinga, Principal Financial Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS
|
**
|
XBRL Instance Document
|
|
|
101.SCH
|
**
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
/s/ Scott N. Flanders
|
|
|
Scott N. Flanders
|
|
|
Chief Executive Officer
|
|
|
(Duly Authorized Officer on Behalf of the Registrant)
|
|
|
|
|
|
/s/ Stuart M. Huizinga
|
|
|
Stuart M. Huizinga
|
|
|
Principal Financial Officer and Accounting Officer
|
|
|
|
|
|
|
|
Incorporation by Reference Herein
|
|
Exhibit
Number
|
|
Description of Exhibit
|
Form
|
Date
|
10.1
|
†*
|
Separation Agreement and Release, dated May 31, 2016, between Gary Lauer L. and eHealth, Inc.
|
|
|
10.2
|
†*
|
Employment Agreement, dated May 31, 2016, between Scott N. Flanders and eHealth, Inc.
|
|
|
10.3
|
†*
|
Separation Agreement and Release, dated June 27, 2016, between William T. Shaughnessy and eHealth, Inc.
|
|
|
10.4
|
†*
|
Transition Agreement and Release, dated July 11, 2016, between Stuart Huizinga and eHealth, Inc.
|
|
|
10.5
|
†*
|
Employment Agreement, dated July 11 2016, between David Francis and eHealth, Inc.
|
|
|
10.6
|
†*
|
2016 Chief Executive Officer Bonus Plan
|
|
|
10.7
|
†*
|
Form of Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) under the 2014 Equity Incentive Plan of eHealth, Inc.
|
|
|
10.8
|
†*
|
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based Vesting) under the 2014 Equity Incentive Plan of eHealth, Inc.
|
|
|
10.9
|
†*
|
Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) granted to Scott N. Flanders on June 3, 2016
|
|
|
10.10
|
†*
|
Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based Vesting) granted to Scott N. Flanders on June 3, 2016
|
|
|
10.11
|
†*
|
Form of Severance Letter
|
|
|
10.12
|
|
Eighth Amendment to Standard Lease Agreement (Office) and Partial Termination of Lease dated June 23, 2016
|
Form 8-K
|
June 28, 2016
|
31.1
|
†
|
Certification of Scott N. Flanders, Chief Executive Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
†
|
Certification of Stuart M. Huizinga, Principal Financial Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
‡
|
Certification of Scott N. Flanders, Chief Executive Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
‡
|
Certification of Stuart M. Huizinga, Principal Financial Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS
|
**
|
XBRL Instance Document
|
|
|
101.SCH
|
**
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Salary, Incentive and Incentive Percentage for the CEO
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
INCENTIVE %
|
INCENTIVE $
|
|
|||||||||||||||
|
OFFICERS
|
SALARY*
|
TITLE
|
TARGET
|
MAX
|
TARGET
|
MAX
|
|
|||||||||||||
|
Scott Flanders
|
$
|
600,000
|
|
CEO
|
100
|
%
|
150
|
%
|
$
|
600,000
|
|
|
$900,000
|
|
|
|||||
|
|
|
|
|
|
|
|
|
Vesting Schedule:
|
This option will vest to the extent that the Performance Goals (as defined below) are achieved and you remain in continuous Service throught the applicable vesting date(s).
|
Expiration Date:
|
[
Insert Date
]. This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.
|
Tax Treatment
|
This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory stock option, as provided in the Notice of Stock Option Grant.
|
Vesting
|
This option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This option will in no event become exercisable for additional shares after your Service has terminated for any reason.
|
Term
|
This option expires in any event at the close of business at Company headquarters on the day before the 7
th
anniversary of the Date of Grant, as shown in the Notice of Stock Option Grant. (It will expire earlier if your Service terminates, as described below.)
|
Regular Termination
|
If your Service terminates for any reason except death or “Total and Permanent Disability” (as defined in the Plan), then this option will expire at the close of business at Company headquarters on the date three months after your termination date. The Company determines when your Service terminates for this purpose.
|
Death
|
If you die before your Service terminates, then this option will expire at the close of business at Company headquarters on the date 12 months after the date of death.
|
Disability
|
If your Service terminates because of your Total and Permanent Disability, then this option will expire at the close of business at Company headquarters on the date 12 months after your termination date.
|
Leaves of Absence and Part-Time Work
|
For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another
bona fide
leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
To the extent this option is an
incentive stock option, no such leave may exceed three (3) months (the “Maximum Leave Period”), unless your reemployment upon expiration of such leave is guaranteed by statute or contract. If your reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the day after the end of the Maximum Leave Period any part of this option intended to be an incentive stock option
will cease to be treated as an
i
ncentive
s
tock
option and will be
treated for tax purposes as a
n
onstatutory
s
tock
option.
If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
|
Restrictions on Exercise
|
The Company will not permit you to exercise this option if the issuance of shares at that time would violate any applicable law or regulation, as determined by the Company.
|
Notice of Exercise
|
When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when the Company receives it.
If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
|
Form of Payment
|
When you submit your notice of exercise, you must include payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms:
•
Your personal check, a cashier’s check or a money order.
•
Certificates for shares of Company stock that you own, along with any forms needed to effect a transfer of those shares to the Company. However, the Company’s consent is required for this alternative. The value of the shares, determined as of the effective date of the option exercise, will be applied to the option exercise price. Instead of surrendering shares of Company stock, you may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the option shares issued to you.
•
Irrevocable directions to a securities broker approved by the Company to sell all or part of your option shares and to deliver to the Company from the sale proceeds an amount sufficient to pay the option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. |
Withholding Taxes and Stock Withholding
|
You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. With the Company’s consent, these arrangements may include withholding shares of Company stock that otherwise would be issued to you when you exercise this option with a Fair Market Value equal to the minimum amount statutorily required to be withheld.
|
Restrictions on Resale
|
You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
|
Transfer of Option
|
Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or a beneficiary designation.
Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other way.
|
Retention Rights
|
Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
|
Stockholder Rights
|
You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share will be adjusted pursuant to the Plan.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions).
|
The Plan and Other Agreements
|
The text of the Plan is incorporated in this Agreement by reference.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement between the parties.
|
Vesting Schedule:
|
Shares covered by this Stock Unit award will vest to the extent that the Performance Goals (as defined below) are achieved and you remain in continuous Service through the applicable vesting date(s).
|
Grant
|
The Company hereby grants you an award of restricted Stock Units (“RSUs”), as set forth in the Notice of Stock Unit Grant (the “Notice of Grant”) and subject to the terms and conditions in this Agreement and the Company’s 2014 Equity Incentive Plan (the “Plan”). Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Unit Agreement.
|
Company’s Obligation
|
Each RSU represents the right to receive a share of Stock (a “Share”) on the vesting date. Unless and until the RSUs vest, you will have no right to receive Shares under such RSUs. Prior to actual distribution of Shares pursuant to any vested RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.
Settlement of any vested RSUs shall be made in whole Shares only.
|
Vesting
|
Subject to the next paragraph (Forfeiture upon Termination of Service), the RSUs awarded by this Agreement will vest according to the vesting schedule specified in the Notice of Grant. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
|
Forfeiture upon Termination of Service
|
Notwithstanding any contrary provision of this Agreement or the Notice of Grant, if you terminate Service for any or no reason prior to vesting, the unvested RSUs awarded by this Agreement will thereupon be forfeited at no cost to the Company.
|
Leaves of Absence
|
For purposes of this RSU, your Service does not terminate when you go on a military leave, a sick leave or another
bona fide
leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence, then the vesting schedule specified in the Notice of Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave.
|
Payment after Vesting
|
Any RSUs that vest hereunder will be paid to you (or in the event of your death, to your estate) in Shares. Subject to any payment delay required under the following paragraph, such vested RSUs shall be paid in whole Shares as soon as practicable after vesting, but in each such case within sixty (60) days following
the vesting date
. In no event will you be permitted, directly or indirectly, to specify the taxable year of payment of any RSUs payable under this Agreement.
Notwithstanding anything in the Plan or this Agreement
or any other agreement (whether entered into before, on or after Date of Grant)
, if the vesting of the balance, or some lesser portion of the balance, of the RSUs is accelerated in connection with your termination of Service (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to your death, and i
f (x) you are a “specified employee” within the meaning of Section 409A at the time of such termination of Service and (y) the payment of such accelerated RSUs will result in the imposition of additional tax under Section 409A if paid to you on or within the six (6) month period following your termination of Service, then the payment of such accelerated RSUs will not be made until the date six (6) months and one (1) day following the date of your termination of Service, unless you die following your termination of Service, in which case, the RSUs will be paid in Shares to your estate as soon as practicable following your death.
|
Section 409A
|
It is the intent of this Agreement that it and all payments and benefits hereunder be exempt from, or comply with, the requirements of Section 409A
so that none of the RSUs provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A
, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Award Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Agreement, “Section 409A” means Section 409A of the Code, and
any final Treasury Regulations and Internal Revenue Service guidance thereunder
, as each may be amended from time to time.
|
Tax Withholding
|
Notwithstanding any contrary provision of this Agreement, no Shares shall be distributed to you unless and until you have made satisfactory arrangements with respect to the payment of income, employment and any other taxes which must be withheld with respect to such Shares. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit you to satisfy such tax withholding obligation, in whole or in part by one or more of the following: (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a value equal to the minimum amount statutorily required to be withheld, (c) delivering to the Company already vested and owned Shares having a value equal to the amount required to be withheld, or (d) selling a sufficient number of such Shares otherwise deliverable to you through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. If you fail to make satisfactory arrangements for the payment of any required tax withholding obligations with respect to Shares that are vesting, the Administrator, in its sole discretion, may require you to permanently forfeit such Shares and the Shares will be returned to the Plan at no cost.
|
Tax Consequences
|
You acknowledge that you have reviewed with your own tax advisors the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, you acknowledge and agree that you are relying solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.
|
Arbitration
|
You and the Company agree that any and all disputes arising out of the terms of the Notice of Grant, the Plan or this Agreement or their interpretation shall be subject to binding arbitration in Santa Clara County, California before the American Arbitration Association under its California Employment Dispute Resolution Rules, or by a judge to be mutually agreed upon. You and the Company agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. You and the Company agree that the prevailing party in any arbitration shall be awarded reasonable attorney’s fees and costs.
|
Payments after Death
|
Any distribution or delivery to be made to you under this Agreement will, if you are then deceased, be made to the administrator or executor of your estate. Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
|
Stockholder Rights
|
Neither you nor any person claiming under or through you will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to you or your broker.
|
No Effect on Employment
|
Your employment with the Company and its Subsidiaries is on an at‑will basis only. Accordingly, the terms of your employment with the Company and its Subsidiaries will be determined from time to time by the Company or the Subsidiary employing you (as the case may be), and the Company or the Subsidiary will have the right, which is hereby expressly reserved, to terminate or change the terms of your employment at any time for any reason whatsoever, with or without good cause or notice.
|
Notices
|
Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company at 440 East Middlefield Road, Mountain View, California 94043,
Attn
: Stock Administration, or at such other address as the Company may hereafter designate in writing or electronically.
|
Grant is Not Transferable
|
Except to the limited extent provided in paragraph, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.
You may, however, dispose of this award in your will or through a beneficiary designation.
|
Binding Agreement
|
Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
|
Additional Conditions to Issuance of Stock
|
If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to you (or your estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.
|
Resale Restrictions
|
You
agree not to sell any RSU Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California, without regard to its choice-of-law provisions.
|
The Plan and Other Agreements
|
The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions of the Plan, the provisions of the Plan will govern.
This Agreement, the Notice of Grant and the Plan constitute the entire understanding between you and the Company regarding this award. Any prior agreements, commitments or negotiations concerning this award are superseded. This Agreement may be amended only by another written agreement between the parties. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without your consent, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this grant of RSUs.
|
Administrator Authority
|
The Administrator will have the power to interpret the Plan, the Notice of Grant and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon you, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Notice of Grant or this Agreement.
|
(a)
|
continued payment of your base salary as in effect immediately prior to the termination of your employment with the Company, for a period of six (6) months following the termination of your employment with the Company, payable in accordance with the Company’s normal payroll practices (“
Salary Severance
”), and
|
(b)
|
if you elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“
COBRA
”) within the time period specified under COBRA for you and your eligible dependents, then the Company will reimburse you for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to your termination) until the earlier of (i) a period of six (6) months following the date of termination or (ii) the date upon which you and/or your eligible dependents become covered under similar plans (“
COBRA Severance
”).
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of eHealth, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ S
COTT
N. F
LANDERS
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Scott N. Flanders
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Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of eHealth, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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|
|
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|
|
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/s/ S
TUART
M. H
UIZINGA
|
|
Stuart M. Huizinga
|
|
Principal Financial Officer and Accounting Officer
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(1)
|
The Form 10-Q, to which this certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of eHealth, Inc.
|
/s/ S
COTT
N. F
LANDERS
|
Scott N. Flanders
|
Chief Executive Officer
|
August 8, 2016
|
(1)
|
The Form 10-Q, to which this certification is attached as Exhibit 32.2, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of eHealth, Inc.
|
/s/ S
TUART
M. H
UIZINGA
|
Stuart M. Huizinga
|
Principal Financial Officer and Accounting Officer
|
August 8, 2016
|