Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | WELLCARE HEALTH PLANS, INC. | |
Entity Central Index Key | 1,279,363 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,073,905 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Premium | $ 3,478.5 | $ 3,139.5 | $ 6,944.6 | $ 6,114.7 |
Investment and other income | 4 | 12.4 | 7.8 | 22.9 |
Total revenues | 3,482.5 | 3,151.9 | 6,952.4 | 6,137.6 |
Expenses: | ||||
Medical benefits | 2,977.1 | 2,834.3 | 6,029.3 | 5,464.2 |
Selling, general and administrative | 255.5 | 228.9 | 512.4 | 474.2 |
ACA industry fee | 58.3 | 36.3 | 116.6 | 68.6 |
Medicaid premium taxes | 20.3 | 18.6 | 40.2 | 35.7 |
Depreciation and amortization | 18.1 | 15 | 34.9 | 29.6 |
Interest | 12.5 | 9.3 | 23.9 | 18.5 |
Impairment and other charges | 0 | 24.1 | 0 | 24.1 |
Total expenses | 3,341.8 | 3,166.5 | 6,757.3 | 6,114.9 |
Income (loss) from operations | 140.7 | (14.6) | 195.1 | 22.7 |
Bargain purchase gain | 0 | 11.1 | 0 | 39.4 |
Income (loss) before income taxes | 140.7 | (3.5) | 195.1 | 62.1 |
Income tax expense | 89 | 4 | 125.9 | 25.5 |
Net income (loss) | 51.7 | (7.5) | 69.2 | 36.6 |
Other comprehensive (loss) income, before tax: | ||||
Change in net unrealized gains and losses on available-for-sale securities | (1.2) | 1 | (0.8) | 1.2 |
Income tax (benefit) expense related to other comprehensive income | (0.4) | 0.3 | (0.3) | 0.2 |
Other comprehensive (loss) income, net of tax | (0.8) | 0.7 | (0.5) | 1 |
Comprehensive income (loss) | $ 50.9 | $ (6.8) | $ 68.7 | $ 37.6 |
Earnings (loss) per common share: | ||||
Basic net income per share (in dollars per share) | $ 1.17 | $ (0.17) | $ 1.57 | $ 0.83 |
Diluted net income per share (in dollars per share) | $ 1.17 | $ (0.17) | $ 1.56 | $ 0.83 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 44,054,778 | 43,867,449 | 44,018,377 | 43,834,748 |
Diluted (in shares) | 44,358,313 | 43,867,449 | 44,331,159 | 44,123,050 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 1,339.5 | $ 1,313.5 |
Investments | 220.8 | 172.8 |
Premiums receivable, net | 973 | 609 |
Pharmacy rebates receivable | 315.1 | 358.9 |
Receivables from government partners | 62.3 | 83 |
Funds receivable for the benefit of members | 913.2 | 781.5 |
Deferred ACA industry fee | 116.2 | 0 |
Prepaid expenses and other current assets, net | 102 | 170.5 |
Deferred income tax asset | 32.2 | 37.1 |
Total current assets | 4,074.3 | 3,526.3 |
Property, equipment and capitalized software, net | 220.9 | 187.1 |
Goodwill | 263.2 | 263.2 |
Other intangible assets, net | 95.4 | 101 |
Long-term investments | 155.8 | 257.3 |
Restricted investments | 198.9 | 150.3 |
Other assets | 12.3 | 9.8 |
Total Assets | 5,020.8 | 4,495 |
Current Liabilities: | ||
Medical benefits payable | 1,405.5 | 1,483.8 |
Unearned premiums | 7.8 | 86.9 |
ACA industry fee liability | 232.8 | 0 |
Accounts payable | 27.1 | 18.9 |
Other accrued expenses and liabilities | 306.7 | 294.7 |
Current portion of amount payable related to investigation resolution | 0 | 35.2 |
Income taxes payable | 18.8 | 1.9 |
Other payables to government partners | 44.1 | 14.3 |
Total current liabilities | 2,042.8 | 1,935.7 |
Deferred income tax liability | 76.7 | 48.4 |
Long-term debt | 1,213.3 | 900 |
Other liabilities | 18.9 | 15 |
Total liabilities | $ 3,351.7 | $ 2,899.1 |
Commitments and contingencies (see Note 11) | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value (20,000,000 authorized, no shares issued or outstanding) | $ 0 | $ 0 |
Common stock, $0.01 par value (100,000,000 authorized, 44,071,136 and 43,914,106 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively) | 0.4 | 0.4 |
Paid-in capital | 507.5 | 503 |
Retained earnings | 1,162.3 | 1,093.1 |
Accumulated other comprehensive loss | (1.1) | (0.6) |
Total Stockholders' Equity | 1,669.1 | 1,595.9 |
Total Liabilities and Stockholders' Equity | $ 5,020.8 | $ 4,495 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 44,071,136 | 43,914,106 |
Common stock, outstanding (in shares) | 44,071,136 | 43,914,106 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Millions | Total | Common Stock | Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2014 | $ 1,595.9 | $ 0.4 | $ 503 | $ 1,093.1 | $ (0.6) |
Balance (in shares) at Dec. 31, 2014 | 43,914,106 | 43,914,106 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued for exercised stock options | $ 0.3 | $ 0 | 0.3 | 0 | 0 |
Common stock issued for exercised stock options (in shares) | 8,020 | ||||
Common stock issued for vested restricted stock units, performance stock units and market stock units | 0 | $ 0 | 0 | 0 | 0 |
Common stock issued for vested restricted stock, restricted stock units, performance stock units and market stock units (in shares) | 215,623 | ||||
Repurchase and retirement of shares to satisfy tax withholding requirements | (5.9) | $ 0 | (5.9) | 0 | 0 |
Repurchase and retirement of shares to satisfy tax withholding requirements (shares) | (66,613) | ||||
Stock-based compensation expense, net of forfeitures | 8.7 | $ 0 | 8.7 | 0 | 0 |
Incremental tax benefit from stock-based compensation | 1.4 | 0 | 1.4 | 0 | 0 |
Comprehensive income | 68.7 | 0 | 0 | 69.2 | (0.5) |
Balance at Jun. 30, 2015 | $ 1,669.1 | $ 0.4 | $ 507.5 | $ 1,162.3 | $ (1.1) |
Balance (in shares) at Jun. 30, 2015 | 44,071,136 | 44,071,136 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash used in operating activities: | ||
Net income | $ 69.2 | $ 36.6 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 34.9 | 29.6 |
Stock-based compensation expense | 8.7 | 6.2 |
Bargain purchase gain | 0 | (39.4) |
Deferred ACA fee amortization | 116.6 | 68.6 |
Asset impairment and other charges | 0 | 24.1 |
Incremental tax benefit from stock-based compensation | (1.4) | (0.3) |
Deferred taxes, net | 33.6 | (3.2) |
Provision for doubtful receivables | 7.2 | 7.8 |
Changes in operating accounts, net of effects from acquisitions: | ||
Premiums receivable | (371.2) | (395.5) |
Pharmacy rebates receivable | 43.8 | (93.6) |
Prepaid expenses and other current assets, net | 69.3 | (7.8) |
Medical benefits payable | (71.4) | 306.9 |
Unearned premiums | (79.1) | 7.7 |
Accounts payable and other accrued expenses | 26.7 | (6.6) |
Other payables to government partners | 50.5 | (131.9) |
Amount payable related to investigation resolution | (35.2) | (35.7) |
Income taxes receivable/payable, net | 20.6 | (20.5) |
Other, net | 2.5 | 0.4 |
Net cash used in operating activities | (74.7) | (246.6) |
Cash (used in) provided by investing activities: | ||
Acquisitions and acquisition-related settlements, net of cash acquired | (17.2) | 137.2 |
Purchases of investments | (86.3) | (329.5) |
Proceeds from sale and maturities of investments | 90.3 | 266 |
Additions to property, equipment and capitalized software, net | (63.6) | (27.9) |
Net cash (used in) provided by investing activities | (76.8) | 45.8 |
Cash provided by (used in) financing activities: | ||
Proceeds from issuance of debt, net of financing costs paid | 308.9 | 0 |
Proceeds from exercises of stock options | 0.3 | 0.2 |
Incremental tax benefit from stock-based compensation | 1.4 | 0.3 |
Repurchase and retirement of shares to satisfy employee tax withholding requirements | (5.9) | (2.4) |
Payments on capital leases | (0.1) | (0.7) |
Funds paid for the benefit of members, net | (127.1) | (164.9) |
Net cash provided by (used in) financing activities | 177.5 | (167.5) |
Increase (decrease) in cash and cash equivalents | 26 | (368.3) |
Balance at beginning of period | 1,313.5 | 1,482.5 |
Balance at end of period | 1,339.5 | 1,114.2 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for taxes | 69.9 | 49.1 |
Cash paid for interest | 21.4 | 17.8 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: | ||
Non-cash additions to property, equipment, and capitalized software | $ 11.2 | $ 1.3 |
ORGANIZATION, BASIS OF PRESENTA
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES WellCare Health Plans, Inc. (the "Company," "we," "us," or "our"), provides managed care services for government-sponsored health care coverage with a focus on Medicaid and Medicare programs. As of June 30, 2015 , we served approximately 3.8 million members. During the six months ended June 30, 2015 , we operated Medicaid health plans in Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of June 30, 2015 , we also operated Medicare Advantage ("MA") coordinated care plans ("CCPs") in Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas, as well as stand-alone Medicare prescription drug plans ("PDP") in 49 states and the District of Columbia. Basis of Presentation and Use of Estimates The accompanying unaudited condensed consolidated balance sheets and statements of comprehensive income, changes in stockholders' equity, and cash flows include the accounts of the Company and all of its majority-owned subsidiaries. We eliminated all intercompany accounts and transactions. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, certain financial information and footnote disclosures normally included in financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2014 included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission in February 2015. Results for the interim periods presented are not necessarily indicative of results that may be expected for the entire year or any other interim period. In the opinion of management, the interim financial statements reflect all normal recurring adjustments that we consider necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented. In accordance with GAAP, we make certain estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. We base these estimates, including assumptions as to the annualized tax rate, on our knowledge of current events and anticipated future events and evaluate and update our assumptions and estimates on an ongoing basis; however, actual results may differ from our estimates. We evaluated all material events subsequent to the date of these condensed consolidated interim financial statements. Significant Accounting Policies Medical Benefits and Medical Benefits Payable We recognize the cost of medical benefits in the period in which services are provided, including an estimate of the cost of medical benefits incurred but not reported ("IBNR"). Medical benefits expense includes direct medical expenses and certain medically-related administrative costs. We evaluate our estimates of medical benefits payable as we obtain more complete claims information and medical expense trend data over time. We record differences between actual experience and estimates used to establish the liability, which we refer to as favorable and unfavorable prior year reserve developments, as increases or decreases to medical benefits expense in the period we identify the differences. Favorable prior year reserve development for the six months ended June 30, 2015 was approximately $44.5 million , primarily related to the Medicaid Health Plans segment, compared to net unfavorable development of $(61.6) million recognized during the corresponding period in 2014. Such amounts are net of the development relating to refunds due to government customers associated with minimum medical loss ratio provisions. ACA Industry Fee In 2014, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA"), began imposing an annual premium-based health insurance industry assessment (the "ACA industry fee") on health insurers. The total ACA industry fee levied on the health insurance industry was $8 billion in 2014 and will be $11.3 billion in 2015. The ACA industry fee is not deductible for income tax purposes. For 2015, we accrued the estimated liability of $232.8 million as of January 1, 2015, with a corresponding deferred expense asset that is being amortized to expense on a straight line basis. We incurred approximately $58.3 million and $36.3 million of such amortization as ACA industry fee expense in the three months ended June 30, 2015 and 2014, respectively, and approximately $116.6 million and $68.6 million of such amortization in the six months ended June 30, 2015 and 2014, respectively. The deferred expense asset amounted to $116.2 million at June 30, 2015 and is reported as "Deferred ACA industry fee" on the condensed consolidated balance sheet. The 2015 final fee amount will be determined in the third quarter of 2015; therefore, our estimate is subject to change. We have obtained amendments, written agreements and other documentation from our Medicaid customers to reimburse us for the effect of the industry fee on our Medicaid plans for 2015, including its non-deductibility for income tax purposes. Consequently, we recognized $ 53.8 million and $108.2 million of reimbursement for the ACA industry fee as premium revenue in the three and six months ended June 30, 2015 , respectively, compared to $ 33.2 million and $57.2 million recognized in the three and six months ended June 30, 2014, respectively. Recently Issued Accounting Standards In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-09, " Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts ", which addresses enhanced disclosure requirements for short-duration insurance contracts. The disclosures required by this update are aimed at providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, as well as the timing, frequency and severity of claims. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual reporting periods beginning after December 15, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, " Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs" to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual reporting periods beginning after December 15, 2016. We will adopt this guidance effective January 1, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, " Revenue from Contracts with Customers (Topic 606). " ASU 2014-09 will supersede existing revenue recognition standards with a single model unless those contracts are within the scope of other standards (e.g., an insurance entity’s insurance contracts). The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, new and enhanced disclosures will be required. Companies can adopt the new standard either using the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption approach. In July 2015, the FASB decided to defer the effective dates of this standard by one year. As such, the standard becomes effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption at the original effective date, interim and annual periods beginning after December 15, 2016, will be permitted. We are currently evaluating the effect of the new revenue recognition guidance. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Windsor On January 1, 2014, we acquired all of the outstanding stock of Windsor Health Group, Inc. ("Windsor") from Munich Health North America, Inc., a part of Munich Re Group ("Munich"). We included the results of Windsor's operations from the date of acquisition in our consolidated financial statements. Windsor’s operations contributed premium revenue of $134.5 million and $160.9 million for the three months ended June 30, 2015 and 2014, respectively, and $278.5 million and $328.5 million for the six months ended June 30, 2015 and 2014, respectively. The accounting for the Windsor acquisition was finalized during the fourth quarter of 2014, and based on the final purchase price allocation, we allocated $195.3 million of the purchase price to identified tangible net assets and $54.3 million of the purchase price to identified intangible assets. A cash settlement of $17.2 million associated with the final purchase price was made during the quarter ended June 30, 2015. The weighted average amortization period for the intangible assets was 11.5 years. Based on the final purchase price allocation, the fair value of the net tangible and intangible assets that we acquired exceeded the total consideration paid or payable to the seller by $29.5 million , which was recognized as a bargain purchase gain for the year ended December 31, 2014. We recognized $39.4 million of the bargain purchase gain in the six months ended June 30, 2014 . The final bargain purchase gain reflects refined estimates of the fair value of certain assets and tax benefits acquired as part of the transaction. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING On a regular basis, we evaluate discrete financial information and assess the performance of our three reportable segments, Medicaid Health Plans, Medicare Health Plans and Medicare PDPs, to determine the most appropriate use and allocation of Company resources. Medicaid Health Plans Our Medicaid Health Plans segment includes plans for beneficiaries of Temporary Assistance for Needy Families ("TANF"), Supplemental Security Income ("SSI"), Aged Blind and Disabled ("ABD") and other state-based programs that are not part of the Medicaid program, such as Children's Health Insurance Program ("CHIP") and Managed Long-Term Care ("MLTC") programs. TANF generally provides assistance to low-income families with children. ABD and SSI generally provide assistance to low-income aged, blind or disabled individuals. CHIP programs provide assistance to qualifying families who are not eligible for Medicaid because their incomes exceed the applicable income thresholds. The MLTC program is designed to help people with chronic illnesses or who have disabilities and need health and long-term care services, such as home care or adult day care, to enable them to stay in their homes and communities as long as possible. Our Medicaid operations in certain states individually account for 10% or more of our consolidated premium revenue. Those states, and the respective Medicaid premium revenue as a percentage of total consolidated premium revenue, are as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Kentucky 19% 18% 19% 18% Florida 16% 13% 16% 12% Georgia 11% 13% 12% 13% In July 2015, our Kentucky Medicaid plan was selected by the Kentucky Cabinet for Health and Family Services to continue serving the Commonwealth's Medicaid Managed Care program in all eight of the program's regions. The new contract began on July 1, 2015 and is for one year. The new contract can be renewed for up to four additional one year terms upon the mutual agreement of the parties, potentially extending it through June 30, 2020. In February 2015, the Georgia Department of Community Health (the "Georgia DCH") issued a request for proposals for its Medicaid program, under which services would commence on July 1, 2016. We have submitted our response and are currently awaiting a decision. In June 2015, Georgia DCH exercised its option to extend the term of our current Georgia Medicaid contract through June 30, 2016. In February 2014, we executed a contract with the Florida Agency for Health Care Administration ("AHCA") pursuant to which our Staywell Health Plan participates in eight out of the state's 11 regions under the Managed Medical Assistance Program ("MMA"), which was fully implemented as of August 2014. The contract expires on December 31, 2018. Our 2012-2015 Florida Medicaid contracts were terminated early in connection with the implementation of the new program. Medicare Health Plans Our Medicare Health Plans reportable segment includes the combined operations of both the MA and Medicare Supplement operating segments. Medicare is a federal program that provides eligible persons age 65 and over and some disabled persons with a variety of hospital, medical and prescription drug benefits. MA is Medicare's managed care alternative to the original Medicare program, which provides individuals standard Medicare benefits directly through the Centers for Medicare & Medicaid Services ("CMS"). Our MA CCPs generally require members to seek health care services and select a primary care physician from a network of health care providers. In addition, we offer coverage of prescription drug benefits under the Medicare Part D program as a component of most of our MA plans. We also offered Medicare Supplement policies in certain states through June 30, 2015. On July 1, 2015, we completed the sale of our Medicare Supplement business. See Note 12 – Subsequent Events of this Form 10-Q for further discussion of this divestiture. Medicare PDPs We offer stand-alone Medicare Part D coverage to Medicare-eligible beneficiaries in our Medicare PDPs segment. The Medicare Part D prescription drug benefit is supported by risk sharing with the federal government through risk corridors designed to limit the losses and gains of the participating drug plans and by reinsurance for catastrophic drug costs. The government subsidy is based on the national weighted average monthly bid for this coverage, adjusted for risk factor payments. Additional subsidies are provided for dually-eligible beneficiaries and specified low-income beneficiaries. The Part D program offers national in-network prescription drug coverage that is subject to limitations in certain circumstances. Summary of Financial Information We allocate goodwill and other intangible assets, as well as the ACA industry fee, to our reportable segments. We do not allocate to our reportable segments any other assets and liabilities, investment and other income, selling, general and administrative expenses, depreciation and amortization, or interest expense to our reportable segments, with the exception of the ACA industry fee. The Company's decision-makers primarily use premium revenue, medical benefits expense and gross margin to evaluate the performance of our reportable segments. A summary of financial information for our reportable segments through the gross margin level and a reconciliation to income from operations is presented in the table below. For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Premium revenue: (in millions) Medicaid Health Plans $ 2,250.9 $ 1,864.5 $ 4,454.1 $ 3,503.3 Medicare Health Plans 992.6 977.9 1,976.0 1,941.3 Medicare PDPs 235.0 297.1 514.5 670.1 Total premium revenue 3,478.5 3,139.5 6,944.6 6,114.7 Medical benefits expense: Medicaid Health Plans 1,933.3 1,695.2 3,850.9 3,084.5 Medicare Health Plans 857.6 864.0 1,714.0 1,715.5 Medicare PDPs 186.2 275.1 464.4 664.2 Total medical benefits expense 2,977.1 2,834.3 6,029.3 5,464.2 ACA industry fee expense: Medicaid Health Plans 34.4 21.3 69.2 40.2 Medicare Health Plans 18.1 11.9 35.8 22.6 Medicare PDPs 5.8 3.1 11.6 5.8 Total ACA industry fee expense 58.3 36.3 116.6 68.6 Gross margin Medicaid Health Plans 283.2 148.0 534.0 378.6 Medicare Health Plans 116.9 102.0 226.2 203.2 Medicare PDPs 43.0 18.9 38.5 0.1 Total gross margin 443.1 268.9 798.7 581.9 Investment and other income 4.0 12.4 7.8 22.9 Other expenses (306.4 ) (295.9 ) (611.4 ) (582.1 ) Income (loss) from operations $ 140.7 $ (14.6 ) $ 195.1 $ 22.7 |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE We compute basic earnings per common share on the basis of the weighted-average number of unrestricted common shares outstanding. We compute diluted earnings per common share on the basis of the weighted-average number of unrestricted common shares outstanding plus the dilutive effect of our stock-based compensation awards using the treasury stock method. The calculation of the weighted-average common shares outstanding — diluted is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Weighted-average common shares outstanding — basic 44,054,778 43,867,449 44,018,377 43,834,748 Dilutive effect of outstanding stock-based compensation awards 303,535 — 312,782 288,302 Weighted-average common shares outstanding — diluted 44,358,313 43,867,449 44,331,159 44,123,050 Anti-dilutive stock-based compensation awards excluded from computation 139,514 839,451 71,517 51,585 For the three months ended June 30, 2014, we excluded all stock-based compensation awards from the computation of diluted loss per share due to their anti-dilutive effect on the three months ended June 30, 2014 net loss per share. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The Company considers all of its investments as available-for-sale securities. Excluding Restricted Investments, the amortized cost, gross unrealized gains or losses and estimated fair value of short-term and long-term investments by security type are summarized in the following tables. Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value June 30, 2015 Auction rate securities $ 34.0 $ — $ (2.3 ) $ 31.7 Corporate debt and other securities 151.3 0.2 (0.2 ) 151.3 Money market funds 41.4 — — 41.4 Municipal securities 51.1 0.3 (0.3 ) 51.1 U.S. government securities 16.3 — (0.1 ) 16.2 Variable rate bond fund 85.1 — (0.2 ) 84.9 $ 379.2 $ 0.5 $ (3.1 ) $ 376.6 December 31, 2014 Auction rate securities $ 34.1 $ — $ (1.8 ) $ 32.3 Certificates of deposit 0.3 — — 0.3 Corporate debt and other securities 162.2 0.1 (0.4 ) 161.9 Money market funds 41.4 — — 41.4 Municipal securities 86.9 0.5 (0.1 ) 87.3 U.S. government securities 21.7 0.1 (0.1 ) 21.7 Variable rate bond fund 85.1 0.2 (0.1 ) 85.2 $ 431.7 $ 0.9 $ (2.5 ) $ 430.1 Realized gains and losses on sales and redemptions of investments were not material for the three and six months ended June 30, 2015 and 2014 . Contractual maturities of available-for-sale investments at June 30, 2015 are as follows: Total Within 1 Year 1 Through 5 Years 5 Through 10 Years Thereafter Auction rate securities $ 31.7 $ — $ — $ — $ 31.7 Corporate debt and other securities 151.3 72.0 78.6 0.2 0.5 Money market funds 41.4 41.4 — — — Municipal securities 51.1 13.2 31.2 6.2 0.5 U.S. government securities 16.2 9.3 6.9 — — Variable rate bond fund 84.9 84.9 — — — $ 376.6 $ 220.8 $ 116.7 $ 6.4 $ 32.7 Actual maturities may differ from contractual maturities due to the exercise of pre-payment options. Excluding investments in U.S. government securities, we are not exposed to any significant concentration of credit risk in our fixed maturities portfolio. Our long-term investments include $31.7 million estimated fair value of municipal note securities with an auction reset feature ("auction rate securities"), which were issued by various state and local municipal entities for the purpose of financing student loans, public projects and other activities. Liquidity for these auction rate securities is typically provided by an auction process, which allows holders to sell their notes and resets the applicable interest rate at pre-determined intervals, usually every seven or 35 days. We consider our auction rate securities to be in an inactive market as auctions have continued to fail in 2015. Our auction rate securities have been in an unrealized loss position for more than twelve months. Two auction rate securities with an aggregate par value of $22.4 million have investment grade security credit ratings and one auction rate security with a par value of $11.6 million has a credit rating below investment grade. Our auction rate securities are covered by government guarantees or municipal bond insurance and we have the ability and intent to hold these securities until maturity or market stability is restored. Accordingly, we do not believe our auction rate securities are impaired and we have not recorded an other-than-temporary impairment as of June 30, 2015 . There were no material redemptions or sales of our auction rate securities during the three and six months ended June 30, 2015 and 2014 , and accordingly, gains and losses associated with our auction rate securities were not material during any of those periods. |
RESTRICTED INVESTMENTS
RESTRICTED INVESTMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Restricted Investments Note [Abstract] | |
RESTRICTED INVESTMENTS | RESTRICTED INVESTMENTS As a condition for licensure, we are required to maintain certain funds on deposit or pledged to various state agencies. Certain of our state contracts require the issuance of surety bonds. We classify restricted investments as long-term regardless of the contractual maturity date of the securities held, due to the nature of the states' requirements. The amortized cost, gross unrealized gains, gross unrealized losses and fair value of our restricted investment securities are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value June 30, 2015 Cash $ 60.6 $ — $ — $ 60.6 Certificates of deposit 1.1 — — 1.1 Money market funds 66.6 — — 66.6 U.S. government securities 70.5 0.1 — 70.6 $ 198.8 $ 0.1 $ — $ 198.9 December 31, 2014 Cash $ 53.3 $ — $ — $ 53.3 Certificates of deposit 1.0 — — 1.0 Money market funds 65.9 — — 65.9 U.S. government securities 30.1 0.1 (0.1 ) 30.1 $ 150.3 $ 0.1 $ (0.1 ) $ 150.3 Our restricted investments increased by $48.6 million from December 31, 2014 as a result of increased membership in our New Jersey Medicaid business resulting from our July 2014 acquisition in this state. Realized gains and losses on restricted investments were not material for the three and six months ended June 30, 2015 and 2014 . |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Compensation expense related to our stock-based compensation awards was $ 4.6 million and $ 5.0 million for the three months ended June 30, 2015 and 2014, respectively, and $8.7 million and $6.2 million for the six months ended June 30, 2015 and 2014, respectively. As of June 30, 2015 , there was $33.9 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements that is expected to be recognized over a weighted-average period of 1.9 years. The unrecognized compensation cost for our performance stock units ("PSUs"), which are subject to variable accounting, was determined based on the closing common stock price of $84.83 as of June 30, 2015 and amounted to approximately $13.9 million of the total unrecognized compensation cost. Due to the nature of the accounting for these awards, future compensation cost will fluctuate based on changes in our common stock price. A summary of stock option activity for the six months ended June 30, 2015 is presented in the table below. Shares Weighted Average Exercise Price Outstanding as of January 1, 2015 8,020 $ 38.92 Granted — Exercised (8,020 ) Forfeited and expired — Outstanding as of June 30, 2015 — $ — A summary of restricted stock unit ("RSU"), PSU and market stock unit ("MSU") award activity for the six months ended June 30, 2015 at target is presented in the table below. RSUs PSUs MSUs Total Outstanding as of January 1, 2015 406,903 395,075 113,663 915,641 Granted 108,301 130,367 65,208 303,876 Vested (148,315 ) (34,814 ) (32,494 ) (215,623 ) Forfeited and expired (18,657 ) (82,408 ) (9,247 ) (110,312 ) Outstanding as of June 30, 2015 348,232 408,220 137,130 893,582 The weighted-average grant-date fair value of all equity awards granted during the six months ended June 30, 2015 was $97.92 . |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Senior Notes On June 1, 2015, we completed the offering and sale of $300.0 million aggregate principal amount of our 5.75% unsecured senior notes due 2020 (the "Senior Notes") pursuant to a reopening of our existing series of such notes; the proceeds of which may be used for general corporate purposes including organic growth and working capital. The offering was completed at an issue price of 104.50% , plus accrued interest, and resulted in a debt premium of $13.5 million , which is being amortized over the remaining term of the Senior Notes. We received net proceeds of $308.9 million from the June 2015 issuance, after approximately $4.6 million incurred in debt issuance costs. Interest is payable on May 15 and November 15 each year, with the first interest payment due on November 15, 2015. As of June 30, 2015 , our outstanding Senior Notes totaled $913.3 million , which were classified as long-term debt in our condensed consolidated balance sheet based on their November 2020 maturity date. The Senior Notes were issued under an indenture, dated as of November 14, 2013 (the "Base Indenture"), as supplemented by the First Supplemental Indenture, dated as of November 14, 2013 (the "First Supplemental Indenture" and, together with the Base Indenture, the "Indenture") each between us and The Bank of New York Mellon Trust Company, N.A., as trustee. The indenture under which the Senior Notes were issued contain covenants that, among other things, limit our ability and the ability of our subsidiaries to: • incur additional indebtedness and issue preferred stock; • pay dividends or make other distributions; • make other restricted payments and investments; • sell assets, including capital stock of restricted subsidiaries; • create certain liens; • incur restrictions on the ability of subsidiaries to pay dividends, make other payments, and guarantee indebtedness; • engage in transactions with affiliates; • create unrestricted subsidiaries; and • merge or consolidate with other entities. Credit Agreement As of June 30, 2015 , our outstanding long-term debt included a $300.0 million term loan (the "Term Loan") outstanding under our existing credit agreement (the "Credit Agreement"). The Credit Agreement also provides for a senior unsecured revolving loan facility (the "Revolving Credit Facility") of up to $300.0 million , which may be used for general corporate purposes of the Company and its subsidiaries. The Term Loan matures in September 2016 and the commitments under the Revolving Credit Facility expire on November 14, 2018. Any amounts outstanding under the Revolving Credit Facility will be payable in full at that time. Borrowings under the Credit Agreement bear interest at a rate of LIBOR plus a spread between 1.50% and 2.625% , or a rate equal to the prime rate plus a spread between 0.50% to 1.625% , depending upon our cash flow leverage ratio (which is defined as the ratio of our total debt to total consolidated EBITDA). Unutilized commitments under the Credit Agreement are subject to a fee of 0.25% to 0.45% depending upon our cash flow leverage ratio. The interest rate on the Term Loan was 2.25% as of June 30, 2015 . The Credit Agreement contains negative and financial covenants that limit certain activities of the Company and its subsidiaries, including (i) restrictions on our ability to incur additional indebtedness; and (ii) financial covenants that require (a) the cash flow leverage ratio not to exceed a maximum; (b) a minimum interest expense and principal payment coverage ratio; and (c) 105% of our required level of statutory net worth for our health maintenance organization and insurance subsidiaries. The Credit Agreement also contains customary representations and warranties that must be accurate in order for us to borrow under the Revolving Credit Facility. In addition, the Credit Agreement contains customary events of default. If an event of default occurs and is continuing, we may be required immediately to repay all amounts outstanding under the Credit Agreement. Lenders holding at least 50% of the loans and commitments under the Credit Agreement may elect to accelerate the maturity of the loans and/or terminate the commitments under the Credit Agreement upon the occurrence and during the continuation of an event of default. As of June 30, 2015 and as of the date of this filing, we remain in compliance with all covenants under both the Senior Notes and the Credit Agreement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, investments, receivables, accounts payable, medical benefits payable, long-term debt and other liabilities. We consider the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value due to the short period of time between the origination of these instruments and the expected realization or payment. Recurring Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis at June 30, 2015 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments: Asset backed securities $ 20.4 $ — $ 20.4 $ — Auction rate securities 31.7 — — 31.7 Corporate debt securities 130.9 — 130.9 — Money market funds 41.4 41.4 — — Municipal securities 51.1 — 51.1 — U.S. government and agency obligations 16.2 11.9 4.3 Variable rate bond fund 84.9 84.9 — — Total investments $ 376.6 $ 138.2 $ 206.7 $ 31.7 Restricted investments: Cash 60.6 60.6 — — Certificates of deposit 1.1 — 1.1 — Money market funds 66.6 66.6 — — U.S. government and agency obligations 70.6 70.6 — — Total restricted investments $ 198.9 $ 197.8 $ 1.1 $ — Amounts accrued related to investigation resolution $ — $ — $ — $ — Assets and liabilities measured at fair value on a recurring basis at December 31, 2014 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments: Asset backed securities $ 23.3 $ — $ 23.3 $ — Auction rate securities 32.3 — — 32.3 Certificates of deposit 0.3 — 0.3 — Corporate debt securities 138.6 — 138.6 — Money market funds 41.4 41.4 — — Municipal securities 87.3 — 87.3 — U.S. government securities 21.7 16.8 4.9 — Variable rate bond fund 85.2 85.2 — — Total investments $ 430.1 $ 143.4 $ 254.4 $ 32.3 Restricted investments: Cash $ 53.3 $ 53.3 $ — $ — Certificates of deposit 1.0 — 1.0 — Money market funds 65.9 65.9 — — U.S. government securities 30.1 30.1 — — Total restricted investments $ 150.3 $ 149.3 $ 1.0 $ — Amounts accrued related to investigation resolution $ 35.2 $ — $ 35.2 $ — The following table presents the carrying value and fair value of our Senior Notes and Term Loan as of June 30, 2015 and December 31, 2014 : June 30, 2015 December 31, 2014 Long term debt $ 1,213.3 $ 900.0 Approximate fair value of our long-term debt 1,236.0 908.7 The fair value of our Senior Notes was determined based on quoted market prices and therefore would be classified within Level 1 of the fair value hierarchy. The fair value of our Term Loan was determined based on a discounted cash flow analysis, and therefore would be classified within Level 2 of the fair value hierarchy. The following table presents the changes in the fair value of our Level 3 auction rate securities for the six months ended June 30, 2015 . Balance as of January 1, 2015 $ 32.3 Realized gains (losses) in earnings — Unrealized gains (losses) in other comprehensive income (0.5 ) Purchases, sales and redemptions (0.1 ) Net transfers in or (out) of Level 3 — Balance as of June 30, 2015 $ 31.7 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective income tax rate for the three and six months ended June 30, 2015 was 63.2% and 64.5% , respectively, compared to (114.3)% (on a pre-tax loss) and 41.1% for the three and six months ended June 30, 2014, respectively. The higher 2015 effective rate primarily reflects the effect of higher non-deductible ACA industry fees compared to 2014. Additionally, the 2014 rate reflects a favorable effect from the Windsor bargain purchase gain. In September 2014, the Internal Revenue Service ("IRS") issued final regulations on the ACA's $0.5 million limit on the deduction for compensation for health insurance providers under Code section 162(m)(6). As a result, we no longer believe the deduction limitations apply to WellCare, and we took deductions totaling $6.2 million , gross before the effect of taxes, for such compensation during the six months ended June 30, 2015 . However, we are not able to conclude at this time that our tax position is more-likely-than-not to be sustained upon IRS review. Therefore, we have recognized a cumulative liability for unrecognized tax benefits amounting to $12.7 million at June 30, 2015 , which includes $10.4 million of previously recorded tax expense from prior periods which we reversed in 2014. The unrecognized tax benefit, if recognized, would reduce the effective tax rate. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Government Investigations Under the terms of settlement agreements entered into on April 26, 2011, and finalized on March 23, 2012, to resolve matters under investigation by the Civil Division of the U.S. Department of Justice ("Civil Division") and certain other federal and state enforcement agencies (the "Settlement"), we agreed to pay the Civil Division a total of $137.5 million in four annual installments of $34.4 million over 36 months, plus interest accrued at 3.125% . The final payment of $35.4 million , which included accrued interest, was remitted to the Civil Division in March 2015. As of March 31, 2015, no amounts remained outstanding related to this obligation. Securities Class Action Complaint In December 2010, we entered into a Stipulation and Agreement of Settlement (the "Stipulation Agreement") with the lead plaintiffs in the consolidated securities class action Eastwood Enterprises, L.L.C. v. Farha, et al. , Case No. 8:07-cv-1940-VMC-EAJ. The Stipulation Agreement requires us to pay to the class 25% of any sums we recover from Todd Farha, Paul Behrens and/or Thaddeus Bereday related to the same facts and circumstances that gave rise to the consolidated securities class action. Messrs. Farha, Behrens and Bereday are three former executives that were implicated in the government investigations of the Company that commenced in 2007. Corporate Integrity Agreement We operate under a Corporate Integrity Agreement (the "Corporate Integrity Agreement") with the Office of Inspector General of the United States Department of Health and Human Services ("OIG-HHS"). The Corporate Integrity Agreement has a term of five years from its effective date of April 26, 2011 and mandates various ethics and compliance programs designed to help ensure our ongoing compliance with federal health care program requirements. The terms of the Corporate Integrity Agreement include certain organizational structure requirements, internal monitoring requirements, compliance training, screening processes for associates, requirements related to reporting to OIG-HHS, and the engagement of an independent review organization to review and prepare written reports regarding, among other things, WellCare's reporting practices and bid submissions to federal health care programs. If we do not comply with the terms of the Corporate Integrity Agreement, we may be subject to penalties or exclusion from participation in federal health care programs. Indemnification Obligations Under Delaware law, our charter and bylaws and certain indemnification agreements to which we are a party, we are obligated to indemnify, or we have otherwise agreed to indemnify, certain of our current and former directors, officers and associates with respect to current and future investigations and litigation, including the matters discussed in this note. The indemnification agreements for our directors and executive officers with respect to events occurring prior to May 2009 require us to indemnify an indemnitee to the fullest extent permitted by law if the indemnitee was or is or becomes a party to or a witness or other participant in any proceeding by reason of any event or occurrence related to the indemnitee's status as a director, officer, associate, agent or fiduciary of the Company or any of our subsidiaries and all expenses, including attorney's fees, judgments, fines, settlement amounts and interest and other charges, and any taxes as a result of the receipt of payments under the indemnification agreement. We will not indemnify the indemnitee if not permitted under applicable law. We are required to advance all expenses incurred by the indemnitee. We are entitled to reimbursement by an indemnitee of expenses advanced if the indemnitee is not permitted to be reimbursed under applicable law after a final judicial determination is made and all rights of appeal have been exhausted or lapsed. We amended and restated our indemnification agreements in May 2009. The revised agreements apply to our officers and directors with respect to events occurring after that time. Pursuant to the 2009 indemnification agreements, we will indemnify the indemnitee against all expenses, including attorney's fees, judgments, penalties, fines, settlement amounts and any taxes imposed as a result of payments made under the indemnification agreement incurred in connection with any proceedings that relate to the indemnitee's status as a director, officer or associate of the Company or any of our subsidiaries or any other enterprise that the indemnitee was serving at our request. We will also indemnify for expenses incurred by an indemnitee if the indemnitee, by reason of his or her corporate status, is a witness in any proceeding. Further, we are required to indemnify for expenses incurred by an indemnitee in defense of a proceeding to the extent the indemnitee has been successful on the merits or otherwise. Finally, if the indemnitee is involved in certain proceedings as a result of the indemnitee's corporate status, we are required to advance the indemnitee's reasonable expenses incurred in connection with such proceeding, subject to the requirement that the indemnitee repay the expenses if it is ultimately determined that the indemnitee is not entitled to be indemnified. We are not obligated to indemnify an indemnitee for losses incurred in connection with any proceeding if a determination has not been made by the Board of Directors, a committee of disinterested directors or independent legal counsel in the specific case that the indemnitee has satisfied any standards of conduct required as a condition to indemnification under Section 145 of the Delaware General Corporation Law. Pursuant to our obligations, we have advanced, and will continue to advance, legal fees and related expenses to three former officers and two additional associates who were criminally indicted in connection with the government investigations of the Company that commenced in 2007 related to federal criminal health care fraud charges including conspiracy to defraud the United States, false statements relating to health care matters, and health care fraud in connection with their defense of criminal charges. In June 2013, the jury in the criminal trial reached guilty verdicts on multiple charges for the four individuals that were tried in 2013. In May 2014, the individuals were sentenced and our request for restitution was denied. All four individuals filed notices of appeal and the government filed notices of cross appeal on three of the four individuals, which the government has subsequently voluntarily dismissed. The fifth individual is expected to be tried after the appeals have been decided. We have also previously advanced legal fees and related expenses to these five individuals regarding: disputes in Delaware Chancery Court related to whether we were legally obligated to advance fees or indemnify certain of these executives; the class actions titled Eastwood Enterprises, L.L.C. v. Farha, et al . and Hutton v. WellCare Health Plans, Inc. et al . filed in federal court; six stockholder derivative actions filed in federal and state courts between October 2007 and January 2008; an investigation by the United States Securities & Exchange Commission (the "Commission"); and an action by the Commission filed in January 2012 against three of the five individuals, Messrs. Farha, Behrens and Bereday. The Delaware Chancery Court cases have concluded. We settled the class actions in May 2011. In 2010, we settled the stockholder derivative actions and we were realigned as the plaintiff to pursue our claims against Messrs. Farha, Behrens and Bereday. These actions, as well as the action by the Commission, are currently stayed. In connection with these matters, we have advanced to the five individuals, cumulative legal fees and related expenses of approximately $198.8 million from the inception of the investigations through June 30, 2015 . We incurred $6.2 million and $12.9 million of these fees and related expenses during the three and six months ended June 30, 2015 , respectively, and $7.1 million and $14.9 million for the same periods in 2014. We expense these costs as incurred and classify the costs as selling, general and administrative expense incurred in connection with the investigations and related matters. We expect the continuing cost of our obligations to the five individuals in connection with their defense and appeal of criminal charges and related litigation to be significant and to continue for a number of years. We have exhausted our insurance policies related to reimbursement of our advancement of fees related to these matters. We are unable to estimate the total amount of these costs or a range of possible loss. Accordingly, we continue to expense these costs as incurred. Even if it is eventually determined that we are entitled to reimbursement of the advanced expenses, it is possible that we may not be able to recover all or any portion of our damages or advances. Our indemnification obligations and requirements to advance legal fees and expenses may continue to have a material adverse effect on our financial condition, results of operations and cash flows. Other Lawsuits and Claims Based on the nature of our business, we are subject to regulatory reviews or other investigations by various state insurance and health care regulatory authorities and other state and federal regulatory authorities. These authorities regularly scrutinize the business practices of health insurance and benefits companies and their reviews focus on numerous facets of our business, including claims payment practices, provider contracting, competitive practices, commission payments, privacy issues and utilization management practices, among others. Some of these reviews have historically resulted in fines imposed on us and some have required changes to our business practices. We continue to be subject to such reviews, which may result in additional fines and/or sanctions being imposed, premium refunds or additional changes in our business practices. Separate and apart from the legal matters described above, we are also involved in other legal actions in the normal course of our business, including, without limitation, wage and hour claims and other employment claims, vendor disputes and provider disputes regarding payment of claims. Some of these actions seek monetary damages including claims for liquidated or punitive damages, which are not covered by insurance. We review relevant information with respect to litigation matters and we update our estimates of reasonably possible losses and related disclosures. We accrue an estimate for contingent liabilities, including attorney's fees related to these matters, if a loss is probable and estimable. Currently, we do not expect that the resolution of any currently pending actions, either individually or in the aggregate, will differ materially from our current estimates or have a material adverse effect on our results of operations, financial condition and cash flows. However, the outcome of any legal actions cannot be predicted, and therefore, actual results may differ from those estimates. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT Sterling Life Insurance Company Divestiture In March 2015, we entered into an agreement to divest Sterling Life Insurance Company, our Medicare supplement business that we acquired as part of the Windsor Health Group transaction in January 2014. The transaction closed on July 1, 2015 and is not expected to have a material effect on our results of operations or financial position in 2015. |
ORGANIZATION, BASIS OF PRESEN19
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated balance sheets and statements of comprehensive income, changes in stockholders' equity, and cash flows include the accounts of the Company and all of its majority-owned subsidiaries. We eliminated all intercompany accounts and transactions. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, certain financial information and footnote disclosures normally included in financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2014 included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission in February 2015. Results for the interim periods presented are not necessarily indicative of results that may be expected for the entire year or any other interim period. |
Use of Estimates | In the opinion of management, the interim financial statements reflect all normal recurring adjustments that we consider necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods presented. In accordance with GAAP, we make certain estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. We base these estimates, including assumptions as to the annualized tax rate, on our knowledge of current events and anticipated future events and evaluate and update our assumptions and estimates on an ongoing basis; however, actual results may differ from our estimates. We evaluated all material events subsequent to the date of these condensed consolidated interim financial statements. |
Medical Benefits and Medical Benefits Payable | Medical Benefits and Medical Benefits Payable We recognize the cost of medical benefits in the period in which services are provided, including an estimate of the cost of medical benefits incurred but not reported ("IBNR"). Medical benefits expense includes direct medical expenses and certain medically-related administrative costs. We evaluate our estimates of medical benefits payable as we obtain more complete claims information and medical expense trend data over time. We record differences between actual experience and estimates used to establish the liability, which we refer to as favorable and unfavorable prior year reserve developments, as increases or decreases to medical benefits expense in the period we identify the differences. |
ACA Industry Fee | ACA Industry Fee In 2014, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA"), began imposing an annual premium-based health insurance industry assessment (the "ACA industry fee") on health insurers. The total ACA industry fee levied on the health insurance industry was $8 billion in 2014 and will be $11.3 billion in 2015. The ACA industry fee is not deductible for income tax purposes. For 2015, we accrued the estimated liability of $232.8 million as of January 1, 2015, with a corresponding deferred expense asset that is being amortized to expense on a straight line basis. We incurred approximately $58.3 million and $36.3 million of such amortization as ACA industry fee expense in the three months ended June 30, 2015 and 2014, respectively, and approximately $116.6 million and $68.6 million of such amortization in the six months ended June 30, 2015 and 2014, respectively. The deferred expense asset amounted to $116.2 million at June 30, 2015 and is reported as "Deferred ACA industry fee" on the condensed consolidated balance sheet. The 2015 final fee amount will be determined in the third quarter of 2015; therefore, our estimate is subject to change. We have obtained amendments, written agreements and other documentation from our Medicaid customers to reimburse us for the effect of the industry fee on our Medicaid plans for 2015, including its non-deductibility for income tax purposes. Consequently, we recognized $ 53.8 million and $108.2 million of reimbursement for the ACA industry fee as premium revenue in the three and six months ended June 30, 2015 , respectively, compared to $ 33.2 million and $57.2 million recognized in the three and six months ended June 30, 2014, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-09, " Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts ", which addresses enhanced disclosure requirements for short-duration insurance contracts. The disclosures required by this update are aimed at providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, as well as the timing, frequency and severity of claims. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual reporting periods beginning after December 15, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, " Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs" to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual reporting periods beginning after December 15, 2016. We will adopt this guidance effective January 1, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, " Revenue from Contracts with Customers (Topic 606). " ASU 2014-09 will supersede existing revenue recognition standards with a single model unless those contracts are within the scope of other standards (e.g., an insurance entity’s insurance contracts). The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, new and enhanced disclosures will be required. Companies can adopt the new standard either using the full retrospective approach, a modified retrospective approach with practical expedients, or a cumulative effect upon adoption approach. In July 2015, the FASB decided to defer the effective dates of this standard by one year. As such, the standard becomes effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption at the original effective date, interim and annual periods beginning after December 15, 2016, will be permitted. We are currently evaluating the effect of the new revenue recognition guidance. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Revenue by geographic location | Our Medicaid operations in certain states individually account for 10% or more of our consolidated premium revenue. Those states, and the respective Medicaid premium revenue as a percentage of total consolidated premium revenue, are as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Kentucky 19% 18% 19% 18% Florida 16% 13% 16% 12% Georgia 11% 13% 12% 13% |
Segment results | A summary of financial information for our reportable segments through the gross margin level and a reconciliation to income from operations is presented in the table below. For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Premium revenue: (in millions) Medicaid Health Plans $ 2,250.9 $ 1,864.5 $ 4,454.1 $ 3,503.3 Medicare Health Plans 992.6 977.9 1,976.0 1,941.3 Medicare PDPs 235.0 297.1 514.5 670.1 Total premium revenue 3,478.5 3,139.5 6,944.6 6,114.7 Medical benefits expense: Medicaid Health Plans 1,933.3 1,695.2 3,850.9 3,084.5 Medicare Health Plans 857.6 864.0 1,714.0 1,715.5 Medicare PDPs 186.2 275.1 464.4 664.2 Total medical benefits expense 2,977.1 2,834.3 6,029.3 5,464.2 ACA industry fee expense: Medicaid Health Plans 34.4 21.3 69.2 40.2 Medicare Health Plans 18.1 11.9 35.8 22.6 Medicare PDPs 5.8 3.1 11.6 5.8 Total ACA industry fee expense 58.3 36.3 116.6 68.6 Gross margin Medicaid Health Plans 283.2 148.0 534.0 378.6 Medicare Health Plans 116.9 102.0 226.2 203.2 Medicare PDPs 43.0 18.9 38.5 0.1 Total gross margin 443.1 268.9 798.7 581.9 Investment and other income 4.0 12.4 7.8 22.9 Other expenses (306.4 ) (295.9 ) (611.4 ) (582.1 ) Income (loss) from operations $ 140.7 $ (14.6 ) $ 195.1 $ 22.7 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of net income per share | The calculation of the weighted-average common shares outstanding — diluted is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Weighted-average common shares outstanding — basic 44,054,778 43,867,449 44,018,377 43,834,748 Dilutive effect of outstanding stock-based compensation awards 303,535 — 312,782 288,302 Weighted-average common shares outstanding — diluted 44,358,313 43,867,449 44,331,159 44,123,050 Anti-dilutive stock-based compensation awards excluded from computation 139,514 839,451 71,517 51,585 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale investments | The Company considers all of its investments as available-for-sale securities. Excluding Restricted Investments, the amortized cost, gross unrealized gains or losses and estimated fair value of short-term and long-term investments by security type are summarized in the following tables. Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value June 30, 2015 Auction rate securities $ 34.0 $ — $ (2.3 ) $ 31.7 Corporate debt and other securities 151.3 0.2 (0.2 ) 151.3 Money market funds 41.4 — — 41.4 Municipal securities 51.1 0.3 (0.3 ) 51.1 U.S. government securities 16.3 — (0.1 ) 16.2 Variable rate bond fund 85.1 — (0.2 ) 84.9 $ 379.2 $ 0.5 $ (3.1 ) $ 376.6 December 31, 2014 Auction rate securities $ 34.1 $ — $ (1.8 ) $ 32.3 Certificates of deposit 0.3 — — 0.3 Corporate debt and other securities 162.2 0.1 (0.4 ) 161.9 Money market funds 41.4 — — 41.4 Municipal securities 86.9 0.5 (0.1 ) 87.3 U.S. government securities 21.7 0.1 (0.1 ) 21.7 Variable rate bond fund 85.1 0.2 (0.1 ) 85.2 $ 431.7 $ 0.9 $ (2.5 ) $ 430.1 |
Contractual maturities of available-for-sale investments | Contractual maturities of available-for-sale investments at June 30, 2015 are as follows: Total Within 1 Year 1 Through 5 Years 5 Through 10 Years Thereafter Auction rate securities $ 31.7 $ — $ — $ — $ 31.7 Corporate debt and other securities 151.3 72.0 78.6 0.2 0.5 Money market funds 41.4 41.4 — — — Municipal securities 51.1 13.2 31.2 6.2 0.5 U.S. government securities 16.2 9.3 6.9 — — Variable rate bond fund 84.9 84.9 — — — $ 376.6 $ 220.8 $ 116.7 $ 6.4 $ 32.7 |
RESTRICTED INVESTMENTS (Tables)
RESTRICTED INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restricted Investments Note [Abstract] | |
Schedule of Restricted Investments | The amortized cost, gross unrealized gains, gross unrealized losses and fair value of our restricted investment securities are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value June 30, 2015 Cash $ 60.6 $ — $ — $ 60.6 Certificates of deposit 1.1 — — 1.1 Money market funds 66.6 — — 66.6 U.S. government securities 70.5 0.1 — 70.6 $ 198.8 $ 0.1 $ — $ 198.9 December 31, 2014 Cash $ 53.3 $ — $ — $ 53.3 Certificates of deposit 1.0 — — 1.0 Money market funds 65.9 — — 65.9 U.S. government securities 30.1 0.1 (0.1 ) 30.1 $ 150.3 $ 0.1 $ (0.1 ) $ 150.3 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | A summary of stock option activity for the six months ended June 30, 2015 is presented in the table below. Shares Weighted Average Exercise Price Outstanding as of January 1, 2015 8,020 $ 38.92 Granted — Exercised (8,020 ) Forfeited and expired — Outstanding as of June 30, 2015 — $ — |
Summary of restricted stock and restricted stock unit activity | A summary of restricted stock unit ("RSU"), PSU and market stock unit ("MSU") award activity for the six months ended June 30, 2015 at target is presented in the table below. RSUs PSUs MSUs Total Outstanding as of January 1, 2015 406,903 395,075 113,663 915,641 Granted 108,301 130,367 65,208 303,876 Vested (148,315 ) (34,814 ) (32,494 ) (215,623 ) Forfeited and expired (18,657 ) (82,408 ) (9,247 ) (110,312 ) Outstanding as of June 30, 2015 348,232 408,220 137,130 893,582 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Assets and liabilities measured at fair value on a recurring basis at June 30, 2015 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments: Asset backed securities $ 20.4 $ — $ 20.4 $ — Auction rate securities 31.7 — — 31.7 Corporate debt securities 130.9 — 130.9 — Money market funds 41.4 41.4 — — Municipal securities 51.1 — 51.1 — U.S. government and agency obligations 16.2 11.9 4.3 Variable rate bond fund 84.9 84.9 — — Total investments $ 376.6 $ 138.2 $ 206.7 $ 31.7 Restricted investments: Cash 60.6 60.6 — — Certificates of deposit 1.1 — 1.1 — Money market funds 66.6 66.6 — — U.S. government and agency obligations 70.6 70.6 — — Total restricted investments $ 198.9 $ 197.8 $ 1.1 $ — Amounts accrued related to investigation resolution $ — $ — $ — $ — Assets and liabilities measured at fair value on a recurring basis at December 31, 2014 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments: Asset backed securities $ 23.3 $ — $ 23.3 $ — Auction rate securities 32.3 — — 32.3 Certificates of deposit 0.3 — 0.3 — Corporate debt securities 138.6 — 138.6 — Money market funds 41.4 41.4 — — Municipal securities 87.3 — 87.3 — U.S. government securities 21.7 16.8 4.9 — Variable rate bond fund 85.2 85.2 — — Total investments $ 430.1 $ 143.4 $ 254.4 $ 32.3 Restricted investments: Cash $ 53.3 $ 53.3 $ — $ — Certificates of deposit 1.0 — 1.0 — Money market funds 65.9 65.9 — — U.S. government securities 30.1 30.1 — — Total restricted investments $ 150.3 $ 149.3 $ 1.0 $ — Amounts accrued related to investigation resolution $ 35.2 $ — $ 35.2 $ — |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the carrying value and fair value of our Senior Notes and Term Loan as of June 30, 2015 and December 31, 2014 : June 30, 2015 December 31, 2014 Long term debt $ 1,213.3 $ 900.0 Approximate fair value of our long-term debt 1,236.0 908.7 |
Auction rate securities measured at fair value on a recurring basis using significant unobservable inputs | The following table presents the changes in the fair value of our Level 3 auction rate securities for the six months ended June 30, 2015 . Balance as of January 1, 2015 $ 32.3 Realized gains (losses) in earnings — Unrealized gains (losses) in other comprehensive income (0.5 ) Purchases, sales and redemptions (0.1 ) Net transfers in or (out) of Level 3 — Balance as of June 30, 2015 $ 31.7 |
ORGANIZATION, BASIS OF PRESEN26
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Organizational Details (Details) Members in Millions, $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($)MembersState | Jun. 30, 2014USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of members | Members | 3.8 | |
Number of states | State | 49 | |
Net favorable development, impact on medical expense | $ 44.5 | |
Net unfavorable development, impact on medical expense | $ (61.6) |
ORGANIZATION, BASIS OF PRESEN27
ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - ACA Industry Fee (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Affordable Care Act levied on health insurance industry | $ 8,000 | ||||
Affordable Care Act levied on health industry (current fiscal year) | $ 11,300 | $ 11,300 | |||
ACA industry fee | 232.8 | 232.8 | 0 | ||
Deferred ACA fee amortization | 58.3 | $ 36.3 | 116.6 | $ 68.6 | |
Deferred ACA industry fee asset | 116.2 | 116.2 | $ 0 | ||
Premium revenue, fee reimbursement | $ 53.8 | $ 33.2 | $ 108.2 | $ 57.2 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Bargain purchase gain | $ 0 | $ 11.1 | $ 0 | $ 39.4 | |
Windsor Health Plans, Inc. | |||||
Business Acquisition [Line Items] | |||||
Premium revenue of acquiree since acquisition date | 134.5 | $ 160.9 | 278.5 | $ 328.5 | |
Purchase price allocated to identified intangible assets | $ 54.3 | ||||
Cash settlement associated with purchase price | $ 17.2 | ||||
Bargain purchase gain | $ 39.4 | 29.5 | |||
Tangible Assets and Liabilities | Windsor Health Plans, Inc. | |||||
Business Acquisition [Line Items] | |||||
Fair value of net tangible assets acquired | $ 195.3 | ||||
Weighted Average | Windsor Health Plans, Inc. | |||||
Business Acquisition [Line Items] | |||||
Weighted average amortization period for intangible assets | 11 years 6 months |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Millions | Jul. 01, 2015RenewalOptions | Jun. 30, 2015USD ($)RegionsSegment | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Regions | Jun. 30, 2014USD ($) |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 3 | ||||
Premium revenue | $ 3,478.5 | $ 3,139.5 | $ 6,944.6 | $ 6,114.7 | |
Medical benefits expense | 2,977.1 | 2,834.3 | 6,029.3 | 5,464.2 | |
ACA industry fee | 58.3 | 36.3 | 116.6 | 68.6 | |
Investment and other income | 4 | 12.4 | 7.8 | 22.9 | |
Income (loss) from operations | $ 140.7 | $ (14.6) | $ 195.1 | $ 22.7 | |
Kentucky | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue net of premium tax (as a percent) | 19.00% | 18.00% | 19.00% | 18.00% | |
Florida | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue net of premium tax (as a percent) | 16.00% | 13.00% | 16.00% | 12.00% | |
Number of Regions executed contracts | Regions | 8 | ||||
Total number of regions | Regions | 11 | 11 | |||
Georgia | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue net of premium tax (as a percent) | 11.00% | 13.00% | 12.00% | 13.00% | |
Minimum | |||||
Segment Reporting Information [Line Items] | |||||
Percentage of consolidated premium revenue | 10.00% | ||||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue | $ 3,478.5 | $ 3,139.5 | $ 6,944.6 | $ 6,114.7 | |
Medical benefits expense | 2,977.1 | 2,834.3 | 6,029.3 | 5,464.2 | |
ACA industry fee | 58.3 | 36.3 | 116.6 | 68.6 | |
Gross margin | 443.1 | 268.9 | 798.7 | 581.9 | |
Operating Segments | Medicaid Health Plans | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue | 2,250.9 | 1,864.5 | 4,454.1 | 3,503.3 | |
Medical benefits expense | 1,933.3 | 1,695.2 | 3,850.9 | 3,084.5 | |
ACA industry fee | 34.4 | 21.3 | 69.2 | 40.2 | |
Gross margin | 283.2 | 148 | 534 | 378.6 | |
Operating Segments | Medicare Health Plans | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue | 992.6 | 977.9 | 1,976 | 1,941.3 | |
Medical benefits expense | 857.6 | 864 | 1,714 | 1,715.5 | |
ACA industry fee | 18.1 | 11.9 | 35.8 | 22.6 | |
Gross margin | 116.9 | 102 | 226.2 | 203.2 | |
Operating Segments | Medicare PDPs | |||||
Segment Reporting Information [Line Items] | |||||
Premium revenue | 235 | 297.1 | 514.5 | 670.1 | |
Medical benefits expense | 186.2 | 275.1 | 464.4 | 664.2 | |
ACA industry fee | 5.8 | 3.1 | 11.6 | 5.8 | |
Gross margin | 43 | 18.9 | 38.5 | 0.1 | |
Segment Reconciling Items | |||||
Segment Reporting Information [Line Items] | |||||
Investment and other income | 4 | 12.4 | 7.8 | 22.9 | |
Other expenses | $ (306.4) | $ (295.9) | $ (611.4) | $ (582.1) | |
Kentucky Medicaid Plan [Member] | Kentucky | |||||
Segment Reporting Information [Line Items] | |||||
Number of renewal options | RenewalOptions | 4 | ||||
Contract term | 1 year |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding — basic | 44,054,778 | 43,867,449 | 44,018,377 | 43,834,748 |
Dilutive effect of: | ||||
Dilutive effect of outstanding stock-based compensation awards | 303,535 | 0 | 312,782 | 288,302 |
Weighted-average common shares outstanding — diluted | 44,358,313 | 43,867,449 | 44,331,159 | 44,123,050 |
Anti-dilutive stock-based compensation awards excluded from computation | 139,514 | 839,451 | 71,517 | 51,585 |
INVESTMENTS (Details)
INVESTMENTS (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($)Security | Dec. 31, 2014USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 379.2 | $ 431.7 |
Gross Unrealized Gains | 0.5 | 0.9 |
Gross Unrealized Losses | (3.1) | (2.5) |
Estimated Fair Value | 376.6 | 430.1 |
Within 1 Year | 220.8 | |
1 Through 5 Years | 116.7 | |
5 Through 10 Years | 6.4 | |
Thereafter | 32.7 | |
Auction rate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 34 | 34.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (2.3) | (1.8) |
Estimated Fair Value | 31.7 | 32.3 |
Within 1 Year | 0 | |
1 Through 5 Years | 0 | |
5 Through 10 Years | 0 | |
Thereafter | 31.7 | |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 0.3 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 0.3 | |
Corporate debt and other securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 151.3 | 162.2 |
Gross Unrealized Gains | 0.2 | 0.1 |
Gross Unrealized Losses | (0.2) | (0.4) |
Estimated Fair Value | 151.3 | 161.9 |
Within 1 Year | 72 | |
1 Through 5 Years | 78.6 | |
5 Through 10 Years | 0.2 | |
Thereafter | 0.5 | |
Money market funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 41.4 | 41.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 41.4 | 41.4 |
Within 1 Year | 41.4 | |
1 Through 5 Years | 0 | |
5 Through 10 Years | 0 | |
Thereafter | 0 | |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 51.1 | 86.9 |
Gross Unrealized Gains | 0.3 | 0.5 |
Gross Unrealized Losses | (0.3) | (0.1) |
Estimated Fair Value | 51.1 | 87.3 |
Within 1 Year | 13.2 | |
1 Through 5 Years | 31.2 | |
5 Through 10 Years | 6.2 | |
Thereafter | 0.5 | |
U.S. government securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16.3 | 21.7 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.1) | (0.1) |
Estimated Fair Value | 16.2 | 21.7 |
Within 1 Year | 9.3 | |
1 Through 5 Years | 6.9 | |
5 Through 10 Years | 0 | |
Thereafter | 0 | |
Variable rate bond fund | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 85.1 | 85.1 |
Gross Unrealized Gains | 0 | 0.2 |
Gross Unrealized Losses | (0.2) | (0.1) |
Estimated Fair Value | 84.9 | $ 85.2 |
Within 1 Year | 84.9 | |
1 Through 5 Years | 0 | |
5 Through 10 Years | 0 | |
Thereafter | 0 | |
External Credit Rating, Investment Grade | Auction rate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 22.4 | |
Number of securities | Security | 2 | |
External Credit Rating, Non Investment Grade | Auction rate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 11.6 | |
Number of securities | Security | 1 | |
Minimum | Auction rate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Rate setting interval for sale | 7 days | |
Maximum | Auction rate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Rate setting interval for sale | 35 days |
RESTRICTED INVESTMENTS (Details
RESTRICTED INVESTMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | $ 198.8 | $ 150.3 |
Gross Unrealized Gains | 0.1 | 0.1 |
Gross Unrealized Losses | 0 | (0.1) |
Estimated Fair Value | 198.9 | 150.3 |
Increase in restricted investments | 48.6 | |
Cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 60.6 | 53.3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 60.6 | 53.3 |
Certificates of deposit | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 1.1 | 1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1.1 | 1 |
Money market funds | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 66.6 | 65.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 66.6 | 65.9 |
U.S. government securities | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 70.5 | 30.1 |
Gross Unrealized Gains | 0.1 | 0.1 |
Gross Unrealized Losses | 0 | (0.1) |
Estimated Fair Value | $ 70.6 | $ 30.1 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 4.6 | $ 5 | $ 8.7 | $ 6.2 |
Unrecognized compensation cost | $ 33.9 | $ 33.9 | ||
Weighted-average period over which compensation costs are expected to be recognized (in years) | 1 year 11 months | |||
Share price | $ 84.83 | $ 84.83 | ||
Equity Instruments Other than Options [Roll Forward] | ||||
Outstanding as of beginning of period (in shares) | 915,641 | |||
Granted (in shares) | 303,876 | |||
Vested (in shares) | (215,623) | |||
Forfeited and expired (in shares) | (110,312) | |||
Outstanding at end of period (in shares) | 893,582 | 893,582 | ||
Grants in period, weighted average grant date fair value | $ 97.92 | |||
Stock Options | ||||
Stock Options [Rollforward] | ||||
Outstanding as of beginning of period (in shares) | 8,020 | |||
Granted (in shares) | 0 | |||
Exercised (in shares) | (8,020) | |||
Forfeited and expired (in shares) | 0 | |||
Outstanding at end of period (in shares) | 0 | 0 | ||
Weighted Average Exercise Price [Rollforward] | ||||
Outstanding as of beginning of period (in dollars per share) | $ 38.92 | |||
Granted (in dollars per share) | ||||
Exercised (in dollars per share) | ||||
Forfeited and expired (in dollars per share) | ||||
Outstanding at end of period (in dollars per share) | $ 0 | $ 0 | ||
RSUs | ||||
Equity Instruments Other than Options [Roll Forward] | ||||
Outstanding as of beginning of period (in shares) | 406,903 | |||
Granted (in shares) | 108,301 | |||
Vested (in shares) | (148,315) | |||
Forfeited and expired (in shares) | (18,657) | |||
Outstanding at end of period (in shares) | 348,232 | 348,232 | ||
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 13.9 | $ 13.9 | ||
Equity Instruments Other than Options [Roll Forward] | ||||
Outstanding as of beginning of period (in shares) | 395,075 | |||
Granted (in shares) | 130,367 | |||
Vested (in shares) | (34,814) | |||
Forfeited and expired (in shares) | (82,408) | |||
Outstanding at end of period (in shares) | 408,220 | 408,220 | ||
MSUs | ||||
Equity Instruments Other than Options [Roll Forward] | ||||
Outstanding as of beginning of period (in shares) | 113,663 | |||
Granted (in shares) | 65,208 | |||
Vested (in shares) | (32,494) | |||
Forfeited and expired (in shares) | (9,247) | |||
Outstanding at end of period (in shares) | 137,130 | 137,130 |
DEBT (Details)
DEBT (Details) - USD ($) | Jun. 01, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Debt Instrument [Line Items] | |||
Proceeds from issuance of debt, net of financing costs paid | $ 308,900,000 | $ 0 | |
Revolving credit facility, maximum borrowing capacity | $ 300,000,000 | ||
Minimum statutory net worth | 105.00% | ||
Minimum percent of loans and commitments owned under credit agreement required to accelerate maturity | 50.00% | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 913,300,000 | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300,000,000 | ||
Interest rate at period end (effective percentage) | 2.25% | ||
5.75% Senior Notes Due 2020 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 300,000,000 | ||
Interest rate | 5.75% | ||
Issue price, percentage | 104.50% | ||
Debt premium | $ 13,500,000 | ||
Proceeds from issuance of debt, net of financing costs paid | 308,900,000 | ||
Debt issuance costs | $ 4,600,000 | ||
Revolving Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Unutilized commitments fee, minimum (in hundredths) | 0.25% | ||
Revolving Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Unutilized commitments fee, minimum (in hundredths) | 0.45% | ||
London Interbank Offered Rate (LIBOR) | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
London Interbank Offered Rate (LIBOR) | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.625% | ||
Prime Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Prime Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.625% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | $ 376.6 | $ 430.1 |
Total restricted investments | 198.9 | 150.3 |
Amounts payable related to investigation resolution | 0 | 35.2 |
Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 20.4 | 23.3 |
Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 31.7 | 32.3 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0.3 | |
Total restricted investments | 1.1 | 1 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 130.9 | 138.6 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 41.4 | 41.4 |
Total restricted investments | 66.6 | 65.9 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 51.1 | 87.3 |
U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 16.2 | 21.7 |
Total restricted investments | 70.6 | 30.1 |
Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 84.9 | 85.2 |
Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total restricted investments | 60.6 | 53.3 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 138.2 | 143.4 |
Total restricted investments | 197.8 | 149.3 |
Amounts payable related to investigation resolution | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | |
Total restricted investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 41.4 | 41.4 |
Total restricted investments | 66.6 | 65.9 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 11.9 | 16.8 |
Total restricted investments | 70.6 | 30.1 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 84.9 | 85.2 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total restricted investments | 60.6 | 53.3 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 206.7 | 254.4 |
Total restricted investments | 1.1 | 1 |
Amounts payable related to investigation resolution | 0 | 35.2 |
Significant Other Observable Inputs (Level 2) | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 20.4 | 23.3 |
Significant Other Observable Inputs (Level 2) | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0.3 | |
Total restricted investments | 1.1 | 1 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 130.9 | 138.6 |
Significant Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Total restricted investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 51.1 | 87.3 |
Significant Other Observable Inputs (Level 2) | U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 4.3 | 4.9 |
Total restricted investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total restricted investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 31.7 | 32.3 |
Total restricted investments | 0 | 0 |
Amounts payable related to investigation resolution | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 31.7 | 32.3 |
Auction rate securities measured at fair value on a recurring basis using significant unobservable inputs [Rollforward] | ||
Beginning balance | 32.3 | |
Realized gains (losses) in earnings | 0 | |
Unrealized gains (losses) in other comprehensive income | (0.5) | |
Purchases, sales and redemptions | (0.1) | |
Net transfers in or (out) of Level 3 | 0 | |
Ending balance | 31.7 | |
Significant Unobservable Inputs (Level 3) | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | |
Total restricted investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Total restricted investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | $ 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | |
Total restricted investments | $ 0 | 0 |
Significant Unobservable Inputs (Level 3) | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total restricted investments | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt | $ 1,213.3 | $ 900 |
Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt | 1,213.3 | 900 |
Approximate fair value of our long-term debt | $ 1,236 | $ 908.7 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (in hundredths) | 63.20% | (114.30%) | 64.50% | 41.10% | |
Tax Deduction Limitation - ACA Compensation | 0.5 | ||||
Compensation deduction | $ 6.2 | ||||
Unrecognized tax benefits | $ 12.7 | $ 12.7 | $ 10.4 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 23, 2012USD ($)Installment | Mar. 31, 2015USD ($) | Jun. 30, 2015USD ($)personActionassociateformer_officer | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)associatepersonActionformer_officer | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)personActionassociateformer_officer | Dec. 31, 2014USD ($) | Jan. 31, 2012former_officer | Dec. 31, 2010 |
Loss Contingencies [Line Items] | ||||||||||
Final payment under settlement agreement | $ 35.4 | |||||||||
Current portion of amount payable related to investigation resolution | $ 0 | $ 0 | $ 0 | $ 0 | $ 35.2 | |||||
Civil Inquiry | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Settlement agreement, amount | $ 137.5 | |||||||||
Number of installments | Installment | 4 | |||||||||
Settlement agreement, amount of installment payments | $ 34.4 | |||||||||
Term of agreement | 36 months | |||||||||
Settlement agreement, interest rate | 3.125% | |||||||||
Class Action Complaints | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Portion of sums recovered from former officers to be paid to class members | 25.00% | |||||||||
Number of former officers being pursued in action filed by entity | former_officer | 3 | 3 | 3 | |||||||
Corporate Integrity Agreement | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Term of agreement | 5 years | |||||||||
Derivative Lawsuits | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of former officers being pursued in action filed by entity | former_officer | 3 | 3 | 3 | |||||||
Number of former associates being pursued in action filed by entity | associate | 2 | 2 | 2 | |||||||
Number of former associates tried in 2013 | associate | 4 | |||||||||
Number of former employees being pursued in action filed by entity | 5 | 5 | 5 | |||||||
Number of actions filed in the Federal Court | Action | 6 | 6 | 6 | |||||||
Number of former employees investigated by SEC | former_officer | 3 | |||||||||
Legal fees | $ 6.2 | $ 7.1 | $ 12.9 | $ 14.9 | $ 198.8 |