Document and Entity Information
Document and Entity Information Document - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 11, 2016 | Jun. 30, 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 Public Float | $ 3.7 | ||
Entity Common Stock, Shares Outstanding | 44,123,087 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Premium | $ 13,874.8 | $ 12,915.5 | $ 9,509.1 |
Investment and other income | 15.4 | 44.4 | 18.8 |
Total revenues | 13,890.2 | 12,959.9 | 9,527.9 |
Expenses: | |||
Medical benefits | 11,978.5 | 11,455.2 | 8,258.6 |
Selling, general and administrative | 1,132.9 | 1,018.8 | 856.5 |
ACA industry fee | 227.3 | 137.7 | 0 |
Medicaid premium taxes | 94.7 | 76.5 | 75.7 |
Depreciation and amortization | 72.6 | 59.9 | 44.1 |
Interest | 54.2 | 39.4 | 11.9 |
Impairment and other charges | 0 | 24.1 | 0 |
Gain on divestiture of business | (6.1) | 0 | 0 |
Total expenses | 13,554.1 | 12,811.6 | 9,246.8 |
Income from operations | 336.1 | 148.3 | 281.1 |
Bargain purchase gain | 0 | 29.5 | 0 |
Loss on extinguishment of debt | 0 | 0 | (2.8) |
Income before income taxes | 336.1 | 177.8 | 278.3 |
Income tax expense | 217.5 | 114.1 | 103 |
Net income | 118.6 | 63.7 | 175.3 |
Other comprehensive income, before tax: | |||
Change in net unrealized gains and losses on available-for-sale securities | (1.9) | 0.5 | (0.8) |
Income tax expense related to other comprehensive income | (0.3) | (0.2) | (0.3) |
Other comprehensive income, net of tax | (1.6) | 0.7 | (0.5) |
Comprehensive income | $ 117 | $ 64.4 | $ 174.8 |
Earnings per common share (see Note 5): | |||
Basic (USD per share) | $ 2.69 | $ 1.45 | $ 4.03 |
Diluted (USD per share) | $ 2.67 | $ 1.44 | $ 3.98 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 44,057,579 | 43,864,367 | 43,535,927 |
Diluted (in shares) | 44,391,032 | 44,163,601 | 44,000,563 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 2,407,000,000 | $ 1,313,500,000 |
Short-term investments | 204,400,000 | 172,800,000 |
Premiums receivable, net | 603,900,000 | 609,000,000 |
Pharmacy rebates receivable, net | 252,500,000 | 358,900,000 |
Receivables from government partners | 0 | 83,000,000 |
Funds receivable for the benefit of members | 577,600,000 | 781,500,000 |
Income taxes receivable | 50,600,000 | 0 |
Prepaid expenses and other current assets, net | 137,700,000 | 170,500,000 |
Deferred income tax asset | 34,800,000 | 37,100,000 |
Total current assets | 4,268,500,000 | 3,526,300,000 |
Property, equipment and capitalized software, net | 244,800,000 | 187,100,000 |
Goodwill | 263,200,000 | 263,200,000 |
Other intangible assets, net | 80,000,000 | 101,000,000 |
Long-term investments | 131,800,000 | 257,300,000 |
Restricted investments | 196,000,000 | 150,300,000 |
Other assets | 9,300,000 | 9,800,000 |
Total Assets | 5,193,600,000 | 4,495,000,000 |
Current Liabilities: | ||
Medical benefits payable | 1,536,000,000 | 1,483,800,000 |
Unearned premiums | 27,700,000 | 86,900,000 |
Accounts payable and accrued expenses | 405,200,000 | 313,600,000 |
Current portion of long-term debt | 300,000,000 | 0 |
Current portion of amount payable related to investigation resolution | 0 | 35,200,000 |
Income taxes payable | 0 | 1,900,000 |
Other payables to government partners | 172,700,000 | 14,300,000 |
Total current liabilities | 2,441,600,000 | 1,935,700,000 |
Deferred income tax liability | 87,400,000 | 48,400,000 |
Long-term debt | 912,100,000 | 900,000,000 |
Other liabilities | 24,200,000 | 15,000,000 |
Total Liabilities | $ 3,465,300,000 | $ 2,899,100,000 |
Commitments and contingencies (see Note 13) | ||
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, 44,113,328 and 43,914,106 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 400,000 | 400,000 |
Paid-in capital | 518,400,000 | 503,000,000 |
Retained earnings | 1,211,700,000 | 1,093,100,000 |
Accumulated other comprehensive loss | (2,200,000) | (600,000) |
Total Stockholders' Equity | 1,728,300,000 | 1,595,900,000 |
Total Liabilities and Stockholders' Equity | $ 5,193,600,000 | $ 4,495,000,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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) | 44,113,328 | 43,914,106 |
Common stock, outstanding (in shares) | 44,113,328 | 43,914,106 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance, beginning of period at Dec. 31, 2012 | $ 1,323.1 | $ 0.4 | $ 469.4 | $ 854.1 | $ (0.8) |
Balance, beginning of period (in shares) at Dec. 31, 2012 | 43,212,375 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Common stock issued for exercised stock options | 10.3 | $ 0 | 10.3 | 0 | 0 |
Common stock issued for exercised stock options (in shares) | 390,942 | ||||
Common stock issued for vested restricted stock units and performance stock units | 0 | $ 0 | 0 | 0 | 0 |
Common stock issued for vested restricted stock units and performance stock units (in shares) | 231,154 | ||||
Repurchase and retirement of shares to satisfy tax withholding requirements | (4.1) | $ 0 | (4.1) | 0 | 0 |
Repurchase and retirement of shares to satisfy tax withholding requirements (in shares) | (67,826) | ||||
Equity-based compensation expense, net of forfeitures | 12.5 | $ 0 | 12.5 | 0 | 0 |
Incremental tax benefit from equity-based compensation | 1.3 | 0 | 1.3 | 0 | 0 |
Comprehensive income (loss) | 174.8 | 0 | 0 | 175.3 | (0.5) |
Balance, end of period at Dec. 31, 2013 | 1,517.9 | $ 0.4 | 489.4 | 1,029.4 | (1.3) |
Balance, end of period (in shares) at Dec. 31, 2013 | 43,766,645 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Common stock issued for exercised stock options | 0.5 | $ 0 | 0.5 | 0 | 0 |
Common stock issued for exercised stock options (in shares) | 20,625 | ||||
Common stock issued for vested restricted stock units and performance stock units | 0 | $ 0 | 0 | 0 | 0 |
Common stock issued for vested restricted stock units and performance stock units (in shares) | 178,772 | ||||
Repurchase and retirement of shares to satisfy tax withholding requirements | (3.1) | $ 0 | (3.1) | 0 | 0 |
Repurchase and retirement of shares to satisfy tax withholding requirements (in shares) | (51,936) | ||||
Equity-based compensation expense, net of forfeitures | 15.7 | $ 0 | 15.7 | 0 | 0 |
Incremental tax benefit from equity-based compensation | 0.5 | 0 | 0.5 | 0 | 0 |
Comprehensive income (loss) | 64.4 | 0 | 0 | 63.7 | 0.7 |
Balance, end of period at Dec. 31, 2014 | $ 1,595.9 | $ 0.4 | 503 | 1,093.1 | (0.6) |
Balance, end of period (in shares) at Dec. 31, 2014 | 43,914,106 | 43,914,106 | |||
Increase (Decrease) in Stockholders' Equity | |||||
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 and performance stock units | 0 | $ 0 | 0 | 0 | 0 |
Common stock issued for vested restricted stock units and performance stock units (in shares) | 270,723 | ||||
Repurchase and retirement of shares to satisfy tax withholding requirements | (7) | $ 0 | (7) | 0 | 0 |
Repurchase and retirement of shares to satisfy tax withholding requirements (in shares) | (79,521) | ||||
Equity-based compensation expense, net of forfeitures | 20.2 | $ 0 | 20.2 | 0 | 0 |
Incremental tax benefit from equity-based compensation | 1.9 | 0 | 1.9 | 0 | 0 |
Comprehensive income (loss) | 117 | 0 | 0 | 118.6 | (1.6) |
Balance, end of period at Dec. 31, 2015 | $ 1,728.3 | $ 0.4 | $ 518.4 | $ 1,211.7 | $ (2.2) |
Balance, end of period (in shares) at Dec. 31, 2015 | 44,113,328 | 44,113,328 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 118.6 | $ 63.7 | $ 175.3 |
Adjustments to reconcile net income to cash flows from operating activities: | |||
Depreciation and amortization | 72.6 | 59.9 | 44.1 |
Stock-based compensation expense | 20.2 | 15.7 | 12.5 |
Gain on divestiture of business | (6.1) | 0 | 0 |
Bargain purchase gain | 0 | (29.5) | 0 |
Incremental tax benefit from stock-based compensation | (1.9) | (0.6) | (3.6) |
Deferred taxes, net | 44.6 | (6.8) | 15.5 |
Provision for doubtful receivables | 14.6 | 15.2 | 10.6 |
Other, net | 19.5 | 24.1 | 11.8 |
Changes in operating accounts, net of effects from acquisitions and divestitures: | |||
Premiums receivable, net | (8.5) | (46.2) | (77.3) |
Pharmacy rebates receivable, net | 106.4 | (161.2) | (38.7) |
Medical benefits payable | 68.6 | 423.4 | 148.8 |
Unearned premiums | (55.6) | 82.4 | 0.1 |
Other receivables/payables to government partners | 241.7 | (106) | (51) |
Amount payable related to investigation resolution | (35.2) | (35.1) | (35.2) |
Accrued liabilities and other, net | 113.1 | 0.3 | (34) |
Net cash provided by operating activities | 712.6 | 299.3 | 178.9 |
Cash flows from investing activities: | |||
Acquisitions and acquisition-related settlements, net of cash acquired | (17.2) | 48 | (174.1) |
Purchases of investments | (165.7) | (416.7) | (462.5) |
Proceeds from sales and maturities of investments | 195.7 | 367.9 | 408.1 |
Additions to property, equipment and capitalized software, net | (137) | (74.8) | (62) |
Net cash used in investing activities | (124.2) | (75.6) | (290.5) |
Cash flows from financing activities: | |||
Proceeds from debt, net of financing costs paid | 308.9 | 298.6 | 816.4 |
Proceeds from exercises of stock options | 0.3 | 0.5 | 10.3 |
Incremental tax benefit from stock-based compensation | 1.9 | 0.6 | 3.6 |
Repurchase and retirement of shares to satisfy tax withholding requirements | (7) | (3.1) | (4.1) |
Payments on debt | 0 | 0 | (365) |
Payments on capital leases | (0.1) | (1.4) | (1.6) |
Funds received (paid) for the benefit of members, net | (201.1) | 687.9 | (34) |
Net cash provided by (used in) financing activities | 505.1 | (392.7) | 493.6 |
Cash and cash equivalents: | |||
Increase (decrease) in cash and cash equivalents | 1,093.5 | (169) | 382 |
Balance at beginning of period | 1,313.5 | 1,482.5 | 1,100.5 |
Balance at end of period | 2,407 | 1,313.5 | 1,482.5 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for taxes | 217.9 | 100.9 | 80.5 |
Cash paid for interest | 51.9 | 36.9 | 6.3 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: | |||
Non-cash additions to property, equipment, and capitalized software | $ 6.1 | $ 11.7 | $ 2.9 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION WellCare Health Plans, Inc., (the "Company," "we," "us," or "our"), provides managed care services exclusively to government-sponsored health care programs. The Company was formed as a Delaware limited liability company in May 2002 to acquire our Florida, New York and Connecticut health plans. We completed the acquisition of the health plans through two concurrent transactions in July 2002. In July 2004, immediately prior to the closing of our initial public offering, we merged the limited liability company into a Delaware corporation and changed our name to WellCare Health Plans, Inc. As of December 31, 2015 , we served approximately 3.8 million members. In 2015 , we operated Medicaid health plans in Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. In connection with our acquisitions of Medicaid plans in South Carolina and Missouri (see Note 3), our Medicaid operations in those states began in February 2013 and April 2013, respectively. As of December 31, 2015 , we offered Medicare Advantage ("MA") coordinated care plans ("CCPs") in certain counties 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. Our MA plans in Arkansas, Mississippi, South Carolina and Tennessee are attributable to our acquisition of Windsor Health Group, Inc. ("Windsor") and our MA operations in those states began on January 1, 2014. Effective January 1, 2015, we no longer offered MA plans in the states of Arizona, Missouri and Ohio. Basis of Presentation and Use of Estimates The consolidated balance sheets and statements of comprehensive income (loss), 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. We prepared the consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"), which requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates 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 consolidated financial statements. Reclassifications Certain reclassifications were made to 2013 and 2014 financial information to conform with 2015 presentation. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, " Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. " ASU 2015-17 requires an entity to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our consolidated results of operations, financial position or cash flows. In September 2015, the FASB issued ASU 2015-16, " Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. " ASU 2015-16 eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This standard is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. We will adopt this standard effective January 1, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated results of operations, financial position or cash flows. In May 2015, the 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 results of operations, financial position 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. In August 2015, the FASB issued ASU 2015-15, " Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of Credit Arrangements. " ASU 2015-15 provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. For public business entities, these standards 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 these standards effective January 1, 2016. We do not believe the adoption of these standards will have a material effect on our consolidated results of operations, financial position 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 August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", which deferred the effective dates of ASU 2014-09 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 principle. Premium Revenue Recognition and Premiums Receivable We earn premium revenue through our participation in Medicaid, Medicaid-related and Medicare programs. Our Medicaid contracts with state agencies generally are multi-year contracts subject to annual renewal provisions, while our Medicare contracts with CMS renew annually. Our Medicare and Medicaid contracts establish fixed, monthly premium rates per member ("PMPM"), which are generally determined at the beginning of each new contract renewal period; however, premiums may be adjusted by CMS and state agencies throughout the terms of the contracts in certain cases. Premium rate changes are recognized in the period the change becomes effective, when the effect of the change in the rate is reasonably estimable, and collection is assured. Our contracts also have additional provisions as described in the sections below. We recognize premium revenue in the period in which we are obligated to provide services to our members. We are generally paid by CMS and state agencies in the month in which we provide services. On a monthly basis, we bill members for any premiums for which they are responsible according to their respective plan. We record premiums earned but not received as premiums receivable and record premiums received in advance of the period of service as unearned premiums in the consolidated balance sheets. Unearned premiums are recognized as revenue when we provide the related services. Member premiums are recognized as revenue in the period of service. We estimate, on an on-going basis, the amount of members' billings that may not be collectible based on our evaluation of historical trends. An allowance is established for the estimated amount that may not be collectible. In addition, we routinely monitor the collectability of specific premiums receivable from CMS and state agencies, including Medicaid receivables for obstetric deliveries and newborns and net receivables for member retroactivity and reduce revenue and premiums receivable by the amount we estimate may not be collectible. We reported premiums receivable net of an allowance for uncollectible premiums receivable of $19.9 million and $21.1 million at December 31, 2015 and 2014 , respectively. Historically, the provision for uncollectible premiums for member premiums receivable has not been material relative to consolidated premium revenue. Premium payments are based upon eligibility lists produced by CMS and state agencies. We verify these lists to determine whether we have been paid for the correct premium category and program. From time to time, CMS and state agencies require us to reimburse them for premiums that we received for individuals who were subsequently determined by us, or by CMS or state agencies, to be ineligible for any government-sponsored program or to belong to a plan other than ours. Additionally, the verification of membership may result in additional premiums due to us from CMS and state agencies for individuals who were subsequently determined to belong to our plan for periods in which we received no premium for those members. We estimate the amount of outstanding retroactivity adjustments and adjust premium revenue based on historical trends, premiums billed, the volume of member and contract renewal activity and other information. We record amounts receivable in premiums receivable, net and amounts payable in other accrued expenses and liabilities in the consolidated balance sheets. Supplemental Medicaid Premiums We earn supplemental premium payments for eligible obstetric deliveries and newborns of our Medicaid members in Georgia, Illinois, Missouri, New Jersey, New York and South Carolina. Each state Medicaid contract specifies how and when these supplemental payments are earned and paid. We also earn supplemental Medicaid premium payments in some states for high cost drugs and other eligible services. We recognize supplemental premium revenue in the period we provide related services to our members. For the years ended December 31, 2015 , 2014 , and 2013 we recognized approximately $269.1 million , $278.4 million and $242.9 million , respectively, of supplemental Medicaid premium revenue. Medicaid Risk-Adjusted Premiums In some instances, our Medicaid premiums are subject to risk score adjustments based on the health profile of our membership. Generally, the risk score is determined by the state agency's analysis of encounter submissions of processed claims data to determine the acuity of our membership relative to the entire state's Medicaid membership. The frequency of when states adjust premiums varies, but is usually done quarterly or semi-annually on a retrospective basis. We recognize periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Medicaid ACA Industry Fee Reimbursement The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the "ACA") imposed certain new taxes and fees, including an annual premium-based health insurance industry assessment (the "ACA industry fee") on health insurers, which began in 2014. As discussed below in " ACA Industry Fee ", we have received amendments, written agreements or other documentation from all our Medicaid state customers, that commit them to reimburse us for the portion of the ACA industry fee on our Medicaid plans, including its non-deductibility for income tax purposes for 2015 and 2014. Consequently, we recognized $219.2 million and $124.6 million of reimbursement for the ACA industry fee as premium revenue for the years ended December 31, 2015 and 2014, respectively. Medicare Risk-Adjusted Premiums CMS provides risk-adjusted payments for MA Plans and PDPs based on the demographics and health severity of enrollees. The risk-adjusted premiums we receive are based on claims and encounter data that we submit to CMS within prescribed deadlines. We develop our estimates for risk-adjusted premiums utilizing historical experience, or other data, and predictive models as sufficient member risk score data becomes available over the course of each CMS plan year. We recognize periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured, which is possible as additional diagnosis code information is reported to CMS, when the ultimate adjustment settlements are received from CMS, or we receive notification of such settlement amounts. CMS adjusts premiums on two separate occasions on a retrospective basis. The first retrospective adjustment for a given plan year generally occurs during the third quarter of that year. This initial settlement represents the update of risk scores for the current plan year based on the severity of claims incurred in the prior plan year. CMS then issues a final retrospective risk adjusted premium settlement for that plan year in the following year. Historically, we have not experienced significant differences between our estimates and amounts ultimately received. However, in the third quarter of 2013, we recognized risk adjusted premium received as part of the 2012 final settlement that was higher than our original estimates, mainly related to members in our California MA plan that were new to Medicare in 2012. The data provided to CMS to determine members' risk scores is subject to audit by CMS even after the annual settlements occur. An audit may result in the refund of premiums to CMS. While our experience to date has not resulted in a material refund, future refunds could materially reduce premium revenue in the year in which CMS determines a refund is required and could be material to our results of operations, financial position and cash flows. Premiums receivable in the accompanying condensed consolidated balance sheets include risk-adjusted premiums receivable of $209.2 million and $178.7 million as of December 31, 2015 and 2014 , respectively. Minimum Medical Expense and Risk Corridor Provisions We may be required to refund certain premium revenue to state agencies and CMS under various contractual and plan arrangements. We estimate the effect of the following arrangements on a monthly basis and reflect any adjustments to premium revenues in current operations. We report the estimated net amounts due to state agencies and CMS in other payables to government partners in the consolidated balance sheets. Certain of our Medicaid contracts require us to expend a minimum percentage of premiums on eligible medical benefits expense. To the extent that we expend less than the minimum percentage of the premiums on eligible medical benefits, we are required to refund to the state all or some portion of the difference between the minimum and our actual allowable medical benefits expense. We estimate the amounts due to the state agencies as a return of premium based on the terms of our contracts with the applicable state agency. Our MA and PDP premiums are subject to risk sharing through the CMS Medicare Part D risk corridor provisions. The risk corridor calculation compares our actual experience to the target amount of prescription drug costs, limited to costs under the standard coverage as defined by CMS, less rebates included in our submitted plan year bid. We receive additional premium from CMS if our actual experience is more than 5% above the target amount. We refund premiums to CMS if our actual experience is more than 5% below the target amount. Based on the risk corridor provision and PDP activity-to-date, an estimated risk-sharing receivable or payable is recorded as an adjustment to premium revenue. After the close of the annual plan year, CMS performs the risk corridor calculation and any differences are settled between CMS and our plans. Historically, we have not experienced material differences between our recorded estimates and the subsequent CMS settlement amounts. Beginning in 2014, the ACA required the establishment of a minimum medical loss ratio (“MLR”) for MA plans and Part D plans, requiring them to spend not less than 85% of premiums on medical benefits. The rules implementing the minimum MLR imposed financial and other penalties for failing to achieve the minimum MLR, including requirements to refund to CMS shortfalls in amounts spent on medical benefits and termination of a plan’s MA contract for prolonged failure to achieve the minimum MLR. MLR is determined by adding a plan’s spending for clinical services, prescription drugs and other direct patient benefits, plus its total spending on quality improvement activities and dividing the total by earned premiums (after subtracting specific identified taxes and other fees). These provisions did not have a material effect to our results of operations in 2015 or 2014. A summary of other net (payables) receivables to/from government partners is as follows (in millions): As of December 31, 2015 2014 Liability to states under Medicaid minimum medical expense provisions $ (32.9 ) $ (14.3 ) (Liability to) receivable from CMS under risk corridor provision (136.8 ) 84.7 Liability to CMS under MA/PDP minimum MLR provisions of the ACA (3.0 ) (1.7 ) Net (payables) receivables to/from government partners (1) $ (172.7 ) $ 68.7 (1) The components of net (payables) receivables to/from government partners are classified in the consolidated balance sheets as $172.7 million in current liabilities as of December 31, 2015, and $83.0 million and $14.3 million in current assets and current liabilities, respectively, as of December 31, 2014. Medicare Part D Settlements We receive certain Part D prospective subsidy payments from CMS for our MA and PDP members as a fixed monthly per member amount, based on the estimated costs of providing prescription drug benefits over the plan year, as reflected in our bids. Approximately nine to ten months subsequent to the end of the plan year, or later in the case of the coverage gap discount subsidy, a settlement payment is made between CMS and our plans based on the difference between the prospective payments and actual claims experience. The subsidy components under Part D are described below. Low-Income Cost Sharing Subsidy ("LICS") -For qualifying LIS members, CMS reimburses us for all or a portion of the LIS member's deductible, coinsurance and co-payment amounts above the out-of-pocket threshold. Catastrophic Reinsurance Subsidy -CMS reimburses plans for 80% of the drug costs after a member reaches his or her out-of-pocket catastrophic threshold through a catastrophic reinsurance subsidy. Coverage Gap Discount Subsidy ("CGDS") -CMS provides monthly prospective payments for pharmaceutical manufacturer discounts made available to members. Catastrophic reinsurance subsidies and the LICS represent cost reimbursements under the Medicare Part D program. We are fully reimbursed by CMS for costs incurred for these contract elements and, accordingly, there is no insurance risk to us. Therefore, amounts received for these subsidies are not considered premium revenue, and are reported, net of the subsidy benefits paid, as Funds receivable/held for the benefit of members in the consolidated balance sheets. The receipts and payments between us and CMS are presented on a net basis as financing activity in our consolidated statements of cash flows since we are essentially administering and paying the benefit subsidies on behalf of CMS. Historically, the settlement payments between us and CMS have not been materially different from our estimates. The balance of funds receivable from CMS grew substantially in 2014 due to growth in our PDP and MA membership and high drug unit costs, resulting in higher benefit payments made on behalf of CMS compared with our bids and compared with prior years, as well as an increase in the CMS risk corridor receivable. Based on our experience in 2014, our 2015 PDP and MA bids reflected significantly higher estimates for cash outflows for the government's responsibility of the Part D benefit plan design, particularly for the catastrophic reinsurance subsidy. However, the level of subsidy payments we made on behalf of CMS compared with our 2015 bids was still significant due to the composition of our 2015 PDP membership, which reflected a higher number of dual-eligible members relative to our overall membership than we expected. In October 2015, we received an $845.5 million settlement payment from CMS relating to the 2014 Part D plan year, which resulted in a meaningful reduction in our CMS Part D receivable for our funds receivable for the benefit of members as well as the CMS risk corridor. CGDS advance payments are recorded as Funds receivable for the benefit of members in the consolidated balance sheets. Receivables are set up for manufacturer-invoiced amounts. Manufacturer payments reduce the receivable as payments are received. After the end of the contract year, during the Medicare Part D Payment reconciliation process for the CGD, CMS will perform a cost-based reconciliation to ensure the Medicare Part D sponsor is paid for gap discounts advanced at the point of sale, based on accepted prescription drug event data. Funds receivable for the benefit of members consisted of the following (in millions): As of December 31, 2015 2014 Low-income cost sharing subsidy $ 288.7 $ 323.1 Catastrophic reinsurance subsidy 267.7 492.5 Coverage gap discount subsidy 21.2 (34.1 ) Funds receivable for the benefit of members $ 577.6 $ 781.5 Medical Benefits Expense 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. Direct medical expenses include amounts paid or payable to hospitals, physicians, pharmacy benefit managers and providers of ancillary services. We also record direct medical expenses for estimated referral claims related to health care providers under contract with us who are financially troubled or insolvent and who may not be able to honor their obligations for the costs of medical services provided by others. In these instances, we may be required to honor these obligations for legal or business reasons. Based on our current assessment of providers under contract with us, such losses have not been and are not expected to be significant. We record direct medical expense for our estimates of provider settlement due to clarification of contract terms, out-of-network reimbursement, claims payment differences and amounts due to contracted providers under risk-sharing arrangements. We estimate pharmacy rebates earned based on historical utilization of specific pharmaceuticals, current utilization and contract terms and record amounts as a reduction of recorded direct medical expenses. Consistent with the criteria specified and defined in guidance issued by the Department of Health and Human Services ("HHS") for costs that qualify to be reported as medical benefits under the minimum MLR provision of the ACA, we record certain medically-related administrative costs such as preventive health and wellness, care management, and other quality improvement costs, as medical benefits expense. All other medically-related administrative costs, such as utilization review services, network and provider credentialing and claims handling costs, are recorded in selling, general, and administrative expense. Medical benefits payable represents amounts for claims fully adjudicated but not yet paid and estimates for IBNR. Our estimate of IBNR is the most significant estimate included in our consolidated financial statements. We determine our best estimate of the base liability for IBNR utilizing consistent standard actuarial methodologies based upon key assumptions, which vary by business segment. Our assumptions include current payment experience, trend factors, and completion factors. Trend factors in our standard actuarial methodologies include contractual requirements, historic utilization trends, the interval between the date services are rendered and the date claims are paid, denied claims activity, disputed claims activity, benefit changes, expected health care cost inflation, seasonality patterns, maturity of lines of business, changes in membership and other factors. After determining an estimate of the base liability for IBNR, we make an additional estimate, also using standard actuarial techniques, to account for adverse conditions that may cause actual claims to be higher than the estimated base reserve. We refer to this additional liability as the provision for moderately adverse conditions. Our estimate of the provision for moderately adverse conditions captures the potential adverse development from factors such as: • our entry into new geographical markets; • our provision of services to new populations such as the aged, blind and disabled; • variations in utilization of benefits and increasing medical costs, including higher drug costs; • changes in provider reimbursement arrangements; • variations in claims processing speed and patterns, claims payment and the severity of claims; and • health epidemics or outbreaks of disease such as the flu or enterovirus. We consider the base actuarial model liability and the provision for moderately adverse conditions as part of our overall assessment of our IBNR estimate to properly reflect the complexity of our business, the number of states in which we operate, and the need to account for different health care benefit packages among those states. 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 developments, as increases or decreases to medical benefits expense in the period we identify the differences. The favorable (unfavorable) cumulative effect of prior year reserve development was $78.1 million , $(48.1) million and $3.0 million in 2015, 2014 and 2013, respectively. Such amounts are net of the development relating to refunds due to government customers with minimum loss ratio provisions. Premium Deficiency Reserves We evaluate our contracts to determine if it is probable that a loss will be incurred. We establish a premium deficiency reserve ("PDR") when it is probable that expected future medical benefits and administrative expenses will exceed future premiums and reinsurance recoveries for the remainder of a contract period. For purposes of determining a PDR, we do not consider investment income and contracts are grouped in a manner consistent with our method of acquiring, servicing and measuring the profitability of such contracts. A PDR is recorded as medical benefits expense and in medical benefits payable. Once established, a PDR is reduced over the contract period as an offset to actual losses. We re-evaluate our PDR estimates each reporting period and, if estimated future losses differ from those in the current PDR estimate, we adjust the liability through medical benefits expense, as necessary. We had no PDR liability recorded in our consolidated balance sheets as of December 31, 2015 and 2014, respectively. Reinsurance We enter into excess of loss reinsurance arrangements to reduce the risk associated with large losses or catastrophic events. We are contingently liable in the event the reinsurance companies do not meet their contractual obligations. We evaluate the financial condition of the reinsurance companies on a regular basis and only contract with well-known, well-established reinsurance companies that have strong financial ratings. We evaluate the terms of the arrangements to determine whether risk transfer and other criteria are met to qualify as reinsurance contracts for GAAP accounting purposes in accordance with ASC 944, Financial Services-Insurance . Premiums paid, or ceded, to the reinsurer, are recorded as a reduction to premium revenue, and expected reimbursements for losses, or recoveries, are recorded as a reduction to medical benefits expense. Amounts recoverable from the reinsurer are estimated in a manner consistent with the claim liability associated with the reinsured policies. ACA Industry Fee The total ACA industry fee levied on the health insurance industry was $8 billion in 2014 and $11.3 billion in 2015, with increasing annual amounts thereafter, growing to $14.3 billion by 2018. After 2018, the industry fee increases according to an index based on net premium growth. The assessment is being levied on certain health insurers that provide insurance in the assessment year and is allocated to health insurers based on each health insurer's share of net premiums for all U.S health insurers in the year preceding the assessment. On December 18, 2015, the President signed the Consolidated Appropriations Act, 2016 which, among other provisions, included a one-year moratorium on the ACA industry fee for 2017. The ACA industry fee is not deductible for income tax purposes, which has significantly increased our effective income tax rate. The initial estimated liability for each year is accrued as of January 1, with a corresponding deferred expense asset that is amortized over 12 months to expense on a straight line basis. The fee is payable by September 30 of each year. We incurred $227.3 million and $137.7 million of such fees in 2015 and 2014, respectively. We have received amendments, written agreements or other documentation from all our Medicaid state customers, that commit them to reimburse us for the portion of the ACA industry fee on our Medicaid plans, including its non-deductibility for income tax purposes for 2015 and 2014. See discussion under "Premium Revenue Recognition and Premiums Receivable." Equity-Based Employee Compensation During the second quarter of 2013, our stockholders approved the WellCare Health Plans, Inc. 2013 Incentive Compensation Plan (the "2013 Plan"). Upon approval of the 2013 Plan, a total of 2,500,000 shares of our common stock were available for issuance pursuant to the 2013 Plan, minus any shares subject to outstanding awards granted on or after January 1, 2013 under our 2004 Equity Incentive Plan ("the Prior Plan"). In addition, shares subject to awards forfeited under the Prior Plan will become available for issuance under the 2013 Plan. No further awards are permitted to be granted under our Prior Plan. Certain of our senior level employees, including executive officers, are eligible for long-term incentive awards ("LTI Program"), consisting of a mix of cash and equity awards, which are granted pursuant to the 2013 Plan. We designed the LTI Program to motivate and promote the achievement of our long-term financial and operating goals and improve retention. Under the LTI Program, we grant multi-year performance period awards that are not realized by employees and officers until subsequent years. We base award amounts on each participant's pre-established long-term incentive target and allocate the awards to various types of equity and performance-based cash awards, depending on job level. The Compensation Committee of our board of directors (the "Compensation Committee") has sole discretion of the ultimate funding and payout of awards under the LTI program. The Compensation Committee awards certain equity-based compensation under our stock plans, including stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and market stock units ("MSUs"), each of which is described below: RSUs - For each RSU granted, employees receive one share of common stock, net of taxes withheld at the statutory minimum, at the end of the vesting period. RSUs typically vest one to three years from the date of grant. PSUs - The actual number of common stock shares earned upon vesting will range from zero shares up to 200% of the target award, depending on the award date, the target award amounts for the PSU awards and our achievement of certain financial and quality-based performance goals set by the Compensation Committee at its sole discretion. PSUs generally cliff-vest 3 years from the grant date based on the achievement of the performance goals and conditioned on the employee's continued service through the vesting date. The number of shares earned by the participant are generally paid net of taxes withheld at the statutory minimum. MSUs - The number of shares of common stock earned upon vesting is determined based on the ratio of our average common stock price during the last 30 days market trading days of the |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Healthfirst NJ Acquisition On July 1, 2014, our New Jersey subsidiary completed the acquisition of Medicaid assets from Healthfirst Health Plan of New Jersey, Inc. ("Healthfirst NJ"). The acquired assets primarily relate to approximately 42,000 Healthfirst NJ Medicaid members who were transferred to our Medicaid plan in New Jersey, as well as certain provider agreements. Based on the final purchase price allocation, we allocated $10.8 million of the purchase price to identified intangible assets and recorded the excess of purchase price over the aggregate fair value of the net assets acquired of $16.2 million as goodwill. The recorded goodwill and other intangible assets related to the Healthfirst NJ acquisition are deductible for income tax purposes. Windsor Acquisition 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. Based on the final purchase price allocation, we allocated $195.3 million of the purchase price to identifiable tangible net assets and $54.3 million of the purchase price to identifiable intangible assets, which had a weighted average amortization period of 11.5 years . We paid $17.2 million associated with the final purchase price settlement during the quarter ended June 30, 2015. The fair value of the net tangible and intangible assets that we acquired exceeded the total consideration paid to the seller by $29.5 million , which was recognized as a bargain purchase gain for the year ended December 31, 2014. After consideration of all relevant factors, we concluded that the excess fair value constituted a bargain purchase gain in accordance with accounting rules related to business combinations. Missouri Care Acquisition On March 31, 2013, we acquired all outstanding stock of Missouri Care, Incorporated, a subsidiary of Aetna Inc. ("Missouri Care"), which participates in the Missouri HealthNet Medicaid program. We included the results of Missouri Care's operations from the date of acquisition in our consolidated financial statements. Based on the final purchase price allocation, we allocated $10.2 million of the purchase price to identified tangible net assets and $7.1 million of the purchase price to identified intangible assets. We recorded the excess of purchase price over the aggregate fair value of the net assets acquired of $10.7 million as goodwill. The recorded goodwill and other intangible assets related to the Missouri Care acquisition are deductible for income tax purposes. WellCare of South Carolina Acquisition On January 31, 2013, we acquired all outstanding stock of WellCare of South Carolina, Inc. ("WCSC"), formerly UnitedHealthcare of South Carolina, Inc., a South Carolina Medicaid subsidiary of UnitedHealth Group Incorporated. We included the results of WCSC's operations from the date of acquisition in our consolidated financial statements. Based on the final purchase price allocation, we allocated $24.7 million of the purchase price to identified tangible net assets and $9.5 million of the purchase price to identified intangible assets. We recorded the excess of purchase price over the aggregate fair value of the net assets acquired of $12.7 million as goodwill. The recorded goodwill and other intangible assets related to the WCSC acquisition are deductible for tax purposes. Sterling Life Insurance Company Divestiture On July 1, 2015, we completed the divestiture of Sterling Life Insurance Company ("Sterling"), our Medicare Supplement business that we acquired as part of the Windsor transaction in January 2014. The transaction did not have a material effect on our results of operations, financial position or cash flows. Pro Forma Financial Information (unaudited) Only pro forma results for 2013 have been presented as the results of operations and financial condition for our 2013 and 2014 acquisitions have been included in our consolidated financial statements since the respective acquisition dates. Assuming these acquisitions occurred on January 1, 2013, for the year ended December 31, 2013, our unaudited pro forma premium revenues, net earnings and diluted earnings per share would have been $10.7 billion , $201.5 million and $4.58 , respectively. The unaudited pro forma adjustments include the pro forma effect of the amortization of finite-lived intangible assets arising from the purchase price allocations, adjustments necessary to align the acquired companies' accounting policies to our accounting policies and the associated income tax effects of the pro forma adjustments. Additionally, the unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have occurred had the acquisitions been consummated at the beginning of the periods presented. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 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, including long-term services and supports. 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 income exceeds 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 Years Ended December 31, 2015 2014 2013 Kentucky 19% 18% 14% Florida 17% 14% 12% Georgia 12% 13% 16% In January 2016, we received a notice that the Georgia Department of Community Health (“Georgia DCH”) intends to extend our current Georgia Medicaid contract, which currently expires on June 30, 2016, for up to twelve months through the addition of two six -month renewal periods. At this time, Georgia DCH anticipates extending the contract at least through December 31, 2016. In September 2015, we received a Notice of Intent to Award a contract from Georgia DCH to continue serving Medicaid members in Georgia. Services under the new contract are expected to commence on January 1, 2017, with an initial six -month term and five additional one -year renewal options at Georgia DCH's discretion. In June 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 commenced on July 1, 2015 and is for one year and four additional one -year renewal options upon the mutual agreement of the parties, potentially extending it through June 30, 2020. 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. Medicare Health Plans 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 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. As a result of the Windsor acquisition completed on January 1, 2014, we began offering Medicare Supplement products. Accordingly, we included results for Medicare Supplement operations together with our MA plans within the Medicare Health Plans segment through June 30, 2015. On July 1, 2015, we completed the sale of our Medicare Supplement business through the Sterling divestiture. The operations of our Medicare Supplement business were not material to overall segment results. 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 any other assets and liabilities, investment and other income, selling, general and administrative expenses, depreciation and amortization, or interest expense to our reportable segments. The Company's chief operating decision maker primarily uses premium revenue, medical benefits expense and gross margin to evaluate the performance of our reportable segments. A summary of financial information for our reportable operating segments through the gross margin level and a reconciliation to income from operations is presented in the tables below. For the Years Ended December 31, 2015 2014 2013 Premium revenue: Medicaid Health Plans $ 9,074.3 $ 7,773.9 $ 5,661.2 Medicare Health Plans 3,898.8 3,963.2 3,071.0 Medicare PDPs 901.7 1,178.4 776.9 Total premium revenue 13,874.8 12,915.5 9,509.1 Medical benefits expense: Medicaid Health Plans 7,866.8 6,853.1 4,927.4 Medicare Health Plans 3,401.7 3,506.9 2,659.5 Medicare PDPs 710.0 1,095.2 671.7 Total medical benefits expense 11,978.5 11,455.2 8,258.6 ACA industry fee expense: Medicaid Health Plans 135.1 81.6 — Medicare Health Plans 68.7 44.7 — Medicare PDPs 23.5 11.4 — Total ACA industry fee expense 227.3 137.7 — Gross margin: Medicaid Health Plans 1,072.4 839.2 733.8 Medicare Health Plans 428.4 411.6 411.5 Medicare PDPs 168.2 71.8 105.2 Total gross margin 1,669.0 1,322.6 1,250.5 Investment and other income 15.4 44.4 18.8 Other expenses (1) (1,348.3 ) (1,218.7 ) (988.2 ) Income from operations $ 336.1 $ 148.3 $ 281.1 (1) Other expenses includes selling, general and administrative expenses, Medicaid Premium taxes, depreciation and amortization, interest and impairment and other charges. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 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. We calculated weighted-average common shares outstanding — diluted as follows: For the Years Ended December 31, 2015 2014 2013 Weighted-average common shares outstanding — basic 44,057,579 43,864,367 43,535,927 Dilutive effect of outstanding stock-based compensation awards 333,453 299,234 464,636 Weighted-average common shares outstanding — diluted 44,391,032 44,163,601 44,000,563 Anti-dilutive stock-based compensation awards excluded from computation 65,839 30,217 79,978 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The Company considers all of its investments as available-for-sale securities. 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 Gross Gross Estimated December 31, 2015 Auction rate securities $ 34.0 $ — $ (2.3 ) $ 31.7 Corporate debt and other securities 121.4 — (0.4 ) 121.0 Money market funds 45.9 — — 45.9 Municipal securities 46.0 0.4 (0.1 ) 46.3 U.S. government securities 7.1 — — 7.1 Variable rate bond fund 85.1 — (0.9 ) 84.2 Total $ 339.5 $ 0.4 $ (3.7 ) $ 336.2 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 Total $ 431.7 $ 0.9 $ (2.5 ) $ 430.1 Contractual maturities of long-term available-for-sale investments at December 31, 2015 are as follows: Total Within 1 Through 5 5 Through 10 Thereafter Auction rate securities $ 31.7 $ — $ — $ — $ 31.7 Corporate debt and other securities 121.0 55.7 65.3 — — Money market funds 45.9 45.9 — — — Municipal securities 46.3 12.2 26.7 7.4 — Variable rate bond fund 84.2 84.2 — — — U.S. government securities 7.1 6.4 0.7 — — Total $ 336.2 $ 204.4 $ 92.7 $ 7.4 $ 31.7 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 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 have not recorded any other-than-temporary impairment as of December 31, 2015 . Redemptions and sales of our auction rate securities during the years ended December 31, 2015, 2014 and 2013 were not material. During the years ended December 31, 2015 , 2014 , and 2013 we sold or redeemed fixed maturity bond investments totaling $126.3 million , $348.7 million , $360.2 million , respectively. Realized gains and losses on sales and redemptions of investments, including sales and redemptions of the fixed maturity bond investments, were not material for the years ended December 31, 2015 , 2014 or 2013 . Additionally, we did not realize any OTTI for any of these years. |
RESTRICTED INVESTMENTS
RESTRICTED INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Investments Note [Abstract] | |
RESTRICTED INVESTMENTS | RESTRICTED INVESTMENTS The amortized cost, gross unrealized gains, gross unrealized losses and fair value of our restricted cash and investment securities are as follows: Amortized Gross Gross Estimated December 31, 2015 Cash $ 3.2 $ — $ — $ 3.2 Certificates of deposit 1.1 — — 1.1 Money market funds 67.5 — — 67.5 U.S. government securities 124.3 — (0.1 ) 124.2 Total $ 196.1 $ — $ (0.1 ) $ 196.0 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 Total $ 150.3 $ 0.1 $ (0.1 ) $ 150.3 Realized gains or losses related to sales and redemptions of restricted investments were not material for the years ended December 31, 2015 , 2014 , or 2013 . |
PROPERTY, EQUIPMENT AND CAPITAL
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE Property, equipment and capitalized software and related accumulated depreciation are as follows: December 31, 2015 2014 Leasehold improvements $ 26.5 $ 26.1 Computer equipment 96.7 69.3 Capitalized software 339.9 256.9 Furniture and equipment 28.8 26.4 491.9 378.7 Less accumulated depreciation (247.1 ) (191.6 ) Total property and equipment, net $ 244.8 $ 187.1 We recognized depreciation expense on property, equipment and capitalized software of $62.0 million , $46.8 million , and $36.7 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively, including depreciation expense on capitalized software of $43.7 million , $30.4 million , and $22.0 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. The increase reflects increased additions to capitalized software and computer equipment during 2015 resulting from investments in our information technology infrastructure. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET A summary of changes in our goodwill by reportable segment is as follows for 2015 and 2014 : Medicaid Health Plans Medicare Health Plans Total Balance as of December 31, 2013 $ 126.8 $ 110.0 $ 236.8 Acquisitions and acquisition related adjustments 26.0 0.4 26.4 Balance as of December 31, 2014 152.8 110.4 263.2 Acquisitions and acquisition related adjustments — — — Balance as of December 31, 2015 (1) $ 152.8 $ 110.4 $ 263.2 (1) Cumulative impairment charges relating to goodwill were $78.3 million as of December 31, 2015 and 2014, which related to goodwill assigned to our Medicare Health Plans reporting unit which we impaired during 2008. Other intangible assets as of December 31, 2015 and 2014 , and the related weighted-average amortization periods as of December 31, 2015 , are as follows: As of December 31, 2015 2014 Weighted Average Amortization Period (In Years) Gross Carrying Amount Accumulated Amortization Other Intangibles, Net Gross Carrying Amount Accumulated Amortization Other Intangibles, Net Provider networks 15.3 $ 8.1 $ (3.3 ) $ 4.8 $ 9.9 $ (3.0 ) $ 6.9 Licenses and permits 15.0 5.6 (3.6 ) 2.0 7.7 (3.4 ) 4.3 Trademarks and tradenames 15.0 11.4 (9.1 ) 2.3 15.9 (10.0 ) 5.9 Membership and state contracts 12.2 89.9 (21.7 ) 68.2 93.2 (14.2 ) 79.0 Other 6.3 4.2 (1.5 ) 2.7 5.7 (0.8 ) 4.9 Total other intangible assets 12.6 $ 119.2 $ (39.2 ) $ 80.0 $ 132.4 $ (31.4 ) $ 101.0 We recorded amortization expense of $10.6 million , $13.1 million , and $7.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Amortization expense expected to be recognized during fiscal years subsequent to December 31, 2015 is as follows: Expected Amortization Expense 2016 $ 10.1 2017 9.7 2018 8.9 2019 8.7 2020 8.5 2021 and thereafter 34.1 Total $ 80.0 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Senior Notes due 2020 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. We are using the proceeds 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. In November 2013, we completed the offering and sale of $600.0 million aggregate principal amount of our Senior Notes. The aggregate net proceeds from this issuance of the Senior Notes were $587.9 million , with a portion of the net proceeds from the offering being used to repay the full $336.5 million balance outstanding under the 2011 Credit Agreement, discussed in Credit Agreements below. The Senior Notes will mature on November 15, 2020 and bear interest at a rate of 5.75% per annum. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. Interest on the Senior Notes is payable semi-annually on May 15 and November 15 of each year. 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 notes were issued contains 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 restricted subsidiaries to pay dividends or make other payments, and in the case of the our subsidiaries, guarantee indebtedness; • engage in transactions with affiliates; • create unrestricted subsidiaries; and • merge or consolidate with other entities. Ranking and Optional Redemption The Senior Notes are senior obligations of our company and rank equally in right of payment with all of our other existing and future unsecured and unsubordinated indebtedness. In addition, the Senior Notes will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries (unless our subsidiaries become guarantors of the Senior Notes). We may redeem up to 40% of the aggregate principal amount of the Senior Notes at any time prior to November 15, 2016, at a redemption price equal to 105.75% of the principal amount of the Senior Notes redeemed, plus accrued and unpaid interest. On or after November 15, 2016, we may on any one or more occasions redeem all or part of the Senior Notes, at the redemption prices (expressed as percentages of principal amount) set forth below, if redeemed during the twelve-month period beginning on November 15 of the years indicated below, subject to the rights of holders of Senior Notes on the relevant record date to receive interest due on the relevant interest payment date: Period Redemption Price 2016 102.875 % 2017 101.438 % 2018 and thereafter 100 % The Senior Notes are classified as long-term debt in the Company’s Consolidated Balance Sheet at December 31, 2015 based on their November 2020 maturity date. Credit Agreements As of December 31, 2015, our current portion of long-term debt included a $300.0 million term loan (the Term Loan") outstanding under our 2014 amended and restated credit agreement (the "2014 Credit Agreement"). The 2014 Credit Agreement provided for a senior unsecured revolving loan facility (the "2014 Revolving Credit Facility") of up to $300.0 million , which was not drawn upon. The Term Loan would have matured in September 2016 and the commitments under the 2014 Revolving Credit Facility would have expired on November 14, 2018. Borrowings under the 2014 Credit Agreement bore 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% and 1.625% , depending upon our cash flow leverage ratio (which was defined as the ratio of our total debt to total consolidated EBITDA). Unutilized commitments under the 2014 Credit Agreement were subject to a fee of 0.25% to 0.45% , depending upon our cash flow leverage ratio. The annual interest rate on the Term Loan was 4.50% as of December 31, 2015. The 2014 Credit Agreement contained negative and financial covenants that limited certain activities of us and our subsidiaries, including (i) restrictions on our ability to incur additional indebtedness; and (ii) financial covenants that required (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 2014 Credit Agreement also contained customary representations and warranties that were required to be accurate in order for us to borrow under the 2014 Revolving Credit Facility. In addition, the 2014 Credit Agreement contained customary events of default. If an event of default occurred and was continuing, we may have been required immediately to repay all amounts outstanding under the 2014 Credit Agreement. Lenders holding at least 50% of the loans and commitments under the 2014 Credit Agreement may have elected to accelerate the maturity of the loans and/or terminate the commitments under the 2014 Credit Agreement upon the occurrence and during the continuation of an event of default. In January 2016, we entered into a senior unsecured revolving credit facility (the “2016 Credit Agreement”). See Note 20 - Subsequent Events to the Consolidated Financial Statements for additional information on the 2016 Credit Agreement. As of December 31, 2015, we were in compliance with all covenants under both the Senior Notes and the 2014 Credit Agreement. As of the date of this filing, we remain in compliance with all covenants under both the Senior Notes and the 2016 Credit Agreement. In November 2013, we terminated our senior secured credit facility dated August 1, 2011, as amended to date (the "2011 Credit Agreement") in connection with our entry into the 2014 Credit Agreement described above. All amounts outstanding under the 2011 Credit Agreement as of November 14, 2013, which amounted to $336.5 million , were paid in full upon termination of the agreement. In conjunction with the extinguishment of debt, we incurred approximately $2.8 million for the accelerated recognition of previously deferred financing costs. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our 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. For other financial instruments, including short- and long-term investments, restricted investments, amounts accrued related to investigation resolution, and long-term debt, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date. Level 1 — Quoted (unadjusted) prices for identical assets or liabilities in active markets : We include investments in cash, money market funds, U.S. government securities and the variable rate bond fund in Level 1. The carrying amounts of money market funds and cash approximate fair value because of the short-term nature of these instruments. We base fair values of the other investments included in Level 1 on unadjusted quoted market prices for identical securities in active markets. Level 2 — Inputs other than quoted prices in active markets : We include in Level 2 investments in certain certificates of deposit, commercial paper, corporate debt, asset-backed and other municipal securities for which fair market valuations are based on quoted prices for identical securities in markets that are not active, quoted prices for similar securities in active markets, broker or dealer quotations, or alternative pricing sources or for which all significant inputs are observable, either directly or indirectly, including interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates. In addition to using market data, we make assumptions when valuing our assets and liabilities, including assumptions about risks inherent in the inputs to the valuation technique. When there is not an observable market price for an identical or similar asset or liability, we use an income approach reflecting our best assumptions regarding expected cash flows, discounted using a commensurate risk-adjusted discount rate. We estimated the fair value of the future payments related to investigation resolution using a discounted cash flow analysis and recorded these amounts at fair value in the short- and long-term portions of amounts accrued related to investigation resolution line items in our consolidated balance sheets. Level 3 — Unobservable inputs that cannot be corroborated by observable market data: We hold investments in auction rate securities, designated as available for sale and reported at fair value. At December 31, 2015 , the auction rate securities had par values of $34.0 million . 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. Auctions for these auction rate securities continued to fail during the twelve months ended December 31, 2015 . An auction failure means that the parties wishing to sell their securities could not be matched with an adequate volume of buyers. As a result, our ability to liquidate and fully recover the carrying value of our remaining auction rate securities in the near term may be limited or non-existent. However, when there is a failed auction, the indenture governing the security requires the issuer to pay interest at a contractually defined rate that is generally above market rates for other types of similar instruments. We continue to receive interest payments on the auction rate securities we hold. Based on our analysis of anticipated cash flows, we have determined that it is more likely than not that we will be able to hold these securities until maturity or until market stability is restored. Additionally, there are government guarantees or municipal bond insurance in place and we have the ability and the present intent to hold these securities until maturity or market stability is restored. Based on this, we do not believe our auction rate securities are impaired and as a result, we have not recorded any impairment losses for our auction rate securities. However, as these securities are believed to be in an inactive market, we have estimated the fair value of these securities using a discounted cash flow model and update these estimates on a quarterly basis. Our analysis considered, among other things, the collateralization underlying the securities, the creditworthiness of the counterparty, the timing of expected future cash flows and the capital adequacy and expected cash flows of the subsidiaries that hold the securities. The estimated values of these securities were also compared, when possible, to valuation data with respect to similar securities held by other parties. Significant unobservable inputs used in the discounted cash flow model include the historical municipal bond index return rate and individual security credit ratings. Increases or decreases in the municipal bond index return rate or changes in security credit ratings could result in a significant change in the fair value estimation of our auction rate securities. Unobservable inputs included in our estimation of fair value of auction rate securities at December 31, 2015 included security credit ratings ranging from AAA/Aaa to BB-/Ba3 and historical municipal bond index returns ranging from 0% to 6.0% . The fair values of auction rate securities are based on an approach that relies heavily on management assumptions and qualitative observations and therefore fall within Level 3 of the fair value hierarchy. We determine transfers between levels at the end of the reporting period. No transfers between levels occurred during the years ended December 31, 2015 and 2014 . Recurring Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis at December 31, 2015 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Significant Other Significant Investments: Asset backed securities $ 17.2 $ — $ 17.2 $ — Auction rate securities 31.7 — — 31.7 Corporate debt securities 103.8 — 103.8 — Money market funds 45.9 45.9 — — Municipal securities 46.3 — 46.3 — U.S. government and agency obligations 7.1 7.1 — — Variable rate bond fund 84.2 84.2 — — Total investments $ 336.2 $ 137.2 $ 167.3 $ 31.7 Restricted investments: Cash 3.2 3.2 — — Certificates of deposit 1.1 — 1.1 — Money market funds 67.5 67.5 — — U.S. government and agency obligations 124.2 124.2 — — Total restricted investments $ 196.0 $ 194.9 $ 1.1 $ — Amounts payable 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 Significant Other Observable Inputs Significant Unobservable Inputs 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: Money market funds $ 65.9 $ 65.9 $ — $ — Cash 53.3 53.3 — — Certificates of deposit 1.0 — 1.0 — U.S. government securities 30.1 30.1 — — Total restricted investments $ 150.3 $ 149.3 $ 1.0 $ — Amounts payable related to investigation resolution $ 35.2 $ — $ 35.2 $ — The following table presents the changes in the fair value of our Level 3 auction rate securities for the years ended December 31, 2015, 2014 and 2013: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) December 31, 2015 December 31, 2014 December 31, 2013 Balance as of January 1 $ 32.3 $ 31.8 $ 32.0 Realized gains (losses) in earnings — — — Changes in net unrealized gains and losses in other comprehensive income (0.5 ) 0.5 (0.2 ) Purchases, sales and redemptions (0.1 ) — — Net transfers in or (out) of Level 3 — — — Balance as of December 31 $ 31.7 $ 32.3 $ 31.8 Debt The following table presents the carrying value and fair value of our Senior Notes as of December 31, 2015 , and our Senior Notes and Term Loan as of December 31, 2014: December 31, 2015 December 31, 2014 Long term debt $ 912.1 $ 900.0 Approximate fair value of our long-term debt 931.5 908.7 The fair value of our Senior Notes was determined based on quoted market prices; therefore, would be classified within Level 1 of the fair value hierarchy. The fair value of our Term Loan as of December 31, 2014 was determined based on a discounted cash flow analysis, utilizing current rates estimated to be available to us for debt of similar terms and remaining maturities; therefore, would be classified within Level 2 of the fair value hierarchy. The current carrying value of our Term Loan approximates the fair value; therefore, the carrying value and fair value were excluded from the table above for December 31, 2015. |
MEDICAL BENEFITS PAYABLE
MEDICAL BENEFITS PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
MEDICAL BENEFITS PAYABLE [Abstract] | |
MEDICAL BENEFITS PAYABLE | MEDICAL BENEFITS PAYABLE Medical benefits payable consists of: As of December 31, 2015 % of Total As of December 31, 2014 % of Total IBNR $ 1,187.9 77% $ 1,111.5 75% Other medical benefits payable 348.1 23% 372.3 25% Total medical benefits payable $ 1,536.0 100% $ 1,483.8 100% A reconciliation of the beginning and ending balances of medical benefits payable is as follows: For the Years Ended December 31, 2015 2014 2013 Beginning balance $ 1,483.8 $ 953.4 $ 733.0 (Divestitures) acquisitions (9.5 ) 107.0 71.6 Medical benefits incurred related to: Current year 12,189.5 11,481.4 8,333.2 Prior year (211.0 ) (26.2 ) (74.6 ) Total 11,978.5 11,455.2 8,258.6 Medical benefits paid related to: Current year (10,763.0 ) (10,089.6 ) (7,490.6 ) Prior year (1,153.8 ) (942.2 ) (619.2 ) Total (11,916.8 ) (11,031.8 ) (8,109.8 ) Ending balance $ 1,536.0 $ 1,483.8 $ 953.4 Our estimates of medical benefits expense recorded at December 31, 2015 , 2014 and 2013 developed favorably by approximately $211.0 million , $26.2 million , and $74.6 million in 2015 , 2014 and 2013 , respectively. The release of the provision for moderately adverse conditions included in our prior year estimates was substantially offset by the provision for moderately adverse conditions established for claims incurred in the current year. Accordingly, the favorable development in our estimate of medical benefits payable related to claims incurred in prior years does not directly correspond to a decrease in medical benefits expense recognized during the period. Excluding the prior year development related to the release of the provision for moderately adverse conditions, our estimates of medical benefits expense recorded at December 31, 2015 developed favorably (unfavorably) by approximately $78.1 million , $(48.1) million , and $3.0 million in 2015, 2014 and 2013 , respectively. Such amounts are net of the development relating to refunds due to government customers with minimum loss ratio provisions. The favorable development recognized in 2015 was primarily due to lower utilization and improved operating performance. The unfavorable development in 2014 was due to higher than expected medical services in our Medicaid and Medicare Health Plan segments that were not discernible until the effect became clearer over time as claim payments were processed. The favorable development in 2013 was due mainly to the medical cost trend emerging favorably in our Medicaid segment due to lower utilization. The Sterling divestiture resulted in a decrease to medical benefits expense as of the effective date of the divestiture. Our acquisitions in 2013 and 2014 resulted in increases to medical benefits payable as of the effective date for each of the acquisitions. See Note 3, Acquisitions and Divestitures , for additional information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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. The indemnification agreements require us to indemnify an indemnitee against 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 individuals; 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 $211.1 million from the inception of the investigations to December 31, 2015 . We incurred $25.2 million , $30.0 million and $46.0 million of these legal fees and related expenses during the years ended December 31, 2015, 2014 and 2013, respectively. 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, protests and appeals related to Medicaid procurement awards, 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. Operating Leases We recorded rental expense of $30.0 million , $25.2 million , and $20.4 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, related to our operating leases for office space. Future minimum lease payments under non-cancelable operating leases with initial or remaining lease terms in excess of one year at December 31, 2015 are as follows: Minimum Lease Payments 2016 $ 31.0 2017 28.5 2018 25.2 2019 20.0 2020 16.8 2021 and thereafter 35.3 Total $ 156.8 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company and subsidiaries file a consolidated federal income tax return and separate state franchise, income and premium tax returns, as applicable. The following table provides components of income tax expense (benefit): For the Years Ended December 31, 2015 2014 2013 Current: Federal $ 161.2 $ 105.1 $ 78.6 State 11.3 15.1 7.5 172.5 120.2 86.1 Deferred: Federal 42.9 (5.7 ) 16.0 State 2.1 (0.4 ) 0.9 45.0 (6.1 ) 16.9 Total income tax expense $ 217.5 $ 114.1 $ 103.0 A reconciliation of income tax at the statutory federal rate of 35% to income tax at the effective rate is as follows: For the Years Ended December 31, 2015 2014 2013 Income tax expense at statutory federal rate $ 117.6 $ 62.2 $ 97.4 Adjustments resulting from: State income tax, net of federal benefit 9.5 9.4 5.8 Tax exempt bargain purchase gain — (10.3 ) — Non-deductible executive compensation 3.5 3.8 5.1 Non-deductible amounts related to investigation resolution — 0.1 (6.9 ) Non-deductible ACA industry fees 79.6 48.2 — Other, net 7.3 0.7 1.6 Total income tax expense $ 217.5 $ 114.1 $ 103.0 Our effective income tax rate on pre-tax income was 64.7% for the year ended December 31, 2015 , compared to 64.2% for the year ended December 31, 2014 and 37.0% for the year ended December 31, 2013 . The higher 2015 and 2014 effective rates mainly reflect the effect of the non-deductible ACA industry fee. Additionally, the effective rate was lower in 2013 due to an issue resolution agreement reached with the IRS regarding the tax treatment of the investigation-related litigation and other resolution costs, resulting in approximately $7.6 million in additional tax benefit over what was recorded as of December 31, 2012. In 2014, the unfavorable effect of the non-deductible ACA industry fee was partially offset by the favorable effect of the Windsor bargain purchase gain. Significant components of our deferred tax assets and liabilities are: As of December 31, Deferred tax assets: 2015 2014 Medical and other benefits discounting $ 15.7 $ 14.2 Unearned premium discounting 2.1 6.4 Tax basis assets 10.1 10.1 Allowance for doubtful accounts 14.7 10.1 Stock-based compensation 9.5 11.6 Amount payable related to investigation resolution — 6.8 Accrued expenses and other 24.1 7.0 76.2 66.2 Deferred tax liabilities: Goodwill, other intangible assets and property and equipment 22.7 3.5 Software development costs 91.6 68.9 Prepaid assets 14.5 5.1 128.8 77.5 Net deferred tax liability $ (52.6 ) $ (11.3 ) We have not recorded a valuation allowance at December 31, 2015 and 2014 as we expect that we will fully realize our deferred tax assets. We classify deferred tax assets and liabilities in the consolidated balance sheets as follows: As of December 31, 2015 2014 Current assets $ 34.8 $ 37.1 Non-current liabilities (87.4 ) (48.4 ) Net deferred tax liability $ (52.6 ) $ (11.3 ) In September 2014, the IRS issued final regulations on the ACA's $0.5 million limit on the deduction for compensation for health insurance providers under Internal Revenue Code section 162(m)(6). As a result, we no longer believe the deduction limitations apply to WellCare, and we took deductions totaling $9.7 million , gross before the effect of taxes, for such compensation during 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 $14.0 million at December 31, 2015. The unrecognized tax benefit, if recognized, would reduce the effective income tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended December 31, 2015 2014 Gross unrecognized tax benefits, beginning of period $ 10.4 $ — Gross increases: Prior year tax positions — — Current year tax positions 3.6 10.4 Gross decreases: Prior year settlements — — Prior year tax positions — — Statute of limitations lapses — — Gross unrecognized tax benefits, end of period $ 14.0 $ 10.4 We believe it is reasonably possible that our liability for unrecognized tax benefits will not significantly increase or decrease in the next twelve months as a result of audit settlements and the expiration of statutes of limitations in certain major jurisdictions. We classify interest and penalties associated with uncertain income tax positions as income taxes within our consolidated financial statements. We did not incur or record interest and accrued penalties for the years ended December 31, 2015 and 2014 . We file our income tax returns in the U.S. federal jurisdiction and various states. The IRS has concluded its CAP review of our 2013 tax return as well as all the prior years. We expect the IRS will conclude its CAP review of our 2014 tax return, with the exception of the compensation deduction limitation issue under Code section 162(m)(6), in 2016 . We are no longer subject to state and local tax examinations prior to 2004. As of December 31, 2015, we are not aware of any material proposed adjustments. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We recorded stock-based compensation expense of $20.2 million , $15.7 million and $12.5 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. As of December 31, 2015 , we expect $26.4 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements, net of estimated forfeitures, to be recognized over a weighted-average period of 1.7 years. The unrecognized compensation cost for our PSUs, which are subject to variable accounting, was determined based on the closing common stock price of $78.21 as of December 31, 2015 and amounted to approximately $10.2 million of the total unrecognized compensation. Due to the nature of the accounting for these awards, future compensation cost will fluctuate based on changes in our common stock price. The weighted-average grant-date fair values of shares granted during the years ended December 31, 2015 , 2014 and 2013 were $97.67 , $64.49 and $61.33 , respectively. The total fair value of all shares vested during the year ended December 31, 2015 was $16.2 million .We generally repurchase vested shares from our employees to satisfy our tax withholding requirements and then retire the repurchased shares. Stock Options We have not granted stock option awards since 2010 and as of December 31, 2015, no stock option awards remain outstanding. The remaining 8,020 shares as of December 31, 2014 were exercised in 2015 at a weighted-average exercise price of $38.92 . The total intrinsic value of options exercised during the years ended December 31, 2015 , 2014 and 2013 was $0.4 million , $0.9 million and $14.1 million , respectively. For the years ended December 31, 2015 , 2014 and 2013 , we received cash from option exercises of $0.3 million , $0.5 million and $10.3 million , respectively. We currently expect to satisfy equity-based compensation awards with available unissued registered shares. Restricted Stock Units A summary of the activity for our RSU awards for the year ended December 31, 2015 is presented in the table below. RSUs Weighted Outstanding as of January 1, 2015 406,903 $ 62.23 Granted 119,888 89.96 Vested (206,005 ) 62.37 Forfeited and expired (30,167 ) 67.74 Outstanding as of December 31, 2015 290,619 73.00 Market Stock Units A summary of the activity for our MSU awards for the year ended December 31, 2015 is presented in the table below. MSUs Weighted Outstanding as of January 1, 2015 113,663 $ 74.31 Granted 67,433 122.25 Vested (32,494 ) 73.38 Forfeited and expired (15,312 ) 81.42 Outstanding as of December 31, 2015 133,290 97.97 Performance Stock Units A summary of the activity for our PSU awards, which are subject to variable accounting, for the year ended December 31, 2015 is presented in the table below. PSUs Weighted Outstanding as of January 1, 2015 395,075 $ 61.13 Granted 136,641 92.31 Vested (34,814 ) 51.90 Forfeited and expired (101,003 ) 63.87 Outstanding as of December 31, 2015 395,899 72.01 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS The Graham Companies We lease office space from The Graham Companies, in which a member of the board of directors and his immediate family has an ownership interest. We paid $0.2 million in rental expense to The Graham Companies in each of the years ended December 31, 2015, 2014 and 2013. |
REGULATORY CAPITAL AND DIVIDEND
REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2015 | |
REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS [Abstract] | |
REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS | REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS Each of our health maintenance organizations ("HMO") and insurance subsidiaries must maintain a minimum amount of statutory capital determined by statute or regulation. The minimum statutory capital requirements differ by state and are generally based on a percentage of annualized premium revenue, a percentage of annualized health care costs, a percentage of certain liabilities, a statutory minimum, risk-based capital ("RBC") requirements or other financial ratios. Failure to maintain these requirements would trigger regulatory action by the state. Such statues, regulations and capital requirements also restrict the timing, payment and amount of dividends and other distributions that may be paid to us as the sole stockholder. Based upon current statutes and regulations, the minimum capital and surplus requirement, or net assets, for these subsidiaries that may not be transferable to us in the form of loans, advances or cash dividends was estimated at $807.9 million at December 31, 2015 and approximately $743.7 million at December 31, 2014 . The combined statutory capital and surplus of our HMO and insurance subsidiaries was $1.4 billion and $1.3 billion at December 31, 2015 and 2014 , respectively, which was in compliance with the minimum capital requirements as of those dates. Dividend restrictions vary by state, but the maximum amount of dividends which can be paid without prior approval from the applicable state is subject to restrictions relating to statutory capital, surplus and net income for the previous year. Some states require prior approval of all dividends, regardless of amount. States may disapprove any dividend that, together with other dividends paid by a subsidiary in the prior 12 months, exceeds the regulatory maximum as computed for the subsidiary based on its statutory surplus and net income. We received $152.0 million , $68.0 million and $147.0 million in dividends from our regulated subsidiaries during the years ended December 31, 2015 , 2014 and 2013 , respectively. The 2015 amount included $29.0 million not requiring prior regulatory approval, and $123.0 million paid after obtaining prior regulatory approval. Under applicable regulatory requirements at December 31, 2015 , the amount of dividends that may be paid through the end of 2016 by our HMO and insurance subsidiaries without prior approval by regulatory authorities is approximately $147.2 million in the aggregate. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS 401(k) Plan We offer a defined contribution retirement savings plan ("401(k) plan"). Eligible employees of the Company and its subsidiaries may elect to participate in this plan. Participants may contribute a certain percentage of their compensation, subject to maximum Federal and plan limits. We incurred matching contribution expense of $9.6 million , $7.9 million and $6.0 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. The matching contributions are made in cash and invested according to the plan participant's investment elections, and there are no shares of our common stock reserved for issuance under the 401(k) plan. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION | QUARTERLY FINANCIAL INFORMATION Selected unaudited quarterly financial data is as follows (in millions, except membership and per share data): For the Three Month Periods Ended March 31, 2015 June 30, 2015 September 30, 2015 (1) December 31, 2015 Total revenues $ 3,469.9 $ 3,482.5 $ 3,441.0 $ 3,496.8 Gross margin 355.5 443.1 436.0 434.4 Income from operations 54.4 140.7 104.7 36.3 Income before income taxes 54.4 140.7 104.7 36.3 Net income 17.5 51.7 36.4 13.0 Net income per share - basic $ 0.40 $ 1.17 $ 0.83 $ 0.29 Net income per share - diluted 0.39 1.17 0.82 0.29 Period end membership 3,822,000 3,827,000 3,786,000 3,767,000 (1) Income from operations for the three months ended September 30, 2015 was adjusted to include the gain on divestiture of business of $4.6 million , related to the Sterling divestiture, to conform with the year-end presentation. For the Three Month Periods Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Total revenues $ 2,985.7 $ 3,151.9 $ 3,407.5 $ 3,414.8 Gross margin 312.9 268.9 365.0 375.8 Income (loss) from operations 37.3 (14.6 ) 69.5 56.1 Income (loss) before income taxes (2) 65.6 (3.5 ) 61.7 54.0 Net (loss) income 44.1 (7.5 ) 19.3 7.7 Net income (loss) per share - basic $ 1.01 $ (0.17 ) $ 0.44 $ 0.18 Net income (loss) per share - diluted 1.00 (0.17 ) 0.44 0.18 Period end membership 3,530,000 3,874,000 4,037,000 4,119,000 (2) The estimated fair value of the net tangible and intangible assets that we acquired in connection with the Windsor acquisition exceeded the total consideration paid, and payable, to the seller. We recognized the excess fair value as a bargain purchase gain, in accordance with accounting rules related to business combinations, after consideration of all relevant factors, which resulted in gains of approximately $28.3 million and $11.1 million in the first and second quarters of 2014, and charges of $7.8 million and $2.1 million in the third and fourth quarters of 2014. The sum of the quarterly amounts may not equal the amount reported for the full year due to rounding. Additionally, per share amounts are computed independently for each quarter and for the full year based on respective weighted-average shares outstanding and other dilutive potential shares and units. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 8, 2016, we entered into the 2016 Credit Agreement, which provides for a senior unsecured revolving loan facility (the "2016 Revolving Credit Facility"), with an initial aggregate principal amount at any time outstanding not to exceed $850.0 million . We then repaid our $300.0 million Term Loan and terminated the 2014 Credit Agreement. The 2016 Credit Agreement provides for the 2016 Revolving Credit Facility of up to $850.0 million (the loans thereunder, the “Revolving Credit Loans”), of which up to $150.0 million is available for letters of credit. The 2016 Credit Agreement also provides that we may, at our option, increase the aggregate amount of the 2016 Revolving Credit Facility and/or obtain incremental term loans in an amount up to $200.0 million without the consent of any lenders not participating in such increase, subject to certain customary conditions and lenders committing to provide the increase in funding. There can be no assurance that additional funding will become available. Unutilized commitments under the 2016 Credit Agreement are subject to a fee of 0.25% to 0.35% depending upon our ratio of total net debt to cash flow. At the closing of the 2016 Credit Agreement, $200.0 million of the 2016 Revolving Credit Facility was drawn upon and, along with $100.0 million in cash, used to repay our $300.0 million Term Loan. Borrowings under the Revolving Credit Loans may be used for general corporate purposes, including, but not limited to, working capital, organic growth and acquisitions. Commitments under the 2016 Revolving Credit Facility expire on January 8, 2021 and any amounts outstanding under the 2016 Revolving Credit Facility will be payable in full at that time. Revolving Credit Loans designated by us at the time of borrowing as “ABR Loans” that are outstanding under the 2016 Credit Agreement bear interest at a rate per annum equal to (i) the greatest of (a) the Prime Rate (as defined in the 2016 Credit Agreement) in effect on such day; (b) the Federal Reserve Bank of New York Rate (as defined in the 2016 Credit Agreement) in effect on such day plus 1/2 of 1% ; and (c) the Adjusted LIBO Rate (as defined in the 2016 Credit Agreement) for a one month interest period on such day plus 1% ; plus (ii) the Applicable Rate. Revolving Credit Loans designated by us at the time of borrowing as “Eurodollar Loans” that are outstanding under the 2016 Credit Agreement bear interest at a rate per annum equal to the Adjusted LIBO Rate (as defined in the 2016 Credit Agreement) for the interest period in effect for such borrowing plus the Applicable Rate. The “Applicable Rate” means a percentage ranging from 0.50% to 1.00% per annum for ABR Loans and a percentage ranging from 1.50% to 2.00% per annum for Eurodollar Loans, depending upon our ratio of total debt to cash flow, as calculated in accordance with the 2016 Credit Agreement. The 2016 Credit Agreement includes negative and financial covenants that limit certain activities of us and our subsidiaries, including (i) restrictions on our ability and the ability of our subsidiaries to incur additional indebtedness; and (ii) financial covenants that require (a) the ratio of total net debt to cash flow not to exceed a maximum; and (b) a minimum interest expense and principal payment coverage ratio. The 2016 Credit Agreement also contains customary representations and warranties that must be accurate in order for us to borrow under the 2016 Revolving Credit Facility. In addition, the 2016 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 2016 Credit Agreement. Lenders holding at least 50% of the loans and commitments under the 2016 Credit Agreement may elect to accelerate the maturity of the loans and/or terminate the commitments under the 2016 Credit Agreement upon the occurrence and during the continuation of an event of default. |
Schedule I CONDENSED FINANCIAL
Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | CONDENSED FINANCIAL INFORMATION OF REGISTRANT WELLCARE HEALTH PLANS, INC. (Parent Company Only) STATEMENTS OF COMPREHENSIVE INCOME (In millions) For the Years Ended December 31, 2015 2014 2013 Revenues: Investment and other income $ 0.5 $ 0.9 $ 0.2 Total revenues 0.5 0.9 0.2 Expenses: Selling, general and administrative 22.1 18.1 15.2 Interest expense 54.2 39.3 11.8 Total expenses 76.3 57.4 27.0 Loss from operations (75.8 ) (56.5 ) (26.8 ) Loss on extinguishment of debt — — (2.8 ) Loss before income taxes (75.8 ) (56.5 ) (29.6 ) Income tax benefit 23.9 17.5 8.9 Loss before equity in subsidiaries (51.9 ) (39.0 ) (20.7 ) Equity in earnings of subsidiaries 170.5 102.7 196.0 Net income 118.6 63.7 175.3 Other comprehensive income, before tax: Change in net unrealized gains and losses on available-for-sale securities (1.9 ) 0.5 (0.8 ) Income tax expense related to other comprehensive income (0.3 ) (0.2 ) (0.3 ) Other comprehensive income (loss), net of tax (1.6 ) 0.7 (0.5 ) Comprehensive income $ 117.0 $ 64.4 $ 174.8 See notes to consolidated financial statements. CONDENSED FINANCIAL INFORMATION OF REGISTRANT WELLCARE HEALTH PLANS, INC. (Parent Company Only) BALANCE SHEETS (In millions, except share data) As of December 31, 2015 2014 Assets Current assets: Cash and cash equivalents $ 108.6 $ 1.4 Short-term investments 2.2 36.9 Taxes receivable 1.9 3.6 Affiliate receivables and other current assets 1,086.2 876.6 Total current assets 1,198.9 918.5 Deferred tax asset 9.6 11.6 Investment in subsidiaries 1,739.5 1,568.4 Deposits and other assets 8.9 8.8 Total Assets $ 2,956.9 $ 2,507.3 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 300.0 $ — Accrued expenses and other current liabilities 6.6 5.1 Total current liabilities 306.6 5.1 Long-term debt 912.1 900.0 Other liabilities 9.9 6.3 Total liabilities 1,228.6 911.4 Commitments and contingencies (see Note 13) — — Stockholders' Equity: Preferred stock, $0.01 par value (20,000,000 authorized, no shares issued or outstanding) — — Common stock, $0.01 par value (100,000,000 authorized, 44,113,328 and 43,914,106 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) 0.4 0.4 Paid-in capital 518.4 503.0 Retained earnings 1,211.7 1,093.1 Accumulated other comprehensive loss (2.2 ) (0.6 ) Total stockholders' equity 1,728.3 1,595.9 Total Liabilities and Stockholders' Equity $ 2,956.9 $ 2,507.3 See notes to consolidated financial statements. CONDENSED FINANCIAL INFORMATION OF REGISTRANT WELLCARE HEALTH PLANS, INC. (Parent Company Only) STATEMENTS OF CASH FLOWS (In millions) For the Years Ended December 31, 2015 2014 2013 Net cash provided by operating activities $ 146.5 $ 83.4 $ 204.9 Cash used in investing activities: Net proceeds (payments) from purchases and sales and maturities of investments 33.1 (33.9 ) — Payments to subsidiaries, net (376.5 ) (616.0 ) (398.5 ) Net cash used in investing activities (343.4 ) (649.9 ) (398.5 ) Cash provided by financing activities: Proceeds from debt, net of financing costs paid 308.9 298.6 816.4 Proceeds from exercises of stock options 0.3 0.5 10.3 Incremental tax benefit from equity-based compensation 1.9 0.6 3.6 Repurchase and retirement of shares to satisfy tax withholding requirements (7.0 ) (3.1 ) (4.1 ) Payments on debt — — (365.0 ) Net cash provided by financing activities 304.1 296.6 461.2 Cash and cash equivalents: Increase (decrease) in cash and cash equivalents 107.2 (269.9 ) 267.6 Balance at beginning of period 1.4 271.3 3.7 Balance at end of period $ 108.6 $ 1.4 $ 271.3 See notes to consolidated financial statements. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Balance at Charged to Write Offs Balance at Year Ended December 31, 2015 Deducted from assets: Allowance for uncollectible accounts: Premiums receivable $ 21.1 $ 12.6 $ 13.8 $ 19.9 Medical advances 1.4 2.0 — 3.4 Total $ 22.5 $ 14.6 $ 13.8 $ 23.3 Year Ended December 31, 2014 Deducted from assets: Allowance for uncollectible accounts: Premiums receivable $ 15.8 $ 15.2 $ 9.9 $ 21.1 Medical advances 1.4 — — 1.4 Total $ 17.2 $ 15.2 $ 9.9 $ 22.5 Year Ended December 31, 2013 Deducted from assets: Allowance for uncollectible accounts: Premiums receivable $ 14.8 $ 10.7 $ 9.7 $ 15.8 Medical advances 1.5 (0.1 ) — 1.4 Total $ 16.3 $ 10.6 $ 9.7 $ 17.2 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated balance sheets and statements of comprehensive income (loss), 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. |
Use of Estimates | We prepared the consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"), which requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates 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 consolidated financial statements. |
Recently Adopted Accounting Standards | Recently Issued Accounting Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, " Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. " ASU 2015-17 requires an entity to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. Early adoption is permitted. We do not believe the adoption of this standard will have a material effect on our consolidated results of operations, financial position or cash flows. In September 2015, the FASB issued ASU 2015-16, " Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. " ASU 2015-16 eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. This standard is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. We will adopt this standard effective January 1, 2016. We do not believe the adoption of this standard will have a material effect on our consolidated results of operations, financial position or cash flows. In May 2015, the 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 results of operations, financial position 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. In August 2015, the FASB issued ASU 2015-15, " Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of Credit Arrangements. " ASU 2015-15 provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. For public business entities, these standards 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 these standards effective January 1, 2016. We do not believe the adoption of these standards will have a material effect on our consolidated results of operations, financial position 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 August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", which deferred the effective dates of ASU 2014-09 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 principle. |
Premium Revenue Recognition and Premiums Receivable | Premium Revenue Recognition and Premiums Receivable We earn premium revenue through our participation in Medicaid, Medicaid-related and Medicare programs. Our Medicaid contracts with state agencies generally are multi-year contracts subject to annual renewal provisions, while our Medicare contracts with CMS renew annually. Our Medicare and Medicaid contracts establish fixed, monthly premium rates per member ("PMPM"), which are generally determined at the beginning of each new contract renewal period; however, premiums may be adjusted by CMS and state agencies throughout the terms of the contracts in certain cases. Premium rate changes are recognized in the period the change becomes effective, when the effect of the change in the rate is reasonably estimable, and collection is assured. Our contracts also have additional provisions as described in the sections below. We recognize premium revenue in the period in which we are obligated to provide services to our members. We are generally paid by CMS and state agencies in the month in which we provide services. On a monthly basis, we bill members for any premiums for which they are responsible according to their respective plan. We record premiums earned but not received as premiums receivable and record premiums received in advance of the period of service as unearned premiums in the consolidated balance sheets. Unearned premiums are recognized as revenue when we provide the related services. Member premiums are recognized as revenue in the period of service. We estimate, on an on-going basis, the amount of members' billings that may not be collectible based on our evaluation of historical trends. An allowance is established for the estimated amount that may not be collectible. In addition, we routinely monitor the collectability of specific premiums receivable from CMS and state agencies, including Medicaid receivables for obstetric deliveries and newborns and net receivables for member retroactivity and reduce revenue and premiums receivable by the amount we estimate may not be collectible. We reported premiums receivable net of an allowance for uncollectible premiums receivable of $19.9 million and $21.1 million at December 31, 2015 and 2014 , respectively. Historically, the provision for uncollectible premiums for member premiums receivable has not been material relative to consolidated premium revenue. Premium payments are based upon eligibility lists produced by CMS and state agencies. We verify these lists to determine whether we have been paid for the correct premium category and program. From time to time, CMS and state agencies require us to reimburse them for premiums that we received for individuals who were subsequently determined by us, or by CMS or state agencies, to be ineligible for any government-sponsored program or to belong to a plan other than ours. Additionally, the verification of membership may result in additional premiums due to us from CMS and state agencies for individuals who were subsequently determined to belong to our plan for periods in which we received no premium for those members. We estimate the amount of outstanding retroactivity adjustments and adjust premium revenue based on historical trends, premiums billed, the volume of member and contract renewal activity and other information. We record amounts receivable in premiums receivable, net and amounts payable in other accrued expenses and liabilities in the consolidated balance sheets. Supplemental Medicaid Premiums We earn supplemental premium payments for eligible obstetric deliveries and newborns of our Medicaid members in Georgia, Illinois, Missouri, New Jersey, New York and South Carolina. Each state Medicaid contract specifies how and when these supplemental payments are earned and paid. We also earn supplemental Medicaid premium payments in some states for high cost drugs and other eligible services. We recognize supplemental premium revenue in the period we provide related services to our members. For the years ended December 31, 2015 , 2014 , and 2013 we recognized approximately $269.1 million , $278.4 million and $242.9 million , respectively, of supplemental Medicaid premium revenue. Medicaid Risk-Adjusted Premiums In some instances, our Medicaid premiums are subject to risk score adjustments based on the health profile of our membership. Generally, the risk score is determined by the state agency's analysis of encounter submissions of processed claims data to determine the acuity of our membership relative to the entire state's Medicaid membership. The frequency of when states adjust premiums varies, but is usually done quarterly or semi-annually on a retrospective basis. We recognize periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Medicaid ACA Industry Fee Reimbursement The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the "ACA") imposed certain new taxes and fees, including an annual premium-based health insurance industry assessment (the "ACA industry fee") on health insurers, which began in 2014. As discussed below in " ACA Industry Fee ", we have received amendments, written agreements or other documentation from all our Medicaid state customers, that commit them to reimburse us for the portion of the ACA industry fee on our Medicaid plans, including its non-deductibility for income tax purposes for 2015 and 2014. Consequently, we recognized $219.2 million and $124.6 million of reimbursement for the ACA industry fee as premium revenue for the years ended December 31, 2015 and 2014, respectively. Medicare Risk-Adjusted Premiums CMS provides risk-adjusted payments for MA Plans and PDPs based on the demographics and health severity of enrollees. The risk-adjusted premiums we receive are based on claims and encounter data that we submit to CMS within prescribed deadlines. We develop our estimates for risk-adjusted premiums utilizing historical experience, or other data, and predictive models as sufficient member risk score data becomes available over the course of each CMS plan year. We recognize periodic changes to risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured, which is possible as additional diagnosis code information is reported to CMS, when the ultimate adjustment settlements are received from CMS, or we receive notification of such settlement amounts. CMS adjusts premiums on two separate occasions on a retrospective basis. The first retrospective adjustment for a given plan year generally occurs during the third quarter of that year. This initial settlement represents the update of risk scores for the current plan year based on the severity of claims incurred in the prior plan year. CMS then issues a final retrospective risk adjusted premium settlement for that plan year in the following year. Historically, we have not experienced significant differences between our estimates and amounts ultimately received. However, in the third quarter of 2013, we recognized risk adjusted premium received as part of the 2012 final settlement that was higher than our original estimates, mainly related to members in our California MA plan that were new to Medicare in 2012. The data provided to CMS to determine members' risk scores is subject to audit by CMS even after the annual settlements occur. An audit may result in the refund of premiums to CMS. While our experience to date has not resulted in a material refund, future refunds could materially reduce premium revenue in the year in which CMS determines a refund is required and could be material to our results of operations, financial position and cash flows. Premiums receivable in the accompanying condensed consolidated balance sheets include risk-adjusted premiums receivable of $209.2 million and $178.7 million as of December 31, 2015 and 2014 , respectively. |
Minimum Medical Expense and Risk Corridor Provisions | Minimum Medical Expense and Risk Corridor Provisions We may be required to refund certain premium revenue to state agencies and CMS under various contractual and plan arrangements. We estimate the effect of the following arrangements on a monthly basis and reflect any adjustments to premium revenues in current operations. We report the estimated net amounts due to state agencies and CMS in other payables to government partners in the consolidated balance sheets. Certain of our Medicaid contracts require us to expend a minimum percentage of premiums on eligible medical benefits expense. To the extent that we expend less than the minimum percentage of the premiums on eligible medical benefits, we are required to refund to the state all or some portion of the difference between the minimum and our actual allowable medical benefits expense. We estimate the amounts due to the state agencies as a return of premium based on the terms of our contracts with the applicable state agency. Our MA and PDP premiums are subject to risk sharing through the CMS Medicare Part D risk corridor provisions. The risk corridor calculation compares our actual experience to the target amount of prescription drug costs, limited to costs under the standard coverage as defined by CMS, less rebates included in our submitted plan year bid. We receive additional premium from CMS if our actual experience is more than 5% above the target amount. We refund premiums to CMS if our actual experience is more than 5% below the target amount. Based on the risk corridor provision and PDP activity-to-date, an estimated risk-sharing receivable or payable is recorded as an adjustment to premium revenue. After the close of the annual plan year, CMS performs the risk corridor calculation and any differences are settled between CMS and our plans. Historically, we have not experienced material differences between our recorded estimates and the subsequent CMS settlement amounts. Beginning in 2014, the ACA required the establishment of a minimum medical loss ratio (“MLR”) for MA plans and Part D plans, requiring them to spend not less than 85% of premiums on medical benefits. The rules implementing the minimum MLR imposed financial and other penalties for failing to achieve the minimum MLR, including requirements to refund to CMS shortfalls in amounts spent on medical benefits and termination of a plan’s MA contract for prolonged failure to achieve the minimum MLR. MLR is determined by adding a plan’s spending for clinical services, prescription drugs and other direct patient benefits, plus its total spending on quality improvement activities and dividing the total by earned premiums (after subtracting specific identified taxes and other fees). These provisions did not have a material effect to our results of operations in 2015 or 2014. |
Medicare Part D Settlements | Medicare Part D Settlements We receive certain Part D prospective subsidy payments from CMS for our MA and PDP members as a fixed monthly per member amount, based on the estimated costs of providing prescription drug benefits over the plan year, as reflected in our bids. Approximately nine to ten months subsequent to the end of the plan year, or later in the case of the coverage gap discount subsidy, a settlement payment is made between CMS and our plans based on the difference between the prospective payments and actual claims experience. The subsidy components under Part D are described below. Low-Income Cost Sharing Subsidy ("LICS") -For qualifying LIS members, CMS reimburses us for all or a portion of the LIS member's deductible, coinsurance and co-payment amounts above the out-of-pocket threshold. Catastrophic Reinsurance Subsidy -CMS reimburses plans for 80% of the drug costs after a member reaches his or her out-of-pocket catastrophic threshold through a catastrophic reinsurance subsidy. Coverage Gap Discount Subsidy ("CGDS") -CMS provides monthly prospective payments for pharmaceutical manufacturer discounts made available to members. Catastrophic reinsurance subsidies and the LICS represent cost reimbursements under the Medicare Part D program. We are fully reimbursed by CMS for costs incurred for these contract elements and, accordingly, there is no insurance risk to us. Therefore, amounts received for these subsidies are not considered premium revenue, and are reported, net of the subsidy benefits paid, as Funds receivable/held for the benefit of members in the consolidated balance sheets. The receipts and payments between us and CMS are presented on a net basis as financing activity in our consolidated statements of cash flows since we are essentially administering and paying the benefit subsidies on behalf of CMS. Historically, the settlement payments between us and CMS have not been materially different from our estimates. The balance of funds receivable from CMS grew substantially in 2014 due to growth in our PDP and MA membership and high drug unit costs, resulting in higher benefit payments made on behalf of CMS compared with our bids and compared with prior years, as well as an increase in the CMS risk corridor receivable. Based on our experience in 2014, our 2015 PDP and MA bids reflected significantly higher estimates for cash outflows for the government's responsibility of the Part D benefit plan design, particularly for the catastrophic reinsurance subsidy. However, the level of subsidy payments we made on behalf of CMS compared with our 2015 bids was still significant due to the composition of our 2015 PDP membership, which reflected a higher number of dual-eligible members relative to our overall membership than we expected. In October 2015, we received an $845.5 million settlement payment from CMS relating to the 2014 Part D plan year, which resulted in a meaningful reduction in our CMS Part D receivable for our funds receivable for the benefit of members as well as the CMS risk corridor. CGDS advance payments are recorded as Funds receivable for the benefit of members in the consolidated balance sheets. Receivables are set up for manufacturer-invoiced amounts. Manufacturer payments reduce the receivable as payments are received. After the end of the contract year, during the Medicare Part D Payment reconciliation process for the CGD, CMS will perform a cost-based reconciliation to ensure the Medicare Part D sponsor is paid for gap discounts advanced at the point of sale, based on accepted prescription drug event data. |
Medical Benefits Expense and Medical Benefits Payable | Medical Benefits Expense 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. Direct medical expenses include amounts paid or payable to hospitals, physicians, pharmacy benefit managers and providers of ancillary services. We also record direct medical expenses for estimated referral claims related to health care providers under contract with us who are financially troubled or insolvent and who may not be able to honor their obligations for the costs of medical services provided by others. In these instances, we may be required to honor these obligations for legal or business reasons. Based on our current assessment of providers under contract with us, such losses have not been and are not expected to be significant. We record direct medical expense for our estimates of provider settlement due to clarification of contract terms, out-of-network reimbursement, claims payment differences and amounts due to contracted providers under risk-sharing arrangements. We estimate pharmacy rebates earned based on historical utilization of specific pharmaceuticals, current utilization and contract terms and record amounts as a reduction of recorded direct medical expenses. Consistent with the criteria specified and defined in guidance issued by the Department of Health and Human Services ("HHS") for costs that qualify to be reported as medical benefits under the minimum MLR provision of the ACA, we record certain medically-related administrative costs such as preventive health and wellness, care management, and other quality improvement costs, as medical benefits expense. All other medically-related administrative costs, such as utilization review services, network and provider credentialing and claims handling costs, are recorded in selling, general, and administrative expense. Medical benefits payable represents amounts for claims fully adjudicated but not yet paid and estimates for IBNR. Our estimate of IBNR is the most significant estimate included in our consolidated financial statements. We determine our best estimate of the base liability for IBNR utilizing consistent standard actuarial methodologies based upon key assumptions, which vary by business segment. Our assumptions include current payment experience, trend factors, and completion factors. Trend factors in our standard actuarial methodologies include contractual requirements, historic utilization trends, the interval between the date services are rendered and the date claims are paid, denied claims activity, disputed claims activity, benefit changes, expected health care cost inflation, seasonality patterns, maturity of lines of business, changes in membership and other factors. After determining an estimate of the base liability for IBNR, we make an additional estimate, also using standard actuarial techniques, to account for adverse conditions that may cause actual claims to be higher than the estimated base reserve. We refer to this additional liability as the provision for moderately adverse conditions. Our estimate of the provision for moderately adverse conditions captures the potential adverse development from factors such as: • our entry into new geographical markets; • our provision of services to new populations such as the aged, blind and disabled; • variations in utilization of benefits and increasing medical costs, including higher drug costs; • changes in provider reimbursement arrangements; • variations in claims processing speed and patterns, claims payment and the severity of claims; and • health epidemics or outbreaks of disease such as the flu or enterovirus. We consider the base actuarial model liability and the provision for moderately adverse conditions as part of our overall assessment of our IBNR estimate to properly reflect the complexity of our business, the number of states in which we operate, and the need to account for different health care benefit packages among those states. 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 developments, as increases or decreases to medical benefits expense in the period we identify the differences. The favorable (unfavorable) cumulative effect of prior year reserve development was $78.1 million , $(48.1) million and $3.0 million in 2015, 2014 and 2013, respectively. |
Reinsurance | Reinsurance We enter into excess of loss reinsurance arrangements to reduce the risk associated with large losses or catastrophic events. We are contingently liable in the event the reinsurance companies do not meet their contractual obligations. We evaluate the financial condition of the reinsurance companies on a regular basis and only contract with well-known, well-established reinsurance companies that have strong financial ratings. We evaluate the terms of the arrangements to determine whether risk transfer and other criteria are met to qualify as reinsurance contracts for GAAP accounting purposes in accordance with ASC 944, Financial Services-Insurance . Premiums paid, or ceded, to the reinsurer, are recorded as a reduction to premium revenue, and expected reimbursements for losses, or recoveries, are recorded as a reduction to medical benefits expense. Amounts recoverable from the reinsurer are estimated in a manner consistent with the claim liability associated with the reinsured policies. |
ACA Industry Fee | ACA Industry Fee The total ACA industry fee levied on the health insurance industry was $8 billion in 2014 and $11.3 billion in 2015, with increasing annual amounts thereafter, growing to $14.3 billion by 2018. After 2018, the industry fee increases according to an index based on net premium growth. The assessment is being levied on certain health insurers that provide insurance in the assessment year and is allocated to health insurers based on each health insurer's share of net premiums for all U.S health insurers in the year preceding the assessment. On December 18, 2015, the President signed the Consolidated Appropriations Act, 2016 which, among other provisions, included a one-year moratorium on the ACA industry fee for 2017. The ACA industry fee is not deductible for income tax purposes, which has significantly increased our effective income tax rate. The initial estimated liability for each year is accrued as of January 1, with a corresponding deferred expense asset that is amortized over 12 months to expense on a straight line basis. The fee is payable by September 30 of each year. We incurred $227.3 million and $137.7 million of such fees in 2015 and 2014, respectively. We have received amendments, written agreements or other documentation from all our Medicaid state customers, that commit them to reimburse us for the portion of the ACA industry fee on our Medicaid plans, including its non-deductibility for income tax purposes for 2015 and 2014. See discussion under "Premium Revenue Recognition and Premiums Receivable." |
Equity-Based Employee Compensation | Equity-Based Employee Compensation During the second quarter of 2013, our stockholders approved the WellCare Health Plans, Inc. 2013 Incentive Compensation Plan (the "2013 Plan"). Upon approval of the 2013 Plan, a total of 2,500,000 shares of our common stock were available for issuance pursuant to the 2013 Plan, minus any shares subject to outstanding awards granted on or after January 1, 2013 under our 2004 Equity Incentive Plan ("the Prior Plan"). In addition, shares subject to awards forfeited under the Prior Plan will become available for issuance under the 2013 Plan. No further awards are permitted to be granted under our Prior Plan. Certain of our senior level employees, including executive officers, are eligible for long-term incentive awards ("LTI Program"), consisting of a mix of cash and equity awards, which are granted pursuant to the 2013 Plan. We designed the LTI Program to motivate and promote the achievement of our long-term financial and operating goals and improve retention. Under the LTI Program, we grant multi-year performance period awards that are not realized by employees and officers until subsequent years. We base award amounts on each participant's pre-established long-term incentive target and allocate the awards to various types of equity and performance-based cash awards, depending on job level. The Compensation Committee of our board of directors (the "Compensation Committee") has sole discretion of the ultimate funding and payout of awards under the LTI program. The Compensation Committee awards certain equity-based compensation under our stock plans, including stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and market stock units ("MSUs"), each of which is described below: RSUs - For each RSU granted, employees receive one share of common stock, net of taxes withheld at the statutory minimum, at the end of the vesting period. RSUs typically vest one to three years from the date of grant. PSUs - The actual number of common stock shares earned upon vesting will range from zero shares up to 200% of the target award, depending on the award date, the target award amounts for the PSU awards and our achievement of certain financial and quality-based performance goals set by the Compensation Committee at its sole discretion. PSUs generally cliff-vest 3 years from the grant date based on the achievement of the performance goals and conditioned on the employee's continued service through the vesting date. The number of shares earned by the participant are generally paid net of taxes withheld at the statutory minimum. MSUs - The number of shares of common stock earned upon vesting is determined based on the ratio of our average common stock price during the last 30 days market trading days of the calendar year immediately preceding the vesting date to the comparable average common stock price in the year immediately preceding the grant date, applied to the base units granted. The performance ratio is capped at 150% or 200% , depending on the grant date. If our common stock price declines by more than 50% over the performance period, no shares are earned by the recipient. The number of shares earned by the participant are generally paid net of taxes withheld at the statutory minimum. We estimate equity-based compensation expense based on awards ultimately expected to vest. We make assumptions of forfeiture rates at the time of grant and continuously reassess our assumptions based on actual forfeiture experience. We estimate compensation cost for RSUs and MSUs based on the grant date fair value and recognize the expense ratably over the vesting period of the award. For RSUs, the grant date fair value is based on the closing price of our common stock on the date of grant. For MSUs, the grant date fair value is measured using a Monte Carlo simulation approach, which estimates the fair value of awards based on randomly generated simulated stock-price paths through a lattice-type structure. MSUs expected to vest are recognized as expense on a straight-line basis over the vesting period, which is generally three years. Our PSUs are subject to variable accounting since they do not have a grant date fair value for accounting purposes due to the subjective nature of the terms of the PSUs, which precludes a mutual understanding of the key terms and conditions. We recognize expense for PSUs ultimately expected to vest over the requisite service period based our estimates of progress made towards the achievement of the predetermined performance measures and changes in the market price of our common stock. |
Member Acquisition Costs | Member Acquisition Costs We incur member acquisition costs, including internal commissions, external agent commissions on renewal policies, agent referral commissions, policy issuance and other administrative costs, in the acquisition and retention of our members. We record these costs as selling, general and administrative expense in the period we incur them. We advance commissions to external agents and brokers for the acquisition of new members to our MA and PDP plans and defer amortization of these costs to the period in which we earn associated premium revenue, which is generally not more than one year. |
Medicaid Premium Taxes | Medicaid Premium Taxes Premiums related to our Medicaid contracts with Georgia, Hawaii, Kentucky, New Jersey and New York are subject to an assessment or tax on Medicaid premiums. The premium revenues we receive from these states include the premium assessment. We have reported premium taxes on a gross basis, as premium revenue and as premium tax expense in the consolidated statements of income. We recognize the premium tax assessment as expense in the period we earn the related premium revenue and remit the taxes back to the state agencies on a periodic basis. |
Income Tax Expense (Benefit) | Income Tax Expense We record income tax expense as incurred based on enacted tax rates, estimates of book-to-tax differences in income, and projections of income that will be earned in each taxing jurisdiction. We recognize deferred tax assets and liabilities for the estimated future tax consequences of differences between the carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using tax rates applicable to taxable income in the years in which we expect to recover or settle those temporary differences. We record a valuation allowance on deferred taxes if we determine it is more likely than not that we will not fully realize the future benefit of deferred tax assets. We file tax returns after the close of our fiscal year end and adjust our estimated tax receivable or liability to the actual tax receivable or due per the filed state and federal tax returns. Historically, we have not experienced significant differences between our estimates of income tax expense and actual amounts incurred. State and federal taxing authorities may challenge the positions we take on our filed tax returns. We evaluate our tax positions and only recognize a tax benefit if it is more likely than not that a tax audit will sustain our conclusion. Based on our evaluation of tax positions, we believe that potential tax exposures have been recorded appropriately. State and federal taxing authorities may propose additional tax assessments based on periodic audits of our tax returns. We believe our tax positions comply with applicable tax law in all material aspects and we will vigorously defend our positions on audit. The ultimate resolution of these audits may materially affect our financial position, results of operations or cash flows. We have not experienced material adjustments to our consolidated financial statements as a result of these audits. We participate in the Internal Revenue Service ("IRS") Compliance Assurance Program ("CAP"). The objective of CAP is to reduce taxpayer burden and uncertainty by working with the IRS to ensure tax return accuracy prior to filing, thereby reducing or eliminating the need for post-filing examinations. |
Cash and Cash Equivalents | Cash and Cash Equivalents We classify unrestricted cash and short-term investments with original maturities of three months or less as cash and cash equivalents in the consolidated balance sheets. We record cash and cash equivalents at cost, which approximates fair value. |
Investments | Investments We classify our fixed maturity securities, including short-term, long-term, and restricted investments, as available-for-sale and report them at fair value. We record unrealized gains and losses on securities, net of deferred income taxes, as a separate component of accumulated other comprehensive loss in the consolidated balance sheets. We record investment income when earned and classify investment income earned but not received in prepaid expenses and other current assets in the consolidated balance sheets. We may purchase fixed maturity securities at a premium or discount. We amortize these premiums and discounts as adjustments to investment income over the estimated remaining term of the securities. We determine realized gains and losses on sales of securities on a specific identification basis. We determine the fair value of fixed maturity securities based on quoted prices in active markets or market prices provided by a third-party pricing service. The third-party pricing service determines market prices using inputs such as reported trades, benchmark yields, issuer spreads, bids, offers, estimated cash flows and prepayment spreads. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, third party pricing services will normally derive the security prices through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, the pricing services may use matrix or model processes to develop a security price using future cash flow expectations based upon collateral performance and discount this at an estimated market rate. Our long-term investments include municipal note investments with an auction reset feature ("auction-rate securities"). We record the fair value of these auction-rate securities based on a discounted cash flow analysis. We regularly compare the fair value of our investments to the amortized cost of those investments. The evaluation of impairment is a quantitative and qualitative process, which is subject to risk and uncertainties. Our fixed maturity investments are exposed to four primary sources of investment risk: credit, interest rate, liquidity and market valuation. The financial statement risks are those associated with the recognition of impairments and income, as well as the determination of fair values. We perform a case-by-case evaluation of the underlying reasons for the decline in fair value and consider a wide range of factors about the security issuer, including assumptions and estimates about the operations of the issuer and its future earnings potential. We use our best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Our evaluation of impairment includes, but is not limited to: • the length of time and the extent to which the market value has been below cost; • the potential for impairments of securities when the issuer is experiencing significant financial difficulties; • the potential for impairments in an entire industry sector or sub-sector; • the potential for impairments in certain economically depressed geographic locations; • the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; • unfavorable changes in forecasted cash flows on asset-backed securities; and • other subjective factors, including concentrations and information obtained from regulators and rating agencies. We recognize impairments of securities when we consider a decline in fair value below the amortized cost basis to be other-than-temporary. If we intend to sell a security, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, we recognize an other-than-temporary impairment ("OTTI") in earnings equal to the entire difference between the security's amortized cost basis and its fair value. If we do not intend to sell the security and it is more likely than not that we will not be required to sell the security before recovery of its amortized cost basis, but the present value of the cash flows expected to be collected is less than the amortized cost basis of the security (referred to as the credit loss), we conclude an OTTI has occurred. In this instance, we bifurcate the total OTTI into the amount related to the credit loss, which we recognize in earnings as investment income, net, with the remaining amount of the total OTTI attributed to other factors (referred to as the noncredit portion) recognized as a separate component in other comprehensive income. After the recognition of an OTTI, we account for the security as if it had been purchased on the measurement date of the OTTI, with an amortized cost basis equal to the previous amortized cost basis less than the OTTI recognized in earnings. |
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 record our restricted investments, which include cash, cash equivalents, and other short-term investments, at fair value. 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. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets, net, are comprised of advances to providers, prepaid premium taxes, divestiture related receivables, pharmaceutical coverage gap discounts receivable, and other prepaid expenses and current assets. We record pharmaceutical coverage gap discounts receivable for amounts billed to pharmaceutical manufacturers by CMS for Medicare Part D coverage gap discounts advanced by us. Pharmaceutical manufacturers remit payments directly to us (see "Premium Revenue Recognition and Premiums Receivable - Medicare Part D Settlements "). |
Property, Equipment and Capitalized Software, net | Property, Equipment and Capitalized Software, net Property, equipment and capitalized software are stated at historical cost, net of accumulated depreciation. We capitalize certain costs incurred in the development of internal-use software, including external direct costs of materials and services and payroll costs of employees devoted to specific software development. We expense other software development costs, such as training and data conversion costs, as incurred. We capitalize the costs of improvements that extend the useful lives of the related assets. We record depreciation expense using the straight-line method over the estimated useful lives of the related assets, which ranges from three to ten years for leasehold improvements, five years for furniture and equipment, and three to seven years for computer equipment and software. We record maintenance and repair costs as selling, general and administrative expense when incurred. On an ongoing basis, we review events or changes in circumstances that may indicate that the carrying value of an asset may not be recoverable. If the carrying value of an asset exceeds the sum of estimated undiscounted future cash flows, we recognize an impairment loss in the current period for the difference between estimated fair value and carrying value. If assets are determined to be recoverable but the useful lives are shorter than we originally estimated, we depreciate the remaining net book value of the asset over the newly determined remaining useful lives. During 2013, we determined that we would be discontinuing certain projects going forward and, as a result, the software and development costs acquired to support these projects would not be fully recoverable. In accordance with the guidance for the impairment of long-lived assets, we evaluated these assets for recovery and recorded a pre-tax asset impairment charge of $9.0 million , which is included in selling, general and administrative expenses in our consolidated statement of comprehensive income for the year ended December 31, 2013. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Our acquisitions have resulted in goodwill, which represents the excess of the acquisition cost over the fair value of net assets acquired. Goodwill is assigned to reporting units, which we determined to be the same as our operating segments. Goodwill recorded at December 31, 2015 and 2014 was $263.2 million , which consisted of $152.8 million and $110.4 million attributable to our Medicaid Health Plans and Medicare Health Plans reporting units, respectively. We test goodwill for impairment at the reporting unit level at least annually, or more frequently if events or circumstances indicate that it would be more likely than not that the fair value of a reporting unit is below its carrying value. Such events or circumstances could include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition and the testing for recoverability of a significant asset group within a reporting unit, among others. To determine whether goodwill is impaired, we compare an estimate of the fair value of the applicable reporting unit to its carrying value, including goodwill. If the carrying value exceeds the estimated fair value, we compare the implied fair value of the applicable goodwill to its carrying value to measure the amount of goodwill impairment, if any. We perform our annual goodwill impairment test based on our financial position and results of operations as of June 30 of each year, which generally coincides with the finalization of federal and state contract negotiations and our initial budgeting and planning process. The annual impairment tests are based on an evaluation of estimated future discounted cash flows. The estimated discounted cash flows are based on the best information available to us at the time, including supportable assumptions and projections we believe are reasonable. Our discounted cash flow estimates use discount rates that correspond to a weighted-average cost of capital consistent with a market-participant view. The discount rates are consistent with those used for investment decisions and take into account the operating plans and strategies of our operating segments. Certain other key assumptions utilized, including changes in membership, premium, health care costs, operating expenses, fees, assessments and taxes and effective tax rates, are based on estimates consistent with those utilized in our annual budgeting and planning process that we believe are reasonable. However, if we do not achieve the results reflected in the assumptions and estimates, our goodwill impairment evaluations could be adversely affected, and we may impair a portion of our goodwill, which would adversely affect our operating results in the period of impairment. Impairments, if any, would be classified as an operating expense. Based on the results of our annual impairment testing in 2015, we determined that the fair value of each reporting unit substantially exceeded its carrying value and no further goodwill impairment assessment was necessary. Other intangible assets resulting from our acquisitions include provider networks, broker networks, trademarks, state contracts, non-compete agreements, licenses and permits. We amortize other intangible assets over their estimated useful lives ranging from approximately one to 15 years . These assets are allocated to reporting units for impairment testing purposes. We review our other intangible assets for impairment when events or changes in circumstances occur, which may potentially affect the estimated useful life or recoverability of the remaining balances of our intangible assets. Such events and changes in circumstances would include significant changes in membership, state funding, federal and state government contracts and provider networks. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to current forecasts of undiscounted future net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. During the second quarter of 2014, we recognized approximately $24.1 million in impairment and other charges. This primarily related to the $18.0 million partial impairment of certain intangible assets recorded in conjunction with the 2012 acquisition of Easy Choice Health Plan, Inc. as well as the full impairment of intangible assets associated with the purchase of certain assets from a small health plan in 2012. Lastly, the charges also included the resolution of certain matters related to the purchase price of our 2013 acquisitions. We were no longer able to recognize such charges as adjustments to acquired assets since we were beyond the measurement period established in the accounting rules for business combinations. During 2015, no events or circumstances have occurred, which may potentially affect the estimated useful life or recoverability of the remaining balances of our other intangible assets. Accordingly, there were no impairment losses recognized during 2015. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of other net (payables) receivables to/from government partners | A summary of other net (payables) receivables to/from government partners is as follows (in millions): As of December 31, 2015 2014 Liability to states under Medicaid minimum medical expense provisions $ (32.9 ) $ (14.3 ) (Liability to) receivable from CMS under risk corridor provision (136.8 ) 84.7 Liability to CMS under MA/PDP minimum MLR provisions of the ACA (3.0 ) (1.7 ) Net (payables) receivables to/from government partners (1) $ (172.7 ) $ 68.7 (1) The components of net (payables) receivables to/from government partners are classified in the consolidated balance sheets as $172.7 million in current liabilities as of December 31, 2015, and $83.0 million and $14.3 million in current assets and current liabilities, respectively, as of December 31, 2014. |
Funds receivable for the benefit of members | Funds receivable for the benefit of members consisted of the following (in millions): As of December 31, 2015 2014 Low-income cost sharing subsidy $ 288.7 $ 323.1 Catastrophic reinsurance subsidy 267.7 492.5 Coverage gap discount subsidy 21.2 (34.1 ) Funds receivable for the benefit of members $ 577.6 $ 781.5 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 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 Years Ended December 31, 2015 2014 2013 Kentucky 19% 18% 14% Florida 17% 14% 12% Georgia 12% 13% 16% |
Segment results | A summary of financial information for our reportable operating segments through the gross margin level and a reconciliation to income from operations is presented in the tables below. For the Years Ended December 31, 2015 2014 2013 Premium revenue: Medicaid Health Plans $ 9,074.3 $ 7,773.9 $ 5,661.2 Medicare Health Plans 3,898.8 3,963.2 3,071.0 Medicare PDPs 901.7 1,178.4 776.9 Total premium revenue 13,874.8 12,915.5 9,509.1 Medical benefits expense: Medicaid Health Plans 7,866.8 6,853.1 4,927.4 Medicare Health Plans 3,401.7 3,506.9 2,659.5 Medicare PDPs 710.0 1,095.2 671.7 Total medical benefits expense 11,978.5 11,455.2 8,258.6 ACA industry fee expense: Medicaid Health Plans 135.1 81.6 — Medicare Health Plans 68.7 44.7 — Medicare PDPs 23.5 11.4 — Total ACA industry fee expense 227.3 137.7 — Gross margin: Medicaid Health Plans 1,072.4 839.2 733.8 Medicare Health Plans 428.4 411.6 411.5 Medicare PDPs 168.2 71.8 105.2 Total gross margin 1,669.0 1,322.6 1,250.5 Investment and other income 15.4 44.4 18.8 Other expenses (1) (1,348.3 ) (1,218.7 ) (988.2 ) Income from operations $ 336.1 $ 148.3 $ 281.1 (1) Other expenses includes selling, general and administrative expenses, Medicaid Premium taxes, depreciation and amortization, interest and impairment and other charges. |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of weighted-average common shares outstanding - diluted | We calculated weighted-average common shares outstanding — diluted as follows: For the Years Ended December 31, 2015 2014 2013 Weighted-average common shares outstanding — basic 44,057,579 43,864,367 43,535,927 Dilutive effect of outstanding stock-based compensation awards 333,453 299,234 464,636 Weighted-average common shares outstanding — diluted 44,391,032 44,163,601 44,000,563 Anti-dilutive stock-based compensation awards excluded from computation 65,839 30,217 79,978 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale securities reconciliation | 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 Gross Gross Estimated December 31, 2015 Auction rate securities $ 34.0 $ — $ (2.3 ) $ 31.7 Corporate debt and other securities 121.4 — (0.4 ) 121.0 Money market funds 45.9 — — 45.9 Municipal securities 46.0 0.4 (0.1 ) 46.3 U.S. government securities 7.1 — — 7.1 Variable rate bond fund 85.1 — (0.9 ) 84.2 Total $ 339.5 $ 0.4 $ (3.7 ) $ 336.2 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 Total $ 431.7 $ 0.9 $ (2.5 ) $ 430.1 |
Contractual maturities of available-for-sale long-term investments | Contractual maturities of long-term available-for-sale investments at December 31, 2015 are as follows: Total Within 1 Through 5 5 Through 10 Thereafter Auction rate securities $ 31.7 $ — $ — $ — $ 31.7 Corporate debt and other securities 121.0 55.7 65.3 — — Money market funds 45.9 45.9 — — — Municipal securities 46.3 12.2 26.7 7.4 — Variable rate bond fund 84.2 84.2 — — — U.S. government securities 7.1 6.4 0.7 — — Total $ 336.2 $ 204.4 $ 92.7 $ 7.4 $ 31.7 |
RESTRICTED INVESTMENTS (Tables)
RESTRICTED INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Investments Note [Abstract] | |
Restricted investment assets | The amortized cost, gross unrealized gains, gross unrealized losses and fair value of our restricted cash and investment securities are as follows: Amortized Gross Gross Estimated December 31, 2015 Cash $ 3.2 $ — $ — $ 3.2 Certificates of deposit 1.1 — — 1.1 Money market funds 67.5 — — 67.5 U.S. government securities 124.3 — (0.1 ) 124.2 Total $ 196.1 $ — $ (0.1 ) $ 196.0 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 Total $ 150.3 $ 0.1 $ (0.1 ) $ 150.3 |
PROPERTY, EQUIPMENT AND CAPIT35
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of property, equipment and capitalized software | Property, equipment and capitalized software and related accumulated depreciation are as follows: December 31, 2015 2014 Leasehold improvements $ 26.5 $ 26.1 Computer equipment 96.7 69.3 Capitalized software 339.9 256.9 Furniture and equipment 28.8 26.4 491.9 378.7 Less accumulated depreciation (247.1 ) (191.6 ) Total property and equipment, net $ 244.8 $ 187.1 |
GOODWILL AND OTHER INTANGIBLE36
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill by reportable segment | A summary of changes in our goodwill by reportable segment is as follows for 2015 and 2014 : Medicaid Health Plans Medicare Health Plans Total Balance as of December 31, 2013 $ 126.8 $ 110.0 $ 236.8 Acquisitions and acquisition related adjustments 26.0 0.4 26.4 Balance as of December 31, 2014 152.8 110.4 263.2 Acquisitions and acquisition related adjustments — — — Balance as of December 31, 2015 (1) $ 152.8 $ 110.4 $ 263.2 (1) Cumulative impairment charges relating to goodwill were $78.3 million as of December 31, 2015 and 2014, which related to goodwill assigned to our Medicare Health Plans reporting unit which we impaired during 2008. |
Summary of acquired intangible assets resulting from business acquisitions | Other intangible assets as of December 31, 2015 and 2014 , and the related weighted-average amortization periods as of December 31, 2015 , are as follows: As of December 31, 2015 2014 Weighted Average Amortization Period (In Years) Gross Carrying Amount Accumulated Amortization Other Intangibles, Net Gross Carrying Amount Accumulated Amortization Other Intangibles, Net Provider networks 15.3 $ 8.1 $ (3.3 ) $ 4.8 $ 9.9 $ (3.0 ) $ 6.9 Licenses and permits 15.0 5.6 (3.6 ) 2.0 7.7 (3.4 ) 4.3 Trademarks and tradenames 15.0 11.4 (9.1 ) 2.3 15.9 (10.0 ) 5.9 Membership and state contracts 12.2 89.9 (21.7 ) 68.2 93.2 (14.2 ) 79.0 Other 6.3 4.2 (1.5 ) 2.7 5.7 (0.8 ) 4.9 Total other intangible assets 12.6 $ 119.2 $ (39.2 ) $ 80.0 $ 132.4 $ (31.4 ) $ 101.0 |
Schedule of future amortization expense | Amortization expense expected to be recognized during fiscal years subsequent to December 31, 2015 is as follows: Expected Amortization Expense 2016 $ 10.1 2017 9.7 2018 8.9 2019 8.7 2020 8.5 2021 and thereafter 34.1 Total $ 80.0 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of redemption prices as percentage of principal amount | On or after November 15, 2016, we may on any one or more occasions redeem all or part of the Senior Notes, at the redemption prices (expressed as percentages of principal amount) set forth below, if redeemed during the twelve-month period beginning on November 15 of the years indicated below, subject to the rights of holders of Senior Notes on the relevant record date to receive interest due on the relevant interest payment date: Period Redemption Price 2016 102.875 % 2017 101.438 % 2018 and thereafter 100 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis at December 31, 2015 are as follows: Fair Value Measurements Using Carrying Value Quoted Prices in Significant Other Significant Investments: Asset backed securities $ 17.2 $ — $ 17.2 $ — Auction rate securities 31.7 — — 31.7 Corporate debt securities 103.8 — 103.8 — Money market funds 45.9 45.9 — — Municipal securities 46.3 — 46.3 — U.S. government and agency obligations 7.1 7.1 — — Variable rate bond fund 84.2 84.2 — — Total investments $ 336.2 $ 137.2 $ 167.3 $ 31.7 Restricted investments: Cash 3.2 3.2 — — Certificates of deposit 1.1 — 1.1 — Money market funds 67.5 67.5 — — U.S. government and agency obligations 124.2 124.2 — — Total restricted investments $ 196.0 $ 194.9 $ 1.1 $ — Amounts payable 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 Significant Other Observable Inputs Significant Unobservable Inputs 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: Money market funds $ 65.9 $ 65.9 $ — $ — Cash 53.3 53.3 — — Certificates of deposit 1.0 — 1.0 — U.S. government securities 30.1 30.1 — — Total restricted investments $ 150.3 $ 149.3 $ 1.0 $ — Amounts payable related to investigation resolution $ 35.2 $ — $ 35.2 $ — |
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 years ended December 31, 2015, 2014 and 2013: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) December 31, 2015 December 31, 2014 December 31, 2013 Balance as of January 1 $ 32.3 $ 31.8 $ 32.0 Realized gains (losses) in earnings — — — Changes in net unrealized gains and losses in other comprehensive income (0.5 ) 0.5 (0.2 ) Purchases, sales and redemptions (0.1 ) — — Net transfers in or (out) of Level 3 — — — Balance as of December 31 $ 31.7 $ 32.3 $ 31.8 |
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 as of December 31, 2015 , and our Senior Notes and Term Loan as of December 31, 2014: December 31, 2015 December 31, 2014 Long term debt $ 912.1 $ 900.0 Approximate fair value of our long-term debt 931.5 908.7 |
MEDICAL BENEFITS PAYABLE (Table
MEDICAL BENEFITS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
MEDICAL BENEFITS PAYABLE [Abstract] | |
Schedule of medical benefits payable | Medical benefits payable consists of: As of December 31, 2015 % of Total As of December 31, 2014 % of Total IBNR $ 1,187.9 77% $ 1,111.5 75% Other medical benefits payable 348.1 23% 372.3 25% Total medical benefits payable $ 1,536.0 100% $ 1,483.8 100% |
Reconciliation of medical benefits payable | A reconciliation of the beginning and ending balances of medical benefits payable is as follows: For the Years Ended December 31, 2015 2014 2013 Beginning balance $ 1,483.8 $ 953.4 $ 733.0 (Divestitures) acquisitions (9.5 ) 107.0 71.6 Medical benefits incurred related to: Current year 12,189.5 11,481.4 8,333.2 Prior year (211.0 ) (26.2 ) (74.6 ) Total 11,978.5 11,455.2 8,258.6 Medical benefits paid related to: Current year (10,763.0 ) (10,089.6 ) (7,490.6 ) Prior year (1,153.8 ) (942.2 ) (619.2 ) Total (11,916.8 ) (11,031.8 ) (8,109.8 ) Ending balance $ 1,536.0 $ 1,483.8 $ 953.4 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | Future minimum lease payments under non-cancelable operating leases with initial or remaining lease terms in excess of one year at December 31, 2015 are as follows: Minimum Lease Payments 2016 $ 31.0 2017 28.5 2018 25.2 2019 20.0 2020 16.8 2021 and thereafter 35.3 Total $ 156.8 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense (benefit) | The following table provides components of income tax expense (benefit): For the Years Ended December 31, 2015 2014 2013 Current: Federal $ 161.2 $ 105.1 $ 78.6 State 11.3 15.1 7.5 172.5 120.2 86.1 Deferred: Federal 42.9 (5.7 ) 16.0 State 2.1 (0.4 ) 0.9 45.0 (6.1 ) 16.9 Total income tax expense $ 217.5 $ 114.1 $ 103.0 |
Reconciliation of income tax effective rate to statutory rate | A reconciliation of income tax at the statutory federal rate of 35% to income tax at the effective rate is as follows: For the Years Ended December 31, 2015 2014 2013 Income tax expense at statutory federal rate $ 117.6 $ 62.2 $ 97.4 Adjustments resulting from: State income tax, net of federal benefit 9.5 9.4 5.8 Tax exempt bargain purchase gain — (10.3 ) — Non-deductible executive compensation 3.5 3.8 5.1 Non-deductible amounts related to investigation resolution — 0.1 (6.9 ) Non-deductible ACA industry fees 79.6 48.2 — Other, net 7.3 0.7 1.6 Total income tax expense $ 217.5 $ 114.1 $ 103.0 |
Deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities are: As of December 31, Deferred tax assets: 2015 2014 Medical and other benefits discounting $ 15.7 $ 14.2 Unearned premium discounting 2.1 6.4 Tax basis assets 10.1 10.1 Allowance for doubtful accounts 14.7 10.1 Stock-based compensation 9.5 11.6 Amount payable related to investigation resolution — 6.8 Accrued expenses and other 24.1 7.0 76.2 66.2 Deferred tax liabilities: Goodwill, other intangible assets and property and equipment 22.7 3.5 Software development costs 91.6 68.9 Prepaid assets 14.5 5.1 128.8 77.5 Net deferred tax liability $ (52.6 ) $ (11.3 ) |
Deferred tax assets and liabilities by balance sheet classification | We classify deferred tax assets and liabilities in the consolidated balance sheets as follows: As of December 31, 2015 2014 Current assets $ 34.8 $ 37.1 Non-current liabilities (87.4 ) (48.4 ) Net deferred tax liability $ (52.6 ) $ (11.3 ) |
Reconciliation of beginning and ending unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Years Ended December 31, 2015 2014 Gross unrecognized tax benefits, beginning of period $ 10.4 $ — Gross increases: Prior year tax positions — — Current year tax positions 3.6 10.4 Gross decreases: Prior year settlements — — Prior year tax positions — — Statute of limitations lapses — — Gross unrecognized tax benefits, end of period $ 14.0 $ 10.4 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock and restricted stock unit activity | A summary of the activity for our RSU awards for the year ended December 31, 2015 is presented in the table below. RSUs Weighted Outstanding as of January 1, 2015 406,903 $ 62.23 Granted 119,888 89.96 Vested (206,005 ) 62.37 Forfeited and expired (30,167 ) 67.74 Outstanding as of December 31, 2015 290,619 73.00 |
Market Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of nonvested award activity | A summary of the activity for our MSU awards for the year ended December 31, 2015 is presented in the table below. MSUs Weighted Outstanding as of January 1, 2015 113,663 $ 74.31 Granted 67,433 122.25 Vested (32,494 ) 73.38 Forfeited and expired (15,312 ) 81.42 Outstanding as of December 31, 2015 133,290 97.97 |
Performance Share Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of nonvested award activity | A summary of the activity for our PSU awards, which are subject to variable accounting, for the year ended December 31, 2015 is presented in the table below. PSUs Weighted Outstanding as of January 1, 2015 395,075 $ 61.13 Granted 136,641 92.31 Vested (34,814 ) 51.90 Forfeited and expired (101,003 ) 63.87 Outstanding as of December 31, 2015 395,899 72.01 |
QUARTERLY FINANCIAL INFORMATI43
QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected unaudited quarterly financial data | Selected unaudited quarterly financial data is as follows (in millions, except membership and per share data): For the Three Month Periods Ended March 31, 2015 June 30, 2015 September 30, 2015 (1) December 31, 2015 Total revenues $ 3,469.9 $ 3,482.5 $ 3,441.0 $ 3,496.8 Gross margin 355.5 443.1 436.0 434.4 Income from operations 54.4 140.7 104.7 36.3 Income before income taxes 54.4 140.7 104.7 36.3 Net income 17.5 51.7 36.4 13.0 Net income per share - basic $ 0.40 $ 1.17 $ 0.83 $ 0.29 Net income per share - diluted 0.39 1.17 0.82 0.29 Period end membership 3,822,000 3,827,000 3,786,000 3,767,000 (1) Income from operations for the three months ended September 30, 2015 was adjusted to include the gain on divestiture of business of $4.6 million , related to the Sterling divestiture, to conform with the year-end presentation. For the Three Month Periods Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Total revenues $ 2,985.7 $ 3,151.9 $ 3,407.5 $ 3,414.8 Gross margin 312.9 268.9 365.0 375.8 Income (loss) from operations 37.3 (14.6 ) 69.5 56.1 Income (loss) before income taxes (2) 65.6 (3.5 ) 61.7 54.0 Net (loss) income 44.1 (7.5 ) 19.3 7.7 Net income (loss) per share - basic $ 1.01 $ (0.17 ) $ 0.44 $ 0.18 Net income (loss) per share - diluted 1.00 (0.17 ) 0.44 0.18 Period end membership 3,530,000 3,874,000 4,037,000 4,119,000 (2) The estimated fair value of the net tangible and intangible assets that we acquired in connection with the Windsor acquisition exceeded the total consideration paid, and payable, to the seller. We recognized the excess fair value as a bargain purchase gain, in accordance with accounting rules related to business combinations, after consideration of all relevant factors, which resulted in gains of approximately $28.3 million and $11.1 million in the first and second quarters of 2014, and charges of $7.8 million and $2.1 million in the third and fourth quarters of 2014. |
ORGANIZATION AND BASIS OF PRE44
ORGANIZATION AND BASIS OF PRESENTATION (Details) Members in Millions | 1 Months Ended | ||
Jul. 31, 2002Transaction | Dec. 31, 2015Members | Dec. 31, 2014State | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of transactions for acquisition | Transaction | 2 | ||
Number of members | Members | 3.8 | ||
Number of states offered Medicare prescription drug plans | State | 49 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Premium revenue recognition [Abstract] | ||||
Allowance for uncollectible premium receivables | $ 19,900 | $ 21,100 | ||
Premium revenue related to newborn and obstetric deliveries | 269,100 | 278,400 | $ 242,900 | |
Fee reimbursement | 219,200 | 124,600 | ||
Risk adjusted premiums | $ 209,200 | 178,700 | ||
Minimum variance above target amount before CMS makes additional payments to plan sponsors | 5.00% | |||
Minimum medical loss ratio | 85.00% | |||
Other payables to government partners [Abstract] | ||||
Liability to states under Medicaid minimum medical expense provisions | $ (32,900) | (14,300) | ||
(Liability to) receivable from CMS under risk corridor provision | (136,800) | 84,700 | ||
Liability to CMS under MA/PDP minimum MLR provisions of the ACA | (3,000) | (1,700) | ||
Net (payable) receivables to government partners | (172,700) | 68,700 | ||
Receivables from government partners | 0 | 83,000 | ||
Other payables to government partners | $ 172,700 | 14,300 | ||
Funds Receivable for the Benefit of Members [Abstract] | ||||
Drug costs reimbursed | 80.00% | |||
Settlement payment from CMS | $ 845,500 | |||
Low-income cost sharing subsidy | $ 288,700 | 323,100 | ||
Catastrophic reinsurance subsidy | 267,700 | 492,500 | ||
Coverage gap discount subsidy | 21,200 | (34,100) | ||
Funds receivable for the benefit of members | 577,600 | 781,500 | ||
Reinsurance [Abstract] | ||||
Net favorable (unfavorable) development related to prior fiscal years | 78,100 | (48,100) | 3,000 | |
Affordable Care Act levied on health insurance industry in 2014 | 8,000,000 | |||
Affordable Care Act levied on health insurance industry in 2015 | 11,300,000 | |||
Expected annual fees for Affordable Care Act levied on health insurance industry, by 2018 | 14,300,000 | |||
ACA industry fee | 227,300 | 137,700 | 0 | |
Medicaid premium taxes [Abstract] | ||||
Medicaid premium taxes | 94,700 | 76,500 | 75,700 | |
Investments [Abstract] | ||||
Other than temporary impairment | 0 | 0 | $ 0 | |
Prepaid expenses and other current assets, net [Abstract] | ||||
Accounts and Other Receivables, Net, Current | $ 6,600 | $ 52,800 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Premium Deficiency Reserve (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Premium deficiency reserve | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Equity Based Compensation (Details) - shares | 12 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2013 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cliff vesting number of shares earned, range, minimum | 0 | |
Vesting period of certain equity-based compensation | 3 years | |
Market Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period of certain equity-based compensation | 3 years | |
Number of calendar days preceding the end of the fiscal year prior to the vesting date with the maximum quotient | 30 days | |
Minimum quotient or payout cap of MSUs | 50.00% | |
2013 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 2,500,000 | |
Minimum | Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Minimum | Market Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cliff vesting target range percentage maximum | 150.00% | |
Maximum | Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Maximum | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cliff vesting target range percentage maximum | 200.00% | |
Maximum | Market Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cliff vesting target range percentage maximum | 200.00% |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Capitalized Software, net (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring | Capitalized software | |
Property, Plant and Equipment [Line Items] | |
Asset impairment charges | $ 9 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||||
Goodwill | $ 263.2 | $ 263.2 | $ 236.8 | ||
Impairment and other charges | 0 | 24.1 | 0 | ||
Minimum | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 1 year | ||||
Maximum | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 15 years | ||||
Medicaid Health Plans | |||||
Goodwill [Line Items] | |||||
Goodwill | 152.8 | 152.8 | 126.8 | ||
Medicare Health Plans | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 110.4 | $ 110.4 | $ 110 | ||
Easy Choice Health Plan, Inc. | |||||
Goodwill [Line Items] | |||||
Impairment of intangible assets | $ 18 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) $ / shares in Units, Members in Thousands, $ in Millions | Jan. 01, 2014USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)Members | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)$ / shares | Jul. 01, 2014USD ($)Members | Mar. 31, 2013USD ($) | Jan. 31, 2013USD ($) |
Business Acquisition [Line Items] | ||||||||
Number of members | Members | 3,800 | |||||||
Goodwill | $ 263.2 | $ 263.2 | $ 236.8 | |||||
Bargain purchase gain | $ 0 | $ 29.5 | 0 | |||||
Pro forma premium revenue | 10,700 | |||||||
Pro forma net earnings | $ 201.5 | |||||||
Pro forma diluted earnings per share | $ / shares | $ 4.58 | |||||||
Healthfirst Health Plan of New Jersey | ||||||||
Business Acquisition [Line Items] | ||||||||
Other intangible assets | $ 10.8 | |||||||
Goodwill | $ 16.2 | |||||||
Windsor Health Plans, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Other intangible assets | $ 54.3 | |||||||
Payments for previous acquisition | $ 17.2 | |||||||
WellCare of South Carolina | ||||||||
Business Acquisition [Line Items] | ||||||||
Other intangible assets | $ 9.5 | |||||||
Goodwill | 12.7 | |||||||
Missouri Care, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Other intangible assets | $ 7.1 | |||||||
Goodwill | 10.7 | |||||||
Weighted Average | Windsor Health Plans, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Estimated useful life | 11 years 6 months | |||||||
Medicaid Health Plans | Healthfirst Health Plan of New Jersey | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of members | Members | 42 | |||||||
Tangible Assets and Liabilities | Windsor Health Plans, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price allocated | $ 195.3 | |||||||
Tangible Assets and Liabilities | WellCare of South Carolina | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price allocated | $ 24.7 | |||||||
Tangible Assets and Liabilities | Missouri Care, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price allocated | $ 10.2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Millions | Jul. 01, 2015RegionsRenewalOptions | Jan. 31, 2016RenewalOptions | Sep. 30, 2015RenewalOptions | Dec. 31, 2015USD ($)Regions | Sep. 30, 2015USD ($)RenewalOptions | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Regions | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue | $ 13,874.8 | $ 12,915.5 | $ 9,509.1 | |||||||||||
Medical benefits expense | 11,978.5 | 11,455.2 | 8,258.6 | |||||||||||
ACA industry fee expense | 227.3 | 137.7 | 0 | |||||||||||
Gross margin | $ 434.4 | $ 436 | $ 443.1 | $ 355.5 | $ 375.8 | $ 365 | $ 268.9 | $ 312.9 | 1,669 | 1,322.6 | 1,250.5 | |||
Investment and other income | 15.4 | 44.4 | 18.8 | |||||||||||
Other expenses | (1,348.3) | (1,218.7) | (988.2) | |||||||||||
Income from operations | $ 36.3 | $ 104.7 | $ 140.7 | $ 54.4 | $ 56.1 | $ 69.5 | $ (14.6) | $ 37.3 | 336.1 | 148.3 | 281.1 | |||
Operating Segments | Medicaid Health Plans | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue | 9,074.3 | 7,773.9 | 5,661.2 | |||||||||||
Medical benefits expense | 7,866.8 | 6,853.1 | 4,927.4 | |||||||||||
ACA industry fee expense | 135.1 | 81.6 | 0 | |||||||||||
Gross margin | 1,072.4 | 839.2 | 733.8 | |||||||||||
Operating Segments | Medicare Health Plans | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue | 3,898.8 | 3,963.2 | 3,071 | |||||||||||
Medical benefits expense | 3,401.7 | 3,506.9 | 2,659.5 | |||||||||||
ACA industry fee expense | 68.7 | 44.7 | 0 | |||||||||||
Gross margin | 428.4 | 411.6 | 411.5 | |||||||||||
Operating Segments | Medicare PDPs | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue | 901.7 | 1,178.4 | 776.9 | |||||||||||
Medical benefits expense | 710 | 1,095.2 | 671.7 | |||||||||||
ACA industry fee expense | 23.5 | 11.4 | 0 | |||||||||||
Gross margin | 168.2 | 71.8 | 105.2 | |||||||||||
Segment Reconciling Items | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Investment and other income | $ 15.4 | $ 44.4 | $ 18.8 | |||||||||||
Minimum | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Percentage of consolidated premium revenue | 10.00% | |||||||||||||
Georgia Medicaid Plan Commencing January 1, 2017 | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of renewal options | RenewalOptions | 5 | 5 | ||||||||||||
Health plan contract, renewal term | 1 year | |||||||||||||
Health plan contract, initial term | 6 months | |||||||||||||
Kentucky | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue net of premium tax (as a percent) | 19.00% | 18.00% | 14.00% | |||||||||||
Kentucky | Kentucky Medicaid Plan | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of renewal options | RenewalOptions | 4 | |||||||||||||
Health plan contract, renewal term | 1 year | |||||||||||||
Health plan contract, initial term | 1 year | |||||||||||||
Total number of regions | Regions | 8 | |||||||||||||
Florida | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue net of premium tax (as a percent) | 17.00% | 14.00% | 12.00% | |||||||||||
Number of regions executed contracts | Regions | 8 | |||||||||||||
Florida | Managed Medical Assistance Program (MMA) | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total number of regions | Regions | 11 | 11 | ||||||||||||
Georgia | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premium revenue net of premium tax (as a percent) | 12.00% | 13.00% | 16.00% | |||||||||||
Subsequent Event | Current Georgia Medicaid Plan | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of renewal options | RenewalOptions | 2 | |||||||||||||
Health plan contract, renewal term | 6 months |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Weighted-average common shares outstanding — basic | 44,057,579 | 43,864,367 | 43,535,927 |
Dilutive effect of outstanding stock-based compensation awards | 333,453 | 299,234 | 464,636 |
Weighted-average common shares outstanding — diluted | 44,391,032 | 44,163,601 | 44,000,563 |
Anti-dilutive stock-based compensation awards excluded from computation | 65,839 | 30,217 | 79,978 |
INVESTMENTS (Details)
INVESTMENTS (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Security | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 339.5 | $ 431.7 | |
Gross Unrealized Gains | 0.4 | 0.9 | |
Gross Unrealized Losses | (3.7) | (2.5) | |
Estimated Fair Value | 336.2 | 430.1 | |
Within 1 Year | 204.4 | ||
1 Through 5 Years | 92.7 | ||
5 Through 10 Years | 7.4 | ||
Thereafter | 31.7 | ||
Total fixed maturity bond investments sold | 126.3 | 348.7 | $ 360.2 |
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 | 121.4 | 162.2 | |
Gross Unrealized Gains | 0 | 0.1 | |
Gross Unrealized Losses | (0.4) | (0.4) | |
Estimated Fair Value | 121 | 161.9 | |
Within 1 Year | 55.7 | ||
1 Through 5 Years | 65.3 | ||
5 Through 10 Years | 0 | ||
Thereafter | 0 | ||
Money market funds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 45.9 | 41.4 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Estimated Fair Value | 45.9 | 41.4 | |
Within 1 Year | 45.9 | ||
1 Through 5 Years | 0 | ||
5 Through 10 Years | 0 | ||
Thereafter | 0 | ||
Municipal securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 46 | 86.9 | |
Gross Unrealized Gains | 0.4 | 0.5 | |
Gross Unrealized Losses | (0.1) | (0.1) | |
Estimated Fair Value | 46.3 | 87.3 | |
Within 1 Year | 12.2 | ||
1 Through 5 Years | 26.7 | ||
5 Through 10 Years | 7.4 | ||
Thereafter | 0 | ||
U.S. government securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 7.1 | 21.7 | |
Gross Unrealized Gains | 0 | 0.1 | |
Gross Unrealized Losses | 0 | (0.1) | |
Estimated Fair Value | 7.1 | 21.7 | |
Within 1 Year | 6.4 | ||
1 Through 5 Years | 0.7 | ||
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 | (0.9) | (0.1) | |
Estimated Fair Value | 84.2 | $ 85.2 | |
Within 1 Year | 84.2 | ||
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 | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted investments [Abstract] | ||
Amortized Cost | $ 196.1 | $ 150.3 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.1) | (0.1) |
Estimated Fair Value | 196 | 150.3 |
Cash | ||
Restricted investments [Abstract] | ||
Amortized Cost | 3.2 | 53.3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 3.2 | 53.3 |
Certificates of deposit | ||
Restricted investments [Abstract] | ||
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 investments [Abstract] | ||
Amortized Cost | 67.5 | 65.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 67.5 | 65.9 |
U.S. government securities | ||
Restricted investments [Abstract] | ||
Amortized Cost | 124.3 | 30.1 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.1) | (0.1) |
Estimated Fair Value | $ 124.2 | $ 30.1 |
PROPERTY, EQUIPMENT AND CAPIT55
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property, equipment and capitalized software, gross | $ 491.9 | $ 378.7 | |
Less accumulated depreciation | (247.1) | (191.6) | |
Total property and equipment, net | 244.8 | 187.1 | |
Depreciation expense | 62 | 46.8 | $ 36.7 |
Amortization expense on software | 43.7 | 30.4 | $ 22 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and capitalized software, gross | 26.5 | 26.1 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and capitalized software, gross | 96.7 | 69.3 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and capitalized software, gross | 339.9 | 256.9 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and capitalized software, gross | $ 28.8 | $ 26.4 |
GOODWILL AND OTHER INTANGIBLE56
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 263.2 | $ 236.8 |
Acquisitions and acquisition related adjustments | 0 | 26.4 |
Goodwill, ending balance | 263.2 | 263.2 |
Medicaid Health Plans | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 152.8 | 126.8 |
Acquisitions and acquisition related adjustments | 0 | 26 |
Goodwill, ending balance | 152.8 | 152.8 |
Medicare Health Plans | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 110.4 | 110 |
Acquisitions and acquisition related adjustments | 0 | 0.4 |
Goodwill, ending balance | 110.4 | 110.4 |
Cumulative impairment charges | $ 78.3 | $ 78.3 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 12 years 7 months | ||
Gross Carrying Amount | $ 119.2 | $ 132.4 | |
Accumulated Amortization | (39.2) | (31.4) | |
Other Intangibles, Net | 80 | 101 | |
Amortization expense | 10.6 | 13.1 | $ 7.4 |
Finite-lived intangible assets, future amortization expense [Abstract] | |||
2,016 | 10.1 | ||
2,017 | 9.7 | ||
2,018 | 8.9 | ||
2,019 | 8.7 | ||
2,020 | 8.5 | ||
2021 and thereafter | 34.1 | ||
Total | $ 80 | ||
Provider networks | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 15 years 4 months | ||
Gross Carrying Amount | $ 8.1 | 9.9 | |
Accumulated Amortization | (3.3) | (3) | |
Other Intangibles, Net | $ 4.8 | 6.9 | |
Licenses and permits | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 15 years | ||
Gross Carrying Amount | $ 5.6 | 7.7 | |
Accumulated Amortization | (3.6) | (3.4) | |
Other Intangibles, Net | $ 2 | 4.3 | |
Trademarks and tradenames | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 15 years | ||
Gross Carrying Amount | $ 11.4 | 15.9 | |
Accumulated Amortization | (9.1) | (10) | |
Other Intangibles, Net | $ 2.3 | 5.9 | |
Membership and state contracts | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 12 years 2 months | ||
Gross Carrying Amount | $ 89.9 | 93.2 | |
Accumulated Amortization | (21.7) | (14.2) | |
Other Intangibles, Net | $ 68.2 | 79 | |
Other | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (In Years) | 6 years 3 months | ||
Gross Carrying Amount | $ 4.2 | 5.7 | |
Accumulated Amortization | (1.5) | (0.8) | |
Other Intangibles, Net | $ 2.7 | $ 4.9 |
DEBT (Details)
DEBT (Details) - USD ($) | Jun. 01, 2015 | Nov. 14, 2013 | Nov. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||||||
Proceeds from debt, net of financing costs paid | $ 308,900,000 | $ 298,600,000 | $ 816,400,000 | |||
Current portion of long-term debt, term loan | 300,000,000 | 0 | ||||
Gains (losses) on extinguishment of debt | $ 0 | $ 0 | $ (2,800,000) | |||
2014 Amended and Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt covenant, minimum required level of statutory net worth | 105.00% | |||||
2014 Amended and Restated Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.25% | |||||
2014 Amended and Restated Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.45% | |||||
Revolving Credit Facility | 2014 Amended and Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility, maximum borrowing capacity | $ 300,000,000 | |||||
Senior Notes | Senior Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Term loan facility, original principal amount | $ 300,000,000 | $ 600,000,000 | ||||
Interest rate | 5.75% | |||||
Issue price | 104.50% | |||||
Debt premium | $ 13,500,000 | |||||
Proceeds from debt, net of financing costs paid | $ 587,900,000 | |||||
Debt issuance costs | $ 4,600,000 | |||||
Term Loan | 2011 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Payments on debt | $ 336,500,000 | |||||
Term Loan | 2014 Amended and Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 4.50% | |||||
Current portion of long-term debt, term loan | $ 300,000,000 | |||||
London Interbank Offered Rate (LIBOR) | 2014 Amended and Restated Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
London Interbank Offered Rate (LIBOR) | 2014 Amended and Restated Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.625% | |||||
Prime Rate | 2014 Amended and Restated Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Prime Rate | 2014 Amended and Restated Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.625% | |||||
Lender Concentration Risk | Revolving Credit Facility | 2014 Amended and Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Minimum lender holding for accelerated maturity rights | 50.00% |
DEBT Redemption of Debt Terms (
DEBT Redemption of Debt Terms (Details) - Senior Notes | 3 Months Ended |
Sep. 30, 2015 | |
Debt Instrument, Redemption, Period One | |
Debt Instrument, Redemption [Line Items] | |
Percent of the aggregate principal amount redeemed | 40.00% |
Redemption price as a percent | 105.75% |
Debt Instrument, Redemption, Period Two | |
Debt Instrument, Redemption [Line Items] | |
Redemption price as a percent | 102.875% |
Debt Instrument, Redemption, Period Three | |
Debt Instrument, Redemption [Line Items] | |
Redemption price as a percent | 101.438% |
Debt Instrument, Redemption, Period Four | |
Debt Instrument, Redemption [Line Items] | |
Redemption price as a percent | 100.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Auction rate securities, par value | $ 34 | |
Pre-determined intervals at which holders are allowed to sell their notes and resets applicable interest rate | every seven or 35 days | |
Fair Value Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 336.2 | $ 430.1 |
Restricted investment | 196 | 150.3 |
Amounts payable related to investigation resolution | 0 | 35.2 |
Fair Value Measurements, Recurring | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 17.2 | 23.3 |
Fair Value Measurements, Recurring | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 31.7 | 32.3 |
Fair Value Measurements, Recurring | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0.3 | |
Restricted investment | 1.1 | 1 |
Fair Value Measurements, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 103.8 | 138.6 |
Fair Value Measurements, Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 45.9 | 41.4 |
Restricted investment | 67.5 | 65.9 |
Fair Value Measurements, Recurring | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 46.3 | 87.3 |
Fair Value Measurements, Recurring | U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 7.1 | 21.7 |
Restricted investment | 124.2 | 30.1 |
Fair Value Measurements, Recurring | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 84.2 | 85.2 |
Fair Value Measurements, Recurring | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted investment | 3.2 | 53.3 |
Fair Value Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 137.2 | 143.4 |
Restricted investment | 194.9 | 149.3 |
Amounts payable related to investigation resolution | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 45.9 | 41.4 |
Restricted investment | 67.5 | 65.9 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 7.1 | 16.8 |
Restricted investment | 124.2 | 30.1 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 84.2 | 85.2 |
Fair Value Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted investment | 3.2 | 53.3 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 167.3 | 254.4 |
Restricted investment | 1.1 | 1 |
Amounts payable related to investigation resolution | 0 | 35.2 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 17.2 | 23.3 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0.3 | |
Restricted investment | 1.1 | 1 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 103.8 | 138.6 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 46.3 | 87.3 |
Fair Value Measurements, Recurring | 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] | ||
Investments | 0 | 4.9 |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 31.7 | 32.3 |
Restricted investment | 0 | 0 |
Amounts payable related to investigation resolution | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 31.7 | 32.3 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | U.S. government and agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Restricted investment | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Variable rate bond fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted investment | $ 0 | $ 0 |
Minimum | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Auction rate securities, period for interest rate reset | 7 days | |
Auction rate securities, municipal bond index return | 0.00% | |
Maximum | Auction rate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Auction rate securities, period for interest rate reset | 35 days | |
Auction rate securities, municipal bond index return | 6.00% |
FAIR VALUE MEASUREMENTS - Unobs
FAIR VALUE MEASUREMENTS - Unobservable Inputs Reconciliation (Details) - Significant Unobservable Inputs (Level 3) - Fair Value Measurements, Recurring - Auction rate securities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Auction rate securities measured at fair value on a recurring basis using significant unobservable inputs [Roll Forward] | |||
Balance at beginning of period | $ 32.3 | $ 31.8 | $ 32 |
Realized gains (losses) in earnings | 0 | 0 | 0 |
Changes in net unrealized gains and losses in other comprehensive income | (0.5) | 0.5 | (0.2) |
Purchases, sales and redemptions | (0.1) | 0 | 0 |
Net transfers in or (out) of Level 3 | 0 | 0 | 0 |
Balance at end of period | $ 31.7 | $ 32.3 | $ 31.8 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt | $ 912.1 | $ 900 |
Senior Notes and Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt | 900 | |
Approximate fair value of our long-term debt | $ 908.7 | |
Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long term debt | 912.1 | |
Approximate fair value of our long-term debt | $ 931.5 |
MEDICAL BENEFITS PAYABLE (Detai
MEDICAL BENEFITS PAYABLE (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
Medical benefits payable and expense [Abstract] | |||||
IBNR | $ 1,187.9 | $ 1,111.5 | |||
Other medical benefits payable | 348.1 | 372.3 | |||
Total medical benefits payable | $ 1,483.8 | $ 953.4 | $ 733 | $ 1,536 | $ 1,483.8 |
IBNR, percentage | 77.00% | 75.00% | |||
Other medical benefits payable, percentage | 23.00% | 25.00% | |||
Reconciliation of the beginning and ending balance of medical benefits payable [Roll Forward] | |||||
Beginning balance | 1,483.8 | 953.4 | 733 | ||
(Divestitures) acquisitions | (9.5) | 107 | 71.6 | ||
Medical benefits incurred related to: | |||||
Current year | 12,189.5 | 11,481.4 | 8,333.2 | ||
Prior year | (211) | (26.2) | (74.6) | ||
Total | 11,978.5 | 11,455.2 | 8,258.6 | ||
Medical benefits paid related to: | |||||
Current year | (10,763) | (10,089.6) | (7,490.6) | ||
Prior year | (1,153.8) | (942.2) | (619.2) | ||
Total | (11,916.8) | (11,031.8) | (8,109.8) | ||
Ending balance | 1,536 | 1,483.8 | 953.4 | ||
Net favorable development, impact on medical expense | 211 | 26.2 | 74.6 | ||
Net favorable (unfavorable) development related to prior fiscal years | $ 78.1 | $ (48.1) | $ 3 |
COMMITMENTS AND CONTINGENCIES64
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 23, 2012USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)Employee | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($)Employee | Jun. 30, 2013Employee | Dec. 31, 2012Action | Dec. 31, 2010 |
Loss Contingencies [Line Items] | |||||||||
Current portion of amount payable related to investigation resolution | $ 0 | $ 0 | $ 35,200,000 | $ 0 | |||||
Operating leases [Abstract] | |||||||||
Rental expense | 30,000,000 | 25,200,000 | $ 20,400,000 | ||||||
Future minimum lease payments under non-cancelable operating leases [Abstract] | |||||||||
2,016 | 31,000,000 | 31,000,000 | |||||||
2,017 | 28,500,000 | 28,500,000 | |||||||
2,018 | 25,200,000 | 25,200,000 | |||||||
2,019 | 20,000,000 | 20,000,000 | |||||||
2,020 | 16,800,000 | 16,800,000 | |||||||
2021 and thereafter | 35,300,000 | 35,300,000 | |||||||
Total | $ 156,800,000 | $ 156,800,000 | |||||||
Civil Inquiry | |||||||||
Loss Contingencies [Line Items] | |||||||||
Settlement agreement, amount | $ 137,500,000 | ||||||||
Settlement agreement, amount of installment payments | $ 34,400,000 | ||||||||
Term of agreement | 36 months | ||||||||
Settlement agreement, interest rate | 3.125% | ||||||||
Final payment under settlement agreement | $ 35,400,000 | ||||||||
Class Action Complaints | |||||||||
Loss Contingencies [Line Items] | |||||||||
Portion of sums recovered from former officers to be paid to class members | 25.00% | ||||||||
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 an action filed by the entity | Employee | 3 | 3 | |||||||
Number of former associates being pursued in action filed by entity | Employee | 2 | 2 | |||||||
Number of former employees found guilty and appealing | Employee | 4 | 4 | 4 | ||||||
Number of former employees receiving notices of cross appeal | Employee | 3 | 3 | |||||||
Number of former employees being pursued in action filed by entity | Employee | 5 | 5 | |||||||
Number of actions filed in the federal and state courts between October 2007 and January 2008 | Action | 6 | ||||||||
Legal fees | $ 25,200,000 | $ 30,000,000 | $ 46,000,000 | $ 211,100,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 161.2 | $ 105.1 | $ 78.6 |
State | 11.3 | 15.1 | 7.5 |
Total current | 172.5 | 120.2 | 86.1 |
Deferred: | |||
Federal | 42.9 | (5.7) | 16 |
State | 2.1 | (0.4) | 0.9 |
Total deferred | 45 | (6.1) | 16.9 |
Total income tax expense | $ 217.5 | 114.1 | 103 |
Statutory federal rate | 35.00% | ||
Reconciliation of income tax at the effective rate to income tax at the statutory federal rate | |||
Income tax expense at statutory federal rate | $ 117.6 | 62.2 | 97.4 |
Adjustments resulting from: | |||
State income tax, net of federal benefit | 9.5 | 9.4 | 5.8 |
Tax exempt bargain purchase gain | 0 | (10.3) | 0 |
Non-deductible executive compensation | 3.5 | 3.8 | 5.1 |
Non-deductible amounts related to investigation resolution | 0 | 0.1 | (6.9) |
Non-deductible ACA industry fees | 79.6 | 48.2 | 0 |
Other, net | 7.3 | 0.7 | 1.6 |
Total income tax expense | $ 217.5 | $ 114.1 | $ 103 |
Effective income tax rate | 64.70% | 64.20% | 37.00% |
Deferred tax assets: | |||
Medical and other benefits discounting | $ 15.7 | $ 14.2 | |
Unearned premium discounting | 2.1 | 6.4 | |
Tax basis assets | 10.1 | 10.1 | |
Allowance for doubtful accounts | 14.7 | 10.1 | |
Stock-based compensation | 9.5 | 11.6 | |
Amount payable related to investigation resolution | 0 | 6.8 | |
Accrued expenses and other | 24.1 | 7 | |
Total deferred tax assets | 76.2 | 66.2 | |
Deferred tax liabilities: | |||
Goodwill, other intangible assets and property and equipment | 22.7 | 3.5 | |
Software development costs | 91.6 | 68.9 | |
Prepaid assets | 14.5 | 5.1 | |
Total deferred tax liabilities | 128.8 | 77.5 | |
Net deferred tax liability | (52.6) | (11.3) | |
Current assets | 34.8 | 37.1 | |
Non-current liabilities | (87.4) | (48.4) | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Compensation deduction | 9.7 | ||
Gross unrecognized tax benefits, beginning of period | 10.4 | 0 | |
Gross increases: | |||
Prior year tax positions | 0 | 0 | |
Current year tax positions | 3.6 | 10.4 | |
Gross decreases: | |||
Prior year settlements | 0 | 0 | |
Prior year tax positions | 0 | 0 | |
Statute of limitations lapses | 0 | 0 | |
Gross unrecognized tax benefits, end of period | $ 14 | $ 10.4 | $ 0 |
Domestic Tax Authority | |||
Adjustments resulting from: | |||
Additional tax benefit | $ 7.6 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 20.2 | $ 15.7 | $ 12.5 |
Unrecognized compensation cost | $ 26.4 | ||
Weighted-average period over which compensation costs are expected to be recognized | 1 year 8 months | ||
Common stock price | $ 78.21 | ||
Total fair value of shares vested | $ 16.2 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | ||
Weighted Average Grant-Date Fair Value [Roll Forward] | |||
Granted (USD per share) | $ 97.67 | $ 64.49 | $ 61.33 |
Stock Options | |||
Other Disclosures [Abstract] | |||
Exercised (in shares) | 8,020 | ||
Exercised (USD per share) | $ 38.92 | ||
Total intrinsic value of options exercised | $ 0.4 | $ 0.9 | $ 14.1 |
Cash received from option exercises | $ 0.3 | $ 0.5 | $ 10.3 |
Restricted Stock Units | |||
Equity Instruments Other than Options [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 406,903 | ||
Granted (in shares) | 119,888 | ||
Vested (in shares) | (206,005) | ||
Forfeited and expired (in shares) | (30,167) | ||
Outstanding at end of period (in shares) | 290,619 | 406,903 | |
Weighted Average Grant-Date Fair Value [Roll Forward] | |||
Outstanding as of beginning of period (USD per share) | $ 62.23 | ||
Granted (USD per share) | 89.96 | ||
Vested (USD per share) | 62.37 | ||
Forfeited and expired (USD per share) | 67.74 | ||
Outstanding at end of period (USD per share) | $ 73 | $ 62.23 | |
Market Stock Units | |||
Equity Instruments Other than Options [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 113,663 | ||
Granted (in shares) | 67,433 | ||
Vested (in shares) | (32,494) | ||
Forfeited and expired (in shares) | (15,312) | ||
Outstanding at end of period (in shares) | 133,290 | 113,663 | |
Weighted Average Grant-Date Fair Value [Roll Forward] | |||
Outstanding as of beginning of period (USD per share) | $ 74.31 | ||
Granted (USD per share) | 122.25 | ||
Vested (USD per share) | 73.38 | ||
Forfeited and expired (USD per share) | 81.42 | ||
Outstanding at end of period (USD per share) | $ 97.97 | $ 74.31 | |
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 10.2 | ||
Equity Instruments Other than Options [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 395,075 | ||
Granted (in shares) | 136,641 | ||
Vested (in shares) | (34,814) | ||
Forfeited and expired (in shares) | (101,003) | ||
Outstanding at end of period (in shares) | 395,899 | 395,075 | |
Weighted Average Grant-Date Fair Value [Roll Forward] | |||
Outstanding as of beginning of period (USD per share) | $ 61.13 | ||
Granted (USD per share) | 92.31 | ||
Vested (USD per share) | 51.90 | ||
Forfeited and expired (USD per share) | 63.87 | ||
Outstanding at end of period (USD per share) | $ 72.01 | $ 61.13 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
The Graham Companies | |||
Related Party Transaction [Line Items] | |||
Rental expenses, related parties | $ 0.2 | $ 0.2 | $ 0.2 |
REGULATORY CAPITAL AND DIVIDE68
REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Required surplus | $ 807.9 | $ 743.7 | |
Combined statutory capital and surplus | 1,400 | 1,300 | |
Dividends received from regulated subsidiaries | 152 | $ 68 | $ 147 |
Subsidiaries | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividends received without regulatory approval | 29 | ||
Dividends received with regulatory approval | 123 | ||
Amount of dividends that may be paid through the end of 2016 without prior approval by regulatory authorities | $ 147.2 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Matching contribution expense under 401(k) plan | $ 9.6 | $ 7.9 | $ 6 |
QUARTERLY FINANCIAL INFORMATI70
QUARTERLY FINANCIAL INFORMATION (Details) $ / shares in Units, Members in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($)Members$ / shares | Sep. 30, 2015USD ($)Members$ / shares | Jun. 30, 2015USD ($)Members$ / shares | Mar. 31, 2015USD ($)Members$ / shares | Dec. 31, 2014USD ($)Members$ / shares | Sep. 30, 2014USD ($)Members$ / shares | Jun. 30, 2014USD ($)Members$ / shares | Mar. 31, 2014USD ($)Members$ / shares | Dec. 31, 2015USD ($)Members$ / shares | Dec. 31, 2014USD ($)Members$ / shares | Dec. 31, 2013USD ($)$ / shares | |
Business Acquisition [Line Items] | |||||||||||
Gain (Loss) on Disposition of Business | $ 4.6 | $ 6.1 | $ 0 | $ 0 | |||||||
Total revenues | $ 3,496.8 | 3,441 | $ 3,482.5 | $ 3,469.9 | $ 3,414.8 | $ 3,407.5 | $ 3,151.9 | $ 2,985.7 | 13,890.2 | 12,959.9 | 9,527.9 |
Gross margin | 434.4 | 436 | 443.1 | 355.5 | 375.8 | 365 | 268.9 | 312.9 | 1,669 | 1,322.6 | 1,250.5 |
Income (loss) from operations | 36.3 | 104.7 | 140.7 | 54.4 | 56.1 | 69.5 | (14.6) | 37.3 | 336.1 | 148.3 | 281.1 |
Income (loss) before income taxes | 36.3 | 104.7 | 140.7 | 54.4 | 54 | 61.7 | (3.5) | 65.6 | 336.1 | 177.8 | 278.3 |
Net (loss) income | $ 13 | $ 36.4 | $ 51.7 | $ 17.5 | $ 7.7 | $ 19.3 | $ (7.5) | $ 44.1 | $ 118.6 | $ 63.7 | $ 175.3 |
Net income (loss) per share - basic (USD per share) | $ / shares | $ 0.29 | $ 0.83 | $ 1.17 | $ 0.40 | $ 0.18 | $ 0.44 | $ (0.17) | $ 1.01 | $ 2.69 | $ 1.45 | $ 4.03 |
Net income (loss) per share - diluted (USD per share) | $ / shares | $ 0.29 | $ 0.82 | $ 1.17 | $ 0.39 | $ 0.18 | $ 0.44 | $ (0.17) | $ 1 | $ 2.67 | $ 1.44 | $ 3.98 |
Period end membership (in members) | Members | 3,767 | 3,786 | 3,827 | 3,822 | 4,119 | 4,037 | 3,874 | 3,530 | 3,767 | 4,119 | |
Bargain purchase, increase (decrease) in gain recognized | $ (2.1) | $ (7.8) | $ 11.1 | $ 28.3 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Jan. 08, 2016 | Dec. 31, 2015 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Cash payments on term loan | $ 100 | |
2016 Revolving Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Revolving credit facility, maximum borrowing capacity | 850 | |
Line of credit, amount outstanding | $ 200 | |
Lenders percentage of loan holdings under debt agreement | 50.00% | |
2016 Revolving Credit Facility | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Unused capacity, commitment fee percentage | 0.25% | |
2016 Revolving Credit Facility | Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Unused capacity, commitment fee percentage | 0.35% | |
2016 Revolving Credit Facility | Letter of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letters of credit, borrowing capacity | $ 150 | |
2016 Revolving Credit Facility | Term Loan | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Revolving credit facility, maximum borrowing capacity | $ 200 | |
2016 Revolving Credit Facility | ABR Loans | Federal Reserve Bank of New York Rate | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 0.50% | |
2016 Revolving Credit Facility | ABR Loans | Adjusted London Interbank Offered Rate | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.00% | |
2016 Revolving Credit Facility | ABR Loans | Applicable Rate | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 0.50% | |
2016 Revolving Credit Facility | ABR Loans | Applicable Rate | Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.00% | |
2016 Revolving Credit Facility | Eurodollar Loans | Applicable Rate | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.50% | |
2016 Revolving Credit Facility | Eurodollar Loans | Applicable Rate | Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 2.00% | |
2014 Amended and Restated Credit Agreement | Minimum | ||
Subsequent Event [Line Items] | ||
Unused capacity, commitment fee percentage | 0.25% | |
2014 Amended and Restated Credit Agreement | Maximum | ||
Subsequent Event [Line Items] | ||
Unused capacity, commitment fee percentage | 0.45% | |
Term Loan | 2014 Amended and Restated Credit Agreement | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repayments of long-term debt | $ 300 |
Schedule I CONDENSED FINANCIA72
Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||||||||||
Investment and other income | $ 15.4 | $ 44.4 | $ 18.8 | ||||||||
Total revenues | $ 3,496.8 | $ 3,441 | $ 3,482.5 | $ 3,469.9 | $ 3,414.8 | $ 3,407.5 | $ 3,151.9 | $ 2,985.7 | 13,890.2 | 12,959.9 | 9,527.9 |
Expenses: | |||||||||||
Selling, general and administrative | 1,132.9 | 1,018.8 | 856.5 | ||||||||
Interest expense | 54.2 | 39.4 | 11.9 | ||||||||
Total expenses | 13,554.1 | 12,811.6 | 9,246.8 | ||||||||
Income (loss) from operations | 36.3 | 104.7 | 140.7 | 54.4 | 56.1 | 69.5 | (14.6) | 37.3 | 336.1 | 148.3 | 281.1 |
Loss on extinguishment of debt | 0 | 0 | (2.8) | ||||||||
Loss before income taxes | 36.3 | 104.7 | 140.7 | 54.4 | 54 | 61.7 | (3.5) | 65.6 | 336.1 | 177.8 | 278.3 |
Income tax benefit | (217.5) | (114.1) | (103) | ||||||||
Net income | $ 13 | $ 36.4 | $ 51.7 | $ 17.5 | $ 7.7 | $ 19.3 | $ (7.5) | $ 44.1 | 118.6 | 63.7 | 175.3 |
Other comprehensive income, before tax: | |||||||||||
Change in net unrealized gains and losses on available-for-sale securities | (1.9) | 0.5 | (0.8) | ||||||||
Income tax expense related to other comprehensive income | (0.3) | (0.2) | (0.3) | ||||||||
Other comprehensive income, net of tax | (1.6) | 0.7 | (0.5) | ||||||||
Comprehensive income | 117 | 64.4 | 174.8 | ||||||||
Parent Company | |||||||||||
Revenues: | |||||||||||
Investment and other income | 0.5 | 0.9 | 0.2 | ||||||||
Total revenues | 0.5 | 0.9 | 0.2 | ||||||||
Expenses: | |||||||||||
Selling, general and administrative | 22.1 | 18.1 | 15.2 | ||||||||
Interest expense | 54.2 | 39.3 | 11.8 | ||||||||
Total expenses | 76.3 | 57.4 | 27 | ||||||||
Income (loss) from operations | (75.8) | (56.5) | (26.8) | ||||||||
Loss on extinguishment of debt | 0 | 0 | (2.8) | ||||||||
Loss before income taxes | (75.8) | (56.5) | (29.6) | ||||||||
Income tax benefit | 23.9 | 17.5 | 8.9 | ||||||||
Loss before equity in subsidiaries | (51.9) | (39) | (20.7) | ||||||||
Equity in earnings of subsidiaries | 170.5 | 102.7 | 196 | ||||||||
Net income | 118.6 | 63.7 | 175.3 | ||||||||
Other comprehensive income, before tax: | |||||||||||
Change in net unrealized gains and losses on available-for-sale securities | (1.9) | 0.5 | (0.8) | ||||||||
Income tax expense related to other comprehensive income | (0.3) | (0.2) | (0.3) | ||||||||
Other comprehensive income, net of tax | (1.6) | 0.7 | (0.5) | ||||||||
Comprehensive income | $ 117 | $ 64.4 | $ 174.8 |
Schedule I CONDENSED FINANCIA73
Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 2,407 | $ 1,313.5 | $ 1,482.5 | $ 1,100.5 |
Short-term investments | 204.4 | 172.8 | ||
Taxes receivable | 50.6 | 0 | ||
Total current assets | 4,268.5 | 3,526.3 | ||
Total Assets | 5,193.6 | 4,495 | ||
Current portion of long-term debt | 300 | 0 | ||
Total current liabilities | 2,441.6 | 1,935.7 | ||
Long-term debt | 912.1 | 900 | ||
Other liabilities | 24.2 | 15 | ||
Total Liabilities | $ 3,465.3 | $ 2,899.1 | ||
Commitments and contingencies (see Note 13) | ||||
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, 44,113,328 and 43,914,106 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 0.4 | 0.4 | ||
Paid-in capital | 518.4 | 503 | ||
Retained earnings | 1,211.7 | 1,093.1 | ||
Accumulated other comprehensive loss | (2.2) | (0.6) | ||
Total Stockholders' Equity | 1,728.3 | 1,595.9 | 1,517.9 | 1,323.1 |
Total Liabilities and Stockholders' Equity | 5,193.6 | 4,495 | ||
Parent Company | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 108.6 | 1.4 | $ 271.3 | $ 3.7 |
Short-term investments | 2.2 | 36.9 | ||
Taxes receivable | 1.9 | 3.6 | ||
Affiliate receivables and other current assets | 1,086.2 | 876.6 | ||
Total current assets | 1,198.9 | 918.5 | ||
Deferred tax asset | 9.6 | 11.6 | ||
Investment in subsidiaries | 1,739.5 | 1,568.4 | ||
Deposits and other assets | 8.9 | 8.8 | ||
Total Assets | 2,956.9 | 2,507.3 | ||
Current portion of long-term debt | 300 | 0 | ||
Accrued expenses and other current liabilities | 6.6 | 5.1 | ||
Total current liabilities | 306.6 | 5.1 | ||
Long-term debt | 912.1 | 900 | ||
Other liabilities | 9.9 | 6.3 | ||
Total Liabilities | 1,228.6 | 911.4 | ||
Commitments and contingencies (see Note 13) | 0 | 0 | ||
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, 44,113,328 and 43,914,106 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 0.4 | 0.4 | ||
Paid-in capital | 518.4 | 503 | ||
Retained earnings | 1,211.7 | 1,093.1 | ||
Accumulated other comprehensive loss | (2.2) | (0.6) | ||
Total Stockholders' Equity | 1,728.3 | 1,595.9 | ||
Total Liabilities and Stockholders' Equity | $ 2,956.9 | $ 2,507.3 |
Schedule I CONDENSED FINANCIA74
Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheets (Parenthetical) (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Condensed Financial Statements, Captions [Line Items] | ||
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) | 44,113,328 | 43,914,106 |
Common stock, outstanding (in shares) | 44,113,328 | 43,914,106 |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
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) | 44,113,328 | 43,914,106 |
Common stock, outstanding (in shares) | 44,113,328 | 43,914,106 |
Schedule I CONDENSED FINANCIA75
Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | $ 712.6 | $ 299.3 | $ 178.9 |
Cash used in investing activities: | |||
Net cash used in investing activities | (124.2) | (75.6) | (290.5) |
Cash provided by financing activities: | |||
Proceeds from debt, net of financing costs paid | 308.9 | 298.6 | 816.4 |
Proceeds from exercises of stock options | 0.3 | 0.5 | 10.3 |
Incremental tax benefit from stock-based compensation | 1.9 | 0.6 | 3.6 |
Repurchase and retirement of shares to satisfy tax withholding requirements | (7) | (3.1) | (4.1) |
Payments on debt | 0 | 0 | (365) |
Net cash provided by (used in) financing activities | 505.1 | (392.7) | 493.6 |
Cash and cash equivalents: | |||
Increase (decrease) in cash and cash equivalents | 1,093.5 | (169) | 382 |
Balance at beginning of period | 1,313.5 | 1,482.5 | 1,100.5 |
Balance at end of period | 2,407 | 1,313.5 | 1,482.5 |
Parent Company | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 146.5 | 83.4 | 204.9 |
Cash used in investing activities: | |||
Net proceeds (payments) from purchases and sales and maturities of investments | 33.1 | (33.9) | 0 |
Payments to subsidiaries, net | (376.5) | (616) | (398.5) |
Net cash used in investing activities | (343.4) | (649.9) | (398.5) |
Cash provided by financing activities: | |||
Proceeds from debt, net of financing costs paid | 308.9 | 298.6 | 816.4 |
Proceeds from exercises of stock options | 0.3 | 0.5 | 10.3 |
Incremental tax benefit from stock-based compensation | 1.9 | 0.6 | 3.6 |
Repurchase and retirement of shares to satisfy tax withholding requirements | (7) | (3.1) | (4.1) |
Payments on debt | 0 | 0 | (365) |
Net cash provided by (used in) financing activities | 304.1 | 296.6 | 461.2 |
Cash and cash equivalents: | |||
Increase (decrease) in cash and cash equivalents | 107.2 | (269.9) | 267.6 |
Balance at beginning of period | 1.4 | 271.3 | 3.7 |
Balance at end of period | $ 108.6 | $ 1.4 | $ 271.3 |
Schedule II Valuation and Qua76
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for uncollectible accounts [Roll Forward] | |||
Balance at Beginning of Period | $ 22.5 | $ 17.2 | $ 16.3 |
Charged to Costs and Expenses | 14.6 | 15.2 | 10.6 |
Write Offs | 13.8 | 9.9 | 9.7 |
Balance at End of Period | 23.3 | 22.5 | 17.2 |
Premiums receivable | |||
Allowance for uncollectible accounts [Roll Forward] | |||
Balance at Beginning of Period | 21.1 | 15.8 | 14.8 |
Charged to Costs and Expenses | 12.6 | 15.2 | 10.7 |
Write Offs | 13.8 | 9.9 | 9.7 |
Balance at End of Period | 19.9 | 21.1 | 15.8 |
Medical Advances | |||
Allowance for uncollectible accounts [Roll Forward] | |||
Balance at Beginning of Period | 1.4 | 1.4 | 1.5 |
Charged to Costs and Expenses | 2 | 0 | (0.1) |
Write Offs | 0 | 0 | 0 |
Balance at End of Period | $ 3.4 | $ 1.4 | $ 1.4 |