Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Note 3 – Stockholders’ Equity |
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Stock Plans—The following table summarizes activity under our 2014 Equity Incentive Plan, 2006 Equity Incentive Plan, 1998 Stock Plan and 2005 Stock Plan (collectively, the “Stock Plans”) (in thousands): |
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| Shares Available for Grant | | | | | | | | | | |
Shares available for grant December 31, 2014 | 4,164 | | | | | | | | | | | |
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Restricted stock units granted | (200 | ) | | | | | | | | | | |
Restricted stock units cancelled (1) | 19 | | | | | | | | | | | |
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Options cancelled (2) | 9 | | | | | | | | | | | |
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Shares available for grant March 31, 2015 | 3,992 | | | | | | | | | | | |
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-1 | Restricted stock units cancelled does not include 9,000 restricted stock units cancelled under the 2006 Equity Incentive Plan. | | | | | | | | | | | |
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-2 | Options cancelled does not include 116,000 stock options cancelled under the 2006 Equity Incentive Plan. | | | | | | | | | | | |
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We maintain our 2006 Equity Incentive Plan, 2005 Stock Plan and 1998 Stock Plan, under which we previously granted options to purchase shares of our common stock and restricted stock units. The 2006 Equity Incentive Plan was terminated with respect to the grant of additional awards on June 12, 2014, upon adoption of our 2014 Equity Incentive Plan. The 2005 Stock Plan and 1998 Stock Plan were terminated with respect to the grant of additional awards upon the effectiveness of the 2006 Equity Incentive Plan. We will continue to issue new shares of common stock upon vesting of restricted stock units and the exercise of stock options previously granted under the 2006 Equity Incentive Plan, 2005 Stock Plan and 1998 Stock Plan. |
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The following table summarizes stock option activity under the Stock Plans (in thousands, except per share amounts and weighted average remaining contractual life data): |
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| Number of Stock Options | | Weighted Average Exercise Price | | Weighted-Average Remaining Contractual Life (years) | | Aggregate Intrinsic Value (1) |
Balance outstanding at December 31, 2014 | 1,724 | | | $ | 18.5 | | | 3.31 | | $ | 12,884 | |
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Granted | — | | | $ | — | | | | | | |
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Exercised | — | | | $ | — | | | | | $ | — | |
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Cancelled | (125 | ) | | $ | 22.66 | | | | | | |
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Balance outstanding at March 31, 2015 | 1,599 | | | $ | 18.17 | | | 3.12 | | $ | 80 | |
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Vested and expected to vest at March 31, 2015 | 1,571 | | | $ | 18.08 | | | 3.09 | | $ | 80 | |
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Exercisable at March 31, 2015 | 1,233 | | | $ | 17.01 | | | 2.68 | | $ | 80 | |
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-1 | The aggregate intrinsic value is calculated as the difference between eHealth’s closing stock price as of December 31, 2014 and March 31, 2015 and the exercise price of in-the-money options as of those dates. | | | | | | | | | | | |
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The total fair value of stock options vested during the three months ended March 31, 2014 and 2015 was $0.6 million and $0.5 million, respectively. |
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The following table summarizes restricted stock unit activity, including performance-based and market-based restricted stock unit activity, under the Stock Plans (in thousands, except per share amounts and weighted average remaining contractual life data): |
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| Number of Restricted Stock Units (1) | | Weighted-Average Grant Date Fair Value | | Weighted-Average Remaining Contractual Life (years) | | Aggregate Intrinsic Value (2) |
Balance outstanding as of December 31, 2014 | 873 | | | $ | 30.86 | | | 2.52 | | $ | 21,753 | |
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Granted | 200 | | | $ | 6.69 | | | | | | |
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Vested | (124 | ) | | $ | 17.95 | | | | | | |
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Cancelled | (28 | ) | | $ | 30.56 | | | | | | |
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Balance outstanding as of March 31, 2015 | 921 | | | $ | 27.37 | | | 2.93 | | $ | 8,642 | |
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-1 | Includes certain restricted stock units with both service and performance-based or market-based vesting criteria granted to our executive officers. | | | | | | | | | | | |
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-2 | The aggregate intrinsic value is calculated as eHealth’s closing stock price as of December 31, 2014 and March 31, 2015 multiplied by the number of restricted stock units outstanding as of December 31, 2014 and March 31, 2015, respectively. | | | | | | | | | | | |
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The fair value of the restricted stock units is based on eHealth’s stock price on the date of grant, and compensation expense related to these awards is recognized on a straight-line basis over the vesting period. The fair value of performance-based restricted stock units is based on eHealth’s stock price on the date of grant, and compensation expense related to these awards is recognized on an accelerated basis over the vesting period. The amount of expense recorded for performance-based restricted stock units is based on expected attainment of performance criteria. The total fair value of restricted stock units vested during the three months ended March 31, 2014 and 2015 was $8.4 million and $1.2 million, respectively. |
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Stock Repurchase Programs—We had no stock repurchase activity during the three months ended March 31, 2015. In addition to the shares repurchased under our past repurchase programs as of March 31, 2015, we have in treasury 327,947 shares that were previously surrendered by employees to satisfy tax withholdings due in connection with the vesting of certain restricted stock units. As of December 31, 2014 and March 31, 2015, we had a total of 10,945,607 shares and 10,991,835 shares, respectively, held in treasury. |
Stock-Based Compensation—In March 2015, we granted market-based stock unit awards to certain members of senior management. Each market-based stock unit award represents a contingent right to receive certain shares of the Company’s common stock upon the attainment of certain stock prices over a four-year performance period. Once a stock price threshold is achieved, the portion of the award related to that threshold will vest on the one-year anniversary of the date of achievement, subject to the employee's continued service through each vesting date. Compensation expense related to these awards is recognized on an accelerated basis over the requisite service period. The weighted-average fair value of the market-based stock unit awards was determined using the Monte Carlo simulation model incorporating the following weighted average assumptions: |
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| Three Months Ended March 31, | | | | | | | | | |
| 2015 | | | | | | | | | |
Expected term | 2.59 years | | | | | | | | | | |
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Expected volatility | 64.7 | % | | | | | | | | | |
Expected dividend yield | — | % | | | | | | | | | |
Risk-free interest rate | 1.13 | % | | | | | | | | | |
Weighted-average fair value | $ | 6.69 | | | | | | | | | | |
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The following table summarizes stock-based compensation expense recorded during the three months ended March 31, 2014 and 2015 (in thousands): |
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| Three Months Ended March 31, | | | | | |
| 2014 | | 2015 | | | | | |
Common stock options | $ | 642 | | | $ | 462 | | | | | | |
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Restricted stock units | 1,803 | | | 1,569 | | | | | | |
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Total stock-based compensation expense | $ | 2,445 | | | $ | 2,031 | | | | | | |
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The following table summarizes stock-based compensation expense by operating function for the three months ended March 31, 2014 and 2015 (in thousands): |
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| Three Months Ended March 31, | | | | | |
| 2014 | | 2015 | | | | | |
Marketing and advertising | $ | 657 | | | $ | 591 | | | | | | |
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Customer care and enrollment | 96 | | | 117 | | | | | | |
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Technology and content | 562 | | | 435 | | | | | | |
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General and administrative | 1,130 | | | 775 | | | | | | |
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Restructuring charges | — | | | 113 | | | | | | |
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Total stock-based compensation expense | $ | 2,445 | | | $ | 2,031 | | | | | | |
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