Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q4 | ||
Trading Symbol | EHTH | ||
Entity Registrant Name | eHealth, Inc. | ||
Entity Central Index Key | 1,333,493 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 146,341,400 | ||
Entity Common Stock, Shares Outstanding | 18,937,969 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 40,293 | $ 61,781 |
Accounts receivable | 9,894 | 9,213 |
Prepaid expenses and other current assets | 4,845 | 5,148 |
Total current assets | 55,032 | 76,142 |
Property and equipment, net | 4,705 | 5,608 |
Other assets | 7,317 | 4,473 |
Intangible assets, net | 7,540 | 8,580 |
Goodwill | 14,096 | 14,096 |
Total assets | 88,690 | 108,899 |
Current liabilities: | ||
Accounts payable | 3,246 | 5,112 |
Accrued compensation and benefits | 15,498 | 10,920 |
Accrued marketing expenses | 4,088 | 7,158 |
Deferred revenue | 385 | 959 |
Other current liabilities | 3,430 | 3,775 |
Total current liabilities | 26,647 | 27,924 |
Non-current liabilities | 900 | 3,374 |
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; Authorized shares: 10,000,000; Issued and outstanding shares: none | 0 | 0 |
Common stock: $0.001 par value; Authorized shares: 100,000,000; Issued shares: 29,492,141 and 29,879,952 at December 31, 2016 and 2017, respectively; Outstanding shares: 18,356,551 and 18,641,957 at December 31, 2016 and 2017, respectively | 30 | 29 |
Additional paid-in capital | 281,706 | 272,778 |
Treasury stock, at cost: 11,135,590 and 11,237,995 shares at December 31, 2016 and 2017, respectively | (199,998) | (199,998) |
Retained earnings (accumulated deficit) | (20,796) | 4,616 |
Accumulated other comprehensive income | 201 | 176 |
Total stockholders’ equity | 61,143 | 77,601 |
Total liabilities and stockholders’ equity | $ 88,690 | $ 108,899 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 29,879,952 | 29,492,141 |
Common Stock, Shares, Outstanding | 18,641,957 | 18,356,551 |
Treasury Stock, Shares | 11,237,995 | 11,135,590 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
Commission | $ 158,424 | $ 170,850 | $ 171,257 |
Other | 13,931 | 16,110 | 18,284 |
Total revenue | 172,355 | 186,960 | 189,541 |
Operating costs and expenses: | |||
Cost of revenue | 2,273 | 3,176 | 4,178 |
Marketing and advertising | 65,874 | 72,213 | 75,571 |
Customer care and enrollment | 59,183 | 48,718 | 43,159 |
Technology and content | 32,889 | 32,749 | 36,351 |
General and administrative | 39,969 | 35,216 | 30,239 |
Acquisition costs | 621 | 0 | 0 |
Restructuring charge (benefit) | 0 | (297) | 4,541 |
Amortization of intangible assets | 1,040 | 1,040 | 1,153 |
Total operating costs and expenses | 201,849 | 192,815 | 195,192 |
Loss from operations | (29,494) | (5,855) | (5,651) |
Other income (expense), net | 327 | 102 | 45 |
Loss before benefit from income taxes | (29,167) | (5,753) | (5,606) |
Benefit from income taxes | (3,755) | (871) | (843) |
Net loss | $ (25,412) | $ (4,882) | $ (4,763) |
Net income per share: | |||
Basic (in usd per share) | $ (1.37) | $ (0.27) | $ (0.26) |
Diluted (in usd per share) | $ (1.37) | $ (0.27) | $ (0.26) |
Weighted-average number of shares used in per share amounts: | |||
Basic (in shares) | 18,512 | 18,272 | 18,008 |
Diluted (in shares) | 18,512 | 18,272 | 18,008 |
Foreign currency translation adjustment, net of taxes | $ 25 | $ (17) | $ 14 |
Comprehensive loss | $ (25,387) | $ (4,899) | $ (4,749) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income |
Balance, shares at Dec. 31, 2014 | 28,776 | (10,946) | ||||
Beginning Balance at Dec. 31, 2014 | $ 73,478 | $ 29 | $ 259,007 | $ (199,998) | $ 14,261 | $ 179 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, shares | 395 | (80) | ||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards | 662 | $ 0 | 662 | |||
Stock-based compensation expense | 7,030 | 7,030 | ||||
Foreign currency translation adjustment, net of taxes | 14 | 14 | ||||
Net loss | (4,763) | (4,763) | ||||
Balance, shares at Dec. 31, 2015 | 29,171 | (11,026) | ||||
Ending Balance at Dec. 31, 2015 | 76,421 | $ 29 | 266,699 | $ (199,998) | 9,498 | 193 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, shares | 321 | (110) | ||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards | (1,187) | $ 0 | (1,187) | |||
Stock-based compensation expense | 7,266 | 7,266 | ||||
Foreign currency translation adjustment, net of taxes | (17) | (17) | ||||
Net loss | (4,882) | (4,882) | ||||
Balance, shares at Dec. 31, 2016 | 29,492 | (11,136) | ||||
Ending Balance at Dec. 31, 2016 | 77,601 | $ 29 | 272,778 | $ (199,998) | 4,616 | 176 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, shares | 388 | (102) | ||||
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards | (765) | $ 1 | (766) | |||
Stock-based compensation expense | 9,694 | 9,694 | ||||
Foreign currency translation adjustment, net of taxes | 25 | 25 | ||||
Net loss | (25,412) | (25,412) | ||||
Balance, shares at Dec. 31, 2017 | 29,880 | (11,238) | ||||
Ending Balance at Dec. 31, 2017 | $ 61,143 | $ 30 | $ 281,706 | $ (199,998) | $ (20,796) | $ 201 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net loss | $ (25,412) | $ (4,882) | $ (4,763) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 2,837 | 3,539 | 4,148 |
Capitalized Computer Software, Amortization | 1,464 | 936 | 627 |
Amortization of book-of-business consideration | 1,167 | 1,649 | 2,006 |
Amortization of intangible assets | 1,040 | 1,040 | 1,153 |
Stock-based compensation expense | 9,694 | 7,266 | 7,002 |
Deferred income taxes | (401) | 114 | 101 |
Other non-cash items | (101) | (233) | 106 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (681) | 434 | (1,447) |
Prepaid expenses and other assets | (1,933) | (486) | 997 |
Accounts payable | (1,866) | 2,227 | (2,949) |
Accrued compensation and benefits | 4,578 | (3,466) | 6,180 |
Accrued marketing expenses | (3,070) | (3,540) | 1,991 |
Deferred revenue | (574) | 567 | (642) |
Accrued restructuring charges | 0 | (433) | 433 |
Other current liabilities | (2,283) | (649) | (1,247) |
Net cash provided by (used in) operating activities | (15,541) | 4,083 | 13,696 |
Investing activities | |||
Capitalized Computer Software, Additions | (3,210) | (1,837) | (1,117) |
Purchases of property and equipment and other assets | (1,868) | (1,889) | (1,879) |
Net cash used in investing activities | (5,078) | (3,726) | (2,996) |
Financing activities | |||
Net proceeds from exercise of common stock options | 1,037 | 62 | 1,572 |
Cash used to net-share settle equity awards | (1,802) | (1,248) | (922) |
Principal payments in connection with capital leases | (105) | (83) | (73) |
Net cash provided by (used in) financing activities | (870) | (1,269) | 577 |
Effect of exchange rate changes on cash and cash equivalents | 1 | (17) | 18 |
Net increase (decrease) in cash and cash equivalents | (21,488) | (929) | 11,295 |
Cash and cash equivalents at beginning of period | 61,781 | 62,710 | 51,415 |
Cash and cash equivalents at end of period | 40,293 | 61,781 | 62,710 |
Capital lease obligations incurred | 76 | 51 | 156 |
Cash paid for interest | 20 | 14 | 34 |
Cash paid for income taxes, net of refunds | $ 219 | $ 628 | $ 6 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary Of Business And Significant Accounting Policies | Summary of Business and Significant Accounting Policies Description of Business— eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading private health insurance exchange for individuals, families and small businesses in the United States. Through our website addresses ( www.eHealth.com , www.eHealthInsurance.com , www.eHealthMedicare.com, www.Medicare.com, www.PlanPrescriber.com and www.GoMedigap.com) , consumers can get quotes from leading health insurance carriers, compare plans side-by-side, and apply for and purchase Medicare-related, individual and family, small business and ancillary health insurance plans. We actively market the availability of Medicare-related insurance plans and offer Medicare plan comparison tools and educational materials for Medicare-related insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans. Our ecommerce technology also enables us to deliver consumers’ health insurance applications electronically to health insurance carriers. We are licensed to market and sell health insurance in all 50 states and the District of Columbia. Principles of Consolidation — The consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Operating Segments — We report segment information based on how our chief executive officer, who is our chief operating decision maker ("CODM"), regularly reviews our operating results, allocates resources and makes decisions regarding our business operations. The performance measures of our segments include total revenue and profit (loss). Our business structure is comprised of two operating segments • Medicare and • Individual, Family and Small Business The Medicare segment consists primarily of commissions earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans, and to a lesser extent, ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision insurance, as well as our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities. The Individual, Family and Small Business segment consists primarily of commissions earned from our sale of individual and family and small business health insurance plans and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, dental, vision, life, short term disability and long term disability insurance. To a lesser extent, the Individual, Family and Small Business segment consists of amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website, our licensing to third parties the use of our health insurance ecommerce technology and our delivery and sale to third parties of individual and family health insurance leads generated by our ecommerce platforms and our marketing activities. Marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect marketing and advertising, customer care and enrollment and technology and content operating expenses are allocated to each segment based on usage. Other indirect general and administrative operating expenses are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the two operating segments and are presented as a reconciling item to our consolidated financial results. Segment profit (loss) is calculated as total revenue for the applicable segment less direct and allocated marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation, depreciation and amortization expense and amortization of intangible assets. Use of Estimates — The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the useful lives of intangible assets, fair value of investments, fair value of our acquired Medicare books-of-business, recoverability of intangible assets, estimates for commission forfeitures, valuation allowance for deferred income taxes, provision for income taxes and the assumptions used in determining stock-based compensation. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. Actual results may differ from these estimates. Reclassifications — For presentation purposes, certain prior period amounts have been reclassified to conform to the reporting in the current period financial statements. Specifically, for the years ended December 31, 2015 and 2016, we reclassified $0.6 million and $0.8 million , respectively, of operating expenses related to our licensing department, which was previously reported as general and administrative expense, to customer care and enrollment expense. This reclassification did not affect previously reported net loss, cash flows or stockholders' equity. Cash Equivalents— We consider all investments with an original maturity of 90 days or less from the date of purchase to be cash equivalents. Cash and cash equivalents are stated at fair value. Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. Capital lease amortization expenses are included in depreciation expense in our Consolidated Statements of Comprehensive Loss. Depreciation and amortization is computed using the straight-line method based on estimated useful lives as follows: Computer equipment and software 3 to 5 years Office equipment and furniture 5 years Leasehold improvements Lesser of useful life (typically 5 to 10 years) or related lease term Maintenance and minor replacements are expensed as incurred. See Note 2 - Balance Sheet Accounts of the Notes to Consolidated Financial Statements for additional information regarding our property and equipment. Business Combinations — We allocate the fair value of the purchase consideration of our acquired businesses to the tangible assets, liabilities and intangible assets acquired based on their estimated fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related costs are recognized separately from the business combination and are expensed as incurred. Goodwill and Intangible Assets— Goodwill represents the excess of the consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business combination. In the event that we realign our reporting units, we allocate our goodwill to the new reporting units using the relative fair value approach. We test our goodwill for impairment on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances indicate that the asset may be impaired. Factors that we consider in deciding when to perform an impairment test include significant negative industry or economic trends or significant changes or planned changes in our use of the intangible assets. We realigned our reporting units into two operating segments during the year ended December 31, 2016, at which time we allocated $3.7 million and $10.4 million of the carrying value of the goodwill to the Medicare and Individual, Family and Small Business segments, respectively, based on the relative fair value of the operating segments. We continued to report the same two segments during the year ended December 31, 2017 and no goodwill impairment has been identified in any of the years presented. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate a potential reduction in their fair values below their respective carrying amounts. Intangible assets with finite useful lives, which include purchased technology, pharmacy and customer relationships, trade names, and certain trademarks, are amortized over their estimated useful lives. Goodwill and intangible assets are considered non-financial assets and therefore, subsequent to their initial recognition are not revalued at fair value each reporting period unless an impairment charge is recognized. We must make subjective judgments in determining the independent cash flows that can be related to specific asset groupings. In addition, we must make subjective judgments regarding the remaining useful lives of assets with finite useful lives. When we determine that the useful life of an asset is shorter than we had originally estimated, we accelerate the rate of amortization over the assets’ new, remaining useful life. We evaluated the remaining useful lives of our intangible assets with finite lives and determined no material adjustments to the remaining lives were required. Book-of-Business Transfers— We have entered into several agreements with a broker partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies. The first of these book-of-business transfers occurred in November 2010 and the most recent in June 2012. Total consideration for these books-of-business amounted to $13.9 million . Consideration for these books-of-business is included in prepaid expenses and other current assets and in other assets in the accompanying Consolidated Balance Sheets. The consideration, which was based on the discounted commissions expected to be received over the remaining life of each transferred Medicare plan member, is being amortized to cost of revenue in the Consolidated Statements of Comprehensive Loss and is presented as amortization of book-of-business consideration in the Consolidated Statements of Cash Flows as we recognize commission revenue related to the transferred Medicare plan members. The amount of consideration we amortize to cost of revenue each quarter is proportional to the amount of commission revenue we recognize on the underlying policies each quarter in relation to the total amount of remaining commission revenue expected to be recognized. Amortization expense recorded to cost of revenue for these books-of-business for the years ended December 31, 2015, 2016 and 2017 totaled $2.0 million , $1.6 million and $1.2 million , respectively. Other Long-Lived Assets— We evaluate other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Revenue Recognition— We recognize revenue for our services when each of the following four criteria is met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured. Our revenue is primarily comprised of compensation paid to us by health insurance carriers related to insurance plans that have been purchased by a member who used our service. We define a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which we are entitled to receive compensation from an insurance carrier. For both Medicare Advantage and Medicare Part D prescription drug plans, we receive a fixed, annual commission payment from insurance carriers once the plan is approved by the carrier and either a fixed, monthly or annual commission payment beginning with and subsequent to the second plan year. Additionally, commission rates may be higher in the first twelve months of the plan if the plan is the first Medicare Advantage or Medicare Part D prescription drug plan issued to the member. In the first plan year of a Medicare Advantage and Medicare Part D prescription drug plan, after the health insurance carrier approves the application but during the effective year of the plan, we are paid a fixed commission that is prorated for the number of months remaining in the calendar year. Additionally, if the plan is the first Medicare Advantage or Medicare Part D plan issued to the member, we may receive a higher commission rate that covers a full twelve-month period, regardless of the month the plan was effective. We earn commission revenue for Medicare Advantage and Medicare Part D prescription drug plans for which we are the broker of record, typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. We recognize commission revenue for both Medicare Advantage and Medicare Part D prescription drug plans for the entire plan year once the annual or first monthly commission amount for the plan year is reported to us by the carrier, net of an estimate for future forfeiture amounts due to plan cancellations. For commissions paid to us on a monthly basis, we record a receivable for the commission amounts to be received over the remainder of the plan year, net of an estimate for commission amounts not expected to be collected due to plan cancellations, which is included in Accounts Receivable in the accompanying Consolidated Balance Sheets. We continue to receive the commission payments from the relevant insurance carrier typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier. Our services are complete when a carrier has approved an application in the initial year and when a member has renewed in a renewal year. The seller’s price is fixed or determinable and collectability is reasonably assured when a carrier has approved an application and the carrier reports to us the annual or first monthly renewal commission amount for each plan year. For individual and family, Medicare Supplement, small business and ancillary plans, our compensation generally represents a flat amount per member per month or a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a much lesser extent, override commissions that health insurance carriers pay us for achieving certain objectives. Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis. We generally continue to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or we otherwise do not remain the agent on the policy. We recognize commission revenue for individual and family, Medicare Supplement, small business and ancillary plans as the commissions are reported to us by the carrier, net of an estimate for future forfeiture amounts due to policy cancellations. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier, a carrier reports to us that it has approved an application submitted through our ecommerce platform and the applicant starts making payments on the plan. Our services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to us by a carrier. We recognize individual and family, small business and ancillary commission override revenue when reported to us by a carrier based on the actual attainment of predetermined target sales levels or other objectives as determined by the carrier. Commission override revenue, which we recognize on the same basis as individual and family, small business and ancillary commissions, is generally reported to us in a more irregular pattern than such commissions. Commissions for all health insurance plans we sell are reported to us by a cash payment and commission statement. We generally receive these communications simultaneously. In instances when we receive the cash payment and commission statement separately and in different accounting periods, we recognize revenue in the period that we receive the earliest communication, provided we receive the second corroborating communication shortly following the end of the accounting period. If the second corroborating communication is not received shortly following the end of the accounting period, we recognize revenue in the period the second communication is received. During 2014, the Centers for Medicare and Medicaid Services (“CMS”) issued a regulation prohibiting carriers from paying commissions during the fourth quarter on Medicare Advantage and Medicare Part D prescription drug plans sold during the fourth quarter with an effective date in the following year. During the fourth quarters of 2015, 2016 and 2017, we recognized revenue for policies included on a commission statement received for those periods, respectively, for which payment was received shortly after year-end and in connection with the carriers’ normal payment cycle during the first quarters of 2016, 2017 and 2018. We use the data in the commission statements to help identify the members for which we are receiving a commission payment and the amount received for each member, and to estimate future forfeiture amounts due to policy cancellations. As a result, we recognize the net amount of compensation earned as the agent in the transaction. Changes in our historical trends would result in changes to our estimated forfeitures in future periods. There were no changes in our average forfeiture rates or reporting time lag during the years ended December 31, 2015, 2016 and 2017, which had a material impact on our estimate for forfeitures. Certain commission amounts are subject to forfeiture if the plan is subsequently cancelled and either the carrier takes back all or a portion of the commission they have paid to us or we will no longer receive monthly commission payments for the remainder of the plan year. We record an estimate for these forfeitures based on our historical cancellation experience using data provided on commission statements. Policy cancellations and the commission amounts, if any, to be taken back by the carrier are typically reported to us by health insurance carriers several months after the policy’s cancellation date. Our estimate for forfeitures payable to a carrier, which is included in other current liabilities in the Consolidated Balance Sheets, includes an estimate of both the reporting time lag and the forfeiture amount, based on our historical experience by policy type. Similarly, our estimate for commission amounts not expected to be collected due to policy cancellations, which is recorded as a reduction of accounts receivable in the Consolidated Balance Sheets, includes an estimate of the annual policy cancellation rate, based on our historical experience by policy type. Other Revenue Our sponsorship and advertising program allows carriers to purchase advertising space in specific markets in a sponsorship area on our website. In return, we are typically paid a monthly fee, which is recognized over the period that advertising is displayed, and often a performance fee based on metrics such as submitted health insurance applications, which is recognized when the earned amounts are fixed and determinable. We also offer Medicare advertising services, which include website development, hosting and maintenance. In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue over the service period. Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and agents to utilize our technology to power their online quoting, content and application submission processes. Typically, we are paid a one-time implementation fee, which we recognize on a straight-line basis over the estimated term of the customer relationship (generally the initial term of the agreement), commencing once the technology is available for use by the third party, and a performance fee based on metrics such as submitted health insurance applications. The metrics used to calculate performance fees for both sponsorship and advertising and technology licensing are based on performance criteria that are either measured based on data tracked by us, or based on data tracked by the third party. In instances where the performance criteria data is tracked by us, we recognize revenue in the period of performance and when all other revenue recognition criteria has been met. In instances where the performance criteria data is tracked by the third party, we recognize revenue when the amounts earned are either fixed or determinable and collection is reasonably assured. Typically, this occurs through our receipt of a cash payment from the third party along with a detailed statement containing the data that is tracked by the third party. Deferred Revenue— Deferred revenue includes deferred technology licensing implementation fees and amounts billed for deliverables, including professional services, in multiple element arrangements that do not have stand-alone value from other, undelivered elements, as well as amounts billed or collected from sponsorship or technology licensing customers in advance of our performing our service for such customers. It also includes the amount by which both unbilled and billed services provided under our technology licensing arrangements exceed the straight-line revenue recognized to date. We defer commission amounts that have been paid to us related to transactions where our services are complete, but where we cannot currently estimate future forfeitures related to those amounts. We allocate revenue to all units of accounting within an arrangement with multiple deliverables at the inception of the arrangement using the relative selling price method. The relative selling price method allocates any discount in an arrangement proportionally to each deliverable on the basis of each deliverable’s relative selling price. The relative selling price established for each deliverable is based on vendor-specific objective evidence of fair value (“VSOE”) if available, third-party evidence of selling price if VSOE is not available, or best estimate of selling price if neither VSOE nor third-party evidence is available. When used, the best estimate of selling price reflects our best estimates of what the selling prices of certain deliverables would be if they were sold regularly on a stand-alone basis. Our process for determining best estimate of selling price for deliverables without VSOE or third-party evidence of selling price considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. Key factors considered by us in developing the relative selling prices for our technology licensing fees include prices charged by us for similar offerings and our historical pricing practices. We may also consider additional factors as appropriate, including competition. A deliverable constitutes a separate unit of accounting when it has stand-alone value and there are no customer-negotiated right of refunds for the delivered elements. If the arrangement includes a customer-negotiated right of refund relative to the delivered item, and the delivery and performance of the undelivered item is considered probable and substantially in our control, the delivered element constitutes a separate unit of accounting. In circumstances when the aforementioned criteria are not met, the deliverable is combined with the undelivered elements, and the allocation of the arrangement consideration and revenue recognition is determined for the combined unit as a single unit. Allocation of the consideration is determined at the inception of the arrangement on the basis of each unit’s relative selling price. After the arrangement consideration has been allocated to each unit of accounting based on their relative selling prices, we apply revenue recognition criteria separately to each respective unit of accounting in the arrangement in accordance with applicable accounting guidance. Cost of Revenue— Included in cost of revenue are payments related to health insurance policies sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements. In order to enter into a revenue-sharing arrangement, marketing partners must be licensed to sell health insurance in the state where the policy is sold. Costs related to revenue-sharing arrangements are expensed as the related revenue is recognized. Additionally, cost of revenue includes the amortization of consideration we paid to a broker partner in connection with the transfer of their Medicare-related health insurance members to us as the new broker of record on the underlying policies. Marketing and Advertising Expenses— Marketing and advertising expenses consist primarily of member acquisition expenses associated with our direct, marketing partner and online advertising member acquisition channels, in addition to compensation and other expenses related to marketing, business development, partner management, public relations and carrier relations personnel who support our offerings. Advertising costs incurred in the years ended December 31, 2015, 2016 and 2017 totaled $66.5 million , $64.8 million and $56.0 million , respectively. Our direct channel expenses primarily consist of costs for direct mail, email marketing and television and radio advertising. Advertising costs for our direct channel are expensed the first time the related advertising takes place. Our marketing partner channel expenses primarily consist of fees paid to marketing partners with which we have a relationship. Our online advertising channel expenses primarily consist of paid keyword search advertising on search engines and retargeting campaigns. Advertising costs for our marketing partner channel and our online advertising channel are expensed as incurred. Research and Development Expenses— Research and development expenses consist primarily of compensation and related expenses incurred for employees on our engineering and technical teams. Research and development costs, which totaled $10.6 million , $8.9 million and $7.6 million for the years ended December 31, 2015, 2016 and 2017, respectively, are included in technology and content expense in the accompanying Consolidated Statements of Comprehensive Loss. Deferred Contract Costs— Deferred contract costs primarily represent direct costs related to professional services provided in connection with technology licensing arrangements that are accounted for as a single unit of accounting. The direct professional services costs are deferred up until the commencement of revenue recognition of the single unit and then recognized as cost of revenue ratably over the same period as the related revenue. Internal-Use Software and Website Development Costs— We capitalize costs of materials, consultants and compensation and benefits costs of employees who devote time to the development of internal-use software during the application development stage. Our judgment is required in determining the point at which various projects enter the phases at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized, which is generally three years. For the years ended December 31, 2015, 2016 and 2017, we capitalized internal-use software and website development costs of $1.1 million , $1.8 million and $3.2 million , respectively, and recorded amortization expense of $0.6 million , $0.9 million and $1.5 million , respectively. Stock-Based Compensation— We recognize stock-based compensation expense in the accompanying Consolidated Statements of Comprehensive Loss based on the fair value of our stock-based awards over their respective vesting periods, which is generally four years. The estimated grant date fair value of our stock options is determined using the Black-Scholes-Merton pricing model and a single option award approach. The weighted-average expected term for stock options granted is calculated using historical option exercise behavior. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date stock price. Through December 31, 2017, we had not declared or paid any cash dividends, and we do not expect to pay any in the foreseeable future. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of our stock options. Expected volatility is determined using a combination of the implied volatility of publicly traded options in our stock and historical volatility of our stock price. The estimated attainment of performance-based awards and related expense is based on the expectations of revenue and earnings target achievement. The estimated fair value of performance awards with market conditions is determined using the Monte-Carlo simulation model. The assumptions used in calculating the fair value of stock-based payment awards and expected attainment of performance-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. We will continue to use judgment in evaluating the expected term and volatility related to our own stock-based awards on a prospective basis, and incorporating these factors into the model. Changes in key assumptions could significantly impact the valuation of such instruments. 401(k) Plan— In September 1998, our board of directors adopted a defined contribution retirement plan (401(k) Plan), which qualifies under Section 401(k) of the Internal Revenue Code of 1986. Participation in the 401(k) Plan is available to substantially all employees in the United States. Employees can contribute up to 25% of their salary, up to the federal maximum allowable limit, on a before-tax basis to the 401(k) Plan. Employee contributions are fully vested when contributed. Our contributions to the 401(k) Plan are discretionary and are expensed when incurred. We also match employee contributions to our 401(k) Plan at 25% of an employee’s contribution each pay period, up to a maximum of 1% of the employee’s salary during such pay period. Our matching contributions are expensed as incurred and vest one-third for each of the first three years of the recipient’s service. The recipient is fully vested in all 401(k) Plan matching contributions after three years of service. We recognized expense of $0.3 million , $0.3 million and $0.4 million for the years ended December 31, 2015, 2016 and 2017, respectively, related to 401(k) matching contributions. Income Taxes— We account for income taxes using the liability method. Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse. We utilize a two-step approach for evaluating uncertain tax positions. Step one, Recognition , requires a company to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processe |
Balance Sheet Accounts
Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Accounts | Balance Sheet Accounts Cash and Cash Equivalents— As of December 31, 2016 and December 31, 2017 , our cash equivalents consisted of money market accounts that invested in U.S. government-sponsored enterprise bonds and discount notes, U.S. government treasury bills and notes and repurchase agreements collateralized by U.S. government obligations. As of December 31, 2016 and December 31, 2017 , our cash equivalents carried no unrealized gains or losses and we did not realize any significant gains or losses on sales of cash equivalents during the years ended December 31, 2016 and 2017. As of December 31, 2016 and December 31, 2017 , our cash and cash equivalent balances were invested as follows (in thousands): December 31, 2016 December 31, 2017 Cash $ 4,066 $ 5,098 Money market funds 57,715 35,195 Total cash and cash equivalents $ 61,781 $ 40,293 Concentration of Credit Risk— Our financial instruments that are exposed to concentrations of credit risk principally consist of cash, cash equivalents and accounts receivable. We invest our cash and cash equivalents with major banks and financial institutions and, at times, such investments are in excess of federally insured limits. We also have deposits with major banks in China that are denominated in both U.S. dollars and Chinese Yuan Renminbi and are not insured by the U.S. federal government. We do not require collateral or other security for our accounts receivable. As of December 31, 2016, three customers represented 23% , 20% and 11% , respectively, for a combined total of 54% of our $9.2 million outstanding accounts receivable balance. As of December 31, 2017 , two customers represented 23% and 22% , respectively, or a combined total of 45% , of our $9.9 million outstanding accounts receivable balance. No other customers represented 10% or more of our total accounts receivable at December 31, 2016 and December 31, 2017. We believe the potential for collection issues with any of our customers was minimal as of December 31, 2017. Accordingly, our estimate for uncollectible amounts at December 31, 2017 was not material. Accounts Receivable— As of December 31, 2016 and December 31, 2017 , our accounts receivable consisted of the following (in thousands): December 31, 2016 December 31, 2017 Commissions receivable $ 7,265 $ 8,419 Accounts receivable – other revenue 1,948 1,475 Total accounts receivable $ 9,213 $ 9,894 The commissions receivable balance as of December 31, 2016 and December 31, 2017, primarily relates to Medicare Advantage and Medicare Part D plans sold during the fourth quarter of 2016 and 2017 with effective dates in 2017 and 2018, respectively. Commissions receivable were recorded net of forfeiture reserves totaling $1.1 million , $1.6 million and $1.5 million as of December 31, 2015, 2016 and 2017, respectively. To date, our estimates have not materially differed from actual results. Prepaid Expenses and Other Current Assets- Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2016 December 31, 2017 Prepaid maintenance contracts $ 2,026 $ 1,945 Book-of-business transfers, net 1,071 539 Prepaid insurance 541 490 Prepaid rent 370 311 Other current assets 1,140 1,560 Prepaid expenses and other current assets $ 5,148 $ 4,845 Property and Equipment- Property and equipment consisted of the following (in thousands): December 31, 2016 December 31, 2017 Computer equipment and software $ 17,524 $ 17,112 Office equipment and furniture 3,490 3,583 Leasehold improvements 3,173 3,156 Property and equipment, gross 24,187 23,851 Less accumulated depreciation and amortization (18,579 ) (19,146 ) Property and equipment, net $ 5,608 $ 4,705 Depreciation and amortization expense related to property and equipment totaled $4.1 million , $3.5 million and $2.8 million in the years ended December 31, 2015, 2016 and 2017, respectively. Other Assets- Other assets consisted of the following (in thousands): December 31, 2016 December 31, 2017 Capitalized project costs $ 2,735 $ 4,481 Security deposits 589 545 Deferred tax assets 204 232 Book-of-business transfers, net 665 30 Other assets 280 2,029 Other assets $ 4,473 $ 7,317 Intangible Assets- The carrying amounts, accumulated amortization, net carrying value and weighted average remaining life of our definite-lived amortizable intangible assets, as well as our indefinite-lived intangible trademarks, are presented in the tables below for (dollars in thousands, weighted-average useful life is as of December 31, 2017): December 31, 2016 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life Technology $ 1,700 $ (1,700 ) $ — $ 1,700 $ (1,700 ) $ — 0 years Pharmacy and customer relationships 10,100 (6,934 ) 3,166 10,100 (7,884 ) 2,216 2.3 years Trade names, trademarks and website addresses 907 (607 ) 300 907 (697 ) 210 2.3 years Total intangible assets subject to amortization $ 12,707 $ (9,241 ) 3,466 $ 12,707 $ (10,281 ) $ 2,426 Indefinite-lived trademarks and domain names 5,114 5,114 Indefinite Intangible assets $ 8,580 $ 7,540 During the years ended December 31, 2015, 2016 and 2017, amortization expense related to intangible assets totaled $1.2 million , $1.0 million and $1.0 million , respectively. As of December 31, 2017, expected amortization expense in future periods is as follows (in thousands): Years Ending December 31, Pharmacy and Customer Relationships Trade Names, Trademarks and Website Addresses Total 2018 950 $ 90 $ 1,040 2019 950 90 1,040 2020 316 30 346 Total $ 2,216 $ 210 $ 2,426 Other Current Liabilities- Other current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2017 Payable to carriers – estimate for forfeitures $ 3,030 $ 1,807 Professional fees 307 1,012 Other accrued expenses 438 611 Total other current liabilities $ 3,775 $ 3,430 Non-current Liabilities- Non-current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2017 Deferred rent – non-current $ 830 $ 724 Income tax payable – non-current 1,978 19 Deferred tax liabilities 443 71 Other non-current liabilities 123 86 Total non-current liabilities $ 3,374 $ 900 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques we use to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or Inputs other than quoted prices that are observable for the asset or liability Level 3 Unobservable inputs for the asset or liability Our cash equivalents were invested in money market funds and were classified as Level 1. We endeavor to utilize the best available information in measuring fair value. We used observable prices in active markets in determining the classification of our money market funds as Level 1. The following table is a summary of financial assets measured at fair value on a recurring basis and their classification within the fair value hierarchy (in thousands). December 31, 2016 December 31, 2017 Carrying Value Level 1 Total Carrying Value Level 1 Total Assets Money market funds $ 57,715 $ 57,715 $ 57,715 $ 35,195 $ 35,195 $ 35,195 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholder's Equity Preferred Stock -Our board of directors has the authority, without any further action by our stockholders, to issue up to 110,000,000 shares, par value $0.001 per share, of which 10,000,000 shares are designated as preferred stock. As of December 31, 2016 and 2017, there were no shares of preferred stock outstanding. Common Stock -On all matters submitted to our stockholders for vote, our common stockholders are entitled to one vote per share, voting together as a single class, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose. Subject to preferences that may apply to any shares of preferred stock outstanding, the holders of common stock are entitled to share equally in any dividends, when and if declared by our board of directors. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share equally in all assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock. Holders of common stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking funds provisions applicable to the common stock. Shares Reserved -We generally issue previously unissued common stock upon the exercise of stock options, the vesting of restricted stock units and upon granting of restricted common stock awards; however we may reissue previously acquired treasury shares to satisfy these future issuances. Shares of authorized but unissued common stock reserved for future issuance were as follows (in thousands): December 31, 2017 Common stock: Stock options issued and outstanding 983 Restricted stock units issued and outstanding 1,745 Shares available for grant 1,409 Total shares reserved 4,137 Stock Plans- On June 12, 2014, upon approval at the Annual Meeting of Stockholders, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan replaced the 2006 Equity Incentive Plan and 4,500,000 shares were authorized for issuance under the 2014 Plan. The 2014 Plan does not include an evergreen provision to automatically increase the number of shares available under it and increases in the number of shares authorized for issuance under the 2014 Plan require stockholder approval. Also, under the 2014 Plan the following shares are not recycled for future grant under the 2014 Plan: (i) shares used in connection with the exercise of an option and/or stock appreciation right to pay the exercise price or purchase price of such award or satisfy applicable tax withholding obligations; and (ii) the gross number of shares subject to stock appreciation rights that are exercised. Furthermore, the 2014 Plan included a provision that prohibits repricing of outstanding stock options or stock appreciation rights and formalized and updated procedures to qualify awards as “performance-based” compensation under Section 162(m) of the Internal Revenue Code in order to preserve full tax deductibility of such awards. We previously granted options to purchase shares of our common stock and restricted stock units under our 2006 Equity Incentive Plan and 2005 Stock Plan. The 2006 Equity Incentive Plan was terminated with respect to the grant of additional awards on June 12, 2014, upon adoption of our 2014 Plan. The 2005 Stock Plan was terminated with respect to the grant of additional awards upon the effectiveness of the 2006 Equity Incentive Plan. Our stock options granted under the 2014 Plan generally vest over four years at a rate of 25% after one year and 1/48th per month thereafter. Stock options granted under the 2014 Plan generally expire after seven years from the date of grant. On December 31, 2017, no shares were subject to repurchase. Our restricted stock unit awards granted under the 2014 Plan, 2006 Plan and 2005 Stock Plan generally vest over four years at a rate of 25% after one year and 25% annually thereafter. We grant market-based restricted stock units to our executive officers and certain members of our senior management team. Each market-based stock unit represents a contingent right to receive certain shares of our 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 following table summarizes activity under our 2014 Equity Incentive Plan (the “2014 Plan”) for the year ended December 31, 2017 (in thousands): Shares Available for Grant 1 Shares available for grant December 31, 2016 1 2,267 Restricted stock units granted 2 (860 ) Options granted 3 (330 ) Restricted stock units cancelled 4 318 Options cancelled 14 Shares available for grant December 31, 2017 1 1,409 (1) Shares available for grant do not include treasury stock shares that could be granted if we determined to do so. (2) Includes grants of restricted stock units with service, performance-based or market-based vesting criteria. (3) Includes grants of stock options with service, performance-based or market-based vesting criteria. (4) Includes cancelled restricted stock units with service, performance-based or market-based vesting criteria. The following table summarizes stock option activity under the Stock Plans (in thousands, except weighted-average exercise price and weighted-average remaining contractual life data): Number of Stock Options 1 Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value 2 Balance outstanding at December 31, 2016 975 $ 18.14 3.5 $ 31 Granted 330 $ 16.95 Exercised (69 ) $ 14.96 Cancelled (253 ) $ 20.43 Balance outstanding at December 31, 2017 983 $ 17.38 4.6 $ 2,522 Vested and expected to vest at December 31, 2017 931 $ 17.44 4.5 $ 2,401 Exercisable at December 31, 2017 405 $ 20.34 2.6 $ 857 (1) Includes certain stock options with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the product between eHealth’s closing stock price as of December 31, 2016 and December 31, 2017 and the exercise price of in-the-money options as of those dates. The following table provides information pertaining to our stock options for the year ended December 31, 2015, 2016 and 2017 (in thousands, except weighted-average fair values): Year Ended December 31, 2015 2016 2017 Weighted average fair value of options granted $ 5.67 $ 4.46 $ 9.03 Total fair value of options vested $ 1,602 $ 1,243 $ 799 Intrinsic value of options exercised $ 546 $ 4 $ 430 The following table summarizes restricted stock unit activity under the Stock Plans (in thousands, except weighted-average grant date fair value and weighted-average remaining contractual life data): Number of Restricted Stock Units 1 Weighted-Average Grant Date Fair Value Weighted-Average Remaining Service Period Aggregate Intrinsic Value 2 Unvested as of December 31, 2016 1,523 $ 12.83 2.8 $ 13,901 Granted 860 $ 16.28 Vested (318 ) $ 15.19 Cancelled (320 ) $ 12.17 Unvested as of December 31, 2017 1,745 $ 14.24 2.3 $ 30,313 (1) Includes certain restricted stock units with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the difference of our closing stock price as of December 31, 2016 and December 31, 2017 multiplied by the number of restricted stock units outstanding as of December 31, 2016 and December 31, 2017 , respectively. Stock Repurchase Programs — We had no stock repurchase activity during the years ended December 31, 2015, 2016 and 2017. In addition to 10,663,888 shares repurchased under our past repurchase programs as of December 31, 2017 , we have in treasury 574,107 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, 2016 and December 31, 2017 , we had a total of 11,135,590 shares and 11,237,995 shares, respectively, held in treasury. For accounting purposes, common stock repurchased under our stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. Stock-Based Compensation Expense — The fair value of stock options granted to employees for the years ended December 31, 2015, 2016 and 2017 was estimated using the following weighted average assumptions: Year Ended December 31, 2015 2016 2017 Expected term 4.3 4.4 4.3 Expected volatility 64.1% 65.4% 69.8% Expected dividend yield —% —% —% Risk-free interest rate 1.2% 1.1% 1.8% The weighted-average fair value of the market-based options and restricted stock units was determined using the Monte Carlo simulation model using the following weighted average assumptions: Year Ended December 31, 2015 2016 2017 Expected term 2.6 2.1 1.6 Expected volatility 64.7% 67.9% 70.9% Expected dividend yield —% —% —% Risk-free interest rate 1.1% 1.1% 1.7% Weighted average grant date fair value $6.69 $9.64 $9.42 The following table summarizes stock-based compensation expense recorded during the years ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Common stock options $ 1,522 $ 1,015 $ 1,863 Restricted stock units 5,480 6,251 7,831 Total stock-based compensation expense $ 7,002 $ 7,266 $ 9,694 The following table summarizes stock-based compensation expense by operating function for the years ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Marketing and advertising $ 1,950 $ 1,237 $ 1,033 Customer care and enrollment 477 497 418 Technology and content 1,728 1,836 1,410 General and administrative 2,734 3,696 6,833 Restructuring charges 113 — — Total stock-based compensation expense $ 7,002 $ 7,266 $ 9,694 As of December 31, 2017, there was $3.4 million of total unamortized compensation costs, net of estimated forfeitures, related to stock options, and these costs are expected to be recognized over a weighted average period of 2.6 years. As of December 31, 2017, there was $17.8 million of total unamortized compensation costs, net of estimated forfeitures, related to restricted stock units, and these costs are expected to be recognized over a weighted average period of 2.7 years. During the year ended December 31, 2016, due to changes in our senior management, we accelerated the vesting dates of certain stock options and restricted stock units granted to three former employees. We recorded a $0.5 million incremental stock-based compensation expense in connection with this modification. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of our loss before benefit for income taxes were as follows (in thousands): Year Ended December 31, 2015 2016 2017 United States $ (6,041 ) $ (6,638 ) $ (30,139 ) Foreign 435 885 972 Loss before provision for income taxes $ (5,606 ) $ (5,753 ) $ (29,167 ) The benefit for income taxes consisted of the following (in thousands): Year Ended December 31, 2015 2016 2017 Current: Federal $ (584 ) $ (948 ) $ (275 ) State (457 ) (214 ) (1,433 ) Foreign 97 178 179 Total current (944 ) (984 ) (1,529 ) Deferred: Federal 121 104 (2,169 ) State 10 24 (43 ) Foreign (30 ) (15 ) (14 ) Total deferred 101 113 (2,226 ) Benefit for income taxes $ (843 ) $ (871 ) $ (3,755 ) On December 22, 2017, the Tax Cuts and Jobs Act of 2017, or the “Jobs Act”, was signed into law resulting in significant changes to the Internal Revenue Code. The Jobs Act reduces the federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, changes U.S international taxation from a worldwide tax system to a territorial system, and imposes a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Jobs Act also includes provisions for the elimination of the Alternative Minimum Tax ("AMT"), among other changes. We calculated our best estimate of the impact of the Jobs Act in our year end income tax provision in accordance with our understanding of the Jobs Act and guidance available as of the filing date of this annual report on Form 10-K and recorded $2.3 million as additional income tax benefit in 2017, the period in which the legislation was enacted. Of the $2.3 million , we recorded a provisional benefit amount of $1.8 million related to the reversal of AMT credits which are now refundable credits under the provisions of the Jobs Act. We have also remeasured the deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future and recorded a $0.5 million benefit as a result of this remeasurement. The effects of other provisions of the Jobs Act are not expected to have a material impact on our consolidated financial statements, however, the final impact of the Jobs Act may differ from our estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued, and resulting actions we may take. . The following table provides a reconciliation of the federal statutory income tax rate to our effective tax rate: Year Ended December 31, 2015 2016 2017 Tax provision (benefit) at U.S. statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.1 (4.6 ) 9.2 Non-qualified stock option windfalls (shortfalls), net (31.6 ) (15.9 ) 0.5 Stock-based compensation (23.0 ) (12.6 ) (2.8 ) Lobbying (5.5 ) (6.2 ) (2.6 ) Research and development credits 20.1 14.1 (0.4 ) Changes in valuation allowance 21.8 14.5 (3.4 ) Tax reform - tax rate change — — (23.7 ) Foreign income tax and income inclusion — (7.5 ) 0.8 Other (2.9 ) (1.7 ) 0.2 Effective tax rate 15.0 % 15.1 % 12.8 % Our effective tax rate in 2015 and 2016 differ from the federal statutory rate primarily due to the reversal of previously recorded reserves related to federal and state tax credits. Our effective tax rate in 2017 differs from the federal statutory rate primarily due to reversal of previously recorded reserves related to federal and state tax credits, reversal of the valuation allowance related to AMT credits and tax rate change resulting from tax reform legislation passed in 2017. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, together with net operating loss and tax credit carry forwards. Significant components of our deferred tax assets were as follows (in thousands): December 31, 2016 December 31, 2017 Deferred tax assets: Accruals and reserves $ 2,242 $ 2,499 Stock-based compensation 2,960 2,443 Intangible assets 1,464 448 Net operating losses 9,337 12,055 Tax credits 4,399 3,569 Other 70 178 Total deferred tax assets 20,472 21,192 Valuation allowance (19,430 ) (20,426 ) Total deferred tax assets net of valuation allowance 1,042 766 Deferred tax liabilities – intangible assets (1,281 ) (551 ) Deferred tax liabilities – fixed assets — (55 ) Net deferred tax assets (liabilities) $ (239 ) $ 160 Assessing the realizability of our deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. We forecast taxable income by considering all available positive and negative evidence, including our history of operating income and losses and our financial plans and estimates that we use to manage the business. These assumptions require significant judgment about future taxable income. As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change. As of December 31, 2017, the valuation allowance was $20.4 million , which represents a full valuation allowance against our federal and state deferred tax assets. The valuation allowance was recorded as a result of increased uncertainty regarding our future taxable income and a lack of sources of other taxable income. The valuation allowance increased by $8.9 million during the year ended December 31, 2016 and increased by $1.0 million during the year ended December 31, 2017. We had net operating loss carry forwards at December 31, 2017 of approximately $39.7 million and $60.0 million for federal income tax and state income tax purposes, respectively. Federal and state net operating loss carry forwards begin expiring in 2034 and 2020, respectively. At December 31, 2017, we had tax credit carry forwards of approximately $3.0 million and $4.2 million for federal income tax and state income tax purposes, respectively. The Federal tax credit carry forwards begin expiring in 2021. The state tax credits carry forward indefinitely. Utilization of the net operating loss ("NOL") carryforwards and credits may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, (the "Code"), and similar state provisions. These ownership change limitations may limit the amount of NOL carryforwards and other tax attributes that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points (by value) of the outstanding stock of a company by certain stockholders. Our ability to use the remaining NOL carryforwards may be further limited if we experience a Section 382 ownership change as a result of future changes in our stock ownership. A reconciliation of the beginning and ending amount of our unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits Balance at December 31, 2014 $ 6,756 Increases based on tax positions related to the prior year 344 Decreases based on tax positions related to the prior year (24 ) Lapse of statute of limitations (1,301 ) Additions based on tax positions related to the current year 409 Balance at December 31, 2015 $ 6,184 Lapse of statute of limitations (1,236 ) Additions based on tax positions related to the current year 305 Balance at December 31, 2016 5,253 Decreases based on tax positions related to the prior year (862 ) Lapse of statute of limitations (1,637 ) Additions based on tax positions related to the current year 342 Balance at December 31, 2017 $ 3,096 Tax positions are evaluated in a two-step process. We first determine whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2017, the total amount of gross unrecognized tax benefits was $3.1 million , of which a nominal amount, if recognized, would impact our effective tax rate. As of December 31, 2016, the total amount of gross unrecognized tax benefits was $5.3 million , of which $1.6 million , if recognized, would impact our effective tax rate. We record interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2017, we had only a nominal amount accrued for estimated interest related to uncertain tax positions. We did not record an accrual for penalties. Included in the balance of income tax liabilities, accrued interest, and accrued penalties at December 31, 2017 is a nominal amount related to tax positions for which it is reasonably possible that the statute of limitations will expire in various jurisdictions and income tax exams will close within the next twelve months. We are subject to taxation in various jurisdictions, including federal, state and foreign. Our federal and state income tax returns are generally not subject to examination by taxing authorities for fiscal years before 2007 due to our net operating losses. The examination of our 2009 and 2010 California income tax returns by the California Franchise Tax Board was completed in the first quarter of 2017. We assessed the impact on our unrecognized tax benefits for all open years and recorded any necessary adjustments in the first quarter of 2017. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and common equivalent shares outstanding during the period. Diluted net loss per share is computed giving effect to all potential dilutive common stock equivalent shares, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted net loss per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2015 2016 2017 Basic: Numerator: Net loss $ (4,763 ) $ (4,882 ) $ (25,412 ) Denominator: Net weighted-average number of common stock shares outstanding 18,008 18,272 18,512 Net loss per share—basic: $ (0.26 ) $ (0.27 ) $ (1.37 ) Diluted: Numerator: Net loss $ (4,763 ) $ (4,882 ) $ (25,412 ) Denominator: Net weighted average number of common stock shares outstanding 18,008 18,272 18,512 Dilutive effect of common stock — — — Total common stock shares used in per share calculation 18,008 18,272 18,512 Net loss per share—diluted $ (0.26 ) $ (0.27 ) $ (1.37 ) For each of the years ended December 31, 2015, 2016 and 2017, we had securities outstanding that could potentially dilute earnings per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net loss per share as their effect would have been anti-dilutive. The number of outstanding anti-dilutive shares that were excluded from the computation of diluted net loss per share consisted of the following (in thousands): Year Ended December 31, 2015 2016 2017 Common stock options 1,484 1,222 908 Restricted stock units 866 768 1,296 Total 2,350 1,990 2,204 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies Legal Proceedings On January 26, 2017, a purported class action lawsuit was filed against us in the Superior Court of the State of California, County of Santa Clara. The complaint alleges that we negligently failed to take necessary precautions required to protect from unauthorized disclosure of personally identifiable information contained on 2016 Form W-2s for current and former employees. The complaint purports to allege causes of action against us for negligence, violation of Section 17200 et seq. of the California Business & Professions Code, declaratory relief and breach of implied contract. The complaint seeks actual damages, punitive damages, statutory damages, costs, including experts’ fees and attorneys’ fees, pre-judgment and post-judgment interest as prescribed by law and equitable, injunctive and declaratory relief as appropriate. In April 2017, an additional purported class action lawsuit was filed against us in the Superior Court of State of California, County of Santa Clara, relating to the same circumstances. The second complaint purports to allege causes of action against us for negligence, violation of California Customer Records Act (California Civil Code Section 1798.80 et seq.), violation of the California Confidentiality of Medical Information Act (California Civil Code Section 56 et seq.), invasion of privacy by public disclosure of private facts, breach of confidentiality and violation of the California Unfair Competition Law (California Business & Professions Code Section 17200 et seq.). The causes of action for violations of the California Customer Records Act and the California Confidentiality of Medical Information Act were dismissed without prejudice. The second complaint seeks actual damages, statutory damages, restitution, disgorgement, equitable, injunctive and declaratory relief, costs, including experts’ fees and attorneys’ fees and costs of prosecuting the action, and pre-judgment and post-judgment interest as prescribed by law. In July 2017, we entered into a binding settlement term sheet where we and the plaintiffs in each of the above-described cases agreed to enter into a settlement, pursuant to which we would receive a release of all claims that were or could have been alleged related to the unauthorized disclosure at issue in each of the cases. In exchange for the release, we agreed to (i) pay, subject to an aggregate cap of $250,000, up to $2,500 to each impacted individual for reasonable, documented out-of-pocket losses or expenses related to the data security incident; (ii) offer to individuals who signed up for identity theft protection that we offered at the time of the incident a one-year extension of the identity theft protection; (iii) offer to individuals who did not sign up for identity theft protection that we offered at the time of the incident three-years of identity theft protection; and (iv) not oppose a request by class counsel for attorneys’ fees, costs and class representative enhancements of up to $245,000 in the aggregate. In December 2017, the Company entered into a joint stipulation for settlement of class action consistent with the settlement term sheet. The terms of the settlement are subject to a hearing and court approval. As of December 31, 2017, we recorded an accrual for estimated potential damages in our consolidated financial statements. Operating Lease Obligations We lease our operating facilities and certain of our equipment and furniture and fixtures under various operating leases, the latest of which expires in July 2023. Certain of these leases have free or escalating rent payment provisions. We recognize rent expense on our operating leases on a straight-line basis over the terms of the leases, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements. In March 2012, we entered into an agreement to lease a building in Mountain View, California, adjacent to our headquarters office. The term of the operating lease is ten years from the date the building was delivered to us in August 2013. The base rent increases annually by 3% . As of December 31, 2017, future minimum payments related to this operating lease totaled $4.2 million over the remaining term of the lease plus our proportionate share of certain operating expenses, insurance costs and taxes for each calendar year during the lease. In April 2013, we entered into an agreement to lease approximately 20,000 square feet of office space in Westford, Massachusetts. The lease commenced in July 2013 and is for a term of 5 years and 3 months. As of December 31, 2017, future minimum payments totaled approximately $0.4 million over the remaining term of the lease. In August 2014, we renewed our agreement to lease and expanded to approximately 50,000 square feet of office space in Gold River, California. The lease commenced in August 2014 and is for a term of 4 years and 5 months. In 2015, we vacated approximately 11,200 square feet of this leased office space as a result of a workforce reduction. We reoccupied approximately 5,400 square feet of this previously vacated office space in 2016. As of December 31, 2017, future minimum payments totaled approximately $3.4 million over the remaining term of the lease. In August 2017, we entered into an agreement to amend our lease on approximately 28,000 square feet of office space in South Jordan, Utah. This amendment extends the term of this facility lease by five years, three months , from January 2018 to March 2023. As of December 31, 2017, future minimum lease payments under this lease amendment totaled approximately $3.4 million over the remaining term of the lease. Total rent expense under all operating leases was approximately $5.4 million , $4.5 million and $4.6 million for the years ended December 31, 2015, 2016 and 2017, respectively. Service and Licensing Obligations We have entered into service and licensing agreements with third party vendors to provide various services, including network access, equipment maintenance and software licensing. The terms of these services and licensing agreements are generally up to three years. As the benefits of these agreements are experienced uniformly over the applicable contractual periods, we record the related service and licensing expenses on a straight-line basis, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements. The following table presents a summary of our future minimum payments under non-cancellable operating lease agreements and contractual service and licensing obligations as of December 31, 2017 (in thousands): Years Ending December 31, Operating Lease Obligations Service and Licensing Obligations Total Obligations 2018 $ 3,617 $ 1,998 $ 5,615 2019 2,996 861 3,857 2020 2,994 330 3,324 2021 1,457 — 1,457 2022 1,501 — 1,501 Thereafter 651 — 651 Total $ 13,216 $ 3,189 $ 16,405 |
Operating Segments, Geographic
Operating Segments, Geographic Information and Significant Customers | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Segments, Geographic Information And Significant Customers | Operating Segments, Geographic Information and Significant Customers Operating Segments The following table presents summary results of our operating segments for the year ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Revenue Medicare $ 63,163 $ 80,269 $ 102,584 Individual, Family and Small Business 126,378 106,691 69,771 Total revenue $ 189,541 $ 186,960 $ 172,355 Segment profit (loss) Medicare segment loss $ (23,284 ) $ (33,141 ) $ (18,760 ) Individual, Family and Small Business segment profit 59,499 67,905 30,427 Total segment profit 36,215 34,764 11,667 Corporate (25,135 ) (29,071 ) (27,590 ) Stock-based compensation expense (6,889 ) (7,266 ) (9,694 ) Depreciation and amortization (4,148 ) (3,539 ) (2,837 ) Restructuring (charge) benefit (4,541 ) 297 — Amortization of intangible assets (1,153 ) (1,040 ) (1,040 ) Other income (expense), net 45 102 $ 327 Loss before benefit for income taxes $ (5,606 ) $ (5,753 ) $ (29,167 ) There are no internal revenue transactions between our operating segments. Our CODM does not separately evaluate assets by segment, and therefore assets by segment are not presented. Geographic Information Our long-lived assets consisted primarily of property and equipment, internally-developed software, goodwill and other indefinite-lived intangible assets and finite-lived intangible assets. Our long-lived assets are attributed to the geographic location in which they are located. Long-lived assets by geographical area as of December 31, 2016 and December 31, 2017 were as follows (in thousands): December 31, 2016 December 31, 2017 United States $ 32,162 $ 32,876 China 391 550 Total $ 32,553 $ 33,426 Significant Customers Substantially all revenue for the years ended December 31, 2015, 2016 and 2017 was generated from customers located in the United States. Carriers representing 10% or more of our total revenue for the years ended December 31, 2015, 2016 and 2017 are presented in the table below: Year Ended December 31, 2015 2016 2017 Humana 23 % 23 % 22 % UnitedHealthcare 1 11 % 13 % 16 % Aetna 2 10 % 10 % 9 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. (2) Aetna includes other carriers owned by Aetna. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) Selected summarized quarterly financial information for 2016 and 2017 is as follows (in thousands, except per share amounts): For the Year Ended December 31, 2017 First Second Quarter Third Quarter Fourth Quarter Year Revenue $ 78,939 $ 27,957 $ 26,619 $ 38,840 $ 172,355 Income (loss) from operations 31,822 (17,225 ) (20,705 ) (23,386 ) (29,494 ) Net income (loss) 33,421 (17,260 ) (20,616 ) (20,958 ) (25,412 ) Net income (loss) per share: Basic $ 1.82 $ (0.93 ) $ (1.11 ) $ (1.12 ) $ (1.37 ) Diluted $ 1.80 $ (0.93 ) $ (1.11 ) $ (1.12 ) $ (1.37 ) For the Year Ended December 31, 2016 First Second Quarter Third Quarter Fourth Quarter Year Revenue $ 73,844 $ 37,277 $ 32,079 $ 43,760 $ 186,960 Income (loss) from operations 23,683 (5,809 ) (6,916 ) (16,813 ) (5,855 ) Net income (loss) 18,034 (476 ) (5,736 ) (16,704 ) (4,882 ) Net income (loss) per share: Basic $ 0.99 $ (0.03 ) $ (0.31 ) $ (0.91 ) $ (0.27 ) Diluted $ 0.99 $ (0.03 ) $ (0.31 ) $ (0.91 ) $ (0.27 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events GoMedigap Acquisition On January 22, 2018, we completed our acquisition of all outstanding membership interests of Wealth, Health and Life Advisors, LLC, more commonly known as GoMedigap, a technology-enabled provider of Medicare Supplement enrollment services. The acquisition price primarily consisted of cash of $15.0 million , less $0.1 million cash acquired, and approximately 294,637 shares of our common stock. In addition, we are obligated to pay an additional $20 million in cash and 589,275 shares of our common stock, subject to the terms of the acquisition agreement and upon final determination of the achievement of certain milestones in 2018 and 2019. Restructuring Activities On February 25, 2018, our Board of Directors approved a plan to close our sales call center in Massachusetts and to terminate the employment of other employees in other locations. As part of this plan, we expect to eliminate approximately 110 full-time positions, representing approximately 10% of our workforce, primarily within customer care and enrollment. We expect to incur approximately $2.0 million to $2.4 million for employee termination benefits and related costs as well as approximately $0.3 million to $0.5 million in contract termination and other restructuring charges. Substantially all of the restructuring charges are expected to result in cash expenditures. These restructuring charges are expected to be recorded in the first half of 2018, when the activities comprising the plan are expected to be substantially completed. |
Summary of Business and Signi17
Summary of Business and Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business— eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading private health insurance exchange for individuals, families and small businesses in the United States. Through our website addresses ( www.eHealth.com , www.eHealthInsurance.com , www.eHealthMedicare.com, www.Medicare.com, www.PlanPrescriber.com and www.GoMedigap.com) , consumers can get quotes from leading health insurance carriers, compare plans side-by-side, and apply for and purchase Medicare-related, individual and family, small business and ancillary health insurance plans. We actively market the availability of Medicare-related insurance plans and offer Medicare plan comparison tools and educational materials for Medicare-related insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans. Our ecommerce technology also enables us to deliver consumers’ health insurance applications electronically to health insurance carriers. We are licensed to market and sell health insurance in all 50 states and the District of Columbia. |
Principles of Consolidation | Principles of Consolidation — The consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). |
Operating Segments | Operating Segments — We report segment information based on how our chief executive officer, who is our chief operating decision maker ("CODM"), regularly reviews our operating results, allocates resources and makes decisions regarding our business operations. The performance measures of our segments include total revenue and profit (loss). Our business structure is comprised of two operating segments • Medicare and • Individual, Family and Small Business The Medicare segment consists primarily of commissions earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans, and to a lesser extent, ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision insurance, as well as our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities. The Individual, Family and Small Business segment consists primarily of commissions earned from our sale of individual and family and small business health insurance plans and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, dental, vision, life, short term disability and long term disability insurance. To a lesser extent, the Individual, Family and Small Business segment consists of amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website, our licensing to third parties the use of our health insurance ecommerce technology and our delivery and sale to third parties of individual and family health insurance leads generated by our ecommerce platforms and our marketing activities. Marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect marketing and advertising, customer care and enrollment and technology and content operating expenses are allocated to each segment based on usage. Other indirect general and administrative operating expenses are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the two operating segments and are presented as a reconciling item to our consolidated financial results. Segment profit (loss) is calculated as total revenue for the applicable segment less direct and allocated marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation, depreciation and amortization expense and amortization of intangible assets. |
Use of Estimates | Use of Estimates — The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the useful lives of intangible assets, fair value of investments, fair value of our acquired Medicare books-of-business, recoverability of intangible assets, estimates for commission forfeitures, valuation allowance for deferred income taxes, provision for income taxes and the assumptions used in determining stock-based compensation. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. Actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash Equivalents— We consider all investments with an original maturity of 90 days or less from the date of purchase to be cash equivalents. Cash and cash equivalents are stated at fair value. |
Property and Equipment | Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. Capital lease amortization expenses are included in depreciation expense in our Consolidated Statements of Comprehensive Loss. Depreciation and amortization is computed using the straight-line method based on estimated useful lives as follows: Computer equipment and software 3 to 5 years Office equipment and furniture 5 years Leasehold improvements Lesser of useful life (typically 5 to 10 years) or related lease term Maintenance and minor replacements are expensed as incurred. |
Business Combinations | Business Combinations — We allocate the fair value of the purchase consideration of our acquired businesses to the tangible assets, liabilities and intangible assets acquired based on their estimated fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related costs are recognized separately from the business combination and are expensed as incurred. |
Goodwill and Intangible Asset | Goodwill and Intangible Assets— Goodwill represents the excess of the consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business combination. In the event that we realign our reporting units, we allocate our goodwill to the new reporting units using the relative fair value approach. We test our goodwill for impairment on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances indicate that the asset may be impaired. Factors that we consider in deciding when to perform an impairment test include significant negative industry or economic trends or significant changes or planned changes in our use of the intangible assets. We realigned our reporting units into two operating segments during the year ended December 31, 2016, at which time we allocated $3.7 million and $10.4 million of the carrying value of the goodwill to the Medicare and Individual, Family and Small Business segments, respectively, based on the relative fair value of the operating segments. We continued to report the same two segments during the year ended December 31, 2017 and no goodwill impairment has been identified in any of the years presented. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate a potential reduction in their fair values below their respective carrying amounts. Intangible assets with finite useful lives, which include purchased technology, pharmacy and customer relationships, trade names, and certain trademarks, are amortized over their estimated useful lives. Goodwill and intangible assets are considered non-financial assets and therefore, subsequent to their initial recognition are not revalued at fair value each reporting period unless an impairment charge is recognized. We must make subjective judgments in determining the independent cash flows that can be related to specific asset groupings. In addition, we must make subjective judgments regarding the remaining useful lives of assets with finite useful lives. When we determine that the useful life of an asset is shorter than we had originally estimated, we accelerate the rate of amortization over the assets’ new, remaining useful life. We evaluated the remaining useful lives of our intangible assets with finite lives and determined no material adjustments to the remaining lives were required. |
Book Of Business Transfers | Book-of-Business Transfers— We have entered into several agreements with a broker partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies. The first of these book-of-business transfers occurred in November 2010 and the most recent in June 2012. Total consideration for these books-of-business amounted to $13.9 million . Consideration for these books-of-business is included in prepaid expenses and other current assets and in other assets in the accompanying Consolidated Balance Sheets. The consideration, which was based on the discounted commissions expected to be received over the remaining life of each transferred Medicare plan member, is being amortized to cost of revenue in the Consolidated Statements of Comprehensive Loss and is presented as amortization of book-of-business consideration in the Consolidated Statements of Cash Flows as we recognize commission revenue related to the transferred Medicare plan members. The amount of consideration we amortize to cost of revenue each quarter is proportional to the amount of commission revenue we recognize on the underlying policies each quarter in relation to the total amount of remaining commission revenue expected to be recognized. Amortization expense recorded to cost of revenue for these books-of-business for the years ended December 31, 2015, 2016 and 2017 totaled $2.0 million , $1.6 million and $1.2 million , respectively. |
Other Long Lived Assets | Other Long-Lived Assets— We evaluate other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. |
Revenue Recognition | Revenue Recognition— We recognize revenue for our services when each of the following four criteria is met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured. Our revenue is primarily comprised of compensation paid to us by health insurance carriers related to insurance plans that have been purchased by a member who used our service. We define a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which we are entitled to receive compensation from an insurance carrier. For both Medicare Advantage and Medicare Part D prescription drug plans, we receive a fixed, annual commission payment from insurance carriers once the plan is approved by the carrier and either a fixed, monthly or annual commission payment beginning with and subsequent to the second plan year. Additionally, commission rates may be higher in the first twelve months of the plan if the plan is the first Medicare Advantage or Medicare Part D prescription drug plan issued to the member. In the first plan year of a Medicare Advantage and Medicare Part D prescription drug plan, after the health insurance carrier approves the application but during the effective year of the plan, we are paid a fixed commission that is prorated for the number of months remaining in the calendar year. Additionally, if the plan is the first Medicare Advantage or Medicare Part D plan issued to the member, we may receive a higher commission rate that covers a full twelve-month period, regardless of the month the plan was effective. We earn commission revenue for Medicare Advantage and Medicare Part D prescription drug plans for which we are the broker of record, typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. We recognize commission revenue for both Medicare Advantage and Medicare Part D prescription drug plans for the entire plan year once the annual or first monthly commission amount for the plan year is reported to us by the carrier, net of an estimate for future forfeiture amounts due to plan cancellations. For commissions paid to us on a monthly basis, we record a receivable for the commission amounts to be received over the remainder of the plan year, net of an estimate for commission amounts not expected to be collected due to plan cancellations, which is included in Accounts Receivable in the accompanying Consolidated Balance Sheets. We continue to receive the commission payments from the relevant insurance carrier typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier. Our services are complete when a carrier has approved an application in the initial year and when a member has renewed in a renewal year. The seller’s price is fixed or determinable and collectability is reasonably assured when a carrier has approved an application and the carrier reports to us the annual or first monthly renewal commission amount for each plan year. For individual and family, Medicare Supplement, small business and ancillary plans, our compensation generally represents a flat amount per member per month or a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a much lesser extent, override commissions that health insurance carriers pay us for achieving certain objectives. Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis. We generally continue to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or we otherwise do not remain the agent on the policy. We recognize commission revenue for individual and family, Medicare Supplement, small business and ancillary plans as the commissions are reported to us by the carrier, net of an estimate for future forfeiture amounts due to policy cancellations. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier, a carrier reports to us that it has approved an application submitted through our ecommerce platform and the applicant starts making payments on the plan. Our services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to us by a carrier. We recognize individual and family, small business and ancillary commission override revenue when reported to us by a carrier based on the actual attainment of predetermined target sales levels or other objectives as determined by the carrier. Commission override revenue, which we recognize on the same basis as individual and family, small business and ancillary commissions, is generally reported to us in a more irregular pattern than such commissions. Commissions for all health insurance plans we sell are reported to us by a cash payment and commission statement. We generally receive these communications simultaneously. In instances when we receive the cash payment and commission statement separately and in different accounting periods, we recognize revenue in the period that we receive the earliest communication, provided we receive the second corroborating communication shortly following the end of the accounting period. If the second corroborating communication is not received shortly following the end of the accounting period, we recognize revenue in the period the second communication is received. During 2014, the Centers for Medicare and Medicaid Services (“CMS”) issued a regulation prohibiting carriers from paying commissions during the fourth quarter on Medicare Advantage and Medicare Part D prescription drug plans sold during the fourth quarter with an effective date in the following year. During the fourth quarters of 2015, 2016 and 2017, we recognized revenue for policies included on a commission statement received for those periods, respectively, for which payment was received shortly after year-end and in connection with the carriers’ normal payment cycle during the first quarters of 2016, 2017 and 2018. We use the data in the commission statements to help identify the members for which we are receiving a commission payment and the amount received for each member, and to estimate future forfeiture amounts due to policy cancellations. As a result, we recognize the net amount of compensation earned as the agent in the transaction. Changes in our historical trends would result in changes to our estimated forfeitures in future periods. There were no changes in our average forfeiture rates or reporting time lag during the years ended December 31, 2015, 2016 and 2017, which had a material impact on our estimate for forfeitures. Certain commission amounts are subject to forfeiture if the plan is subsequently cancelled and either the carrier takes back all or a portion of the commission they have paid to us or we will no longer receive monthly commission payments for the remainder of the plan year. We record an estimate for these forfeitures based on our historical cancellation experience using data provided on commission statements. Policy cancellations and the commission amounts, if any, to be taken back by the carrier are typically reported to us by health insurance carriers several months after the policy’s cancellation date. Our estimate for forfeitures payable to a carrier, which is included in other current liabilities in the Consolidated Balance Sheets, includes an estimate of both the reporting time lag and the forfeiture amount, based on our historical experience by policy type. Similarly, our estimate for commission amounts not expected to be collected due to policy cancellations, which is recorded as a reduction of accounts receivable in the Consolidated Balance Sheets, includes an estimate of the annual policy cancellation rate, based on our historical experience by policy type. Other Revenue Our sponsorship and advertising program allows carriers to purchase advertising space in specific markets in a sponsorship area on our website. In return, we are typically paid a monthly fee, which is recognized over the period that advertising is displayed, and often a performance fee based on metrics such as submitted health insurance applications, which is recognized when the earned amounts are fixed and determinable. We also offer Medicare advertising services, which include website development, hosting and maintenance. In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue over the service period. Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and agents to utilize our technology to power their online quoting, content and application submission processes. Typically, we are paid a one-time implementation fee, which we recognize on a straight-line basis over the estimated term of the customer relationship (generally the initial term of the agreement), commencing once the technology is available for use by the third party, and a performance fee based on metrics such as submitted health insurance applications. The metrics used to calculate performance fees for both sponsorship and advertising and technology licensing are based on performance criteria that are either measured based on data tracked by us, or based on data tracked by the third party. In instances where the performance criteria data is tracked by us, we recognize revenue in the period of performance and when all other revenue recognition criteria has been met. In instances where the performance criteria data is tracked by the third party, we recognize revenue when the amounts earned are either fixed or determinable and collection is reasonably assured. Typically, this occurs through our receipt of a cash payment from the third party along with a detailed statement containing the data that is tracked by the third party. |
Deferred Revenue | Deferred Revenue— Deferred revenue includes deferred technology licensing implementation fees and amounts billed for deliverables, including professional services, in multiple element arrangements that do not have stand-alone value from other, undelivered elements, as well as amounts billed or collected from sponsorship or technology licensing customers in advance of our performing our service for such customers. It also includes the amount by which both unbilled and billed services provided under our technology licensing arrangements exceed the straight-line revenue recognized to date. We defer commission amounts that have been paid to us related to transactions where our services are complete, but where we cannot currently estimate future forfeitures related to those amounts. We allocate revenue to all units of accounting within an arrangement with multiple deliverables at the inception of the arrangement using the relative selling price method. The relative selling price method allocates any discount in an arrangement proportionally to each deliverable on the basis of each deliverable’s relative selling price. The relative selling price established for each deliverable is based on vendor-specific objective evidence of fair value (“VSOE”) if available, third-party evidence of selling price if VSOE is not available, or best estimate of selling price if neither VSOE nor third-party evidence is available. When used, the best estimate of selling price reflects our best estimates of what the selling prices of certain deliverables would be if they were sold regularly on a stand-alone basis. Our process for determining best estimate of selling price for deliverables without VSOE or third-party evidence of selling price considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. Key factors considered by us in developing the relative selling prices for our technology licensing fees include prices charged by us for similar offerings and our historical pricing practices. We may also consider additional factors as appropriate, including competition. A deliverable constitutes a separate unit of accounting when it has stand-alone value and there are no customer-negotiated right of refunds for the delivered elements. If the arrangement includes a customer-negotiated right of refund relative to the delivered item, and the delivery and performance of the undelivered item is considered probable and substantially in our control, the delivered element constitutes a separate unit of accounting. In circumstances when the aforementioned criteria are not met, the deliverable is combined with the undelivered elements, and the allocation of the arrangement consideration and revenue recognition is determined for the combined unit as a single unit. Allocation of the consideration is determined at the inception of the arrangement on the basis of each unit’s relative selling price. After the arrangement consideration has been allocated to each unit of accounting based on their relative selling prices, we apply revenue recognition criteria separately to each respective unit of accounting in the arrangement in accordance with applicable accounting guidance. |
Cost Of Revenue Policy | Cost of Revenue— Included in cost of revenue are payments related to health insurance policies sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements. In order to enter into a revenue-sharing arrangement, marketing partners must be licensed to sell health insurance in the state where the policy is sold. Costs related to revenue-sharing arrangements are expensed as the related revenue is recognized. Additionally, cost of revenue includes the amortization of consideration we paid to a broker partner in connection with the transfer of their Medicare-related health insurance members to us as the new broker of record on the underlying policies. |
Marketing and Advertising Expense | Marketing and Advertising Expenses— Marketing and advertising expenses consist primarily of member acquisition expenses associated with our direct, marketing partner and online advertising member acquisition channels, in addition to compensation and other expenses related to marketing, business development, partner management, public relations and carrier relations personnel who support our offerings. Advertising costs incurred in the years ended December 31, 2015, 2016 and 2017 totaled $66.5 million , $64.8 million and $56.0 million , respectively. Our direct channel expenses primarily consist of costs for direct mail, email marketing and television and radio advertising. Advertising costs for our direct channel are expensed the first time the related advertising takes place. Our marketing partner channel expenses primarily consist of fees paid to marketing partners with which we have a relationship. Our online advertising channel expenses primarily consist of paid keyword search advertising on search engines and retargeting campaigns. Advertising costs for our marketing partner channel and our online advertising channel are expensed as incurred. |
Research and Development Expense | Research and Development Expenses— Research and development expenses consist primarily of compensation and related expenses incurred for employees on our engineering and technical teams. Research and development costs, which totaled $10.6 million , $8.9 million and $7.6 million for the years ended December 31, 2015, 2016 and 2017, respectively, are included in technology and content expense in the accompanying Consolidated Statements of Comprehensive Loss. |
Deferred Contract Cost | Deferred Contract Costs— Deferred contract costs primarily represent direct costs related to professional services provided in connection with technology licensing arrangements that are accounted for as a single unit of accounting. The direct professional services costs are deferred up until the commencement of revenue recognition of the single unit and then recognized as cost of revenue ratably over the same period as the related revenue. |
Internal-Use Software and Website Development Costs | Internal-Use Software and Website Development Costs— We capitalize costs of materials, consultants and compensation and benefits costs of employees who devote time to the development of internal-use software during the application development stage. Our judgment is required in determining the point at which various projects enter the phases at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized, which is generally three years. For the years ended December 31, 2015, 2016 and 2017, we capitalized internal-use software and website development costs of $1.1 million , $1.8 million and $3.2 million , respectively, and recorded amortization expense of $0.6 million , $0.9 million and $1.5 million , respectively. |
Stock-Based Compensation | Stock-Based Compensation— We recognize stock-based compensation expense in the accompanying Consolidated Statements of Comprehensive Loss based on the fair value of our stock-based awards over their respective vesting periods, which is generally four years. The estimated grant date fair value of our stock options is determined using the Black-Scholes-Merton pricing model and a single option award approach. The weighted-average expected term for stock options granted is calculated using historical option exercise behavior. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date stock price. Through December 31, 2017, we had not declared or paid any cash dividends, and we do not expect to pay any in the foreseeable future. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of our stock options. Expected volatility is determined using a combination of the implied volatility of publicly traded options in our stock and historical volatility of our stock price. The estimated attainment of performance-based awards and related expense is based on the expectations of revenue and earnings target achievement. The estimated fair value of performance awards with market conditions is determined using the Monte-Carlo simulation model. The assumptions used in calculating the fair value of stock-based payment awards and expected attainment of performance-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. We will continue to use judgment in evaluating the expected term and volatility related to our own stock-based awards on a prospective basis, and incorporating these factors into the model. Changes in key assumptions could significantly impact the valuation of such instruments. |
401(k) Plan | 401(k) Plan— In September 1998, our board of directors adopted a defined contribution retirement plan (401(k) Plan), which qualifies under Section 401(k) of the Internal Revenue Code of 1986. Participation in the 401(k) Plan is available to substantially all employees in the United States. Employees can contribute up to 25% of their salary, up to the federal maximum allowable limit, on a before-tax basis to the 401(k) Plan. Employee contributions are fully vested when contributed. Our contributions to the 401(k) Plan are discretionary and are expensed when incurred. We also match employee contributions to our 401(k) Plan at 25% of an employee’s contribution each pay period, up to a maximum of 1% of the employee’s salary during such pay period. Our matching contributions are expensed as incurred and vest one-third for each of the first three years of the recipient’s service. The recipient is fully vested in all 401(k) Plan matching contributions after three years of service. We recognized expense of $0.3 million , $0.3 million and $0.4 million for the years ended December 31, 2015, 2016 and 2017, respectively, related to 401(k) matching contributions. |
Income Taxes | Income Taxes— We account for income taxes using the liability method. Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse. We utilize a two-step approach for evaluating uncertain tax positions. Step one, Recognition , requires a company to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, Measurement , is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement. We record interest and penalties related to uncertain tax positions as income tax expense in the consolidated financial statements. |
Seasonality | Principles of Consolidation — The consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Seasonality— A greater number of our Medicare-related health insurance plans are sold in our fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D prescription drug coverage for the following year. Additionally, substantially all of the Medicare Advantage and Medicare Part D prescription drug policies we have sold renew on January 1 of each year, resulting in our recognizing substantially all renewal Medicare Advantage and Medicare Part D prescription drug plan commission revenue in our first quarter. Our Medicare plan-related commission revenue is highest in our first quarter and is higher in our fourth quarter compared to our second and third quarters. The majority of our individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Compensation — Stock Compensation (Topic 718) — In May 2017, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. ASU 2017-09 is to be applied on a prospective basis to an award modified on or after the adoption date. We will adopt ASU 2017-09 in the first quarter of 2018 and do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. Goodwill Impairment (Topic 350) — In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The new standard is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 with early adoption permitted for annual goodwill impairment tests performed after January 1, 2017. The standard must be applied prospectively. Upon adoption, the standard will impact how we assess goodwill for impairment. We do not expect ASU 2017-04 will have a material impact on our consolidated financial statements. Statement of Cash Flows (Topic 230) — In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. Under the ASU, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. ASU 2016-18 will be effective for us beginning on January 1, 2018 and will be applied on a retrospective basis. We do not expect the adoption of this new standard will have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented on the statement of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017. We will adopt ASU 2016-15 in the first quarter of 2018 and we do not expect the adoption of this new standard will have a material impact on our consolidated financial statements. Leases (Topic 842) — In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease; for lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct finance leases. The guidance also eliminates existing real estate-specific provisions for all entities. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are currently considering our timing of adoption and are in the process of evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. Revenue Recognition (Topic 606) — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing . ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09).ASU 2014-09 may be adopted retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We will adopt this new accounting standard for the reporting periods beginning on January 1, 2018, using the full retrospective method to restate each prior reporting period presented. We have completed a review of our business processes, systems and controls as part of our effort to adopt the new revenue recognition standard and are executing on our developed project plan that includes analyzing the standard’s impact on our contract portfolio, comparing our historical policies and practices to the requirements of the new standard and identifying differences from applying the requirements of the new standard to our contracts. We have implemented necessary internal controls to ensure we adequately evaluate our portfolio of contracts under the five-step model promulgated by the FASB to ensure proper assessment of our operating results under the new standard. We do not expect a significant change in our control environment due to the adoption of the new standard; however, we will continue to assess as we finalize the impact of the adoption. We are also reporting on the progress of the implementation to our board of directors and the audit committee of our board of directors on a regular basis during the project’s duration. The adoption of the new standard will have a material impact to our opening balance sheet as of January 1, 2016 due to the cumulative effect of adopting under the full retrospective method. In addition, our adoption of the new standard will have a material impact on our commission revenue and, as a result, on our consolidated balance sheets and consolidated statements of comprehensive income (loss) as of and for the years ended December 31, 2016 and 2017. Under the new standard, since our services associated with Medicare-related, individual and family and ancillary health insurance plans are complete once an application is approved by a carrier, we will recognize Medicare-related, individual and family and ancillary health insurance plan commission revenue at the time the plan is approved by the carrier equal to the estimated commissions we expect to collect on the plan. The estimated commissions we expect to collect on a plan and that we will recognize as revenue upon approval of the application will vary based on product type and other factors, such as the estimated commission rates and the estimated life of the respective policies. These estimates will change with our actual experience after adoption. We are still in the process of finalizing our estimates by product type. Due to annual services we provide in renewing small business health insurance plans, we expect to recognize small business health insurance plan commission revenue at the time the plan is approved by the carrier, and when it renews each year thereafter, equal to the estimated commissions we expect to collect from the plan over the following 12-months. We have reviewed our contracts with our customers, the carriers whose plans we sell, and determined that we do not incur incremental costs when we enter into new contracts with carriers; therefore, we do not expect to capitalize contract acquisition costs as a result of the adoption of the new standard. Topic 606 will require us to make significant estimates, including, but not limited to, the estimated consideration to be paid to us over the estimated life of plans approved by carriers, or the following 12 months for small business health insurance plans, for which we are the broker of record. In addition, we are in the process of assessing the impact of the adoption of the new standard will have on our accounting for income taxes. Our adoption of the new standard will also significantly change the seasonality of our revenues, primarily with respect to our Medicare-related, individual and family and ancillary health insurance plan commission revenue. Under Topic 606, we expect to recognize significantly lower commission revenue in the first quarter of each year when we have historically recognized commission revenue from Medicare-related renewals and expect to instead record significantly greater commission revenue in the fourth quarter of each year as a result of the increase in approved plans we experience during the fourth quarter annual and open enrollment periods. |
Summary of Business and Signi18
Summary of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Depreciation and amortization is computed using the straight-line method based on estimated useful lives as follows: Computer equipment and software 3 to 5 years Office equipment and furniture 5 years Leasehold improvements Lesser of useful life (typically 5 to 10 years) or related lease term |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule Of Cash And Cash Equivalents | As of December 31, 2016 and December 31, 2017 , our cash and cash equivalent balances were invested as follows (in thousands): December 31, 2016 December 31, 2017 Cash $ 4,066 $ 5,098 Money market funds 57,715 35,195 Total cash and cash equivalents $ 61,781 $ 40,293 |
Schedule Of Accounts Receivable | As of December 31, 2016 and December 31, 2017 , our accounts receivable consisted of the following (in thousands): December 31, 2016 December 31, 2017 Commissions receivable $ 7,265 $ 8,419 Accounts receivable – other revenue 1,948 1,475 Total accounts receivable $ 9,213 $ 9,894 |
Schedule Of Prepaid Expenses And Other Current Assets | Prepaid Expenses and Other Current Assets- Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2016 December 31, 2017 Prepaid maintenance contracts $ 2,026 $ 1,945 Book-of-business transfers, net 1,071 539 Prepaid insurance 541 490 Prepaid rent 370 311 Other current assets 1,140 1,560 Prepaid expenses and other current assets $ 5,148 $ 4,845 |
Schedule Of Property And Equipment | Property and Equipment- Property and equipment consisted of the following (in thousands): December 31, 2016 December 31, 2017 Computer equipment and software $ 17,524 $ 17,112 Office equipment and furniture 3,490 3,583 Leasehold improvements 3,173 3,156 Property and equipment, gross 24,187 23,851 Less accumulated depreciation and amortization (18,579 ) (19,146 ) Property and equipment, net $ 5,608 $ 4,705 |
Schedule Of Other Assets | Other assets consisted of the following (in thousands): December 31, 2016 December 31, 2017 Capitalized project costs $ 2,735 $ 4,481 Security deposits 589 545 Deferred tax assets 204 232 Book-of-business transfers, net 665 30 Other assets 280 2,029 Other assets $ 4,473 $ 7,317 |
Schedule Of Intangible Assets | The carrying amounts, accumulated amortization, net carrying value and weighted average remaining life of our definite-lived amortizable intangible assets, as well as our indefinite-lived intangible trademarks, are presented in the tables below for (dollars in thousands, weighted-average useful life is as of December 31, 2017): December 31, 2016 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life Technology $ 1,700 $ (1,700 ) $ — $ 1,700 $ (1,700 ) $ — 0 years Pharmacy and customer relationships 10,100 (6,934 ) 3,166 10,100 (7,884 ) 2,216 2.3 years Trade names, trademarks and website addresses 907 (607 ) 300 907 (697 ) 210 2.3 years Total intangible assets subject to amortization $ 12,707 $ (9,241 ) 3,466 $ 12,707 $ (10,281 ) $ 2,426 Indefinite-lived trademarks and domain names 5,114 5,114 Indefinite Intangible assets $ 8,580 $ 7,540 |
Schedule Of Intangible Assets Future Amortization Expense | As of December 31, 2017, expected amortization expense in future periods is as follows (in thousands): Years Ending December 31, Pharmacy and Customer Relationships Trade Names, Trademarks and Website Addresses Total 2018 950 $ 90 $ 1,040 2019 950 90 1,040 2020 316 30 346 Total $ 2,216 $ 210 $ 2,426 |
Schedule Of Other Current Liabilities | Other current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2017 Payable to carriers – estimate for forfeitures $ 3,030 $ 1,807 Professional fees 307 1,012 Other accrued expenses 438 611 Total other current liabilities $ 3,775 $ 3,430 |
Schedule Of Non-Current Liabilities | Non-current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2017 Deferred rent – non-current $ 830 $ 724 Income tax payable – non-current 1,978 19 Deferred tax liabilities 443 71 Other non-current liabilities 123 86 Total non-current liabilities $ 3,374 $ 900 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Classifications of Fair Value Hierarchy | We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or Inputs other than quoted prices that are observable for the asset or liability Level 3 Unobservable inputs for the asset or liability |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The following table is a summary of financial assets measured at fair value on a recurring basis and their classification within the fair value hierarchy (in thousands). December 31, 2016 December 31, 2017 Carrying Value Level 1 Total Carrying Value Level 1 Total Assets Money market funds $ 57,715 $ 57,715 $ 57,715 $ 35,195 $ 35,195 $ 35,195 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Common Stock Shares Reserved For Future Issuance | We generally issue previously unissued common stock upon the exercise of stock options, the vesting of restricted stock units and upon granting of restricted common stock awards; however we may reissue previously acquired treasury shares to satisfy these future issuances. Shares of authorized but unissued common stock reserved for future issuance were as follows (in thousands): December 31, 2017 Common stock: Stock options issued and outstanding 983 Restricted stock units issued and outstanding 1,745 Shares available for grant 1,409 Total shares reserved 4,137 |
Schedule Of Stock Option Share Activity Under Stock Plans | The following table summarizes activity under our 2014 Equity Incentive Plan (the “2014 Plan”) for the year ended December 31, 2017 (in thousands): Shares Available for Grant 1 Shares available for grant December 31, 2016 1 2,267 Restricted stock units granted 2 (860 ) Options granted 3 (330 ) Restricted stock units cancelled 4 318 Options cancelled 14 Shares available for grant December 31, 2017 1 1,409 (1) Shares available for grant do not include treasury stock shares that could be granted if we determined to do so. (2) Includes grants of restricted stock units with service, performance-based or market-based vesting criteria. (3) Includes grants of stock options with service, performance-based or market-based vesting criteria. (4) Includes cancelled restricted stock units with service, performance-based or market-based vesting criteria. |
Schedule Of Activity Under Stock Plans | The following table summarizes stock option activity under the Stock Plans (in thousands, except weighted-average exercise price and weighted-average remaining contractual life data): Number of Stock Options 1 Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value 2 Balance outstanding at December 31, 2016 975 $ 18.14 3.5 $ 31 Granted 330 $ 16.95 Exercised (69 ) $ 14.96 Cancelled (253 ) $ 20.43 Balance outstanding at December 31, 2017 983 $ 17.38 4.6 $ 2,522 Vested and expected to vest at December 31, 2017 931 $ 17.44 4.5 $ 2,401 Exercisable at December 31, 2017 405 $ 20.34 2.6 $ 857 (1) Includes certain stock options with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the product between eHealth’s closing stock price as of December 31, 2016 and December 31, 2017 and the exercise price of in-the-money options as of those dates. The following table provides information pertaining to our stock options for the year ended December 31, 2015, 2016 and 2017 (in thousands, except weighted-average fair values): Year Ended December 31, 2015 2016 2017 Weighted average fair value of options granted $ 5.67 $ 4.46 $ 9.03 Total fair value of options vested $ 1,602 $ 1,243 $ 799 Intrinsic value of options exercised $ 546 $ 4 $ 430 |
Schedule Of Restricted Stock Unit Activity Under Stock Plans | The following table summarizes restricted stock unit activity under the Stock Plans (in thousands, except weighted-average grant date fair value and weighted-average remaining contractual life data): Number of Restricted Stock Units 1 Weighted-Average Grant Date Fair Value Weighted-Average Remaining Service Period Aggregate Intrinsic Value 2 Unvested as of December 31, 2016 1,523 $ 12.83 2.8 $ 13,901 Granted 860 $ 16.28 Vested (318 ) $ 15.19 Cancelled (320 ) $ 12.17 Unvested as of December 31, 2017 1,745 $ 14.24 2.3 $ 30,313 (1) Includes certain restricted stock units with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the difference of our closing stock price as of December 31, 2016 and December 31, 2017 multiplied by the number of restricted stock units outstanding as of December 31, 2016 and December 31, 2017 , respectively. |
Schedule Of Fair Value Of Stock Options Granted, Valuation Assumptions | Stock-Based Compensation Expense — The fair value of stock options granted to employees for the years ended December 31, 2015, 2016 and 2017 was estimated using the following weighted average assumptions: Year Ended December 31, 2015 2016 2017 Expected term 4.3 4.4 4.3 Expected volatility 64.1% 65.4% 69.8% Expected dividend yield —% —% —% Risk-free interest rate 1.2% 1.1% 1.8% |
Schedule Of Fair Value Of Market-Based Stock Unit Awards, Valuation Assumptions | The weighted-average fair value of the market-based options and restricted stock units was determined using the Monte Carlo simulation model using the following weighted average assumptions: Year Ended December 31, 2015 2016 2017 Expected term 2.6 2.1 1.6 Expected volatility 64.7% 67.9% 70.9% Expected dividend yield —% —% —% Risk-free interest rate 1.1% 1.1% 1.7% Weighted average grant date fair value $6.69 $9.64 $9.42 |
Schedule Of Stock-Based Compensation Expense By Award Type | The following table summarizes stock-based compensation expense recorded during the years ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Common stock options $ 1,522 $ 1,015 $ 1,863 Restricted stock units 5,480 6,251 7,831 Total stock-based compensation expense $ 7,002 $ 7,266 $ 9,694 |
Schedule Of Stock-Based Compensation Expense By Operating Function | The following table summarizes stock-based compensation expense by operating function for the years ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Marketing and advertising $ 1,950 $ 1,237 $ 1,033 Customer care and enrollment 477 497 418 Technology and content 1,728 1,836 1,410 General and administrative 2,734 3,696 6,833 Restructuring charges 113 — — Total stock-based compensation expense $ 7,002 $ 7,266 $ 9,694 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Components Of Income Tax Expense | The components of our loss before benefit for income taxes were as follows (in thousands): Year Ended December 31, 2015 2016 2017 United States $ (6,041 ) $ (6,638 ) $ (30,139 ) Foreign 435 885 972 Loss before provision for income taxes $ (5,606 ) $ (5,753 ) $ (29,167 ) |
Schedule Of Income Before Income Tax, Domestic And Foreign | The benefit for income taxes consisted of the following (in thousands): Year Ended December 31, 2015 2016 2017 Current: Federal $ (584 ) $ (948 ) $ (275 ) State (457 ) (214 ) (1,433 ) Foreign 97 178 179 Total current (944 ) (984 ) (1,529 ) Deferred: Federal 121 104 (2,169 ) State 10 24 (43 ) Foreign (30 ) (15 ) (14 ) Total deferred 101 113 (2,226 ) Benefit for income taxes $ (843 ) $ (871 ) $ (3,755 ) |
Schedule Of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of the federal statutory income tax rate to our effective tax rate: Year Ended December 31, 2015 2016 2017 Tax provision (benefit) at U.S. statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.1 (4.6 ) 9.2 Non-qualified stock option windfalls (shortfalls), net (31.6 ) (15.9 ) 0.5 Stock-based compensation (23.0 ) (12.6 ) (2.8 ) Lobbying (5.5 ) (6.2 ) (2.6 ) Research and development credits 20.1 14.1 (0.4 ) Changes in valuation allowance 21.8 14.5 (3.4 ) Tax reform - tax rate change — — (23.7 ) Foreign income tax and income inclusion — (7.5 ) 0.8 Other (2.9 ) (1.7 ) 0.2 Effective tax rate 15.0 % 15.1 % 12.8 % |
Schedule Of Deferred Tax Assets And Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, together with net operating loss and tax credit carry forwards. Significant components of our deferred tax assets were as follows (in thousands): December 31, 2016 December 31, 2017 Deferred tax assets: Accruals and reserves $ 2,242 $ 2,499 Stock-based compensation 2,960 2,443 Intangible assets 1,464 448 Net operating losses 9,337 12,055 Tax credits 4,399 3,569 Other 70 178 Total deferred tax assets 20,472 21,192 Valuation allowance (19,430 ) (20,426 ) Total deferred tax assets net of valuation allowance 1,042 766 Deferred tax liabilities – intangible assets (1,281 ) (551 ) Deferred tax liabilities – fixed assets — (55 ) Net deferred tax assets (liabilities) $ (239 ) $ 160 |
Schedule Of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of our unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits Balance at December 31, 2014 $ 6,756 Increases based on tax positions related to the prior year 344 Decreases based on tax positions related to the prior year (24 ) Lapse of statute of limitations (1,301 ) Additions based on tax positions related to the current year 409 Balance at December 31, 2015 $ 6,184 Lapse of statute of limitations (1,236 ) Additions based on tax positions related to the current year 305 Balance at December 31, 2016 5,253 Decreases based on tax positions related to the prior year (862 ) Lapse of statute of limitations (1,637 ) Additions based on tax positions related to the current year 342 Balance at December 31, 2017 $ 3,096 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule Of Computation Of Basic And Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2015 2016 2017 Basic: Numerator: Net loss $ (4,763 ) $ (4,882 ) $ (25,412 ) Denominator: Net weighted-average number of common stock shares outstanding 18,008 18,272 18,512 Net loss per share—basic: $ (0.26 ) $ (0.27 ) $ (1.37 ) Diluted: Numerator: Net loss $ (4,763 ) $ (4,882 ) $ (25,412 ) Denominator: Net weighted average number of common stock shares outstanding 18,008 18,272 18,512 Dilutive effect of common stock — — — Total common stock shares used in per share calculation 18,008 18,272 18,512 Net loss per share—diluted $ (0.26 ) $ (0.27 ) $ (1.37 ) |
Schedule Of Anti-dilutive Shares Excluded From Computation Of Net Income Per Share | The number of outstanding anti-dilutive shares that were excluded from the computation of diluted net loss per share consisted of the following (in thousands): Year Ended December 31, 2015 2016 2017 Common stock options 1,484 1,222 908 Restricted stock units 866 768 1,296 Total 2,350 1,990 2,204 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Rental Payments For Operating Leases | The following table presents a summary of our future minimum payments under non-cancellable operating lease agreements and contractual service and licensing obligations as of December 31, 2017 (in thousands): Years Ending December 31, Operating Lease Obligations Service and Licensing Obligations Total Obligations 2018 $ 3,617 $ 1,998 $ 5,615 2019 2,996 861 3,857 2020 2,994 330 3,324 2021 1,457 — 1,457 2022 1,501 — 1,501 Thereafter 651 — 651 Total $ 13,216 $ 3,189 $ 16,405 |
Operating Segments, Geographi25
Operating Segments, Geographic Information and Significant Customers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents summary results of our operating segments for the year ended December 31, 2015, 2016 and 2017 (in thousands): Year Ended December 31, 2015 2016 2017 Revenue Medicare $ 63,163 $ 80,269 $ 102,584 Individual, Family and Small Business 126,378 106,691 69,771 Total revenue $ 189,541 $ 186,960 $ 172,355 Segment profit (loss) Medicare segment loss $ (23,284 ) $ (33,141 ) $ (18,760 ) Individual, Family and Small Business segment profit 59,499 67,905 30,427 Total segment profit 36,215 34,764 11,667 Corporate (25,135 ) (29,071 ) (27,590 ) Stock-based compensation expense (6,889 ) (7,266 ) (9,694 ) Depreciation and amortization (4,148 ) (3,539 ) (2,837 ) Restructuring (charge) benefit (4,541 ) 297 — Amortization of intangible assets (1,153 ) (1,040 ) (1,040 ) Other income (expense), net 45 102 $ 327 Loss before benefit for income taxes $ (5,606 ) $ (5,753 ) $ (29,167 ) |
Schedule Of Long Lived Assets By Geographical Areas | Long-lived assets by geographical area as of December 31, 2016 and December 31, 2017 were as follows (in thousands): December 31, 2016 December 31, 2017 United States $ 32,162 $ 32,876 China 391 550 Total $ 32,553 $ 33,426 |
Schedule Of Revenue By Major Customers | arriers representing 10% or more of our total revenue for the years ended December 31, 2015, 2016 and 2017 are presented in the table below: Year Ended December 31, 2015 2016 2017 Humana 23 % 23 % 22 % UnitedHealthcare 1 11 % 13 % 16 % Aetna 2 10 % 10 % 9 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. (2) Aetna includes other carriers owned by Aetna. |
Selected Quarterly Financial 26
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule Of Quarterly Financial Information (Unaudited) | Selected summarized quarterly financial information for 2016 and 2017 is as follows (in thousands, except per share amounts): For the Year Ended December 31, 2017 First Second Quarter Third Quarter Fourth Quarter Year Revenue $ 78,939 $ 27,957 $ 26,619 $ 38,840 $ 172,355 Income (loss) from operations 31,822 (17,225 ) (20,705 ) (23,386 ) (29,494 ) Net income (loss) 33,421 (17,260 ) (20,616 ) (20,958 ) (25,412 ) Net income (loss) per share: Basic $ 1.82 $ (0.93 ) $ (1.11 ) $ (1.12 ) $ (1.37 ) Diluted $ 1.80 $ (0.93 ) $ (1.11 ) $ (1.12 ) $ (1.37 ) For the Year Ended December 31, 2016 First Second Quarter Third Quarter Fourth Quarter Year Revenue $ 73,844 $ 37,277 $ 32,079 $ 43,760 $ 186,960 Income (loss) from operations 23,683 (5,809 ) (6,916 ) (16,813 ) (5,855 ) Net income (loss) 18,034 (476 ) (5,736 ) (16,704 ) (4,882 ) Net income (loss) per share: Basic $ 0.99 $ (0.03 ) $ (0.31 ) $ (0.91 ) $ (0.27 ) Diluted $ 0.99 $ (0.03 ) $ (0.31 ) $ (0.91 ) $ (0.27 ) |
Summary of Business and Signi27
Summary of Business and Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | 20 Months Ended | ||
Dec. 31, 2017USD ($)segmentstate | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Jun. 30, 2012USD ($) | |
Accounting Policies [Abstract] | ||||
Finite-lived Intangible Assets Acquired | $ 13,900 | |||
Amortization of book-of-business consideration | $ 1,167 | $ 1,649 | $ 2,006 | |
Advertising Expense | 56,000 | 64,800 | 66,500 | |
Research and Development Expense | 7,600 | 8,900 | 10,600 | |
Capitalized Computer Software, Additions | $ (3,210) | $ (1,837) | (1,117) | |
Number of states in which the Company is licensed to market and sell health insurance | state | 50 | |||
Number of operating segments | segment | 2 | 2 | ||
Prior period reclassification adjustment | $ 800 | 600 | ||
Capitalized Computer Software, Amortization | $ 1,464 | 936 | 627 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 25.00% | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 1.00% | |||
Defined Contribution Plan, Matching Contributions Vesting Period | 3 years | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 400 | $ 300 | $ 300 |
Summary of Business and Signi28
Summary of Business and Significant Accounting Policies (Goodwill) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | ||
Goodwill | $ 14,096 | $ 14,096 |
Individual, Family and Small Business Segment | ||
Goodwill [Line Items] | ||
Goodwill | 3,700 | 3,700 |
Medicare Segment [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 10,400 | $ 10,400 |
Balance Sheet Accounts (Narrati
Balance Sheet Accounts (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($)customer | Dec. 31, 2015USD ($) | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation | $ 2,837 | $ 3,539 | $ 4,148 |
Amortization of acquired intangible assets | 1,040 | 1,040 | 1,153 |
Concentration Risk [Line Items] | |||
Accounts receivable | 9,894 | 9,213 | |
Allowance for Receivables [Member] | Other commissions receivable [Member] | |||
Concentration Risk [Line Items] | |||
Allowance for estimated forfeitures | $ 1,500 | $ 1,600 | $ 1,100 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Number of significant customers | customer | 2 | 3 | |
Concentration Risk, Percentage | 45.00% | 54.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 23.00% | 23.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 22.00% | 20.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11.00% |
Balance Sheet Accounts (Schedul
Balance Sheet Accounts (Schedule of Cash and Cash Equivalents) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash | $ 5,098 | $ 4,066 | ||
Money market funds | 35,195 | 57,715 | ||
Total cash and cash equivalents | $ 40,293 | $ 61,781 | $ 62,710 | $ 51,415 |
Balance Sheet Accounts (Sched31
Balance Sheet Accounts (Schedule of Accounts Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 9,894 | $ 9,213 |
Commissions receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 8,419 | 7,265 |
Accounts receivable – other revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 1,475 | $ 1,948 |
Balance Sheet Accounts (Sched32
Balance Sheet Accounts (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid maintenance contracts (current) | $ 1,945 | $ 2,026 |
Book-of-business transfers, net (current) | 539 | 1,071 |
Prepaid insurance | 490 | 541 |
Prepaid rent | 311 | 370 |
Other assets (current) | 1,560 | 1,140 |
Prepaid expenses and other current assets | $ 4,845 | $ 5,148 |
Balance Sheet Accounts (Sched33
Balance Sheet Accounts (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Computer equipment and software | $ 17,112 | $ 17,524 |
Office equipment and furniture | 3,583 | 3,490 |
Leasehold improvements | 3,156 | 3,173 |
Property and equipment, gross | 23,851 | 24,187 |
Less accumulated depreciation and amortization | (19,146) | (18,579) |
Property and equipment, net | $ 4,705 | $ 5,608 |
Balance Sheet Accounts (Sched34
Balance Sheet Accounts (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Capitalized Computer Software, Net | $ 4,481 | $ 2,735 |
Book-of-business transfers, net (non-current) | 30 | 665 |
Security deposits | 545 | 589 |
Deferred tax assets | 232 | 204 |
Other | 2,029 | 280 |
Other assets | $ 7,317 | $ 4,473 |
Balance Sheet Accounts (Sched35
Balance Sheet Accounts (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 12,707 | $ 12,707 |
Accumulated Amortization | (10,281) | (9,241) |
Total finite-lived intangible assets, net | 2,426 | 3,466 |
Indefinite-lived trademarks and domain names | 5,114 | 5,114 |
Intangible assets | 7,540 | 8,580 |
Technology [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,700 | 1,700 |
Accumulated Amortization | (1,700) | (1,700) |
Total finite-lived intangible assets, net | $ 0 | 0 |
Weighted Average Remaining Life | 0 years | |
Pharmacy And Customer Relationships [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 10,100 | 10,100 |
Accumulated Amortization | (7,884) | (6,934) |
Total finite-lived intangible assets, net | $ 2,216 | 3,166 |
Weighted Average Remaining Life | 2 years 4 months | |
Trade Names, Trademarks and Website Addresses [Member] | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 907 | 907 |
Accumulated Amortization | (697) | (607) |
Total finite-lived intangible assets, net | $ 210 | $ 300 |
Weighted Average Remaining Life | 2 years 4 months |
Balance Sheet Accounts (Sched36
Balance Sheet Accounts (Schedule of Intangible Asset Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
2,018 | $ 1,040 | |
2,019 | 1,040 | |
2,020 | 346 | |
Total finite-lived intangible assets, net | 2,426 | $ 3,466 |
Pharmacy And Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,018 | 950 | |
2,019 | 950 | |
2,020 | 316 | |
Total finite-lived intangible assets, net | 2,216 | 3,166 |
Trade Names, Trademarks and Website Addresses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,018 | 90 | |
2,019 | 90 | |
2,020 | 30 | |
Total finite-lived intangible assets, net | $ 210 | $ 300 |
Balance Sheet Accounts (Sched37
Balance Sheet Accounts (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Payable to carriers –estimate for forfeitures | $ 1,807 | $ 3,030 |
Professional fees | 1,012 | 307 |
Other accrued expenses | 611 | 438 |
Total other current liabilities | $ 3,430 | $ 3,775 |
Balance Sheet Accounts (Sched38
Balance Sheet Accounts (Schedule of Non-Current Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Deferred rent – non-current | $ 724 | $ 830 |
Income tax payable – non-current | 19 | 1,978 |
Deferred tax liabilities | 71 | 443 |
Other non-current liabilities | 86 | 123 |
Total non-current liabilities | $ 900 | $ 3,374 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 35,195 | $ 57,715 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 35,195 | 57,715 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 35,195 | $ 57,715 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 45 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Jun. 12, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized | 110,000,000 | 110,000,000 | ||
Preferred stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |
Preferred stock, shares outstanding | 0 | 0 | 0 | |
Shares available for grant | 1,409,000 | 1,409,000 | 4,500,000 | |
Number of shares repurchased under share repurchase plan | 10,663,888 | |||
Treasury shares that were previously surrendered by employees to satisfy tax withholdings | 574,107 | |||
Treasury Stock, Shares | 11,237,995 | 11,135,590 | 11,237,995 | |
Incremental stock-based compensation expense | $ 0.5 | |||
Common stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period for awards | 7 years | |||
Unrecognized stock-based compensation, options | $ 3.4 | $ 3.4 | ||
Recognition period for unrecognized stock-based compensation expense | 2 years 6 months 22 days | |||
Common stock options | Period One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting term for awards | 4 years | |||
Vesting percent | 25.00% | |||
Common stock options | Period Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting term for awards | 1 year | |||
Vesting percent | 2.08% | |||
Restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation, restricted stock units | $ 17.8 | $ 17.8 | ||
Recognition period for unrecognized stock-based compensation expense | 2 years 8 months 1 day | |||
Restricted stock units [Member] | Period One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting term for awards | 4 years | |||
Vesting percent | 25.00% | |||
Restricted stock units [Member] | Period Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting term for awards | 1 year | |||
Vesting percent | 25.00% |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Shares Reserved) (Details) - shares | Dec. 31, 2017 | Jun. 12, 2014 |
Stockholders' Equity Note [Abstract] | ||
Stock options issued and outstanding | 983,000 | |
Restricted stock units issued and outstanding | 1,745,000 | |
Shares available for grant | 1,409,000 | 4,500,000 |
Total shares reserved | 4,137,000 |
Stockholders' Equity (Schedul42
Stockholders' Equity (Schedule of Stock Plan Activity) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Movement in Shares Available for Grant [Roll Forward] | |
Shares available for grant | 1,409 |
2014 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Movement in Shares Available for Grant [Roll Forward] | |
Shares available for grant | 2,267 |
Restricted stock units granted | (860) |
Options granted | (330) |
Restricted stock units cancelled | 318 |
Options cancelled | 14 |
Shares available for grant | 1,409 |
Stockholders' Equity (Schedul43
Stockholders' Equity (Schedule of Option Activity Under Stock Plans) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Stock Options | |||
Stock options issued and outstanding | 983 | ||
Common stock options | |||
Number of Stock Options | |||
Stock options issued and outstanding | 975 | ||
Granted | 330 | ||
Exercised | (69) | ||
Cancelled | (253) | ||
Stock options issued and outstanding | 983 | 975 | |
Options vested and expected to vest | 931 | ||
Options exercisable | 405 | ||
Weighted Average Exercise Price | |||
Weighted-average exercise price, balance outstanding | $ 18.14 | ||
Granted | 16.95 | ||
Exercised | 14.96 | ||
Cancelled | 20.43 | ||
Weighted-average exercise price, balance outstanding | 17.38 | $ 18.14 | |
Weighted-average exercise price, vested and expected to vest | 17.44 | ||
Weighted-average exercise price, exercisable | $ 20.34 | ||
Weighted-average remaining contractual life (years), balance outstanding | 4 years 6 months 25 days | 3 years 6 months 6 days | |
Weighted-average remaining contractual life (years), vested and expected to Vest | 4 years 5 months 23 days | ||
Weighted-average remaining contractual life (years), exercisable | 2 years 6 months 23 days | ||
Aggregate intrinsic value, balance outstanding | $ 2,522 | $ 31 | |
Aggregate intrinsic value, vested and expected to vest | 2,401 | ||
Aggregate intrinsic value, exercisable | $ 857 | ||
Weighted average fair value of options granted | $ 9.03 | $ 4.46 | $ 5.67 |
Total fair value of options vested | $ 799 | $ 1,243 | $ 1,602 |
Intrinsic value of options exercised | $ 430 | $ 4 | $ 546 |
Stockholders' Equity (Schedul44
Stockholders' Equity (Schedule of Restricted Stock Unit Activity Under Stock Plans) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Restricted Stock Units | ||
Restricted Stock Units Issued And Outstanding | 1,745 | |
Restricted Stock Units [Member] | ||
Number of Restricted Stock Units | ||
Restricted Stock Units Issued And Outstanding | 1,523 | |
Granted | 860 | |
Vested | (318) | |
Cancelled | (320) | |
Restricted Stock Units Issued And Outstanding | 1,745 | 1,523 |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Balance | $ 12.83 | |
Granted | 16.28 | |
Vested | 15.19 | |
Cancelled | 12.17 | |
Weighted-Average Grant Date Fair Value, Balance | $ 14.24 | $ 12.83 |
Weighted-Average Remaining Service Period | 2 years 3 months 14 days | 2 years 9 months 7 days |
Aggregate Intrinsic Value | $ 30,313 | $ 13,901 |
Stockholders' Equity (Schedul45
Stockholders' Equity (Schedule of Fair Value of Stock Options, Valuation Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 4 years 3 months 18 days | 4 years 4 months 10 days | 4 years 3 months 7 days |
Expected volatility | 69.80% | 65.40% | 64.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.80% | 1.10% | 1.20% |
Market-based options and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 1 year 7 months 13 days | 2 years 1 month 13 days | 2 years 7 months 2 days |
Expected volatility | 70.90% | 67.90% | 64.70% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.70% | 1.10% | 1.10% |
Weighted average grant date fair value | $ 9.42 | $ 9.64 | $ 6.69 |
Stockholders' Equity (Schedul46
Stockholders' Equity (Schedule of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 9,694 | $ 7,266 | $ 7,002 |
Common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,863 | 1,015 | 1,522 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 7,831 | 6,251 | 5,480 |
Marketing And Advertising [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,033 | 1,237 | 1,950 |
Customer Care And Enrollment [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 418 | 497 | 477 |
Technology And Content [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,410 | 1,836 | 1,728 |
General And Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 6,833 | 3,696 | 2,734 |
Restructuring Charges [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 0 | $ 0 | $ 113 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | ||||
Change in rate, amount | $ 2,300 | |||
Reversal of AMT credits | 1,800 | |||
Change In tax rate, deferred tax asset, provisional income tax expense | 500 | |||
Valuation allowance | 20,426 | $ 19,430 | ||
Increase (decrease) in net valuation allowance | 1,000 | 8,900 | ||
Tax credits | 3,569 | 4,399 | ||
Unrecognized tax benefits | 3,096 | 5,253 | $ 6,184 | $ 6,756 |
Unrecognized tax benefits that would impact effective tax rate | $ 1,600 | |||
Federal Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating loss carry forwards | 39,700 | |||
Tax credits | 3,000 | |||
State Tax Jurisdiction [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating loss carry forwards | 60,000 | |||
Tax credits | $ 4,200 |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Pre-Tax Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (30,139) | $ (6,638) | $ (6,041) |
Foreign | 972 | 885 | 435 |
Loss before benefit from income taxes | $ (29,167) | $ (5,753) | $ (5,606) |
Income Taxes (Schedule of Curre
Income Taxes (Schedule of Current and Deferred Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ (275) | $ (948) | $ (584) |
State | (1,433) | (214) | (457) |
Foreign | 179 | 178 | 97 |
Total current | (1,529) | (984) | (944) |
Deferred: | |||
Federal | (2,169) | 104 | 121 |
State | (43) | 24 | 10 |
Foreign | (14) | (15) | (30) |
Total deferred | (2,226) | 113 | 101 |
Provision (benefit) for income taxes | $ (3,755) | $ (871) | $ (843) |
Income Taxes (Income Tax Rate R
Income Taxes (Income Tax Rate Reconciliation Schedule) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax provision (benefit) at U.S. statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 9.20% | (4.60%) | 1.10% |
Non-qualified stock option shortfalls, net | 0.50% | (15.90%) | (31.60%) |
Changes in valuation allowance | (3.40%) | 14.50% | 21.80% |
Effective Income Tax Rate Reconciliation Non-Deductible Lobbying Expenses | (2.60%) | (6.20%) | (5.50%) |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (23.70%) | 0.00% | 0.00% |
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | (0.80%) | 7.50% | 0.00% |
Stock-based compensation | (2.80%) | (12.60%) | (23.00%) |
Research and development credits | 0.40% | (14.10%) | (20.10%) |
Other | 0.20% | (1.70%) | (2.90%) |
Effective tax rate | 12.80% | 15.10% | 15.00% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Accruals and reserves | $ 2,499 | $ 2,242 |
Stock-based compensation | 2,443 | 2,960 |
Intangible assets | 448 | 1,464 |
Net operating losses | 12,055 | 9,337 |
Tax credits | 3,569 | 4,399 |
Other | 178 | 70 |
Total deferred tax assets | 21,192 | 20,472 |
Valuation allowance | (20,426) | (19,430) |
Total deferred tax assets net of valuation allowance | 766 | 1,042 |
Deferred Tax Liabilities, Net [Abstract] | ||
Deferred tax liabilities – intangible assets | (551) | (1,281) |
Deferred tax liabilities – fixed assets | (55) | 0 |
Net deferred tax liabilities | $ (239) | |
Net deferred tax asset | $ 160 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Unrecognized Tax Benefits Schedule) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 5,253 | $ 6,184 | $ 6,756 |
Increases based on tax positions related to the prior year | 344 | ||
Decreases based on tax positions related to the prior year | (24) | ||
Decreases based on tax positions related to the prior year | (862) | ||
Lapse of statute of limitations | (1,637) | (1,236) | (1,301) |
Additions based on tax positions related to the current year | 342 | 305 | 409 |
Unrecognized tax benefits, ending balance | $ 3,096 | $ 5,253 | $ 6,184 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Computation of Basic and Diluted Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (20,958) | $ (20,616) | $ (17,260) | $ 33,421 | $ (16,704) | $ (5,736) | $ (476) | $ 18,034 | $ (25,412) | $ (4,882) | $ (4,763) |
Net weighted-average number of common stock shares outstanding | 18,512 | 18,272 | 18,008 | ||||||||
Net income per share-basic (in usd per share) | $ (1.12) | $ (1.11) | $ (0.93) | $ 1.82 | $ (0.91) | $ (0.31) | $ (0.03) | $ 0.99 | $ (1.37) | $ (0.27) | $ (0.26) |
Weighted average number of options | 0 | 0 | 0 | ||||||||
Total common stock shares used in per share calculation | 18,512 | 18,272 | 18,008 | ||||||||
Net income per share-diluted (in usd per share) | $ (1.12) | $ (1.11) | $ (0.93) | $ 1.80 | $ (0.91) | $ (0.31) | $ (0.03) | $ 0.99 | $ (1.37) | $ (0.27) | $ (0.26) |
Net Loss Per Share (Schedule 54
Net Loss Per Share (Schedule of Anti-Dilutive Shares Excluded from Computation Of Net Income Per Share) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total | 2,204 | 1,990 | 2,350 |
Common stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total | 908 | 1,222 | 1,484 |
Restricted stock units [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total | 1,296 | 768 | 866 |
Commitments and Contingencies55
Commitments and Contingencies (Narrative) (Details) - Breach of Contract - Maximum | 1 Months Ended |
Jul. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | |
Litigation settlement, amount awarded | $ 250,000 |
Litigation settlement, amount awarded, per individual | $ 2,500 |
Litigation settlement, amount awarded, period of extended protection (in years) | 1 year |
Litigation settlement, amount awarded, period of protection | 3 years |
Litigation settlement, expense | $ 245,000 |
Commitments and Contingencies56
Commitments and Contingencies (Operating lease) (Details) $ in Thousands | Aug. 31, 2017ft² | Aug. 31, 2014ft² | Jul. 31, 2013ft² | Mar. 31, 2012 | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($)ft² |
Commitments And Contingencies Disclosure [Line Items] | |||||||
Future minimum payments related to operating lease | $ 16,405 | ||||||
Office space, square feet vacated | ft² | 11,200 | ||||||
Office space, square feet reoccupied | ft² | 5,400 | ||||||
Operating lease expense | 4,600 | $ 4,500 | $ 5,400 | ||||
Mountain View, California lease agreement [Member] | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Operating lease, term | 10 years | ||||||
Operating lease, percentage of annual base rent increase | 3.00% | ||||||
Future minimum payments related to operating lease | 4,200 | ||||||
Westford, Massachusetts Lease Agreement [Member] | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Operating lease, term | 5 years 3 months | ||||||
Future minimum payments related to operating lease | 400 | ||||||
Office space, square feet | ft² | 20,000 | ||||||
Gold River, California Lease Agreement [Member] | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Operating lease, term | 4 years 5 months | ||||||
Future minimum payments related to operating lease | 3,400 | ||||||
Office space, square feet | ft² | 50,000 | ||||||
South Jordan, Utah | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Operating lease, term | 5 years 3 months | ||||||
Future minimum payments related to operating lease | $ 3,400 | ||||||
Office space, square feet | ft² | 28,000 |
Commitments and Contingencies57
Commitments and Contingencies (Schedule of Future Minimum Obligations) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | $ 5,615 |
2,019 | 3,857 |
2,020 | 3,324 |
2,021 | 1,457 |
2,022 | 1,501 |
Thereafter | 651 |
Total | 16,405 |
Operating Lease Obligations | |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | 3,617 |
2,019 | 2,996 |
2,020 | 2,994 |
2,021 | 1,457 |
2,022 | 1,501 |
Thereafter | 651 |
Total | 13,216 |
Service And Licensing Obligations | |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | 1,998 |
2,019 | 861 |
2,020 | 330 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 3,189 |
Operating Segments, Geographi58
Operating Segments, Geographic Information and Significant Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 38,840 | $ 26,619 | $ 27,957 | $ 78,939 | $ 43,760 | $ 32,079 | $ 37,277 | $ 73,844 | $ 172,355 | $ 186,960 | $ 189,541 |
Total stock-based compensation expense | (9,694) | (7,266) | (6,889) | ||||||||
Depreciation and amortization | (2,837) | (3,539) | (4,148) | ||||||||
Restructuring benefit | 0 | 297 | (4,541) | ||||||||
Amortization of intangible assets | (1,040) | (1,040) | (1,153) | ||||||||
Other income (expense), net | 327 | 102 | 45 | ||||||||
Loss before benefit from income taxes | (29,167) | (5,753) | (5,606) | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 172,355 | 186,960 | 189,541 | ||||||||
Segment profit (loss) | 11,667 | 34,764 | 36,215 | ||||||||
Operating Segments [Member] | Medicare [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 102,584 | 80,269 | 63,163 | ||||||||
Segment profit (loss) | (18,760) | (33,141) | (23,284) | ||||||||
Operating Segments [Member] | Individual, Family and Small Business Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 69,771 | 106,691 | 126,378 | ||||||||
Segment profit (loss) | 30,427 | 67,905 | 59,499 | ||||||||
Corporate, Non-Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment profit (loss) | $ (27,590) | $ (29,071) | $ (25,135) |
Operating Segments, Geographi59
Operating Segments, Geographic Information and Significant Customers (Schedule Of Long-Lived Assets By Geographical Area) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Total | $ 33,426 | $ 32,553 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total | 32,876 | 32,162 |
China | ||
Segment Reporting Information [Line Items] | ||
Total | $ 550 | $ 391 |
Operating Segments, Geographi60
Operating Segments, Geographic Information and Significant Customers (Schedule of Revenue by Major Customers) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Humana | |||
Revenue, Major Customer [Line Items] | |||
Major customer revenue, percentage | 22.00% | 23.00% | 23.00% |
UnitedHealthcare | |||
Revenue, Major Customer [Line Items] | |||
Major customer revenue, percentage | 16.00% | 13.00% | 11.00% |
Aetna | |||
Revenue, Major Customer [Line Items] | |||
Major customer revenue, percentage | 9.00% | 10.00% | 10.00% |
Selected Quarterly Financial 61
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Revenue | $ 38,840 | $ 26,619 | $ 27,957 | $ 78,939 | $ 43,760 | $ 32,079 | $ 37,277 | $ 73,844 | $ 172,355 | $ 186,960 | $ 189,541 |
Income (loss) from operations | (23,386) | (20,705) | (17,225) | 31,822 | (16,813) | (6,916) | (5,809) | 23,683 | (29,494) | (5,855) | (5,651) |
Net loss | $ (20,958) | $ (20,616) | $ (17,260) | $ 33,421 | $ (16,704) | $ (5,736) | $ (476) | $ 18,034 | $ (25,412) | $ (4,882) | $ (4,763) |
Basic (in usd per share) | $ (1.12) | $ (1.11) | $ (0.93) | $ 1.82 | $ (0.91) | $ (0.31) | $ (0.03) | $ 0.99 | $ (1.37) | $ (0.27) | $ (0.26) |
Diluted (in usd per share) | $ (1.12) | $ (1.11) | $ (0.93) | $ 1.80 | $ (0.91) | $ (0.31) | $ (0.03) | $ 0.99 | $ (1.37) | $ (0.27) | $ (0.26) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Feb. 25, 2018USD ($)position | Jan. 22, 2018USD ($)shares |
GoMedigap | ||
Subsequent Event [Line Items] | ||
Payments to acquire business | $ 15 | |
Cash acquired | $ 0.1 | |
Shares acquired | shares | 294,637 | |
Earnout consideration | $ 20 | |
Earnout consideration, shares | shares | 589,275 | |
Personnel and Facility Related Restructuring Costs | ||
Subsequent Event [Line Items] | ||
Positions eliminated | position | 110 | |
Percentage of total workforce | 10.00% | |
Termination benefits and related costs | Minimum | ||
Subsequent Event [Line Items] | ||
Expected cost | $ 2 | |
Termination benefits and related costs | Maximum | ||
Subsequent Event [Line Items] | ||
Expected cost | 2.4 | |
Contract termination and other restructuring charges | Minimum | ||
Subsequent Event [Line Items] | ||
Expected cost | 0.3 | |
Contract termination and other restructuring charges | Maximum | ||
Subsequent Event [Line Items] | ||
Expected cost | $ 0.5 |