Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-33071 | |
Entity Registrant Name | EHEALTH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 56-2357876 | |
Entity Address, Address Line One | 2625 AUGUSTINE DRIVE, SECOND FLOOR | |
Entity Address, City or Town | SANTA CLARA | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 650 | |
Local Phone Number | 584-2700 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | EHTH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 25,614,001 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001333493 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | [1] | Dec. 31, 2019 |
Current assets: | |||
Cash and cash equivalents | $ 184,167 | $ 23,466 | |
Short-term marketable securities | 33,683 | 0 | |
Accounts receivable | 668 | 2,332 | |
Contract assets – commissions receivable – current | 125,252 | 174,526 | |
Prepaid expenses and other current assets | 9,202 | 7,822 | |
Total current assets | 352,972 | 208,146 | |
Contract assets – commissions receivable – non-current | 435,465 | 414,696 | |
Property and equipment, net | 12,875 | 10,518 | |
Long-term marketable securities | 24,409 | 0 | |
Operating lease right-of-use assets | 43,396 | 36,621 | |
Restricted cash | 3,353 | 3,354 | |
Other assets | 19,300 | 18,004 | |
Intangible assets, net | 9,516 | 10,062 | |
Goodwill | 40,233 | 40,233 | |
Total assets | 941,519 | 741,634 | |
Current liabilities: | |||
Accounts payable | 8,906 | 24,554 | |
Accrued compensation and benefits | 18,473 | 29,578 | |
Accrued marketing expenses | 4,711 | 12,041 | |
Earnout liability — current | 0 | 37,273 | |
Lease liabilities — current | 4,174 | 4,759 | |
Deferred revenue | 2,683 | 2,570 | |
Other current liabilities | 3,736 | 2,210 | |
Total current liabilities | 42,683 | 112,985 | |
Deferred income taxes — non-current | 61,623 | 64,130 | |
Lease liabilities — non-current | 41,992 | 34,305 | |
Other non-current liabilities | 3,535 | 3,050 | |
Stockholders’ equity: | |||
Common stock | 37 | 35 | |
Additional paid-in capital | 717,380 | 455,159 | |
Treasury stock, at cost | (199,998) | (199,998) | |
Retained earnings | 274,157 | 271,852 | |
Accumulated other comprehensive income | 110 | 116 | |
Total stockholders’ equity | 791,686 | 527,164 | |
Total liabilities and stockholders’ equity | $ 941,519 | $ 741,634 | |
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 106,408 | $ 68,773 |
Operating costs and expenses: | ||
Cost of revenue | 1,138 | (77) |
Marketing and advertising | 37,764 | 23,941 |
Customer care and enrollment | 30,535 | 19,944 |
Technology and content | 15,740 | 9,017 |
General and administrative | 19,653 | 11,278 |
Amortization of intangible assets | 547 | 547 |
Change in fair value of earnout liability | 0 | 13,306 |
Total operating costs and expenses | 105,377 | 77,956 |
Income (loss) from operations | 1,031 | (9,183) |
Other income, net | 373 | 557 |
Income (loss) before benefit from income taxes | 1,404 | (8,626) |
Benefit from income taxes | (2,048) | (3,467) |
Net income (loss) | $ 3,452 | $ (5,159) |
Net income (loss) per share: | ||
Basic (in usd per share) | $ 0.14 | $ (0.24) |
Diluted (in usd per share) | $ 0.13 | $ (0.24) |
Weighted-average number of shares used in per share amounts: | ||
Basic (in shares) | 24,719 | 21,831 |
Diluted (in shares) | 26,179 | 21,831 |
Comprehensive income: | ||
Unrealized holding gain for available for sales debt securities, net of tax | $ 25 | $ 0 |
Foreign currency translation adjustment, net of taxes | (31) | 29 |
Comprehensive income (loss) | 3,446 | (5,130) |
Commission | ||
Revenue: | ||
Total revenue | 99,669 | 64,227 |
Other | ||
Revenue: | ||
Total revenue | $ 6,739 | $ 4,546 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income | |
Beginning balance (in shares) at Dec. 31, 2018 | 30,863 | (11,426) | |||||
Beginning Balance at Dec. 31, 2018 | $ 303,149 | $ 31 | $ 298,024 | $ (199,998) | $ 204,965 | $ 127 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with exercise of common stock options (in shares) | 172 | ||||||
Issuance of common stock in connection with exercise of common stock options | 2,367 | 2,367 | |||||
Repurchase of shares to satisfy employee tax withholding obligations | (1,280) | (1,280) | |||||
Repurchase of shares to satisfy employee tax withholding obligations (in shares) | (24) | ||||||
Stock issued in equity offering (in shares) | 2,760 | ||||||
Shares issued in equity offering | 126,051 | $ 3 | 126,048 | ||||
Settlement of earnout liability (in shares) | 295 | ||||||
Settlement of earnout liability | 17,264 | 17,264 | |||||
Stock-based compensation expense | 3,229 | 3,229 | |||||
Foreign currency translation adjustment, net of taxes | 29 | 29 | |||||
Net income (loss) | (5,159) | (5,159) | |||||
Ending balance (in shares) at Mar. 31, 2019 | 34,090 | (11,450) | |||||
Ending Balance at Mar. 31, 2019 | 445,650 | $ 34 | 445,652 | $ (199,998) | 199,806 | 156 | |
Beginning balance (in shares) at Dec. 31, 2019 | 34,752 | (11,616) | |||||
Beginning Balance at Dec. 31, 2019 | 527,164 | $ 35 | 455,159 | $ (199,998) | 271,852 | 116 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with exercise of common stock options (in shares) | 141 | ||||||
Issuance of common stock in connection with exercise of common stock options | 1,091 | 1,091 | |||||
Repurchase of shares to satisfy employee tax withholding obligations | (4,375) | (4,375) | |||||
Repurchase of shares to satisfy employee tax withholding obligations (in shares) | (33) | ||||||
Stock issued in equity offering (in shares) | 2,070 | ||||||
Shares issued in equity offering | 228,024 | $ 2 | 228,022 | ||||
Settlement of earnout liability (in shares) | 295 | ||||||
Settlement of earnout liability | 28,521 | 28,521 | |||||
Stock-based compensation expense | 8,962 | 8,962 | |||||
Other comprehensive income, net of tax | (6) | (6) | |||||
Foreign currency translation adjustment, net of taxes | (31) | ||||||
Net income (loss) | 3,452 | 3,452 | |||||
Ending balance (in shares) at Mar. 31, 2020 | 37,258 | (11,649) | |||||
Ending Balance at Mar. 31, 2020 | $ 791,686 | [1] | $ 37 | $ 717,380 | $ (199,998) | $ 274,157 | $ 110 |
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income (loss) | $ 3,452 | $ (5,159) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 823 | 655 |
Amortization of internally developed software | 1,501 | 719 |
Amortization of intangible assets | 547 | 547 |
Stock-based compensation expense | 8,714 | 3,229 |
Deferred income taxes | (2,141) | (3,543) |
Change in fair value of earnout liability | 0 | 13,306 |
Other non-cash items | 223 | (1,194) |
Increase (Decrease) in Operating Capital [Abstract] | ||
Accounts receivable | 1,664 | 221 |
Contract assets – commissions receivable | 26,873 | 17,648 |
Prepaid expenses and other assets | (159) | 1,111 |
Accounts payable | (16,279) | (768) |
Accrued compensation and benefits | (11,104) | (9,390) |
Accrued marketing expenses | (7,329) | (7,147) |
Deferred revenue | 113 | 2,897 |
Accrued expenses and other liabilities | 2,009 | (383) |
Net cash provided by operating activities | 8,907 | 12,749 |
Investing activities: | ||
Capitalized internal-use software and website development costs | (3,564) | (1,487) |
Purchases of property and equipment and other assets | (2,508) | (1,509) |
Purchases of marketable securities | (58,064) | 0 |
Cash used in investing activities | (64,136) | (2,996) |
Financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 228,024 | 126,051 |
Net proceeds from exercise of common stock options | 1,091 | 2,367 |
Repurchase of shares to satisfy employee tax withholding obligations | (4,375) | (1,280) |
Repayment of debt | 0 | (5,000) |
Acquisition-related contingent payments | (8,751) | (9,542) |
Principal payments in connection with leases | (58) | (25) |
Net cash provided by financing activities | 215,931 | 112,571 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | 62 |
Net increase in cash, cash equivalents and restricted cash | 160,700 | 122,386 |
Cash, cash equivalents and restricted cash at beginning of period | 26,820 | 13,089 |
Cash, cash equivalents and restricted cash at end of period | $ 187,520 | $ 135,475 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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 health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstances. Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs. Our omni-channel consumer engagement platform is designed to meet the consumer wherever they prefer to engage with us, and enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent. We have created a marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 180 health insurance carriers across all fifty states and the District of Columbia. Basis of Presentation – The accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, and the condensed consolidated statements of comprehensive income (loss), stockholders' equity, and cash flows for the three months ended March 31, 2020 and 2019, respectively, are unaudited. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. The accompanying financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with those rules and regulations. Certain reclassifications might be made to conform with the current presentation. However, the Company believes that the disclosures made are adequate to make the information not misleading. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and include all adjustments necessary for the fair presentation of our financial position as of March 31, 2020 and December 31, 2019, and our results of operations for the periods presented. Our financial position as of March 31, 2020 and results of operations and cash flows for the three months ended March 31, 2020 were not materially impacted by the COVID-19 pandemic but the Company is continuously assessing the evolving situation related to the pandemic. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2020 and therefore should not be relied upon as an indicator of future results. Significant Accounting Polices, Estimates and Judgements – The preparation of condensed 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 condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the commissions we expect to collect for each approved member cohort, allowance for credit loss, the useful lives of intangible assets, fair value of investments, recoverability of intangible assets, valuation allowance for deferred income taxes, provision (benefit) 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. With the exception of the change for the accounting of credit losses as a result of the adoption of Accounting Standard Updates ("ASU") No. 2016-13, Financial Instruments – Credit Losses discussed below, there have been no material changes to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. 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, Medicare Supplement, and Medicare Part D prescription drug coverage for the following year. As a result, our Medicare plan-related commission revenue is highest in our fourth quarter. Due to the recent reintroduction of the Medicare Advantage open enrollment period that takes place in the first quarter of the year, our commission revenue is typically second-highest in our first quarter. The majority of our major medical individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period 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 major medical individual and family health insurance outside of the open enrollment period, 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. Recently Adopted Accounting Pronouncement Financial Instruments – Credit Losses (Topic 326) – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), that requires companies to present certain financial assets net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. Contract assets – commissions receivable are the Company's only financial assets that were materially impacted by this guidance. We adopted ASU 2016-13 using a modified retrospective transition method on January 1, 2020 for all financial assets measured at amortized cost. Results for periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported under the previous accounting standards. We recorded a $1.1 million decrease, net of income taxes, to the retained earnings as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. See Note 3 – Supplemental Financial Statement Information for further discussion on credit losses. T he impacts from the adoption are summarized as follows (in thousands): Balance Sheet Impact: December 31, 2019 Transition Adjustments January 1, 2020 Contract assets – commissions receivable – current $ 174,526 $ (71) $ 174,455 Contract assets – commissions receivable – non-current $ 414,696 $ (1,442) $ 413,254 Other assets* $ 18,004 $ 366 $ 18,370 Total assets $ 741,634 $ (1,147) $ 740,487 Retained earnings $ 271,852 $ (1,147) $ 270,705 ____________ * Adjustment to Other assets is related to the increase in deferred tax asset resulted from the adoption of the accounting guidance. Financial Instruments (Topic 820) – In 2018, the FASB issued ASU No. 2018-13, to change the disclosure requirements for fair value measurement with the objective of improving the effectiveness of the notes to financial statements. This new guidance removed and modified certain disclosure requirements under Topic 820. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Intangible – Goodwill and Other (Topic 350) – In 2017, the FASB issued ASU 2017-04 to simplify the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted Income Taxes (Topic 740) – In December 2019, the FASB issued ASU No. 2019-12, Income Tax, Simplifying the Accounting for Income Taxes , which aims to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application of and simplify U.S. GAAP for other areas under this Topic by clarifying existing guidance. ASU 2019-12 will be effective for us beginning January 1, 2021. The amendments in this standard update have individually different adoption approaches. We do not anticipate a material impact on our consolidated financial statements and disclosure from the adoption of this standard update. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue – The table below disaggregates our revenue by product (in thousands): Three Months Ended March 31, 2020 2019 Medicare Medicare Advantage $ 68,347 $ 39,843 Medicare Supplement 15,170 8,597 Medicare Part D 5,661 2,336 Total Medicare 89,178 50,776 Individual and Family (1) Non-Qualified Health Plans 1,446 2,629 Qualified Health Plans 1,210 3,508 Total Individual and Family 2,656 6,137 Ancillary Short-term 2,216 1,316 Dental 743 790 Vision 243 462 Other 1,049 951 Total Ancillary 4,251 3,519 Small Business 2,971 2,640 Commission Bonus 613 1,155 Total Commission Revenue 99,669 64,227 Other Revenue 6,739 4,546 Total Revenue $ 106,408 $ 68,773 _____________ (1) We define our individual and family plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both qualified and non-qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase non-qualified health plans cannot receive a subsidy in connection with the purchase of non-qualified plans. Revenue Recognition Based on Estimated Constrained LTV We recognize revenue for plans approved during the period by applying the latest estimated constrained life time value (“LTV”) for that product. We recognize adjustment revenue for plans approved in prior periods when there is a change in estimate to expected cash collections as a result of sufficient evidence that demonstrates a trend that is different from the estimated constrained LTV at the time of approval. We recognize adjustment revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. We assess the risk of significant revenue reversal based on statistical and qualitative analysis given historical information and current market conditions. Our commission revenue for each product line is based on a number of assumptions, which include, but are not limited to, estimating conversion of an approved member to a paying member, forecasting average plan duration and forecasting the commission amounts likely to be received per member. These assumptions are based on our analysis of historical trends for different cohorts and incorporate management’s judgment in interpreting those trends to apply the constraints discussed below. For our Medicare commission revenue, which represented 89% and 79% of our total commission revenue for the three months ended March 31, 2020 and 2019, respectively, the estimated average plan duration, which is the average length of time paying members are active on their plans, used to calculate Medicare health insurance plan LTVs historically has been approximately 3 years for Medicare Advantage plans, approximately 5 years for Medicare Part D prescription drug plans, and approximately 5 years for Medicare Supplement plans. While the average plan duration has been approximately 3 years for Medicare Advantage plans, certain members may have a duration of up to 12 years. The estimated average plan duration used to calculate the LTV for major medical individual and family health insurance plans historically has been approximately 1.5 to 2 years. For short term health insurance plan LTVs, the estimated average plan duration historically has been less than six months. For all other ancillary health insurance plan LTVs, the estimated average plan duration has historically varied from 1 to 3 years. To the extent we make changes to the assumptions we use to calculate constrained LTVs, we recognize the impact of changes to commission revenue in the reporting period in which the change is made, including revisions of estimated lifetime commissions either below or in excess of previously estimated constrained LTV recognized as revenue. Constraints are applied to LTV for revenue recognition purposes to help ensuring that the total estimated lifetime commissions expected to be collected for an approved member’s plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved. Judgments that can be significant in estimating LTVs are related to the constraint. To determine the constraints to be applied to LTV, we compare prior calculations of LTV to actual cash received and review the reasons for any variations. We then apply judgment in assessing whether the difference between historical cash collections and LTV is representative of differences that can be expected in future periods. We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future periods including but not limited to commission rates, carrier mix, plan duration, changes in laws and regulations, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship. We evaluate the appropriateness of our constraints on a quarterly basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed. We recorded adjustment revenue of $12.7 million and $7.4 million, or $0.52 and $0.34 per basic share, or $0.49 and $0.34 per diluted share, respectively, for the three months ended March 31, 2020 and 2019, respectively. Commission revenue by segment is presented in the table below (in thousands): Three Months Ended March 31, 2020 2019 Medicare Commission Revenue from Members Approved During the Period (1) $ 81,125 $ 50,582 Net Commission Revenue from Members Approved in Prior Periods (2) 8,979 1,067 Total Medicare Segment Commission Revenue $ 90,104 $ 51,649 Individual, Family and Small Business Commission Revenue from Members Approved During the Period (1) $ 5,796 $ 6,225 Net Commission Revenue from Members Approved in Prior Periods (2) 3,769 6,353 Total IFP/SMB Segment Commission Revenue $ 9,565 $ 12,578 _____________ (1) These amounts include commission bonus revenue. (2) These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as adjustment revenue within the relevant reporting period. These amounts include revenue associated with renewing small business health insurance members. Adjustment revenue also includes reductions to revenue for certain prior periods cohorts which were immaterial for the three months ended March 31, 2020 and 2019, respectively. |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Financial Statement Information | Supplemental Financial Statement Information Cash, Cash Equivalents and Restricted Cash 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. We also invested in marketable securities that are measured and recorded at fair value. See Note 4 – Fair Value Measurements for further discussion about our marketable securities. As of March 31, 2020 and December 31, 2019, our cash, cash equivalent and restricted cash balances were invested as follows (in thousands): March 31, 2020 December 31, 2019 Cash $ 16,364 $ 16,205 Cash equivalents 167,803 7,261 Restricted cash 3,353 3,354 Total cash, cash equivalents and restricted cash $ 187,520 $ 26,820 As of March 31, 2020 and December 31, 2019, we had $3.4 million of restricted cash which was classified as a non-current asset on our Condensed Consolidated Balance Sheets. This amount collateralizes letters of credit related to certain lease commitments. Contract Assets and Accounts Receivable We do not require collateral or other security for our contract assets and accounts receivable. We believe the potential for collection issues with any of our customers was minimal as of March 31, 2020. Our contract assets and accounts receivable consisted of the following for the periods presented (in thousands): March 31, 2020 December 31, 2019 Contract assets – commissions receivable – current $ 125,252 $ 174,526 Contract assets – commissions receivable – non-current 435,465 414,696 Accounts receivable 668 2,332 Total contract assets and accounts receivable $ 561,385 $ 591,554 We estimate the allowance for credit loss balance using relevant available information from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Specifically, for the purpose of measuring the probability of default parameters, we utilize Capital IQ, Standard & Poors and Moody's analytics. Our estimates of loss given default are determined by using our historical collections data as well as historical information obtained through our research and review of other insurance related companies. Our estimated exposure at default is determined by applying these internal and external data sources to our commission receivable balances. As such, we apply an immediate reversion method and revert to historical loss information when computing our credit loss exposure. Subsequent to the adoption of ASC 326, we considered the impact of recent events and global economic condition when evaluating the appropriate adjustments to our allowance as of March 31, 2020. Determining the extent of these adjustments in the three months ended March 31, 2020 was especially challenging because we do not have any historical loss information for a period of similar economic decline. We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimated of credit losses was not materially impacted as of March 31, 2020. After our management's evaluation, we recorded credit loss expenses of $0.1 million during the three months ended March 31, 2020 which is included in general and administrative expense on our Condensed Consolidated Statement of Comprehensive Income. Our contract assets – commission receivable activities, net of credit losses are summarized as follows (in thousands): Three Months Ended March 31, 2020 Medicare Segment IFP/SMB Segment Total Beginning balance $ 550,922 $ 38,300 $ 589,222 Commission revenue from members approved during the period 81,125 5,796 86,921 Net commission revenue adjustments from members approved in prior period 8,979 3,769 12,748 Cash receipts (112,731) (13,811) (126,542) Change in credit loss allowance* (1,574) (58) (1,632) Ending balance $ 526,721 $ 33,996 $ 560,717 Three Months Ended March 31, 2019 Medicare Segment IFP/SMB Segment Total Beginning balance $ 311,977 $ 33,881 $ 345,858 Commission revenue from members approved during the period 50,582 6,225 56,807 Net commission revenue adjustments from members approved in prior period 1,067 6,353 7,420 Cash receipts (67,873) (14,001) (81,874) Change in credit loss allowance — — — Ending balance $ 295,753 $ 32,458 $ 328,211 _____________ * Amount consists of transition adjustment of $1.5 million related to the adoption of ASC 326 as of January 1, 2020 and the subsequent credit loss adjustment of $0.1 million as of March 31, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details regarding the adoption impact. Credit Risk Our financial instruments that are exposed to concentrations of credit risk principally consist of cash, cash equivalents, contract assets – commissions receivable, 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. The deposits in China were $4.1 million as of March 31, 2020. We do not require collateral or other security for either our contract assets or accounts receivable. Carriers that represented 10% or more of our total contract assets and accounts receivable balance are summarized as of the dates presented below: March 31, 2020 December 31, 2019 Humana 22 % 22 % Aetna (1) 21 % 20 % UnitedHealthCare (2) 20 % 20 % _____________ (1) Aetna also includes other carriers owned by Aetna. (2) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. Prepaid Expenses and Other Current Assets – Prepaid expenses and other current assets are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Prepaid maintenance contracts 5,460 3,853 Prepaid expenses 1,727 2,207 Prepaid insurance 543 918 Income tax receivable 1,041 584 Other 431 260 Prepaid expenses and other current assets 9,202 7,822 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
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; and Level 3 Unobservable inputs for the asset or liability. Our financial assets and liabilities measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy for the period presented below (in thousands): March 31, 2020 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 105,798 $ 105,798 $ — $ — $ 105,798 Commercial paper 62,005 — 62,005 — 62,005 Short-term marketable securities Commercial paper 23,063 — 23,063 — 23,063 Agency bonds 10,620 — 10,620 — 10,620 Long-term marketable securities Agency bonds 24,409 — 24,409 — 24,409 Total assets measured and recorded at fair value $ 225,895 $ 105,798 $ 120,097 $ — $ 225,895 December 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 7,261 $ 7,261 $ — $ — $ 7,261 Liabilities Earnout liability – current $ 37,273 $ — $ — $ 37,273 $ 37,273 Our cash equivalents were invested in money market funds and commercial paper with original maturity 90 days or less 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 investments as Level 1. As of March 31, 2020, our Level 2 assets included our available for sale marketable securities, which consisted of commercial paper and agency bonds with maturity less than two years. We classify our marketable debt securities within Level 2 in the fair value hierarchy because we use quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. Our portfolio primarily consisted of financial instruments with credit rating of AA+ or equivalent by S&P Rating and Moody's Investor Services. There were no transfers between the hierarchy levels during the three months ended March 31, 2020. The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands): As of March 31, 2020 Amortized Cost Fair Value Due in 1 year $ 201,482 $ 201,486 Due in 1 year through 5 years 24,388 24,409 Total $ 225,870 $ 225,895 Unrealized gains and losses on available-for-sale debt securities are included in accumulated other comprehensive income and summarized as follows as of March 31, 2020: Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents Money market funds $ 105,798 $ — $ — $ 105,798 Commercial paper 62,005 — — 62,005 Short-term marketable securities Commercial paper 23,063 — — 23,063 Agency bonds 10,616 5 (1) 10,620 Long-term marketable securities Agency bonds 24,388 21 — 24,409 Total $ 225,870 $ 26 $ (1) $ 225,895 As of March 31, 2020, there were four securities in net loss positions and their unrealized losses were immaterial. We did not record any credit losses regarding our available-for-sales debt securities during the three months ended March 31, 2020. Earnout Liabilities Our earnout liabilities in connection with our GoMedigap acquisition in 2018 have been recognized at fair value. We measure the earnout liability using internally developed assumptions; therefore, it is classified as Level 3. The fair value of the earnout liability was measured using probability-weighted analysis and is discounted using a rate that appropriately captures the risk associated with the obligation. Key assumptions included new enrollments and volatility for the years ended December 31, 2019 and 2018 and our stock price at the time of payment. Earnout liability activities are summarized as follows (in thousands): Balance as of December 31, 2019 $ 37,273 Change in fair value — Settlements (37,273) Balance as of March 31, 2020 $ — In February 2019, we made the first earnout payment to GoMedigap consisting of $9.5 million in cash and 294,608 shares of our common stock with a value of $17.3 million. In January 2020, we made the second and last payment, which consisted of $8.8 million in cash and 294,608 shares of our common stock with a value of $28.5 million. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Public Offering of Common Stock – Pursuant to the effective registration statement which was filed on December 17, 2018, and amended on January 22, 2019 and March 2, 2020, we entered into an underwriting agreement in March 2020 to issue a total of 2,070,000 shares of common stock, which included the exercise in full of the underwriters’ option to purchase 270,000 additional shares of common stock, at a price to the public of $115.00 per share. Net proceeds from the offering were approximately $228.0 million after deducting underwriting discounts, commissions and expenses of the offering. We intend to use the net proceeds of the offering for general corporate purposes, including working capital. Stock Repurchase Programs – We had no stock repurchase activity during the three months ended March 31, 2020. In addition to 10,663,888 shares repurchased under our previous repurchase programs, we have in treasury 985,454 shares as of March 31, 2020 that were previously surrendered by employees to satisfy tax withholding due in connection with the vesting of certain restricted stock units. As of March 31, 2020 and December 31, 2019, we had a total of 11,649,342 shares and 11,615,558 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 – Our stock-based compensation expense is summarized as follows by award types (in thousands): Three Months Ended March 31, 2020 2019 Common stock options $ 306 $ 602 Restricted stock units 8,408 2,627 Total stock-based compensation expense $ 8,714 $ 3,229 Our stock-based compensation expense is summarized as follows by operating functions (in thousands): Three Months Ended March 31, 2020 2019 Marketing and advertising $ 1,730 $ 629 Customer care and enrollment 662 273 Technology and content 1,617 549 General and administrative 4,705 1,778 Total stock-based compensation expense $ 8,714 $ 3,229 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Diluted net income 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 income per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Net income (loss) $ 3,452 $ (5,159) Shares used in per share calculation – basic 24,719 21,831 Net income (loss) per share – basic: $ 0.14 $ (0.24) Diluted: Net income (loss) $ 3,452 $ (5,159) Shares used in per share calculation – basic 24,719 21,831 Dilutive effect of common stock 1,460 — Total common stock shares used in diluted share calculation 26,179 21,831 Net income (loss) per share – diluted $ 0.13 $ (0.24) For the three months ended March 31, 2019, 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 income (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 1.0 million and 1.4 million shares related to common stock options and restricted stock units, respectively. There were no antidilutive shares for the three months ended March 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases Refer to Note 9 – Leases for commitments related to our operating leases. Contingencies From time to time, we receive inquiries from governmental bodies and also may be subject to various legal proceedings and claims arising in the ordinary course of business. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our consolidated financial statements. An estimated loss contingency is accrued in the consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We accrued approximately $1.2 million as of March 31, 2020 for amounts we believe will be payable for certain current legal proceedings, including the matters discussed below. Legal proceedings or other contingencies could result in material costs, even if we ultimately prevail. Legal Proceedings On April 6, 2018, a former employee, Lupita Gonzalez, filed a complaint against us in the Superior Court of the State of California for the County of Sacramento (the “Gonzalez Complaint”). The Gonzalez Complaint is brought under the California Private Attorney General Act (“PAGA”) on behalf of all current and former hourly-paid or non-exempt employees who work or have worked for us in California. The claim alleges that we violated wage and hour laws with respect to these non-exempt employees, including, among other things, the failure to comply with California law as to (i) the payment of overtime wages; (ii) the payment of minimum wages; (iii) providing compliant meal and rest periods, (iv) the payment of wages earned during employment and owed upon the termination of employment; (v) providing complete and accurate wage statements, (vi) keeping of accurate payroll records; and (vii) the proper reimbursement for necessary business-related expenses and costs. The Gonzalez Complaint seeks penalties and costs, expenses and attorneys’ fees. On July 1, 2019, two other current or former employees, Michael Le’Vias and Ramona Meadows, filed a related complaint against us and eHealth Ins. Serv. Co., in the Superior Court of the State of California for the County of Santa Clara (the “Le’Vias Complaint”). A substantial overlap exists between the facts and circumstances alleged in the Gonzalez Complaint and the Le’Vias Complaint. Specifically, the Le’Vias Complaint is also brought under PAGA on behalf of all current and former hourly-paid or non-exempt employees who work or have worked for us in California. The claim alleges that we violated wage and hour laws with respect to these non-exempt employees, including, among other things, the failure to comply with California law as to (i) the payment of overtime wages; (ii) the payment of minimum wages; (iii) providing compliant meal and rest periods, (iv) the payment of wages earned during employment and owed upon the termination of employment; (v) providing complete and accurate wage statements, (vi) keeping of accurate payroll records; and (vii) the proper reimbursement for necessary business-related expenses and costs. The Le’Vias Complaint seeks unpaid wages, penalties and costs, expenses and attorneys’ fees. The parties have agreed to resolve both the Le’Vias and Gonzalez Complaints, which settlement will require court approval. In the interim, the parties have filed notices of conditional settlement in both matters, and the April 13, 2020 trial date for the Gonzalez matter has been vacated. On April 8, 2020 and April 29, 2020, two purported class action lawsuits were filed against us, our chief executive officer, Scott N. Flanders, our chief financial officer, Derek N. Yung and our chief operating officer, David K. Francis, in the United States District Court for the Northern District of California. The cases are captioned Patel v. eHealth, Inc., et al ., Case No. 5:20-cv-02395 (N.D. Cal.) and Bertrand v. eHealth, Inc. et al. , Case No. 3:20-cv-02967 (N.D. Cal.). The complaints allege, among other things, that we and Messrs. Flanders, Yung and Francis made materially false and misleading statements and/or failed to disclose material information regarding our accounting and modeling assumptions, rate of member churn and our profitability during the alleged class period of March 19, 2018 to April 7, 2020. The complaints allege that we and Messrs. Flanders, Yung and Francis violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaints seek compensatory and (in the Patel lawsuit) punitive damages, attorneys’ fees and costs, and such other relief as the court deems proper. We believe the lawsuits to be without merit and intend to vigorously defend ourselves against them. 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. 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. Our future minimum payments under non-cancellable contractual service and licensing obligations as of March 31, 2020 are summarized as follows (in thousands): For the Years Ending December 31, Service and Licensing Obligations Remainder of 2020 $ 1,961 2021 2,189 2022 692 2023 444 2024 229 Thereafter — Total $ 5,515 |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information 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. Our business structure is comprised of two operating segments: Medicare and Individual, Family and Small Business. Please refer to Note 1 – Summary of Business and Significant Accounting Policies of the Notes to Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2019 for our accounting policies of operating segments. The following table presents summary results of our operating segments for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Revenue: Medicare $ 96,151 $ 54,901 Individual, Family and Small Business 10,257 13,872 Total revenue $ 106,408 $ 68,773 Segment profit: Medicare segment profit $ 21,960 $ 10,826 Individual, Family and Small Business segment profit 2,603 6,024 Total segment profit 24,563 16,850 Corporate (13,448) (8,296) Stock-based compensation expense (8,714) (3,229) Change in fair value of earnout liability — (13,306) Depreciation and amortization (823) (655) Amortization of intangible assets (547) (547) Other income, net 373 557 Income (loss) before benefit from income taxes $ 1,404 $ (8,626) There are no internal revenue transactions between our operating segments. With the exception of contract assets – commissions receivable, which is presented by segment in Note 3 – Supplemental Financial Statement Information , our CODM does not separately evaluate assets by segment, and therefore, assets by segment are not presented. Geographic Information Our long-lived assets primarily consist of property and equipment and internally-developed software. Our long-lived assets are attributed to the geographic location in which they are located. Long-lived assets by geographical area are summarized as follows (in thousands): March 31, 2020 December 31, 2019 United States $ 99,297 $ 64,408 China 418 471 Total $ 99,715 $ 64,879 Significant Customers Substantially all revenue for the three months ended March 31, 2020 and 2019 was generated from customers located in the United States. Carriers representing 10% or more of our total revenue for the three months ended March 31, 2020 and 2019 are presented in the table below: Three Months Ended March 31, 2020 2019 UnitedHealthcare (1) 22 % 17 % Humana 19 % 23 % Aetna (2) 15 % 17 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. (2) Aetna also includes other carriers owned by Aetna. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We have operating and finance leases for our corporate offices and certain equipment. Our leases have remaining lease terms of 1 to 10 years. Our operating lease expense recognized under ASC 842 for the three months ended March 31, 2020 and 2019 were $2.1 million and $1.3 million, respectively. Our cash outflows related to operating leases were $1.6 million and $0.9 million for the three months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020, we had non-cash investing activities of $7.1 million relating to right-of-use assets on the Condensed Consolidated Statements of Cash Flows. Supplemental information as of March 31, 2020 related to leases is as follows (in thousands): Operating lease right-of-use assets $ 43,396 Operating lease liabilities $ 46,166 Weighted-average remaining lease term of operating leases 7.9 years Weighted-average discount rate used to recognize operating lease right-of-use-assets 5.5 % As of March 31, 2020, maturities of operating lease liabilities are as follows (in thousands): Year ending December 31, Reminder of 2020 $ 5,058 2021 6,950 2022 6,988 2023 7,863 2024 7,706 Thereafter 27,603 Total lease payments 62,168 Less imputed interest (16,002) Total $ 46,166 Operating Lease Obligations We lease our operating facilities and certain of our equipment, furniture and fixtures under various operating leases, the latest of which expires in January 2030. 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. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt On September 17, 2018, we entered into a Credit Agreement with Royal Bank of Canada (“RBC”), as administrative agent and collateral agent (the “Credit Agreement”). The Credit Agreement provides for a $40.0 million secured asset-backed revolving credit facility with a $5.0 million letter of credit sub-facility. On December 20, 2019, we amended our revolving credit facility agreement with RBC (the “Amendment”) and increased the borrowing amount from $40.0 to $75.0 million. The maturity date has been extended to December 20, 2022. The borrowing base under the Credit Agreement is comprised of an amount equal to (a) the lesser of (i) eighty percent (80%) of Eligible Commissions Receivables (as defined in the Credit Agreement) we actually collected by during the immediately preceding period of three months or (ii) eighty percent (80%) of our Eligible Commission Receivables for the immediately succeeding period of three months, plus (b) fifty percent (50%) of our Eligible Commission Receivables for the immediately succeeding period of six months (excluding the immediately succeeding period of three months), in each case subject to reserves established by RBC (the “Borrowing Base”). The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes. The borrowers have the right to prepay the loans under the Credit Agreement in whole or in part at any time without penalty. Subject to availability under the Borrowing Base, amounts repaid may be reborrowed. Amounts not borrowed under the Credit Agreement will be subject to a commitment fee of 0.5% per annum on the daily unused portion of the credit facility, to be paid in arrears on the first business day of each calendar quarter. At closing, the Company paid a one-time facility fee of 1.75% of the total commitments of $40 million. We also paid a one-time closing fee of 0.5% of the new commitment of $75.0 million in connection with the Amendment. The Company is also obligated to pay other customary administration fees for a credit facility of this size and type. The availability under the credit facility is up to the lesser of $40 million or the Borrowing Base, which may be reduced from time to time pursuant to the Credit Agreement. The Amendment increased the availability up to the lesser of $75.0 million or the Borrowing Base, which may be reduced from time to time pursuant to the Credit Agreement. Financial covenants in the original Credit Agreement required that we maintain Excess Availability (as defined in the Credit Agreement) at or above $6 million at any time. The Amendment also changed the financial covenants to require us to maintain at least $6.0 million of Excess Availability at all times or, if greater, up to $11.3 million depending on our borrowing base as determined by eligible past and future commission receivables. In addition, the Amendment also included changes in the payment conditions to, among other things, require us to have at least $10.0 million of liquidity or, if greater, up to $18.8 million depending on our borrowing base as determined by eligible past and future commission receivables, in order for us to make certain permitted acquisitions, investments, distributions and payments of indebtedness. The Amendment also stated the seasonal amount thresholds used in connection with the cash dominion and field examination covenants in the Credit Agreement. We incurred $1.2 million of issuance costs in connection with the Credit Agreement, which were capitalized as part of Other assets on our Consolidated Balance Sheet of the period we entered into the Credit Agreement. The Amendment did not change the interest rate. In connection with this Amendment, we incurred closing costs totaling $0.5 million, which was capitalized and recorded as Other assets on our Consolidated Balance Sheet as of December 31, 2019. The remaining balance of unamortized issuance costs was $1.1 million as of March 31, 2020 and December 31, 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Coronavirus Aid, Relief and Economic Security ("CARES") Act was signed into law on March 27, 2020. The business tax provisions of the CARES Act include temporary changes to income based tax laws, including the ability to utilize net operating losses, interest expense deductions, alternative minimum tax credit refunds, charitable contributions, and depreciation of qualified improvement property. The income tax provisions of the CARES Act do not have a material impact on our Condensed Consolidated Financial Statements for the period ended March 31, 2020. The following table summarizes our benefit from income taxes and our effective tax rates for the three months ended March 31, 2020 and 2019 (in thousands, except effective tax rate): Three Months Ended March 31, 2020 2019 Income (loss) before benefit from income taxes $ 1,404 $ (8,626) Benefit from income taxes (2,048) (3,467) Effective tax rate (145.9) % 40.2 % For the three months ended March 31, 2020, we recognized a benefit from income taxes of $2.0 million, representing an effective tax rate of (145.9)%, which was lower than the statutory federal tax rate primarily due to stock-based compensation windfalls. For the three months ended March 31, 2019, we recognized a benefit from income taxes of $3.5 million, representing an effective tax rate of 40.2%, which was higher than the statutory federal tax rate due primarily to stock-based compensation adjustments, non-deductible lobbying expenses and foreign income inclusions, partially offset by research and development credits. |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business – eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstances. Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs. Our omni-channel consumer engagement platform is designed to meet the consumer wherever they prefer to engage with us, and enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent. We have created a marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 180 health insurance carriers across all fifty states and the District of Columbia. |
Basis of Presentation | Basis of Presentation – The accompanying condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, and the condensed consolidated statements of comprehensive income (loss), stockholders' equity, and cash flows for the three months ended March 31, 2020 and 2019, respectively, are unaudited. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. The accompanying financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with those rules and regulations. Certain reclassifications might be made to conform with the current presentation. However, the Company believes that the disclosures made are adequate to make the information not misleading. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and include all adjustments necessary for the fair presentation of our financial position as of March 31, 2020 and December 31, 2019, and our results of operations for the periods presented. Our financial position as of March 31, 2020 and results of operations and cash flows for the three months ended March 31, 2020 were not materially impacted by the COVID-19 pandemic but the Company is continuously assessing the evolving situation related to the pandemic. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2020 and therefore should not be relied upon as an indicator of future results. |
Significant Accounting Policies, Estimates and Judgements | Significant Accounting Polices, Estimates and Judgements – The preparation of condensed 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 condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the commissions we expect to collect for each approved member cohort, allowance for credit loss, the useful lives of intangible assets, fair value of investments, recoverability of intangible assets, valuation allowance for deferred income taxes, provision (benefit) 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. With the exception of the change for the accounting of credit losses as a result of the adoption of Accounting Standard Updates ("ASU") No. 2016-13, Financial Instruments – Credit Losses discussed below, there have been no material changes to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. |
Seasonality | 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, Medicare Supplement, and Medicare Part D prescription drug coverage for the following year. As a result, our Medicare plan-related commission revenue is highest in our fourth quarter. Due to the recent reintroduction of the Medicare Advantage open enrollment period that takes place in the first quarter of the year, our commission revenue is typically second-highest in our first quarter. The majority of our major medical individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period 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 major medical individual and family health insurance outside of the open enrollment period, 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. |
Recently Adopted Accounting Pronouncement; Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncement Financial Instruments – Credit Losses (Topic 326) – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), that requires companies to present certain financial assets net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. Contract assets – commissions receivable are the Company's only financial assets that were materially impacted by this guidance. We adopted ASU 2016-13 using a modified retrospective transition method on January 1, 2020 for all financial assets measured at amortized cost. Results for periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported under the previous accounting standards. We recorded a $1.1 million decrease, net of income taxes, to the retained earnings as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. See Note 3 – Supplemental Financial Statement Information for further discussion on credit losses. T he impacts from the adoption are summarized as follows (in thousands): Balance Sheet Impact: December 31, 2019 Transition Adjustments January 1, 2020 Contract assets – commissions receivable – current $ 174,526 $ (71) $ 174,455 Contract assets – commissions receivable – non-current $ 414,696 $ (1,442) $ 413,254 Other assets* $ 18,004 $ 366 $ 18,370 Total assets $ 741,634 $ (1,147) $ 740,487 Retained earnings $ 271,852 $ (1,147) $ 270,705 ____________ * Adjustment to Other assets is related to the increase in deferred tax asset resulted from the adoption of the accounting guidance. Financial Instruments (Topic 820) – In 2018, the FASB issued ASU No. 2018-13, to change the disclosure requirements for fair value measurement with the objective of improving the effectiveness of the notes to financial statements. This new guidance removed and modified certain disclosure requirements under Topic 820. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Intangible – Goodwill and Other (Topic 350) – In 2017, the FASB issued ASU 2017-04 to simplify the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted Income Taxes (Topic 740) – In December 2019, the FASB issued ASU No. 2019-12, Income Tax, Simplifying the Accounting for Income Taxes , which aims to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application of and simplify U.S. GAAP for other areas under this Topic by clarifying existing guidance. ASU 2019-12 will be effective for us beginning January 1, 2021. The amendments in this standard update have individually different adoption approaches. We do not anticipate a material impact on our consolidated financial statements and disclosure from the adoption of this standard update. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Adoption of ASU 2016-13 | T he impacts from the adoption are summarized as follows (in thousands): Balance Sheet Impact: December 31, 2019 Transition Adjustments January 1, 2020 Contract assets – commissions receivable – current $ 174,526 $ (71) $ 174,455 Contract assets – commissions receivable – non-current $ 414,696 $ (1,442) $ 413,254 Other assets* $ 18,004 $ 366 $ 18,370 Total assets $ 741,634 $ (1,147) $ 740,487 Retained earnings $ 271,852 $ (1,147) $ 270,705 ____________ * Adjustment to Other assets is related to the increase in deferred tax asset resulted from the adoption of the accounting guidance. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Segment | Disaggregation of Revenue – The table below disaggregates our revenue by product (in thousands): Three Months Ended March 31, 2020 2019 Medicare Medicare Advantage $ 68,347 $ 39,843 Medicare Supplement 15,170 8,597 Medicare Part D 5,661 2,336 Total Medicare 89,178 50,776 Individual and Family (1) Non-Qualified Health Plans 1,446 2,629 Qualified Health Plans 1,210 3,508 Total Individual and Family 2,656 6,137 Ancillary Short-term 2,216 1,316 Dental 743 790 Vision 243 462 Other 1,049 951 Total Ancillary 4,251 3,519 Small Business 2,971 2,640 Commission Bonus 613 1,155 Total Commission Revenue 99,669 64,227 Other Revenue 6,739 4,546 Total Revenue $ 106,408 $ 68,773 _____________ (1) We define our individual and family plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both qualified and non-qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase non-qualified health plans cannot receive a subsidy in connection with the purchase of non-qualified plans. Commission revenue by segment is presented in the table below (in thousands): Three Months Ended March 31, 2020 2019 Medicare Commission Revenue from Members Approved During the Period (1) $ 81,125 $ 50,582 Net Commission Revenue from Members Approved in Prior Periods (2) 8,979 1,067 Total Medicare Segment Commission Revenue $ 90,104 $ 51,649 Individual, Family and Small Business Commission Revenue from Members Approved During the Period (1) $ 5,796 $ 6,225 Net Commission Revenue from Members Approved in Prior Periods (2) 3,769 6,353 Total IFP/SMB Segment Commission Revenue $ 9,565 $ 12,578 _____________ (1) These amounts include commission bonus revenue. (2) These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as adjustment revenue within the relevant reporting period. These amounts include revenue associated with renewing small business health insurance members. Adjustment revenue also includes reductions to revenue for certain prior periods cohorts which were immaterial for the three months ended March 31, 2020 and 2019, respectively. |
Supplemental Financial Statem_2
Supplemental Financial Statement Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule Of Cash, Cash Equivalents and Restricted Cash | As of March 31, 2020 and December 31, 2019, our cash, cash equivalent and restricted cash balances were invested as follows (in thousands): March 31, 2020 December 31, 2019 Cash $ 16,364 $ 16,205 Cash equivalents 167,803 7,261 Restricted cash 3,353 3,354 Total cash, cash equivalents and restricted cash $ 187,520 $ 26,820 |
Schedule of Cash, Cash Equivalents and Restricted Cash | As of March 31, 2020 and December 31, 2019, our cash, cash equivalent and restricted cash balances were invested as follows (in thousands): March 31, 2020 December 31, 2019 Cash $ 16,364 $ 16,205 Cash equivalents 167,803 7,261 Restricted cash 3,353 3,354 Total cash, cash equivalents and restricted cash $ 187,520 $ 26,820 |
Schedule of Accounts Receivable | Our contract assets and accounts receivable consisted of the following for the periods presented (in thousands): March 31, 2020 December 31, 2019 Contract assets – commissions receivable – current $ 125,252 $ 174,526 Contract assets – commissions receivable – non-current 435,465 414,696 Accounts receivable 668 2,332 Total contract assets and accounts receivable $ 561,385 $ 591,554 |
Schedule of Contract Assets - Commissions Receivable | Our contract assets – commission receivable activities, net of credit losses are summarized as follows (in thousands): Three Months Ended March 31, 2020 Medicare Segment IFP/SMB Segment Total Beginning balance $ 550,922 $ 38,300 $ 589,222 Commission revenue from members approved during the period 81,125 5,796 86,921 Net commission revenue adjustments from members approved in prior period 8,979 3,769 12,748 Cash receipts (112,731) (13,811) (126,542) Change in credit loss allowance* (1,574) (58) (1,632) Ending balance $ 526,721 $ 33,996 $ 560,717 Three Months Ended March 31, 2019 Medicare Segment IFP/SMB Segment Total Beginning balance $ 311,977 $ 33,881 $ 345,858 Commission revenue from members approved during the period 50,582 6,225 56,807 Net commission revenue adjustments from members approved in prior period 1,067 6,353 7,420 Cash receipts (67,873) (14,001) (81,874) Change in credit loss allowance — — — Ending balance $ 295,753 $ 32,458 $ 328,211 _____________ * Amount consists of transition adjustment of $1.5 million related to the adoption of ASC 326 as of January 1, 2020 and the subsequent credit loss adjustment of $0.1 million as of March 31, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details regarding the adoption impact. |
Schedule of Credit Risk | Carriers that represented 10% or more of our total contract assets and accounts receivable balance are summarized as of the dates presented below: March 31, 2020 December 31, 2019 Humana 22 % 22 % Aetna (1) 21 % 20 % UnitedHealthCare (2) 20 % 20 % _____________ (1) Aetna also includes other carriers owned by Aetna. |
Schedule Of Prepaid Expenses And Other Current Assets | Prepaid expenses and other current assets are summarized as follows (in thousands): March 31, 2020 December 31, 2019 Prepaid maintenance contracts 5,460 3,853 Prepaid expenses 1,727 2,207 Prepaid insurance 543 918 Income tax receivable 1,041 584 Other 431 260 Prepaid expenses and other current assets 9,202 7,822 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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; and Level 3 Unobservable inputs for the asset or liability. |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | Our financial assets and liabilities measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy for the period presented below (in thousands): March 31, 2020 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 105,798 $ 105,798 $ — $ — $ 105,798 Commercial paper 62,005 — 62,005 — 62,005 Short-term marketable securities Commercial paper 23,063 — 23,063 — 23,063 Agency bonds 10,620 — 10,620 — 10,620 Long-term marketable securities Agency bonds 24,409 — 24,409 — 24,409 Total assets measured and recorded at fair value $ 225,895 $ 105,798 $ 120,097 $ — $ 225,895 December 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 7,261 $ 7,261 $ — $ — $ 7,261 Liabilities Earnout liability – current $ 37,273 $ — $ — $ 37,273 $ 37,273 |
Summary of Financial Liabilities Measured at Fair Value on a Recurring Basis | Our financial assets and liabilities measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy for the period presented below (in thousands): March 31, 2020 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 105,798 $ 105,798 $ — $ — $ 105,798 Commercial paper 62,005 — 62,005 — 62,005 Short-term marketable securities Commercial paper 23,063 — 23,063 — 23,063 Agency bonds 10,620 — 10,620 — 10,620 Long-term marketable securities Agency bonds 24,409 — 24,409 — 24,409 Total assets measured and recorded at fair value $ 225,895 $ 105,798 $ 120,097 $ — $ 225,895 December 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 7,261 $ 7,261 $ — $ — $ 7,261 Liabilities Earnout liability – current $ 37,273 $ — $ — $ 37,273 $ 37,273 |
Summary of Contractual Maturities | The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands): As of March 31, 2020 Amortized Cost Fair Value Due in 1 year $ 201,482 $ 201,486 Due in 1 year through 5 years 24,388 24,409 Total $ 225,870 $ 225,895 |
Summary of Unrealized Gains and Losses | Unrealized gains and losses on available-for-sale debt securities are included in accumulated other comprehensive income and summarized as follows as of March 31, 2020: Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents Money market funds $ 105,798 $ — $ — $ 105,798 Commercial paper 62,005 — — 62,005 Short-term marketable securities Commercial paper 23,063 — — 23,063 Agency bonds 10,616 5 (1) 10,620 Long-term marketable securities Agency bonds 24,388 21 — 24,409 Total $ 225,870 $ 26 $ (1) $ 225,895 |
Summary of Earnout Liability Activity | Earnout liability activities are summarized as follows (in thousands): Balance as of December 31, 2019 $ 37,273 Change in fair value — Settlements (37,273) Balance as of March 31, 2020 $ — |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Stock-Based Compensation Expense By Award Type | Our stock-based compensation expense is summarized as follows by award types (in thousands): Three Months Ended March 31, 2020 2019 Common stock options $ 306 $ 602 Restricted stock units 8,408 2,627 Total stock-based compensation expense $ 8,714 $ 3,229 |
Schedule Of Stock-Based Compensation Expense By Operating Function | Our stock-based compensation expense is summarized as follows by operating functions (in thousands): Three Months Ended March 31, 2020 2019 Marketing and advertising $ 1,730 $ 629 Customer care and enrollment 662 273 Technology and content 1,617 549 General and administrative 4,705 1,778 Total stock-based compensation expense $ 8,714 $ 3,229 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 income per share (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Net income (loss) $ 3,452 $ (5,159) Shares used in per share calculation – basic 24,719 21,831 Net income (loss) per share – basic: $ 0.14 $ (0.24) Diluted: Net income (loss) $ 3,452 $ (5,159) Shares used in per share calculation – basic 24,719 21,831 Dilutive effect of common stock 1,460 — Total common stock shares used in diluted share calculation 26,179 21,831 Net income (loss) per share – diluted $ 0.13 $ (0.24) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Contractual Obligations | Our future minimum payments under non-cancellable contractual service and licensing obligations as of March 31, 2020 are summarized as follows (in thousands): For the Years Ending December 31, Service and Licensing Obligations Remainder of 2020 $ 1,961 2021 2,189 2022 692 2023 444 2024 229 Thereafter — Total $ 5,515 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents summary results of our operating segments for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Revenue: Medicare $ 96,151 $ 54,901 Individual, Family and Small Business 10,257 13,872 Total revenue $ 106,408 $ 68,773 Segment profit: Medicare segment profit $ 21,960 $ 10,826 Individual, Family and Small Business segment profit 2,603 6,024 Total segment profit 24,563 16,850 Corporate (13,448) (8,296) Stock-based compensation expense (8,714) (3,229) Change in fair value of earnout liability — (13,306) Depreciation and amortization (823) (655) Amortization of intangible assets (547) (547) Other income, net 373 557 Income (loss) before benefit from income taxes $ 1,404 $ (8,626) |
Schedule Of Long Lived Assets By Geographical Areas | Long-lived assets by geographical area are summarized as follows (in thousands): March 31, 2020 December 31, 2019 United States $ 99,297 $ 64,408 China 418 471 Total $ 99,715 $ 64,879 |
Schedule Of Revenue By Major Customers | Carriers representing 10% or more of our total revenue for the three months ended March 31, 2020 and 2019 are presented in the table below: Three Months Ended March 31, 2020 2019 UnitedHealthcare (1) 22 % 17 % Humana 19 % 23 % Aetna (2) 15 % 17 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. (2) Aetna also includes other carriers owned by Aetna. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental information as of March 31, 2020 related to leases is as follows (in thousands): Operating lease right-of-use assets $ 43,396 Operating lease liabilities $ 46,166 Weighted-average remaining lease term of operating leases 7.9 years Weighted-average discount rate used to recognize operating lease right-of-use-assets 5.5 % |
Schedule of Operating Lease Maturities | As of March 31, 2020, maturities of operating lease liabilities are as follows (in thousands): Year ending December 31, Reminder of 2020 $ 5,058 2021 6,950 2022 6,988 2023 7,863 2024 7,706 Thereafter 27,603 Total lease payments 62,168 Less imputed interest (16,002) Total $ 46,166 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Components Of Income Tax Expense | The following table summarizes our benefit from income taxes and our effective tax rates for the three months ended March 31, 2020 and 2019 (in thousands, except effective tax rate): Three Months Ended March 31, 2020 2019 Income (loss) before benefit from income taxes $ 1,404 $ (8,626) Benefit from income taxes (2,048) (3,467) Effective tax rate (145.9) % 40.2 % |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Policies - Narrative (Details) $ in Thousands | Mar. 31, 2020USD ($)numberOfInsuranceCarriersstate | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of health insurance carriers (more than) | numberOfInsuranceCarriers | 180 | |||
Number of states in which the Company is licensed to market and sell health insurance | state | 50 | |||
Decrease in retained earnings | $ 274,157 | [1] | $ 271,852 | |
Transition Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Decrease in retained earnings | $ (1,147) | |||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Policies - Adoption of ASU 2016-13 (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | [1] | Jan. 01, 2020 | Dec. 31, 2019 |
Balance Sheet Impact | ||||
Contract assets – commissions receivable – current | $ 125,252 | $ 174,526 | ||
Contract assets – commissions receivable – non-current | 435,465 | 414,696 | ||
Other assets | 19,300 | 18,004 | ||
Total assets | 941,519 | 741,634 | ||
Retained earnings | $ 274,157 | $ 271,852 | ||
Transition Adjustments | ||||
Balance Sheet Impact | ||||
Contract assets – commissions receivable – current | $ (71) | |||
Contract assets – commissions receivable – non-current | (1,442) | |||
Other assets | 366 | |||
Total assets | (1,147) | |||
Retained earnings | (1,147) | |||
Adjusted Balance | ||||
Balance Sheet Impact | ||||
Contract assets – commissions receivable – current | 174,455 | |||
Contract assets – commissions receivable – non-current | 413,254 | |||
Other assets | 18,370 | |||
Total assets | 740,487 | |||
Retained earnings | $ 270,705 | |||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 106,408 | $ 68,773 |
Earnings per share, basic (in usd per share) | $ 0.14 | $ (0.24) |
Earnings per share, diluted (in usd per share) | $ 0.13 | $ (0.24) |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 89,178 | $ 50,776 |
Individual and Family | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,656 | 6,137 |
Ancillary | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,251 | 3,519 |
Commission, Members Approved In Prior Periods | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 12,748 | $ 7,420 |
Earnings per share, basic (in usd per share) | $ 0.52 | $ 0.34 |
Earnings per share, diluted (in usd per share) | $ 0.49 | $ 0.34 |
Product Concentration Risk | Revenue | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Commission revenue, percentage | 89.00% | 79.00% |
Medicare Advantage | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 3 years | |
Total revenue | $ 68,347 | $ 39,843 |
Medicare Part D | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 5 years | |
Total revenue | $ 5,661 | 2,336 |
Medicare Supplement | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 5 years | |
Total revenue | $ 15,170 | 8,597 |
Other | Ancillary | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1,049 | $ 951 |
Minimum | Individual and Family | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 1 year 6 months | |
Minimum | Other | Ancillary | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 1 year | |
Maximum | Individual and Family | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 2 years | |
Maximum | Medicare Advantage | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 12 years | |
Maximum | Other | Ancillary | ||
Disaggregation of Revenue [Line Items] | ||
Average plan duration | 3 years |
Revenue - Commission Revenue by
Revenue - Commission Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 106,408 | $ 68,773 |
Commission | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 99,669 | 64,227 |
Commission revenue from members approved during the period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 86,921 | 56,807 |
Net commission revenue adjustments from members approved in prior period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 12,748 | 7,420 |
Medicare | Commission | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 90,104 | 51,649 |
Medicare | Commission revenue from members approved during the period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 81,125 | 50,582 |
Medicare | Net commission revenue adjustments from members approved in prior period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,979 | 1,067 |
Individual, Family and Small Business | Commission | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 9,565 | 12,578 |
Individual, Family and Small Business | Commission revenue from members approved during the period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,796 | 6,225 |
Individual, Family and Small Business | Net commission revenue adjustments from members approved in prior period | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,769 | $ 6,353 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 106,408 | $ 68,773 |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 89,178 | 50,776 |
Medicare | Medicare Advantage | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 68,347 | 39,843 |
Medicare | Medicare Supplement | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,170 | 8,597 |
Medicare | Medicare Part D | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 5,661 | 2,336 |
Individual and Family | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,656 | 6,137 |
Individual and Family | Non-Qualified Health Plans | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,446 | 2,629 |
Individual and Family | Qualified Health Plans | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,210 | 3,508 |
Ancillary | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,251 | 3,519 |
Ancillary | Short-term | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,216 | 1,316 |
Ancillary | Dental | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 743 | 790 |
Ancillary | Vision | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 243 | 462 |
Ancillary | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,049 | 951 |
Small Business | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,971 | 2,640 |
Commission Bonus | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 613 | 1,155 |
Commission | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 99,669 | 64,227 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 6,739 | $ 4,546 |
Supplemental Financial Statem_3
Supplemental Financial Statement Information- Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |||||
Cash | $ 16,364 | $ 16,205 | |||
Cash equivalents | 167,803 | 7,261 | |||
Restricted cash | 3,353 | [1] | 3,354 | ||
Total cash, cash equivalents and restricted cash | $ 187,520 | $ 26,820 | $ 135,475 | $ 13,089 | |
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Supplemental Financial Statem_4
Supplemental Financial Statement Information - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | ||
Balance Sheet Related Disclosures [Abstract] | |||
Restricted cash | $ 3,353 | [1] | $ 3,354 |
Credit loss expense | 100 | ||
China | |||
Cash and Cash Equivalents [Line Items] | |||
Deposits | $ 4,100 | ||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Supplemental Financial Statem_5
Supplemental Financial Statement Information - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Contract assets – commissions receivable – current | $ 125,252 | [1] | $ 174,526 |
Contract assets – commissions receivable – non-current | 435,465 | [1] | 414,696 |
Accounts receivable | 668 | [1] | 2,332 |
Total contract assets and accounts receivable | $ 561,385 | $ 591,554 | |
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Supplemental Financial Statem_6
Supplemental Financial Statement Information - Schedule of Commissions Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Change in Contract with Customer, Asset [Roll Forward] | |||
Beginning balance | $ 589,222 | $ 345,858 | |
Total revenue | 106,408 | 68,773 | |
Cash receipts | (126,542) | (81,874) | |
Change in credit loss allowance | (1,632) | 0 | |
Ending balance | 560,717 | 328,211 | |
Credit loss expense | 100 | ||
Medicare | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Beginning balance | 550,922 | 311,977 | |
Cash receipts | (112,731) | (67,873) | |
Change in credit loss allowance | (1,574) | 0 | |
Ending balance | 526,721 | 295,753 | |
Individual, Family and Small Business | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Beginning balance | 38,300 | 33,881 | |
Cash receipts | (13,811) | (14,001) | |
Change in credit loss allowance | (58) | 0 | |
Ending balance | 33,996 | 32,458 | |
Transition Adjustments | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Allowance for credit loss | $ (1,500) | ||
Commission revenue from members approved during the period | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | 86,921 | 56,807 | |
Commission revenue from members approved during the period | Medicare | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | 81,125 | 50,582 | |
Commission revenue from members approved during the period | Individual, Family and Small Business | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | 5,796 | 6,225 | |
Net commission revenue adjustments from members approved in prior period | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | 12,748 | 7,420 | |
Net commission revenue adjustments from members approved in prior period | Medicare | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | 8,979 | 1,067 | |
Net commission revenue adjustments from members approved in prior period | Individual, Family and Small Business | |||
Change in Contract with Customer, Asset [Roll Forward] | |||
Total revenue | $ 3,769 | $ 6,353 |
Supplemental Financial Statem_7
Supplemental Financial Statement Information - Schedule of Credit Risk (Details) - Customer Concentration Risk - Accounts Receivable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Humana | ||
Concentration Risk [Line Items] | ||
Major customer revenue, percentage | 22.00% | 22.00% |
Aetna | ||
Concentration Risk [Line Items] | ||
Major customer revenue, percentage | 21.00% | 20.00% |
UnitedHealthcare | ||
Concentration Risk [Line Items] | ||
Major customer revenue, percentage | 20.00% | 20.00% |
Supplemental Financial Statem_8
Supplemental Financial Statement Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Prepaid maintenance contracts | $ 5,460 | $ 3,853 | |
Prepaid expenses | 1,727 | 2,207 | |
Prepaid insurance | 543 | 918 | |
Income tax receivable | 1,041 | 584 | |
Other | 431 | 260 | |
Prepaid expenses and other current assets | $ 9,202 | [1] | $ 7,822 |
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Assets | |||
Short-term marketable securities | $ 33,683 | [1] | $ 0 |
Long-term marketable securities | 24,409 | [1] | 0 |
Liabilities | |||
Earnout liability — current | 0 | [1] | 37,273 |
Level 1 | Recurring | |||
Assets | |||
Total assets measured and recorded at fair value | 105,798 | ||
Liabilities | |||
Earnout liability — current | 0 | ||
Level 2 | Recurring | |||
Assets | |||
Total assets measured and recorded at fair value | 120,097 | ||
Liabilities | |||
Earnout liability — current | 0 | ||
Level 3 | Recurring | |||
Assets | |||
Total assets measured and recorded at fair value | 0 | ||
Liabilities | |||
Earnout liability — current | 37,273 | ||
Carrying Value | Recurring | |||
Assets | |||
Total assets measured and recorded at fair value | 225,895 | ||
Liabilities | |||
Earnout liability — current | 37,273 | ||
Fair Value | Recurring | |||
Assets | |||
Total assets measured and recorded at fair value | 225,895 | ||
Liabilities | |||
Earnout liability — current | 37,273 | ||
Commercial paper | |||
Assets | |||
Short-term marketable securities | 23,063 | ||
Commercial paper | Level 1 | Recurring | |||
Assets | |||
Short-term marketable securities | 0 | ||
Commercial paper | Level 2 | Recurring | |||
Assets | |||
Short-term marketable securities | 23,063 | ||
Commercial paper | Level 3 | Recurring | |||
Assets | |||
Short-term marketable securities | 0 | ||
Commercial paper | Carrying Value | Recurring | |||
Assets | |||
Short-term marketable securities | 23,063 | ||
Commercial paper | Fair Value | Recurring | |||
Assets | |||
Short-term marketable securities | 23,063 | ||
Agency bonds | |||
Assets | |||
Short-term marketable securities | 10,620 | ||
Long-term marketable securities | 24,409 | ||
Agency bonds | Level 1 | Recurring | |||
Assets | |||
Short-term marketable securities | 0 | ||
Long-term marketable securities | 0 | ||
Agency bonds | Level 2 | Recurring | |||
Assets | |||
Short-term marketable securities | 10,620 | ||
Long-term marketable securities | 24,409 | ||
Agency bonds | Level 3 | Recurring | |||
Assets | |||
Short-term marketable securities | 0 | ||
Long-term marketable securities | 0 | ||
Agency bonds | Carrying Value | Recurring | |||
Assets | |||
Short-term marketable securities | 10,620 | ||
Long-term marketable securities | 24,409 | ||
Agency bonds | Fair Value | Recurring | |||
Assets | |||
Short-term marketable securities | 10,620 | ||
Long-term marketable securities | 24,409 | ||
Money market funds | |||
Assets | |||
Cash equivalents | 105,798 | ||
Money market funds | Level 1 | Recurring | |||
Assets | |||
Cash equivalents | 105,798 | 7,261 | |
Money market funds | Level 2 | Recurring | |||
Assets | |||
Cash equivalents | 0 | 0 | |
Money market funds | Level 3 | Recurring | |||
Assets | |||
Cash equivalents | 0 | 0 | |
Money market funds | Carrying Value | Recurring | |||
Assets | |||
Cash equivalents | 105,798 | 7,261 | |
Money market funds | Fair Value | Recurring | |||
Assets | |||
Cash equivalents | 105,798 | $ 7,261 | |
Commercial paper | |||
Assets | |||
Cash equivalents | 62,005 | ||
Commercial paper | Level 1 | Recurring | |||
Assets | |||
Cash equivalents | 0 | ||
Commercial paper | Level 2 | Recurring | |||
Assets | |||
Cash equivalents | 62,005 | ||
Commercial paper | Level 3 | Recurring | |||
Assets | |||
Cash equivalents | 0 | ||
Commercial paper | Carrying Value | Recurring | |||
Assets | |||
Cash equivalents | 62,005 | ||
Commercial paper | Fair Value | Recurring | |||
Assets | |||
Cash equivalents | $ 62,005 | ||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Amortized Cost | |
Due in 1 year | $ 201,482 |
Due in 1 year through 5 years | 24,388 |
Total | 225,870 |
Fair Value | |
Due in 1 year | 201,486 |
Due in 1 year through 5 years | 24,409 |
Total | $ 225,895 |
Fair Value Measurements - Unrea
Fair Value Measurements - Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Cash equivalents | |||
Amortized Cost | $ 184,167 | [1] | $ 23,466 |
Short-term marketable securities | |||
Fair Value | 33,683 | [1] | 0 |
Long-term marketable securities | |||
Fair Value | 24,409 | [1] | $ 0 |
Total | 225,870 | ||
Unrealized Gain | 26 | ||
Unrealized Loss | (1) | ||
Fair Value | 225,895 | ||
Money market funds | |||
Cash equivalents | |||
Amortized Cost | 105,798 | ||
Fair Value | 105,798 | ||
Commercial paper | |||
Cash equivalents | |||
Amortized Cost | 62,005 | ||
Fair Value | 62,005 | ||
Commercial paper | |||
Short-term marketable securities | |||
Amortized Cost | 23,063 | ||
Unrealized Gain | 0 | ||
Unrealized Loss | 0 | ||
Fair Value | 23,063 | ||
Agency bonds | |||
Short-term marketable securities | |||
Amortized Cost | 10,616 | ||
Unrealized Gain | 5 | ||
Unrealized Loss | (1) | ||
Fair Value | 10,620 | ||
Long-term marketable securities | |||
Amortized Cost | 24,388 | ||
Unrealized Gain | 21 | ||
Unrealized Loss | 0 | ||
Fair Value | $ 24,409 | ||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2020USD ($)shares | Feb. 28, 2019USD ($)shares | Mar. 31, 2020USD ($)numberOfSecurities | Mar. 31, 2019USD ($) | |
Business Acquisition [Line Items] | ||||
Number of securities in net loss positions | numberOfSecurities | 4 | |||
Acquisition-related contingent payments | $ 8,751 | $ 9,542 | ||
GoMedigap | ||||
Business Acquisition [Line Items] | ||||
Acquisition-related contingent payments | $ 8,800 | $ 9,500 | ||
Earnout consideration (in shares) | shares | 294,608 | 294,608 | ||
Stock issued for acquisition | $ 28,500 | $ 17,300 |
Fair Value Measurements - Earno
Fair Value Measurements - Earnout Liability Activity (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 37,273 |
Change in fair value | 0 |
Settlements | (37,273) |
Ending balance | $ 0 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||
Sale of stock, shares issued (in shares) | 2,070,000 | ||
Sale of stock, price per share (in dollars per share) | $ 115 | $ 115 | |
Net proceeds from sale of stock | $ 228 | ||
Number of shares repurchased under share repurchase plan (in shares) | 0 | ||
Treasury shares that were previously surrendered by employees to satisfy tax withholdings (in shares) | 985,454 | ||
Treasury stock (in shares) | 11,649,342 | 11,649,342 | 11,615,558 |
Over-Allotment Option | |||
Equity, Class of Treasury Stock [Line Items] | |||
Sale of stock, shares issued (in shares) | 270,000 | ||
Previous share repurchase programs | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares repurchased under share repurchase plan (in shares) | 10,663,888 |
Equity - Schedule of Stock-Base
Equity - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 8,714 | $ 3,229 |
Common stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 306 | 602 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 8,408 | 2,627 |
Marketing and advertising | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,730 | 629 |
Customer care and enrollment | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 662 | 273 |
Technology and content | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,617 | 549 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 4,705 | $ 1,778 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic: | ||
Net income (loss) | $ 3,452 | $ (5,159) |
Shares used in per share calculation - basic (in shares) | 24,719 | 21,831 |
Earnings per share, basic (in usd per share) | $ 0.14 | $ (0.24) |
Diluted: | ||
Dilutive effect of common stock (in shares) | 1,460 | 0 |
Total common stock shares used in diluted share calculation (in shares) | 26,179 | 21,831 |
Earnings per share, diluted (in usd per share) | $ 0.13 | $ (0.24) |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Anti-Dilutive Shares Excluded from Computation Of Net Income Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,000,000 | |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,400,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Jul. 01, 2019plaintiff | Apr. 29, 2020claim | Mar. 31, 2020USD ($) |
Loss Contingencies [Line Items] | |||
Loss contingency accrued | $ 1,200 | ||
Remainder of 2020 | 1,961 | ||
2021 | 2,189 | ||
2022 | 692 | ||
2023 | 444 | ||
2024 | 229 | ||
Thereafter | 0 | ||
Total | $ 5,515 | ||
Subsequent Event [Member] | |||
Loss Contingencies [Line Items] | |||
New claims filed | claim | 2 | ||
Le'Vias Compliant | |||
Loss Contingencies [Line Items] | |||
Number of plaintiffs | plaintiff | 2 |
Segment and Geographic Inform_3
Segment and Geographic Information - Segment Operating Results (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Total revenue | $ 106,408 | $ 68,773 |
Stock-based compensation expense | (8,714) | (3,229) |
Change in fair value of earnout liability | 0 | (13,306) |
Depreciation and amortization | (823) | (655) |
Amortization of intangible assets | (547) | (547) |
Other income, net | 373 | 557 |
Income (loss) before benefit from income taxes | 1,404 | (8,626) |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 106,408 | 68,773 |
Segment profit (loss) | 24,563 | 16,850 |
Operating Segments | Medicare | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 96,151 | 54,901 |
Segment profit (loss) | 21,960 | 10,826 |
Operating Segments | Individual, Family and Small Business | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 10,257 | 13,872 |
Segment profit (loss) | 2,603 | 6,024 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Segment profit (loss) | $ (13,448) | $ (8,296) |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule Of Long-Lived Assets By Geographical Area (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 99,715 | $ 64,879 |
United States | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 99,297 | 64,408 |
China | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 418 | $ 471 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Revenue by Major Customers (Details) - Customer Concentration Risk - Revenue | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Humana | ||
Revenue, Major Customer [Line Items] | ||
Major customer revenue, percentage | 19.00% | 23.00% |
UnitedHealthcare | ||
Revenue, Major Customer [Line Items] | ||
Major customer revenue, percentage | 22.00% | 17.00% |
Aetna | ||
Revenue, Major Customer [Line Items] | ||
Major customer revenue, percentage | 15.00% | 17.00% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Jan. 31, 2020ft² | Jan. 01, 2020periods | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | $ 2,100 | $ 1,300 | ||
Operating cash outflow from operating leases | 1,600 | $ 900 | ||
Acquired right-of-use asset | 7,100 | |||
Future minimum lease payments | $ 62,168 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 10 years | |||
Gold River, California | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space, square feet | ft² | 63,206 | |||
Future minimum lease payments | $ 13,500 | |||
Number of extension periods | periods | 1 | |||
Extension term | 5 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 43,396 | [1] | $ 36,621 |
Operating lease liabilities | $ 46,166 | ||
Weighted-average remaining lease term of operating leases | 7 years 10 months 24 days | ||
Weighted-average discount rate used to recognize operating lease right-of-use-assets | 5.50% | ||
[1] | Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details. |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating leases | |
Reminder of 2020 | $ 5,058 |
2021 | 6,950 |
2022 | 6,988 |
2023 | 7,863 |
2024 | 7,706 |
Thereafter | 27,603 |
Total lease payments | 62,168 |
Less imputed interest | (16,002) |
Operating lease liabilities | $ 46,166 |
Debt (Details)
Debt (Details) - USD ($) | Dec. 20, 2019 | Sep. 17, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Borrowings under line of credit | $ 0 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 75,000,000 | $ 40,000,000 | ||
Commitment fee percentage | 0.50% | |||
Facility fee percentage | 0.50% | 1.75% | ||
Maximum borrowing capacity | $ 75,000,000 | $ 40,000,000 | ||
Covenant, minimum cash and cash equivalents | 6,000,000 | 6,000,000 | ||
Covenant, maximum cash and cash equivalents | 11,300,000 | |||
Minimum liquidity | 10,000,000 | |||
Maximum liquidity | $ 18,800,000 | |||
Debt issuance costs | 1,200,000 | $ 1,100,000 | $ 1,100,000 | |
Revolving Credit Facility | Credit Agreement Amendment | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 500,000 | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 5,000,000 | |||
Eligible Commissions Receivables, Preceding Three Months | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing base percentage | 80.00% | |||
Eligible Commissions Receivables, Succeeding Three Months | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing base percentage | 80.00% | |||
Eligible Commissions Receivables, Succeeding Six Months | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing base percentage | 50.00% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) before benefit from income taxes | $ 1,404 | $ (8,626) |
Benefit from income taxes | $ (2,048) | $ (3,467) |
Effective tax rate | (145.90%) | 40.20% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Benefit from income taxes | $ 2,048 | $ 3,467 |
Effective tax rate | (145.90%) | 40.20% |
Uncategorized Items - ehth-2020
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,147,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,147,000) |