Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 12, 2015 |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HIIQ | ||
Entity Registrant Name | Health Insurance Innovations, Inc. | ||
Entity Central Index Key | 1561387 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $59.90 | ||
Class A common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 7,796,989 | ||
Class B common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 6,841,667 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $14,256,000 | $17,054,000 |
Cash held on behalf of others | 7,642,000 | 4,591,000 |
Investment proceeds receivable | 15,000,000 | |
Short-term investments | 461,000 | 6,877,000 |
Accounts receivable, prepaid expenses and other current assets | 2,332,000 | 963,000 |
Advanced commissions | 5,973,000 | 2,596,000 |
Income taxes receivable | 12,000 | 395,000 |
Total current assets | 30,676,000 | 47,476,000 |
Property and equipment, net | 526,000 | 389,000 |
Goodwill | 41,076,000 | 18,014,000 |
Intangible assets, net | 13,565,000 | 5,281,000 |
Other assets | 329,000 | 489,000 |
Total assets | 86,172,000 | 71,649,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 11,397,000 | 7,074,000 |
Current portion of contingent consideration | 2,647,000 | 1,945,000 |
Deferred revenue | 64,000 | 882,000 |
Deferred tax liability | 13,000 | |
Due to member | 229,000 | 916,000 |
Other current liabilities | 189,000 | 187,000 |
Total current liabilities | 14,539,000 | 11,004,000 |
Contingent acquisition consideration | 1,753,000 | 1,931,000 |
Deferred tax liability | 2,287,000 | |
Due to member | 387,000 | 423,000 |
Other liabilities | 494,000 | 514,000 |
Total liabilities | 19,460,000 | 13,872,000 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock (par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding) | ||
Additional paid-in capital | 42,647,000 | 28,787,000 |
Treasury stock, at cost (47,144 and 129,881 shares, respectively) | -347,000 | -1,563,000 |
Accumulated deficit | -3,694,000 | -3,355,000 |
Total Health Insurance Innovations, Inc. stockholders' equity | 38,621,000 | 23,883,000 |
Noncontrolling interests | 28,091,000 | 33,894,000 |
Total stockholders' equity | 66,712,000 | 57,777,000 |
Total liabilities and stockholders' equity | 86,172,000 | 71,649,000 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 8,000 | 5,000 |
Total stockholders' equity | 8,000 | 5,000 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | 7,000 | 9,000 |
Total stockholders' equity | $7,000 | $9,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 47,144 | 129,881 |
Class A common stock | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,900,085 | 5,309,594 |
Common stock, shares outstanding | 7,852,941 | 5,179,713 |
Class B common stock | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,841,667 | 8,566,667 |
Common stock, shares outstanding | 6,841,667 | 8,566,667 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
Revenues (premium equivalents of $156,039 and $100,002 for the years ended December 31, 2014 and 2013, respectively) | $88,758 | $56,639 |
Cost of revenues | 2,391 | |
Gross margin | 86,367 | 56,639 |
Operating expenses: | ||
Third-party commissions | 42,760 | 32,244 |
Credit cards and ACH fees | 1,863 | 1,173 |
Contract termination | 5,500 | |
Selling, general and administrative | 37,504 | 23,959 |
Depreciation and amortization | 2,367 | 1,313 |
Total operating expenses | 84,494 | 64,189 |
Income (loss) from operations | 1,873 | -7,550 |
Other expense (income): | ||
Interest (income) expense | -13 | 1 |
Fair value adjustment of contingent consideration | 1,103 | 453 |
Other expense | 270 | 397 |
Net income (loss) before income taxes | 513 | -8,401 |
Provision for income taxes | 90 | 18 |
Net income (loss) | 423 | -8,419 |
Net income (loss) attributable to noncontrolling interests | 762 | -5,064 |
Net loss attributable to Health Insurance Innovations, Inc. | ($339) | ($3,355) |
Net loss per share attributable to Health Insurance Innovations, Inc. | ||
Basic | ($0.06) | ($0.70) |
Diluted | ($0.06) | ($0.70) |
Weighted average Class A shares outstanding | ||
Basic | 6,057,516 | 4,813,222 |
Diluted | 6,057,516 | 4,813,222 |
Recovered_Sheet1
Consolidated Statements Of Operations (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
Premium equivalent amount | $156,039 | $100,002 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders'/Member's Equity (USD $) | Total | Class A common stock | Class B common stock | Noncontrolling Interests | Additional Paid-in Capital | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Initial public offering | Initial public offering | Initial public offering | Initial public offering | Underwriters exercise of over-allotment options | Underwriters exercise of over-allotment options | Underwriters exercise of over-allotment options | Private Placement | Private Placement | Private Placement | Pre IPO | Pre IPO |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Class A common stock | USD ($) | USD ($) | Class A common stock | Class B common stock | Noncontrolling Interests | Additional Paid-in Capital | USD ($) | Class A common stock | Additional Paid-in Capital | USD ($) | Class A common stock | Additional Paid-in Capital | Health Plan Intermediaries, LLC and Subsidiaries | Noncontrolling Interests |
USD ($) | USD ($) | USD ($) | Class B common stock | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||
USD ($) | ||||||||||||||||||||
Beginning balance at Dec. 31, 2012 | $6,338 | $6,335 | $3 | |||||||||||||||||
Net loss | -259 | -248 | -11 | |||||||||||||||||
Contributions | 10 | 10 | ||||||||||||||||||
Distributions | -171 | -171 | ||||||||||||||||||
Ending balance at Feb. 13, 2013 | 5,918 | |||||||||||||||||||
Ending balance at Feb. 13, 2013 | 5,918 | 5,916 | 2 | |||||||||||||||||
Beginning balance at Dec. 31, 2012 | 6,338 | |||||||||||||||||||
Net loss | -8,419 | |||||||||||||||||||
Issuance of restricted shares from treasury, shares | -182,964 | |||||||||||||||||||
Ending balance at Dec. 31, 2013 | 57,777 | -1,563 | ||||||||||||||||||
Ending balance, Shares at Dec. 31, 2013 | 129,881 | |||||||||||||||||||
Beginning balance at Feb. 11, 2013 | ||||||||||||||||||||
Effects of initial public offering and reorganization | 5,918 | -5,916 | -2 | |||||||||||||||||
Issuance of common stock, shares | 4,666,667 | 8,666,667 | ||||||||||||||||||
Ending balance at Feb. 13, 2013 | 5,918 | 5,918 | ||||||||||||||||||
Ending balance at Feb. 13, 2013 | 5,918 | 5,916 | 2 | |||||||||||||||||
Net loss | -8,160 | -4,805 | -3,355 | |||||||||||||||||
Contributions | 6 | 6 | ||||||||||||||||||
Distributions | -2,217 | -2,217 | ||||||||||||||||||
Issuance of common stock | 57,755 | 5 | 57,750 | 9 | 36,444 | -36,453 | 1,400 | 1,400 | ||||||||||||
Issuance of common stock, shares | 4,666,667 | 8,666,667 | 100,000 | |||||||||||||||||
Purchase of Series B Membership interests and exchange and cancellation of Class B common stock | -1,400 | -1,400 | ||||||||||||||||||
Purchase of Series B Membership interests and exchange and cancellation of Class B common stock, shares | -100,000 | |||||||||||||||||||
Issuance of Class A common stock under equity compensation plans | 6,296 | 6,296 | ||||||||||||||||||
Issuance of Class A common stock under equity compensation plans, shares | 542,927 | |||||||||||||||||||
Issuance of restricted shares from treasury | -2,408 | 2,408 | ||||||||||||||||||
Issuance of restricted shares from treasury, shares | -182,964 | |||||||||||||||||||
Stock withheld in treasury from restricted share vesting | -1,731 | -1,731 | ||||||||||||||||||
Stock withheld in treasury from restricted share vesting, shares | -129,881 | 152,845 | ||||||||||||||||||
Forfeiture of restricted stock held in treasury | 2,240 | -2,240 | ||||||||||||||||||
Forfeiture of restricted stock held in treasury, shares | 160,000 | |||||||||||||||||||
Acquisition of noncontrolling interest in consolidated subsidiary | -90 | -52 | -38 | |||||||||||||||||
Ending balance at Dec. 31, 2013 | 57,777 | 5 | 9 | 33,894 | 28,787 | -1,563 | -3,355 | |||||||||||||
Ending balance, Shares at Dec. 31, 2013 | 5,179,713 | 8,566,667 | 129,881 | |||||||||||||||||
Net loss | 423 | 762 | -339 | |||||||||||||||||
Distributions | -264 | -264 | ||||||||||||||||||
Issuance of common stock | 20,959 | 2 | 20,957 | |||||||||||||||||
Issuance of common stock, shares | 1,725,000 | |||||||||||||||||||
Purchase of Series B Membership interests and exchange and cancellation of Class B common stock | -20,925 | -2 | -6,301 | -14,622 | ||||||||||||||||
Issuance of Class A common stock under equity compensation plans, shares | 49,500 | |||||||||||||||||||
Issuance of restricted shares from treasury | 150,000 | -1,793 | 1,793 | |||||||||||||||||
Issuance of restricted shares from treasury, shares | -150,000 | |||||||||||||||||||
Stock withheld in treasury from restricted share vesting | -273 | -12,403 | -273 | |||||||||||||||||
Stock withheld in treasury from restricted share vesting, shares | 12,403 | |||||||||||||||||||
Forfeiture of restricted stock held in treasury | 131 | -11,542 | 131 | |||||||||||||||||
Forfeiture of restricted stock held in treasury, shares | 11,542 | |||||||||||||||||||
Common stock issued as consideration for business acquisition | 6,734 | 1 | 6,733 | |||||||||||||||||
Common stock issued as consideration for business acquisition, shares | 815,991 | |||||||||||||||||||
Repurchases of Class A common stock | -304 | -304 | ||||||||||||||||||
Repurchases of Class A common stock, shares | -43,318 | 43,318 | ||||||||||||||||||
Stock compensation expense | 2,454 | 2,454 | ||||||||||||||||||
Ending balance at Dec. 31, 2014 | $66,712 | $8 | $7 | $28,091 | $42,647 | ($347) | ($3,694) | |||||||||||||
Ending balance, Shares at Dec. 31, 2014 | 7,852,941 | 6,841,667 | 47,144 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Operating activities: | ||
Net income (loss) | $423 | ($8,419) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) provided by operating activities: | ||
Stock-based compensation | 2,454 | 6,296 |
Depreciation and amortization | 2,367 | 1,313 |
Loss on extinguishment of debt | 71 | |
Fair value adjustments to contingent acquisition consideration | 1,103 | 453 |
Gain on sale of available-for-sale securities | -20 | |
Benefit for deferred income taxes | -440 | |
Amortization of deferred financing costs | 0 | 7 |
Changes in operating assets and liabilities: | ||
Increase in cash held on behalf of others | -3,051 | -752 |
Increase in advanced commissions | -3,377 | -2,171 |
Decrease (increase) in income taxes receivable | 383 | -395 |
(Increase) decrease in accounts receivable, prepaid expenses and other assets | -830 | 488 |
Increase in accounts payable, accrued expenses and other liabilities | 3,870 | 830 |
(Decrease) increase in deferred revenue | -911 | 614 |
Increase in due to member pursuant to tax receivable agreement | 423 | |
Net cash provided by (used in) operating activities | 1,971 | -1,242 |
Investing activities: | ||
Business acquisition, net of cash acquired | -22,327 | -9,909 |
Proceeds from sale of available-for-sale securities | 33,020 | |
Acquisitions of held-to-maturity investments | -9,863 | |
Maturities of held-to-maturity investments | 6,876 | 2,526 |
Acquisition of available-for-sale security | -18,000 | -15,000 |
Purchases of property and equipment | -291 | -143 |
Loans to distributors | 156 | |
Proceeds from repayment of loan to distributors | -174 | |
Payments for deposits | -500 | -158 |
Net cash used in investing activities | -1,222 | -32,565 |
Financing activities: | ||
Purchase of Series B Membership interests | -20,959 | -1,400 |
Payments for equity issuance | -1,643 | |
Repayments of long-term debt and noncompete obligation | -121 | -3,506 |
Payments of contingent acquisition consideration | -1,800 | -1,450 |
Distributions to member | -1,180 | -2,245 |
Acquisition of noncontrolling interest in subsidiary | -90 | |
Contributions from noncontrolling interests | 16 | |
Net cash (used in) provided by financing activities | -3,547 | 50,111 |
Net (decrease) increase in cash and cash equivalents | -2,798 | 16,304 |
Cash and cash equivalents at beginning of period | 17,054 | 750 |
Cash and cash equivalents at end of period | 14,256 | 17,054 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 17 | |
Cash paid for income taxes | 154 | 413 |
Supplemental disclosure of non-cash investing activities: | ||
Class A common stock issued as consideration for business acquisition | 6,734 | |
Contingent consideration for business acquisition | 1,263 | 3,876 |
Proceeds receivable from sale of available-for-sale security | 15,000 | |
Declared but unpaid distribution to member of Health Plan Intermediaries, LLC | 916 | |
Class A common stock | ||
Financing activities: | ||
Issuance of Class A common stock in private offering | 20,959 | |
Issuance of common stock in initial public offering | 60,760 | |
Purchases of Class A common stock pursuant to share repurchase plan | -304 | |
Class A common stock withheld in treasury from restricted share vesting | -142 | -1,731 |
Class A common stock | Underwriters exercise of over-allotment options | ||
Financing activities: | ||
Issuance of common stock in initial public offering | $1,400 |
Organization_Basis_of_Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 1 | Organization, Basis of Presentation, and Summary of Significant Accounting Policies | |
In this annual report, unless the context suggests otherwise, references to the “Company,” “we,” “us” and “our” refer (1) prior to the February 13, 2013 closing of an initial public offering (“IPO”) of the Class A common stock of Health Insurance Innovations, Inc. and related transactions, to Health Plan Intermediaries, LLC (“HPI”) and its consolidated subsidiaries and (2) after the IPO and related transactions, to Health Insurance Innovations, Inc. and its consolidated subsidiaries. The terms “HII”, “HPIH”, and “ICE” refer to the stand-alone entities Health Insurance Innovations, Inc., Health Plan Intermediaries Holdings, LLC, and Insurance Center for Excellence, LLC, respectively. The term “Secured” refers to (a) prior to or at the time of their July 17, 2013 acquisition by us, Sunrise Health Plans, Inc., Sunrise Group Marketing, Inc. and Secured Software Solutions, Inc., collectively, and (b) following our July 17, 2013 acquisition, the entities described in (a) and the limited liability companies into which such entities were converted shortly following such acquisition. The term “SIL” refer to Simple Insurance Leads LLC, a partially owned venture we and a third party formed in June 2013 and which commenced operations in October 2013. The terms “HealthPocket” or “HP” refer to HealthPocket, Inc., our wholly owned subsidiary which was acquired by HPIH on July 14, 2014. The term “ASIA” refers to American Service Insurance Agency LLC, a wholly owned subsidiary which was acquired by HPIH on August 8, 2014. HPIH, ICE, Secured, SIL, HP and ASIA are consolidated subsidiaries of HII. | |||
Principles of Consolidation and Basis of Presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Health Insurance Innovations, Inc., its wholly-owned subsidiaries, and Variable Interest Entities (“VIE”), of which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in preparing the consolidated financial statements. The results of operations for business combinations are included from their respective dates of acquisition. | |||
Business Description and Organizational Structure of the Company | |||
Our Business | |||
We are a developer and administrator of affordable individual health insurance and discount benefit plans that are sold throughout the United States. The main product we sell, Short Term Medical insurance (“STM”), is an alternative to Patient Protection and Affordable Care Act-qualified individual major medical insurance plans and generally offers comparable benefits for qualifying individuals. We design and structure insurance products on behalf of our contracted insurance carrier companies; market them to individuals through a network of distributors; and manage the member relationship through customer service agents. Our sales are primarily executed online and offer real-time fulfillment through a proprietary web-based technology platform, through which we receive credit card and automated clearing house payments (“ACH”) directly from the purchasing customers, whom are also referred to as members, at the time of sale. The plans are underwritten by contracted insurance carrier companies, and we assume no underwriting or insurance risk. | |||
Our History | |||
Our business began operations as HPI in 2008. To facilitate the IPO, HII was incorporated in the State of Delaware in October 2012. In November 2012, through a series of transactions, HPI assigned the operating assets of our business to HPIH, and HPIH assumed the operating liabilities of HPI. Since November 2012, we have operated our business through HPIH and its subsidiaries. | |||
Upon completion of the IPO, HII became a holding company, the principal asset of which is its interest in HPIH. All of HII’s business is conducted through HPIH and its subsidiaries. HII is the sole managing member and has 100% of the voting rights and control of HPIH. | |||
Our Reorganization and IPO | |||
HII was incorporated in the State of Delaware in October 2012 to facilitate the IPO and to become a holding company owning as its principal asset membership interests in HPIH. Since November 2012, we have operated our business through HPIH and its consolidated subsidiaries. See Note 8 for more information about the IPO. | |||
In anticipation of the IPO, in November 2012, HPI assigned the operating assets of our business through a series of transactions to HPIH, and HPIH assumed the operating liabilities of HPI. | |||
HII sold 4,666,667 shares of common stock for $14.00 per share in the IPO on February 13, 2013. Simultaneous with the offering, HII obtained a 35% membership interest, 35% economic interest and 100% of the voting interest in HPIH. | |||
Upon completion of the offering, HII became a holding company the principal asset of which is its interest in HPIH. All of HII’s business is conducted through HPIH and its subsidiaries. HII is the sole managing member of HPIH and has 100% of the voting rights and control. | |||
HII has two classes of outstanding capital stock: Class A common stock and Class B common stock. Class A shares represent 100% of the economic rights of the holders of all classes of our common stock to share in our distributions. Class B shares do not entitle their holders to any dividends paid by, or rights upon liquidation of, HII. Shares of our Class A common stock vote together with shares of our Class B common stock as a single class, except as otherwise required by law. Each share of our Class A common stock and our Class B common stock entitles its holder to one vote. As of December 31, 2014, Mr. Kosloske beneficially owns 46.6% of our outstanding Class A common stock and Class B common stock on a combined basis, which equals his combined economic interest in the Company. | |||
HPIH has two series of outstanding equity: Series A Membership Interests, which may only be issued to HII, as sole managing member, and Series B Membership Interests. The Series B Membership Interests are held by HPI and Health Plan Intermediaries Sub, LLC (“HPIS”), a subsidiary of HPI, and these entities are beneficially owned by Mr. Kosloske. As of December 31, 2014, (i) the Series A Membership Interests held by HII represent 53.4% of the outstanding membership interests, 53.4% of the economic interests and 100% of the voting interests in HPIH and (ii) the Series B Membership Interests held by the entities beneficially owned by Mr. Kosloske represent 46.6% of the outstanding membership interests, 46.6% of the economic interests and no voting interest in HPIH. | |||
Reclassifications | |||
Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Such reclassifications are to include short-term loans receivable in advanced commissions; carriers and vendors payable and commissions payable in accounts payable and accrued expenses; the long-term portion of the noncompete obligation in other liabilities in the accompanying consolidated balance sheets. Those reclassifications had no impact on net loss or cash flows as previously reported. | |||
Use of Estimates | |||
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. These estimates also affect the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. | |||
Summary of Significant Accounting Policies | |||
Revenue Recognition | |||
Our revenues primarily consist of commissions and fees earned for health insurance policies and ancillary products issued to members, enrollment fees paid by members, and administration fees paid by members as a direct result of our enrollment services. The members’ payments include a combination of risk premium, fees for discount benefit plans and an enrollment fee, which are collectively referred to as “premium equivalents.” Revenues reported by the Company are net of premiums remitted to insurance carriers and fees paid for discount benefit plans. Revenues are net of an allowance for policies expected to be cancelled by members during a limited cancellation period. We establish an allowance for estimated policy cancellations through a charge to revenues. The allowance is estimated using historical data to project future experience. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported. We periodically review the adequacy of the allowance and record adjustments as necessary. The net allowance for estimated policy cancellations as of December 31, 2014 and 2013 was $159,000 and $191,000, respectively. | |||
Revenue is earned at the time of sale. Commission rates for our products are agreed to in advance with the relevant insurance carrier and vary by carrier and policy type. Under our carrier compensation arrangements, the commission rate schedule that is in effect on the policy effective date governs the commissions over the life of the policy. In addition, we earn enrollment and administration fees on policies issued. All amounts due to insurance carriers and discount benefit vendors are reported and paid to them according to the procedures provided for in the contractual agreements between the individual carrier or vendor and us. Risk premiums are typically reported and remitted to insurance carriers on the 15th of the month following the end of the month in which they are collected. | |||
In concluding that revenues should be reported on a net basis, we considered Financial Accounting Standards Board (“FASB”) requirements and whether we have the responsibility to provide the goods or services to the customer or if we rely on a supplier to provide the goods or services to the customer. We are not the ultimate party responsible for providing the insurance coverage or discount benefits to the member and, therefore, we are not the primary obligor in the arrangement. The supplier, or insurance carrier, bears the risk for that insurance coverage. We therefore report our revenues net of amounts paid to the contracted insurance carrier companies and discount benefit vendors. | |||
Commission revenues earned at ICE, Secured, and ASIA, which are licensed insurance agent call centers are recognized as earned for sales of insurance and ancillary products. Commissions are earned based on commission rates contracted with insurance carriers or ancillary insurance product vendors, net of an estimate for forfeiture amounts payable for future policy cancellations. | |||
HP’s revenue is principally derived from marketing fees, licensing fees, limited exclusivity fees, and landing page development fees. HP recognizes revenue when: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; (2) delivery has occurred or services have been provided; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. | |||
Revenue is considered earned when the performance measures have been completed. Deposits (whether refundable or non-refundable), early payments and progress payments are not recognized as revenue until the revenue producing event has occurred. | |||
Marketing fee revenue. HP offers marketing services over a specified term. This fee is related to telephone and website traffic received by HealthPocket.com for the customer and is recognized on a straight-line basis over the life of the specified term of the marketing services. There are two ways marketing fee revenue is determined: lead fee revenue and conversion fee revenue. HP offers lead marketing services in the form of providing leads to customers. Revenue for leads provided is recognized based on the contractually agreed price per lead multiplied by the number of leads provided by HP during the period. HP offers conversion marketing services in the form of providing leads to customers with revenue recognized on a cost per acquisition basis. Revenue is calculated based on the number of qualifying conversions generated by HP leads. The customer collects conversion data and provides a contractually agreed periodical report to HP. Revenue is recognized based on the agreed price per lead conversion multiplied by the number of leads converted during the period. | |||
Limited exclusivity fee revenue. HP offers to certain customers limited exclusivity for placement of advertisements on the HealthPocket website for a fee. This fee is recognized on a straight-line basis over the life of the limited exclusivity term. | |||
Landing page development. HP offers to design, build and support a customer’s hosting of certain landing pages for the purpose of capturing e-leads and phone calls. Revenue for this service is recognized on a straight-line basis over the life of the support period of the landing pages. | |||
Third Party Commissions and Advanced Commissions | |||
We utilize a broad network of licensed third party distributors, in addition to our internal distributors to sell the plans that we develop. We pay commissions to these distributors based on a percentage of the policy premium that varies by type of policy. We pay fees to the distributors for discount benefit plans issued. | |||
Advanced commissions consist of amounts advanced to certain third party distributors. We perform ongoing credit evaluations of our distributors, all of which are located in the United States. We recover the advanced commissions from future commissions earned on premiums collected. We have not experienced any credit losses from commission advances and, accordingly, have not recognized any provision for bad debt expense for the periods presented. In addition, from time to time, certain of these advanced commissions arrangements include a loan agreement for the purposes of securing the advanced payments we make. Generally, these loans will be paid by commissions earned by the distributor, as described in the respective agreements. A fee for the advance commission of up to 2% of the insurance premium sold is charged to the distributors and recognized as interest income as earned. The interest income earned from advanced commissions for the year ended December 31, 2014 and 2013 were $ 220,000 and $93,000, respectively. Advanced commissions outstanding as of December 31, 2014 and 2013 totaled $6.0 million and $2.6 million, respectively. | |||
Cash and Cash Equivalents | |||
We account for cash on hand and demand deposits with banks and other financial institutions as cash. Short-term, highly liquid investments with original maturities of three months or less, when purchased, are considered cash equivalents. Investments in cash equivalents include, but are not limited to, demand deposit accounts, money market accounts and certificates of deposit with original maturities of three months or less. | |||
Periodically, we invest cash on hand in other highly-liquid investments. Such investments that have maturities greater than three months up to one year are classified as short-term investments and include, but are not limited to, certificates of deposit with maturities greater than three months, but less than one year. Certain certificates of deposits have maturities beyond one year from the balance sheet date; these are classified as long-term and are included in other assets on the accompanying consolidated balance sheets. | |||
Cash Held on Behalf of Others | |||
In our capacity as the policy administrator, we collect premiums from members and distributors and, after deducting our earned commission and fees, remit these premiums to our contracted insurance carriers, discount benefit vendors and distributors. We hold the unremitted funds in a fiduciary capacity until they are disbursed, and the use of such funds is restricted. We hold these funds in bank accounts. These unremitted amounts are reported as cash held on behalf of others in the accompanying consolidated balance sheets with the related liabilities reported as carriers and vendors payable and commissions payable. Cash held on behalf of others at December 31, 2014 and 2013 was $7.6 million and $4.6 million, respectively. | |||
Investments | |||
We have invested a portion of the proceeds from the IPO in certain investment securities. As of December 31, 2014 and 2013, all such investments are certificates of deposit and are classified as held-to-maturity and recorded at amortized cost. Certificates of deposit with original maturities of three months or less, when purchased, are classified as cash equivalents. Certificates of deposits with maturities greater than three months to 12 months are classified as short-term investments. Certificates of deposits with maturities greater than twelve months are considered long term assets until such time that the remaining maturities of the certificates of deposit are 12 months or less, in which case they are reclassified to short-term investments. | |||
As of December 31, 2014, we had two certificates of deposit with maturities of three months with a balance of $461,000 and are included in short-term investments on the accompanying balance sheet as of December 31, 2014. As of December 31, 2013, we had two certificates of deposit with maturities of 15 months with a balance of $460,000 and are included in other assets on the accompanying consolidated balance sheet as of December 31, 2013. | |||
During the year ended December 31, 2013, we had also invested $15.0 million in a fixed-income mutual fund which was classified as available for sale. We sold this mutual fund in December 2013 for $15.0 million. The transaction settled, and we received the proceeds on January 2, 2014; as such, the proceeds are included in investment proceeds receivable on the accompanying consolidated balance sheet. | |||
Accounts Receivable | |||
Accounts receivable represent amounts due to us for premiums collected by a third party and are generally considered delinquent 15 days after the due date. The underlying insurance contracts are cancelled retroactively if the payment remains delinquent. We have not experienced any credit losses from accounts receivable and have not recognized a provision for uncollectible accounts receivable. | |||
Property and Equipment | |||
Property and equipment is recorded at cost, less accumulated depreciation, in the accompanying consolidated balance sheets. Depreciation expense for property and equipment is computed using the straight-line method over the following estimated useful lives: | |||
Computer equipment | 5 years | ||
Furniture and fixtures | 7 years | ||
Leasehold improvements | Shorter of the lease term or estimated useful life | ||
The Company’s management periodically reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. No impairment losses were recognized for the periods presented. | |||
Goodwill and Other Intangible Assets | |||
Goodwill | |||
As a result of our various acquisitions, we have recorded goodwill which represents the excess of the consideration paid over the fair value of the identifiable net assets acquired in a transaction accounted for as a business combination. An impairment test is performed by us at least annually as of October 1st of each year, or whenever events or circumstances indicate a potential for impairment. | |||
Under FASB guidance, we have the option of performing a qualitative assessment to determine whether based on the fact and circumstances it is more likely than not that the fair value of the reporting unit exceeds the carrying value of its net assets. A qualitative assessment requires judgments involving relevant factors, including but not limited to, changes in the general economic environment, industry and regulatory considerations, current economic performance compared to historical economic performance and other relevant company-specific events such as changes in management, key personnel or business strategy, where applicable. If we elect to bypass the qualitative assessment, or if we determine, based upon our assessment of those qualitative factors that it is more likely than not that the fair value of the unit is less than its carrying value, a quantitative assessment for impairment is required. We have two reporting units, which are our operating segments, Insurance Plan Development and Distribution (“IPD”) and HP.The quantitative assessment for evaluating the potential impairment of goodwill involves a two-step assessment process which requires significant estimates and judgments by us to be used during the analysis. In step one we determine if there is an indication of goodwill impairment by determining the fair value of the reporting unit’s net assets and comparing that value to the operating segment’s carrying value including the goodwill. If the carrying value of the net assets exceed the fair value, then the second step of the impairment assessment is required. The step two assessment determines if an impairment exists, and if so, the magnitude of the impairment by comparing the estimated fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The excess of the carrying value over the estimated fair value of the goodwill determines the amount of impairment which would then be recorded as a loss on our statement of operations in the year the impairment occurred. | |||
While performing an impairment assessment we use a combination of valuation approaches including the market approach and the income approach. | |||
The market approach uses a guideline company methodology, which is based upon a comparison of the reporting unit to similar publicly-traded companies within our industry. We derive a market value of invested capital or business enterprise value for each comparable company by multiplying the price per share of common stock of the publicly traded companies by their total common shares outstanding and adding each company’s current level of debt. We calculate a business enterprise multiple based on revenue and earnings from each company, then apply those multiples to our revenue and earnings to calculate a business enterprise value. Assumptions regarding the selection of comparable companies are made based on, among other factors, capital structure, operating environment and industry. As the comparable companies were typically larger and more diversified than our business, multiples were adjusted prior to application to our revenues and earnings to reflect differences in margins, long-term growth prospects and market capitalization. | |||
The income approach uses a discounted debt-free cash flow analysis to measure fair value by estimating the present value of future economic benefits. To perform the discounted debt-free cash flow analysis, we develop a pro forma analysis of the reporting unit to estimate future available debt-free cash flow and discounting estimated debt-free cash flow by an estimated industry weighted average cost of capital based on the same comparable companies used in the market approach. Per FASB guidance, the weighted average cost of capital is based on inputs (e.g., capital structure, risk, etc.) from a market participant’s perspective and not necessarily from the reporting unit’s perspective. Future cash flow is projected based on assumptions for our economic growth, industry expansion, future operations and the discount rate, all of which require significant judgments by management. | |||
We establish our assumptions and arrive at the estimates used in these calculations based upon our historical experience, knowledge of our industry and by incorporating third-party data, which we believe results in a reasonably accurate approximation of fair value. Nevertheless, changes in the assumptions used could have an impact on our assessment of recoverability. We believe our projected sales are reasonable based on, among other things, available information regarding our industry. We also believe the royalty rate is appropriate. The weighted average discount rate is impacted by current financial market trends and will remain dependent on such trends in the future. | |||
After computing a separate business enterprise value under the above approaches, we apply a weighting to them to derive the business enterprise value of the reporting unit. The weightings are evaluated each time a goodwill impairment assessment is performed and give consideration to the relative reliability of each approach at that time. Based on these weightings, we calculated a business enterprise value for the reporting unit. The implied fair value is then compared to the reporting unit’s carrying value. Upon completion of the analysis in step one as of October 1, 2014, we determined that the fair value of each of the reporting units exceeded its respective carrying value. As such, a step two analysis was not required. | |||
Our goodwill balance arose from our previous acquisitions. See Note 2 and Note 5 of the consolidated financial statements for further information on the acquisitions and our goodwill balance as of December 31, 2014 and 2013, respectively. See Note 5 for further discussion of our goodwill. | |||
Other Intangible Assets | |||
Our other intangible assets arose primarily from acquisitions. Finite-lived intangible assets are amortized over their useful lives from two to fifteen years. See Note 5 for further discussion of our intangible assets. | |||
Intangible assets subject are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of the asset or asset group is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If the carrying amount of an asset or asset group is not recoverable, we recognizes an impairment loss based on the excess of the carrying amount of the long-lived asset or asset group over its respective fair value which is generally determined as the present value of estimated future cash flows or as the appraised value. No impairments on intangible assets were recorded during the years ended December 31, 2014 or 2013. | |||
Advertising Costs | |||
Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2014 and 2013 are $2.5 million and $513,000, respectively. The advertising expenses for 2014 related to HP and HPIH and are $1.8 million and $0.7 million, respectively. All of the advertising expenses in 2013 were related to HPIH. HP advertising expenses of $1.7 million, related primarily to online advertising placements are classified as cost of sales on the consolidated statements of operations as these costs are directly attributable to generating customer referral revenue. Other HP advertising costs of $62,000 are classified as selling, general and administrative (“S, G & A”) expense on the consolidated statements of operations. All of the advertising expenses related to HPIH are classified as S, G & A expense. | |||
Accounting for Stock-Based Compensation | |||
Expense for stock-based compensation is recognized based upon estimated grant date fair value and is amortized over the service period of the awards using the accelerated method. For grants of stock appreciation rights (“SARs”) and stock options, we apply the Black-Scholes option-pricing model in determining the fair value of share-based payments to employees. The resulting compensation expense is recognized over the requisite service period. The requisite service period is the period during which an employee is required to provide service in exchange for an award, which often is the vesting period. Compensation expense is recognized only for those awards expected to vest. All stock-based compensation expense is classified within S, G & A expense in the consolidated statements of operations. See Note 9 for further discussion of stock-based compensation. | |||
Accounting for Income Taxes | |||
Our former operating entity, HPI, was taxed as an S corporation for income tax purposes. Therefore, we were not subject to entity-level federal or state income taxation prior to the IPO. HPIH is taxed as a partnership for federal income tax purposes; as a result, it is not subject to entity-level federal or state income taxation but its members are liable for taxes with respect to their allocable shares of each company’s respective net taxable income. | |||
We are subject to U.S. corporate federal, state and local income taxes that are attributable to HII as reflected in our consolidated financial statements. We use the liability method of accounting for income taxes. Significant management judgment is required in determining the provision for income taxes and, in particular, any valuation allowance that is recorded or released against our deferred tax assets. | |||
We evaluate quarterly the positive and negative evidence regarding the realization of net deferred tax assets. The carrying value of our net deferred tax assets is based on our belief that it is more likely than not that we will generate sufficient future taxable income to realize these deferred tax assets. | |||
We account for uncertainty in income taxes using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Such amounts are subjective, as a determination must be made on the probability of various possible outcomes. We reevaluate uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition and measurement could result in recognition of a tax benefit or an additional tax provision. See Note 10 for further discussion of income taxes. | |||
Basic and Diluted Earnings (Loss) per Share | |||
Basic earnings (loss) per share is determined by dividing the net earnings (loss) attributable to common stockholders by the weighted average number of common shares and participating securities outstanding during the period. Participating securities are included in the basic earnings (loss) per share calculation when dilutive. Diluted earnings (loss) per share is determined by dividing the net (loss) attributable to common stockholders by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares are included in the diluted earnings (loss) per share calculation when dilutive. Potential common shares consisting of common stock issuable upon exercise of outstanding SARs and options are computed using the treasury stock method. See Note 11 for further discussion of earnings (loss) per share. | |||
The Company has two classes of common stock: Class A common stock and Class B common stock. Holders of each of Class A common stock and Class B common stock are entitled to one vote per share on all matters to be voted upon by the shareholders, and holders of each class will vote together as a single class on matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law. For more information on our classes of stock, see Note 8. | |||
Fair Value Measurements | |||
We measure and report financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (referred to as 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 used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of our financial assets and liabilities is determined by using three levels of input, which are defined as follows: | |||
Level 1: | Quoted prices in active markets for identical assets or liabilities | ||
Level 2: | Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||
Level 3: | Unobservable inputs for the asset or liability | ||
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | |||
We utilize the market approach to measure the fair value of our financial assets. As subjectivity exists with respect to many of the valuation techniques, the fair value estimates we have disclosed may not equal prices that we may ultimately realize if the assets are sold or the liabilities are settled with third parties. See Note 12 for a description of our valuation methods. | |||
Recent Accounting Pronouncements | |||
In the following summary of recent accounting pronouncements, all references to effective dates of FASB guidance relate to nonpublic entities. As noted above, we have elected to delay the adoption of new and revised accounting standards until those standards would otherwise apply to nonpublic companies under provisions of the JOBS Act. | |||
In May 2014, the FASB issued an amendment to its accounting guidance related to revenue recognition. The amendment clarifies the principles for recognizing revenue. The guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in the judgments and assets recognized from costs incurred to obtain or fulfill a contract. We will adopt this guidance in reporting periods beginning after December 15, 2017. We are currently evaluating the impact of adopting this pronouncement on our consolidated financial statements. | |||
In July 2013, the FASB issued guidance which states that a liability for uncertain tax positions, or a portion of a liability for uncertain tax provisions, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, liability for uncertain tax positions should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the uncertain tax position and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. We plan to adopt this guidance during the quarter ended March 31, 2015, but we do not anticipate that it will have a significant impact on our consolidated financial statements. | |||
Business_Acquisitions
Business Acquisitions | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Business Acquisitions | 2 | Business Acquisitions | ||||||
Acquisition of HP | ||||||||
On July 14, 2014, we entered into an agreement to acquire (the “Merger Agreement”) HP from Mr. Bruce Telkamp (“Telkamp”), Dr. Sheldon Wang (“Wang”) and minority equity holders of HP. The closing of the acquisition occurred on July 14, 2014 simultaneous with the signing of the Merger Agreement. | ||||||||
Pursuant to the Merger Agreement, at the closing, we paid consideration consisting of approximately $21.9 million in cash and 900,900 shares of Class A common stock, $0.001 par value per share, with such shares of the Class A common stock having an agreed upon aggregate value of $10.0 million, or $11.10 per share, which had a fair value of $6.7 million as of the acquisition date. A portion of the merger consideration consisting of $3.2 million in cash was deposited with an escrow agent to fund payment obligations with respect to post-closing working capital adjustments, post-closing indemnification obligations of HP’s former equity holders, and fees and expenses of the representative of HP’s former equity holders. | ||||||||
All vested options and warrants to acquire shares of HP’s capital stock were terminated in connection with the acquisition, and the holders thereof will receive in cash a portion of the aggregate consideration upon the terms and subject to the conditions set forth in the Merger Agreement. All unvested options to acquire shares of HP’s capital stock were converted into options to acquire shares of our Class A common stock (“Replacement Options”) upon the terms and subject to the conditions set forth in the Merger Agreement. The total number of Replacement Options was 84,909. Pursuant to the Merger Agreement, this amount offset the total number of shares included in the consolidation. The Replacement Options are included as a component of stock-based compensation on the accompanying consolidated statements of operations. See Note 9 for information on the Replacement Options. As of December 31, 2014, the net amount of shares of Class A common stock issued as a result of the acquisition was 815,991. | ||||||||
Under the terms of the Merger Agreements, the former equity holders of HP may elect to receive cash or shares of our Class A common stock. Telkamp and Wang have agreed to accept cash and common stock, including 50% each of any of the shares that were issued as part of the aggregate consideration that are not elected to be received as consideration by other former HP equity holders. | ||||||||
Effective July 14, 2014, our Board of Directors appointed Telkamp as our Chief Operating Officer and we entered into an employment agreement Mr. Telkamp where he also agreed to continue to serve as HP’s Chief Executive Officer. Telkamp’s employment agreement provides for, among other things, a noncompetition covenant beginning on July 14, 2014 and ending on the last day of any salary continuation period (as defined in Telkamp’s employment agreement). In addition, the Merger Agreement provides for, among other things, a noncompetition covenant applicable to Telkamp beginning on July 14, 2014 and ending on July 14, 2017. Telkamp was also appointed as a member of our Board of Directors. In addition, effective July 14, 2014, our Board of Directors appointed Wang as our Chief Technology Officer and we entered into an employment agreement with Wang where he also agreed to continue to serve as HP’s President. Wang’s employment agreement provides for, among other things, a noncompetition covenant beginning on July 14, 2014 and ending on the last day of any salary continuation period (as defined in Wang’s employment agreement). In addition, the Merger Agreement provides for, among other things, a noncompetition covenant applicable to Wang beginning on July 14, 2014 and ending on July 14, 2017. | ||||||||
During the year ended December 31, 2014, we recognized $537,000 in transaction costs related to HP. Transaction costs were expensed as incurred and are included in S, G & A expenses in the accompanying consolidated statements of operations. | ||||||||
This transaction provides us with additional benefits such as increased and ongoing sales referrals that we own, broad consumer and industry data to facilitate our entry into new markets and revenue streams, advanced health information technology to position us to better assist our stakeholders, including customers, insurance brokers and insurance carriers, and other technological and operational synergies. | ||||||||
The following table summarizes the fair value of the consideration for the acquisition as of July 14, 2014 ($ in thousands): | ||||||||
Cash paid at closing (1) | $ | 21,901 | ||||||
Class A common stock, at fair value (2) | 6,734 | |||||||
Total consideration | $ | 28,635 | ||||||
-1 | Cash paid at closing includes $17.0 million in cash, $3.2 million in cash held in escrow, as noted above, $1.2 million for the payoff of outstanding bank debt held by HP, $54,000 for the payoff of HP loans payable to Telkamp and Wang, and $482,000 in estimated acquisition-related expenses incurred by HP. | |||||||
-2 | The fair value of the Class A common stock derived from the market price of the stock, adjusted to include a discount for a lack of marketability, due to trading restrictions pursuant to the Merger Agreement and other factors. | |||||||
The following table summarizes the allocation of the total purchase price for the acquisition as of July 14, 2014 ($ in thousands): | ||||||||
Cash | $ | 1,294 | ||||||
Accounts receivable and other assets (1) | 104 | |||||||
Property and equipment (1) | 6 | |||||||
Accounts payable, accrued expenses and other liabilities (1) | (480 | ) | ||||||
Deferred tax liability - long-term | (2,967 | ) | ||||||
Intangible asset – technology | 8,000 | |||||||
Intangible asset – brand | 1,280 | |||||||
Intangible asset – customer relationships | 430 | |||||||
Intangible asset – noncompete agreements | 27 | |||||||
Goodwill (2) | 20,941 | |||||||
$ | 28,635 | |||||||
1 | (1)The carrying value of accounts receivable, accounts payable, accrued expenses and property and equipment approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition. | |||||||
-2 | As of December 31, 2014, we expect none of the goodwill acquired in this transaction to be deductible for income tax purposes. | |||||||
The goodwill allocated to the purchase price was calculated as the fair value of the consideration less the assets acquired and liabilities assumed. This value is primarily related to the expected results of future operations of HP and the operational and technological synergies we expect to realize as a result of the acquisition. | ||||||||
As a result of acquiring HP, our consolidated results of operations include the results of HP since the acquisition date. HP’s revenues and pre-tax net loss included in our results of operations since the acquisition was $3.3 million and $1.6 million, respectively, for the year ended December 31, 2014. Net loss before taxes include $633,000 of amortization expense related to the identified intangible assets recorded as a result of the acquisition. | ||||||||
Acquisition of ASIA | ||||||||
On August 8, 2014, we entered into an agreement (the “Purchase Agreement”) to acquire all of the issued and outstanding membership interests of ASIA, a Texas insurance brokerage, from Mr. Landon Jordan (“Jordan”) for an initial cash payment of $1.8 million, comprised of a prior deposit of $325,000 and a closing payment of $1.5 million, and $2.2 million in contingent consideration, as described below. The closing of the acquisition occurred on August 8, 2014 simultaneous with the signing of the Purchase Agreement. | ||||||||
Pursuant to the Purchase Agreement, Jordan may receive total contingent consideration of $2.2 million, payable in cash. This amount is payable in two cash payments of $1.2 million and $1.0 million, respectively, if ASIA attains certain amounts of adjusted EBITDA, as defined by the Purchase Agreement, during each of the periods from September 1, 2014 through August 31, 2015, and September 1, 2015 through August 31, 2016. As of December 31, 2014, the fair value of the contingent consideration was $1.4 million which is included in contingent acquisition consideration on the accompanying consolidated balance sheets. During the year ended December 31, 2014, we recorded $130,000 in adjustments to the fair value of the contingent consideration, primarily due to the discounting of the future payments. The estimated range of potential total contingent consideration is zero to approximately $2.2 million. | ||||||||
Effective August 8, 2014, we also entered into an employment agreement with Jordan which provides for, among other things, a noncompetition covenant beginning on August 8, 2014 and ending on the later of August 8, 2017 and one year following the date on which Jordan’s employment with us is terminated. | ||||||||
During the year ended December 31, 2014, we recognized $55,000 in transaction costs related to ASIA. Transaction costs were expensed as incurred and are included in S, G & A expenses in the accompanying consolidated statements of operations. | ||||||||
The following table summarizes the fair value of the consideration for the acquisition as of August 8, 2014 ($ in thousands): | ||||||||
Cash paid at closing | $ | 1,825 | ||||||
Contingent consideration | 1,263 | |||||||
Total consideration | $ | 3,088 | ||||||
The following table summarizes the allocation of the total purchase price for the acquisition as of August 8, 2014 ($ in thousands): | ||||||||
Cash | $ | 105 | ||||||
Accounts receivable and other assets (1) | 271 | |||||||
Accounts payable, accrued expenses and other liabilities (1) | (163 | ) | ||||||
Intangible asset – customer relationships-distributors | 449 | |||||||
Intangible asset – customer relationships-direct | 266 | |||||||
Intangible asset – brand | 21 | |||||||
Intangible asset – noncompete agreements | 18 | |||||||
Goodwill (2) | 2,121 | |||||||
$ | 3,088 | |||||||
-1 | The carrying value of accounts receivable, accounts payable, accrued expenses and property and equipment approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition. | |||||||
-2 | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $840,000. | |||||||
The goodwill allocated to the purchase price was calculated as the fair value of the consideration less the assets acquired and liabilities assumed. This value is primarily related to expected results of future operations of ASIA and the operational and technological synergies we expect to realize as a result of the acquisition. | ||||||||
As a result of acquiring ASIA, our consolidated results of operations include the results of ASIA since the acquisition date. ASIA’s revenues and pre-tax net loss included in our results of operations since the acquisition through December 31, 2014 was $1.5 million and $353,000, respectively. Net loss before taxes include $75,000 of amortization expense related to the identified intangible assets recorded as a result of the acquisition. | ||||||||
Unaudited Pro Forma Information | ||||||||
The following table (all amounts in thousands, except per share data) presents unaudited pro forma information for the Company assuming the acquisition of HP and ASIA had occurred as of January 1, 2013. This pro forma information does not purport to represent what our actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
Revenues | $ | 90,566 | $ | 58,907 | ||||
Net (loss) income before income taxes | (641 | ) | (12,205 | ) | ||||
Net (loss) income | 112 | (12,224 | ) | |||||
Net (loss) income attributable to Health Insurance Innovations, Inc. | (83 | ) | (7,634 | ) | ||||
Loss per share – basic | (0.01 | ) | (1.59 | ) | ||||
Loss per share – diluted | (0.01 | ) | (1.59 | ) | ||||
Acquisition of Secured | ||||||||
On July 17, 2013, we consummated a Stock Purchase Agreement (the “Purchase Agreement”) with Joseph Safina, Howard Knaster and Jorge Saavedra (collectively, the “Sellers”), pursuant to which we acquired from the Sellers all of the outstanding equity of each of the Secured entities, which consisted of Sunrise Health Plans, Inc., a licensed insurance broker, Sunrise Group Marketing, Inc., a call center and sales lead management company, and Secured Software Solutions, Inc., an intellectual property holding company, each of which was converted to a limited liability company shortly after closing, for a cash payment of $10.0 million plus approximately $6.6 million of contingent consideration which included contingent stock awards and a note payable. The funding of the $10.0 million cash portion of the purchase price was provided primarily from net proceeds from the IPO. | ||||||||
In November 2013, HPIH and the Sellers reached an agreement to modify the contingent consideration, including the thresholds to earn such contingent consideration, and to terminate the contingent stock awards and note payable. Instead, the contingent consideration is payable in cash only. The contingent consideration included a one-time payment of $1.0 million, which was paid in November 2013. A fixed component in the aggregate of $250,000 will be paid quarterly if certain levels of policies in force, as defined by the amendment, are achieved, up to a maximum of $3.0 million. A variable component of no more than $200,000 per quarter will be paid if certain levels of growth in policies in force are achieved, up to a maximum of $2.4 million. In addition, one of the principals severed his employment with Sunrise Health Plans, Inc. and entered into a consulting arrangement with the Company. Contingent consideration included an estimated payment of $150,000 to compensate the Sellers for personal income tax liability triggered by the acquisition. This amount was determined to be $43,000 upon finalization of the Sellers’ tax liabilities and was paid to the Sellers in September 2014. The difference was included in fair value adjustment of contingent consideration in the accompanying consolidated statement of operations. As of December 31, 2014, we had made total payments of $3.3 million under the contingent consideration agreement, and the maximum remaining payments under the agreement total $3.3 million. The estimated range of potential total contingent consideration is approximately $3.3 million to $6.6 million. | ||||||||
The fair value of contingent consideration is $ 3.0 million and $3.9 million as of December 31, 2014 and 2013, respectively, and is included in contingent acquisition consideration on the accompanying consolidated balance sheets. During the years ended December 31, 2014 and 2013, we recorded $1.0 million and $453,000, respectively, in adjustments to fair value of the contingent consideration, which is included in fair value adjustment of contingent consideration on the accompanying consolidated statements of operations. The increase for the year ended December 31, 2014 was largely related to an increase in the probability of payment of the contingent acquisition consideration. | ||||||||
The following table summarizes the fair value of the consideration for the acquisition as of July 17, 2013 ($ in thousands). The fair values are derived using discount rates related to the probability of the Sellers meeting the thresholds for payment and other risk factors including credit risk. | ||||||||
Cash paid at closing | $ | 10,000 | ||||||
Contingent consideration | 4,872 | |||||||
Total consideration | $ | 14,872 | ||||||
The following table summarizes the allocation of the total purchase price for the acquisition as of July 17, 2013 ($ in thousands): | ||||||||
Cash | $ | 91 | ||||||
Accounts receivable and other assets (1) | 332 | |||||||
Property and equipment (1) | 128 | |||||||
Accounts payable and accrued expenses (1) | (326 | ) | ||||||
Intangible asset – brand | 76 | |||||||
Intangible asset – noncompete agreements | 99 | |||||||
Intangible asset – customer relationships-distributors | 1,050 | |||||||
Intangible asset – customer relationships-direct | 788 | |||||||
Intangible asset – capitalized software | 526 | |||||||
Goodwill (2) | 12,108 | |||||||
$ | 14,872 | |||||||
-1 | The carrying value of accounts receivable, property and equipment and accounts payable and accrued expenses acquired approximated fair value; as such, no adjustments to these accounts were recorded in association with the acquisition. | |||||||
-2 | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $9.4 million. | |||||||
The goodwill allocated to the purchase price was calculated as the fair value of the consideration less the assets acquired and liabilities assumed. This value is primarily related to expected results of future operations of Secured and the operational and technological synergies we expect to realize as a result of the acquisition. | ||||||||
Related to the acquisition of Secured, during the year ended December 31, 2013, we recognized $301,000 in transaction costs. Transaction costs were expensed as incurred and are included in S, G & A expenses in the accompanying consolidated statement of operations. | ||||||||
As a result of acquiring Secured, our consolidated results of operations include the results of Secured since the acquisition date. Secured’s revenues and pre-tax net loss included in our results of operations for the year ended December 31, 2014 are $10.2 million and $47,000, respectively. Net loss before taxes for the year ended December 31, 2014 includes $798,000 of amortization expense related to the identified intangible assets recorded as a result of the acquisition. Secured’s revenues and pre-tax net loss included in our results of operations from the acquisition date through December 31, 2013 were $3.3 million and $204,000, respectively. Net loss before taxes included $366,000 of amortization expense related to the identified intangible assets recorded as a result of the acquisition. | ||||||||
The following table presents unaudited pro forma information for the Company assuming the acquisition of Secured had occurred as of January 1, 2013 (all amounts in thousands, except per share data). This pro forma information does not purport to represent what our actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. | ||||||||
Year Ended December 31, 2013 | ||||||||
(Unaudited) | ||||||||
Revenues | $ | 58,363 | ||||||
Net (loss) income before income taxes | (6,775 | ) | ||||||
Net (loss) income | (6,788 | ) | ||||||
Net (loss) income attributable to Health Insurance Innovations, Inc. and Health Plan Intermediaries, LLC | $ | (2,932 | ) | |||||
Loss per share – basic | $ | (0.61 | ) | |||||
Loss per share – diluted | $ | (0.61 | ) | |||||
Formation of ICE | ||||||||
On June 1, 2012, we and TSG Agency, LLC (“TSG”) formed ICE. ICE is a licensed call center and a call center training facility for our distributors. Upon formation, we received an 80% controlling interest in ICE. We made contributions to ICE of $40,000 during the year ended December 31, 2013. TSG received a 20% noncontrolling interest in ICE and contributed $16,000 to ICE during the year ended December 31, 2013. On June 30, 2013, we purchased TSG’s 20% interest in ICE for $90,000 and, as a result, ICE is our wholly-owned subsidiary. |
Variable_Interest_Entities
Variable Interest Entities | 12 Months Ended | |
Dec. 31, 2014 | ||
Variable Interest Entity Measure Of Activity [Abstract] | ||
Variable Interest Entities | 3 | Variable Interest Entities |
As of December 31, 2014, we are the primary beneficiary of two entities that each constitute a VIE pursuant to FASB guidance. | ||
HPIH | ||
As of December 31, 2014, we had a variable interest in HPIH. HPIH is a VIE as the voting rights of the investors are not proportional to their obligations to absorb the expected losses of HPIH. We hold 100% of the voting power in HPIH, but own 53.4% of the total membership and economic interest, and the other members of HPIH hold no voting rights in HPIH. Further, substantially all of the activities of HPIH are conducted on behalf of a membership with disproportionately few voting rights. We have concluded that we are the primary beneficiary of HPIH, and, therefore, should consolidate HPIH since we have power over and receive the benefits of HPIH. We have the power to direct the activities of HPIH that most significantly impact its economic performance. Our minority equity interest in HPIH obligates us to absorb losses of HPIH and gives us the right to receive benefits from HPIH related to the day-to-day operations of the entity, both of which could potentially be significant to HPIH. As such, our maximum exposure to loss as a result of our involvement in this VIE is the net income or loss allocated to us based on our minority interest. | ||
On August 15, 2014, the non-HII members of HPIH exchanged 1,725,000 Class B Membership Units of HPIH (together with an equal number of shares of HII Class B common stock) in exchange for an equal number of Class A common stock pursuant to an Exchange Agreement (the “Exchange Agreement”). See Note 8 for further information on the Exchange Agreement and this transaction. This transaction resulted in HII obtaining greater than 50% of the membership and economic interest of HPIH. As of December 31, 2014, HII holds 100% of the voting power and 53.4% of the membership and economic interest in HPIH. | ||
SIL | ||
On October 7, 2013, HPIH entered into a Limited Liability Company Operating Agreement (the “SIL LLC Agreement”) with Health Benefits One, LLC (“HBO”) to form SIL, a venture intended to procure sales leads to distribute to us and to our distributors. As of December 31, 2014, we had made $492,000 in contributions to SIL under the SIL LLC Agreement. | ||
We also entered into an agreement to loan $185,000 to SIL. Pursuant to this agreement, the loan can be paid via earned commissions of HBO paid by us. HBO had no obligations to make any initial capital contributions. | ||
Per the LLC Agreement, so long as HPIH’s unreturned capital contributions have not been reduced to zero, HPIH may, without the consent of HBO, cause SIL to take any significant actions affecting SIL’s day-to-day operations, including, the sale or disposition of SIL assets and entrance into voluntary liquidation or receivership of SIL. As such, we determined that we have the power to control the day-to-day activities of SIL. | ||
We have concluded that we are the primary beneficiary of SIL, and therefore, should consolidate SIL since we have both power and benefits over SIL. We have the power to direct the activities of SIL that most significantly impact its economic performance. Per the terms of the SIL LLC Agreement, we have determined that 100% of the operating income or loss of the VIE should be allocated to us. As of December 31, 2014, our maximum exposure to loss as a result of our involvement is VIE, is 100% of our capital contributions to SIL, or $492,000, the remaining balance of $116,000 on the loan, plus 100% of the operating income or loss of the VIE, as noted above. | ||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property Plant And Equipment [Abstract] | ||||||||
Property and Equipment | 4 | Property and Equipment | ||||||
Property and equipment, net, are comprised of the following ($ in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Computer equipment | $ | 349 | $ | 188 | ||||
Furniture and fixtures | 251 | 207 | ||||||
Leasehold improvements | 249 | 147 | ||||||
Total property and equipment | 849 | 542 | ||||||
Less accumulated depreciation | (323 | ) | (153 | ) | ||||
Total property and equipment, net | $ | 526 | $ | 389 | ||||
Depreciation expense, including depreciation related to assets acquired through capital leases, was approximately $160,000 and $96,000, respectively, for the year ended December 31, 2014 and 2013. | ||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Goodwill and Intangible Assets | 5 | Goodwill and Intangible Assets | ||||||||||||||
Goodwill | ||||||||||||||||
Goodwill has been recorded as a result of the acquisitions previously described. Additions to goodwill during the year ended December 31, 2014 arose from the acquisitions of HP and ASIA, and additions to goodwill during the year ended December 31, 2013 arose from the acquisition of Secured. See Note 2 for further discussion of our acquisitions during the years ended December 31, 2014 and 2013. | ||||||||||||||||
No losses on impairment of goodwill were recorded during the years ended December 31, 2014 and 2013. | ||||||||||||||||
The changes in the carrying amounts of goodwill by operating segment are as follows ($ in thousands): | ||||||||||||||||
IPD | HP | Total | ||||||||||||||
Balance as of January 1, 2013 | $ | 5,906 | $ | – | $ | 5,906 | ||||||||||
Goodwill acquired | 12,108 | – | 12,108 | |||||||||||||
Impairment | – | – | – | |||||||||||||
Balance as of December 31, 2013 | 18,014 | – | 18,014 | |||||||||||||
Goodwill acquired | 2,121 | 20,941 | 23,062 | |||||||||||||
Impairment | – | – | – | |||||||||||||
Balance as of December 31, 2014 | $ | 20,135 | $ | 20,941 | $ | 41,076 | ||||||||||
Other intangible assets | ||||||||||||||||
Our other intangible assets arose primarily from the acquisitions described above and consist of a brand, the carrier network, distributor relationships, customer relationships, noncompete agreements and capitalized software. Finite-lived intangible assets are amortized over their useful lives from two to fifteen years. | ||||||||||||||||
Major classes of intangible assets as of December 31, 2014 consisted of the following ($ in thousands): | ||||||||||||||||
Weighted-average | Gross Carrying | Accumulated | Intangible | |||||||||||||
Amortization | Amount | Amortization | Assets, net | |||||||||||||
Brand | 14.1 | $ | 1,377 | $ | (103 | ) | $ | 1,274 | ||||||||
Carrier network | 5 | 40 | (26 | ) | 14 | |||||||||||
Distributor relationships | 9.3 | 5,109 | (1,791 | ) | 3,318 | |||||||||||
Noncompete agreements | 4.7 | 987 | (462 | ) | 525 | |||||||||||
Customer relationships | 5.8 | 1,484 | (644 | ) | 840 | |||||||||||
Capitalized software | 6.7 | 8,571 | (977 | ) | 7,594 | |||||||||||
Total intangible assets | 7.8 | $ | 17,568 | $ | (4,003 | ) | $ | 13,565 | ||||||||
Major classes of intangible assets as of December 31, 2013 consisted of the following ($ in thousands): | ||||||||||||||||
Weighted-average | Gross Carrying | Accumulated | Intangible | |||||||||||||
Amortization | Amount | Amortization | Assets, net | |||||||||||||
Brand | 2 | $ | 76 | $ | (17 | ) | $ | 59 | ||||||||
Carrier network | 5 | 40 | (18 | ) | 22 | |||||||||||
Distributor relationships | 8.8 | 4,660 | (1,192 | ) | 3,468 | |||||||||||
Noncompete agreements | 4.8 | 942 | (254 | ) | 688 | |||||||||||
Customer relationships | 2 | 788 | (181 | ) | 607 | |||||||||||
Capitalized software | 2.2 | 571 | (134 | ) | 437 | |||||||||||
Total intangible assets | 6.9 | $ | 7,077 | $ | (1,796 | ) | $ | 5,281 | ||||||||
Amortization expense for year ended December 31, 2014 and 2013 was $2.2 million and $1.2 million, respectively. | ||||||||||||||||
Estimated annual pretax amortization for intangibles assets for 2015 and in each of the next five years are as follows ($ in thousands): | ||||||||||||||||
2015 | $ | 2,626 | ||||||||||||||
2016 | 2,173 | |||||||||||||||
2017 | 1,984 | |||||||||||||||
2018 | 1,743 | |||||||||||||||
2019 | 1,357 | |||||||||||||||
Thereafter | 3,682 | |||||||||||||||
Total | $ | 13,565 | ||||||||||||||
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Payables And Accruals [Abstract] | ||||||||
Accounts Payable and Accrued Expenses | 6 | Accounts Payable and Accrued Expenses | ||||||
Accounts payable and accrued expenses consisted of the following as of ($ in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts payable | $ | 906 | $ | 588 | ||||
Carriers and vendors payable | 5,830 | 3,310 | ||||||
Commissions payable | 2,009 | 1,453 | ||||||
Accrued wages | 1,062 | 793 | ||||||
Accrued refunds | 815 | 715 | ||||||
Accrued credit card/ACH fees | 144 | 80 | ||||||
Accrued interest | 1 | 35 | ||||||
Accrued professional fees | 198 | 34 | ||||||
Other accruals | 432 | 66 | ||||||
Total accounts payable and accrued expenses | $ | 11,397 | $ | 7,074 | ||||
Debt
Debt | 12 Months Ended | |
Dec. 31, 2014 | ||
Debt Disclosure [Abstract] | ||
Debt | 7 | Debt |
Revolving Line of Credit | ||
On December 15, 2014, we entered into a three-year revolving line of credit (“RLOC”) for $15.0 million with a bank. The purpose of the RLOC is to provide working capital to support our general corporate expenses and to help us maintain adequate liquidity. Borrowings under this facility are secured by all of our and our subsidiaries’ assets, including, but not limited to, cash, accounts receivable, and property and equipment. The stated interest rate for the RLOC is 30-day LIBOR, plus 1.95%. As of December 31, 2014, we have not drawn on the RLOC. | ||
The RLOC is subject to customary covenants and restrictions which, among other things, require us to maintain minimum working capital equal to 1.50 times the outstanding balance, and require that our maximum funded debt to tangible net worth ratio shall not exceed 1.50 at any time during the term of the RLOC. The RLOC also imposes certain nonfinancial covenants on us that would require immediate payment if we, among other things, reorganize, merge, consolidate, or otherwise change ownership or business structure without the bank’s prior written consent. | ||
The RLOC agreements also contain customary representations and warranties and events of default. The payment of outstanding principal under the RLOC and accrued interest thereon may be accelerated and become immediately due and payable upon default of payment or other performance obligations or failure to comply with financial or other covenants in the RLOC agreements, subject to applicable notice requirements and cure periods as provided in the RLOC agreements. | ||
Under the terms of the RLOC, we incurred certain costs related to acquiring the RLOC of $23,000. These costs have been capitalized and are included in Accounts receivable, net, prepaid expenses and other current assets at December 31, 2014. The deferred financing costs consist primarily of consulting and legal fees directly related to the bank loan. These amounts are amortized over the life of the related debt. | ||
Long-term Debt | ||
During September 2011, HPI entered into a bank loan agreement with a principal balance of $4.3 million. The purpose of this loan was to finance a portion of the acquisition of the remaining 50% interest in HPI as discussed in Note 1. In February 2013, we repaid the $3.2 million outstanding balance of the loan using a portion of the proceeds of the IPO. The remaining deferred financing costs of $71,000 were written-off to other expense (income) on the accompanying consolidated statements of operations for the year ended December 31, 2013 when the loan was repaid. | ||
Interest expense incurred on the loan for the years ended 2014 and 2013 was $0 and $17,000, respectively. Amortization expense of deferred financing costs for the year ended 2014 and 2013 was $0 and $7,000, respectively. As a result of no borrowings against the RLOC and the repayment of the bank loan from the IPO proceeds, at December 31, 2014 and 2013, respectively, we have no outstanding indebtedness. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |
Dec. 31, 2014 | ||
Stockholders Equity Note [Abstract] | ||
Stockholders' Equity | 8 | Stockholders’ Equity |
On February 13, 2013, we completed our IPO by issuing 4,666,667 shares of our Class A common stock, par value $0.001 per share, at a price to the public of $14.00 per share of common stock. In addition, we issued 8,666,667 shares of our Class B common stock, of which 8,580,000 shares of Class B common stock were obtained by HPI and 86,667 shares of Class B common stock were obtained by HPIS, of which HPI is the managing member. In addition, we granted the underwriters of the IPO the right to purchase additional shares of Class A common stock to cover over-allotments (the “over-allotment option”). | ||
Our authorized capital stock consists of 100,000,000 shares of Class A common stock, par value $0.001 per share, 20,000,000 shares of Class B common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share. | ||
Class A Common Stock and Class B Common Stock | ||
Each share of Class A common stock and Class B common stock entitles its holders to one vote per share on all matters to be voted upon by the stockholders, and holders of each class will vote together as a single class on all such matters. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, expect as otherwise required by applicable law. As of December 31, 2014, the Class A common stockholders had 53.4% of the voting power in HII and the Class B common stockholders had 46.6% of the voting power in HII. Holders of shares of our Class A common stock have 100% of the economic interest in HII. Holders of Class B common stock do not have an economic interest in HII. | ||
The determination to pay dividends, if any, to our Class A common stockholders will be made by our Board of Directors. We do not, however, expect to declare or pay any cash or other dividends in the foreseeable future on our Class A common stock, as we intend to reinvest any cash flow generated by operations in our business. We may enter into credit agreements or other borrowing arrangements in the future that prohibit or restrict our ability to declare or pay dividends on our Class A common stock. In the event of liquidation, dissolution or winding up of HII, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The holders of our Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of our common stock will be subject to those of the holders of any shares of our preferred stock we may issue in the future. | ||
Class B common stockholders will not be entitled to any dividend payments. In the event of any dissolution, liquidation, or winding up of our affairs, whether voluntary or involuntary, after payment of our debts and other liabilities and making provision for any holders of our preferred stock that have a liquidation preference, our Class B common stockholders will not be entitled to receive any of our assets. In the event of our merger or consolidation with or into another company in connection with which shares of Class A common stock and Class B common stock (together with the related membership interests) are converted into, or become exchangeable for, shares of stock, other securities or property (including cash), each Class B common stockholder will be entitled to receive the same number of shares of stock as is received by Class A stockholders for each share of Class A stock, and will not be entitled, for each share of Class B stock, to receive other securities or property (including cash). No holders of Class B common stock will have preemptive rights to purchase additional shares of Class B common stock. | ||
Exchange Agreement | ||
On February 13, 2013, we entered into an exchange agreement (the “Exchange Agreement”) with the holders of the Series B Membership Interests of HPIH (“Series B Membership Interests”). Pursuant to and subject to the terms of the Exchange Agreement and the amended and restated limited liability company agreement of HPIH, holders of Series B Membership Interests, at any time and from time to time, may exchange one or more Series B Membership Interests, together with an equal number of shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications. | ||
Holders will not have the right to exchange Series B Membership Interests if we determine that such exchange would be prohibited by law or regulation or would violate other agreements to which we may be subject. We may impose additional restrictions on exchanges that we determine necessary or advisable so that HPIH is not treated as a “publicly traded partnership” for U.S. federal income tax purposes. If the Internal Revenue Service were to contend successfully that HPIH should be treated as a “publicly traded partnership” for U.S. federal income tax purposes, HPIH would be treated as a corporation for U.S. federal income tax purposes and thus would be subject to entity-level tax on its taxable income. | ||
A holder that exchanges Series B Membership Interests will also be required to deliver an equal number of shares of our Class B common stock. In connection with each exchange, HPIH will cancel the delivered Series B Membership Interests and issue to us Series A Membership Interests on a one-for-one basis. Thus, as holders exchange their Series B Membership Interests for Class A common stock, our interest in HPIH will increase. | ||
In accordance with the Exchange Agreement, in March 2013, we received a net amount of $1.4 million in proceeds from the issuance of 100,000 shares of Class A common stock through the over-allotment option. We immediately used the proceeds to acquire Series B Membership Interests, together with an equal number of shares of our Class B common stock, from HPI. These Series B Membership Interests were immediately recapitalized into Series A Membership Interests in HPIH. | ||
On February 1, 2014, a registration statement on Form S-3 became effective under which we registered 8,566,667 shares of our Class A common stock for resale from time to time by the selling stockholder, of which all such shares are issuable upon the exchange of an equivalent number of Series B Membership Interests (together with an equal number of shares of our Class B common stock). | ||
On August 15, 2014, we entered into an underwriting agreement with Raymond James & Associates, Inc., as the underwriter, and HPI and HPIS, as selling stockholders (the “Selling Stockholders”). Pursuant to the underwriting agreement and the Exchange Agreement, we issued 1,725,000 shares of Class A common stock, at a public offering price of $12.15 per share ($11.54 per share, net of underwriting discounts), for net proceeds of $19.9 million. We immediately used these proceeds to acquire Series B Membership Interests, together an equal number of shares of our Class B common stock from HPI and HPIS. These Series B Membership Interests were immediately recapitalized into Series A Membership Interests in HPIH. The Selling Stockholders agreed to sell to the underwriter, for resale, all 1,725,000 shares of Class A common stock. The sale by the Selling Stockholders was made pursuant to the registration statement on Form S-3 described above. No other shares of Class A common stock have been issued or sold pursuant to the registration statement on Form S-3. The acquisition of the Series B Membership Interests resulted in a decrease in noncontrolling interests with an offsetting increase in stockholders’ equity as of December 31, 2014 to reflect the decrease in the noncontrolling interest’s investment in HPIH. See Notes 14 and 16 for further discussion of this transaction’s effects on a tax receivable agreement we entered into with holders of Series B Membership Interests. | ||
Preferred Stock | ||
Our board of directors has the authority to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by the stockholders. | ||
The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of HII without further action by the stockholders and may adversely affect the voting and other rights of the holders of Class A common stock. At present, we have no plans to issue any preferred stock. | ||
Treasury Stock | ||
Treasury stock is recorded at cost. As of December 31, 2014 and 2013, we held 47,144 and 129,881 shares of treasury stock, respectively recorded at a cost of $347,000 and $1.6 million, respectively. | ||
Share Repurchase Program | ||
On December 17, 2014, our Board of Directors authorized us to purchase up to 800,000 shares of our registered Class A common stock under a repurchase program which could remain in place until December 31, 2016. We have adopted a plan (the “Repurchase Plan”) under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in connection with this authorization. The Repurchase Plan allows us to repurchase our shares of Class A common stock at times when we otherwise might be prevented from doing so under insider trading laws or self-imposed trading blackout periods. | ||
During the year ended December 31, 2014, we repurchased 43,318 shares of our registered Class A common stock under the Repurchase Program at an average price per share of $7.01. | ||
Tax Obligation Settlements and Treasury Stock Transactions | ||
Treasury stock is recorded pursuant to the surrender of shares by certain employees to satisfy statutory tax withholding obligations on vested restricted stock awards. In addition, certain forfeited stock based awards are transferred to and recorded as treasury stock, and certain restricted stock awards have been granted from shares in Treasury, and certain forfeited awards. | ||
During the year ended December 31, 2014, 12,403 shares were transferred to Treasury as a result of surrendered shares of vested restricted stock awards, 11,542 shares were transferred to Treasury as the result of forfeitures of restricted stock awards, and 150,000 shares were granted to certain employees from Treasury as restricted stock awards. During the year ended December 31, 2013, 312,845 shares were transferred to Treasury as a result of surrendered shares of vested restricted stock awards, and 182,964 shares were granted to certain employees from Treasury as restricted stock awards. | ||
Stockbased_Compensation
Stock-based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||
Stock-based Compensation | 9 | Stock-based Compensation | |||||||||||||||
We maintain one stock-based incentive plan, the Health Insurance Innovations, Inc. Long Term Incentive Plan (the “LTIP”), which became effective February 7, 2013, under which SARs, restricted stock, restricted stock units and other types of equity and cash incentive awards may be granted to employees, non-employee directors and service providers. The LTIP expires after ten years, unless prior to that date the maximum number of shares available for issuance under the plan has been issued or our Board of Directors terminates this plan. There are 1,250,000 shares of Class A common stock reserved for issuance under the LTIP. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
The vesting periods for grant recipients are at the discretion of the Compensation Committee of our Board of Directors and may be vested upon grant in whole or in part but generally have used a four-year period. Restricted stock units are amortized using the accelerated method over the vesting period. | |||||||||||||||||
The table below summarizes activity regarding unvested restricted stock under the LTIP during the year ended December 31, 2014 and 2013 (all amounts in thousands, except per share data): | |||||||||||||||||
Number of Shares Outstanding | Weighted-Average Grant Date Fair Value (per share) | Aggregate Intrinsic Value | |||||||||||||||
Restricted stock unvested at February 7, 2013 | – | $ | – | ||||||||||||||
2013 activity: | |||||||||||||||||
Granted | 806 | $ | 12.97 | ||||||||||||||
Vested | (408 | ) | $ | 12.21 | |||||||||||||
Forfeited | (240 | ) | $ | 14 | |||||||||||||
Restricted stock unvested at December 31, 2013 | 158 | $ | 13.38 | $ | 1,601 | ||||||||||||
Granted | 200 | $ | 11.61 | ||||||||||||||
Vested | (54 | ) | $ | 12.05 | |||||||||||||
Forfeited | (12 | ) | $ | 12.13 | |||||||||||||
Restricted stock unvested at December 31, 2014 | 292 | $ | 12.25 | $ | 2,092 | ||||||||||||
We realized income tax benefits of approximately $98,000 and $550,000 from activity involving restricted shares for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||
Stock Appreciation Rights | |||||||||||||||||
The SARs activity for the year ended December 31, 2014 and 2013 is as follows (all amounts in thousands, except per share data): | |||||||||||||||||
SARs | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (a) | ||||||||||||||
Outstanding at February 7, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | 439 | $ | 12.71 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (60 | ) | $ | 13.97 | – | – | |||||||||||
Outstanding at December 31, 2013 | 379 | $ | 12.51 | 6.3 years | $ | – | |||||||||||
Granted | 260 | $ | 12.33 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (45 | ) | $ | 13.09 | – | – | |||||||||||
Outstanding at December 31, 2014 | 594 | $ | 12.37 | 6.1 years | $ | – | |||||||||||
Exercisable at December 31, 2014 | 129 | $ | 12.63 | 5.6 years | $ | – | |||||||||||
(a) | The intrinsic value of a SAR is the amount by which the market value of the underlying stock as of December 31, 2014 and 2013 exceeds the exercise price of the option multiplied by the number of shares represented by such SAR. | ||||||||||||||||
(b) | Shares issued upon the exercise of SARs are treated as newly issued shares. There were no shares issued during 2014 and 2013 related to exercises of SARs. | ||||||||||||||||
(c) | There was no tax benefit recognized in 2014 and 2013 related to stock-based compensation for SARs. | ||||||||||||||||
During the year ended December 31, 2014, the weighted-average grant date fair value per share of stock-based compensation granted to employees during the period above was $4.62 per share. The total fair value of SARs that vested for the year ended December 31, 2014 was $626,000. | |||||||||||||||||
During the year ended December 31, 2013, the weighted-average grant date fair value per share of stock-based compensation granted to employees during the period above was $4.90. The total fair value of SARs that vested for the year ended December 31, 2013 was $268,000. | |||||||||||||||||
Stock Options | |||||||||||||||||
The stock option activity for the year ended December 31, 2014 and 2013 and is as follows (all amounts in thousands, except per share data): | |||||||||||||||||
Stock options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (a) | ||||||||||||||
Outstanding at February 7, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | – | $ | – | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | – | $ | – | – | – | ||||||||||||
Outstanding at December 31, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | 85 | $ | 12.13 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (1 | ) | $ | – | – | – | |||||||||||
Outstanding at December 31, 2014 | 84 | $ | 12.13 | 8.3 years | $ | – | |||||||||||
Exercisable at December 31, 2014 | 13 | $ | 12.13 | 8.2 years | $ | – | |||||||||||
(a) | The intrinsic value of a stock option is the amount by which the market value of the underlying stock as of December 31, 2014 and 2013 exceeds the exercise price of the option multiplied by the number of shares represented by such stock option. | ||||||||||||||||
(b) | Shares issued upon the exercise of stock options are treated as newly issued shares. There were no shares issued during 2014 and 2013 related to exercises of stock options. | ||||||||||||||||
(c) | There was no tax benefit recognized in 2014 and 2013 related to stock-based compensation for stock options. | ||||||||||||||||
During the year ended December 31, 2014, the weighted-average grant date fair value per share of stock-based compensation granted to employees during the period above was $11.15 per share. The total fair value of stock options that vested for the year ended December 31, 2014 was $149,000. | |||||||||||||||||
Accounting for Stock-Based Compensation | |||||||||||||||||
Expense for stock-based compensation is recognized based upon estimated grant date fair value and is amortized over the service period of the awards using the accelerated method. For grants of SARs and options, we apply the Black-Scholes option-pricing model in determining the fair value of share-based payments to employees. The resulting compensation expense is recognized over the requisite service period. The requisite service period is the period during which an employee is required to provide service in exchange for an award, which often is the vesting period. Compensation expense is recognized only for those awards expected to vest, with forfeitures estimated based on our historical experience and future expectations. All stock-based compensation expense is classified within S, G & A expense in the consolidated statements of operations. None of the stock-based compensation was capitalized during the years ended December 31, 2014 and 2013. | |||||||||||||||||
The expected term of the awards represents the estimated period of time until exercise, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. For the years ended December 31, 2014 and 2013, the expected stock price volatility was determined using a peer group of public companies within our industry as we believe this method better approximates the long-term volatility of our stock. In the time since our IPO, our stock has been subject to large fluctuations due to a small percentage of shares available for trading, resulting in a low trading volume. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with an equivalent remaining term. We have not paid dividends in the past and do not currently plan to pay any dividends in the foreseeable future. | |||||||||||||||||
The Black-Scholes option-pricing model was used with the following weighted average assumptions for the years ended December 31, 2014 and 2013: | |||||||||||||||||
For the year December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free rate | 1.6 | % | 1.2 | % | |||||||||||||
Expected life | 4.9 years | 4.7 years | |||||||||||||||
Volatility | 40.7 | % | 44 | % | |||||||||||||
Expected dividend | none | none | |||||||||||||||
The following table summarizes stock-based compensation expense for the year ended December 31, 2014 and 2013 ($ in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
SARs | $ | 1,049 | $ | 525 | |||||||||||||
Restricted shares | 938 | 5,771 | |||||||||||||||
Stock options | 467 | – | |||||||||||||||
$ | 2,454 | $ | 6,296 | ||||||||||||||
The following table summarizes unrecognized stock-based compensation and the remaining period over which such stock-based compensation is expected to be recognized as of December 31, 2014 and 2013 ($ in thousands): | |||||||||||||||||
Remaining | |||||||||||||||||
years | |||||||||||||||||
2014 | |||||||||||||||||
SARs | $ | 1,492 | 2.41 | ||||||||||||||
Restricted shares | 2,477 | 2.39 | |||||||||||||||
Stock options | 469 | 1.32 | |||||||||||||||
$ | 4,438 | ||||||||||||||||
2013 | |||||||||||||||||
SARs | $ | 1,302 | 2.48 | ||||||||||||||
Restricted shares | 1,323 | 2.21 | |||||||||||||||
$ | 2,625 | ||||||||||||||||
These amounts do not include the cost of any additional awards that may be granted in future periods nor any changes in our forfeiture rate. There were no SARs or stock options exercised during the years ended December 31, 2014 and 2013. |
Income_Tax
Income Tax | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Tax Disclosure [Abstract] | ||||||||||
Income Tax | 10 | Income Tax | ||||||||
The provision for income tax for the years ended December 31, 2014 and 2013 consisted of the following components ($ in thousands): | ||||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
Current: | ||||||||||
Federal | $ | 456 | $ | – | ||||||
State | 74 | 18 | ||||||||
Total current taxes | 530 | 18 | ||||||||
Deferred: | ||||||||||
Federal | (315 | ) | – | |||||||
State | (125 | ) | – | |||||||
Total deferred taxes | (440 | ) | – | |||||||
Income taxes | $ | 90 | $ | 18 | ||||||
The items accounting for differences between the income tax provision, or benefit, computed at the federal statutory rate and the provision for income tax for the years ended December 31, 2014 and 2013 was as follows: | ||||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
U.S. federal income tax rate | 35 | % | 35 | % | ||||||
State income taxes, net of federal tax benefits | (16.7 | ) | 0.2 | |||||||
Valuation allowance | 85.2 | (6.7 | ) | |||||||
Operations of nontaxable subsidiary | (84.8 | ) | (21.0 | ) | ||||||
Stock-based compensation contribution | (41.4 | ) | (7.0 | ) | ||||||
Non-deductible or non-taxable items | (4.5 | ) | (0.7 | ) | ||||||
Tax expense resulting from allocation of tax benefits to contributed capital | 44.6 | - | ||||||||
Income taxes | 17.4 | % | (0.2 | ) | % | |||||
The deferred income tax assets consisted of the following as of December 31, 2014 and 2013 ($ in thousands): | ||||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
Deferred tax assets: | ||||||||||
Investment in subsidiary | $ | 19,505 | $ | 277 | ||||||
Tax receivable agreement | 236 | 158 | ||||||||
Stock compensation | 207 | – | ||||||||
Net operating loss carryforwards | 1,220 | 127 | ||||||||
Total deferred tax assets | 21,168 | 562 | ||||||||
Less valuation allowances | (19,744 | ) | (562 | ) | ||||||
Deferred tax assets, net of valuation allowance | 1,424 | – | ||||||||
Deferred tax liabilities: | ||||||||||
Identifiable intangible assets | (3,710 | ) | – | |||||||
Other | (14 | ) | – | |||||||
Deferred tax liabilities, net | $ | (2,300 | ) | $ | – | |||||
At December 31, 2014 and 2013, HII had no federal net operating loss carryforwards and approximately $338,000, respectively of federal net operating loss carryforwards as of December 31, 2013, with varying amounts of state net operating loss carryforwards for both years. These carryforwards generally are available through 2023. Additionally HP had federal and state net operating loss carryforwards of approximately $3.0 million, which are generally available through 2024. | ||||||||||
Our former operating entity, HPI, was taxed as an S corporation for income tax purposes. Therefore, we were not subject to entity-level federal or state income taxation prior to the IPO. HPIH is taxed as a partnership for income tax purposes; as a result, it is not subject to entity-level federal or state income taxation but its members are liable for taxes with respect to their allocable shares of each company’s respective net taxable income. We are subject to U.S. corporate federal, state and local income taxes on our allocable share of net taxable income that is reflected in our consolidated financial statements. Additionally, certain state jurisdictions tax HPIH instead of its members, the effects of which are reflected in our consolidated provision for income taxes. | ||||||||||
The effective tax rate for the years ended December 31, 2014 and 2013 was 17.4% and (0.2)% and a provision for income taxes of $90,000 and $18,000, respectively. Deferred taxes on our investment in HPIH are measured on the difference between the carrying amount of our investment in HPIH and the corresponding tax basis of this investment. We do not measure deferred taxes on differences within HPIH, as those differences inherently comprise our deferred taxes on our external investment in HPIH. Additionally, certain state jurisdictions tax HPIH and HPIS instead of their members, the effects of which are reflected in our consolidated provision for income taxes. | ||||||||||
Our effective tax rate includes a rate detriment attributable to the fact that certain of our subsidiaries operate as limited liability companies which are not subject to federal or state income tax. Accordingly, a portion of our earnings or losses attributable to noncontrolling interests are not subject to corporate level taxes. Additionally, our effective tax rate includes a valuation allowance placed on all of our deferred tax assets, as our belief is more likely than not that some of our deferred tax assets will not be realized to offset future taxable income. | ||||||||||
We evaluate quarterly the positive and negative evidence regarding the expected realization of net deferred tax assets. The carrying value of our net deferred tax assets is based on our assessment as to whether it is more likely than not that we will generate sufficient future taxable income to realize these deferred tax assets. We concluded that it is more likely than not that some of our deferred tax assets will not be realized due to the presence of losses during the only year in which we measured deferred tax assets and because there are limited means by which our deferred tax asset on our investment in HPIH can be realized. For these reasons, we provided a valuation allowance of $19.7 million and $562,000 against our deferred tax assets for the years ended December 31, 2014 and 2013, respectively. | ||||||||||
We account for uncertainty in income taxes using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Such amounts are subjective, as a determination must be made on the probability of various possible outcomes. We reevaluate uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition and measurement could result in recognition of a tax benefit or an additional tax provision. | ||||||||||
As of December 31, 2014 and 2013, respectively, we did not have any balance of gross unrecognized tax benefits, and as such, no amount would favorably affect the effective income tax rate in any future periods. For the year ended December 31, 2014 and 2013, respectively, there was no change to our total gross unrecognized tax benefit. We believe that there will not be a significant increase or decrease to the uncertain tax positions within 12 months of the reporting date. The Company accounts for interest and penalties associated with uncertain tax positions as a component of tax expense, and none were included in the Company’s financial statements as there are not uncertain tax positions outstanding as of December 31, 2014 and 2013, respectively. The Company’s 2012 through 2014 tax years remain subject to examination by tax authorities. |
Net_Loss_per_Share
Net Loss per Share | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Net Loss per Share | 11 | Net Loss per Share | |||||||
The computations of basic and diluted net loss per share attributable to HII for the years ended December 31, 2014 and 2013 were as follows ($ in thousands, except share and per share data): | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Basic net loss attributable to HII | $ | (339 | ) | $ | (3,355 | ) | |||
Average shares—basic | 6,057,516 | 4,813,222 | |||||||
Effect of dilutive securities: | |||||||||
Restricted shares | – | – | |||||||
SARs | – | – | |||||||
Stock Options | – | – | |||||||
Average shares—diluted | 6,057,516 | 4,813,222 | |||||||
Basic net loss per share attributable to HII | $ | (0.06 | ) | $ | (0.70 | ) | |||
Diluted net loss per share attributable to HII | $ | (0.06 | ) | $ | (0.70 | ) | |||
Potential common shares are included in the diluted net loss per share calculation when dilutive. Potential common shares consist of Class A common stock issuable through restricted stock grants and SARs and are calculated using the treasury stock method. | |||||||||
The following securities were not included in the calculation of diluted net loss per share because such inclusion would be anti-dilutive (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Restricted shares | 292 | 158 | |||||||
SARs | 594 | 379 | |||||||
Stock options | 84 | – | |||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | 12 | Fair Value Measurements | |||||||||||||||
We measure and report financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (referred to as 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 used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of our financial assets and liabilities is determined by using three levels of input, which are defined as follows: | |||||||||||||||||
Level 1: | Quoted prices in active markets for identical assets or liabilities | ||||||||||||||||
Level 2: | Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||||||||||||||||
Level 3: | Unobservable inputs for the asset or liability | ||||||||||||||||
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | |||||||||||||||||
We utilize the market approach to measure the fair value of our financial assets. As subjectivity exists with respect to many of the valuation techniques, the fair value estimates we have disclosed may not equal prices that we may ultimately realize if the assets are sold or the liabilities are settled with third parties. Below is a description of our valuation methods. | |||||||||||||||||
Investments. Our short-term investments include certificates of deposit of varying maturities. The certificates of deposit are classified as held to maturity and have maturities ranging from greater than three to fifteen months. The investments are classified within Level 1 of the fair value hierarchy. Because the carrying values of the investments approximate the fair values, there are no holding gains or losses on these securities. | |||||||||||||||||
Contingent consideration for business acquisition. The contingent consideration related to the acquisitions of Secured and ASIA includes periodic cash payments, as described in Note 2, and are valued using external valuation specialists. The inputs include discount rates reflecting the credit risk, risk and the probability of the underlying outcome of the results required by the acquirees to receive payment and the nature of such payments. The underlying outcomes are subject to actual revenues and earnings relative to the target results in the respective instruments or agreement. These liabilities are included in Level 3 of the fair value hierarchy. | |||||||||||||||||
Noncompete obligation. Our noncompete obligation, an exclusivity agreement with the developer of A.R.I.E.S as described in Note 14 are primarily valued using nonbinding market prices as stated in the agreement that are corroborated by observable market data. The inputs and fair value are reviewed for reasonableness and may be further validated by comparison to publicly available information or compared to multiple independent valuation sources. The noncompete obligation is classified within Level 2 of the fair value hierarchy. | |||||||||||||||||
The carrying amounts of financial assets and liabilities reported in the accompanying consolidated balance sheets for cash and cash equivalents, cash held on behalf of others, credit card transactions receivable, accounts receivable, advanced commissions, carriers and vendors payable, commissions payable, and accounts payable and accrued expenses as of December 31, 2014 and 2013, respectively, approximate fair value because of the short-term duration of these instruments. | |||||||||||||||||
We recognize transfers between levels within the fair value hierarchy on the date of the change in circumstances that requires such transfer. We began classifying all of our contingent acquisition consideration as Level 3 in the fourth quarter of 2013. | |||||||||||||||||
As of December 31, 2014, our assets and liabilities measured at fair value were as follows ($ in thousands): | |||||||||||||||||
Fair Value Measurement as of December 31, 2014 | |||||||||||||||||
Carrying Value as of December 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Certificates of deposit | $ | 461 | $ | 461 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Noncompete obligation, including current portion | $ | 463 | $ | – | $ | 457 | $ | – | |||||||||
Contingent acquisition consideration, including current portion | 4,400 | – | – | 4,400 | |||||||||||||
$ | 4,863 | $ | – | $ | 457 | $ | 4,400 | ||||||||||
As of December 31, 2013, our assets and liabilities measured at fair value were as follows ($ in thousands): | |||||||||||||||||
Fair Value Measurement as of December 31, 2013 | |||||||||||||||||
Carrying Value as of December 31, 2013 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Certificates of deposit | $ | 7,337 | $ | 7,337 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Noncompete obligation, including current portion | $ | 626 | $ | – | $ | 613 | $ | – | |||||||||
Contingent acquisition consideration, including current portion | 3,876 | – | – | 3,876 | |||||||||||||
$ | 4,502 | $ | – | $ | 613 | $ | 3,876 | ||||||||||
A summary of the changes in the fair value of liabilities carried at fair value that have been classified in Level 3 of the fair value hierarchy was as follows ($ in thousands): | |||||||||||||||||
Contingent Acquisition Consideration | |||||||||||||||||
Balance as of January 1, 2013 | $ | – | |||||||||||||||
Issuance and settlements, net | 3,423 | ||||||||||||||||
Realized loss included in income | 29 | ||||||||||||||||
Unrealized loss included in income | 424 | ||||||||||||||||
Total realized and unrealized loss | 453 | ||||||||||||||||
Balance as of December 31, 2013 | 3,876 | ||||||||||||||||
Issuance and settlements, net | (579 | ) | |||||||||||||||
Realized gain included in income | (102 | ) | |||||||||||||||
Unrealized loss included in income | 1,205 | ||||||||||||||||
Total realized and unrealized loss | 1,103 | ||||||||||||||||
Balance as of December 31, 2014 | $ | 4,400 | |||||||||||||||
Realized and unrealized loss on the contingent acquisition consideration are included in other expense (income) on the accompanying consolidated statements of operations. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Information | 13 | Segment Information | |||||||||||||||
For the year ended December 31, 2014, we operated as two reportable segments: 1) IPD and 2) HP. For the year ended December 31, 2013, we operated as a single reportable segment, IPD. The IPD segments comprises our business activities in designing, implementing and administering STM and other products and the distribution of those products to consumers via our call center distribution network and online purchasing. The HP segment comprises the business activities of HP, including the development of HP, including the development of HealthPocket.com and generation of referral-based and other revenues. Intercompany revenues are based on contracted rates for services provided, which generally are referrals provided HealthPocket to the other segment. | |||||||||||||||||
The following table shows the financial results of our operating segments for the year ended December 31, 2014 ($ in thousands). For the year ended December 31, 2013, we operated as a single reportable segment. | |||||||||||||||||
IPD | HP | Inter-Segment Eliminations | Consolidated Total | ||||||||||||||
Revenues | $ | 85,960 | $ | 3,258 | $ | (460 | ) | $ | 88,758 | ||||||||
Gross margin | 85,960 | 867 | (460 | ) | 86,367 | ||||||||||||
Other operating expenses | 80,720 | 1,867 | (460 | ) | 82,127 | ||||||||||||
Depreciation and amortization | 1,730 | 637 | – | 2,367 | |||||||||||||
Total operating expenses | 82,450 | 2,504 | (460 | ) | 84,494 | ||||||||||||
Other expense | 1,354 | 6 | – | 1,360 | |||||||||||||
Net income (loss) before income taxes | 2,156 | (1,643 | ) | – | 513 | ||||||||||||
Provision (benefit) for income taxes | 757 | (667 | ) | – | 90 | ||||||||||||
Net income (loss) | $ | 1,399 | $ | (976 | ) | $ | – | $ | 423 | ||||||||
Total assets as of December 31, 2014 | $ | 55,041 | $ | 31,723 | $ | (592 | ) | $ | 86,172 | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments And Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | 14 | Commitments and Contingencies | ||
Leases | ||||
We lease office spaces to conduct the operations of HPIH and subsidiaries which expire in between 2015 and 2019. The office space operating lease agreements contain rent holidays and rent escalation provisions. Rent holidays and rent escalation provisions are considered in determining straight-line rent expense to be recorded over the lease term. The difference between cash rent payments and straight-line rent expense was $60,000 and $70,000 as of December 31, 2014 and 2013, respectively. Total rent expense under all operating leases, which includes equipment, was $505,000 and $308,000 for the years ended December 31, 2014 and 2013, respectively, and is included in S, G & A expenses in the accompanying consolidated statements of operations. | ||||
As of December 31, 2014, the future minimum lease payments under noncancellable operating leases were as follows ($ in thousands): | ||||
2015 | $ | 493 | ||
2016 | 330 | |||
2017 | 226 | |||
2018 | 119 | |||
2019 | 69 | |||
Total minimum lease payments | $ | 1,237 | ||
BimSym Agreements | ||||
On August 1, 2012, the Company entered into a software assignment agreement with BimSym eBusiness Solutions, Inc. (“BimSym”) for our exclusive ownership of all rights, title and interest in the technology platform (“A.R.I.E.S. System”) developed by BimSym and utilized by us. As a result of the agreement, we purchased the A.R.I.E.S. System, our proprietary sales and member administration platforms, for $45,000 and this purchase was capitalized and recorded as an intangible asset. In connection with this agreement, we simultaneously entered into a master services agreement for the technology, under which we are required to make monthly payments of $26,000 for five years. After the five-year term, this agreement automatically renews for one-year terms unless we give 60 days’ notice. | ||||
Additionally, we also entered into an exclusivity agreement with BimSym whereby neither BimSym nor any of its affiliates will create, market or sell a software, system or service with the same or similar functionality as that of A.R.I.E.S. System under which we are required to make monthly payments of $16,000 for five years. The present value of these payments was capitalized and recorded as an intangible asset with a corresponding liability on the accompanying consolidated balance sheets. | ||||
Tax Receivable Agreement | ||||
On February 13, 2013, we entered into a tax receivable agreement with the holders of the HPIH Series B Membership Interests, which holders are beneficially owned by Mr. Kosloske. The agreement requires us to pay to such holders 85% of the cash savings, if any, in U.S. federal, state and local income tax we realize (or are deemed to realize in the case of an early termination payment, a change in control or a material breach by us of our obligations under the tax receivable agreement) as a result of any possible future increases in tax basis and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement itself. This is HII’s obligation and not an obligation of HPIH. HII will benefit from the remaining 15% of any realized cash savings. For purposes of the tax receivable agreement, cash savings in income tax is computed by comparing our actual income tax liability with our hypothetical liability had we not been able to utilize the tax benefits subject to the tax receivable agreement itself. The tax receivable agreement became effective upon completion of the IPO and will remain in effect until all such tax benefits have been used or expired, unless HII exercises its right to terminate the tax receivable agreement for an amount based on the agreed payments remaining to be made under the agreement or HII breaches any of its material obligations under the tax receivable agreement in which case all obligations will generally be accelerated and due as if HII had exercised its right to terminate the agreement. Any potential future payments will be calculated using the market value of our Class A common stock at the time of the relevant exchange and prevailing tax rates in future years and will be dependent on us generating sufficient future taxable income to realize the benefit. Payments are generally due under the tax receivable agreement within a specified period of time following the filing of our tax return for the taxable year with respect to which payment of the obligation arises. | ||||
Exchanges of Series B Membership Interests, together with an equal number of shares of our Class B common stock, for shares of our Class A common stock, are expected to increase our tax basis in our share of HPIH’s tangible and intangible assets. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits and therefore may reduce the amount of tax that we would otherwise be required to pay in the future. As of December 31, 2014, Series B Membership Interests, together with an equal number of shares of Class B common stock have been exchanged for a total of 1,825,000 shares of Class A common stock subsequent to the IPO. See Note 8 for further information on these issuances of Class A common stock. As of result of the exchanges noted above, we have recorded a liability of $616,000 pursuant to the tax receivable agreement as of December 31, 2014. We have determined that some of this amount is probable of being paid, because a portion of the deductions and other tax benefits noted above will be utilized based on our taxable income for 2014. Therefore we have also reversed a portion of the valuation allowance on our deferred tax assets related to the tax receivable agreement. The exchange transactions created a tax benefit to be shared by the Company and the entities beneficially owned by Mr. Kosloske. Our total liability pursuant to the tax receivable agreement for exchange transactions completed through December 31, 2014 would be $616,000, representing the share of tax benefits payable to the entities beneficially owned by Mr. Kosloske, if we generate sufficient taxable income in the future. We have made no payments under the tax receivable agreement as of December 31, 2014. See Note 10 for further information on the income tax implications of the tax receivable agreement. | ||||
Distributor Commission Advance | ||||
From time to time, we enter into agreements with our distributors to make advanced commission payments to them. Certain of these agreements include a loan agreement for the purposes of securing the advanced payments we make. Generally, these loans will be paid by commissions earned by the distributor, as described in the respective agreements. | ||||
In September 2014, we entered into an agreement with one of our distributors, and certain individuals and entities related to this distributor, (collectively, the “Distributor”), to make advances via a variable secured promissory note. The variable secured promissory note executed by the Distributor (the “September 2014 Note”) provides for advances up to an aggregate amount of $4.8 million, payable in three installments of $1.5 million, $1.5 million, and $1.8 million, respectively. The first advance installment of $1.5 million was made in September 2014 and is included in advanced commissions on accompanying consolidated balance sheet as of December 31, 2014. The latter two installments will be made on the earlier of June 26, 2015 and February 26, 2016, respectively, or the achievement of certain levels of sales of our products, as defined in the September 2014 Note, on or before such dates. The September 2014 Note, which secured the advances matures on April 26, 2017 and bears interest only upon the occurrence of an event of default, as defined in the Note. All amounts outstanding, including interest, are due within thirty days of the maturity date, subject to acceleration upon the occurrence of an event of default. | ||||
Under the September 2014 Note, the Distributor is eligible to earn bonus commissions for each qualifying sale of our products, as defined in the September 2014 Note. Any such bonus commissions earned during the term of the September 2014 Note will be applied against the outstanding balance payable to us under the September 2014 Note, in lieu of a cash payment to us, and the net amount (if any) will be payable to the Distributor. | ||||
In January 2015, we entered into agreements with the Distributor to make advances via two additional variable secured promissory notes, which we refer to as the “January 2015 Production Note” and the “January 2015 MDF Note”, and collectively as the “January 2015 Variable Notes”. The January 2015 Variable Notes provide for advances of up to $2.0 million each. The first installments, $1,500,000 under the January 2015 Production Note and $1,000,000 under the January 2015 MDF Note, were made in January 2015. Both January 2015 Variable Notes provide for second installments of $500,000 each, payable on July 1, 2015, and the January 2015 MDF Note provides for a third installment of $500,000, payable on January 1, 2016. The January 2015 Variable Notes, which secure the advances, mature on December 31, 2017 and bear interest only upon the occurrence of an event of default, as defined in each of the January 2015 Variable Notes. All amounts outstanding, including interest, are due on the maturity date, subject to acceleration upon the occurrence of an event of default. | ||||
Under the January 2015 Production Note, the Distributor is eligible to earn bonus commissions for each qualifying sale of our products, as defined in the January 2015 Production Note. Any such bonus commissions earned during the term of the January 2015 Production Note will be applied against the outstanding balance payable to us under the January 2015 Production Note, in lieu of a cash payment to us, and the net amount (if any) will be payable to the Distributor. | ||||
Under the January 2015 MDF Note, the Distributor is eligible to earn production credits for achieving certain sales targets of our products, as defined in the January 2015 MDF Note. Any such production credits earned during the term of the January 2015 MDF Note will be applied against the outstanding balance payable to us under the January 2015 MDF Note, in lieu of a cash payment to us, but no amount will be payable to us by the Distributor. | ||||
In addition, in January 2015 we entered into a revolving secured promissory note (the “January 2015 Revolver”) with the Distributor. Pursuant to the January 2015 Revolver, we may make loans, from time to time, to the Distributor. The maximum aggregate principal amount loaned by us under the January 2015 Revolver is capped at the lesser of what we refer to as the available amount and $1,000,000 (increased to $1,500,000 on July 1, 2015 if there has not been an event of default, as defined in the January 2015 Revolver). The January 2015 Revolver bears interest at an annual rate of 6.0%. Pursuant to the January 2015 Revolver, on each of December 31, 2015 and 2016, the Distributor shall make a payment to us in an amount that will reduce the amount outstanding under the January 2015 Revolver to $300,000 or less plus accrued interest on the principal amounts so repaid. The January 2015 Revolver matures on December 31, 2017. All amounts outstanding, including interest, are due on the maturity date, subject to acceleration upon the occurrence of an event of default. In January 2015, we loaned $1.0 million to the Distributor under the January 2015 Revolver. | ||||
Legal Proceedings | ||||
As of December 31, 2014, we had no significant outstanding legal proceedings. We are subject to certain legal proceedings and claims that may arise in the ordinary course of business. In the opinion of management, we do not have a potential liability related to any current legal proceedings and claims that would individually, or in the aggregate, have a material adverse effect on our financial condition, liquidity, results of operations, or cash flows. |
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended | |
Dec. 31, 2014 | ||
Compensation And Retirement Disclosure [Abstract] | ||
Employee Benefit Plan | 15 | Employee Benefit Plan |
We sponsor a benefit plan to provide retirement benefits for our employees, known as the Health Plan Intermediaries Holdings LLC 401(k) Profit Sharing Plan & Trust (the “Plan”). Participants may make voluntary contributions to the Plan from their annual base pre-tax compensation, cash bonuses, and commissions in an amount not to exceed the federally determined maximum allowable contribution amounts. For both the years ended December 31, 2014 and 2013, the base maximum allowable contribution amount was $17,500. The Plan also permits for discretionary company contributions. We have made no discretionary contributions during the years ended December 31, 2014 and 2013, respectively. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2014 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions | 16 | Related-Party Transactions |
Health Plan Intermediaries, LLC | ||
HPI and its subsidiary HPIS, which are beneficially owned by Mr. Kosloske, are related parties by virtue of their Series B Membership interests in HPIH, of which we are managing member. During the years ended December 31, 2014 and 2013, HPIH paid cash distributions of $1.2 million and $2.2 million, respectively, to these entities related to estimated federal and state income taxes, pursuant to the operating agreement entered into by HPIH and HPI. The distribution made during the year ended December 31, 2014 included $916,000 that was accrued as of December 31, 2013. The distribution made during the year ended December 31, 2013 consisted of an accrual of $773,000 made during the year ended December 31, 2012 and an additional accrual of $171,000 which was made prior to the IPO. | ||
Tax Receivable Agreement | ||
As discussed in Note 14, on February 13, 2013, we entered into a tax receivable agreement with the holders of HPIH Series B Membership Interests, which are beneficially owned by Mr. Kosloske. | ||
As of December 31, 2014 and 2013, respectively, we have made no such payments under the tax receivable agreement. As of December 31, 2014, we would be obligated to pay $616,000 pursuant to the tax receivable agreement, of which $229,000 is included in current liabilities on the accompanying consolidated balance sheets. As of December 31, 2013, $423,000 was payable pursuant to the tax receivable agreement and was included in long-term liabilities in our accompanying consolidated balance sheets. | ||
Our total liability pursuant to the tax receivable agreement for exchange transactions completed through December 31, 2014 would be $10.8 million if we generate sufficient taxable income in the future. | ||
TSG Agency, LLC | ||
TSG was a related party by virtue of its involvement in ICE, as described in Note 2. On March 14, 2013, we terminated our contract rights with TSG for an aggregate cash price of $5.5 million. In conjunction with the transaction, Ivan Spinner, TSG’s principal, joined HII as an employee. | ||
On June 30, 2013, we purchased TSG’s interest in ICE for a cash payment to TSG of $90,000. See Note 2 for further information on this transaction. | ||
On March 15, 2014, Mr. Spinner’s employment agreement with HII was terminated. | ||
Health Benefits One, LLC | ||
In October 2013, HPIH formed SIL with HBO, one of our distributors. See Note 3 for more information on this joint venture. HBO is a related party by virtue of its 50% ownership of membership interests in SIL. During 2014 and 2013, we made net advanced commissions payments of $1.8 million and $801,000, respectively, and recognized $5.7 million and $906,000, respectively, of commission expense related to HBO. As of December 31, 2014 and 2013, the advanced commissions balance related to HBO included in the accompanying consolidated balance sheets was $2.3 million and $457,000, respectively. | ||
Concentrations_of_Credit_Risk_
Concentrations of Credit Risk and Significant Customers | 12 Months Ended | |
Dec. 31, 2014 | ||
Text Block [Abstract] | ||
Concentrations of Credit Risk and Significant Customers | 17 | Concentrations of Credit Risk and Significant Customers |
Accounts receivable were approximately $1.8 million and $630,000 as of December 31, 2014 and 2013, respectively. As of December 31, 2014 we had two customers who make up 35% and 15%, or a total of 50% of the accounts receivable balance. As of December 31, 2013, we had a single distributor who made up and 21% of the accounts receivable balance. | ||
Revenues consist of commissions earned for health insurance policies and discount benefit plans issued to members, enrollment fees paid by members, and monthly administration fees paid by members as a direct result of enrollment services provided by us. None of our members individually accounted for 10% or more of the Company’s revenue for the years ended December 31, 2014 and 2013. | ||
During the year ended December 31, 2014, two carriers represented 43% and 36% of premium equivalents. During the years ended December 31, 2013, three carriers represented 41%, 22% and 20% of premium equivalents, respectively. |
Organization_Basis_of_Presenta1
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation | ||
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Health Insurance Innovations, Inc., its wholly-owned subsidiaries, and Variable Interest Entities (“VIE”), of which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in preparing the consolidated financial statements. The results of operations for business combinations are included from their respective dates of acquisition. | |||
Reclassifications | Reclassifications | ||
Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Such reclassifications are to include short-term loans receivable in advanced commissions; carriers and vendors payable and commissions payable in accounts payable and accrued expenses; the long-term portion of the noncompete obligation in other liabilities in the accompanying consolidated balance sheets. Those reclassifications had no impact on net loss or cash flows as previously reported. | |||
Use of Estimates | Use of Estimates | ||
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. These estimates also affect the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. | |||
Revenue Recognition | Revenue Recognition | ||
Our revenues primarily consist of commissions and fees earned for health insurance policies and ancillary products issued to members, enrollment fees paid by members, and administration fees paid by members as a direct result of our enrollment services. The members’ payments include a combination of risk premium, fees for discount benefit plans and an enrollment fee, which are collectively referred to as “premium equivalents.” Revenues reported by the Company are net of premiums remitted to insurance carriers and fees paid for discount benefit plans. Revenues are net of an allowance for policies expected to be cancelled by members during a limited cancellation period. We establish an allowance for estimated policy cancellations through a charge to revenues. The allowance is estimated using historical data to project future experience. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported. We periodically review the adequacy of the allowance and record adjustments as necessary. The net allowance for estimated policy cancellations as of December 31, 2014 and 2013 was $159,000 and $191,000, respectively. | |||
Revenue is earned at the time of sale. Commission rates for our products are agreed to in advance with the relevant insurance carrier and vary by carrier and policy type. Under our carrier compensation arrangements, the commission rate schedule that is in effect on the policy effective date governs the commissions over the life of the policy. In addition, we earn enrollment and administration fees on policies issued. All amounts due to insurance carriers and discount benefit vendors are reported and paid to them according to the procedures provided for in the contractual agreements between the individual carrier or vendor and us. Risk premiums are typically reported and remitted to insurance carriers on the 15th of the month following the end of the month in which they are collected. | |||
In concluding that revenues should be reported on a net basis, we considered Financial Accounting Standards Board (“FASB”) requirements and whether we have the responsibility to provide the goods or services to the customer or if we rely on a supplier to provide the goods or services to the customer. We are not the ultimate party responsible for providing the insurance coverage or discount benefits to the member and, therefore, we are not the primary obligor in the arrangement. The supplier, or insurance carrier, bears the risk for that insurance coverage. We therefore report our revenues net of amounts paid to the contracted insurance carrier companies and discount benefit vendors. | |||
Commission revenues earned at ICE, Secured, and ASIA, which are licensed insurance agent call centers are recognized as earned for sales of insurance and ancillary products. Commissions are earned based on commission rates contracted with insurance carriers or ancillary insurance product vendors, net of an estimate for forfeiture amounts payable for future policy cancellations. | |||
HP’s revenue is principally derived from marketing fees, licensing fees, limited exclusivity fees, and landing page development fees. HP recognizes revenue when: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; (2) delivery has occurred or services have been provided; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. | |||
Revenue is considered earned when the performance measures have been completed. Deposits (whether refundable or non-refundable), early payments and progress payments are not recognized as revenue until the revenue producing event has occurred. | |||
Marketing fee revenue. HP offers marketing services over a specified term. This fee is related to telephone and website traffic received by HealthPocket.com for the customer and is recognized on a straight-line basis over the life of the specified term of the marketing services. There are two ways marketing fee revenue is determined: lead fee revenue and conversion fee revenue. HP offers lead marketing services in the form of providing leads to customers. Revenue for leads provided is recognized based on the contractually agreed price per lead multiplied by the number of leads provided by HP during the period. HP offers conversion marketing services in the form of providing leads to customers with revenue recognized on a cost per acquisition basis. Revenue is calculated based on the number of qualifying conversions generated by HP leads. The customer collects conversion data and provides a contractually agreed periodical report to HP. Revenue is recognized based on the agreed price per lead conversion multiplied by the number of leads converted during the period. | |||
Limited exclusivity fee revenue. HP offers to certain customers limited exclusivity for placement of advertisements on the HealthPocket website for a fee. This fee is recognized on a straight-line basis over the life of the limited exclusivity term. | |||
Landing page development. HP offers to design, build and support a customer’s hosting of certain landing pages for the purpose of capturing e-leads and phone calls. Revenue for this service is recognized on a straight-line basis over the life of the support period of the landing pages. | |||
Third Party Commissions and Advanced Commissions | Third Party Commissions and Advanced Commissions | ||
We utilize a broad network of licensed third party distributors, in addition to our internal distributors to sell the plans that we develop. We pay commissions to these distributors based on a percentage of the policy premium that varies by type of policy. We pay fees to the distributors for discount benefit plans issued. | |||
Advanced commissions consist of amounts advanced to certain third party distributors. We perform ongoing credit evaluations of our distributors, all of which are located in the United States. We recover the advanced commissions from future commissions earned on premiums collected. We have not experienced any credit losses from commission advances and, accordingly, have not recognized any provision for bad debt expense for the periods presented. In addition, from time to time, certain of these advanced commissions arrangements include a loan agreement for the purposes of securing the advanced payments we make. Generally, these loans will be paid by commissions earned by the distributor, as described in the respective agreements. A fee for the advance commission of up to 2% of the insurance premium sold is charged to the distributors and recognized as interest income as earned. The interest income earned from advanced commissions for the year ended December 31, 2014 and 2013 were $ 220,000 and $93,000, respectively. Advanced commissions outstanding as of December 31, 2014 and 2013 totaled $6.0 million and $2.6 million, respectively. | |||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||
We account for cash on hand and demand deposits with banks and other financial institutions as cash. Short-term, highly liquid investments with original maturities of three months or less, when purchased, are considered cash equivalents. Investments in cash equivalents include, but are not limited to, demand deposit accounts, money market accounts and certificates of deposit with original maturities of three months or less. | |||
Periodically, we invest cash on hand in other highly-liquid investments. Such investments that have maturities greater than three months up to one year are classified as short-term investments and include, but are not limited to, certificates of deposit with maturities greater than three months, but less than one year. Certain certificates of deposits have maturities beyond one year from the balance sheet date; these are classified as long-term and are included in other assets on the accompanying consolidated balance sheets. | |||
Cash Held on Behalf of Others | Cash Held on Behalf of Others | ||
In our capacity as the policy administrator, we collect premiums from members and distributors and, after deducting our earned commission and fees, remit these premiums to our contracted insurance carriers, discount benefit vendors and distributors. We hold the unremitted funds in a fiduciary capacity until they are disbursed, and the use of such funds is restricted. We hold these funds in bank accounts. These unremitted amounts are reported as cash held on behalf of others in the accompanying consolidated balance sheets with the related liabilities reported as carriers and vendors payable and commissions payable. Cash held on behalf of others at December 31, 2014 and 2013 was $7.6 million and $4.6 million, respectively. | |||
Investments | Investments | ||
We have invested a portion of the proceeds from the IPO in certain investment securities. As of December 31, 2014 and 2013, all such investments are certificates of deposit and are classified as held-to-maturity and recorded at amortized cost. Certificates of deposit with original maturities of three months or less, when purchased, are classified as cash equivalents. Certificates of deposits with maturities greater than three months to 12 months are classified as short-term investments. Certificates of deposits with maturities greater than twelve months are considered long term assets until such time that the remaining maturities of the certificates of deposit are 12 months or less, in which case they are reclassified to short-term investments. | |||
As of December 31, 2014, we had two certificates of deposit with maturities of three months with a balance of $461,000 and are included in short-term investments on the accompanying balance sheet as of December 31, 2014. As of December 31, 2013, we had two certificates of deposit with maturities of 15 months with a balance of $460,000 and are included in other assets on the accompanying consolidated balance sheet as of December 31, 2013. | |||
During the year ended December 31, 2013, we had also invested $15.0 million in a fixed-income mutual fund which was classified as available for sale. We sold this mutual fund in December 2013 for $15.0 million. The transaction settled, and we received the proceeds on January 2, 2014; as such, the proceeds are included in investment proceeds receivable on the accompanying consolidated balance sheet. | |||
Accounts Receivable | Accounts Receivable | ||
Accounts receivable represent amounts due to us for premiums collected by a third party and are generally considered delinquent 15 days after the due date. The underlying insurance contracts are cancelled retroactively if the payment remains delinquent. We have not experienced any credit losses from accounts receivable and have not recognized a provision for uncollectible accounts receivable. | |||
Property and Equipment | Property and Equipment | ||
Property and equipment is recorded at cost, less accumulated depreciation, in the accompanying consolidated balance sheets. Depreciation expense for property and equipment is computed using the straight-line method over the following estimated useful lives: | |||
Computer equipment | 5 years | ||
Furniture and fixtures | 7 years | ||
Leasehold improvements | Shorter of the lease term or estimated useful life | ||
The Company’s management periodically reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. No impairment losses were recognized for the periods presented. | |||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | ||
Goodwill | |||
As a result of our various acquisitions, we have recorded goodwill which represents the excess of the consideration paid over the fair value of the identifiable net assets acquired in a transaction accounted for as a business combination. An impairment test is performed by us at least annually as of October 1st of each year, or whenever events or circumstances indicate a potential for impairment. | |||
Under FASB guidance, we have the option of performing a qualitative assessment to determine whether based on the fact and circumstances it is more likely than not that the fair value of the reporting unit exceeds the carrying value of its net assets. A qualitative assessment requires judgments involving relevant factors, including but not limited to, changes in the general economic environment, industry and regulatory considerations, current economic performance compared to historical economic performance and other relevant company-specific events such as changes in management, key personnel or business strategy, where applicable. If we elect to bypass the qualitative assessment, or if we determine, based upon our assessment of those qualitative factors that it is more likely than not that the fair value of the unit is less than its carrying value, a quantitative assessment for impairment is required. We have two reporting units, which are our operating segments, Insurance Plan Development and Distribution (“IPD”) and HP.The quantitative assessment for evaluating the potential impairment of goodwill involves a two-step assessment process which requires significant estimates and judgments by us to be used during the analysis. In step one we determine if there is an indication of goodwill impairment by determining the fair value of the reporting unit’s net assets and comparing that value to the operating segment’s carrying value including the goodwill. If the carrying value of the net assets exceed the fair value, then the second step of the impairment assessment is required. The step two assessment determines if an impairment exists, and if so, the magnitude of the impairment by comparing the estimated fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The excess of the carrying value over the estimated fair value of the goodwill determines the amount of impairment which would then be recorded as a loss on our statement of operations in the year the impairment occurred. | |||
While performing an impairment assessment we use a combination of valuation approaches including the market approach and the income approach. | |||
The market approach uses a guideline company methodology, which is based upon a comparison of the reporting unit to similar publicly-traded companies within our industry. We derive a market value of invested capital or business enterprise value for each comparable company by multiplying the price per share of common stock of the publicly traded companies by their total common shares outstanding and adding each company’s current level of debt. We calculate a business enterprise multiple based on revenue and earnings from each company, then apply those multiples to our revenue and earnings to calculate a business enterprise value. Assumptions regarding the selection of comparable companies are made based on, among other factors, capital structure, operating environment and industry. As the comparable companies were typically larger and more diversified than our business, multiples were adjusted prior to application to our revenues and earnings to reflect differences in margins, long-term growth prospects and market capitalization. | |||
The income approach uses a discounted debt-free cash flow analysis to measure fair value by estimating the present value of future economic benefits. To perform the discounted debt-free cash flow analysis, we develop a pro forma analysis of the reporting unit to estimate future available debt-free cash flow and discounting estimated debt-free cash flow by an estimated industry weighted average cost of capital based on the same comparable companies used in the market approach. Per FASB guidance, the weighted average cost of capital is based on inputs (e.g., capital structure, risk, etc.) from a market participant’s perspective and not necessarily from the reporting unit’s perspective. Future cash flow is projected based on assumptions for our economic growth, industry expansion, future operations and the discount rate, all of which require significant judgments by management. | |||
We establish our assumptions and arrive at the estimates used in these calculations based upon our historical experience, knowledge of our industry and by incorporating third-party data, which we believe results in a reasonably accurate approximation of fair value. Nevertheless, changes in the assumptions used could have an impact on our assessment of recoverability. We believe our projected sales are reasonable based on, among other things, available information regarding our industry. We also believe the royalty rate is appropriate. The weighted average discount rate is impacted by current financial market trends and will remain dependent on such trends in the future. | |||
After computing a separate business enterprise value under the above approaches, we apply a weighting to them to derive the business enterprise value of the reporting unit. The weightings are evaluated each time a goodwill impairment assessment is performed and give consideration to the relative reliability of each approach at that time. Based on these weightings, we calculated a business enterprise value for the reporting unit. The implied fair value is then compared to the reporting unit’s carrying value. Upon completion of the analysis in step one as of October 1, 2014, we determined that the fair value of each of the reporting units exceeded its respective carrying value. As such, a step two analysis was not required. | |||
Our goodwill balance arose from our previous acquisitions. See Note 2 and Note 5 of the consolidated financial statements for further information on the acquisitions and our goodwill balance as of December 31, 2014 and 2013, respectively. See Note 5 for further discussion of our goodwill. | |||
Other Intangible Assets | |||
Our other intangible assets arose primarily from acquisitions. Finite-lived intangible assets are amortized over their useful lives from two to fifteen years. See Note 5 for further discussion of our intangible assets. | |||
Intangible assets subject are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of the asset or asset group is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If the carrying amount of an asset or asset group is not recoverable, we recognizes an impairment loss based on the excess of the carrying amount of the long-lived asset or asset group over its respective fair value which is generally determined as the present value of estimated future cash flows or as the appraised value. No impairments on intangible assets were recorded during the years ended December 31, 2014 or 2013. | |||
Advertising Costs | Advertising Costs | ||
Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2014 and 2013 are $2.5 million and $513,000, respectively. The advertising expenses for 2014 related to HP and HPIH and are $1.8 million and $0.7 million, respectively. All of the advertising expenses in 2013 were related to HPIH. HP advertising expenses of $1.7 million, related primarily to online advertising placements are classified as cost of sales on the consolidated statements of operations as these costs are directly attributable to generating customer referral revenue. Other HP advertising costs of $62,000 are classified as selling, general and administrative (“S, G & A”) expense on the consolidated statements of operations. All of the advertising expenses related to HPIH are classified as S, G & A expense. | |||
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation | ||
Expense for stock-based compensation is recognized based upon estimated grant date fair value and is amortized over the service period of the awards using the accelerated method. For grants of stock appreciation rights (“SARs”) and stock options, we apply the Black-Scholes option-pricing model in determining the fair value of share-based payments to employees. The resulting compensation expense is recognized over the requisite service period. The requisite service period is the period during which an employee is required to provide service in exchange for an award, which often is the vesting period. Compensation expense is recognized only for those awards expected to vest. All stock-based compensation expense is classified within S, G & A expense in the consolidated statements of operations. See Note 9 for further discussion of stock-based compensation. | |||
Accounting for Income Taxes | Accounting for Income Taxes | ||
Our former operating entity, HPI, was taxed as an S corporation for income tax purposes. Therefore, we were not subject to entity-level federal or state income taxation prior to the IPO. HPIH is taxed as a partnership for federal income tax purposes; as a result, it is not subject to entity-level federal or state income taxation but its members are liable for taxes with respect to their allocable shares of each company’s respective net taxable income. | |||
We are subject to U.S. corporate federal, state and local income taxes that are attributable to HII as reflected in our consolidated financial statements. We use the liability method of accounting for income taxes. Significant management judgment is required in determining the provision for income taxes and, in particular, any valuation allowance that is recorded or released against our deferred tax assets. | |||
We evaluate quarterly the positive and negative evidence regarding the realization of net deferred tax assets. The carrying value of our net deferred tax assets is based on our belief that it is more likely than not that we will generate sufficient future taxable income to realize these deferred tax assets. | |||
We account for uncertainty in income taxes using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Such amounts are subjective, as a determination must be made on the probability of various possible outcomes. We reevaluate uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition and measurement could result in recognition of a tax benefit or an additional tax provision. See Note 10 for further discussion of income taxes. | |||
Basic and Diluted Earnings (Loss) per Share | Basic and Diluted Earnings (Loss) per Share | ||
Basic earnings (loss) per share is determined by dividing the net earnings (loss) attributable to common stockholders by the weighted average number of common shares and participating securities outstanding during the period. Participating securities are included in the basic earnings (loss) per share calculation when dilutive. Diluted earnings (loss) per share is determined by dividing the net (loss) attributable to common stockholders by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares are included in the diluted earnings (loss) per share calculation when dilutive. Potential common shares consisting of common stock issuable upon exercise of outstanding SARs and options are computed using the treasury stock method. See Note 11 for further discussion of earnings (loss) per share. | |||
The Company has two classes of common stock: Class A common stock and Class B common stock. Holders of each of Class A common stock and Class B common stock are entitled to one vote per share on all matters to be voted upon by the shareholders, and holders of each class will vote together as a single class on matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law. For more information on our classes of stock, see Note 8. | |||
Fair Value Measurements | Fair Value Measurements | ||
We measure and report financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (referred to as 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 used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of our financial assets and liabilities is determined by using three levels of input, which are defined as follows: | |||
Level 1: | Quoted prices in active markets for identical assets or liabilities | ||
Level 2: | Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||
Level 3: | Unobservable inputs for the asset or liability | ||
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | |||
We utilize the market approach to measure the fair value of our financial assets. As subjectivity exists with respect to many of the valuation techniques, the fair value estimates we have disclosed may not equal prices that we may ultimately realize if the assets are sold or the liabilities are settled with third parties. See Note 12 for a description of our valuation methods. | |||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||
In the following summary of recent accounting pronouncements, all references to effective dates of FASB guidance relate to nonpublic entities. As noted above, we have elected to delay the adoption of new and revised accounting standards until those standards would otherwise apply to nonpublic companies under provisions of the JOBS Act. | |||
In May 2014, the FASB issued an amendment to its accounting guidance related to revenue recognition. The amendment clarifies the principles for recognizing revenue. The guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in the judgments and assets recognized from costs incurred to obtain or fulfill a contract. We will adopt this guidance in reporting periods beginning after December 15, 2017. We are currently evaluating the impact of adopting this pronouncement on our consolidated financial statements. | |||
In July 2013, the FASB issued guidance which states that a liability for uncertain tax positions, or a portion of a liability for uncertain tax provisions, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, liability for uncertain tax positions should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the uncertain tax position and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. We plan to adopt this guidance during the quarter ended March 31, 2015, but we do not anticipate that it will have a significant impact on our consolidated financial statements. |
Organization_Basis_of_Presenta2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Summary of Estimated Useful Lives | Property and equipment is recorded at cost, less accumulated depreciation, in the accompanying consolidated balance sheets. Depreciation expense for property and equipment is computed using the straight-line method over the following estimated useful lives: | ||
Computer equipment | 5 years | ||
Furniture and fixtures | 7 years | ||
Leasehold improvements | Shorter of the lease term or estimated useful life | ||
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
HealthPocket, Inc | ||||||||
Summary of Fair Value of Consideration for Acquisition | The following table summarizes the fair value of the consideration for the acquisition as of July 14, 2014 ($ in thousands): | |||||||
Cash paid at closing (1) | $ | 21,901 | ||||||
Class A common stock, at fair value (2) | 6,734 | |||||||
Total consideration | $ | 28,635 | ||||||
-1 | Cash paid at closing includes $17.0 million in cash, $3.2 million in cash held in escrow, as noted above, $1.2 million for the payoff of outstanding bank debt held by HP, $54,000 for the payoff of HP loans payable to Telkamp and Wang, and $482,000 in estimated acquisition-related expenses incurred by HP. | |||||||
-2 | The fair value of the Class A common stock derived from the market price of the stock, adjusted to include a discount for a lack of marketability, due to trading restrictions pursuant to the Merger Agreement and other factors. | |||||||
Summary of Allocation of Total Purchase Prices of Acquisition | The following table summarizes the allocation of the total purchase price for the acquisition as of July 14, 2014 ($ in thousands): | |||||||
Cash | $ | 1,294 | ||||||
Accounts receivable and other assets (1) | 104 | |||||||
Property and equipment (1) | 6 | |||||||
Accounts payable, accrued expenses and other liabilities (1) | (480 | ) | ||||||
Deferred tax liability - long-term | (2,967 | ) | ||||||
Intangible asset – technology | 8,000 | |||||||
Intangible asset – brand | 1,280 | |||||||
Intangible asset – customer relationships | 430 | |||||||
Intangible asset – noncompete agreements | 27 | |||||||
Goodwill (2) | 20,941 | |||||||
$ | 28,635 | |||||||
1 | (1)The carrying value of accounts receivable, accounts payable, accrued expenses and property and equipment approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition. | |||||||
-2 | As of December 31, 2014, we expect none of the goodwill acquired in this transaction to be deductible for income tax purposes. | |||||||
American Service Insurance Agency LLC | ||||||||
Summary of Fair Value of Consideration for Acquisition | The following table summarizes the fair value of the consideration for the acquisition as of August 8, 2014 ($ in thousands): | |||||||
Cash paid at closing | $ | 1,825 | ||||||
Contingent consideration | 1,263 | |||||||
Total consideration | $ | 3,088 | ||||||
Summary of Allocation of Total Purchase Prices of Acquisition | The following table summarizes the allocation of the total purchase price for the acquisition as of August 8, 2014 ($ in thousands): | |||||||
Cash | $ | 105 | ||||||
Accounts receivable and other assets (1) | 271 | |||||||
Accounts payable, accrued expenses and other liabilities (1) | (163 | ) | ||||||
Intangible asset – customer relationships-distributors | 449 | |||||||
Intangible asset – customer relationships-direct | 266 | |||||||
Intangible asset – brand | 21 | |||||||
Intangible asset – noncompete agreements | 18 | |||||||
Goodwill (2) | 2,121 | |||||||
$ | 3,088 | |||||||
-1 | The carrying value of accounts receivable, accounts payable, accrued expenses and property and equipment approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition. | |||||||
-2 | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $840,000. | |||||||
HealthPocket, Inc. and American Service Insurance Agency LLC | ||||||||
Unaudited Pro Forma Information for Company Assuming Acquisition | The following table (all amounts in thousands, except per share data) presents unaudited pro forma information for the Company assuming the acquisition of HP and ASIA had occurred as of January 1, 2013. This pro forma information does not purport to represent what our actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
Revenues | $ | 90,566 | $ | 58,907 | ||||
Net (loss) income before income taxes | (641 | ) | (12,205 | ) | ||||
Net (loss) income | 112 | (12,224 | ) | |||||
Net (loss) income attributable to Health Insurance Innovations, Inc. | (83 | ) | (7,634 | ) | ||||
Loss per share – basic | (0.01 | ) | (1.59 | ) | ||||
Loss per share – diluted | (0.01 | ) | (1.59 | ) | ||||
Sunrise Health Plans, Inc. and Affiliates | ||||||||
Summary of Fair Value of Consideration for Acquisition | The following table summarizes the fair value of the consideration for the acquisition as of July 17, 2013 ($ in thousands). The fair values are derived using discount rates related to the probability of the Sellers meeting the thresholds for payment and other risk factors including credit risk. | |||||||
Cash paid at closing | $ | 10,000 | ||||||
Contingent consideration | 4,872 | |||||||
Total consideration | $ | 14,872 | ||||||
Summary of Allocation of Total Purchase Prices of Acquisition | The following table summarizes the allocation of the total purchase price for the acquisition as of July 17, 2013 ($ in thousands): | |||||||
Cash | $ | 91 | ||||||
Accounts receivable and other assets (1) | 332 | |||||||
Property and equipment (1) | 128 | |||||||
Accounts payable and accrued expenses (1) | (326 | ) | ||||||
Intangible asset – brand | 76 | |||||||
Intangible asset – noncompete agreements | 99 | |||||||
Intangible asset – customer relationships-distributors | 1,050 | |||||||
Intangible asset – customer relationships-direct | 788 | |||||||
Intangible asset – capitalized software | 526 | |||||||
Goodwill (2) | 12,108 | |||||||
$ | 14,872 | |||||||
· | The carrying value of accounts receivable, property and equipment and accounts payable and accrued expenses acquired approximated fair value; as such, no adjustments to these accounts were recorded in association with the acquisition. | |||||||
· | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $9.4 million. | |||||||
Unaudited Pro Forma Information for Company Assuming Acquisition | The following table presents unaudited pro forma information for the Company assuming the acquisition of Secured had occurred as of January 1, 2013 (all amounts in thousands, except per share data). This pro forma information does not purport to represent what our actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. | |||||||
Year Ended December 31, 2013 | ||||||||
(Unaudited) | ||||||||
Revenues | $ | 58,363 | ||||||
Net (loss) income before income taxes | (6,775 | ) | ||||||
Net (loss) income | (6,788 | ) | ||||||
Net (loss) income attributable to Health Insurance Innovations, Inc. and Health Plan Intermediaries, LLC | $ | (2,932 | ) | |||||
Loss per share – basic | $ | (0.61 | ) | |||||
Loss per share – diluted | $ | (0.61 | ) | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property Plant And Equipment [Abstract] | ||||||||
Summary of Property and Equipment, Net | Property and equipment, net, are comprised of the following ($ in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Computer equipment | $ | 349 | $ | 188 | ||||
Furniture and fixtures | 251 | 207 | ||||||
Leasehold improvements | 249 | 147 | ||||||
Total property and equipment | 849 | 542 | ||||||
Less accumulated depreciation | (323 | ) | (153 | ) | ||||
Total property and equipment, net | $ | 526 | $ | 389 | ||||
Depreciation expense, including depreciation related to assets acquired through capital leases, was approximately $160,000 and $96,000, respectively, for the year ended December 31, 2014 and 2013. |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Summary of Changes in Carrying Amounts of Goodwill | The changes in the carrying amounts of goodwill by operating segment are as follows ($ in thousands): | |||||||||||||||
IPD | HP | Total | ||||||||||||||
Balance as of January 1, 2013 | $ | 5,906 | $ | – | $ | 5,906 | ||||||||||
Goodwill acquired | 12,108 | – | 12,108 | |||||||||||||
Impairment | – | – | – | |||||||||||||
Balance as of December 31, 2013 | 18,014 | – | 18,014 | |||||||||||||
Goodwill acquired | 2,121 | 20,941 | 23,062 | |||||||||||||
Impairment | – | – | – | |||||||||||||
Balance as of December 31, 2014 | $ | 20,135 | $ | 20,941 | $ | 41,076 | ||||||||||
Schedule of Major Classes of Intangible Assets | Major classes of intangible assets as of December 31, 2014 consisted of the following ($ in thousands): | |||||||||||||||
Weighted-average | Gross Carrying | Accumulated | Intangible | |||||||||||||
Amortization | Amount | Amortization | Assets, net | |||||||||||||
Brand | 14.1 | $ | 1,377 | $ | (103 | ) | $ | 1,274 | ||||||||
Carrier network | 5 | 40 | (26 | ) | 14 | |||||||||||
Distributor relationships | 9.3 | 5,109 | (1,791 | ) | 3,318 | |||||||||||
Noncompete agreements | 4.7 | 987 | (462 | ) | 525 | |||||||||||
Customer relationships | 5.8 | 1,484 | (644 | ) | 840 | |||||||||||
Capitalized software | 6.7 | 8,571 | (977 | ) | 7,594 | |||||||||||
Total intangible assets | 7.8 | $ | 17,568 | $ | (4,003 | ) | $ | 13,565 | ||||||||
Major classes of intangible assets as of December 31, 2013 consisted of the following ($ in thousands): | ||||||||||||||||
Weighted-average | Gross Carrying | Accumulated | Intangible | |||||||||||||
Amortization | Amount | Amortization | Assets, net | |||||||||||||
Brand | 2 | $ | 76 | $ | (17 | ) | $ | 59 | ||||||||
Carrier network | 5 | 40 | (18 | ) | 22 | |||||||||||
Distributor relationships | 8.8 | 4,660 | (1,192 | ) | 3,468 | |||||||||||
Noncompete agreements | 4.8 | 942 | (254 | ) | 688 | |||||||||||
Customer relationships | 2 | 788 | (181 | ) | 607 | |||||||||||
Capitalized software | 2.2 | 571 | (134 | ) | 437 | |||||||||||
Total intangible assets | 6.9 | $ | 7,077 | $ | (1,796 | ) | $ | 5,281 | ||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated annual pretax amortization for intangibles assets for 2015 and in each of the next five years are as follows ($ in thousands): | |||||||||||||||
2015 | $ | 2,626 | ||||||||||||||
2016 | 2,173 | |||||||||||||||
2017 | 1,984 | |||||||||||||||
2018 | 1,743 | |||||||||||||||
2019 | 1,357 | |||||||||||||||
Thereafter | 3,682 | |||||||||||||||
Total | $ | 13,565 | ||||||||||||||
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Payables And Accruals [Abstract] | ||||||||
Summary of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following as of ($ in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts payable | $ | 906 | $ | 588 | ||||
Carriers and vendors payable | 5,830 | 3,310 | ||||||
Commissions payable | 2,009 | 1,453 | ||||||
Accrued wages | 1,062 | 793 | ||||||
Accrued refunds | 815 | 715 | ||||||
Accrued credit card/ACH fees | 144 | 80 | ||||||
Accrued interest | 1 | 35 | ||||||
Accrued professional fees | 198 | 34 | ||||||
Other accruals | 432 | 66 | ||||||
Total accounts payable and accrued expenses | $ | 11,397 | $ | 7,074 | ||||
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Schedule of Stock Option Activity | The stock option activity for the year ended December 31, 2014 and 2013 and is as follows (all amounts in thousands, except per share data): | ||||||||||||||||
Stock options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (a) | ||||||||||||||
Outstanding at February 7, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | – | $ | – | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | – | $ | – | – | – | ||||||||||||
Outstanding at December 31, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | 85 | $ | 12.13 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (1 | ) | $ | – | – | – | |||||||||||
Outstanding at December 31, 2014 | 84 | $ | 12.13 | 8.3 years | $ | – | |||||||||||
Exercisable at December 31, 2014 | 13 | $ | 12.13 | 8.2 years | $ | – | |||||||||||
(a) | The intrinsic value of a stock option is the amount by which the market value of the underlying stock as of December 31, 2014 and 2013 exceeds the exercise price of the option multiplied by the number of shares represented by such stock option. | ||||||||||||||||
(b) | Shares issued upon the exercise of stock options are treated as newly issued shares. There were no shares issued during 2014 and 2013 related to exercises of stock options. | ||||||||||||||||
(c) | There was no tax benefit recognized in 2014 and 2013 related to stock-based compensation for stock options. | ||||||||||||||||
Summary of Weighted Average Assumptions | The Black-Scholes option-pricing model was used with the following weighted average assumptions for the years ended December 31, 2014 and 2013: | ||||||||||||||||
For the year December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Risk-free rate | 1.6 | % | 1.2 | % | |||||||||||||
Expected life | 4.9 years | 4.7 years | |||||||||||||||
Volatility | 40.7 | % | 44 | % | |||||||||||||
Expected dividend | none | none | |||||||||||||||
Summary of Stock Based Compensation Expense | The following table summarizes stock-based compensation expense for the year ended December 31, 2014 and 2013 ($ in thousands): | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
SARs | $ | 1,049 | $ | 525 | |||||||||||||
Restricted shares | 938 | 5,771 | |||||||||||||||
Stock options | 467 | – | |||||||||||||||
$ | 2,454 | $ | 6,296 | ||||||||||||||
Summary of Unrecognized Stock Based Compensation | The following table summarizes unrecognized stock-based compensation and the remaining period over which such stock-based compensation is expected to be recognized as of December 31, 2014 and 2013 ($ in thousands): | ||||||||||||||||
Remaining | |||||||||||||||||
years | |||||||||||||||||
2014 | |||||||||||||||||
SARs | $ | 1,492 | 2.41 | ||||||||||||||
Restricted shares | 2,477 | 2.39 | |||||||||||||||
Stock options | 469 | 1.32 | |||||||||||||||
$ | 4,438 | ||||||||||||||||
2013 | |||||||||||||||||
SARs | $ | 1,302 | 2.48 | ||||||||||||||
Restricted shares | 1,323 | 2.21 | |||||||||||||||
$ | 2,625 | ||||||||||||||||
Stock Appreciation Rights (SARs) | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Summary of Stock-Based Incentive Activity | The SARs activity for the year ended December 31, 2014 and 2013 is as follows (all amounts in thousands, except per share data): | ||||||||||||||||
SARs | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (a) | ||||||||||||||
Outstanding at February 7, 2013 | – | $ | – | – | $ | – | |||||||||||
Granted | 439 | $ | 12.71 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (60 | ) | $ | 13.97 | – | – | |||||||||||
Outstanding at December 31, 2013 | 379 | $ | 12.51 | 6.3 years | $ | – | |||||||||||
Granted | 260 | $ | 12.33 | – | – | ||||||||||||
Exercised (b)(c) | – | $ | – | – | – | ||||||||||||
Forfeited or expired | (45 | ) | $ | 13.09 | – | – | |||||||||||
Outstanding at December 31, 2014 | 594 | $ | 12.37 | 6.1 years | $ | – | |||||||||||
Exercisable at December 31, 2014 | 129 | $ | 12.63 | 5.6 years | $ | – | |||||||||||
(a) | The intrinsic value of a SAR is the amount by which the market value of the underlying stock as of December 31, 2014 and 2013 exceeds the exercise price of the option multiplied by the number of shares represented by such SAR. | ||||||||||||||||
(b) | Shares issued upon the exercise of SARs are treated as newly issued shares. There were no shares issued during 2014 and 2013 related to exercises of SARs. | ||||||||||||||||
(c) | There was no tax benefit recognized in 2014 and 2013 related to stock-based compensation for SARs. | ||||||||||||||||
Long Term Incentive Plan | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Summary of Unvested Restricted Stock Units Activity Under LTIP | The table below summarizes activity regarding unvested restricted stock under the LTIP during the year ended December 31, 2014 and 2013 (all amounts in thousands, except per share data): | ||||||||||||||||
Number of Shares Outstanding | Weighted-Average Grant Date Fair Value (per share) | Aggregate Intrinsic Value | |||||||||||||||
Restricted stock unvested at February 7, 2013 | – | $ | – | ||||||||||||||
2013 activity: | |||||||||||||||||
Granted | 806 | $ | 12.97 | ||||||||||||||
Vested | (408 | ) | $ | 12.21 | |||||||||||||
Forfeited | (240 | ) | $ | 14 | |||||||||||||
Restricted stock unvested at December 31, 2013 | 158 | $ | 13.38 | $ | 1,601 | ||||||||||||
Granted | 200 | $ | 11.61 | ||||||||||||||
Vested | (54 | ) | $ | 12.05 | |||||||||||||
Forfeited | (12 | ) | $ | 12.13 | |||||||||||||
Restricted stock unvested at December 31, 2014 | 292 | $ | 12.25 | $ | 2,092 | ||||||||||||
Income_Tax_Tables
Income Tax (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Tax Disclosure [Abstract] | ||||||||||
Components of Income Tax Expense (Benefit) | The provision for income tax for the years ended December 31, 2014 and 2013 consisted of the following components ($ in thousands): | |||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
Current: | ||||||||||
Federal | $ | 456 | $ | – | ||||||
State | 74 | 18 | ||||||||
Total current taxes | 530 | 18 | ||||||||
Deferred: | ||||||||||
Federal | (315 | ) | – | |||||||
State | (125 | ) | – | |||||||
Total deferred taxes | (440 | ) | – | |||||||
Income taxes | $ | 90 | $ | 18 | ||||||
Differences between Income Tax Expense (Benefit) at the U.S. Federal Statutory Income Tax Rate and the Provision for Income Taxes | The items accounting for differences between the income tax provision, or benefit, computed at the federal statutory rate and the provision for income tax for the years ended December 31, 2014 and 2013 was as follows: | |||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
U.S. federal income tax rate | 35 | % | 35 | % | ||||||
State income taxes, net of federal tax benefits | (16.7 | ) | 0.2 | |||||||
Valuation allowance | 85.2 | (6.7 | ) | |||||||
Operations of nontaxable subsidiary | (84.8 | ) | (21.0 | ) | ||||||
Stock-based compensation contribution | (41.4 | ) | (7.0 | ) | ||||||
Non-deductible or non-taxable items | (4.5 | ) | (0.7 | ) | ||||||
Tax expense resulting from allocation of tax benefits to contributed capital | 44.6 | - | ||||||||
Income taxes | 17.4 | % | (0.2 | ) | % | |||||
Schedule of Deferred Tax Assets and Liabilities | The deferred income tax assets consisted of the following as of December 31, 2014 and 2013 ($ in thousands): | |||||||||
Year Ended December 31, | ||||||||||
2014 | 2013 | |||||||||
Deferred tax assets: | ||||||||||
Investment in subsidiary | $ | 19,505 | $ | 277 | ||||||
Tax receivable agreement | 236 | 158 | ||||||||
Stock compensation | 207 | – | ||||||||
Net operating loss carryforwards | 1,220 | 127 | ||||||||
Total deferred tax assets | 21,168 | 562 | ||||||||
Less valuation allowances | (19,744 | ) | (562 | ) | ||||||
Deferred tax assets, net of valuation allowance | 1,424 | – | ||||||||
Deferred tax liabilities: | ||||||||||
Identifiable intangible assets | (3,710 | ) | – | |||||||
Other | (14 | ) | – | |||||||
Deferred tax liabilities, net | $ | (2,300 | ) | $ | – | |||||
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Summary of Reconciliation of Numerators and Denominators of Basic and Diluted Net Loss | The computations of basic and diluted net loss per share attributable to HII for the years ended December 31, 2014 and 2013 were as follows ($ in thousands, except share and per share data): | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Basic net loss attributable to HII | $ | (339 | ) | $ | (3,355 | ) | |||
Average shares—basic | 6,057,516 | 4,813,222 | |||||||
Effect of dilutive securities: | |||||||||
Restricted shares | – | – | |||||||
SARs | – | – | |||||||
Stock Options | – | – | |||||||
Average shares—diluted | 6,057,516 | 4,813,222 | |||||||
Basic net loss per share attributable to HII | $ | (0.06 | ) | $ | (0.70 | ) | |||
Diluted net loss per share attributable to HII | $ | (0.06 | ) | $ | (0.70 | ) | |||
Summary of Securities Not Included in Calculation of Diluted Net Loss | The following securities were not included in the calculation of diluted net loss per share because such inclusion would be anti-dilutive (in thousands): | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Restricted shares | 292 | 158 | |||||||
SARs | 594 | 379 | |||||||
Stock options | 84 | – | |||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value | As of December 31, 2014, our assets and liabilities measured at fair value were as follows ($ in thousands): | ||||||||||||||||
Fair Value Measurement as of December 31, 2014 | |||||||||||||||||
Carrying Value as of December 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Certificates of deposit | $ | 461 | $ | 461 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Noncompete obligation, including current portion | $ | 463 | $ | – | $ | 457 | $ | – | |||||||||
Contingent acquisition consideration, including current portion | 4,400 | – | – | 4,400 | |||||||||||||
$ | 4,863 | $ | – | $ | 457 | $ | 4,400 | ||||||||||
As of December 31, 2013, our assets and liabilities measured at fair value were as follows ($ in thousands): | |||||||||||||||||
Fair Value Measurement as of December 31, 2013 | |||||||||||||||||
Carrying Value as of December 31, 2013 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Certificates of deposit | $ | 7,337 | $ | 7,337 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Noncompete obligation, including current portion | $ | 626 | $ | – | $ | 613 | $ | – | |||||||||
Contingent acquisition consideration, including current portion | 3,876 | – | – | 3,876 | |||||||||||||
$ | 4,502 | $ | – | $ | 613 | $ | 3,876 | ||||||||||
Summary of the Changes in the Fair Value of Liabilities Carried at Fair Value | A summary of the changes in the fair value of liabilities carried at fair value that have been classified in Level 3 of the fair value hierarchy was as follows ($ in thousands): | ||||||||||||||||
Contingent Acquisition Consideration | |||||||||||||||||
Balance as of January 1, 2013 | $ | – | |||||||||||||||
Issuance and settlements, net | 3,423 | ||||||||||||||||
Realized loss included in income | 29 | ||||||||||||||||
Unrealized loss included in income | 424 | ||||||||||||||||
Total realized and unrealized loss | 453 | ||||||||||||||||
Balance as of December 31, 2013 | 3,876 | ||||||||||||||||
Issuance and settlements, net | (579 | ) | |||||||||||||||
Realized gain included in income | (102 | ) | |||||||||||||||
Unrealized loss included in income | 1,205 | ||||||||||||||||
Total realized and unrealized loss | 1,103 | ||||||||||||||||
Balance as of December 31, 2014 | $ | 4,400 | |||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of Financial Results of Reportable Segments | The following table shows the financial results of our operating segments for the year ended December 31, 2014 ($ in thousands). For the year ended December 31, 2013, we operated as a single reportable segment. | ||||||||||||||||
IPD | HP | Inter-Segment Eliminations | Consolidated Total | ||||||||||||||
Revenues | $ | 85,960 | $ | 3,258 | $ | (460 | ) | $ | 88,758 | ||||||||
Gross margin | 85,960 | 867 | (460 | ) | 86,367 | ||||||||||||
Other operating expenses | 80,720 | 1,867 | (460 | ) | 82,127 | ||||||||||||
Depreciation and amortization | 1,730 | 637 | – | 2,367 | |||||||||||||
Total operating expenses | 82,450 | 2,504 | (460 | ) | 84,494 | ||||||||||||
Other expense | 1,354 | 6 | – | 1,360 | |||||||||||||
Net income (loss) before income taxes | 2,156 | (1,643 | ) | – | 513 | ||||||||||||
Provision (benefit) for income taxes | 757 | (667 | ) | – | 90 | ||||||||||||
Net income (loss) | $ | 1,399 | $ | (976 | ) | $ | – | $ | 423 | ||||||||
Total assets as of December 31, 2014 | $ | 55,041 | $ | 31,723 | $ | (592 | ) | $ | 86,172 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments And Contingencies Disclosure [Abstract] | ||||
Schedule of Future Minimum Operating Lease Payments | As of December 31, 2014, the future minimum lease payments under noncancellable operating leases were as follows ($ in thousands): | |||
2015 | $ | 493 | ||
2016 | 330 | |||
2017 | 226 | |||
2018 | 119 | |||
2019 | 69 | |||
Total minimum lease payments | $ | 1,237 | ||
Income_Tax_Additional_Informat
Income Tax - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | ||
Operating Loss Carryforwards | $0 | $338,000 |
Operating loss carryforwards, expiration year | 2023 | |
Effective tax rate | 17.40% | -0.20% |
Provision for income taxes | 90,000 | 18,000 |
Deferred tax assets valuation allowance | 19,744,000 | 562,000 |
Minimum percentage that is likely to be realized of the largest amount of tax benefit to be measured upon settlement of an uncertain tax position | 50.00% | |
Change in gross unrecognized tax benefit | 0 | 0 |
HealthPocket, Inc | ||
Income Taxes [Line Items] | ||
Operating Loss Carryforwards | $3,000,000 | |
Operating loss carryforwards, expiration year | 2024 |
Organization_Basis_of_Presenta3
Organization, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 13, 2013 | |
Certificate | Certificate | ||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Allowance for estimated policy cancellations, net | $159,000 | $191,000 | |
Fee for the advanced commission | 2.00% | ||
Interest income earned from advanced commissions | 220,000 | 93,000 | |
Advanced commission outstanding | 5,973,000 | 2,596,000 | |
Cash held on behalf of others | 7,642,000 | 4,591,000 | |
Short-term investments | 461,000 | 6,877,000 | |
Number of certificates of deposits | 2 | 2 | |
Investment in fixed-income mutual fund | 18,000,000 | 15,000,000 | |
Sale of mutual fund | 15,000,000 | ||
Impairments on intangible assets | 0 | 0 | |
Advertising expense | 2,500,000 | 513,000 | |
HealthPocket, Inc | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Advertising expense | 1,800,000 | ||
HealthPocket, Inc | Cost of Sales | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Advertising expense | 1,700,000 | ||
HealthPocket, Inc | S, General & A Expenses | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Advertising expense | 62,000 | ||
Minimum | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Finite lived intangible asset useful life | 2 years | ||
Maximum | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Finite lived intangible asset useful life | 15 years | ||
Certificates of Deposit | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Short-term investments | 461,000 | ||
Long-term investments | 460,000 | ||
Class A common stock | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Common stock, shares issued | 7,900,085 | 5,309,594 | |
Percentage of economic rights of holders of all classes of our common stock | 100.00% | ||
Number of votes for common stock holders per share | 1 | ||
Class B common stock | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Common stock, shares issued | 6,841,667 | 8,566,667 | |
Number of votes for common stock holders per share | 1 | ||
HPI | Beneficial Owner | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of outstanding common stock owned after IPO | 46.60% | ||
Health Plan Intermediaries Holdings, LLC | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Advertising expense | $700,000 | ||
Membership Interest | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 35.00% | ||
Economic Interest | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 35.00% | ||
Economic Interest | HPI | Series B | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 46.60% | ||
Voting Interest | Health Insurance Innovations, Inc. | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 100.00% | ||
Initial public offering | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Common stock, shares issued | 4,666,667 | ||
Share price | 14 | ||
Date of sale of stock | 13-Feb-13 | ||
Initial public offering | Class A common stock | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Share price | 14 | ||
Initial public offering | Membership Interest | Health Insurance Innovations, Inc. | Series A Equity Units | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 53.40% | ||
Initial public offering | Membership Interest | HPI | Series B | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 46.60% | ||
Initial public offering | Economic Interest | Health Insurance Innovations, Inc. | Series A Equity Units | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 53.40% | ||
Initial public offering | Voting Interest | Health Plan Intermediaries Holdings, LLC | Series A Equity Units | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Interest owned | 100.00% |
Organization_Basis_of_Presenta4
Organization, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Computer Equipment | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Estimated useful life | 5 years |
Furniture and Fixtures | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Estimated useful life | 7 years |
Leasehold Improvements | |
Property Plant And Equipment Estimated Useful Lives [Line Items] | |
Estimated useful life | Shorter of the lease term or estimated useful life |
Business_Acquisitions_Addition
Business Acquisitions - Additional Information (Detail) (USD $) | 1 Months Ended | 11 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||
Feb. 13, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Jul. 14, 2014 | Aug. 08, 2014 | Jul. 17, 2013 | Nov. 30, 2013 | Sep. 30, 2011 | Jun. 01, 2012 | Sep. 30, 2014 | ||
Business Acquisition [Line Items] | |||||||||||||
Common stock issued as consideration for business acquisition | $6,734,000 | ||||||||||||
Amortization expense related to identified intangible assets | 2,200,000 | 1,200,000 | |||||||||||
Fair value adjustments to contingent acquisition consideration | 1,103,000 | 453,000 | |||||||||||
Contributions | 10,000 | 6,000 | |||||||||||
Acquisition of noncontrolling interest in subsidiary | 90,000 | ||||||||||||
HPI | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership percentage | 50.00% | ||||||||||||
HPI | ICE | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership percentage | 20.00% | ||||||||||||
Acquisition of noncontrolling interest in subsidiary | 90,000 | ||||||||||||
TSG | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisition of noncontrolling interest in subsidiary | 90,000 | ||||||||||||
Controlling Interest | HPI | ICE | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership percentage | 80.00% | ||||||||||||
Capital contribution | 40,000 | 40,000 | |||||||||||
Noncontrolling Interests | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contributions | 6,000 | ||||||||||||
Noncontrolling Interests | TSG | ICE | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership percentage | 20.00% | ||||||||||||
Contributions | 16,000 | ||||||||||||
Class A common stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Common stock issued as consideration for business acquisition, shares | 815,991 | ||||||||||||
Common stock, par value | $0.00 | $0.00 | $0.00 | ||||||||||
Common stock issued as consideration for business acquisition | 1,000 | ||||||||||||
HealthPocket, Inc | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Date of merger agreement with HealthPocket, Inc | 14-Jul-14 | ||||||||||||
Cash paid at closing | 21,901,000 | [1] | |||||||||||
Common stock issued as consideration for business acquisition, shares | 815,991 | ||||||||||||
Merger consideration deposited as escrow deposit | 3,200,000 | ||||||||||||
Percentage of shares former equity holders will take in cash or stock | 50.00% | ||||||||||||
Noncompetition covenant expiration date | 14-Jul-17 | ||||||||||||
Transaction costs for business acquisition | 537,000 | ||||||||||||
Revenue from acquiree since acquisition date | 3,300,000 | ||||||||||||
Pre-tax net loss from acquiree since acquisition date | 1,600,000 | ||||||||||||
Amortization expense related to identified intangible assets | 633,000 | ||||||||||||
Business acquisition consideration cash payment | 17,000,000 | ||||||||||||
HealthPocket, Inc | Replacement Options | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total number of replacement Options | 84,909 | ||||||||||||
HealthPocket, Inc | Class A common stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Common stock issued as consideration for business acquisition, shares | 900,900 | ||||||||||||
Common stock, par value | $0.00 | ||||||||||||
Common stock issued as consideration for business acquisition | 10,000,000 | ||||||||||||
Price per share of shares issued for acquisition | $11.10 | ||||||||||||
HealthPocket, Inc | Fair Value | Class A common stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Class A common stock, at fair value | 6,734,000 | [2] | |||||||||||
American Service Insurance Agency LLC | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash paid at closing | 1,825,000 | ||||||||||||
Revenue from acquiree since acquisition date | 1,500,000 | ||||||||||||
Pre-tax net loss from acquiree since acquisition date | 353,000 | ||||||||||||
Amortization expense related to identified intangible assets | 75,000 | ||||||||||||
Contingent acquisition consideration | 2,200,000 | ||||||||||||
Fair value adjustments to contingent acquisition consideration | 130,000 | ||||||||||||
Potential total contingent consideration, minimum | 0 | ||||||||||||
Potential total contingent consideration, maximum | 2,200,000 | ||||||||||||
Date of employment agreement with Jordan | 8-Aug-14 | ||||||||||||
Expiration date of Agreement | 8-Aug-17 | ||||||||||||
Employment contract termination period | 1 year | ||||||||||||
American Service Insurance Agency LLC | Initial payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash paid at closing | 1,800,000 | ||||||||||||
American Service Insurance Agency LLC | Paid at closing | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash paid at closing | 1,500,000 | ||||||||||||
Merger consideration prior deposit amount | 325,000 | ||||||||||||
American Service Insurance Agency LLC | First potential cash payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 1,200,000 | ||||||||||||
American Service Insurance Agency LLC | Second potential cash payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 1,000,000 | ||||||||||||
American Service Insurance Agency LLC | Fair Value | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 1,400,000 | ||||||||||||
Acquisition of American Service Insurance Agency, LLC | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Transaction costs for business acquisition | 55,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Cash paid at closing | 10,000,000 | ||||||||||||
Transaction costs for business acquisition | 301,000 | ||||||||||||
Revenue from acquiree since acquisition date | 10,200,000 | 3,300,000 | |||||||||||
Pre-tax net loss from acquiree since acquisition date | 47,000 | 204,000 | |||||||||||
Amortization expense related to identified intangible assets | 798,000 | 366,000 | |||||||||||
Contingent acquisition consideration | 3,300,000 | ||||||||||||
Potential total contingent consideration, minimum | 3,300,000 | ||||||||||||
Potential total contingent consideration, maximum | 6,600,000 | 6,600,000 | |||||||||||
Business acquisition consideration cash payment | 3,300,000 | ||||||||||||
Fixed component contingent consideration | 250,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Maximum | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fixed component contingent consideration | 3,000,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | One Time Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business acquisition consideration cash payment | 1,000,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Quarterly Variable Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 200,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Maximum Potential Variable Payment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 2,400,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Compensation To Income Tax Liability | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 150,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Final Tax Liabilities paid | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 43,000 | ||||||||||||
Sunrise Health Plans, Inc. and Affiliates | Fair Value | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent acquisition consideration | 3,900,000 | 3,000,000 | 3,900,000 | ||||||||||
Sunrise Health Plans, Inc. and Affiliates | Fair Value Adjustments | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value adjustments to contingent acquisition consideration | $1,000,000 | $453,000 | |||||||||||
[1] | Cash paid at closing includes $17.0 million in cash, $3.2 million in cash held in escrow, as noted above, $1.2 million for the payoff of outstanding bank debt held by HP, $54,000 for the payoff of HP loans payable to Telkamp and Wang, and $482,000 in estimated acquisition-related expenses incurred by HP. | ||||||||||||
[2] | The fair value of the Class A common stock derived from the market price of the stock, adjusted to include a discount for a lack of marketability, due to trading restrictions pursuant to the Merger Agreement and other factors. |
Business_Acquisitions_Summary_
Business Acquisitions - Summary of Fair Value of Consideration for Acquisition (Detail) (USD $) | 0 Months Ended | |||
In Thousands, unless otherwise specified | Jul. 14, 2014 | Aug. 08, 2014 | Jul. 17, 2013 | |
HealthPocket, Inc | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | $21,901 | [1] | ||
Total consideration | 28,635 | |||
HealthPocket, Inc | Fair Value | Class A common stock | ||||
Business Acquisition [Line Items] | ||||
Class A common stock, at fair value | 6,734 | [2] | ||
American Service Insurance Agency LLC | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | 1,825 | |||
Total consideration | 3,088 | |||
American Service Insurance Agency LLC | Fair Value | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 1,263 | |||
Sunrise Health Plans, Inc. and Affiliates | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | 10,000 | |||
Total consideration | 14,872 | |||
Sunrise Health Plans, Inc. and Affiliates | Fair Value | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $4,872 | |||
[1] | Cash paid at closing includes $17.0 million in cash, $3.2 million in cash held in escrow, as noted above, $1.2 million for the payoff of outstanding bank debt held by HP, $54,000 for the payoff of HP loans payable to Telkamp and Wang, and $482,000 in estimated acquisition-related expenses incurred by HP. | |||
[2] | The fair value of the Class A common stock derived from the market price of the stock, adjusted to include a discount for a lack of marketability, due to trading restrictions pursuant to the Merger Agreement and other factors. |
Business_Acquisitions_Summary_1
Business Acquisitions - Summary of Fair Value of Consideration for Acquisition (Parenthetical) (Detail) (HealthPocket, Inc, USD $) | 0 Months Ended |
Jul. 14, 2014 | |
Business Acquisition [Line Items] | |
Business acquisition consideration cash payment | $17,000,000 |
Merger consideration deposited as escrow deposit | 3,200,000 |
Acquisition related expenses | 482,000 |
Loans payable to Telkamp and Wang | |
Business Acquisition [Line Items] | |
Contingent consideration | 54,000 |
Outstanding bank debt | |
Business Acquisition [Line Items] | |
Contingent consideration | $1,200,000 |
Business_Acquisitions_Summary_2
Business Acquisitions - Summary of Allocation of Total Purchase Prices for Acquisition (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 14, 2014 | Aug. 08, 2014 | Jul. 17, 2013 | |||
In Thousands, unless otherwise specified | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | $41,076 | $18,014 | $5,906 | ||||||
HealthPocket, Inc | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | 1,294 | ||||||||
Accounts receivable and other assets | 104 | [1] | |||||||
Property and equipment | 6 | [1] | |||||||
Accounts payable and accrued expenses | -480 | [1] | |||||||
Deferred tax liability - long-term | -2,967 | ||||||||
Goodwill | 20,941 | [2] | |||||||
Total consideration | 28,635 | ||||||||
HealthPocket, Inc | Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 8,000 | ||||||||
HealthPocket, Inc | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 1,280 | ||||||||
HealthPocket, Inc | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 430 | ||||||||
HealthPocket, Inc | Noncompete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 27 | ||||||||
American Service Insurance Agency LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | 105 | ||||||||
Accounts receivable and other assets | 271 | [1] | |||||||
Goodwill | 2,121 | [3] | |||||||
Total consideration | 3,088 | ||||||||
Accounts payable, accrued expenses and other liabilities | -163 | [1] | |||||||
American Service Insurance Agency LLC | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 21 | ||||||||
American Service Insurance Agency LLC | Noncompete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 18 | ||||||||
American Service Insurance Agency LLC | Customer Relationships-Distributors | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 449 | ||||||||
American Service Insurance Agency LLC | Customer Relationships-Direct | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 266 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | 91 | ||||||||
Accounts receivable and other assets | 332 | [4] | |||||||
Property and equipment | 128 | [4] | |||||||
Accounts payable and accrued expenses | -326 | [4] | |||||||
Goodwill | 12,108 | [5] | |||||||
Total consideration | 14,872 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 76 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | Noncompete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 99 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | Customer Relationships-Distributors | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 1,050 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | Customer Relationships-Direct | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | 788 | ||||||||
Sunrise Health Plans, Inc. and Affiliates | Capitalized software | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible asset | $526 | ||||||||
[1] | The carrying value of accounts receivable, accounts payable, accrued expenses and property and equipment approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition. | ||||||||
[2] | As of December 31, 2014, we expect none of the goodwill acquired in this transaction to be deductible for income tax purposes. | ||||||||
[3] | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $840,000. | ||||||||
[4] | The carrying value of accounts receivable, property and equipment and accounts payable and accrued expenses acquired approximated fair value; as such, no adjustments to these accounts were recorded in association with the acquisition. | ||||||||
[5] | As of December 31, 2014, the amount of goodwill acquired that we expect to be deductible for income tax purposes is $9.4 million. |
Business_Acquisitions_Summary_3
Business Acquisitions - Summary of Allocation of Total Purchase Prices for Acquisition (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 |
HealthPocket, Inc | |
Business Acquisition [Line Items] | |
Business acquisition, goodwill, expected tax deductible amount | $0 |
American Service Insurance Agency LLC | |
Business Acquisition [Line Items] | |
Business acquisition, goodwill, expected tax deductible amount | 840,000 |
Sunrise Health Plans, Inc. and Affiliates | |
Business Acquisition [Line Items] | |
Business acquisition, goodwill, expected tax deductible amount | $9,400,000 |
Business_Acquisitions_Unaudite
Business Acquisitions - Unaudited Pro Forma Information for Company Assuming Acquisition (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
HealthPocket, Inc. and American Service Insurance Agency LLC | ||
Business Acquisition [Line Items] | ||
Revenues | $90,566 | $58,907 |
Net (loss) income before income taxes | -641 | -12,205 |
Net (loss) income | 112 | -12,224 |
Net (loss) income attributable to Health Insurance Innovations, Inc. | -83 | -7,634 |
Loss per share b basic | ($0.01) | ($1.59) |
Loss per share b diluted | ($0.01) | ($1.59) |
Sunrise Health Plans, Inc. and Affiliates | ||
Business Acquisition [Line Items] | ||
Revenues | 58,363 | |
Net (loss) income before income taxes | -6,775 | |
Net (loss) income | -6,788 | |
Net (loss) income attributable to Health Insurance Innovations, Inc. | ($2,932) | |
Loss per share b basic | ($0.61) | |
Loss per share b diluted | ($0.61) |
Variable_Interest_Entities_Add
Variable Interest Entities - Additional Information (Detail) (USD $) | 11 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Aug. 15, 2014 |
Class B common stock | |||
Variable Interest Entity [Line Items] | |||
Units exchanged | 100,000 | ||
Health Plan Intermediaries Holdings, LLC | |||
Variable Interest Entity [Line Items] | |||
Percentage of voting interests | 100.00% | ||
Health Plan Intermediaries Holdings, LLC | Class B common stock | |||
Variable Interest Entity [Line Items] | |||
Units exchanged | 1,725,000 | ||
Health Plan Intermediaries Holdings, LLC | Maximum | |||
Variable Interest Entity [Line Items] | |||
Total membership interest without voting right | 53.40% | ||
Health Plan Intermediaries Holdings, LLC | Minimum | |||
Variable Interest Entity [Line Items] | |||
Percentage of voting interests | 50.00% | ||
Simple Insurance Leads LLC | |||
Variable Interest Entity [Line Items] | |||
Capital contribution | 492 | ||
Variable interest entity beneficiary agreement loan | 185 | ||
Variable interest entity maximum loss exposure of contributed capital, percentage | 100.00% | ||
Variable interest entity maximum loss exposure of operating income, percentage | 100.00% | ||
Variable Interest Entity, Maximum Loss Exposure, Amount | 492 | ||
Variable interest entity, maximum loss exposure remaining amount | 116 |
Property_and_Equipment_Summary
Property and Equipment - Summary of Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $849 | $542 |
Less accumulated depreciation | -323 | -153 |
Total property and equipment, net | 526 | 389 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 349 | 188 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 251 | 207 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $249 | $147 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $160 | $96 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill And Intangible Assets Disclosure [Line Items] | ||
Impairment loss on goodwill | $0 | $0 |
Amortization expense | $2,200,000 | $1,200,000 |
Minimum | ||
Goodwill And Intangible Assets Disclosure [Line Items] | ||
Finite lived intangible asset useful life | 2 years | |
Maximum | ||
Goodwill And Intangible Assets Disclosure [Line Items] | ||
Finite lived intangible asset useful life | 15 years |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Summary of Changes in Carrying Amounts of Goodwill (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | ||
Goodwill Beginning Balance | $18,014,000 | $5,906,000 |
Goodwill acquired | 23,062,000 | 12,108,000 |
Impairment loss on goodwill | 0 | 0 |
Goodwill Ending Balance | 41,076,000 | 18,014,000 |
Insurance Plan Development And Distribution | ||
Goodwill [Line Items] | ||
Goodwill Beginning Balance | 18,014,000 | 5,906,000 |
Goodwill acquired | 2,121,000 | 12,108,000 |
Goodwill Ending Balance | 20,135,000 | 18,014,000 |
Health Pocket | ||
Goodwill [Line Items] | ||
Goodwill acquired | 20,941,000 | |
Goodwill Ending Balance | $20,941,000 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets - Schedule of Major Classes of Intangible Assets (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 7 years 9 months 18 days | 6 years 10 months 24 days |
Gross Carrying Amount | $17,568 | $7,077 |
Accumulated Amortization | -4,003 | -1,796 |
Intangible Asset, net | 13,565 | 5,281 |
Brand | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 14 years 1 month 6 days | 2 years |
Gross Carrying Amount | 1,377 | 76 |
Accumulated Amortization | -103 | -17 |
Intangible Asset, net | 1,274 | 59 |
Carrier network | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 5 years | 5 years |
Gross Carrying Amount | 40 | 40 |
Accumulated Amortization | -26 | -18 |
Intangible Asset, net | 14 | 22 |
Distributor relationships | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 9 years 3 months 18 days | 8 years 9 months 18 days |
Gross Carrying Amount | 5,109 | 4,660 |
Accumulated Amortization | -1,791 | -1,192 |
Intangible Asset, net | 3,318 | 3,468 |
Noncompete agreements | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 4 years 8 months 12 days | 4 years 9 months 18 days |
Gross Carrying Amount | 987 | 942 |
Accumulated Amortization | -462 | -254 |
Intangible Asset, net | 525 | 688 |
Customer relationships | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 5 years 9 months 18 days | 2 years |
Gross Carrying Amount | 1,484 | 788 |
Accumulated Amortization | -644 | -181 |
Intangible Asset, net | 840 | 607 |
Capitalized software | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted-average Amortization | 6 years 8 months 12 days | 2 years 2 months 12 days |
Gross Carrying Amount | 8,571 | 571 |
Accumulated Amortization | -977 | -134 |
Intangible Asset, net | $7,594 | $437 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2015 | $2,626 | |
2016 | 2,173 | |
2017 | 1,984 | |
2018 | 1,743 | |
2019 | 1,357 | |
Thereafter | 3,682 | |
Intangible Asset, net | $13,565 | $5,281 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses - Summary of Accounts Payable and Accrued Expenses (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts payable and accrued expenses | ||
Accounts payable | $906 | $588 |
Carriers and vendors payable | 5,830 | 3,310 |
Commissions payable | 2,009 | 1,453 |
Accrued wages | 1,062 | 793 |
Accrued refunds | 815 | 715 |
Accrued credit card/ACH fees | 144 | 80 |
Accrued interest | 1 | 35 |
Accrued professional fees | 198 | 34 |
Other accruals | 432 | 66 |
Total accounts payable and accrued expenses | $11,397 | $7,074 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||
Feb. 28, 2013 | Sep. 30, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 15, 2014 | |
Debt Instrument [Line Items] | |||||
Bank loan agreement with a principal amount | $4,300,000 | ||||
Outstanding balance amount repaid | 3,200,000 | ||||
Loss on extinguishment of debt | 71,000 | ||||
Interest expense incurred | 0 | 17,000 | |||
Amortization expense on deferred financing costs | 0 | 7,000 | |||
HPI | |||||
Debt Instrument [Line Items] | |||||
Ownership percentage | 50.00% | ||||
Revolving Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, term | 3 years | ||||
Borrowing capacity | 15,000,000 | ||||
Debt instrument description of variable rate | 30-day LIBOR | ||||
Amount drawn on RLOC | 0 | ||||
Description of covenants under the Facility | The RLOC is subject to customary covenants and restrictions which, among other things, require us to maintain minimum working capital equal to 1.50 times the outstanding balance, and require that our maximum funded debt to tangible net worth ratio shall not exceed 1.50 at any time during the term of the RLOC. The RLOC also imposes certain nonfinancial covenants on us that would require immediate payment if we, among other things, reorganize, merge, consolidate, or otherwise change ownership or business structure without the bankbs prior written consent. | ||||
Deferred financing costs capitalized | $23,000 | ||||
Revolving Line of Credit | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 1.95% |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 11 Months Ended | 12 Months Ended | 0 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 17, 2014 | Aug. 15, 2014 | Feb. 01, 2014 | Feb. 13, 2013 |
Class Of Stock [Line Items] | |||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Preferred stock, par value | $0.00 | $0.00 | 0.001 | ||||
Issuance of common stock | $57,755 | ||||||
Treasury stock, shares | 129,881 | 47,144 | 129,881 | ||||
Treasury Stock, Carrying Cost | 1,563 | 347 | 1,563 | ||||
Treasury Stock | |||||||
Class Of Stock [Line Items] | |||||||
Repurchase of stock, shares | 43,318 | ||||||
Treasury Stock Acquired, Average Cost Per Share | $7.01 | ||||||
Number of shares transferred to Treasury | 152,845 | 12,403 | |||||
Issuance of restricted shares from treasury, shares | 182,964 | 150,000 | 182,964 | ||||
Treasury Stock | Vested restricted stock awards | |||||||
Class Of Stock [Line Items] | |||||||
Number of shares transferred to Treasury | 12,403 | 312,845 | |||||
Treasury Stock | Forfeitures of restricted stock awards | |||||||
Class Of Stock [Line Items] | |||||||
Number of shares transferred to Treasury | 11,542 | ||||||
Exchange Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 100,000 | ||||||
Issuance of common stock | 1,400 | ||||||
Initial public offering | |||||||
Class Of Stock [Line Items] | |||||||
Share price | $14 | ||||||
Class A common stock | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $0.00 | $0.00 | 0.001 | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Issuance of common stock | 5 | ||||||
Stock Repurchase Program Expiration Date | 31-Dec-16 | ||||||
Repurchase of stock, shares | -43,318 | ||||||
Number of shares transferred to Treasury | -129,881 | ||||||
Class A common stock | Maximum | |||||||
Class Of Stock [Line Items] | |||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 800,000 | ||||||
Class A common stock | Underwriting Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 1,725,000 | ||||||
Share price | $11.54 | ||||||
Issuance of common stock | 19,900 | ||||||
Common stock price | $12.15 | ||||||
Class A common stock | HII | |||||||
Class Of Stock [Line Items] | |||||||
Common Stock, Voting Rights | one vote per share | ||||||
Common stock voting rights percentage | 53.40% | ||||||
Economic interest | 100.00% | ||||||
Class A common stock | Initial public offering | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 4,666,667 | 8,566,667 | 4,666,667 | ||||
Common stock, par value | $0.00 | ||||||
Share price | $14 | ||||||
Class B common stock | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $0.00 | $0.00 | 0.001 | ||||
Common stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||
Class B common stock | HII | |||||||
Class Of Stock [Line Items] | |||||||
Common Stock, Voting Rights | one vote per share | ||||||
Common stock voting rights percentage | 46.60% | ||||||
Economic interest | 0.00% | ||||||
Class B common stock | Initial public offering | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 8,666,667 | 8,666,667 | |||||
Issuance of common stock | $9 | ||||||
HPI | Initial public offering | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 8,580,000 | ||||||
HPIS | Initial public offering | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, shares | 86,667 |
Stockbased_Compensation_Additi
Stock-based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock - based compensation cost, capitalized | $0 | $0 |
Restricted shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Income tax benefits from activity involving restricted shares | 98,000 | 550,000 |
Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted average grant date fair value per share | $4.62 | $4.90 |
Total fair value of SARs | 626,000 | 268,000 |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted average grant date fair value per share | $11.15 | |
Total fair value of SARs | $149,000 | |
Long Term Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common stock reserved for issuance | 1,250,000 | |
Long Term Incentive Plan , Expiration Period | 10 years |
Stockbased_Compensation_Summar
Stock-based Compensation - Summary of Unvested Restricted Stock Units Activity Under LTIP (Detail) (Long Term Incentive Plan, Restricted shares, USD $) | 11 Months Ended | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
Long Term Incentive Plan | Restricted shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning Balance, Unvested | 158 | |
Granted | 806 | 200 |
Vested | -408 | -54 |
Forfeited | -240 | -12 |
Ending Balance, Unvested | 158 | 292 |
Beginning Balance, Unvested, Weighted-Average Grant Date Fair Value (per share) | $13.38 | |
Granted, Weighted-Average Grant Date Fair Value (per share) | $12.97 | $11.61 |
Vested, Weighted-Average Grant Date Fair Value (per share) | $12.21 | $12.05 |
Forfeited, Weighted-Average Grant Date Fair Value (per share) | $14 | $12.13 |
Ending Balance, Unvested, Weighted-Average Grant Date Fair Value (per share) | $13.38 | $12.25 |
Ending Balance, Unvested, Aggregate Intrinsic Value | $1,601 | $2,092 |
Stockbased_Compensation_Stockb
Stock-based Compensation - Stock-based Incentive Activity (Detail) (Stock Appreciation Rights (SARs), USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning Balance, Outstanding, Options | 379,000 | |
Granted, Options | 439,000 | 260,000 |
Exercised, Options | 0 | 0 |
Forfeited or expired, Options | -60,000 | -45,000 |
Ending Balance, Outstanding, Options | 379,000 | 594,000 |
Ending Balance, Exercisable, Options | 129,000 | |
Beginning Balance, Outstanding, Weighted-Average Exercise Price | $12.51 | |
Granted, Weighted-Average Exercise Price | $12.71 | $12.33 |
Forfeited or expired, Weighted-Average Exercise Price | $13.97 | $13.09 |
Ending Balance, Outstanding, Weighted-Average Exercise Price | $12.51 | $12.37 |
Ending Balance, Exercisable, Weighted-Average Exercise Price | $12.63 | |
Ending Balance, Outstanding, Weighted-Average Remaining Contractual Term (in years) | 6 years 3 months 18 days | 6 years 1 month 6 days |
Ending Balance, Exercisable, Weighted-Average Remaining Contractual Term (in years) | 5 years 7 months 6 days |
Stockbased_Compensation_Stockb1
Stock-based Compensation - Stock-based Incentive Activity (Parenthetical) (Detail) (Stock Appreciation Rights (SARs), USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares issued upon the exercise of SARs/stock options | 0 | 0 |
Tax benefit related to stock-based compensation | $0 | $0 |
Stockbased_Compensation_Schedu
Stock-based Compensation - Schedule of Stock Option Activity (Detail) (Stock Options, USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Granted, Options | 85,000 | |
Exercised, Options | 0 | 0 |
Forfeited or expired, Options | -1,000 | |
Ending Balance, Outstanding, Options | 84,000 | |
Ending Balance, Exercisable, Options | 13,000 | |
Granted, Weighted-Average Exercise Price | $12.13 | |
Ending Balance, Outstanding, Weighted-Average Exercise Price | $12.13 | |
Ending Balance, Exercisable, Weighted-Average Exercise Price | $12.13 | |
Ending Balance, Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 3 months 18 days | |
Ending Balance, Exercisable, Weighted-Average Remaining Contractual Term (in years) | 8 years 2 months 12 days |
Stockbased_Compensation_Schedu1
Stock-based Compensation - Schedule of Stock Option Activity (Parenthetical) (Detail) (Stock Options, USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares issued upon the exercise of SARs/stock options | 0 | 0 |
Tax benefit related to stock-based compensation | $0 | $0 |
Stockbased_Compensation_Summar1
Stock-based Compensation - Summary of Weighted Average Assumptions (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Risk-free rate | 1.60% | 1.20% |
Expected life | 4 years 10 months 24 days | 4 years 8 months 12 days |
Volatility | 40.70% | 44.00% |
Expected dividend | 0.00% | 0.00% |
Stockbased_Compensation_Summar2
Stock-based Compensation - Summary of Stock-based Compensation Expenses (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $2,454 | $6,296 |
Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,049 | 525 |
Restricted shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 938 | 5,771 |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $467 |
Stockbased_Compensation_Summar3
Stock-based Compensation - Summary of Unrecognized Stock-based Compensation (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized stock-based compensation amount | $4,438 | $2,625 |
Stock Appreciation Rights (SARs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized stock-based compensation amount | 1,492 | 1,302 |
Stock-based compensation expense amount expected to be recognized | 2 years 4 months 28 days | 2 years 5 months 23 days |
Restricted shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized stock-based compensation amount | 2,477 | 1,323 |
Stock-based compensation expense amount expected to be recognized | 2 years 4 months 21 days | 2 years 2 months 16 days |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized stock-based compensation amount | $469 | |
Stock-based compensation expense amount expected to be recognized | 1 year 3 months 26 days |
Income_Tax_Components_of_Incom
Income Tax - Components of Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Current: | ||
Federal | $456 | |
State | 74 | 18 |
Total current taxes | 530 | 18 |
Deferred: | ||
Federal | -315 | |
State | -125 | |
Total deferred taxes | -440 | |
Income taxes | $90 | $18 |
Income_Tax_Differences_between
Income Tax - Differences between Income Tax Expense (Benefit) at the U.S. Federal Statutory Income Tax Rate and the Provision for Income Taxes (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal income tax rate | 35.00% | 35.00% |
State income taxes, net of federal tax benefits | -16.70% | 0.20% |
Valuation allowance | 85.20% | -6.70% |
Operations of nontaxable subsidiary | -84.80% | -21.00% |
Stock-based compensation contribution | -41.40% | -7.00% |
Non-deductible or non-taxable items | -4.50% | -0.70% |
Tax expense resulting from allocation of tax benefits to contributed capital | 44.60% | |
Income taxes | 17.40% | -0.20% |
Income_Tax_Schedule_of_Deferre
Income Tax - Schedule of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Investment in subsidiary | $19,505 | $277 |
Tax receivable agreement | 236 | 158 |
Stock compensation | 207 | |
Net operating loss carryforwards | 1,220 | 127 |
Total deferred tax assets | 21,168 | 562 |
Less valuation allowances | -19,744 | -562 |
Deferred tax assets, net of valuation allowance | 1,424 | |
Deferred tax liabilities: | ||
Identifiable intangible assets | -3,710 | |
Other | -14 | |
Deferred tax liabilities, net | ($2,300) |
Net_Loss_per_Share_Computation
Net Loss per Share - Computations of Basic and Diluted Net Loss Per Share (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Earnings Loss Per Share [Line Items] | ||
Basic net loss attributable to HII | ($339) | ($3,355) |
Average sharesbbasic | 6,057,516 | 4,813,222 |
Effect of dilutive securities: | ||
Average sharesbdiluted | 6,057,516 | 4,813,222 |
Basic net loss per share attributable to HII | ($0.06) | ($0.70) |
Diluted net loss per share attributable to HII | ($0.06) | ($0.70) |
Restricted shares | ||
Effect of dilutive securities: | ||
Dilutive securities | 0 | 0 |
Stock Appreciation Rights (SARs) | ||
Effect of dilutive securities: | ||
Dilutive securities | 0 | 0 |
Stock Options | ||
Effect of dilutive securities: | ||
Dilutive securities | 0 | 0 |
Net_Loss_per_Share_Securities_
Net Loss per Share - Securities Not Included in Diluted Net Loss per Share (Detail) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 292 | 158 |
Stock Appreciation Rights (SARs) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 594 | 379 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 84 |
Fair_Value_Measurements_Summar
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Carrying Value | ||
Assets | ||
Certificates of deposit | $461 | $7,337 |
Liabilities: | ||
Noncompete obligation, including current portion | 463 | 626 |
Contingent acquisition consideration | 4,400 | 3,876 |
Liabilities | 4,863 | 4,502 |
Estimate of Fair Value Measurement | Fair Value Measurement Level 1 | ||
Assets | ||
Certificates of deposit | 461 | 7,337 |
Estimate of Fair Value Measurement | Fair Value Measurement Level 2 | ||
Liabilities: | ||
Noncompete obligation, including current portion | 457 | 613 |
Liabilities | 457 | 613 |
Estimate of Fair Value Measurement | Fair Value Measurement Level 3 | ||
Liabilities: | ||
Contingent acquisition consideration | 4,400 | 3,876 |
Liabilities | $4,400 | $3,876 |
Fair_Value_Measurements_Summar1
Fair Value Measurements - Summary of the Changes in the Fair Value of Liabilities Carried at Fair Value (Detail) (Fair Value Measurement Level 3, Contingent Acquisition Consideration, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Measurement Level 3 | Contingent Acquisition Consideration | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $3,876 | |
Issuance and settlements, net | -579 | 3,423 |
Realized loss (gain) included in income | -102 | 29 |
Unrealized loss included in income | 1,205 | 424 |
Total realized and unrealized loss | 1,103 | 453 |
Ending Balance | $4,400 | $3,876 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Segment | Segment | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | 1 |
Segment_Information_Schedule_o
Segment Information - Schedule of Financial Results of Reportable Segments (Detail) (USD $) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 13, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ||||
Revenues | $88,758 | $56,639 | ||
Gross margin | 86,367 | 56,639 | ||
Other operating expenses | 82,127 | |||
Depreciation and amortization | 2,367 | 1,313 | ||
Total operating expenses | 84,494 | |||
Other expense | 1,360 | |||
Net income (loss) before income taxes | 513 | -8,401 | ||
Provision (benefit) for income taxes | 90 | 18 | ||
Net income (loss) | -259 | -8,160 | 423 | -8,419 |
Total assets as of December 31, 2014 | 71,649 | 86,172 | 71,649 | |
Insurance Plan Development And Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 85,960 | |||
Gross margin | 85,960 | |||
Other operating expenses | 80,720 | |||
Depreciation and amortization | 1,730 | |||
Total operating expenses | 82,450 | |||
Other expense | 1,354 | |||
Net income (loss) before income taxes | 2,156 | |||
Provision (benefit) for income taxes | 757 | |||
Net income (loss) | 1,399 | |||
Total assets as of December 31, 2014 | 55,041 | |||
Health Pocket | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,258 | |||
Gross margin | 867 | |||
Other operating expenses | 1,867 | |||
Depreciation and amortization | 637 | |||
Total operating expenses | 2,504 | |||
Other expense | 6 | |||
Net income (loss) before income taxes | -1,643 | |||
Provision (benefit) for income taxes | -667 | |||
Net income (loss) | -976 | |||
Total assets as of December 31, 2014 | 31,723 | |||
Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | -460 | |||
Gross margin | -460 | |||
Other operating expenses | -460 | |||
Total operating expenses | -460 | |||
Total assets as of December 31, 2014 | ($592) |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Sep. 30, 2014 | Jan. 31, 2015 | Feb. 13, 2013 | Dec. 31, 2013 | |
Note | |||||
Commitment And Contingencies [Line Items] | |||||
Exclusive option agreement maturity term | 5 years | ||||
Tax receivable agreement liability adjustment | $616,000 | ||||
Advanced commissions | 5,973,000 | 2,596,000 | |||
Subsequent Events | |||||
Commitment And Contingencies [Line Items] | |||||
Payable by the Distributor | 0 | ||||
Distributor Promissory Note | |||||
Commitment And Contingencies [Line Items] | |||||
Variable secured promissory note, advance amount | 4,800,000 | ||||
Advanced commissions | 1,500,000 | ||||
Installment payment date description | The latter two installments will be made on the earlier of June 26, 2015 and February 26, 2016, respectively, or the achievement of certain levels of sales of our products, as defined in the September 2014 Note, on or before such dates. | ||||
Note maturity date | 26-Apr-17 | ||||
Distributor Promissory Note | Subsequent Events | |||||
Commitment And Contingencies [Line Items] | |||||
Number of additional variable secured promissory notes | 2 | ||||
Distributor Promissory Note | Subsequent Events | January 2015 Production Note | |||||
Commitment And Contingencies [Line Items] | |||||
Note maturity date | 31-Dec-17 | ||||
Distributor Promissory Note | Subsequent Events | January 2015 MDF Note | |||||
Commitment And Contingencies [Line Items] | |||||
Note maturity date | 31-Dec-17 | ||||
Distributor Promissory Note | Subsequent Events | January 2015 Revolver | |||||
Commitment And Contingencies [Line Items] | |||||
Date revolving promissory note to be increased | 1-Jul-15 | ||||
Annual interest rate | 6.00% | ||||
Repayment of loan | Pursuant to the January 2015 Revolver, on each of December 31, 2015 and 2016, the Distributor shall make a payment to us in an amount that will reduce the amount outstanding under the January 2015 Revolver to $300,000 or less plus accrued interest on the principal amounts so repaid. | ||||
Maximum loan outstanding to revolver | 300,000 | ||||
Date of maturity | 31-Dec-17 | ||||
Loaned amount during the period | 1,000,000 | ||||
Distributor Promissory Note | Second Installment | |||||
Commitment And Contingencies [Line Items] | |||||
Contingent note installment payment | 1,500,000 | ||||
Distributor Promissory Note | Second Installment | Subsequent Events | January 2015 Production Note | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 500,000 | ||||
Date of installment | 1-Jul-15 | ||||
Distributor Promissory Note | Second Installment | Subsequent Events | January 2015 MDF Note | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 500,000 | ||||
Date of installment | 1-Jul-15 | ||||
Distributor Promissory Note | Second Installment | Subsequent Events | January 2015 Revolver | |||||
Commitment And Contingencies [Line Items] | |||||
Date of installment | 31-Dec-16 | ||||
Distributor Promissory Note | Third Installment | |||||
Commitment And Contingencies [Line Items] | |||||
Contingent note installment payment | 1,800,000 | ||||
Distributor Promissory Note | Third Installment | Subsequent Events | January 2015 MDF Note | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 500,000 | ||||
Date of installment | 1-Jan-16 | ||||
Distributor Promissory Note | First Installment | Subsequent Events | January 2015 Production Note | |||||
Commitment And Contingencies [Line Items] | |||||
Amount already advanced to distributor under promissory note agreement | 1,500,000 | ||||
Distributor Promissory Note | First Installment | Subsequent Events | January 2015 MDF Note | |||||
Commitment And Contingencies [Line Items] | |||||
Amount already advanced to distributor under promissory note agreement | 1,000,000 | ||||
Distributor Promissory Note | First Installment | Subsequent Events | January 2015 Revolver | |||||
Commitment And Contingencies [Line Items] | |||||
Date of installment | 31-Dec-15 | ||||
Tax Receivable Agreement | |||||
Commitment And Contingencies [Line Items] | |||||
Other tax benefits recorded as liability | 616,000 | ||||
Amount paid under agreement | 0 | ||||
Series B Membership Interests | |||||
Commitment And Contingencies [Line Items] | |||||
Tax benefit saving, percentage | 15.00% | ||||
Series B Membership Interests | Tax Receivable Agreement | |||||
Commitment And Contingencies [Line Items] | |||||
Tax benefit payment, percentage | 85.00% | ||||
Exclusive Option Agreement | |||||
Commitment And Contingencies [Line Items] | |||||
Monthly payment for services agreement for the technology | 16,000 | ||||
Vendor Contracts | |||||
Commitment And Contingencies [Line Items] | |||||
Term of service agreement unless notice given | 1 year | ||||
Required notice period to terminate service agreement | 60 days | ||||
Vendor Contracts | Software Assignment Agreement | |||||
Commitment And Contingencies [Line Items] | |||||
System purchase amount | 45,000 | ||||
Vendor Contracts | Master Service Agreements | |||||
Commitment And Contingencies [Line Items] | |||||
Monthly payment for services agreement for the technology | 26,000 | ||||
Service agreement term | 5 years | ||||
Agreement renewal | one-year terms unless we give 60 daysb notice | ||||
Maximum | Distributor Promissory Note | Subsequent Events | January 2015 Production Note | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 2,000,000 | ||||
Maximum | Distributor Promissory Note | Subsequent Events | January 2015 MDF Note | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 2,000,000 | ||||
Maximum | Distributor Promissory Note | Subsequent Events | January 2015 Revolver | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 1,000,000 | ||||
Maximum | Distributor Promissory Note | After July 1, 2015 | Subsequent Events | January 2015 Revolver | |||||
Commitment And Contingencies [Line Items] | |||||
Promissory note, maximum amount of loans and advances to be provided | 1,500,000 | ||||
Operating Lease Agreements | |||||
Commitment And Contingencies [Line Items] | |||||
Difference between cash rent payments and straight-line rent expense | 60,000 | 70,000 | |||
Operating Lease Agreements | S, General & A Expenses | |||||
Commitment And Contingencies [Line Items] | |||||
Operating lease rental expense | $505,000 | $308,000 | |||
Operating Lease Agreements | Health Plan Intermediaries Holdings, LLC | Minimum | |||||
Commitment And Contingencies [Line Items] | |||||
Lease agreement expires | 2015 | ||||
Operating Lease Agreements | Health Plan Intermediaries Holdings, LLC | Maximum | |||||
Commitment And Contingencies [Line Items] | |||||
Lease agreement expires | 2019 | ||||
Shares Issued Under Exchange Agreement | Common Stock Issuance Over Allotment Option | Class A common stock | |||||
Commitment And Contingencies [Line Items] | |||||
Issuance of common stock, shares | 1,825,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Operating Lease Payments (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2015 | $493 |
2016 | 330 |
2017 | 226 |
2018 | 119 |
2019 | 69 |
Total minimum lease payments | $1,237 |
Employee_Benefit_Plan_Addition
Employee Benefit Plan - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation And Retirement Disclosure [Abstract] | ||
Employer discretionary contribution amount | $0 | $0 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 1 Months Ended | 11 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Feb. 13, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Mar. 14, 2013 | Dec. 31, 2012 | Oct. 31, 2013 | |
Related Party Transaction [Line Items] | ||||||||
Amount of distributions paid | $171,000 | $2,217,000 | $264,000 | |||||
Related Party Accrued Distribution | 916,000 | 229,000 | 916,000 | |||||
Other tax benefits recorded as liability, noncurrent | 423,000 | 387,000 | 423,000 | |||||
Tax receivable agreement liability adjustment | 616,000 | |||||||
Contract termination | 5,500,000 | |||||||
Acquisition of noncontrolling interest in subsidiary | 90,000 | |||||||
Commissions payable | 1,453,000 | 2,009,000 | 1,453,000 | |||||
Health Plan Intermediaries Holdings, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amount of distributions paid | 1,200,000 | 2,200,000 | ||||||
Related Party Accrued Distribution | 916,000 | 916,000 | 773,000 | |||||
Health Plan Intermediaries Holdings, LLC | Pre IPO | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Accrued Distribution | 171,000 | |||||||
Tax Receivable Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amount paid under agreement | 0 | 0 | ||||||
Other tax benefits recorded as liability, noncurrent | 423,000 | 423,000 | ||||||
Other tax benefits recorded as liability | 616,000 | |||||||
Other tax benefits recorded as liability, current | 229,000 | |||||||
Tax receivable agreement liability adjustment | 10,800,000 | |||||||
TSG | ||||||||
Related Party Transaction [Line Items] | ||||||||
Contract termination | 5,500,000 | |||||||
Acquisition of noncontrolling interest in subsidiary | 90,000 | |||||||
Health Benefits One L L C | ||||||||
Related Party Transaction [Line Items] | ||||||||
Advanced commissions payments, net | 1,800,000 | 801,000 | ||||||
Commission expense, recognized | 5,700,000 | 906,000 | ||||||
Commissions payable | $457,000 | $2,300,000 | $457,000 | |||||
Health Benefits One L L C | Simple Insurance Leads LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership of membership interests | 50.00% |
Concentrations_of_Credit_Risk_1
Concentrations of Credit Risk and Significant Customers - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Customer | Customer | |
Carrier | Distributor | |
Carrier | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $1,800 | $630 |
Number of distributors | 1 | |
Number of customers accounted for more than 10% of company's revenue | 0 | 0 |
Number of insurance carriers | 2 | 3 |
Accounts Receivable | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Number of customers | 2 | |
Concentration risk percentage | 50.00% | |
Accounts Receivable | Credit Concentration Risk | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 35.00% | |
Accounts Receivable | Credit Concentration Risk | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 15.00% | |
Accounts Receivable | Credit Concentration Risk | Distributor One | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 21.00% | |
Revenue From Services | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% | 10.00% |
Premium Equivalents | Customer Concentration Risk | H C C Medical Insurance Services Company | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 43.00% | |
Premium Equivalents | Customer Concentration Risk | Companion Life | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 36.00% | 41.00% |
Premium Equivalents | Customer Concentration Risk | Starr Indemnity And Liability Company | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22.00% | |
Premium Equivalents | Customer Concentration Risk | United States Fire | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20.00% |