United States securities and exchange commission logo
April 14, 2021
G. Mike Mikan
Chief Executive Officer
Bright Health Group Inc.
8000 Norman Center Drive
Suite 1200
Minneapolis, MN 55437
Re: Bright Health Group
Inc.
Draft Registration
Statement on Form S-1
Submitted on March
18, 2021
CIK No. 0001671284
Dear Mr. Mikan:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement submitted March 18, 2021
General
1. Please provide us with
copies of all written communications, as defined in Rule 405 under
the Securities Act,
that you, or anyone authorized to do so on your behalf, have presented
or expect to present to
potential investors in reliance on Rule 163B of the Securities Act,
whether or not you
retained, or intend to retain, copies of those communications.
G. Mike Mikan
Bright Health Group Inc.
April 14, 2021
Page 2
2. Please file your exhibits as part of your amended filings so that we
may have sufficient
time with which to review your exhibits. If you intend to omit or
redact information in
accordance with Rule 601 of Regulation S-K for part of any of your
exhibits, please
contact the staff so we may discuss the process for handling such
exhibits.
Bright Health's Businesses, page 5
3. We note your disclosure on page 72 that you, "generate revenue from
premiums,
including value-based provider revenue, and fee-for-service provider
revenue received
from consumers and payors." Please include in this section a narrative
description,
inclusive of graphics if appropriate, of your typical revenue stream.
Describe who your
customers and payors are and how the revenue flows through you and
your various
business operations.
4. Please revise this section to include an organizational chart that
shows how NeueHealth,
Bright HealthCare, BiOS, DocSquad, and any other material aspects of
your business fit
together within your corporate structure.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Metrics and Non-GAAP Financial Measures, page 69
5. Please revise the table on page 69 to insert your GAAP net loss before
Adjusted
EBITDA. See Compliance and Disclosure Interpretations Question 102.10
on Non-
GAAP Financial Measures.
Critical Accounting Policies and Estimates
Medical Costs Payable, page 80
6. You disclose that completion factors are the most significant factor
used in developing
your estimate of the medical costs payable. In your sensitivity
disclosure presented at the
top of page 81 you show the impact of reasonably likely changes in
completion factors on
your medial cost payable at December 31, 2020. Please address the
following
Tell us why you apparently believe both positive and negative
changes in completion
factors are reasonably likely to occur when you disclose only
favorable prior year
development in each of the last three years.
Explain why the maximum impact on your medical costs payable at
December 31,
2020 is only about 3.3% of the recorded balance when prior year
development
recorded in 2020 and 2019 was 19.2% and 32.3%, respectively, of the
beginning of
the year payable amount.
In this disclosure and in your policy note on page F-13 you disclose
that medical cost
FirstName LastNameG.
trend factors Mike Mikanin the most recent months. Please tell us
your consideration
are applied
Comapany for
NameBright
includingHealth Group
additional Inc.
sensitivity disclosures based on
reasonably likely changes
in medical
April 14, 2021 Page 2 cost trend factors and/or any other material input to
your liability estimate.
FirstName LastName
G. Mike Mikan
FirstName LastNameG.
Bright Health Group Inc.Mike Mikan
Comapany
April NameBright Health Group Inc.
14, 2021
April 314, 2021 Page 3
Page
FirstName LastName
Notes to Consolidated Financial Statements
Note 8. Medical Costs Payable, page F-28
7. Please revise your rollforward of medical costs payable on page F-28
to include 2018
activity as required by ASC 944-40-50-3.
Note 15. Segments and Geographic Information, page F-35
8. Please tell us why it is appropriate to aggregate your Bright
Healthcare - IFP and Bright
HealthCare - MA operating segments into one reportable segment. In
your response, tell
us how these operating segments have similar economic characteristics
and class of
customer as stipulated in ASC 280-10-50-11. Explain how relatively
older customers who
qualify for Medicare Advantage plans that anecdotally have higher
claims rates and costs
can result in similar long-term average gross margin expectations
compared to individual
and family plans.
You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at
(202) 551-3474
if you have questions regarding comments on the financial statements and
related
matters. Please contact Eric Envall at (202) 551-3234 or J. Nolan McWilliams at
(202) 551-
3217 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: Hui Lin