eHealth Inc

Previous wording

We are a leading private online health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to expertly guide consumers through their health insurance enrollment and related options, when, where and how they prefer. Our platform leverages technology to solve a critical problem in a large and growing market by aiding consumers in what has traditionally been a complex, confusing and opaque health insurance purchasing process. Our omnichannel consumer engagement platform differentiates our offering from other brokers and enables consumers to use our services online, by telephone with a licensed insurance agent, or benefit advisor, or through a hybrid online assisted interaction that includes live agent chat and co-browsing capabilities. We have created a consumer-centric marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual, family, small business and other ancillary health insurance products from over 180 health insurance carriers nationwide. Our plan recommendation tool curates this broad plan selection by analyzing customer health-related information against plan data for insurance coverage fit. This tool is supported by a unified data platform and is available to our ecommerce customers and our benefit advisors. We strive to be the most trusted partner to the consumer in their life’s journey through the health insurance market.

Current wording

We are a leading private online health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to expertly guide consumers through their health insurance enrollment and related options, when, where and how they prefer. Our platform leverages technology to solve a critical problem in a large and growing market by aiding consumers in what has traditionally been a complex, confusing and opaque health insurance purchasing process. Our omnichannel consumer engagement platform differentiates our offering from other brokers and enables consumers to use our services online, by telephone with a licensed insurance agent, or benefit advisor, or through a hybrid online assisted interaction that includes live agent chat and co-browsing capabilities. We have created a consumer-centric marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual, family, small business and other ancillary health insurance products from over 180 health insurance carriers nationwide. Our plan recommendation tool curates this broad plan selection by analyzing customer health-related information against plan data for insurance coverage fit. This tool is supported by a unified data platform and is available to our ecommerce customers and our benefit advisors. We strive to be the most trusted partner to consumers in their journeys through the health insurance market.

Previous wording

Agency performance during the second quarter was driven by our enhanced marketing strategies, greater lead conversion rates and the retention of our tenured benefit advisors. We also observed significant traction in our Amplify initiatives which is an important element of our business diversification strategy. This year, we added new carriers to the Amplify platform and are expanding relationships with our existing customers.

Current wording

During the first nine months of 2024, we maintained momentum in our Medicare business, delivering strong enrollment growth across our core agency (“Agency”) and carrier-dedicated (“Amplify”) models. Agency performance was driven by our enhanced marketing strategies, greater lead conversion rates and the retention of our tenured benefit advisors. We also observed significant traction in our Amplify initiatives, which is an important element of our business diversification strategy. This year, we added new carriers to the Amplify platform and are expanding relationships with our existing customers.

Previous wording

During the first half of 2024, we maintained momentum in our Medicare business delivering strong enrollment growth across our core agency (“Agency”) and carrier-dedicated (“Amplify”) models. Our Agency model consists of arrangements where we are the broker of record while our Amplify model consists of both broker of record arrangements as well as non-broker of record arrangements where we provide business process outsourcing services (“BPO”) Broker of record arrangements generate commission revenue, and fee-based BPO arrangements generate fee-based revenue which is recorded in other revenue.

Current wording

Our Agency model consists of arrangements where we are the broker of record while our Amplify model consists of both broker of record arrangements as well as non-broker of record arrangements where we provide business process outsourcing services (“BPO”). Broker of record arrangements generate commission revenue and while we recognize constrained lifetime value (“LTV”) of commissions for approved members as revenue at the time applications are approved, our collection of the cash commissions resulting from approved applications generally occurs over a number of years. Our fee-based BPO arrangements generate fee-based revenue, which is recorded in other revenue, and cash is collected in advance or in close proximity to when revenue is recognized.

Previous wording

During the second quarter of 2024, a portion of our Amplify broker of record arrangements converted to fee-based BPO arrangements, resulting in a reduction of our Medicare approved members and a decrease in the corresponding commission revenue, while our fee-based BPO arrangements have increased, contributing to substantial growth in our other revenue. While we have observed declines in Medicare plan approved members, which only reflect our broker-of-record arrangements, our total Medicare submissions, inclusive of our broker of record and fee-based BPO arrangements, increased 16% during the second quarter of 2024 compared to the same

Current wording

During the second quarter of 2024, a portion of our Amplify broker of record arrangements converted to fee-based BPO arrangements, which resulted in a reduction of our Medicare approved members and a decrease in the corresponding commission revenue, while our fee-based BPO arrangements increased, contributing to substantial

Previous wording

period in 2023. Submissions describe applications that are submitted by individuals online through our eHealth platform or completed with the assistance of our benefit advisors where the individual provides authorization to the benefit advisor to submit the application to the insurance carrier partner. The individual may have additional actions to take before the application will be reviewed by the insurance carrier and not all submissions ultimately become approved members.

Current wording

growth in our other revenue. Even with this shift, during the three and nine months ended September 30, 2024, we observed a 6% increase in Medicare plan approved members, which only reflect our broker-of-record arrangements. Our total Medicare submissions, inclusive of our broker of record and fee-based BPO arrangements, increased 22% and 17% during the three and nine months ended September 30, 2024, respectively, compared to the same period in 2023. Submissions describe applications that are submitted by individuals online through our eHealth platform or completed with the assistance of our benefit advisors where the individual provides authorization to the benefit advisor to submit the application to the insurance carrier partner. The individual may have additional actions to take before the application will be reviewed by the insurance carrier and not all submissions ultimately become approved members.

Previous wording

We also began preparations for the 2025 Annual Enrollment Period (“AEP”). We expect to see significant consumer demand this upcoming AEP, presenting a growth opportunity for us that is driven by anticipated changes in many Medicare Advantage plans as well as a reduction in tele-broker capacity as several of our competitors have exited the market over the past twelve months. Our AEP preparedness efforts include development of and continued enhancements of our marketing materials, enhancements to our omni-channel consumer platform and hiring and training of the new benefit advisor classes. We have also launched the next phase of our retention strategy including Match Monitor, a tool that allows members to easily understand the implications of annual notice changes, check if any of their critical benefits are impacted and compare their current plan to other options. We also expanded our loyalty program, ePerks, by adding new partners to the platform and we have developed a plan tracker tool called eHealth Application Tracker, which is designed to allow beneficiaries to monitor the status of their Medicare plan application in real-time. Member retention is especially important in the upcoming annual enrollment cycle given the anticipated increase in consumer shopping.

Current wording

During the third quarter of 2024, we largely completed our preparations for the 2025 Annual Enrollment Period (“AEP”). We expect to see significant consumer demand this upcoming AEP, presenting a growth opportunity for us that is driven by anticipated changes in many Medicare Advantage plans as well as a reduction in tele-broker capacity as several of our competitors have exited the market over the past twelve months. Our AEP preparedness efforts include the advancement of our brand-driven marketing strategy, development of AEP marketing materials, including new television ads, enhancements to consumer experience on our omni-channel platform with its differentiated tech-enabled features and the achievement of our benefit advisor hiring and training goals with a benefit advisor mix that is more tenured relative to last year. We have also launched the next phase of our retention strategy including the introduction of Match Monitor, a tool that allows members to easily understand the implications of annual notice changes, check if any of their critical benefits are impacted and compare their current plan to other options. Member retention is especially important in the upcoming annual enrollment cycle given the anticipated increase in consumer shopping.

Previous wording

Approved members represent the number of individuals on submitted applications that were approved by the relevant insurance carrier for the identified product during the current period for which we are the broker of record. The applications may be submitted in either the current period or prior periods. Not all approved members ultimately become paying members.

Current wording

Approved members represent the number of individuals on submitted applications, or submissions, that were approved by the relevant insurance carrier for the identified product during the current period for which we are the broker of record. The applications may be submitted in either the current period or prior periods. Not all approved members ultimately become paying members.

Previous wording

Three Months Ended June 30, 2024 and 2023 – Total approved members declined 7% during the three months ended June 30, 2024 compared to the same period in 2023, driven by:

Current wording

Three Months Ended September 30, 2024 and 2023 – Total approved members was flat during the three months ended September 30, 2024 compared to the same period in 2023, driven by:

Previous wording

•a 1% decline in Medicare approved members, primarily resulting from:

Current wording

•a 6% increase in Medicare approved members, primarily resulting from:

Previous wording

◦a 6% increase in Medicare Advantage approved members due to an increased number of benefit advisors and increased variable marketing spend year-over-year, partially offset by the shift from some broker of record arrangements to fee-based arrangements within our Amplify platform.

Current wording

◦a 14% increase in Medicare Advantage approved members due to a 21% increase in Medicare Advantage broker of record submissions as a result of increased variable marketing spend year-over-year and an increased number of benefit advisors year-over-year along with improved telesales conversion rates, partially offset by the shift of some broker of record arrangements to fee-based arrangements within our Amplify platform which are not included in the approved member metrics, and

Previous wording

◦a 33% decline in Medicare Supplement approved members due to the shift from some broker of record arrangements to fee-based arrangements within our Amplify platform, and

Current wording

◦a 52% and 48% decline in Medicare Supplement and Medicare Part D approved members, respectively, due to the shift of some Medicare Supplement broker of record arrangements to fee-based arrangements within our Amplify platform and a shift away from standalone Medicare Part D plans.

Previous wording

•a 15% decline in ancillary approved members due to declines in approved members across all ancillary insurance products that are typically cross-sold with new individual and family plan enrollments; and

Current wording

•a 12% decline in ancillary approved members due to declines in approved members across all ancillary insurance products that are typically cross-sold with new individual and family plan enrollments; and

Previous wording

•a 26% and 34% decline in individual and family plan and small business health insurance approved members, respectively, primarily due to a decrease in volume as we focus on implementing operational enhancements with a plan to resume enrollment growth in our E&I segment in the fourth quarter of 2024;

Current wording

•a 23% and 13% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume as we focus on implementing operational enhancements within our Employer and Individual (“E&I”) segment.

Previous wording

Six Months Ended June 30, 2024 and 2023 – Total approved members declined 2% during the six months ended June 30, 2024 compared to the same period in 2023, driven by:

Current wording

Nine Months Ended September 30, 2024 and 2023 – Total approved members declined 2% during the nine months ended September 30, 2024 compared to the same period in 2023, driven by:

Previous wording

•a 16% decline in ancillary approved members due to declines in approved members across most ancillary insurance products that are typically cross-sold with new individual and family plan enrollments; and

Current wording

•a 14% decline in ancillary approved members due to declines in approved members across most ancillary insurance products that are typically cross-sold with new individual and family plan enrollments; and

Previous wording

•a 53% and 18% decline in small business health insurance and individual and family plan approved members, respectively, primarily due to a decrease in volume as we focus on implementing operational enhancements with a plan to resume enrollment growth in our E&I segment in the fourth quarter of 2024.

Current wording

•a 25% and 29% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume as we focused on implementing operational enhancements in our E&I segment;

Previous wording

volatility and the observed increases in LTV trends, partially offset by less favorable retention for Q2 2024 cohorts compared to Q2 2023 cohorts;

Current wording

•a 1% decrease in Medicare Advantage plans, reflecting less favorable retention trends for Q3 2024 cohorts compared to Q3 2023 cohorts, partly offset by favorable carrier and contract mix and a decrease in constraint due to a decline in volatility and the observed increases in LTV trends;

Previous wording

•a 27% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix and favorable retention;

Current wording

•a 33% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix and favorable retention;

Previous wording

•a 3% decrease in Medicare Part D plans, primarily driven by unfavorable carrier and contract mix, partially offset by improved retention;

Current wording

•a 6% decrease in Medicare Part D plans, primarily driven by unfavorable carrier and contract mix, partially offset by improved retention;

Previous wording

•a 24%, 15% and 7% increase in dental, vision and short-term plans, respectively, primarily driven by favorable carrier and contract mix; and

Current wording

•a 9% and 8% increase in dental and vision and plans, respectively, primarily driven by favorable carrier and contract mix; and

Previous wording

Estimated membership represents the estimated number of members active as of the date indicated based on the number of members for whom we have received or applied a commission payment during the period of estimation. There is generally up to a few months lag between newly approved plans and the receipt of commission payments from the health insurance carrier. A member who purchases and is active on multiple standalone insurance plans will be counted as a member more than once. For example, a member who is active on both an individual and family health insurance plan and a standalone dental plan will be counted as two continuing members.

Current wording

Estimated membership represents the estimated number of members active as of the date indicated based on the number of members for whom we have received or applied a commission payment during the period of estimation. Estimated membership only includes estimated active members for arrangements where we are the broker of record. There is generally up to a few months lag between newly approved plans and the receipt of commission payments from the health insurance carrier. A member who purchases and is active on multiple standalone insurance plans will be counted as a member more than once. For example, a member who is active on both an individual and family health insurance plan and a standalone dental plan will be counted as two continuing members.

Previous wording

After we have estimated membership for a period, we may receive information from health insurance carriers that would have impacted the estimate if we had received the information prior to the date of estimation. We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member of ours. For instance, we reconcile information carriers provide to us and may determine that we were not historically paid commissions owed to us, which would cause us to have underestimated membership. Conversely, carriers may require us to return commission payments paid in a prior period due to policy cancellations for members we previously estimated as being active. We do not update our estimated membership numbers reported in previous periods. Instead, we reflect updated information regarding our historical membership in the membership estimate for the current period. If we experience a significant variance in historical membership as compared to our initial estimates, while we keep the prior period data consistent with previously reported amounts, we may provide the updated information in other communications or disclosures. As a result of the delay in our receipt of information from insurance carriers, actual trends in our membership are most discernible over periods longer than from one quarter to the next, making it difficult for us to determine with any certainty the impact of current conditions on our membership retention. Various circumstances could cause the

Current wording

After we have estimated membership for a period, we may receive information from health insurance carriers that would have impacted the estimate if we had received the information prior to the date of estimation. We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member of ours. For instance, we reconcile information carriers provide to us and may determine that we were not historically paid commissions owed to us, which would cause us to have underestimated membership. Conversely, carriers may require us to return commission payments paid in a prior period due to policy cancellations for members we previously estimated as being active. We do not update our estimated membership numbers reported in previous periods. Instead, we reflect updated information regarding our historical membership in the membership estimate for the current period. If we experience a significant variance in historical membership as compared to our initial estimates, while we keep the prior period data consistent with previously reported amounts, we may provide the updated information in other communications or disclosures. As a result of the delay in our receipt of information from insurance carriers, actual trends in our membership are most discernible over periods longer than from one quarter to the next, making it difficult for us to determine with any certainty the impact of current conditions on our membership retention. Various circumstances could cause the assumptions and estimates that we make in connection with estimating our membership to be inaccurate, which would cause our membership estimates to be inaccurate.

Previous wording

June 30, 2024 compared to June 30, 2023 - Total estimated membership declined 3% as of June 30, 2024 compared to June 30, 2023 due to:

Current wording

September 30, 2024 compared to September 30, 2023 – Total estimated membership declined 2% as of September 30, 2024 compared to September 30, 2023 due to:

Previous wording

•an 11%, 11% and 3% decline year-over-year in individual and family plan, ancillary plan and small business plan estimated membership, respectively, primarily due to a decrease in approved applications as we focus on implementing operational enhancements with a plan to resume enrollment growth in our E&I segment in the fourth quarter of 2024; and

Current wording

•an 11%, 8% and 11% decline year-over-year in individual and family plan, ancillary plan and small business plan estimated membership, respectively, primarily due to a decrease in approved applications as we focus on implementing operational enhancements in our E&I segment; and

Previous wording

•overall flat Medicare estimated membership year over year, due to a 2% and 3% increase in Medicare Advantage and Medicare Supplement plans, respectively, as a result of increased approved applications, partially offset by the shift from some broker of record arrangements to fee-based arrangements within our Amplify platform, which impacted all Medicare products.

Current wording

•a 1% increase in Medicare estimated membership year over year, due to:

Previous wording

◦a 6% increase in Medicare Advantage plan approved members, partially offset by decreases in Medicare Supplement and Medicare Part D plan approved members;

Current wording

◦partially offset by the shift of some broker of record arrangements to fee-based arrangements within our Amplify platform, which are not included in estimated membership, as well as a decline in Medicare Part D plan approved applications due to the shift away from standalone Medicare Part D plans.

Previous wording

Three Months Ended June 30, 2024 and 2023 - Total acquisition cost per MA-equivalent approved member decreased $46, or 4%, during the three months ended June 30, 2024 compared to the same period in 2023, driven by:

Current wording

Three Months Ended September 30, 2024 and 2023 – Total acquisition cost per MA-equivalent approved member decreased $247, or 16%, during the three months ended September 30, 2024 compared to the same period in 2023, driven by:

Previous wording

•a $107, or 15%, decrease in CC&E cost per MA-equivalent approved member driven by:

Current wording

•a $227, or 24%, decrease in CC&E cost per MA-equivalent approved member driven by:

Previous wording

◦continued optimization of our sales force operations, and

Current wording

◦continued optimization of our sales force operations driven by enhanced training protocols and new agent-facing sales tools.

Previous wording

Three Months Ended June 30, 2024 and 2023 - Total acquisition cost per IFP-equivalent approved member increased $57, or 20%, during the three months ended June 30, 2024 compared to the same period in 2023, driven by:

Current wording

Three Months Ended September 30, 2024 and 2023 – Total acquisition cost per IFP-equivalent approved member increased $153, or 47%, during the three months ended September 30, 2024 compared to the same period in 2023, driven by:

Previous wording

•a $54, or 23%, increase in CC&E cost per IFP-equivalent approved member due the overall decline in individual and family plan, ancillary and small business approved members as a result of a decline in our conversion rates; and

Current wording

•a $103, or 40%, increase in CC&E cost per IFP-equivalent approved member due to the overall decline in individual and family plan and short-term plan approved members; and

Previous wording

•a $3, or 5%, increase in variable marketing cost per IFP-equivalent approved member, primarily driven by the decline in approved members as a result of a decline in our conversion rates.

Current wording

•a $50, or 74%, increase in variable marketing cost per IFP-equivalent approved member, primarily driven by the decline in individual and family plan and short-term plan approved members.

Previous wording

There have been no changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024, that have had a significant impact on our condensed consolidated financial statements and related notes. Please refer to Management’s Discussion and Analysis of Financial Condition and Results of

Current wording

There have been no changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024, that have had a significant impact on our condensed consolidated financial statements and related notes. Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, for a complete discussion of our other critical accounting policies and estimates.

Previous wording

Three Months Ended June 30, 2024 and 2023 – Commission revenue decreased $3.3 million, or 6%, during the three months ended June 30, 2024 compared to the same period in 2023 due to:

Current wording

Three Months Ended September 30, 2024 and 2023 – Commission revenue decreased $9.0 million, or 16%, during the three months ended September 30, 2024 compared to the same period in 2023 due to:

Previous wording

◦improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement products;

Current wording

◦partially offset by improved constrained LTV of commissions per approved member for dental, vision and small business products in our E&I segment.

Previous wording

Other revenue increased $2.4 million, or 37%, during the three months ended June 30, 2024 compared to the same period in 2023 due to an increase in fee-based revenue due to a shift in some of our Amplify broker of record arrangements to fee-based arrangements.

Current wording

Other revenue increased $2.7 million, or 36%, during the three months ended September 30, 2024 compared to the same period in 2023 due to an increase in fee-based revenue driven by the shift in some of our Amplify broker of record arrangements to fee-based BPO arrangements, partly offset by a decline in sponsorship revenue.

Previous wording

Six Months Ended June 30, 2024 and 2023 – Commission revenue increased $9.6 million, or 7%, during the six months ended June 30, 2024 compared to the same period in 2023 due to:

Current wording

Nine Months Ended September 30, 2024 and 2023 – Commission revenue increased $0.6 million, during the nine months ended September 30, 2024 compared to the same period in 2023 due to:

Previous wording

◦a 6% increase in overall Medicare plan approved members, specifically driven by increases in Medicare Advantage and Medicare Supplement plan approved members;

Current wording

◦a 6% increase in overall Medicare plan approved members, specifically driven by a 9% growth in Medicare Advantage approved members,

Previous wording

Other revenue increased $8.7 million, or 71%, during the six months ended June 30, 2024 compared to the same period in 2023 due to an increase in sponsorship revenue as well as fee-based revenue due to a shift in some of our Amplify broker of record arrangements to fee-based arrangements.

Current wording

Other revenue increased $11.5 million, or 58%, during the nine months ended September 30, 2024 compared to the same period in 2023 due to an increase in sponsorship revenue as well as fee-based revenue driven by the expansion of our fee-based BPO arrangements.

Previous wording

Marketing and advertising expenses consist primarily of member acquisition expenses associated with our direct marketing and marketing partner member acquisition channels, in addition to compensation and other expenses related to marketing, business development, partner management, public relations and carrier relations personnel who support our offerings. Marketing and advertising expenses also include cost of revenue, which consists of payments related to health insurance plans sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements. We recognize expenses in our direct marketing acquisition channel in the period in which they are incurred, including in the period in which the consumer clicks on the advertisement for direct online channels. We generally compensate our marketing partners for referrals based on the consumer submitting a health insurance application on our platform, regardless of whether the consumer’s application is approved by the health insurance carrier, or for the referral of a Medicare-related lead to us by the marketing partner.

Current wording

consists of payments related to health insurance plans sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements. We recognize expenses in our direct marketing acquisition channel in the period in which they are incurred, including in the period in which the consumer clicks on the advertisement for direct online channels. We generally compensate our marketing partners for referrals based on the consumer submitting a health insurance application on our platform, regardless of whether the consumer’s application is approved by the health insurance carrier, or for the referral of a Medicare-related lead to us by the marketing partner.