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United States securities and exchange commission logo
May 6, 2020
Derek N. Yung
Chief Financial Officer
eHealth, Inc.
2625 Augustine Drive
Second Floor
Santa Clara, California 95054
Re: eHealth, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed March 2, 2020
File No. 001-33071
Dear Mr. Yung:
We have limited our review of your filing to the financial
statements and related
disclosures 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 these comments within 10 business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2019
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Member Acquisition, page 50
1. In the footnotes to the
table on page 51 you describe how you calculate the variable cost
per member presented in
the table. You disclose in each instance that the denominator is a
derived metric and
describe how you calculated that divisor, but do not appear to disclose
the rationale behind
the computation. For each footnote in the table on page 51, please
tell us why you
calculate the divisor the way you do. In your response address each
component, and tell us
why some individual components themselves are divided by either
three or four. In
addition, tell us your consideration for disclosing this information in your
filing or tell us where
you disclose it.
Notes to Consolidated Financial Statements
Derek N. Yung
FirstName LastNameDerek N. Yung
eHealth, Inc.
Comapany NameeHealth, Inc.
May 6, 2020
May 6, 2020 Page 2
Page 2
FirstName LastName
Note 1 - Summary of Business and Significant Accounting Policies
Commission Revenue, page 80
2. You disclose here that health insurance carriers are your customers
yet you disclose or
imply throughout your filing that the policyholders are your
customers. In this regard, for
example, on page 5 you indicate that you actively market various
products to your
"Medicare-eligible customers" and to your "individual and family and
small business
customers" and in your revenue recognition policy note on page 80 you
discuss your
customer care centers which appear to be accessed by policyholders.
Please tell us how
the identification of policyholders as customers is consistent with
your determination for
accounting purposes that the health insurance carriers are your
customers. In your
response, tell us how this apparent discrepancy is either meaningful
to investors or, at a
minimum, not confusing.
Note 2 - Revenue
Revenue Recognition Based on Estimated Constrained LTV, page 85
3. On page 86 you disclose that you had sufficient additional information
with respect to
increases in LTVs and estimates of future cash collections related to
prior period cohorts
to recognize adjustment revenue related to these prior period cohorts
in 2019. You then
disclose that you recognized $50.8 million of adjustment revenue for
Medicare Advantage
plans during the fourth quarter of 2019. Please address the following:
Tell us what additional information surfaced in the fourth quarter
of 2019 prompting
recognition of additional revenue in that quarter.
Tell us what enhancements you made to your Medicare Advantage LTV
estimation
models in the fourth quarter of 2019 that provide greater
statistical certainty on
expected cash collections. Tell us why you made these
enhancements.
Tell us what role, if any, Mr. Robert Hurley took in your revenue
recognition
practices, in general, and the enhancements identified in the
preceding bullet, in
particular.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at (202)
551-
3474 with any questions.
Sincerely,
Division of
Corporation Finance
Derek N. Yung
eHealth, Inc.
FirstName LastNameDerek N. Yung
May 6, 2020
Page 3
Comapany NameeHealth, Inc.
May 6, 2020 Page 3 Office of Finance
FirstName LastName