Document And Entity Information (USD $)	12 Months Ended
Document And Entity Information (USD $)	Dec. 31, 2011	Feb. 29, 2012	Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	ehth
Entity Registrant Name	eHealth, Inc.
Entity Central Index Key	0001333493
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 157,835,147
Entity Common Stock, Shares Outstanding		19,476,599

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 123,607	$ 128,074
Accounts receivable	8,055	10,810
Deferred income taxes	4,622	5,347
Prepaid expenses and other current assets	3,377	4,361
Total current assets	139,661	148,592
Property and equipment, net	4,631	4,528
Deferred income taxes	3,390	3,119
Other assets	5,641	2,937
Intangible assets, net	10,526	12,573
Goodwill	14,096	14,096
Total assets	177,945	185,845
Liabilities and stockholders' equity
Accounts payable	2,391	3,573
Accrued compensation and benefits	7,904	7,523
Accrued marketing expenses	6,195	3,644
Deferred revenue	314	2,785
Other current liabilities	1,547	2,672
Total current liabilities	18,351	20,197
Non-current liabilities	3,920	3,451
Commitments and contingencies (see Note 9)
Stockholders' equity:
Preferred stock: $0.001 par value; Authorized shares: 10,000,000; Issued and outstanding shares: none
Common stock: $0.001 par value; Authorized shares: 100,000,000; 25,530,856 and 25,776,663 shares issued at December 31, 2010 and 2011, respectively; and 21,574,728 and 19,882,832 shares outstanding at December 31, 2010 and 2011, respectively	26	26
Additional paid-in capital	215,364	203,231
Treasury stock, at cost: 3,956,128 and 5,893,831 shares at December 31, 2010 and 2011, respectively	(81,557)	(56,202)
Retained earnings	21,661	14,937
Accumulated other comprehensive income	180	205
Total stockholders' equity	155,674	162,197
Total liabilities and stockholders' equity	$ 177,945	$ 185,845

Consolidated Balance Sheet (Parenthetical) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	19,882,832	21,574,728
Common Stock, Shares, Outstanding	19,882,832	21,574,728
Treasury Stock, Shares	5,893,831	3,956,128

Consolidated Statements Of Income And Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenue:
Commission	$ 120,321	$ 135,366	$ 119,259
Other	31,327	25,038	15,631
Total revenue	151,648	160,404	134,890
Operating costs and expenses:
Cost of revenue	8,340	5,499	4,581
Marketing and advertising	56,877	60,102	53,987
Customer care and enrollment	22,898	17,810	14,769
Technology and content	21,657	19,241	15,685
General and administrative	26,593	24,055	20,028
Amortization of intangible assets	2,046	1,138
Total operating costs and expenses	138,411	127,845	109,050
Income from operations	13,237	32,559	25,840
Interest and other income (expense), net	(53)	9	938
Income before income taxes	13,184	32,568	26,778
Provision for income taxes	6,460	15,086	11,431
Net income	6,724	17,482	15,347
Change in unrealized gain on marketable securities, net of taxes		(20)	(192)
Foreign currency translation adjustment	(25)	2	3
Total comprehensive income	$ 6,699	$ 17,464	$ 15,158
Net income per share:
Basic	$ 0.32	$ 0.76	$ 0.63
Diluted	$ 0.31	$ 0.73	$ 0.61
Weighted-average number of shares used in per share amounts:
Basic	20,947	23,118	24,309
Diluted	21,703	23,873	25,201

Consolidated Statements Of Stockholder's Equity (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Deferred Stock-Based Compensation [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2008	$ 25	$ 173,095	$ (639)	$ (22)	$ (17,892)	$ 412	$ 154,979
Balance, shares at Dec. 31, 2008	25,095		(54)
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards		858					858
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, Shares	216
Stock-based compensation expense		4,815					4,815
Amortization of deferred stock-based compensation, net of adjustments for terminated employees				22			22
Excess tax benefits from stock-based compensation		4,979					4,979
Change in unrealized gain on investments, net of taxes						(192)	(192)
Foreign currency translation adjustment						3	3
Repurchase of common stock, shares			(1,840)
Repurchase of common stock			(29,360)				(29,360)
Net income					15,347		15,347
Balance at Dec. 31, 2009	25	183,747	(29,999)		(2,545)	223	151,451
Balance, shares at Dec. 31, 2009	25,311		(1,894)
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards	1	236					237
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, Shares	220
Stock-based compensation expense		6,395					6,395
Excess tax benefits from stock-based compensation		12,853					12,853
Change in unrealized gain on investments, net of taxes						(20)	(20)
Foreign currency translation adjustment						2	2
Repurchase of common stock, shares			(2,062)
Repurchase of common stock			(26,203)				(26,203)
Net income					17,482		17,482
Balance at Dec. 31, 2010	26	203,231	(56,202)		14,937	205	162,197
Balance, shares at Dec. 31, 2010	25,531		(3,956)
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards		347					347
Issuance of common stock in connection with exercise of common stock options and release of vested restricted stock units, net of cash used to net settle equity awards, Shares	246
Stock-based compensation expense		7,096					7,096
Excess tax benefits from stock-based compensation		4,690					4,690
Foreign currency translation adjustment						(25)	(25)
Repurchase of common stock, shares			(1,938)
Repurchase of common stock			(25,355)				(25,355)
Net income					6,724		6,724
Balance at Dec. 31, 2011	$ 26	$ 215,364	$ (81,557)		$ 21,661	$ 180	$ 155,674
Balance, shares at Dec. 31, 2011	25,777		(5,894)

Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities
Net income	$ 6,724	$ 17,482	$ 15,347
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	5,604	14,274	9,352
Depreciation and amortization	2,358	2,209	2,211
Amortization of intangible assets	2,046	1,138
Amortization and accretion on marketable securities, net		50	749
Stock-based compensation expense	7,096	6,395	4,835
Excess tax benefits from stock-based compensation	(4,690)	(12,853)	(4,979)
Deferred rent	(3)	(11)	(45)
Loss on disposal of property and equipment	38	9	16
Changes in operating assets and liabilities:
Accounts receivable	3,383	(8,146)	(290)
Prepaid expenses and other current assets	2,628	(1,062)	389
Other assets	(16)	43	358
Accounts payable	(1,948)	(459)	1,060
Accrued compensation and benefits	363	2,311	388
Accrued marketing expenses	2,551	(235)	717
Deferred revenue	(2,471)	2,356	(26)
Other current liabilities	(1,122)	(2,992)	4
Net cash provided by operating activities	22,541	20,509	30,086
Investing activities
Purchases of property and equipment	(2,407)	(2,948)	(1,433)
Acquisition of PlanPrescriber, net of cash acquired		(27,203)
Book of business transfers	(4,190)	(2,550)	(1,280)
Purchases of marketable securities			(40,550)
Sales of marketable securities			5,006
Maturities of marketable securities		22,100	68,932
Net cash provided by (used in) investing activities	(6,597)	(10,601)	30,675
Financing activities
Proceeds from exercise of common stock options	899	814	1,031
Cash used to net settle equity awards	(552)	(586)	(171)
Excess tax benefits from stock-based compensation	4,690	12,853	4,979
Repurchase of common stock	(25,355)	(26,203)	(29,360)
Principal payments in connection with capital leases	(63)	(44)	(41)
Net cash used in financing activities	(20,381)	(13,166)	(23,562)
Effect of exchange rate changes on cash and cash equivalents	(30)	(7)	4
Net increase (decrease) in cash and cash equivalents	(4,467)	(3,265)	37,203
Cash and cash equivalents at beginning of period	128,074	131,339	94,136
Cash and cash equivalents at end of period	123,607	128,074	131,339
Supplemental disclosure of non-cash activities
Book of business transfers	902
Capital lease obligations incurred	71
Supplemental disclosure of cash flows
Cash paid for interest	16	15	20
Cash paid for income taxes	$ 1,718	$ 2,577	$ 2,999

Summary Of Business And Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary Of Business And Significant Accounting Policies [Abstract]

Summary Of Business And Significant Accounting Policies

Note 1 - Summary of Business and Significant Accounting Policies

Description of Business—eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) offers Internet-based health insurance agency services for individuals, families and small businesses in the United States, as well as technology licensing and Internet advertising services. Our services and technology enable individuals, families and small businesses to compare and purchase health insurance plans from health insurance carriers across the nation. We began actively marketing the availability of Medicare-related insurance plans during 2010 and we offer Medicare plan comparison tools and educational materials for Medicare-related insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans. We are licensed to market and sell health insurance in all 50 states and the District of Columbia.

Principles of Consolidation—The consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

Segments—We operate in one business segment. See Note 10 – Operating Segments, Geographic Information and Significant Customers for additional information regarding our business segment.

Use of Estimates—The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the useful lives of intangible assets, fair value of investments, fair value of intangible assets, estimates for commission forfeitures, valuation allowance for deferred income taxes, provision for income taxes, our assessment whether internal use software and website development costs will result in additional functionality and the assumptions used in determining stock-based compensation. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. Actual results may differ from these estimates.

Cash Equivalents—We consider all investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents are stated at fair value.

Property and Equipment—Property and equipment are stated at cost, less accumulated depreciation and amortization. Capital lease amortization expenses are included in depreciation expense in our consolidated statements of income and comprehensive income. Depreciation and amortization is computed using the straight-line method based on estimated useful lives as follows:

Computer equipment and software		3 to 5 years
Office equipment and furniture		5 years
Leasehold improvements		Lesser of useful life (typically 5 to 7 years) or related lease term

Maintenance and minor replacements are expensed as incurred.

See Note 3 – Balance Sheet Accounts for additional information regarding our property and equipment.

Acquisition of PlanPrescriber—In April 2010, we acquired PlanPrescriber, Inc., formerly Experion Systems, Inc., a privately-held company. PlanPrescriber is a leading provider of online tools that help Medicare eligible individuals navigate their Medicare health insurance options. See Note 2 – Acquisition of PlanPrescriber, Inc. for additional information.

Goodwill and Intangible Assets—Goodwill represents the excess of the consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business acquisition. We do not amortize goodwill but test for impairment on an annual basis on or about November 30 of each year and whenever events or changes in circumstances indicate a reduction in its fair value below its carrying amount.

Intangible assets with finite useful lives, which include purchased technology, pharmacy and customer relationships, trade names, trademarks and website addresses, are amortized over their estimated useful lives and are reviewed for impairment annually on or about November 30 of each year or when facts or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Factors that we consider in deciding when to perform an impairment review include significant negative industry or economic trends or significant changes or planned changes in our use of the intangible assets. We measure the recoverability of assets that will continue to be used in our operations by comparing the carrying value of the asset grouping to our estimate of the related total future undiscounted net cash flows. If an asset grouping’s carrying value is not recoverable through the related undiscounted cash flows, the asset grouping is considered to be impaired. The impairment is measured by comparing the difference between the asset grouping’s carrying value and its fair value. Fair value is the price that would be received from selling an asset in an orderly transaction between market participants at the measurement date.

Goodwill and intangible assets are considered non-financial assets, and are recorded at fair value only when an impairment charge is recognized.

We must make subjective judgments in determining the independent cash flows that can be related to specific asset groupings. In addition, we must make subjective judgments regarding the remaining useful lives of assets with finite useful lives. When we determine that the useful life of an asset is shorter than we had originally estimated, we accelerate the rate of amortization over the assets’ new, remaining useful life. We evaluated the remaining useful lives of our intangible assets with finite lives in the fourth quarter of 2011 and determined no adjustments to the remaining lives were required.

In September 2011, the FASB issued authoritative guidance that allows an entity to use a qualitative approach to test goodwill for impairment. This guidance permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. We adopted this guidance in the fourth quarter of 2011.

Other Long-Lived Assets—We evaluate other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. No other long-lived assets were deemed impaired during the three-year period ended December 31, 2011.

Book of Business Transfers—In November 2010, May 2011 and October 2011, we entered into agreements with a partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies in exchange for total consideration of $3.3 million, $3.1 million and $1.2 million, respectively, which is included in prepaid expenses and other current assets and other assets in the accompanying balance sheets. The consideration, which was based on the discounted commissions expected to be received over the remaining life of each transferred Medicare plan member, is being amortized to cost of revenue in the consolidated statements of income and comprehensive income as we recognize commission revenue related to the transferred Medicare plan members, over a period of up to five years. Amortization expense recorded to cost of revenue for these books of businesses for the years ended December 31, 2010 and 2011 totaled $10 thousand and $0.7 million, respectively. Cash consideration paid in connection with the book of business transfers are presented under investing activities in the consolidated statements of cash flows as purchase of other assets. In 2011, we offset a portion of the total consideration payable by us against outstanding accounts receivable from the partner. This amount is included in the supplemental disclosure of non-cash activities in the consolidated statements of cash flows.

Revenue Recognition—We recognize revenue for our services when each of the following four criteria is met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. Our revenue is primarily comprised of compensation paid to us by health insurance carriers related to insurance policies that have been purchased by a member who used our service. We define a member as an individual currently covered by an insurance plan, including individual, family, Medicare-related, small business, short-term and ancillary plans, for which we are entitled to receive compensation from an insurance carrier. We use the data supplied to us by insurance carriers to help identify the members for which we are receiving a commission payment and the amount received for each member, and to estimate future forfeiture amounts due to policy cancellations.

Commission Revenue—For individual, family, Medicare Supplement and small business plans, our compensation generally represents a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a policy (commissions) and, to a much lesser extent, override commissions that health insurance carriers pay us for achieving certain objectives. Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis. We continue to receive the commission payment from the relevant insurance carrier until the health insurance policy is cancelled or we otherwise do not remain the agent on the policy. We recognize commission revenue for individual, family and small business plans as the commissions are reported to us by the carrier, net of an estimate for future forfeiture amounts due to policy cancellations. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier, a carrier reports to us that it has approved an application submitted through our ecommerce platform and the applicant starts making payments on the policy. Our services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectibility is reasonably assured when commission amounts have been reported to us by a carrier.

We recognize individual, family and small business commission override revenue when reported to us by a carrier based on the actual attainment of predetermined target sales levels or other objectives as determined by the carrier. Commission override revenue, which we recognize on the same basis as individual, family and small business commissions, is generally reported to us in a more irregular pattern than such commissions.

For both Medicare Advantage and Medicare Part D prescription drug plans, we receive a fixed, annual commission payment from insurance carriers once the policy is approved by the carrier and either a fixed, monthly commission payment beginning with and subsequent to the second policy year for a Medicare Advantage policy or a fixed, annual commission payment beginning with and subsequent to the second policy year for a Medicare Part D prescription drug policy. We recognize commission revenue for both Medicare Advantage and Medicare Part D prescription drug plans for the entire policy year once the annual or first monthly commission amount for the policy year is reported to us by the carrier, net of an estimate for future forfeiture amounts due to policy cancellations. For commissions paid to us on a monthly basis, we will record a receivable for the commission amounts to be received over the remainder of the policy year, net of an estimate for commission amounts not expected to be collected due to policy cancellations, which is included in accounts receivable in the accompanying balance sheets. We generally continue to receive the commission payments from the relevant insurance carrier until the earlier of our being notified that the health insurance policy has been cancelled, our no longer remaining the agent on the policy, or our commission term with the carrier expires, typically up to six years from the effective date of the policy. We determine that there is persuasive evidence of an arrangement when we have a commission agreement with a health insurance carrier. Our services are complete when a carrier has approved an application in the initial year and when a member has renewed in a renewal year. The seller’s price is fixed or determinable and collectibility is reasonably assured when a carrier has approved an application and the carrier reports to us the annual or first monthly renewal commission amount for each policy year.

Commissions for all health insurance plans we sell are reported to us by a commission statement that is usually accompanied by a cash payment. We generally receive these communications simultaneously. In instances when we receive the cash payment and commission statement separately and in different accounting periods, we recognize revenue in the period that we receive the earliest communication, provided we receive the second corroborating communication shortly following the end of the accounting period. If the second corroborating communication is not received shortly following the end of the accounting period, we recognize revenue in the period the second communication is received. We use the data in the commission statements to help identify the members for which we are receiving a commission payment and the amount received for each member, and to estimate future forfeiture amounts due to policy cancellations. As a result, we recognize the net amount of compensation earned as the agent in the transaction.

Certain commission amounts are subject to forfeiture when the policy is subsequently cancelled and either the carrier takes back all or a portion of the commission they have paid to us or we will no longer receive monthly commissions payments for the remainder of the policy year. We record an estimate for these forfeitures based on our historical cancellation experience using data provided on commission statements. Policy cancellations and the commission amounts, if any, to be taken back by the carrier are typically reported to us by health insurance carriers several months after the policy’s cancellation date. Our estimate for forfeitures payable to a carrier, which is included in other current liabilities in the accompanying balance sheets, includes an estimate of both the reporting time lag and the forfeiture amount, based on our historical experience by policy type. Similarly, our estimate for commission amounts not expected to be collected due to policy cancellations, which is recorded as a reduction of accounts receivable in the accompanying balance sheets, includes an estimate of the annual policy cancellation rate, based on our historical experience by policy type. Changes that are inconsistent with our historical trends would result in changes to our estimated forfeitures in future periods. There were no changes in our average forfeiture rates or reporting time lag during the years ended December 31, 2010 and 2011 which had a material impact on our estimate for forfeitures.

We rely on health insurance carriers to report accurately and in a timely manner the amount of commissions earned by us, and we calculate our commission revenues, prepare our financial reports, projections and budgets, and direct our marketing and other operating efforts based on the reports we receive from them. Each month we analyze the reports we receive from health insurance carriers by comparing such data to the database we maintain on our members. It is often difficult for us to independently determine whether or not carriers are reporting all commissions due to us, primarily because members on individual, family and small business policies typically terminate their policies by discontinuing their premium payments to the carrier instead of by informing us of the cancellation. Also, some of our individual, family and small business members pay their premiums less frequently than monthly. This results in our having to identify underpayment or non-payment of commissions on a policy and follow up with a carrier to obtain an explanation and/or request correction of the amount of commissions paid to us.

Sponsorship Revenue—Our sponsorship advertising program allows carriers to purchase advertising space in specific markets in a sponsorship area on our website. In return, we are typically paid a monthly fee, which is recognized over the period that advertising is displayed, and a performance-based fee based on metrics such as submitted health insurance applications. We offer sponsorship services for our Medicare plan carriers to purchase advertising on a separate website developed, hosted and maintained by us. In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue over the service period.

Technology Licensing Revenue—Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and agents to utilize our technology to power their online quoting, content and application submission processes. Typically, we are paid a one-time implementation fee, which we recognize on a straight-line basis over the estimated term of the customer relationship (generally the initial term of the agreement), commencing once the technology is available for use by the third party, and a performance fee based on metrics such as submitted health insurance applications. The metrics used to calculate performance fees for both sponsorship advertising and technology licensing are based on performance criteria that are either measured based on data tracked by us, or based on data tracked by the third party. In instances where the performance criteria data is tracked by us, we recognize revenue in the period of performance. In instances where the performance criteria data is tracked by the third party, we recognize revenue when the amounts earned are both fixed and determinable and collection is reasonably assured. Typically, this occurs through our receipt of a cash payment from the third party along with a detailed statement containing the data that is tracked by the third party.

We began to license our technology to government agency customers and in 2010 we were awarded a contract from the federal government to provide technology and information services relating to the federal government’s healthcare reform website, which is a multiple element arrangement. We were not able to establish fair value for each element within the contract and, therefore, accounted for the entire contract as one unit of accounting. We deferred all revenue related to the contract until our technology was available for use by the federal government. Revenue was recognized on a straight-line basis from the date our technology was available for use by the federal government to the end of the initial one-year term of the contract in July 2011. The term of this contract expired in January 2012.

Medicare Lead Referral Revenue—Medicare-related revenue we have generated includes referral fees paid to us based on Medicare leads generated by our online platforms that are delivered and sold to third parties. We sell our leads to a limited number of purchasers of our leads, and the majority of our lead referral revenue is generated during the Medicare annual enrollment period, which occurs during the fourth quarter of the calendar year, when we generate and sell a majority of our Medicare leads. We recognize lead referral revenue when persuasive evidence of an arrangement exists, delivery of a lead has occurred, the fee is fixed or determinable and collectability is reasonably assured. Delivery is deemed to have occurred at the time a lead is delivered to the customer.

Deferred Revenue—Deferred revenue consists of deferred technology licensing implementation fees as well as amounts billed or collected from sponsorship or technology licensing customers in advance of our performing our service for such customers. It also includes the amount by which both unbilled and billed services provided under our federal government contract exceed the straight-line revenue recognized to date. We defer commission amounts that have been paid to us related to transactions where our services are complete, but where we cannot currently estimate future forfeitures related to those amounts.

Multiple-element Arrangements—In accordance with Accounting Standards Update (“ASU”) No. 2009-13—Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”), which was effective for us prospectively for revenue arrangements entered into or materially modified on or after January 1, 2011, we allocate revenue to all units of accounting within an arrangement with multiple deliverables at the inception of the arrangement using the relative selling price method. The relative selling price method allocates any discount in an arrangement proportionally to each deliverable on the basis of each deliverable’s relative selling price. The relative selling price established for each deliverable is based on vendor-specific objective evidence of fair value (“VSOE”) if available, third-party evidence of selling price if VSOE is not available, or best estimate of selling price if neither VSOE nor third-party evidence is available. When used, the best estimate of selling price reflects our best estimates of what the selling prices of certain deliverables would be if they were sold regularly on a stand-alone basis. Our process for determining best estimate of selling price for deliverables without VSOE or third-party evidence of selling price considers multiple factors that may vary depending upon the unique facts and circumstances related to each deliverable. Key factors considered by us in developing the relative selling prices for our technology licensing fees include prices charged by us for similar offerings and our historical pricing practices. We may also consider additional factors as appropriate, including competition. The adoption of ASU 2009-13 did not have a material impact to our results of operations or financial position.

A deliverable constitutes a separate unit of accounting when it has stand-alone value and there are no customer-negotiated right of refunds for the delivered elements. If the arrangement includes a customer-negotiated right of refund relative to the delivered item, and the delivery and performance of the undelivered item is considered probable and substantially in our control, the delivered element constitutes a separate unit of accounting. In circumstances when the aforementioned criteria are not met, the deliverable is combined with the undelivered elements, and the allocation of the arrangement consideration and revenue recognition is determined for the combined unit as a single unit. Allocation of the consideration is determined at the inception of the arrangement on the basis of each unit's relative selling price. After the arrangement consideration has been allocated to each unit of accounting based on their relative selling prices, we apply revenue recognition criteria separately to each respective unit of accounting in the arrangement in accordance with applicable accounting guidance.

Cost of Revenue—Cost of revenue consists of payments related to health insurance policies sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements Cost of revenue also includes direct labor and other direct costs incurred in connection with our government systems business, as well as the amortization of consideration we paid to certain brokers in connection with the transfer of their health insurance members to us as the new broker of record on the underlying policies. These transfers have included both individual and family plan members as well as Medicare plan members. In order to enter into a revenue-sharing arrangement, marketing partners must be licensed to sell health insurance in the state where the policy is sold. Costs related to revenue-sharing arrangements are expensed as the related revenue is recognized. Initial direct labor and other direct costs incurred in connection with our contract with the federal government, but prior to the availability of our technology for use by the federal government, were deferred and included in prepaid expenses and other current assets in our consolidated balance sheet and were amortized to cost of revenue from the date our technology was available for use by the federal government to the end of the initial one-year term of the contract in July 2011.

Costs associated with revenue-sharing of commissions with partners have been included in cost of revenue.

Marketing and Advertising—Marketing and advertising expenses consist primarily of member acquisition expenses associated with our direct, marketing partner and online advertising 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. Our direct channel expenses primarily consist of costs for television advertising, radio advertising, print advertising, direct mail and email marketing. We report the cost of advertising as expense in the period in which costs are incurred. Advertising costs incurred in the years ended December 31, 2009, 2010 and 2011 totaled $49.3 million, $53.9 million and $49.2 million, respectively.

Research and Development—Research and development expenses consist primarily of compensation and related expenses incurred for enhancements to the functionality of our website. Research and development costs, which totaled $5.2 million, $6.4 million and $7.3 million for the years ended December 31, 2009, 2010 and 2011, respectively, are included in technology and content expense in the accompanying consolidated statements of income and comprehensive income.

Internal-Use Software and Website Development Costs—We capitalize costs of materials, consultants and compensation and benefits costs of employees who devote time to the development of internal-use software; however, we usually expense as incurred website development costs for new features and functionalities because it is not probable that they will result in additional functionality until they are both developed and tested with confirmation that they are more effective than the current set of features and functionalities on our website. Our judgment is required in determining the point at which various projects enter the states at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized, which is generally three years. To the extent that we change the manner in which we develop and test new features and functionalities related to our website, assess the ongoing value of capitalized assets or determine the estimated useful lives over which the costs are amortized, the amount of website development costs we capitalize and amortize in future periods would be impacted. Through December 31, 2011, the majority of our internal-use software and website development costs have been expensed as incurred.

Stock-Based Compensation—We recognize stock-based compensation expense in the accompanying consolidated statements of income and comprehensive income based on the fair value of our stock-based awards over their respective vesting periods, which is generally four years. The estimated grant date fair value of our stock-based awards is determined using the Black-Scholes-Merton pricing model and a single option award approach. The weighted-average expected term for stock options granted during 2011was calculated using historical option exercise behavior. Prior to 2011, the weighted-average expected term for stock options granted was calculated using the simplified method, as we did not have sufficient historical option exercise behavior on which to estimate expected terms. The simplified method defines the expected term as the average of the contractual term and the vesting period of the stock option. We estimate our expected volatility using a combination of our weighted-average implied volatility and our historical volatility. Prior to 2011, we estimated the volatility used as an input to the model based on an analysis of our stock price since our initial public offering in October 2006, as well as an analysis of similar public companies for which we have data. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date stock price. Through December 31, 2011, we had not declared or paid any cash dividends, and we do not expect to pay any in the foreseeable future. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of our stock options. The assumptions used in calculating the fair value of stock-based payment awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. We will continue to use judgment in evaluating the expected term and volatility related to our own stock-based awards on a prospective basis, and incorporating these factors into the model. Changes in key assumptions will significantly impact the valuation of such instruments.

401(k) Plan—In September 1998, our board of directors adopted a defined contribution retirement plan (401(k) Plan), which qualifies under Section 401(k) of the Internal Revenue Code of 1986. Participation in the 401(k) Plan is available to substantially all employees in the United States. Employees can contribute up to 25% of their salary, up to the federal maximum allowable limit, on a before-tax basis to the 401(k) Plan. Employee contributions are fully vested when contributed. Company contributions to the 401(k) Plan are discretionary and are expensed when incurred. In April 2006, we began matching employee contributions to our 401(k) Plan at 25% of an employee’s contribution each pay period, up to a maximum of 1% of the employee’s salary during such pay period. Our matching contributions are expensed as incurred and vest one-third for each of the first three years of the recipient’s service. The recipient is fully vested in all 401(k) Plan matching contributions after three years of service.

Income Taxes—We account for income taxes using the liability method. Deferred income taxes are determined based on the differences between the financial reporting and tax bases of assets and liabilities, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse.

We consider stock option deduction benefits in excess of book compensation charges realized when we obtain an incremental benefit determined by the “With and Without” calculation method. Under the “With and Without” approach, excess tax benefits related to share-based payments are not deemed to be realized until after the utilization of all other tax benefits available to us. For example, net operating loss and tax credit carry forwards from prior years are used to reduce taxes currently payable prior to deductions from stock option exercises for purposes of financial reporting, while for tax return purposes, current year stock compensation deductions are generally used before net operating loss carry forwards. Indirect effects of excess tax benefits, such as the effect on research and development tax credits, are not considered.

We utilize a two-step approach for evaluating uncertain tax positions. Step one, Recognition, requires a company to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, Measurement, is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement.

We record interest and penalties related to uncertain tax positions as income tax expense in the consolidated financial statements.

Seasonality— The number of individual and family health insurance applications submitted through our ecommerce platform has generally increased in our first quarter compared to our fourth quarter and in our third quarter compared to our second quarter. Conversely, we have generally experienced a decline or flattening of individual and family submitted applications in our second quarter compared to our first quarter and in our fourth quarter compared to our third quarter. Since a significant portion of our marketing and advertising expenses are driven by the number of health insurance applications submitted on our ecommerce platform, those expenses are influenced by these patterns. The reasons for these seasonal patterns are not entirely clear.

The vast majority of Medicare plans are sold in the fourth quarter of each year during the Medicare annual enrollment period, when Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D prescription drug coverage for the following year. As a result, we have generated the majority of our Medicare plan-related revenue in the fourth quarter of the year. We significantly increased our temporary customer care center staff during the third quarter in preparation for the Medicare annual enrollment period. We employ our temporary customer care center staff until the end of the Medicare annual enrollment period in December. As a result, our customer care center staffing costs are significantly higher in the third and fourth quarters compared to the first and second quarters. We also incurred significantly greater Medicare plan-related online advertising expenses during the third and fourth quarters. Because the majority of our Medicare plan-related revenue is not generated until the fourth quarter, our temporary customer care center staffing costs and marketing expenses incurred in the third quarter have had a significant negative impact on our profitability during the third quarter.

Based on these seasonal trends, we expect our revenue to be highest in the fourth quarter of the year and we expect our profitability to be relatively higher in the second and fourth quarters and relatively lower in the first and third quarters quarters of the year.

Recent Accounting Pronouncements—In May 2011, the FASB issued updated accounting guidance related to fair value measurements and disclosures that result in common fair value measurements and disclosures between GAAP and International Financial Reporting Standards (“IFRS”). This guidance includes amendments that clarify the intent about the application of existing fair value measurements and disclosures, while other amendments change a principle or requirement for fair value measurements or disclosures. This guidance is effective for interim and annual periods beginning after December 15, 2011. The new guidance is to be adopted prospectively and early adoption is not permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

In June 2011, the FASB issued authoritative guidance related to the presentation of comprehensive income. The guidance requires that all non-owner changes in stockholders’ equity be presented in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This guidance is effective for interim and annual periods beginning after December 15, 2011. The new guidance is to be applied retrospectively and early adoption is permitted. We will adopt the guidance beginning in the first quarter of 2012 and we do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

In December 2011, the FASB issued authoritative guidance to amend the requirement for an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. We will adopt the guidance beginning in the first quarter of 2013 and we do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Acquisition Of PlanPrescriber, Inc

12 Months Ended

Dec. 31, 2011

Acquisition Of PlanPrescriber, Inc [Abstract]

Acquisition Of PlanPrescriber, Inc

Note 2 – Acquisition of PlanPrescriber, Inc.

On April 30, 2010, we acquired 100% of the outstanding common shares and voting interest of PlanPrescriber, Inc., formerly Experion Systems, Inc., a privately-held company. The purchase price totaled $28.0 million and was primarily paid in cash. PlanPrescriber is a leading provider of online and pharmacy-based tools to help Medicare eligible individuals navigate their Medicare health insurance options. PlanPrescriber is a wholly-owned subsidiary of eHealth. We recorded the purchase of PlanPrescriber using the acquisition method of accounting and we recognized the assets acquired and liabilities assumed at their fair values as of the date of acquisition. Under the acquisition method, the total purchase price was allocated to PlanPrescriber’s net tangible and intangible assets based upon their estimated fair values as of April 30, 2010. The excess purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. The results of operations are included in our consolidated results of operations beginning with the date of the acquisition. Pro forma results of operations have not been presented because the effects of the acquisition of PlanPrescriber were not material to our consolidated results of operations.

The following table summarizes the final allocation of the purchase price, including the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of April 30, 2010 (in thousands):

			As of April 30, 2010
Cash			$	776
Accounts receivable				369
Other acquired assets				86
Acquired intangible assets				13,400
	Total identifiable assets acquired			14,631
Deferred tax liabilities				(180	)
Assumed liabilities				(568	)
		Net identifiable assets acquired		13,883
Goodwill				14,096
		Purchase price	$	27,979

The fair value of acquired accounts receivable approximates the contractual amount. We recognized $0.6 million of acquisition-related costs that were expensed as incurred during the year ended December 31, 2010. These costs were included in general and administrative expenses on the consolidated statements of income and comprehensive income.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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+ Details

Balance Sheet Accounts

12 Months Ended

Dec. 31, 2011

Balance Sheet Accounts [Abstract]

Balance Sheet Accounts

Note 3 – Balance Sheet Accounts

Cash and Cash Equivalents—As of December 31, 2010 and 2011, our cash equivalents consisted of money market accounts that invested in U.S. government-sponsored enterprise bonds and discount notes, U.S. government treasury bills and notes and repurchase agreements collateralized by U.S. government obligations. At December 31, 2010 and 2011, our cash equivalents carried no unrealized gains or losses and we did not realize any significant gains or losses on sales of cash equivalents during the years ended December 31, 2009, 2010 and 2011.

Accounts Receivable—We do not require collateral or other security for our accounts receivable. As of December 31, 2011, one customer represented 73% of our $8.1 million outstanding accounts receivable. No other customers represented 10% or more of our total accounts receivable at December 31, 2011. We believe the potential for collection issues with any of our customers is minimal as of December 31, 2011. Accordingly, our estimate for uncollectible amounts at December 31, 2011 was not material.

As of December 31, 2010 and 2011, our accounts receivable consisted of the following (in thousands):

	December 31, 2010		December 31, 2011

Accounts receivable – from other revenues	$	10,672	$	7,702
Commissions receivable		138		353
Total accounts receivable	$	10,810	$		8,055

Concentration of Credit Risk—Our financial instruments that are exposed to concentrations of credit risk principally consist of cash, cash equivalents and accounts receivable. We invest our cash and cash equivalents with major banks and financial institutions and, at times, such investments are in excess of federally insured limits. We also have deposits with major banks in China that are denominated in both U.S. dollars and Chinese Renminbi and are not insured by the U.S. federal government.

As of December 31, 2010 and 2011, our cash and cash equivalent balances were invested as follows (in thousands):

	December 31, 2010		December 31, 2011

Cash	$	11,663	$	17,256
Money market funds		116,411		106,351
Total cash and cash equivalents	$	128,074	$		123,607

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	As of December 31,
	2010		2011
Book of business transfers, net	$	1,009	$	1,659
Deferred contract costs, net		1,773		—
Prepaid maintenance contracts		464		495
Prepaid insurance		464		372
Other		651		851
Prepaid expenses and other current assets	$	4,361	$	3,377

Property and Equipment

Property and equipment consisted of the following (in thousands):

	As of December 31,
	2010			2011
Computer equipment and software	$	11,134		$	11,465
Office equipment and furniture		1,462			1,606
Leasehold improvements		863			880
		13,459			13,951
Less accumulated depreciation and amortization		(8,931	)		(9,320	)
Property and equipment, net	$	4,528		$	4,631

Depreciation and amortization expense related to property and equipment totaled $2.2 million, $2.2 million and $2.4 million in the years ended December 31, 2009, 2010 and 2011, respectively.

Goodwill and Intangible Assets

As a result of the streamlining of a legacy software product, we assessed intangible assets for impairment in the fourth quarter of 2011 and recorded an impairment charge of $0.3 million related to certain acquired intangible assets. The impairment charge is included in amortization of intangible assets on the consolidated statements of income and comprehensive income.

The carrying amounts, accumulated amortization and weighted average remaining life of acquired intangible assets, as well as our other intangible website addresses and trademarks, are presented in the table below (dollars in thousands):

				Gross Carrying Amount								Accumulated Amortization									Net Carrying Amount					Weighted Average Useful Life
				December 31, 2010			Impairment			December 31, 2011		December 31, 2010			Amortization Expense			December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2011
Acquired technology				$		1,800	$	(48	)	$	1,752	$	(235	)	$	(353	)	$	(588	)	$	1,565		$	1,164		3.3 years
Acquired pharmacy and customer relationships						10,700		(290	)		10,410		(843	)		(1,265	)		(2,108	)		9,857			8,302		6.6 years
Acquired trade names, trademarks and website addresses						900		—			900		(60	)		(90	)		(150	)		840			750		8.4 years
		Acquired intangible assets				13,400		(338	)		13,062		(1,138	)		(1,708	)		(2,846	)		12,262			10,216
Website Addresses						7		—			7		(3	)		(1)			(4	)		4			3		4.2 years
	Total intangible assets subject to amortization					13,407		(338	)		13,069		(1,141	)		(1,709	)		(2,850	)		12,266			10,219
Trademarks						307		—			307		—			—			—			307			307		N.A.
	Total intangible assets, net		$		13,714		$	(338	)	$	13,376	$	(1,141	)	$	(1,709	)	$	(2,850	)	$	12,573	$		10,526

During the years ended December 31, 2010 and 2011, amortization expense related to intangible assets totaled $1.1 million and $1.7 million, respectively.

As of December 31, 2011, expected amortization expense in future periods is as follows (in thousands):

Years Ending December 31,	Purchased Technology		Pharmacy and Customer Relationships					Trade Names, Trademarks and Website Addresses					Total

2012	$	345		$		1,180			$		91		$		1,616
2013		345				979					91				1,415
2014		345				979					91				1,415
2015		118				979					91				1,188
2016		5				979					91				1,075
Thereafter		6					3,206					298			3,510
Total	$	1,164			$		8,302			$		753		$	10,219

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	As of December 31,
	2010		2011
Payable to carriers – estimate for forfeitures	$	873	$	927
Income taxes payable		802		—
Professional fees		671		324
Other accrued expenses		326		296
Other current liabilities	$	2,672	$	1,547

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

We define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques we use to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We classify the inputs used to measure fair value into the following hierarchy:

Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2		Unadjusted quoted prices in active markets for similar assets or liabilities, or
		Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
		Inputs other than quoted prices that are observable for the asset or liability

Level 3		Unobservable inputs for the asset or liability

As of December 31, 2010 and 2011, our cash equivalents were invested in money market funds and were classified as Level 1. We endeavor to utilize the best available information in measuring fair value. We used observable prices in active markets in determining the classification of our money market funds as Level 1.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 17-22, 27, 28

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+ Details

Stockholders' Equity And Stock Plans

12 Months Ended

Dec. 31, 2011

Stockholders' Equity And Stock Plans [Abstract]

Stockholders' Equity And Stock Plans

Note 5 – Stockholders’ Equity and Stock Plans

Stockholders’ Equity

Preferred Stock—Our board of directors has the authority, without any further action by our stockholders, to issue up to 110,000,000 shares, par value $0.001 per share, of which 10,000,000 shares are designated as preferred stock. As of December 31, 2010 and 2011, there were no shares of preferred stock outstanding.

Common Stock—On all matters submitted to our stockholders for vote, our common stockholders are entitled to one vote per share, voting together as a single class, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose. Subject to preferences that may apply to any shares of preferred stock outstanding, the holders of common stock are entitled to share equally in any dividends, when and if declared by our board of directors. Upon our liquidation, dissolution or winding-up, the holders of common stock are entitled to share equally in all assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred stock. Holders of common stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking funds provisions applicable to the common stock.

Shares Reserved—We issue common stock upon the exercise of stock options, the vesting of restricted stock units and upon granting of restricted common stock awards. Shares of authorized but unissued common stock reserved for future issuance were as follows (in thousands):

	As of December 31,
	2010	2011

Common stock:
Stock options issued and outstanding	3,491	3,412
Restricted stock units issued and outstanding	370	474
Stock options and awards available for future grants	3,283	3,870
	7,144	7,756

Stock Plans

Our 2006 Equity Incentive Plan (the “2006 Plan”) became effective in October 2006. As of December 31, 2011, we had 3,870,346 shares of our common stock available for future grants under the 2006 Plan. In general, if options or shares awarded under the 2006 Plan are forfeited or repurchased, those options or shares will again become available for grant under the 2006 Plan. In addition, on January 1 of each year, the number of shares available for future grant under the 2006 Plan will automatically increase by the lowest of (a) 1,500,000 shares, (b) 4% of the total number of shares of our common stock then outstanding or (c) a lower number determined by our board of directors or its compensation committee. Employees, non-employee members of our board of directors and consultants of our company are eligible to participate in our 2006 Plan. The 2006 Plan requires that the exercise price of stock options and stock appreciation rights awarded shall in no event be less than 100% of the fair market value of a share of common stock on the date of grant.

We also maintain the 1998 Stock Plan and the 2005 Stock Plan, under which we previously granted options to purchase shares of our common stock and restricted common stock. The 1998 and 2005 Stock Plans were terminated with respect to the grant of additional awards upon the effective date of the registration statement related to our initial public offering in October 2006, although we will continue to issue new shares of common stock upon the exercise of stock options previously granted under the 1998 and 2005 Stock Plans.

Our stock options and restricted stock awards granted under the 2006 Plan and the 1998 and 2005 Stock Plans (collectively, the “Stock Plans”) generally vest over four years at a rate of 25% after one year and 1/48^th per month thereafter. Our stock options granted prior to December 31, 2007 generally expire after ten years from the date of grant. Stock options granted subsequent to December 31, 2007 generally expire after seven years from the date of grant. As of December 31, 2011, no shares were subject to repurchase. Our restricted stock unit awards granted under the 2006 Plan generally vest over four years at a rate of 25% after one year and 25% annually thereafter.

In the first half of 2011, we issued restricted stock units representing 115,080 shares of common stock with both service and performance-based vesting criteria to our executive officers. The performance-based contingency period for these restricted stock units is the year ended December 31, 2011, and the measurement of achievement was based on our 2011 revenue, non-GAAP operating earnings and EBITDA results. These performance-based restricted stock units were granted pursuant to the terms of our 2006 Plan. Shares earned and eligible to vest will vest one-third annually in 2012, 2013 and 2014.

The following table summarizes shares available for grant under our Stock Plans (in thousands):

	Shares Available for Grant (1)
Shares available for grant December 31, 2008	2,714
Reduction in number of authorized shares (2)	(17	)
Additional shares authorized (3)	1,002
Restricted stock units granted	(215	)
Options granted	(407	)
Options cancelled	74
Restricted stock units and awards cancelled	13
Shares available for grant December 31, 2009	3,164
Reduction in number of authorized shares (2)	(19	)
Additional shares authorized (3)	937
Restricted stock units granted	(132	)
Options granted	(836	)
Options cancelled	139
Restricted stock units cancelled	30
Shares available for grant December 31, 2010	3,283
Reduction in number of authorized shares (2)	(5	)
Additional shares authorized (3)	863
Restricted stock units granted (4)	(323	)
Options granted	(278	)
Options cancelled	251
Restricted stock units cancelled (5)	79
Shares available for grant December 31, 2011	3,870

(1) Shares available for grant exclude treasury stock of 3,956,128 shares and 5,893,831 shares at December 31, 2010 and 2011, respectively, that could be granted if we determined to do so.

(2) The 1998 and 2005 Stock Plans were terminated with respect to the grant of additional shares upon the effective date of the registration statement related to our initial public offering in October 2006, resulting in reductions in the total number of shares authorized for issuance.

(3) On January 1, 2009, 2010 and 2011, the number of shares authorized for issuance under the 2006 Plan was automatically increased pursuant to the terms of the 2006 Plan by 1,001,637 shares, 936,669 shares and 862,989 shares, respectively.

(4) Includes a grant of 115,080 restricted stock units with both service and performance-based vesting criteria to our executive officers.

(5) Includes 51,786 restricted stock units with both service and performance-based vesting criteria that were cancelled.

The following table summarizes option activity under the Stock Plans (in thousands, except per share amounts and weighted average remaining contractual life data):

	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (1)
Balance outstanding at December 31, 2008	2,725		$	9.85	5.91	$	15,878
Options granted	407		$	15.89
Options exercised	(159	)	$	6.49
Options cancelled	(74	)	$	22.49
Balance outstanding at December 31, 2009	2,899		$	10.56	5.16	$	20,895
Options granted	836		$	15.47
Options exercised	(105	)	$	7.76
Options cancelled	(139	)	$	15.60
Balance outstanding at December 31, 2010	3,491		$	11.62	4.69	$	16,349
Options granted	278		$	12.93
Options exercised	(106	)	$	8.50
Options cancelled	(251	)	$	17.93
Balance outstanding at December 31, 2011	3,412		$	11.36	3.80	$	17,078
Vested and expected to vest at December 31, 2011	3,369		$	11.32	3.77	$	17,026
Exercisable at December 31, 2011	2,647		$	10.34	3.29	$	16,227

(1) The aggregate intrinsic value is calculated as the difference between eHealth’s closing stock price as of December 31 of each year presented in the table and the exercise price of in-the-money options as of those dates.

Total intrinsic value of stock options exercised during the years ended December 31, 2009, 2010 and 2011 was $1.4 million, $0.8 million and $0.6 million, respectively.

The following table summarizes information about stock options outstanding as of December 31, 2011 (in thousands, except per share amounts and weighted average remaining contractual life data):

	Outstanding		Vested and Exercisable
Exercise Price	Number of Shares of Common Stock Subject to Options	Weighted Average Remaining Contractual Life (in years)	Number of Shares of Common Stock Subject to Options	Weighted Average Exercise Price
$1.00 - $2.00	1,038	1.40	1,038	$	2.00
$4.00 - $6.50	18	2.94	18	$	5.41
$8.00 - $12.20	648	4.75	516	$	9.65
$12.30 - $19.05	1,238	5.19	618	$	16.10
$19.10 - $31.08	470	4.12	457	$	22.42
$1.00 - $31.08	3,412	3.80	2,647	$	10.34

The following table summarizes restricted stock unit activity under the Stock Plans (in thousands, except weighted average remaining contractual life data):

		Number of Restricted Stock Units			Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (1)
Balance outstanding as of December 31, 2008			231			1.73	$	3,070
	Granted		215
	Vested		(60	)
	Cancelled		(3	)
Balance outstanding as of December 31, 2009			383			1.47	$	6,289
	Granted		132
	Vested		(115	)
	Cancelled		(30	)
Balance outstanding as of December 31, 2010			370			2.22	$	4,816
	Granted (2)		323
	Vested		(140	)
	Cancelled (3)		(79	)
Balance outstanding as of December 31, 2011			474			1.92	$	6,958

Expected to vest at December 31, 2011			421			1.90	$	6,182

(1) The aggregate intrinsic value is calculated as eHealth’s closing stock price as of December 31 of each year presented in the table above multiplied by the number of restricted stock units outstanding on those dates.

(2) Includes a grant of 115,080 restricted stock units with both service and performance-based vesting criteria to our executive officers.

(3) Includes 51,786 restricted stock units with both service and performance-based vesting criteria that were cancelled.

The fair value of the restricted stock units is based on eHealth’s stock price on the date of grant, and compensation expense is recognized on a straight-line basis over the vesting period. The total grant date fair value of restricted stock units vested during the years ended December 31, 2010 and 2011 was $1.9 million and $1.8 million, respectively.

Stock Repurchase Programs

On July 27, 2010, we announced that our board of directors approved a stock repurchase program authorizing us to purchase up to $30 million of our common stock. In January 2011, we completed this stock repurchase program, having repurchased in the aggregate 2.3 million shares for approximately $30.0 million at an average price of $13.06 per share including commissions. Purchases under this repurchase program were made in the open market and complied with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The cost of the repurchased shares was funded from available working capital.

On June 14, 2011, we announced that our board of directors approved a stock repurchase program authorizing us to purchase up to an additional $30 million of our common stock. Repurchases under this program began in the third quarter of 2011. Purchases under the repurchase program were made in the open market and complied with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. As of December 31, 2011, we had repurchased 1.6 million shares for approximately $21.6 million at an average price of $13.29 per share including commissions. The cost of the repurchased shares was funded from available working capital.

For accounting purposes, common stock repurchased under our stock repurchase programs was recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. All shares repurchased under these programs are returned to the status of authorized but unissued shares of common stock.

Stock repurchase activity under our stock repurchase programs during the years ended December 31, 2010 and 2011 is summarized as follows (in thousands, except share and per share amounts):

	Total Number of Shares Purchased		Average Price Paid per Share (2)		Amount of Repurchase
Cumulative balance at December 31, 2009 (1)		1,877,850	$	15.97	$	29,999
Repurchases of common stock during 2010		2,026,802	$	12.93		26,204
Cumulative balance at December 31, 2010 (1)		3,904,652	$	14.39		56,203
Repurchases of common stock during 2011		1,893,154	$	13.39		25,354
Cumulative balance at December 31, 2011 (1)		5,797,806	$	14.07	$	81,557

(1) Cumulative balances at December 31, 2009, 2010 and 2011 include shares repurchased in connection with our stock repurchase programs announced on July 27, 2010 and June 14, 2011, as well as a previous stock repurchase plan announced in 2008.

(2) Average price paid per share includes commissions.

In addition to the 5,797,806 shares repurchased under our repurchase programs as of December 31, 2011, we have in treasury 96,025 shares that were surrendered by employees to satisfy tax withholdings due in connection with the vesting of certain restricted stock units. As of December 31, 2010 and 2011, we had a total of 3,956,128 shares and 5,893,831 shares, respectively, held in treasury.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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-Paragraph 1

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-URI http://asc.fasb.org/extlink&oid=6521494

Reference 14: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Number 43

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-Section B

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Reference 19: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 129

-Paragraph 2, 3, 4, 5, 6, 7, 8

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Name Regulation S-X (SX)

-Number 210

-Section 08

-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

-Number 5

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section E

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 6 – Stock-Based Compensation

The fair value of stock options granted to employees for the years ended December 31, 2009, 2010 and 2011 was estimated using the following weighted average assumptions:

	Year Ended December 31,
	2009		2010		2011
	2009		2010		2011

Expected term		4.6 years		4.6 years		4.6 years
Expected volatility		59.8%		52.5%		49.3%
Expected dividend yield		0%		0%		0%
Risk-free interest rate		1.64%		2.25%		1.74%
Weighted average grant-date fair value	$	7.93	$	7.09	$	5.51

The following table summarizes stock-based compensation expense recorded during the years ended December 31, 2009, 2010 and 2011 (in thousands):

	Year Ended December 31,
	2009		2010		2011

Common stock options	$	3,055	$	3,936	$	3,712
Restricted stock units		1,756		2,459		3,384
Restricted common stock		24		—		—
Total stock-based compensation expense	$	4,835	$	6,395	$	7,096

The following table summarizes stock-based compensation expense by operating function included in the consolidated statements of income and comprehensive income for the years ended December 31, 2009, 2010 and 2011 (in thousands):

	Year Ended December 31,
	2009		2010		2011

Marketing and advertising	$	803	$	808	$	962
Customer care and enrollment		325		384		344
Technology and content		1,194		1,622		1,669
General and administrative		2,513		3,581		4,121
Total stock-based compensation expense	$	4,835	$	6,395	$	7,096

The following table presents total unrecognized stock-based compensation expense as of December 31, 2011 related to stock options and restricted stock units granted to employees under our stock plans (in thousands):

	Stock Options			Restricted Stock Units				Total
As of December 31, 2011
Unrecognized stock-based compensation expense	$	4,884			$	4,317			$	9,201
Estimated forfeitures		(507	)			(482	)			(989	)
Unrecognized stock-based compensation expense, net of estimated forfeitures	$	4,377			$	3,835			$	8,212

Unrecognized stock-based compensation expense, net of estimated forfeitures, was $8.2 million as of December 31, 2011 and will be amortized on a straight-line basis over the remaining weighted average vesting term of the underlying equity awards which was approximately 2.9 years as of December 31, 2011. Unrecognized stock-based compensation will be adjusted for subsequent changes in estimated forfeitures.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 123R

-Paragraph 64, 65, A240

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 7 – Income Taxes

The components of our income before income taxes were as follows (in thousands):

	Year Ended December 31,
		2009			2010			2011
United States	$	27,262		$	33,226		$	13,327
Foreign		(484	)		(658	)		(143	)
Total	$	26,778		$	32,568		$	13,184

The provision for income taxes consisted of the following (in thousands):

				Year Ended December 31,
					2009			2010			2011
Current:
		Federal		$	6,732		$	13,529		$	5,179
		State			2,746			3,259			828
		Foreign			—			2			—
			Total current		9,478			16,790			6,007
Deferred:
	Federal				2,634			(1,917	)		620
	State				(681	)		213			(167	)
			Total deferred		1,953			(1,704	)		453

Provision for income taxes				$	11,431		$	15,086		$	6,460

The following table provides a reconciliation of the federal statutory income tax rate to our effective tax rate for the years ended December 31, 2009, 2010 and 2011:

		Year Ended December 31,
			2009		2010		2011
Federal statutory rate			35.0	%	35.0	%	35.0	%
State income taxes			5.0		5.7		3.0
Lobbying			1.9		1.1		7.0
California apportionment change			—		2.0		—
Foreign income and withholding taxes			0.6		0.7		0.4
Research and development tax credits			(0.2	)	(0.1	)	(0.5	)
Stock-based compensation			0.6		0.6		0.7
Other			(0.2	)	1.3		3.4
	Effective tax rate		42.7	%	46.3	%	49.0	%

Our effective tax rates in 2010 and 2011 were higher than statutory federal and state tax rates primarily due to non-deductible lobbying expenses, tax shortfalls related to share-based payments, non-deductible acquisition-related costs incurred as a result of the purchase of PlanPrescriber and additional state tax expense resulting from an increase in valuation allowance against state deferred tax assets resulting from a reduction in California apportionment. Our effective tax rate in 2009 was higher than statutory federal and state tax rates primarily due to non-deductible lobbying expenses and tax shortfalls related to share-based payments, partially offset by an income tax adjustment related to an increase in our deferred income tax assets resulting from a reduction in estimated limitations on both our federal and California net operating loss carry forwards.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, together with net operating loss and tax credit carry forwards. Significant components of our deferred tax assets were as follows (in thousands):

		As of December 31,
		As of December 31,
		2010			2011
Deferred tax assets:
	Federal, state and foreign net operating loss carry forwards	$	5,159		$	4,234
	Federal and state tax credit carry forwards		1,231			440
	Stock-based compensation		3,365			4,795
	Accruals and reserves		1,983			2,176
	Other		1,846			751
Gross deferred tax assets			13,584			12,396
Valuation allowance			(694	)		(651	)
Total deferred tax assets			12,890			11,745
Deferred tax liabilities – intangible assets amortization			(4,424	)		(3,733	)
Total net deferred tax assets		$	8,466		$	8,012

Net deferred tax assets – current		$	5,347		$	4,622
Net deferred tax assets – non-current			3,119			3,390
Total net deferred tax assets		$	8,466		$	8,012

Assessing the realizability of our deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. We forecast taxable income by considering all available positive and negative evidence, including our history of operating income and losses and our financial plans and estimates that we use to manage the business. These assumptions require significant judgment about future taxable income. As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

The net valuation allowance increased $0.4 million and decreased $0.4 million in the years ended December 31, 2009 and 2010, respectively, related to net operating carry forwards in China. The change in our net valuation allowance for the year ended December 31, 2011 was not material.

For tax return purposes, we had net operating loss carry forwards at December 31, 2011 of approximately $7.8 million and $72.9 million for federal income tax and state income tax purposes, respectively. Included in the state net operating loss carry forward are unrealized state net operating loss deductions resulting from stock option exercises of approximately $55.4 million. The benefit of these unrealized stock option-related deductions has not been included in the deferred tax assets table above and will be recognized as a credit to additional paid-in capital when realized. Federal and state net operating loss carry forwards begin expiring in 2021 and 2012, respectively. The federal net operating loss carry forward is subject to an annual limitation of approximately $2.5 million due to section 382 of the Internal Revenue Code. Approximately $2.9 million of the state net operating loss carry forward is subject to an annual limitation of approximately $0.2 million due to section 382 of the Internal Revenue Code.

In September 2008, the state of California approved its budget for fiscal year ending June 30, 2009, which contained changes to the California tax law which substantially limited our ability to utilize available state net operating loss and tax credit carry forwards to reduce our state income taxes payable. In October 2010, the state of California approved its budget for fiscal year ending June 30, 2011, which again contained changes to the California tax law which substantially limited our ability to utilize available state net operating loss carry forwards to reduce our state income taxes payable. The changes in the California tax law did not impact our effective tax rates for 2009, 2010 and 2011, nor will they affect the amount of net operating loss or tax credit carry forwards that we expect to ultimately use to offset future California taxes, but the changes did limit the amount of net operating loss carry forwards we were able to utilize to reduce our taxes payable during 2009, 2010 and 2011. As a result, we experienced an increase in cash taxes payable to the state of California during the years ended December 31, 2009, 2010 and 2011.

During the years ended December 31, 2009, 2010 and 2011, primarily due to the restriction on our ability to utilize net operating loss carry forwards to reduce taxes currently payable in California, we utilized excess tax benefits related to share-based payments, which resulted in a decrease in cash generated from operating activities and a corresponding increase in cash generated from financing activities of $5.0 million, $12.8 million and $4.7 million for the years ended December 31, 2009, 2010 and 2011, respectively.

At December 31, 2011, we had tax credit carry forwards of approximately $3.0 million and $0.1 million for federal income tax and state income tax purposes, respectively. Federal tax credit carry forwards begin expiring in 2020 and state tax credits carry forward indefinitely.

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is as follows (in thousands):

				Unrecognized Tax Benefits
Balance at December 31, 2008			$	2,759
	Decreases based on tax positions related to the prior year			(26	)
	Additions based on tax positions related to the current year			277
	Settlements			—
Balance at December 31, 2009				3,010
		Decreases based on tax positions related to the prior year		(6	)
		Additions based on tax positions related to the current year		283
		Settlements		—
Balance at December 31, 2010				3,287
	Additions based on tax positions related to the prior year			23
	Additions based on tax positions related to the current year			989
	Settlements			—
Balance at December 31, 2011			$	4,299

As of December 31, 2010 and 2011, there were $2.6 million and $3.5 million, respectively, of unrecognized tax benefits, that, if recognized, would impact the effective tax rate.

All tax years after 1998 are open to examination and adjustment due to our net operating losses.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

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+ Details

Net Income Per Share

12 Months Ended

Dec. 31, 2011

Net Income Per Share [Abstract]

Net Income Per Share

Note 8 – Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period (excluding shares subject to repurchase). Diluted net income per share is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Diluted net income per share is computed giving effect to all potential dilutive common stock, including options, restricted stock and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

				Year Ended December 31,
				2009			2010			2011
Basic:
	Numerator:
		Net income allocated to common stock		$	15,347		$	17,482		$	6,724

	Denominator:
		Weighted average number of common stock shares			25,130			23,525			21,673
		Weighted average number of common stock shares held in treasury			(821	)		(407	)		(726	)
		Net weighted average number of common stock shares outstanding			24,309			23,118			20,947

	Net income per share—basic:			$	0.63		$	0.76		$	0.32

Diluted:
	Numerator:
		Net income allocated to common stock		$	15,347		$	17,482		$	6,724
	Denominator:
		Net weighted average number of common stock shares outstanding			24,309			23,118			20,947
		Weighted average number of options			838			733			693
		Weighted average number of restricted stock and restricted stock units			54			22			63
			Total common stock shares used in per share calculation		25,201			23,873			21,703

	Net income per share—diluted:			$	0.61		$	0.73		$	0.31

For each of the years ended December 31, 2009, 2010 and 2011, we had securities outstanding that could potentially dilute earnings per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net income per share as their effect would have been anti-dilutive. The number of outstanding weighted average anti-dilutive shares that were excluded from the computation of diluted net income per share consisted of the following (in thousands):

	Year Ended December 31,
	2009	2010	2011
Common stock options	1,122	1,602	1,833
Restricted stock units	6	186	85
Total	1,128	1,788	1,918

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Commitments And Contingencies

12 Months Ended

Dec. 31, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note 9 – Commitments and Contingencies

Total rent expense under all operating leases was approximately $3.4 million, $3.5 million and $4.0 million for the years ended December 31, 2009, 2010 and 2011, respectively. Future minimum lease payments under non-cancellable operating leases and certain contractual service and licensing obligations at December 31, 2011 were as follows (in thousands):

Years Ending December 31,	Operating Lease Obligations			Service and Licensing Obligations			Total Obligations

2012		$	3,587		$	151	$	3,738
2013			1,317			151		1,468
2014			874			75		949
2015			673			—		673
2016			691			—		691
Thereafter			1,189			—		1,189
Total		$	8,331		$	377	$	8,708

Leases—We lease certain of our office, operating facilities, equipment and furniture and fixtures under various operating leases, the latest of which expires in August 2018. Certain of these leases have free or escalating rent payment provisions. We recognize rent expense on our operating leases on a straight-line basis over the terms of the leases, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements.

On July 8, 2011, we entered into an agreement to extend the lease on our headquarter office in Mountain View, California, for an additional seven years through August 2018. On September 8, 2011, we entered into an agreement to extend the lease on an adjacent office in Mountain View, California, for an additional two years through August 2013.

Service and Licensing Obligations—We have entered into service and licensing agreements with third party vendors to provide various services, including network access, equipment maintenance and software licensing. The terms of these services and licensing agreements are generally up to three years. We record the related service and licensing expenses on a straight-line basis, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements.

Legal Proceedings—In the ordinary course of our business, we have received and may continue to receive inquiries from state regulators relating to various matters. We have become, and may in the future become, involved in litigation in the ordinary course of our business. If we are found to have violated laws or regulations in any of the states, we could be subject to various fines and penalties, including revocation of our license to sell insurance in those states, and our business and financial results would be harmed. We would also be harmed to the extent that related publicity damages our reputation as a trusted source of objective information relating to health insurance and its affordability. It could also be costly to defend ourselves regardless of the outcome. At December 31, 2010 and 2011, we were not involved in any claims against us that were material and, accordingly, did not record any related liabilities as of December 31, 2010 and 2011.

Guarantees and Indemnifications—We have agreed to indemnify members of our board of directors and our executive officers for fees, expenses, judgments, fines and settlement amounts incurred in any action or proceeding, including actions or proceedings by or in the right of the Company, to which any of them is, or is threatened to be, made a party by reason of their service as a director or officer of the Company or service provided to another company or enterprise at our request. The term of the director and officer indemnification is perpetual as to events or occurrences that take place while the director or officer is, or was, serving at our request. As such, the maximum potential amount of future payment we could be required to make under these indemnification arrangements is unlimited. We, however, maintain directors and officers insurance coverage that limits our exposure under certain circumstances and that may allow us to recover a portion of future amounts paid. Accordingly, we have not recorded any liabilities for these agreements as of December 31, 2010 or 2011.

While we have made various guarantees included in contracts in the normal course of business, primarily in the form of indemnity obligations under certain circumstances, these guarantees do not represent significant commitments or contingent liabilities of the indebtedness of others. Accordingly, we have not recorded a liability related to these indemnification provisions.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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-Name FASB Interpretation (FIN)

-Number 14

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

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+ Details

Operating Segments, Geographic Information And Significant Customers

12 Months Ended

Dec. 31, 2011

Operating Segments, Geographic Information And Significant Customers [Abstract]

Operating Segments, Geographic Information And Significant Customers

Note 10 – Operating Segments, Geographic Information and Significant Customers

Operating Segments— Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance of the Company. We operate in one segment and accordingly we have provided only enterprise-wide disclosures. Our chief executive officer, who is our chief operating decision maker, reviews our financial information in a similar manner.

Geographic Information—As of December 31, 2010 and 2011, our long-lived assets consisted primarily of property and equipment, goodwill and other indefinite-lived intangible assets and finite-lived intangible assets. Our long-lived assets are attributed to the geographic location in which they are located. Long-lived assets by geographical area were as follows (in thousands):

	As of December 31, 2010		As of December 31, 2011

United States	$	33,495	$	34,469
China		639		425
Total	$	34,134	$	34,894

Significant Customers—Substantially all revenue for all years presented was generated from customers located in the United States. Carriers representing 10% or more of our total revenue in any of the years ended December 31, 2009, 2010 and 2011 are presented in the table below:

	Year Ended December 31,
	2009			2010			20011

UnitedHealthcare (1)		14	%		14	%		13	%
WellPoint (2)		15	%		12	%		11	%
Aetna		16	%		17	%		8	%

(1) UnitedHealthcare includes other carriers owned by UnitedHealthcare.

(2) Wellpoint includes other carriers owned by Wellpoint.

Commission revenue attributable to major medical individual and family health insurance plans was approximately 91%, 91% and 86% of our commission revenue in the years ended December 31, 2009, 2010 and 2011, respectively. We define our individual and family plan offerings as major medical individual and family health insurance plans, which do not include small business, short-term major medical, stand-alone dental, life, student and Medicare-related health insurance plan offerings.

As of December 31, 2011, one customer represented 73% of our $8.1 million outstanding accounts receivable. No other customers represented 10% or more of our total accounts receivable at December 31, 2011.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Name Accounting Standards Codification

-Topic 280

-SubTopic 10

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+ Details

Selected Quarterly Financial Data

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data [Abstract]

Selected Quarterly Financial Data

Note 11 – Selected Quarterly Financial Data (Unaudited)

Selected summarized quarterly financial information for 2011 and 2010 is as follows (in thousands, except per share amounts):

2011	1^st Quarter		2^ND Quarter		3^RD Quarter			4^TH Quarter		Year

Revenue	$	37,555	$	36,186	$	34,787		$	43,120	$	151,648
Income from operations		3,967		4,850		43			4,377		13,237
Net income (loss)		1,981		2,732		(249	)		2,260		6,724
Net income (loss) per share:
Basic	$	0.09	$	0.13	$	(0.01	)	$	0.11	$	0.32
Diluted	$	0.09	$	0.12	$	(0.01	)	$	0.11	$	0.31

2010	1^st Quarter		2^ND Quarter		3^RD Quarter			4^TH Quarter		Year

Revenue	$	35,989	$	36,256	$	37,451		$	50,708	$	160,404
Income from operations		5,899		5,752		4,842			16,066		32,559
Net income		3,233		3,041		2,598			8,610		17,482
Net income per share:
Basic	$	0.14	$	0.13	$	0.11		$	0.39	$	0.76
Diluted	$	0.13	$	0.13	$	0.11		$	0.38	$	0.73

Revenue for the three months ended December 31, 2010 included a one-time commission payment of $6.0 million, which we received from one of our health insurance carrier partners on a number of existing policies, for which we had provided all services.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

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