SEC Filing | eHealth, Inc.

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ehth-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-33071

_____________________________________________

EHEALTH, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________


Delaware						56-2357876
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No)

2625 AUGUSTINE DRIVE, SECOND FLOOR

SANTA CLARA, CA 95054

(Address of principal executive offices)

(650) 584-2700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EHTH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of July 31, 2021 was 26,185,716 shares.

EHEALTH, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	PAGE
Summary of Risk Factors		2
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 6.	Exhibits	77
	Signatures	78

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EHEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, unaudited)


	June 30, 2021		December 31, 2020 *
Assets
Current assets:
Cash and cash equivalents	$	229,260	$	43,759
Short-term marketable securities	75,830		49,620
Accounts receivable	3,534		1,799
Contract assets – commissions receivable – current	181,673		219,153
Prepaid expenses and other current assets	11,594		16,661
Total current assets	501,891		330,992
Contract assets – commissions receivable – non-current	573,949		573,252
Property and equipment, net	14,296		14,609

Operating lease right-of-use assets	39,996		42,558
Restricted cash	3,354		3,354
Intangible assets, net	8,273		8,569
Goodwill	40,233		40,233
Other assets	29,746		26,455
Total assets	$	1,211,738	$	1,040,022
Liabilities, Series A preferred stock, and stockholders’ equity
Current liabilities:
Accounts payable	$	15,423	$	36,921
Accrued compensation and benefits	16,833		20,542
Accrued marketing expenses	10,141		17,788

Lease liabilities – current	5,443		5,192
Deferred revenue	1,363		308
Other current liabilities	3,806		3,657
Total current liabilities	53,009		84,408
Deferred income taxes – non-current	64,925		72,317
Lease liabilities – non-current	38,577		41,369
Other non-current liabilities	4,969		4,370
Total liabilities	161,480		202,464
Commitments and contingencies
Series A convertible preferred stock	218,504		—
Stockholders’ equity:
Common stock	38		38
Additional paid-in capital	738,906		721,013
Treasury stock, at cost	(199,998)		(199,998)
Retained earnings	292,467		316,155
Accumulated other comprehensive income	341		350
Total stockholders’ equity	831,754		837,558
Total liabilities, Series A preferred stock, and stockholders’ equity	$	1,211,738	$	1,040,022

_______

*See Note 1 – Summary of Business and Significant Accounting Policies

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts, unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Commission	$	89,823	$	80,773	$	216,875	$	180,442
Other	6,734		7,993		13,896		14,732
Total revenue	96,557		88,766		230,771		195,174
Operating costs and expenses:
Cost of revenue	246		540		1,242		1,678
Marketing and advertising	44,581		32,873		95,455		70,637
Customer care and enrollment	38,362		27,148		72,524		57,683
Technology and content	20,464		13,373		43,627		29,113
General and administrative	18,118		20,713		41,172		40,366
Amortization of intangible assets	119		373		295		920

Restructuring charges	—		—		2,431		—

Total operating costs and expenses	121,890		95,020		256,746		200,397
Loss from operations	(25,333)		(6,254)		(25,975)		(5,223)
Other income, net	172		452		322		825
Loss before benefit from income taxes	(25,161)		(5,802)		(25,653)		(4,398)
Benefit from income taxes	(6,752)		(2,432)		(6,444)		(4,480)
Net income (loss)	(18,409)		(3,370)		(19,209)		82

Paid-in-kind dividends for preferred stock	(3,082)		—		(3,082)		—
Change in preferred stock redemption value	(1,397)		—		(1,397)		—

Net income (loss) attributable to common stockholders	$	(22,888)	$	(3,370)	$	(23,688)	$	82

Net income (loss) per share attributable to common stockholders:
Basic	$	(0.86)	$	(0.13)	$	(0.89)	$	—
Diluted	$	(0.86)	$	(0.13)	$	(0.89)	$	—
Weighted-average number of shares used in per share amounts:
Basic	26,677		26,358		26,639		25,539
Diluted	26,677		26,358		26,639		26,758
Comprehensive income (loss):
Net income (loss)	$	(18,409)	$	(3,370)	$	(19,209)	$	82
Unrealized holding gain (loss) for available for sales debt securities, net of tax	(35)		143		(51)		168
Foreign currency translation adjustment	59		—		42		(31)
Comprehensive income (loss)	$	(18,385)	$	(3,227)	$	(19,218)	$	219

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


Three Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of March 31, 2021	37,993	$	38	$	728,213	11,912	$	(199,998)	$	315,355	$	317	$	843,925
Issuance of common stock in connection with equity incentive plans	63	—		517		—	—		—		—		517
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(870)		13	—		—		—		(870)
Changes in convertible preferred stock	—	—		—		—	—		(4,479)		—		(4,479)
Issuance of common stock for employee stock purchase program	38	—		2,248		—	—		—		—		2,248
Stock-based compensation	—	—		8,798		—	—		—		—		8,798
Other comprehensive income, net of tax	—	—		—		—	—		—		24		24
Net loss	—	—		—		—	—		(18,409)		—		(18,409)
Balance as of June 30, 2021	38,094	$	38	$	738,906	11,925	$	(199,998)	$	292,467	$	341	$	831,754


Three Months Ended June 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of March 31, 2020	37,258	$	37	$	717,380	11,649	$	(199,998)	$	274,157	$	110	$	791,686

Issuance of common stock in connection with equity incentive plans	115	—		223		—	—		—		—		223
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(3,785)		49	—		—		—		(3,785)


Stock-based compensation	—	—		7,158		—	—		—		—		7,158
Other comprehensive income, net of tax	—	—		—		—	—		—		143		143
Net loss	—	$	—	$	—	—	$	—	$	(3,370)	$	—	$	(3,370)
Balance as of June 30, 2020	37,373	$	37	$	720,976	11,698	$	(199,998)	$	270,787	$	253	$	792,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


Six Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2020	37,755	$	38	$	721,013	11,831	$	(199,998)	$	316,155	$	350	$	837,558
Issuance of common stock in connection with equity incentive plans	301	—		802		—	—		—		—		802
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(5,907)		94	—		—		—		(5,907)
Changes in convertible preferred stock	—	—		—		—	—		(4,479)		—		(4,479)
Issuance of common stock for employee stock purchase program	38	—		2,248		—	—		—		—		2,248
Stock-based compensation	—	—		20,750		—	—		—		—		20,750
Other comprehensive income, net of tax	—	—		—		—	—		—		(9)		(9)
Net loss	—	—		—		—	—		(19,209)		—		(19,209)
Balance as of June 30, 2021	38,094	$	38	$	738,906	11,925	$	(199,998)	$	292,467	$	341	$	831,754


Six Months Ended June 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2019	34,752	$	35	$	455,159	11,616	$	(199,998)	$	271,852	$	116	$	527,164
Cumulative effect from the adoption of ASU 2016-13	—	—		—		—	—		(1,147)		—		(1,147)
Issuance of common stock in connection with equity incentive plans	256	—		1,314		—	—		—		—		1,314
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(8,160)		82	—		—		—		(8,160)
Shares issued in equity offering	2,070	2		228,022		—	—		—		—		228,024
Settlement of earnout liability	295	—		28,521		—	—		—		—		28,521
Stock-based compensation	—	—		16,120		—	—		—		—		16,120
Other comprehensive income, net of tax	—	—		—		—	—		—		137		137
Net income	—	—		—		—	—		82		—		82
Balance as of June 30, 2020	37,373	$	37	$	720,976	11,698	$	(199,998)	$	270,787	$	253	$	792,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Six Months Ended June 30,
	2021		2020
Operating activities:
Net income (loss)	$	(19,209)	$	82
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	2,202		1,681
Amortization of internally developed software	5,739		3,235
Amortization of intangible assets	295		920
Stock-based compensation expense	19,647		15,390
Deferred income taxes	(7,392)		(4,520)


Other non-cash items	779		246
Changes in operating assets and liabilities:
Accounts receivable	(1,736)		(392)
Contract assets – commissions receivable	37,007		4,842
Prepaid expenses and other assets	4,317		(1,031)
Accounts payable	(21,416)		(17,482)
Accrued compensation and benefits	(3,709)		(7,782)
Accrued marketing expenses	(7,647)		(7,328)
Deferred revenue	1,056		(2,473)
Accrued expenses and other liabilities	793		2,214
Net cash provided by (used in) operating activities	10,726		(12,398)
Investing activities:
Capitalized internal-use software and website development costs	(7,342)		(7,609)
Purchases of property and equipment and other assets	(2,705)		(4,664)
Purchases of marketable securities	(67,811)		(147,546)
Proceeds from redemption and maturities of marketable securities	41,514		13,250


Net cash used in investing activities	(36,344)		(146,569)
Financing activities:
Proceeds from issuance of preferred stock, net of issuance costs	214,025		—
Proceeds from issuance of common stock, net of issuance costs	—		228,024
Net proceeds from exercise of common stock options and employee stock purchases	3,051		1,314
Repurchase of shares to satisfy employee tax withholding obligations	(5,907)		(8,160)



Acquisition-related contingent payments	—		(8,751)
Principal payments in connection with leases	(76)		(83)
Net cash provided by financing activities	211,093		212,344
Effect of exchange rate changes on cash, cash equivalents and restricted cash	26		(1)
Net increase in cash, cash equivalents and restricted cash	185,501		53,376
Cash, cash equivalents and restricted cash at beginning of period	47,113		26,820
Cash, cash equivalents and restricted cash at end of period	$	232,614	$	80,196

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 – Summary of Business and Significant Accounting Policies

Description of Business – eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstances. Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs. Our omnichannel consumer engagement platform enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent. We have created a marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 200 health insurance carriers across all fifty states and the District of Columbia.

Basis of Presentation – The accompanying condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of comprehensive income (loss) and stockholders’ equity for the three and six months ended June 30, 2021 and 2020, respectively, and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited. The condensed consolidated balance sheet data as of December 31, 2020 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 26, 2021 and amended on April 29, 2021. The accompanying financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K.

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with those rules and regulations. Certain prior period amounts have been reclassified to conform with our current period presentation. However, we believe that the disclosures made are adequate to make the information not misleading.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 and include all adjustments necessary for the fair presentation of our financial position as of June 30, 2021 and December 31, 2020, and our results of operations for the periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2021 and therefore should not be relied upon as an indicator of future results.

Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2020, we identified certain errors, including a $3.0 million under-recognition of stock-based compensation expense and a $1.5 million over-recognition of licensing costs for the year ended December 31, 2020. We adjusted for these items in the first quarter of 2021 and the adjustments reduced our net loss by approximately $1.5 million, or $0.06 per basic and diluted share in our Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2021. These items also reduced our net loss by approximately $1.5 million, or $0.06 per basic and diluted share, on our Condensed Consolidated Statement of Comprehensive Income (Loss) for the six months ended June 30, 2021. We evaluated the effects of these out-of-period adjustments, both qualitatively and quantitatively, and concluded that the errors and the correction thereof were immaterial both individually and in the aggregate to the current reporting period and the periods in which they originated, including quarterly reporting.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Significant Accounting Policies, Estimates and Judgments – The preparation of condensed 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 condensed 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, recoverability of intangible assets, the commissions we expect to collect for each approved member cohort, valuation allowance for deferred income taxes, provision (benefit) for income taxes 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. There have been no material changes to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Seasonality – Open enrollment periods drive the seasonality of our business. A greater number of our Medicare-related health insurance plans are sold in our fourth quarter 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, our Medicare plan-related commission revenue is highest in our fourth quarter. Our Medicare plan-related commission revenue is also elevated compared to the second and third quarters as a result of the reintroduction of the Medicare Advantage open enrollment period in the first quarter of 2019. Any changes or additional enrollment periods may change the seasonality of our business.

The majority of our individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. In the states where the Federally Facilitated marketplace operates as the state health insurance exchange, individuals and families generally are not able to purchase individual and family health insurance outside of the annual enrollment period, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.

Recently Adopted Accounting Pronouncements

Income Taxes (Topic 740) – In December 2019, the Financial Accounting Standard Board (“FASB”) issued ASU No. 2019-12, Income Tax, Simplifying the Accounting for Income Taxes, which aims to simplify the accounting for income taxes. We adopted this guidance in the first quarter of 2021 and it did not have a material impact on our condensed consolidated financial statements.

Codification Improvements – In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. ASU 2020-10 is intended to facilitate codification updates for technical corrections, such as conforming amendments, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements. It contains amendments that improve the consistency of the codification by including all disclosure guidance in the appropriate disclosure section and other updates that vary in nature. We adopted this guidance in the first quarter of 2021 with no material impact on our condensed consolidated financial statements and disclosures.

Debt with Conversion and Other Options (Topic 470) and Contracts in Entity's Own Equity (Topic 815) – In June 2020, the FASB issued ASU No. 2020-06 to simplify the accounting for convertible instruments and improve the usefulness and relevance of information regarding convertible instruments. This ASU reduces the number of accounting models for converting debt instruments and convertible preferred stock. ASU No. 2020-06 is effective for us in 2022, with early adoption permitted. We have early adopted this guidance in the first quarter of 2021 and it did not have a material impact on our condensed consolidated financial statements.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 2 – Revenue

Disaggregation of Revenue – The table below depicts the disaggregation of revenue by product and is consistent with how we evaluate our financial performance (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Medicare
Medicare Advantage	$	69,142	$	58,586	$	172,667	$	126,933
Medicare Supplement	3,921		9,893		12,143		25,063
Medicare Part D	(6,027)		1,158		(4,291)		6,819
Total Medicare	67,036		69,637		180,519		158,815
Individual and Family (1)
Non-Qualified Health Plans	11,076		1,224		14,443		2,670
Qualified Health Plans	2,838		883		4,938		2,093
Total Individual and Family	13,914		2,107		19,381		4,763
Ancillary
Short-term	1,513		2,070		3,269		4,286
Dental	3,660		596		5,388		1,339
Vision	934		187		1,139		430
Other	1,021		797		1,056		1,846
Total Ancillary	7,128		3,650		10,852		7,901
Small Business	2,290		2,281		5,513		5,252
Commission Bonus	(545)		3,098		610		3,711
Total Commission Revenue	89,823		80,773		216,875		180,442
Other Revenue
Sponsorship and Advertising Revenue	6,023		7,369		11,837		13,259
Other	711		624		2,059		1,473
Total Other Revenue	6,734		7,993		13,896		14,732
Total Revenue	$	96,557	$	88,766	$	230,771	$	195,174

_____________

(1)We define our individual and family plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both qualified and non-qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase non-qualified health plans cannot receive a subsidy in connection with the purchase of non-qualified plans.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Commission revenue by segment is presented in the table below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Medicare
Commission Revenue from Members Approved During the Period (1)	$	78,598	$	72,165	$	193,276	$	153,290
Net Commission Revenue from Members Approved in Prior Periods (2)	(11,543)		685		(11,529)		9,664
Total Medicare Segment Commission Revenue	$	67,055	$	72,850	$	181,747	$	162,954
Individual, Family and Small Business
Commission Revenue from Members Approved During the Period (1)	$	5,208	$	4,362	$	11,603	$	10,158
Commission Revenue from Renewals of Small Business Members During the Period (3)	1,723		1,487		4,410		3,883
Net Commission Revenue from Members Approved in Prior Periods (2)	15,837		2,074		19,115		3,447
Total IFP/SMB Segment Commission Revenue	$	22,768	$	7,923	$	35,128	$	17,488

Total Commission Revenue from Members Approved During the Period (1)	$	83,806	$	76,527	$	204,879	$	163,448
Commission Revenue from Renewals of Small Business Members During the Period (3)	1,723		1,487		4,410		3,883
Total Net Commission Revenue from Members Approved in Prior Periods (2)(4)	4,294		2,759		7,586		13,111
Total Commission Revenue	$	89,823	$	80,773	$	216,875	$	180,442

_____________

(1)These amounts include commission bonus revenue.

(2)These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as adjustments to revenue within the relevant reporting period. The net adjustment revenue includes both increases in revenue for certain prior period cohorts as well as reductions in revenue for certain prior period cohorts.

(3)Commission revenue from renewals of small business members during the period was previously included in net commission revenue from members approved in prior periods. However, beginning in the first quarter of 2021, we enhanced our reporting by separately disclosing commission revenue from renewals of small business members during the period in a separate line item.

(4)The impacts of total net commission revenue from members approved in prior periods were $0.16 and $0.10 per basic and diluted share for the three months ended June 30, 2021 and 2020, respectively. The impacts of total net commission revenue from members approved in prior periods were $0.28 and $0.51 per basic share, or $0.28 and $0.49 per diluted share, for the six months ended June 30, 2021 and 2020, respectively.

The total reductions to revenue from members approved in prior periods were $18.5 million and $1.6 million for the three months ended June 30, 2021 and 2020, respectively, and $19.4 million and $1.6 million for the six months ended June 30, 2021 and 2020, respectively. These reductions to revenue primarily related to the Medicare segment.

Note 3 – Supplemental Financial Statement Information

Cash, Cash Equivalents and Restricted Cash

We consider all investments with an original maturity of 90 days or less from the date of purchase to be cash equivalents. Cash and cash equivalents are stated at fair value. We also invest in marketable securities that are measured and recorded at fair value. See Note 4 – Fair Value Measurements for further discussion about our marketable securities.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Our cash, cash equivalent and restricted cash balances are summarized as follows (in thousands):


	June 30, 2021		December 31, 2020
Cash	$	35,192	$	39,552
Cash equivalents	194,068		4,207
Cash and cash equivalents	229,260		43,759
Restricted cash	3,354		3,354
Total cash, cash equivalents and restricted cash	$	232,614	$	47,113

As of June 30, 2021 and December 31, 2020, we had $3.4 million of restricted cash which was classified as a non-current asset on our Condensed Consolidated Balance Sheets. This amount collateralizes letters of credit related to certain lease commitments.

Contract Assets and Accounts Receivable

We do not require collateral or other security for our contract assets and accounts receivable. We believe the potential for collection issues with any of our customers was minimal as of June 30, 2021.

We estimate an allowance for credit losses using relevant available information from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. Specifically, for the purpose of measuring the probability of default parameters, we utilize Capital IQ’s, Standard & Poor’s and Moody’s analytics. Our estimates of loss given default are determined by using our historical collections data as well as historical information obtained through our research and review of other insurance related companies. Our estimated exposure at default is determined by applying these internal and external data sources to our commission receivable balances. As such, we apply an immediate reversion method and revert to historical loss information when computing our credit loss exposure. Credit loss expenses are assessed quarterly and included in general and administrative expense on our Condensed Consolidated Statement of Comprehensive Income (Loss). There were no write-offs during either the three or six months ended June 30, 2021.

We considered the impact of recent events and global economic conditions when evaluating the appropriate adjustments to our allowance for credit losses as of June 30, 2021. We also considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic.

The change in the allowance for credit losses for the six months ended June 30, 2021 is summarized as follows (in thousands):



Beginning balance	$	2,026
Change in allowance	(225)
Ending balance	$	1,801

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Our contract assets – commission receivable activities, net of credit loss allowances are summarized as follows (in thousands):


	Six Months Ended June 30, 2021
	Medicare Segment		IFP/SMB Segment		Total
Beginning balance	$	739,637	$	52,768	$	792,405
Commission revenue from members approved during the period	193,276		11,603		204,879
Commission revenue from renewals of small business members during the periods (1)	—		4,410		4,410
Net commission revenue adjustments from members approved in prior periods	(11,529)		19,115		7,586
Cash receipts	(230,446)		(23,437)		(253,883)
Net change in credit loss allowance	206		19		225
Ending balance	$	691,144	$	64,478	$	755,622

Six Months Ended June 30, 2020

Medicare Segment

IFP/SMB Segment

Total

Beginning balance