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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 September 30, 2021
OR
 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 classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.001 per shareEHTHThe 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 filerSmaller 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 November 1, 2021 was 26,388,112 shares.




EHEALTH, INC.
FORM 10-Q

TABLE OF CONTENTS
PART I FINANCIAL INFORMATIONPAGE
Summary of Risk Factors
2
Item 1.
Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020
Item 2.
Item 3.
Item 4.
PART II 
OTHER INFORMATION
Item 1.
Item 1A.
Item 6.



























1




Summary of Risk Factors

The following is a summary of the principal risks we face, any of which could adversely affect our business, operating results, financial condition or prospects:

If our ability to enroll individuals during enrollment periods is impeded or if investments we make in enrollment periods do not result in the returns we expected when making those investments, our business, operating results and financial condition would be harmed.
We may be unsuccessful in competing effectively against current and future competitors, including government-run health insurance exchanges.
Our business may be harmed if we lose our relationship with health insurance carriers or our relationship with health insurance carriers is modified.
Our financial results will be adversely impacted if our membership does not grow or if member retention does not improve and plan terminations do not decline.
If we are not able to maintain and enhance our brand, our business and operating results will be harmed.
The ongoing COVID-19 pandemic and public health crises, illness, epidemics or pandemics could adversely impact our business, operating results and financial condition.
Our business may be harmed if we are not successful in executing on our strategic investments and initiatives, including our growth strategy and retention initiatives.
The success of our customer care center operations depends upon our ability to timely hire, train, retain and ensure the productivity of our licensed health insurance agents.
If we are not successful in cost-effectively converting visitors to our website and customers who call into our call centers into members for whom we receive commissions, our business and operating results would be harmed. 
We depend upon Internet search engines and social media platforms to attract a significant portion of the consumers who visit our website, and if we are unable to effectively advertise on search engines or social media platforms on a cost-effective basis, our business and operating results would be harmed.
We rely significantly on marketing partners and our business and operating results would be harmed if we are unable to maintain effective relationships with our existing marketing partners or if we do not establish successful relationships with new marketing partners.
Our future operating results are likely to fluctuate and could fall short of expectations. 
The marketing and sale of Medicare plans are subject to numerous, complex and frequently changing laws, regulations and guidelines, and non-compliance with or changes in laws, regulations and guidelines could harm our business, operating results and financial condition.
Changes and developments in the health insurance industry or system as a result of health care reform could harm our business, operating results and financial condition.
Our success in selling health insurance is dependent in part on the actions of federal and state governments. Changes in the laws and regulations governing the offer, sale and purchase of health insurance could harm our business and operating results.
Our business is subject to security risks and, if we experience a successful cyberattack, a security breach or are otherwise unable to safeguard the confidentiality and integrity of the data we hold, including sensitive personal information, our business will be harmed. Our business is also subject to emerging privacy laws being passed at the state level that create unique compliance challenges.
Our operating results will be impacted by factors that impact our estimate of the constrained lifetime value, or LTV, of commissions per approved member.
Operating and growing our business may require additional capital, and if capital is not available to us, our business, operating results and financial condition may suffer.

2




PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS
EHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
 September 30, 2021December 31, 2020 *
Assets
Current assets:
Cash and cash equivalents$157,530 $43,759 
Short-term marketable securities70,212 49,620 
Accounts receivable1,305 1,799 
Contract assets – commissions receivable – current194,197 219,153 
Prepaid expenses and other current assets36,653 16,661 
Total current assets459,897 330,992 
Contract assets – commissions receivable – non-current563,171 573,252 
Property and equipment, net13,795 14,609 
Operating lease right-of-use assets38,693 42,558 
Restricted cash3,354 3,354 
Intangible assets, net8,153 8,569 
Goodwill40,233 40,233 
Other assets32,307 26,455 
Total assets$1,159,603 $1,040,022 
Liabilities, convertible preferred stock, and stockholders’ equity
Current liabilities:
Accounts payable$10,084 $36,921 
Accrued compensation and benefits20,424 20,542 
Accrued marketing expenses11,263 17,788 
Lease liabilities – current5,570 5,192 
Deferred revenue10,547 308 
Other current liabilities4,546 3,657 
Total current liabilities62,434 84,408 
Deferred income taxes – non-current52,185 72,317 
Lease liabilities – non-current37,138 41,369 
Other non-current liabilities4,747 4,370 
Total liabilities156,504 202,464 
Commitments and contingencies
Convertible preferred stock225,438  
Stockholders’ equity:
Common stock38 38 
Additional paid-in capital744,784 721,013 
Treasury stock, at cost(199,998)(199,998)
Retained earnings232,519 316,155 
Accumulated other comprehensive income318 350 
Total stockholders’ equity777,661 837,558 
Total liabilities, convertible preferred stock, and stockholders’ equity$1,159,603 $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.
3




EHEALTH, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share amounts, unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2021202020212020
Revenue:  
Commission$59,191 $73,544 $276,066 $253,986 
Other4,723 20,740 18,619 35,472 
Total revenue63,914 94,284 294,685 289,458 
Operating costs and expenses:
Cost of revenue(25)482 1,217 2,160 
Marketing and advertising43,317 33,405 138,772 104,042 
Customer care and enrollment48,956 43,342 121,480 101,025 
Technology and content20,369 17,673 63,996 46,786 
General and administrative16,640 19,942 57,812 60,308 
Amortization of intangible assets121 287 416 1,207 
Restructuring and reorganization charges573  3,004  
Total operating costs and expenses129,951 115,131 386,697 315,528 
Loss from operations(66,037)(20,847)(92,012)(26,070)
Other income (expense), net189 (101)511 724 
Loss before benefit from income taxes(65,848)(20,948)(91,501)(25,346)
Benefit from income taxes(12,834)(6,443)(19,278)(10,923)
Net loss(53,014)(14,505)(72,223)(14,423)
Paid-in-kind dividends for preferred stock(4,561) (7,643) 
Change in preferred stock redemption value(2,373) (3,770) 
Net loss attributable to common stockholders$(59,948)$(14,505)$(83,636)$(14,423)
 
Net loss per share attributable to common stockholders:
Basic$(2.24)$(0.55)$(3.13)$(0.56)
Diluted$(2.24)$(0.55)$(3.13)$(0.56)
Weighted-average number of shares used in per share amounts:
Basic and diluted26,786 26,487 26,688 25,838 
Comprehensive loss:
Net loss$(53,014)$(14,505)$(72,223)$(14,423)
Unrealized holding gain (loss) for available for sales debt securities, net of tax3 (97)(48)71 
Foreign currency translation adjustment(26)104 16 73 
Comprehensive loss$(53,037)$(14,498)$(72,255)$(14,279)

The accompanying notes are an integral part of these condensed consolidated financial statements.
4




EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, unaudited)

Three Months Ended September 30, 2021
 Common StockAdditional Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal Stockholders’ Equity
 SharesAmountSharesAmount
Balance as of June 30, 202138,094 $38 $738,906 11,925 $(199,998)$292,467 $341 $831,754 
Issuance of common stock in connection with equity incentive plans231 — 1,933 — — — — 1,933 
Repurchase of shares to satisfy employee tax withholding obligations— — (2,061)51 — — — (2,061)
Paid-in-kind dividend and accretion related to convertible preferred stock— — — — — (6,934)— (6,934)
Stock-based compensation— — 6,006 — — — — 6,006 
Other comprehensive income, net of tax— — — — — — (23)(23)
Net loss— — — — — (53,014)— (53,014)
Balance as of September 30, 202138,325 $38 $744,784 11,976 $(199,998)$232,519 $318 $777,661 
Three Months Ended September 30, 2020
 Common StockAdditional Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal Stockholders’ Equity
 SharesAmountSharesAmount
Balance as of June 30, 202037,373 $37 $720,976 11,698 $(199,998)$270,787 $253 $792,055 
Issuance of common stock in connection with equity incentive plans275 1 262 — — — — 263 
Repurchase of shares to satisfy employee tax withholding obligations— — (9,014)112 — — — (9,014)
Stock-based compensation— — 6,880 — — — — 6,880 
Other comprehensive income, net of tax— — — — — — 7 7 
Net loss— $— $— — $— $(14,505)$— $(14,505)
Balance as of September 30, 202037,648 $38 $719,104 11,810 $(199,998)$256,282 $260 $775,686 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5




EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, unaudited)

Nine Months Ended September 30, 2021
 Common StockAdditional Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal Stockholders’ Equity
 SharesAmountSharesAmount
Balance as of December 31, 202037,755 $38 $721,013 11,831 $(199,998)$316,155 $350 $837,558 
Issuance of common stock in connection with equity incentive plans532 — 2,735 — — — — 2,735 
Repurchase of shares to satisfy employee tax withholding obligations— — (7,968)145 — — — (7,968)
Paid-in-kind dividend and accretion related to convertible preferred stock— — — — — (11,413)— (11,413)
Issuance of common stock for employee stock purchase program38 — 2,248 — — — — 2,248 
Stock-based compensation— — 26,756 — — — — 26,756 
Other comprehensive income, net of tax— — — — — — (32)(32)
Net loss— — — — — (72,223)— (72,223)
Balance as of September 30, 202138,325 $38 $744,784 11,976 $(199,998)$232,519 $318 $777,661 
Nine Months Ended September 30, 2020
 Common StockAdditional Paid-in
Capital
Treasury StockRetained EarningsAccumulated Other Comprehensive IncomeTotal Stockholders’ Equity
 SharesAmountSharesAmount
Balance as of December 31, 201934,752 $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 plans531 1 1,576 — — — — 1,577 
Repurchase of shares to satisfy employee tax withholding obligations— — (17,174)194 — — — (17,174)
Shares issued in equity offering2,070 2 228,022 — — — — 228,024 
Settlement of earnout liability295 — 28,521 — — — — 28,521 
Stock-based compensation— — 23,000 — — — — 23,000 
Other comprehensive income, net of tax— — — — — — 144 144 
Net loss— — — — — (14,423)— (14,423)
Balance as of September 30, 202037,648 $38 $719,104 11,810 $(199,998)$256,282 $260 $775,686 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6




EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands, unaudited)
Nine Months Ended September 30,
 20212020
Operating activities:
Net loss$(72,223)$(14,423)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization3,700 2,604 
Amortization of internally developed software9,140 5,307 
Amortization of intangible assets416 1,207 
Stock-based compensation expense24,881 21,722 
Deferred income taxes(20,134)(10,982)
Other non-cash items908 421 
Changes in operating assets and liabilities:
Accounts receivable493 (1,522)
Contract assets – commissions receivable35,244 (16,772)
Prepaid expenses and other assets(20,790)(9,398)
Accounts payable(26,913)(3,196)
Accrued compensation and benefits(118)(7,438)
Accrued marketing expenses(6,525)(5,449)
Deferred revenue10,240 23,901 
Accrued expenses and other liabilities1,360 3,059 
Net cash used in operating activities(60,321)(10,959)
Investing activities:
Capitalized internal-use software and website development costs(12,589)(12,082)
Purchases of property and equipment and other assets(3,554)(6,454)
Purchases of marketable securities(88,967)(180,505)
Proceeds from redemption and maturities of marketable securities68,288 70,750 
Net cash used in investing activities(36,822)(128,291)
Financing activities:
Proceeds from issuance of preferred stock, net of issuance costs214,025  
Proceeds from issuance of common stock, net of issuance costs 228,024 
Net proceeds from exercise of common stock options and employee stock purchases4,983 1,577 
Repurchase of shares to satisfy employee tax withholding obligations(7,968)(17,174)
Acquisition-related contingent payments (8,751)
Principal payments in connection with leases(126)(121)
Net cash provided by financing activities210,914 203,555 
Effect of exchange rate changes on cash, cash equivalents and restricted cash 62 
Net increase in cash, cash equivalents and restricted cash113,771 64,367 
Cash, cash equivalents and restricted cash at beginning of period47,113 26,820 
Cash, cash equivalents and restricted cash at end of period$160,884 $91,187 


 The accompanying notes are an integral part of these condensed consolidated financial statements.
7






EHEALTH, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1Summary 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 September 30, 2021, the condensed consolidated statements of comprehensive loss and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the nine months ended September 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 direct and indirect 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.

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 September 30, 2021 and December 31, 2020, and our results of operations for the periods presented. The results for the three and nine months ended September 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 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 Loss for the nine months ended September 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.

8






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 in the first quarter 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 to or adoption of open enrollment or special enrollment periods may change the seasonality of our business.

The majority of our individual and family health insurance plans is 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. Extended open enrollment or special enrollment periods may change the seasonality of our individual and family health insurance business. For example, the COVID-related special enrollment period which ended on August 15, 2021 has caused increased commission revenue from the sale of individual and family health insurance plans outside of the open enrollment period. In addition, we may experience changes in seasonality due to the extension of the 2022 open enrollment period to January 15, 2022 for most states.

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 early adopted this guidance in the first quarter of 2021, and it did not have a material impact on our condensed consolidated financial statements.



9






EHEALTH, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 2Revenue

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 September 30, Nine Months Ended September 30,
2021202020212020
Medicare
Medicare Advantage$36,557 $41,901 $209,224 $168,834 
Medicare Supplement3,214 7,321 15,357 32,384 
Medicare Part D1,338 329 (2,953)7,148 
Total Medicare41,109 49,551 221,628 208,366 
Individual and Family (1)
Non-Qualified Health Plans5,909 9,915 20,352 12,585 
Qualified Health Plans2,266 1,466 7,204 3,559 
Total Individual and Family8,175 11,381 27,556 16,144 
Ancillary
Short-term1,370 2,438 4,639 6,724 
Dental3,938 4,452 9,326 5,791 
Vision642 1,798 1,781 2,228 
Other845 847 1,901 2,693 
Total Ancillary6,795 9,535 17,647 17,436 
Small Business2,190 1,723 7,703 6,975 
Commission Bonus and Other922 1,354 1,532 5,065 
Total Commission Revenue59,191 73,544 276,066 253,986 
Other Revenue
Sponsorship and Advertising Revenue4,165 18,855 16,002 32,114 
Other558 1,885 2,617 3,358 
Total Other Revenue4,723 20,740 18,619 35,472 
Total Revenue$63,914 $94,284 $294,685 $289,458 
_____________

(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 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 those plans.



10






EHEALTH, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Commission revenue by segment is presented in the table below (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021202020212020
Medicare
Commission Revenue from Members Approved During the Period (1)
$42,698 $52,040 $235,974 $205,330 
Net Commission Revenue from Members Approved in Prior Periods (2)
(171)(698)(11,700)8,966 
Total Medicare Segment Commission Revenue$42,527 $51,342 $224,274 $214,296 
Individual, Family and Small Business
Commission Revenue from Members Approved During the Period (1)
$4,892 $4,012 $16,495 $14,170 
Commission Revenue from Renewals of Small Business Members During the Period (3)
1,744 1,122 6,154 5,005 
Net Commission Revenue from Members Approved in Prior Periods (2)
10,028 17,068 29,143 20,515 
Total IFP/SMB Segment Commission Revenue$16,664 $22,202 $51,792 $39,690 
Total Commission Revenue from Members Approved During the Period (1)
$47,590 $56,052 $252,469 $219,500 
Commission Revenue from Renewals of Small Business Members During the Period (3)
1,744 1,122 6,154 5,005 
Total Net Commission Revenue from Members Approved in Prior Periods (2)(4)
9,857 16,370 17,443 29,481 
Total Commission Revenue$59,191 $73,544 $276,066 $253,986 
_____________

(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 $0.37 and $0.62 per basic and diluted share for the three months ended September 30, 2021 and 2020, respectively. The impacts of total net commission revenue from members approved in prior periods were $0.65 and $1.14 per basic and diluted share, for the nine months ended September 30, 2021 and 2020, respectively.
The total reductions to revenue from members approved in prior periods were $3.2 million and $3.7 million for the three months ended September 30, 2021 and 2020, respectively, and $22.6 million and $5.3 million for the nine months ended September 30, 2021 and 2020, respectively. These reductions to revenue primarily related to the Medicare segment.


Note 3Supplemental 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 4Fair Value Measurements for further discussion about our marketable securities.

11






EHEALTH, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Our cash, cash equivalent and restricted cash balances are summarized as follows (in thousands):
September 30, 2021December 31, 2020
Cash$37,765 $39,552 
Cash equivalents119,765 4,207 
Cash and cash equivalents157,530 43,759 
Restricted cash3,354 3,354 
Total cash, cash equivalents and restricted cash$160,884 $47,113 

As of September 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 September 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 Loss. There were no write-offs during any of the three or nine month periods ended September 30, 2021 and 2020.

We considered the impact of recent events and global economic conditions when evaluating the appropriate adjustments to our allowance for credit losses as of September 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 nine months ended September 30, 2021 is summarized as follows (in thousands): 
Beginning balance$2,026 
Change in allowance(207)
Ending balance$1,819 


12






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):
Nine Months Ended September 30, 2021
Medicare SegmentIFP/SMB SegmentTotal
Beginning balance$739,637 $52,768 $792,405 
Commission revenue from members approved during the period235,974 16,495 252,469 
Commission revenue from renewals of small business members during the period (1)
 6,154 6,154 
Net commission revenue from members approved in prior periods(11,700)29,143 17,443 
Cash receipts(276,825)