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Risks Related to Our Business
−Removed: 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.
−Removed: The marketing and sale of Medicare plans are subject to numerous laws, regulations and guidelines at the federal and state level.
−Removed: The marketing and sale of Medicare Advantage and Medicare Part D prescription drug plans are principally regulated by the Centers for Medicare and Medicaid Services, or CMS, but are also subject to state laws.
−Removed: The marketing and sale of Medicare Supplement plans are principally regulated on a state-by-state basis by state departments of insurance.
−Removed: The laws and regulations applicable to the marketing and sale of Medicare plans are numerous, ambiguous and complex, and, particularly with respect to regulations and guidance issued by CMS for Medicare Advantage and Medicare Part D prescription drug plans, change frequently.
−Removed: We have altered, and likely will have to continue to alter, our marketing and sales process to comply with these laws, regulations and guidelines.
−Removed: Health insurance carriers whose Medicare plans we sell approve our websites, our call center scripts and some of our marketing material.
−Removed: We must receive these approvals in order for us market and sell Medicare plans to Medicare-eligible individuals as a health insurance agent.
−Removed: We are also required to file many of these materials on a regular basis with CMS.
−Removed: In addition, certain aspects of our Medicare plan marketing partner relationships have been in the past, and will be in the future, subjected to CMS and health insurance carrier review.
−Removed: CMS, state departments of insurance or health insurance carriers may determine to object to or not to approve aspects of our online platforms, sales function or marketing material and processes and may determine that certain existing aspects of our Medicare-related business are not in compliance with legal requirements.
−Removed: Health insurance carriers may terminate our relationship with them or take other corrective action if our Medicare product sales, marketing and operations are not in compliance or give rise to too many complaints.
−Removed: The termination of or change in our relationship with health insurance carriers for this reason would reduce the products we are able to offer, could result in the loss of commissions for past and future sales and would otherwise harm our business, operating results and financial condition.
−Removed: Changes to the laws, regulations and guidelines relating to the sale of Medicare plans, their interpretation or the manner in which they are enforced could impact the manner in which we conduct our Medicare business, our ecommerce platforms or our sale of Medicare plans, or we could be prevented from operating aspects of our Medicare revenue generating activities altogether, which would harm our business, operating results and financial condition.
−Removed: We have received, and may in the future receive, inquiries from CMS or state departments of insurance regarding our marketing and business practices and compliance with laws and regulations.
−Removed: Inquiries and proceedings initiated by the government could adversely impact our health insurance licenses, require us to pay fines, require us to modify marketing and business practices, result in litigation and otherwise harm our business, operating results or financial condition.
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.
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We also compete with the original Medicare program.
−Removed: The Affordable Care Act exchanges have websites where individuals and small businesses can purchase health insurance, and they also have offline customer support and enrollment capabilities.
+Added: The Affordable Care Act exchanges have websites where individuals and small businesses can purchase
+Added: health insurance, and they also have offline customer support and enrollment capabilities.
Our competitors also include local insurance agents across the United States who sell health insurance plans in their communities, companies that advertise primarily through television, and companies that operate websites that provide quote information or the opportunity to purchase health insurance online, including lead aggregator services.
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Some of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, technical, marketing and other resources than we do.
−Removed: As compared to us, our current and future competitors may be able to undertake more extensive marketing campaigns for their brands and services,
−Removed: devote more resources to website and systems development, negotiate more favorable commission rates and commission override payments, and make more attractive offers to potential employees, marketing partners and third-party service providers.
+Added: As compared to us, our current and future competitors may be able to undertake more extensive marketing campaigns for their brands and services, devote more resources to website and systems development, negotiate more favorable commission rates and commission override payments, and make more attractive offers to potential employees, marketing partners and third-party service providers.
Competitive pressures from government-run health insurance exchanges and other competitors may result in our experiencing increased marketing costs, decreased demand and loss of market share, increased health insurance plan termination, reduction in our membership or revenue and may otherwise harm our business, operating results and financial condition.
−Removed: Our operating results will be impacted by factors that impact our estimate of the constrained lifetime value (LTV) of commissions per approved member.
−Removed: Effective January 1, 2018, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASC 606) .
−Removed: As a result of the adoption of ASC 606, we recognize revenue for plans approved during the period by applying the latest estimated constrained LTVs for that product.
−Removed: Constrained LTVs are estimates and are based on a number of assumptions, which include, but are not limited to, estimates of the conversion rates of approved members into paying members, forecasted average plan duration and forecasted commission rates we expect to receive per approved member's plan.
−Removed: These assumptions are based on historical trends and require significant judgment by our management in interpreting those trends and in applying the constraints.
−Removed: Changes in our historical trends will result in changes to our constrained LTV estimates in future periods and therefore could adversely affect our revenue and financial results in those future periods.
−Removed: As a result, negative changes in the factors upon which we estimate constrained LTVs, such as reduced conversion of approved members to paying members, increased health insurance plan terminations or a reduction in the lifetime commission amounts we expect to receive for selling the plan to a member or other changes could harm our business, operating results and financial condition.
−Removed: In addition, if we ultimately receive commission payments that are less than the amount we estimated when we recognized commission revenue, we would need to write off the remaining commission receivable balance, which would adversely impact our business, operating results, and financial condition.
−Removed: The rate at which approved members become paying members is a significant factor in our estimation of constrained LTVs.
−Removed: To the extent we experience a decline in the rate at which approved members turn into our paying members, our business, operating results, and financial condition would be harmed.
−Removed: The forecasted average plan duration is another important factor in our estimation of constrained LTV.
−Removed: We receive commissions from health insurance carriers for health insurance plans sold through us.
−Removed: When one of these plans is canceled, or if we otherwise do not remain the agent on the policy, we no longer receive the related commission payment.
−Removed: Our forecasted average plan duration and health insurance plan termination rate are calculated based on our historical data by plan type.
−Removed: As a result, a reduction in our forecasted average plan duration or an inability to produce accurate forecasted average plan duration may adversely impact our business, operating results and financial condition.
−Removed: Commission rates are also a significant factor in our estimation of constrained LTVs.
−Removed: The commission rates we receive are impacted by a variety of factors, including the particular health insurance plans chosen by our members, the carriers offering those plans, our members’ states of residence, the laws and regulations in those jurisdictions, the average premiums of plans purchased through us and health care reform.
−Removed: Our commission revenue per member has in the past decreased, and could in the future decrease, as a result of reductions in contractual commission rates, a change in the mix of carriers whose products we sell during a given period, and increased health insurance plan termination rates, all of which are beyond our control and may occur on short notice.
−Removed: To the extent these and other factors cause our commission revenue per member to decline, our revenue may decline and our business, operating results and financial condition would be harmed.
−Removed: Given that Medicare-related and individual and family health insurance purchasing is concentrated during enrollment periods, we may experience a shift in the mix of Medicare-related and individual and family health insurance products selected by our members over a short period of time.
−Removed: Any reduction in our average commission revenue per member caused by such a shift or otherwise would harm our business, operating results and financial condition.
−Removed: The determination of constraints is also a factor that requires significant management judgment.
−Removed: Constraints are applied to LTVs for revenue recognition purposes and help ensure that the total estimated lifetime commissions expected to be collected from an approved member's plan are recognized as revenue only to the extent that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved.
−Removed: We determine the constraint for each product by comparing prior calculations of LTV to actual cash received and review the reasons for any variations.
−Removed: We then apply judgment in assessing whether the difference between historical cash collections and LTV is representative of differences that can be expected in future periods.
−Removed: We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future
−Removed: periods including but not limited to commission rates, carrier mix, plan duration, changes in laws and regulations, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship.
−Removed: We evaluate the appropriateness of our constraints on a quarterly basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.
−Removed: If we underestimate the initial constraint applied to LTVs, we might be required to increase the constraint or record an impairment in a future period which would harm our business, operating results and financial condition.
Our business may be harmed if we lose our relationship with health insurance carriers or our relationship with health insurance carriers is modified.
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Carriers may be unwilling to allow us to sell their existing or new health insurance plans, or desire to amend our agreements with them for a variety of reasons, including for competitive or regulatory reasons, dissatisfaction with the economics of the members that we place with them or because they do not want to be associated with our brand.
−Removed: The termination of our relationship with a health insurance carrier, the reduction of commission rates, or the amendment of or change in our relationship with a carrier could reduce the variety, quality and affordability of health insurance plans we offer, cause a loss of commission payments, including commissions for past and/or future sales, cause a reduction in constrained LTVs, result in a loss of existing and potential members, adversely impact our profitability or have other adverse impacts, which could harm our business, operating results and financial condition.
+Added: The termination of our relationship with a health insurance carrier, the reduction of commission rates, or the amendment of or change in our relationship with a carrier could reduce the variety, quality and affordability of health insurance plans we offer, cause a loss of commission payments, including commissions for past and/or future sales, cause a reduction in the estimated constrained LTVs, we use for revenue recognition purposes, result in a loss of existing and potential members, adversely impact our profitability or have other adverse impacts, which could harm our business, operating results and financial condition.
Health insurance carriers can unilaterally amend the commission rates that they pay to us.
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In addition, the reduction in contractual commission rates and these carriers’ desire to not sell individual and family health insurance reduced the number of plans that we are able to offer on our websites, which resulted in less consumer demand for the individual and family health insurance that we sell and a reduction in our membership.
−Removed: In the future and as a result of health care reform, the COVID-19 pandemic or for other reasons, an increasing number of health insurance carriers may decide to reduce our commissions, rely on their own internal distribution channels to sell their own plans, determine not to sell their plans or otherwise limit or prohibit us from selling their plans.
+Added: In the future, health insurance carriers may decide to reduce our commissions, rely on their own internal distribution channels to sell their own plans, determine not to sell their plans or otherwise limit or prohibit us from selling their plans.
In addition to reducing commission rates, health insurance carriers may determine to exit certain states or increase premiums to a significant degree, which could cause our members’ health insurance to be terminated or our members to purchase new health insurance or determine not to pay for health insurance at all.
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Our members and/or health insurance carriers may choose to discontinue their health insurance plans for a variety of reasons.
−Removed: Consumers may also purchase individual and family and Medicare-related health insurance plans directly from other sources, such as government-run health insurance exchanges, and we would not remain the agent on the policy and receive the related commission.
−Removed: Medicare Advantage plan enrollees may enroll in another Medicare Advantage plan or disenroll from their Medicare Advantage plan and return to original Medicare during the Medicare annual enrollment period that occurs in the fourth quarter every year and the Medicare Advantage open enrollment period that occurs in the first quarter of the year.
+Added: Consumers may also purchase individual and family and Medicare-related health insurance plans directly from other sources, such as our competitors, and we would not remain the agent on the policy and receive the related commission.
+Added: Medicare Advantage plan and Medicare Part D prescription drug plan enrollees may select another plan during the Medicare annual enrollment period that occurs in the fourth quarter every year.
+Added: Medicare Advantage plan enrollees may also select another plan during the Medicare Advantage open enrollment period that occurs in the first quarter of the year.
In addition, certain individuals are permitted to enroll, disenroll or change their Medicare Advantage or Medicare Part D prescription drug plans during special enrollment periods.
−Removed: If our Medicare Advantage and other health insurance plan termination rates do not decline in subsequent quarters, our business, operating results and financial condition would be harmed.
+Added: We experienced an increased attrition rate in our Medicare Advantage and Medicare prescription drug plan membership in 2020 above historical levels prior to that time.
+Added: While we have implemented measures to improve the attrition rate, if our Medicare Advantage and other health insurance plan termination rates do not decline in subsequent quarters, our business, operating results and financial condition would be harmed.
In addition, enrollment periods could cause us to further experience increased termination rates in the future, which could adversely impact our business, operating results and financial condition.
−Removed: Any decrease in the amount of time we retain our members on the health insurance plans that they purchased through us could adversely impact the estimated constrained LTV we use for purposes of recognizing revenue, which could harm our business, operating results and financial condition.
+Added: Any decrease in the amount of time we retain our members on the health insurance plans that they purchased through us could adversely impact the estimated constrained LTVs we use for purposes of recognizing revenue, which would harm our business, operating results and financial condition.
For example, our Medicare Advantage plan and Medicare Part D prescription drug plan LTVs have been negatively impacted by increased plan termination rates.
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The ongoing COVID-19 pandemic and public health crises, illness, epidemics or pandemics could adversely impact our business, operating results and financial condition.
−Removed: COVID-19 and public health crises, illness, epidemics or pandemics, in general, and disruption to our call center and service operations, in particular, could materially impact our business, operations and financial condition.
+Added: COVID-19 and public health crises, illness, epidemics or pandemics, in general, and any associated disruption to our call center and service operations, in particular, could materially impact our business, operations and financial condition.
In an effort to mitigate the spread of COVID-19, and to comply with applicable government directives, we generally have directed employees to work from home and implemented new business protocols for employees who have resumed work in our offices.
−Removed: A potential COVID-19 infection of any of our employees could adversely impact our operations, including resulting in the sudden closure
−Removed: of any of our offices.
+Added: A potential COVID-19 infection of any of our employees could adversely impact our operations, including resulting in the sudden closure of any of our offices.
Our business operations may be disrupted if key personnel or significant portions of our employees are unable to work effectively, especially if such disruption occurs during or in our preparation for the Medicare annual enrollment period.
−Removed: We have had to adjust our business operations, including onboarding and training new health insurance agents remotely and asking our employees to work from home, which could cause operational difficulties, reduce the effectiveness of our agents in selling health insurance and impair our ability to manage our business.
−Removed: The transition of our employee population to a remote work environment may exacerbate certain risks to our business, including an increased demand for information technology resources, increased risk of phishing and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information about us or our customers or other third-parties.
+Added: We have had to adjust our business operations, including onboarding and training new health insurance agents remotely and asking employees to work from home, which could cause operational difficulties, reduce the effectiveness of our agents in selling health insurance and impair our ability to manage our business.
+Added: An increased number of employees in a remote work environment may exacerbate certain risks to our business, including an increased demand for information technology resources, increased risk of phishing and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information about us or our customers or other third-parties.
Our business operations and recruitment efforts could be impacted if government offices, including CMS and state departments of insurance, are adversely impacted by COVID-19 given that some of our marketing materials require CMS approval and health insurance agent licensing and licensing renewals are dependent on state department of insurance processing.
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COVID-19 presents uncertainties and risks with respect to the demand for and pricing of health insurance plans, which could negatively impact our business, operating results and financial condition.
−Removed: While we have not experienced a significant impact on our business, operating results or financial condition as a result of COVID-19 to date, there can be no assurances that they will not be materially adversely affected in the future.
The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted.
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Due to our national reach and the large number of carriers whose plans are purchased by our members, the process of changing writing agents has in the past taken and could take a significant period of time to complete.
−Removed: If the transition is not successful, our ability to sell health insurance plans may be interrupted, our agency relationship with particular insurance carriers may be terminated, our commission payments could be discontinued or delayed and, as a result, our business, operating results and financial condition would be harmed.
+Added: the transition is not successful, our ability to sell health insurance plans may be interrupted, our agency relationship with particular insurance carriers may be terminated, our commission payments could be discontinued or delayed and, as a result, our business, operating results and financial condition would be harmed.
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.
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Our pursuit of these strategic initiatives may not be successful.
−Removed: Our cash flow from operations is expected to be negative in the year ending December 31, 2020 and was negative in each of the years ended December 31, 2019,
−Removed: 2018 and 2017.
−Removed: As a result, our investment in these initiatives could result in our needing to raise additional capital.
+Added: Our cash flow from operations is expected to be negative in the year ending December 31, 2021 and was negative in each of the years ended December 31, 2020, 2019 and 2018.
If we are not successful in executing on our business strategy, our business, operating results and financial condition would be harmed.
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In addition, we typically experience the highest plan termination rates from our Medicare Advantage plan members in the first year following the effective date of plan enrollment.
−Removed: If we experience significant growth in Medicare Advantage approved members resulting in an increased number of first year member as a percentage of our total estimated membership, we may also experience increased health insurance plan terminations in the year following such periods of growth.
−Removed: The seasonality of our business could change in the future due to other factors, including as a result of changes in timing of the Medicare or individual and family health plan enrollment periods, adoption of new enrollment periods such as the COVID-related special enrollment period that was adopted in the second quarter of 2020, and changes in the laws and regulations that govern the sale of health insurance.
+Added: If we experience significant growth in Medicare Advantage approved members resulting in an increased number of first year members as a percentage of our total estimated membership, we may also experience increased health insurance plan terminations in the year following such periods of growth.
+Added: The seasonality of our business could change in the future due to other factors, including as a result of changes in timing of the Medicare or individual and family health plan enrollment periods, adoption of new enrollment periods such as the COVID-related special enrollment period that was adopted in the second quarter of 2020 for Medicare Advantage and Medicare Part D prescription drug plans, and changes in the laws and regulations that govern the sale of health insurance.
We may not be able to timely adjust to changes in customer demand and the seasonality of our business.
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We depend upon our employees, state departments of insurance, government exchanges and health insurance carriers for the licensing, certification and appointment of our health insurance agents.
−Removed: The COVID-19 pandemic and resulting containment measures have negatively impacted the capacity of health insurance license testing facilities and have caused delays in the completion of background checks and fingerprinting requirements.
+Added: The COVID-19 pandemic and resulting containment measures have negatively
+Added: impacted the capacity of health insurance license testing facilities and have caused delays in the completion of background checks and fingerprinting requirements.
As a result, these health insurance agents may experience delays in obtaining health insurance licenses and certifications and health insurance carrier appointments.
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Failure to retain, train and ensure the productivity of our health insurance agent employees and employees of outsourced call centers would harm our business, operating results and financial condition.
−Removed: Our ability to sell Medicare-related health insurance plans as a health insurance agent depends upon maintenance of functioning information technology systems.
−Removed: The success of our Medicare plan customer care center operations is dependent upon information technology systems.
−Removed: Many of our Medicare plan members utilize our customer care center in connection with their purchase of a Medicare plan.
−Removed: CMS rules require that our health insurance agent employees utilize CMS-approved scripts in connection with the sale of Medicare plans and that we record and maintain the recording of telephonic interactions relating to the sale of Medicare plans.
−Removed: We rely on telephone, call recording, customer relationship management and other systems and technology in our Medicare customer care center operations, and we are dependent upon third parties for some of them, including our telephone and call recording systems.
−Removed: These systems have failed temporarily in the past and may experience additional disruption due to systems upgrades, power outages, an increase in remote work or other impacts as a result of COVID-19.
−Removed: The effectiveness and stability of our Medicare customer care center systems and technology are critical to our ability to sell Medicare plans, particularly during the Medicare enrollment periods, and the failure or interruption of any of these systems and technology or any inability to handle increased volume would harm our business, operating results and financial condition.
−Removed: System failures or capacity constraints could harm our business and operating results.
−Removed: The performance, reliability and availability of our ecommerce and telephony platforms and underlying network infrastructures are critical to our financial results, our brand and our relationship with members, marketing partners and health insurance carriers.
−Removed: Although we regularly attempt to enhance our platforms and system infrastructure, system failures and interruptions may occur if we are unable to accurately project the rate or timing of increases in our website or call center traffic or for other reasons, some of which are completely outside our control.
−Removed: We could experience significant failures and interruptions, which would harm our business, operating results and financial condition.
−Removed: If these failures or interruptions occurred during the Medicare annual enrollment period, the Medicare Advantage open enrollment period or during the open enrollment period under health care reform, the negative impact on us would be particularly pronounced.
−Removed: We rely in part upon third-party vendors, including data center and bandwidth providers, to operate our ecommerce and telephony platforms.
−Removed: We cannot predict whether additional network capacity will be available from these vendors as we need it, and our network or our suppliers’ networks might be unable to achieve or maintain a sufficiently high capacity of data transmission.
−Removed: Any system failure that causes an interruption in or decreases the responsiveness of our services would impair our revenue-generating capabilities and harm our business and operating results and damage our reputation.
−Removed: In addition, any loss of data could result in loss of customers and subject us to potential liability.
−Removed: Our facilities and our database and systems are vulnerable to damage or interruption from human error, fire, floods, power loss, telecommunications failures, physical or electronic break-ins, computer viruses, acts of terrorism, other attempts to harm our systems and similar events.
−Removed: In addition, our operations are vulnerable to earthquakes, fire, severe weather conditions, including those brought about by climate change, and other natural disasters in the San Francisco Bay Area and elsewhere in Northern California as well as in other parts of the country where we or our outsourced health insurance agents maintain offices and in China.
−Removed: Our success in selling Medicare-related health insurance will depend upon a number of factors some of which are outside of our control.
−Removed: Our success in selling Medicare-related health insurance is dependent upon a number of factors, including:
−Removed: • our ability to continue to adapt our ecommerce platforms to market Medicare plans, including our development or acquisition of marketing tools and features important in the sale of Medicare plans online and the effective modification of our user experience;
−Removed: • our success in marketing to Medicare-eligible individuals, including television advertising, online marketing and direct mail marketing, and in entering into and maintaining marketing partner relationships to drive Medicare-eligible individuals to our ecommerce platforms or customer care centers on a cost-effective basis;
−Removed: • our ability to hire and retain additional employees with experience in Medicare, including our ability to timely implement Medicare sales expertise into our customer care centers;
−Removed: • our ability to implement and maintain an effective information technology infrastructure for the sale of Medicare plans, including the infrastructure and systems that support our websites, call centers and call recording;
−Removed: • our ability to leverage technology in order to sell, and otherwise become more efficient at selling, Medicare-related plans over the telephone;
−Removed: • our ability to comply with the numerous, complex and changing laws, regulations, guidelines and policies of the federal and state government, including CMS guidelines and policies relating to the marketing and sale of Medicare plans and health care reform;
−Removed: • the effectiveness with which our competitors market the availability of Medicare plans from sources other than our ecommerce platforms.
−Removed: As a result of these factors, we may prove unsuccessful in marketing Medicare plans and acting as a health insurance agent in connection with their sale, which would harm our business, operating results and financial condition.
−Removed: In addition, if our efforts to market Medicare plans during enrollment periods were impeded due to lack of timely health insurance carrier or CMS approval, or for other reasons, the impact on our business, operating results and financial condition would be significantly greater given the seasonality of our Medicare-related revenue, membership acquisition and expenses and the fact that much of the sales of Medicare plans occur during this period.
−Removed: 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.
−Removed: The United States health insurance system is subject to a changing regulatory environment.
−Removed: The future financial performance of our business will depend in part on our ability to adapt to regulatory developments.
−Removed: For example, the federal Patient Protection and Affordable Care Act of 2010 and related regulatory reforms have and will continue to change the industry in which we operate in substantial ways.
−Removed: The implementation of health care reform has increased, and could further increase, our competition in the individual and family health insurance market, reduce demand for the health insurance for individuals and families that we sell, decrease the number of health insurance plans that we sell as well as the number of health insurance carriers offering them, cause carriers to increase premiums or reduce commissions and other amounts they pay for our services, any of which could materially harm our business, operating results and financial condition.
−Removed: These and other impacts of health care reform caused a significant decline in our individual and family plan and revenue membership and other changes in the future could have a similar impact on our Medicare related health insurance business.
−Removed: Our business, operating results, financial condition and prospects may be materially and adversely affected if we are unable to adapt to developments in healthcare reform in the United States.
−Removed: The Trump administration and Republican leadership in Congress have attempted on several occasions to repeal or amend the Affordable Care Act through changes in regulations.
−Removed: The Affordable Care Act contains a mandate requiring individuals to maintain health insurance plans that comply with the Affordable Care Act or face a tax penalty.
−Removed: As a part of the tax reform law that came into effect in December 2017, the tax penalty for violating the mandate was set at zero effective in 2019, essentially repealing it.
−Removed: The essential repeal of the individual mandate could cause individuals to determine not to purchase or maintain individual and family health insurance and could cause carriers to increase premiums, reduce commissions or exit the business of selling individual and family health insurance, any of which would adversely impact our business, operating results and financial condition.
−Removed: The Trump administration also eased the regulatory restrictions placed on short-term health insurance plans, which plans often provide fewer benefits than the essential health benefits defined under the Affordable Care Act.
−Removed: The expansion of the availability of short-term health insurance in many states may cause individuals and families to purchase short-term health insurance instead of individual and family health insurance, which could adversely impact our business, operating results and financial condition if any reduction in our sales of individual and family health insurance is not offset by increased revenue from sales of short-term health insurance.
−Removed: Since the enactment of the Affordable Care Act, there have been judicial and Congressional challenges to certain aspects of the law.
−Removed: In December 2018, a federal district court in Texas determined that the individual mandate in the Affordable Care Act is unconstitutional, because it was not within Congress’s tax power or interstate commerce power.
−Removed: It also determined that the remaining provisions of the Affordable Care Act were inseverable and therefore invalid.
−Removed: The court, however, did not rule that the operation of the Affordable Care Act be enjoined, so the law continues to operate until determined otherwise by the court or an appellate court.
−Removed: The Fifth Circuit Court of Appeals agreed with the district court that the mandate is unconstitutional, but remanded the case back to the district court to address whether the unconstitutionality of the mandate should impact the rest of the law.
−Removed: In March 2020, the Supreme Court agreed to review the case, including whether the individual mandate is unconstitutional, and if the mandate is unconstitutional whether the rest of the Affordable Care Act can survive.
−Removed: Oral argument of the case is scheduled to occur before the Supreme Court in November 2020.
−Removed: If the Affordable Care Act were finally determined to be unconstitutional and no longer operated, it is unclear what impact it or its replacement would have on our business.
−Removed: However, it or its replacement could adversely impact our business, operating results and financial condition.
−Removed: Our business depends upon the private sector of the United States health insurance system, which is subject to a changing environment.
−Removed: Changes and developments in the health insurance system in the United States could reduce demand for our services and harm our business.
−Removed: Ongoing healthcare reform efforts and measures may expand the role of government-sponsored coverage, including single payer or so called “Medicare-for-All” proposals, which could have far-reaching implications for the health insurance industry if enacted.
−Removed: Some proposals would seek to eliminate the private marketplace, while others would expand a government-sponsored option to a larger population.
−Removed: We are unable to predict the full impact of healthcare reform initiatives on our operations in light of the uncertainty of whether initiatives will be successful and the uncertainty regarding the terms and timing of any provisions enacted and the impact of any of those provisions on various healthcare and insurance industry participants.
−Removed: Changes to the health insurance system as a result of any change in the balance of power in Congress or as a result of the election of a new President could harm our business, operating results and financial condition.
−Removed: In the event that laws, regulations or rules that eliminate or reduce private sources of health insurance are adopted, the demand for our products could be adversely impacted and our business, operating results and financial condition would be harmed.
−Removed: Our business may be harmed if we do not enroll subsidy-eligible individuals through government-run health insurance exchanges efficiently.
−Removed: In order to offer the qualified health plans that individuals and families must purchase to receive Affordable Care Act subsidies, agents and brokers must meet certain conditions, such as receiving permission to do so from the applicable government health insurance exchange, entering into an agreement with the health insurance exchange or a partner of the exchange, ensuring that the enrollment and subsidy application is completed through the health insurance exchange and complying with privacy, security and other standards.
−Removed: In the event Internet-based agents and brokers such as us use the Internet for completion of qualified health plan selection purposes, their websites are required to meet certain additional requirements.
−Removed: To the extent we enroll individuals and families into qualified health plans, we do so through the Federally Facilitated Marketplace, or FFM, which runs all or part of the health insurance exchange in 36 states.
−Removed: We may experience difficulty in satisfying the conditions and requirements to offer qualified health plans to our existing members and new potential members, and in getting them enrolled through the FFM.
−Removed: If we are not able to satisfy these conditions and requirements, or if we are not able to successfully adopt and maintain solutions that allow us to enroll large numbers of individuals and families in qualified plans over the Internet both during and outside of open enrollment periods, we will lose existing members and new members, and may incur additional expense, which would harm our business, operating results and financial condition.
−Removed: Beginning in the open enrollment period that occurred in the fourth quarter of 2018, CMS adopted a new enhanced direct enrollment pathway for CMS-approved partners to enroll individuals into qualified health plans and complete all steps in the eligibility and enrollment process on a single website.
−Removed: Before enhanced direct enrollment partners are approved, extensive security and privacy reviews are conducted by an independent third-party auditor and CMS reviews the audit results to ensure the entity satisfies numerous additional privacy and security standards.
−Removed: We entered into an agreement to outsource certain aspects of the enrollment process for qualified health plans to a third party in light of the expense and burden associated with the additional requirements.
−Removed: However, if we do not develop the ability to satisfy the requirements to use the improved qualified health plan enrollment process in the future, or if we are unsuccessful in entering into or maintaining a relationship with a third party who is approved to use the process, we could be required to use an alternative “double redirect ” process that would require our customers to visit the FFM website in the middle of purchasing qualified health insurance plans to receive a subsidy eligibility determination, which could cause a reduction in our individual and family health insurance plan membership and commission revenue.
−Removed: In addition, if we are not able to adopt or contract with and maintain solutions to integrate with government-run health insurance exchanges or if the health insurance exchange websites and other processes are unstable or not consumer friendly, efficient and compatible with the process we have adopted for enrolling individuals and families into qualified health plans through the exchanges, we would not be successful in retaining and acquiring members, and our business, operating results and financial condition would be harmed.
−Removed: The FFM may at any time cease allowing us to enroll individuals in qualified health plans or change the requirements for doing so.
−Removed: If it does so or if the FFM platform does not function properly, our ability to retain existing members and add new members could be negatively impacted, which would harm our business, operating results and financial condition.
+Added: During the 2020 annual enrollment period, we experienced reduced conversion rates from health insurance agents that work at an outsourced call center, which impacted our revenue and cost of acquisition during the fourth quarter of 2020.
+Added: As a result, we have determined to increase the number of our health insurance agent employees to a much more significant degree than we have in the past.
+Added: Our ability to do so successfully will depend on the success of our recruiting efforts and our ability to train, license and appoint with carriers the newly employed agents so that they are effective in selling plans in time for the Medicare annual enrollment period occurring in 2021.
+Added: If we are not successful in these efforts, we may need to rely more than we have planned on outsourced health insurance agents or rely on a fewer number of employed agents, which could harm our business, operating results and financial condition.
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.
2 unchanged sentences
In addition, the rate at which consumers who are approved become paying members impacts the constrained LTV of our approved members, which impacts the revenue that we are able to recognize.
−Removed: factors have influenced, and could in the future influence, these conversion rates for any given period, some of which are outside of our control.
+Added: A number of factors have influenced, and could in the future influence, these conversion rates for any given period, some of which are outside of our control.
These factors include, but are not limited to:
−Removed: • changes in consumer shopping behavior due to circumstances outside of our control, such as economic conditions, consumers’ ability or willingness to pay for health insurance, adverse weather conditions or natural disasters, availability of unemployment benefits or proposed or enacted legislative or regulatory changes impacting our business, including health care reform;
+Added: • changes in consumer shopping behavior due to circumstances outside of our control, such as economic conditions, the COVID-19 pandemic, consumers’ ability or willingness to pay for health insurance, adverse weather conditions or natural disasters, availability of unemployment benefits or proposed or enacted legislative or regulatory changes impacting our business, including health care reform;
• the quality of and changes to the consumer experience on our ecommerce platforms or with our customer care centers;
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To the extent the rate at which we convert consumers visiting our ecommerce platforms or telephonically via our customer care centers into members suffers, our membership may decline, which would harm our business, operating results and financial condition.
−Removed: Our future operating results are likely to fluctuate and could fall short of expectations.
−Removed: Our operating results are likely to fluctuate as a result of a variety of factors, including the factors described elsewhere in this Risk Factors section, many of which are outside of our control.
−Removed: Among these factors, the assumptions underlying our estimates of commission revenue as required by ASC 606 , may vary significantly over time.
−Removed: As a result, comparing our operating results on a period-to-period basis may not be meaningful and you should not rely on our past results as an indication of our future performance, particularly in light of the fact that our business and industry are undergoing substantial change as a result of health care reform, competition and initiatives we determined to pursue.
−Removed: If our revenue or operating results differ from our guidance or fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.
−Removed: In the past, when our revenue and operating results differed from our guidance and the expectations of investors or securities analysts, the price of our common stock was impacted.
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 derive a significant portion of our website traffic from consumers who search for health insurance through Internet search engines, such as Google, Bing and Yahoo!, and through social media platforms, such as Facebook.
−Removed: A critical factor in attracting consumers to our website is whether we are prominently displayed in response to an Internet search relating to health
−Removed: insurance or on a social media platform.
+Added: A critical factor in attracting consumers to our website is whether we are prominently displayed in response to an Internet search relating to health insurance or on a social media platform.
Search engines typically provide two types of search results, algorithmic listings and paid advertisements.
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The competition has increased the cost of paid internet search advertising and has increased our marketing and advertising expenses.
−Removed: If paid search advertising costs increase or become cost prohibitive, whether as a results of competition, algorithm changes or otherwise our advertising expenses could rise significantly or we could reduce or discontinue our paid search advertisements, either of which would harm our business, operating results and financial condition.
+Added: If paid search advertising costs increase or become cost prohibitive, whether as a results of competition, algorithm changes or otherwise our
+Added: advertising expenses could rise significantly or we could reduce or discontinue our paid search advertisements, either of which would harm our business, operating results and financial condition.
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.
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If CMS or state departments of insurance were to change existing laws, regulations or guidelines, or interpret existing laws, regulations or guidelines, to prohibit these arrangements, or if hospital systems or pharmacy partners otherwise decided to no longer utilize aspects of our platform and tools, we could experience a significant decline in the number of Medicare-eligible individuals who are referred to our platforms and customer care centers, which would harm our business, operating results and financial condition.
+Added: Our future operating results are likely to fluctuate and could fall short of expectations.
+Added: Our operating results are likely to fluctuate as a result of a variety of factors, including the factors described elsewhere in this Risk Factors section, many of which are outside of our control.
+Added: For example and among these factors, the assumptions underlying our estimates of commission revenue as required by ASC 606 may vary significantly over time.
+Added: As a result, comparing our operating results on a period-to-period basis may not be meaningful and you should not rely on our past results as an indication of our future performance, particularly in light of the fact that our business and industry are undergoing substantial change as a result of health care reform, competition and initiatives we determined to pursue.
+Added: If our revenue or operating results differ from our guidance or fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.
+Added: In the past, when our revenue and operating results differed from our guidance and the expectations of investors or securities analysts, the price of our common stock was impacted.
If commission reports we receive from carriers are inaccurate or not sent to us in a timely manner, our business and operating results could be harmed and we may not recognize trends in our membership.
7 unchanged sentences
To the extent that health insurance carriers understate or fail to accurately report the amount of commissions due to us in a timely manner or at all, our estimates of constrained LTV may be adversely impacted, which would harm our business, operating results and financial condition.
−Removed: In addition, any inaccuracies in the reports would adversely impact our commission revenue for future periods which is based on historical trends, including trends relating to contracted commission rates and expected health insurance plan cancellation.
+Added: In addition, any inaccuracies in the reporting from and reconciliations with insurance carriers may also impact our estimates of constrained LTV or our estimates of commission revenue for future periods which is based on historical trends, including trends relating to contracted commission rates and expected health insurance plan cancellation.
We do not receive information about membership cancellations from our health insurance carriers directly, which makes it difficult for us to determine the impact of current conditions on our membership retention and to accurately estimate membership as of a specific date.
7 unchanged sentences
Given the number of months required to observe non-payment of commissions in order to confirm cancellations, we estimate the number of members who are active on health insurance plans as of a specified date.
−Removed: After we have estimated membership for a period, we may receive information from health insurance carriers that would have impacted the estimate if
−Removed: we had received the information prior to the date of estimation.
+Added: After we have estimated membership for a period, we may receive information from health insurance carriers that would have impacted the estimate if we had received the information prior to the date of estimation.
We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member of ours.
5 unchanged sentences
We were not able to observe the increased membership cancellations that occurred during the first quarter of 2020 until after we reported our estimated membership for the period.
−Removed: Various circumstances, including market-related factors such as changes in timing of enrollment periods and other factors specific to our business, could cause the assumptions and estimates that we make in connection with estimating our membership and constrained LTV to be inaccurate, which would harm our business, operating results and financial condition.
−Removed: Our business is subject to security risks and, if we are subject to cyberattacks, security breaches or otherwise unable to safeguard the security and privacy of confidential data, including personal health information, our business will be harmed.
−Removed: Our services involve the collection and storage of confidential and personally identifiable information of consumers and the transmission of this information to their chosen health insurance carriers and to government.
−Removed: For example, we collect names, addresses, Social Security and credit card numbers and protected health information such as information regarding the medical history of consumers.
−Removed: As a result, we are subject to various laws and regulations and contractual requirements regarding the collection, maintenance, protection, use, transmission, disclosure and disposal of sensitive personal information.
−Removed: We also hold a significant amount of information relating to our current and former employees.
−Removed: We cannot guarantee that our facilities and systems, and those of our third party service providers, will be free of security breaches, cyberattacks, acts of vandalism, computer viruses, malware, misplaced or lost data, programming and/or human errors or other similar events.
−Removed: Compliance with privacy and security laws, requirements and regulations, particularly new state legislation such as the California Consumer Privacy Act, may result in cost increases due to new constraints on our business, the development of new processes, the effects of potential non-compliance by us or third party service providers, and enforcement actions.
−Removed: We may be required to expend significant amounts and other resources to protect against security breaches or to alleviate problems caused by security breaches.
−Removed: Despite our implementation of security measures, techniques used to obtain unauthorized access or to sabotage systems change frequently.
−Removed: As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures.
−Removed: Additionally, our third party service providers may cause security breaches for which we are responsible.
−Removed: Any compromise or perceived compromise of our security or the security of one of our vendors could damage our reputation, cause the termination of relationships with government-run health insurance exchanges and our members, marketing partners and health insurance carriers, reduce demand for our services and subject us to significant liability and expense as well as regulatory action and lawsuits, which would harm our business, operating results and financial condition.
−Removed: The COVID-19 pandemic generally is increasing the attack surface available to criminals, as more companies and individuals work remotely and otherwise work online.
−Removed: Consequently, the risk of a cybersecurity incident has increased.
−Removed: We cannot provide assurances that our preventative efforts, or those of our vendors or service providers, will be successful.
−Removed: In addition, in the event that additional data security laws are implemented, or our health insurance carrier or other partners determine to impose requirements on us relating to data security, we may not be able to timely comply with such requirements or such requirements may not be compatible with our current processes.
−Removed: Changing our processes could be time consuming and expensive, and failure to timely implement required changes could result in our inability to sell health insurance plans in a particular jurisdiction or for a particular health insurance carrier or subject us to liability for non-compliance, any of which would damage our business, operating results and financial condition.
−Removed: For instance, health insurance carriers may require us to be compliant with security standards in order to accept credit card information from consumers or require us to comply with privacy and security standards to do business with us at all.
−Removed: Compliance with privacy and security standards is regularly assessed, and we may not always be
−Removed: compliant with the standards.
−Removed: If we are not in compliance, we may not be able to accept credit card information from consumers or conduct health insurance business, and our relationship with health insurance carriers could be adversely impacted or terminated, which would harm our business, operating results and financial condition.
+Added: Various circumstances, including market-related factors such as
+Added: changes in timing of enrollment periods and other factors specific to our business, could cause the assumptions and estimates that we make in connection with estimating our membership and constrained LTV to be inaccurate, which would harm our business, operating results and financial condition.
+Added: Our carrier advertising and sponsorship business may not be successful.
+Added: We develop, host and maintain carrier dedicated Medicare plan websites and may undertake other marketing and advertising initiatives through our Medicare plan advertising program.
+Added: We also allow health insurance carriers to purchase advertising space for non-Medicare products on our website through our sponsorship program.
+Added: To the extent that economic conditions, health care reform or other factors impact the amount health insurance carriers are willing to pay for advertising, our advertising and sponsorship program will be adversely impacted.
+Added: In addition, since we maintain relationships with a limited number of health insurance carriers to sell their Medicare plans, our Medicare plan-related advertising revenue is concentrated in a small number of health insurance carriers and our ability to generate Medicare plan-related advertising revenue would be harmed by the termination or non-renewal of any of these relationships as well as by a reduction in the amount a health insurance carrier is willing to pay for these services.
+Added: Moreover, in light of the regulations applicable to the marketing and sale of Medicare plans, and given that these regulations are often unclear, change frequently and are subject to changing interpretations, we may in the future not be permitted to sell Medicare plan-related advertising.
+Added: If we are not successful in these areas or these factors are unfavorable to us, our business, operating results and financial condition could be harmed.
+Added: The success of our sponsorship and advertising program depends on a number of factors, including the amount health insurance carriers are willing to pay for advertising, the effectiveness of the sponsorship and advertising program as a cost-effective method for carriers to obtain additional members, consumer demand for the health insurance carrier’s product, our ability to attract consumers to our ecommerce platform, our call centers or the dedicated Medicare plan websites and convert those consumers into members, and the cost, benefit and brand recognition of the health insurance plan that is the subject of the advertising, among others.
+Added: If we are not successful in these areas or these factors are unfavorable to us, our business, operating results and financial condition could be harmed.
+Added: Our business may be harmed if we do not enroll subsidy-eligible individuals through government-run health insurance exchanges efficiently.
+Added: In order to offer the qualified health plans that individuals and families must purchase to receive Affordable Care Act subsidies, agents and brokers must meet certain conditions, such as receiving permission to do so from the applicable government health insurance exchange, entering into an agreement with the health insurance exchange or a partner of the exchange, ensuring that the enrollment and subsidy application is completed through the health insurance exchange and complying with privacy, security and other standards.
+Added: In the event Internet-based agents and brokers such as us use the Internet for completion of qualified health plan selection purposes, their websites are required to meet certain additional requirements.
+Added: To the extent we enroll individuals and families into qualified health plans, we do so through the Federally Facilitated Marketplace, or FFM, which runs all or part of the health insurance exchange in 36 states.
+Added: We may experience difficulty in satisfying the conditions and requirements to offer qualified health plans to our existing members and new potential members, and in getting them enrolled through the FFM.
+Added: If we are not able to satisfy these conditions and requirements, or if we are not able to successfully adopt and maintain solutions that allow us to enroll large numbers of individuals and families in qualified plans over the Internet both during and outside of open enrollment periods, we will lose existing members and new members, and may incur additional expense, which would harm our business, operating results and financial condition.
+Added: Beginning in the open enrollment period that occurred in the fourth quarter of 2018, CMS adopted a new enhanced direct enrollment pathway for CMS-approved partners to enroll individuals into qualified health plans and complete all steps in the eligibility and enrollment process on a single website.
+Added: Before enhanced direct enrollment partners are approved, extensive security and privacy reviews are conducted by an independent third-party auditor and CMS reviews the audit results to ensure the entity satisfies numerous additional privacy and security standards.
+Added: We entered into an agreement to outsource certain aspects of the enrollment process for qualified health plans to a third party in light of the expense and burden associated with the additional requirements.
+Added: However, if we do not develop the ability to satisfy the requirements to use the improved qualified health plan enrollment process in the future, or if we are unsuccessful in entering into or maintaining a relationship with a third party who is approved to use the process, we may not be able to enroll individuals into qualified health plans through the FFM or could be required to use an inferior process to do so, which could cause a reduction in our individual and family health insurance plan membership and commission revenue.
+Added: In addition, if we are not able to adopt or contract with and maintain solutions to integrate with government-run health insurance exchanges or if the health insurance exchange websites and other processes are unstable or not consumer friendly, efficient and compatible with the process we have adopted for enrolling individuals and families into
+Added: qualified health plans through the exchanges, we would not be successful in retaining and acquiring members, and our business, operating results and financial condition would be harmed.
+Added: The FFM may at any time cease allowing us to enroll individuals in qualified health plans or change the requirements for doing so.
+Added: If it does so or if the FFM platform does not function properly, our ability to retain existing members and add new members could be negatively impacted, which would harm our business, operating results and financial condition.
There are many risks associated with our operations in China.
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Any sudden disruption of our operations in China would adversely impact our business.
−Removed: If we are required to move aspects of our operations from China to our offices in the United States as a result of political instability, changes in laws, inquiries from health insurance carriers or for other reasons, we could incur increased expenses, and our business, operating results and financial condition could be harmed.
−Removed: Our carrier advertising and sponsorship business may not be successful.
−Removed: We develop, host and maintain carrier dedicated Medicare plan websites and may undertake other marketing and advertising initiatives through our Medicare plan advertising program.
−Removed: We also allow health insurance carriers to purchase advertising space for non-Medicare products on our website through our sponsorship program.
−Removed: To the extent that economic conditions, health care reform or other factors impact the amount health insurance carriers are willing to pay for advertising, our advertising and sponsorship program will be adversely impacted.
−Removed: In addition, since we maintain relationships with a limited number of health insurance carriers to sell their Medicare plans, our Medicare plan-related advertising revenue is concentrated in a small number of health insurance carriers and our ability to generate Medicare plan-related advertising revenue would be harmed by the termination or non-renewal of any of these relationships as well as by a reduction in the amount a health insurance carrier is willing to pay for these services.
−Removed: Moreover, in light of the regulations applicable to the marketing and sale of Medicare plans, and given that these regulations are often unclear, change frequently and are subject to changing interpretations, we may in the future not be permitted to sell Medicare plan-related advertising.
−Removed: If we are not successful in generating Medicare plan-related advertising revenue, our business, operating results and financial condition could be harmed.
−Removed: The success of our sponsorship and advertising program depends on a number of factors, including the amount health insurance carriers are willing to pay for advertising, the effectiveness of the sponsorship and advertising program as a cost-effective method for carriers to obtain additional members, consumer demand for the health insurance carrier’s product, our ability to attract consumers to our ecommerce platform or the dedicated Medicare plan websites and convert those consumers into members, and the cost, benefit and brand recognition of the health insurance plan that is the subject of the advertising, among others.
−Removed: We may not be able to adequately protect our intellectual property, which could harm our business and operating results.
−Removed: We believe that our intellectual property is an essential asset of our business and that our technology currently gives us a competitive advantage in the distribution of Medicare-related, individual and family and small business health insurance.
−Removed: We rely on a combination of copyright, trademark and trade secret laws as well as confidentiality procedures and contractual provisions to establish and protect our intellectual property rights in the United States.
−Removed: The efforts we have taken to protect our intellectual property may not be sufficient or effective, and our trademarks may be held invalid or unenforceable.
−Removed: Moreover, the law relating to intellectual property is not as developed in China, and our intellectual property rights may not be as respected in China as they are in the United States.
−Removed: We may not be effective in policing unauthorized use of our intellectual property, trade secrets and other confidential information, and even if we do detect violations, litigation may be necessary to enforce our intellectual property rights.
−Removed: Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive, could divert our management’s attention and may result in a court determining that our intellectual property or other rights are unenforceable.
−Removed: If we are not successful in cost-effectively protecting our intellectual property rights, trade secrets and confidential information, our business, operating results and financial condition could be harmed.
+Added: If we are required to move aspects of our operations from China to our offices in the
+Added: United States as a result of political instability, changes in laws, inquiries from health insurance carriers or for other reasons, we could incur increased expenses, and our business, operating results and financial condition could be harmed.
+Added: We cannot predict the impact that changing climate conditions, including legal, regulatory and social responses thereto, may have on our business.
+Added: Global climate change has added, and will continue to add, to the unpredictability, frequency and severity of natural disasters, including but not limited to hurricanes, tornadoes, freezes, droughts, other storms and fires in certain parts of the world.
+Added: In response, a number of legal and regulatory measures and social initiatives have been introduced in an effort to reduce greenhouse gas and other carbon emissions that are chief contributors to global climate change.
+Added: We cannot predict the impact that changing climate conditions will have on our business, though extreme weather events could impact our facilities, technological assets, business continuity and reputation.
+Added: The legal, regulatory and social responses to climate change could also adversely affect our results of business, operating results and financial conditions.
+Added: Our success in selling Medicare-related health insurance will depend upon a number of factors some of which are outside of our control.
+Added: Our success in selling Medicare-related health insurance is dependent upon a number of factors, including:
+Added: • our ability to continue to adapt our ecommerce platforms to market Medicare plans, including our development or acquisition of marketing tools and features important in the sale of Medicare plans online and the effective modification of our user experience;
+Added: • our success in marketing to Medicare-eligible individuals, including television advertising, online marketing and direct mail marketing, and in entering into and maintaining marketing partner relationships to drive Medicare-eligible individuals to our ecommerce platforms or customer care centers on a cost-effective basis;
+Added: • our ability to hire and retain additional employees with experience in Medicare, including our ability to timely implement Medicare sales expertise into our customer care centers;
+Added: • our ability to implement and maintain an effective information technology infrastructure for the sale of Medicare plans, including the infrastructure and systems that support our websites, call centers and call recording;
+Added: • our ability to leverage technology in order to sell, and otherwise become more efficient at selling, Medicare-related plans over the telephone;
+Added: • our ability to comply with the numerous, complex and changing laws, regulations, guidelines and policies of the federal and state government, including CMS guidelines and policies relating to the marketing and sale of Medicare plans and health care reform;
+Added: • the effectiveness with which our competitors market the availability of Medicare plans from sources other than our ecommerce platforms.
+Added: As a result of these and other factors, we may prove unsuccessful in marketing Medicare plans and acting as a health insurance agent in connection with their sale, which would harm our business, operating results and financial condition.
+Added: In addition, if our efforts to market Medicare plans during enrollment periods were impeded due to lack of timely health insurance carrier or CMS approval, or for other reasons, the impact on our business, operating results and financial condition would be significantly greater given the seasonality of our Medicare-related revenue, membership acquisition and expenses and the fact that much of the sales of Medicare plans occur during this period.
+Added: Risks Related to Laws and Regulations
+Added: 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.
+Added: The marketing and sale of Medicare plans are subject to numerous laws, regulations and guidelines at the federal and state level.
+Added: The marketing and sale of Medicare Advantage and Medicare Part D prescription drug plans are principally regulated by the CMS but are also subject to state laws.
+Added: The marketing and sale of Medicare Supplement plans are principally regulated on a state-by-state basis by state departments of insurance.
+Added: The laws and regulations applicable to the marketing and sale of Medicare plans are numerous, ambiguous and complex, and, particularly with respect to regulations and guidance issued by CMS for Medicare Advantage and Medicare Part D prescription drug plans, change frequently.
+Added: We have altered, and likely will have to continue to alter, our marketing and sales process to comply with these laws, regulations and guidelines.
+Added: Health insurance carriers whose Medicare plans we sell approve our websites, our call center scripts and some of our marketing material.
+Added: We must receive these approvals in order for us market and sell Medicare plans to Medicare-eligible individuals as a health insurance agent.
+Added: We are also required to file many of these materials on a regular basis with CMS.
+Added: In addition, certain aspects of our Medicare plan marketing partner relationships have been in the past, and will be in the future, subjected to CMS and health insurance carrier review.
+Added: CMS, state departments of insurance or health insurance carriers may determine to object to or not to approve aspects of our online platforms, sales function or marketing material and processes and may determine that certain existing aspects of our Medicare-related business are not in compliance with legal requirements.
+Added: Health insurance carriers may terminate our relationship with them or take other corrective action if our Medicare product sales, marketing and operations are not in compliance or give rise to too many complaints.
+Added: The termination of or change in our relationship with health insurance carriers for this reason would reduce the products we are able to offer, could result in the loss of commissions for past and future sales and would otherwise harm our business, operating results and financial condition.
+Added: Changes to the laws, regulations and guidelines relating to the sale of Medicare plans, their interpretation or the manner in which they are enforced could impact the manner in which we conduct our Medicare business, our ecommerce platforms or our sale of Medicare plans, or we could be prevented from operating aspects of our Medicare revenue generating activities altogether, which would harm our business, operating results and financial condition.
+Added: We have received, and may in the future receive, inquiries from CMS or state departments of insurance regarding our marketing and business practices and compliance with laws and regulations.
+Added: Inquiries and proceedings initiated by the government could adversely impact our health insurance licenses, require us to pay fines, require us to modify marketing and business practices, result in litigation and otherwise harm our business, operating results or financial condition.
+Added: CMS recently indicated that it is changing its process for the submission and approval of marketing materials related to Medicare Advantage and Medicare Part D prescription drug plans.
+Added: The practical application of the current process allows for a lead carrier to handle most of the review and filing of Medicare plan marketing materials with CMS.
+Added: If the manner in which any new process is implemented requires multiple carriers to review and potentially comment on our marketing materials, it could harm our ability to efficiently change and implement new marketing materials, including call center scripts, which could harm our business, operating results and financial condition.
+Added: 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.
+Added: The United States health insurance system is subject to a changing regulatory environment.
+Added: The future financial performance of our business will depend in part on our ability to adapt to regulatory developments.
+Added: For example, the federal Patient Protection and Affordable Care Act of 2010 and related regulatory reforms have and will continue to change the industry in which we operate in substantial ways.
+Added: The implementation of health care reform has increased, and could further increase, our competition in the individual and family health insurance market, reduce demand for the health insurance for individuals and families that we sell, decrease the number of health insurance plans that we sell as well as the number of health insurance carriers offering them, cause carriers to increase premiums or reduce commissions and other amounts they pay for our services, any of which could materially harm our business, operating results and financial condition.
+Added: These and other impacts of health care reform caused a significant decline in our individual and family plan revenue and membership and other changes in the future could have a similar impact on our Medicare related health insurance business.
+Added: Our business, operating results, financial condition and prospects may be materially and adversely affected if we are unable to adapt to developments in healthcare reform in the United States.
+Added: The Affordable Care Act contains a mandate requiring individuals to maintain health insurance plans that comply with the Affordable Care Act or face a tax penalty.
+Added: As a part of the tax reform law that came into effect in December 2017, the tax penalty for violating the mandate was set at zero effective in 2019, essentially repealing it.
+Added: The essential repeal of the individual mandate could cause individuals to determine not to purchase or maintain individual and family health insurance and could cause carriers to increase premiums, reduce commissions or exit the business of selling individual and family health insurance, any of which would adversely impact our business, operating results and financial condition.
+Added: Since the enactment of the Affordable Care Act, there have been judicial and Congressional challenges to certain aspects of the law.
+Added: In December 2018, a federal district court in Texas determined that the individual mandate in the Affordable Care Act is unconstitutional, because it was not within Congress’s tax power or interstate commerce power.
+Added: It also determined that the remaining provisions of the Affordable Care Act were inseverable and therefore invalid.
+Added: The court, however, did not rule that the operation of the Affordable Care Act be enjoined, so the law continues to operate until determined otherwise by the court or an appellate court.
+Added: The Fifth Circuit Court of Appeals agreed with the district court that the mandate is unconstitutional, but remanded the case back to the district court to address whether the unconstitutionality of the mandate should impact the rest of the law.
+Added: In March 2020, the Supreme Court agreed to review the case, including whether the individual mandate is unconstitutional, and if the mandate is unconstitutional whether the rest of the Affordable Care Act can survive.
+Added: Oral argument of the case before the Supreme Court occurred and we are awaiting the court's decision.
+Added: If the Affordable Care Act were finally determined to be unconstitutional and no longer operated, it is unclear what impact it or its replacement would have on our business.
+Added: However, it or its replacement could adversely impact our business, operating results and financial condition.
+Added: Our business depends upon the private sector of the United States health insurance system, which is subject to a changing environment.
+Added: Changes and developments in the health insurance system in the United States could reduce demand for our services and harm our business.
+Added: Ongoing healthcare reform efforts and measures may expand the role of government-sponsored coverage, including single payer or so called “Medicare-for-All” proposals, which could have far-reaching implications for the health insurance industry if enacted.
+Added: Some proposals would seek to eliminate the private marketplace, while others would expand a government-sponsored option to a larger population.
+Added: We are unable to predict the full impact of healthcare reform initiatives on our operations in light of the uncertainty of whether initiatives will be successful and the uncertainty regarding the terms and timing of any provisions enacted and the impact of any of those provisions on various healthcare and insurance industry participants.
+Added: Changes to the health insurance system as a result of the change in the balance of power in Congress or as a result of the Biden administration could harm our business, operating results and financial condition.
+Added: In the event that laws, regulations or rules that eliminate or reduce private sources of health insurance are adopted, the demand for our products could be adversely impacted and our business, operating results and financial condition would be harmed.
From time to time we are subject to various legal proceedings which could adversely affect our business.
4 unchanged sentences
If we are unsuccessful in our defense in these legal proceedings, we may be forced to pay damages or fines, enter into consent decrees, stop offering our services or change our business practices, any of which would harm our business, operating results or financial condition.
+Added: Our success in selling health insurance is dependent in part on the actions of federal and state governments.
+Added: Changes in the laws and regulations governing the offer, sale and purchase of health insurance could harm our business and operating results.
+Added: The laws and regulations governing the offer, sale and purchase of health insurance are complex and subject to change, and future changes may be adverse to our business.
+Added: For example, a long-standing provision in most applicable state laws that we believe is advantageous to our business is that once health insurance premiums are set by the carrier and approved by state regulators, they are fixed and not generally subject to negotiation or discounting by insurance companies or agents.
+Added: Additionally, state regulations generally prohibit carriers, agents and brokers from providing financial incentives, such as rebates, to their members in connection with the sale of health insurance.
+Added: As a result, we do not currently compete with carriers or other agents and brokers on the price of the health insurance plans offered on our website.
+Added: If these regulations change, we could be forced to reduce prices or provide rebates or other incentives for the health insurance plans sold through our ecommerce platform, which would harm our business, operating results and financial condition.
+Added: In addition, a federal law was
+Added: recently passed that requires disclosure of commissions paid to us to the purchaser of small business, major medical individual and family and short-term health insurance plans.
+Added: The provisions of the law have not gone into effect.
+Added: It is unclear what impact the law will have when it goes into effect, but it could cause health insurance carriers to lower our commission rates, which could reduce our revenue.
+Added: States and federal governments may adopt laws and regulations that are adverse to our business, including laws and regulations that impact the types of health insurance coverage available to consumers, the product features and benefits, our marketing and selling of plans and the role and compensation of agents and brokers in the sale of health insurance.
+Added: Changes to the rules and regulations that apply to our sale of Medicare related health insurance are more likely given that the Biden administration recently took office.
+Added: CMS may change the rules and regulations applicable to us in connection with our Medicare plan business, and those changes could harm our business, operating results and financial condition.
+Added: The Biden administration has also indicated that it is in support of changes to the Affordable Care Act.
+Added: It is difficult to predict what changes the Biden administration may make in the rules and regulations relating to our sale of the products that we sell, but the changes could harm our business, operating results and financial condition.
+Added: If we fail to comply with the numerous state insurance laws and regulations that are applicable to the sale of health insurance, our business and operating results could be harmed.
+Added: We are required to maintain a valid license in each state in which we transact health insurance business and to adhere to sales, documentation and administration practices specific to that state.
+Added: We must maintain our health insurance licenses to continue selling plans and to continue to receive commissions from health insurance carriers.
+Added: In addition, each employee who transacts health insurance business on our behalf must maintain a valid license in one or more states.
+Added: Because we do business in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is difficult and imposes significant costs on our business.
+Added: Each jurisdiction’s insurance department typically has the power, among other things, to:
+Added: • grant, limit, suspend and revoke licenses to transact insurance business;
+Added: • conduct inquiries into the insurance-related activities and conduct of agents and agencies;
+Added: • require and regulate disclosure in connection with the sale and solicitation of health insurance;
+Added: • authorize how, by which personnel and under what circumstances insurance premiums can be quoted and published and an insurance policy sold;
+Added: • approve which entities can be paid commissions from carriers and the circumstances under which they may be paid;
+Added: • regulate the content of insurance-related advertisements, including web pages, and other marketing practices;
+Added: • approve policy forms, require specific benefits and benefit levels and regulate premium rates;
+Added: • impose fines and other penalties;
+Added: • impose continuing education requirements.
+Added: Due to the complexity, periodic modification and differing interpretations of state insurance laws and regulations, we may not have always been, and we may not always be, in compliance with them.
+Added: New state insurance laws, regulations and guidelines also may not be compatible with the sale of health insurance over the Internet or with various aspects of our platform or manner of marketing or selling health insurance plans.
+Added: Failure to comply with insurance laws, regulations and guidelines or other laws and regulations applicable to our business could result in significant liability, additional department of insurance licensing requirements, required modification of our advertising and business practices, changes to our existing technology or platforms, the limitation, suspension and/or revocation of our licenses in a particular jurisdiction, termination of our relationship with health insurance carriers or loss of commissions and/or our inability to sell health insurance plans, which would harm our business, operating results and financial condition.
+Added: Moreover, an adverse regulatory action in one jurisdiction could result in penalties and adversely affect our license status, business or reputation in other jurisdictions due to the requirement that adverse regulatory actions in one jurisdiction be reported to other jurisdictions.
+Added: Even if the allegations in any regulatory or other action
+Added: against us are proven false, any surrounding negative publicity could harm consumer, marketing partner or health insurance carrier confidence in us, which could significantly damage our brand.
+Added: Our business is subject to security risks and, if we experience cyberattacks, security breaches or are otherwise unable to safeguard the security and privacy of confidential data, including personal health information, our business will be harmed.
+Added: Our services involve the collection and storage of confidential and personally identifiable information of consumers and the transmission of this information to their chosen health insurance carriers and to government.
+Added: For example, we collect names, addresses, credit card and social security numbers and protected health information such as information regarding the medical history of consumers.
+Added: As a result, we are subject to various laws and regulations and contractual requirements regarding the collection, maintenance, protection, use, transmission, disclosure and disposal of sensitive personal information.
+Added: We also hold a significant amount of information relating to our current and former employees.
+Added: We cannot guarantee that our facilities and systems, and those of our third party service providers, will be free of security breaches, cyberattacks, acts of vandalism, computer viruses, malware, misplaced or lost data, programming and/or human errors or other similar events.
+Added: Compliance with privacy and security laws, requirements and regulations, particularly new state legislation such as the California Consumer Privacy Act, may result in cost increases due to new constraints on our business, the development of new processes, the effects of potential non-compliance by us or third party service providers, and enforcement actions.
+Added: We may be required to expend significant amounts and other resources to protect against security breaches or to alleviate problems caused by security breaches.
+Added: Despite our implementation of security measures, techniques used to obtain unauthorized access or to sabotage systems change frequently.
+Added: As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures.
+Added: Additionally, our third party service providers may cause security breaches for which we are responsible.
+Added: Any compromise or perceived compromise of our security or the security of one of our vendors could damage our reputation, cause the termination of relationships with government-run health insurance exchanges and our members, marketing partners and health insurance carriers, reduce demand for our services and subject us to significant liability and expense as well as regulatory action and lawsuits, which would harm our business, operating results and financial condition.
+Added: The COVID-19 pandemic generally is increasing the attack surface available to criminals, as more companies and individuals work remotely and otherwise work online.
+Added: Consequently, the risk of a cybersecurity incident has increased.
+Added: We cannot provide assurances that our preventative efforts, or those of our vendors or service providers, will be successful.
+Added: In addition, in the event that additional data security laws are implemented, or our health insurance carrier or other partners determine to impose requirements on us relating to data security, we may not be able to timely comply with such requirements or such requirements may not be compatible with our current processes.
+Added: Changing our processes could be time consuming and expensive, and failure to timely implement required changes could result in our inability to sell health insurance plans in a particular jurisdiction or for a particular health insurance carrier or subject us to liability for non-compliance, any of which would damage our business, operating results and financial condition.
+Added: For instance, health insurance carriers may require us to be compliant with additional security standards in order to accept credit card information from consumers or require us to comply with additional privacy and security standards to do business with us at all.
+Added: Compliance with privacy and security standards is regularly assessed, and we may not always be compliant with the standards.
+Added: If we are not in compliance, we may not be able to accept credit card information from consumers or conduct health insurance business, and our relationship with health insurance carriers could be adversely impacted or terminated, which would harm our business, operating results and financial condition.
Any legal liability, regulatory penalties, or negative publicity for the information on our website or that we otherwise provide could harm our business and operating results.
1 unchanged sentence
A significant amount of both automated and manual effort is required to maintain the considerable amount of insurance plan information on our website.
−Removed: We also use the information provided on our website and otherwise
−Removed: collected by us to publish reports designed to educate consumers, facilitate public debate, and facilitate reform at the state and federal level.
−Removed: If the information we provide on our website, through our customer care centers, in our marketing materials or otherwise is not accurate or is construed as misleading, or if we do not properly assist individuals and businesses in purchasing health insurance, members, health insurance carriers and others could attempt to hold us liable for damages, our relationships with health insurance carriers could be terminated or impaired and regulators could attempt to subject us to penalties, force us to stop using our websites, marketing material or certain aspects of them, revoke our licenses to transact health insurance business in a particular jurisdiction, and/or compromise the status of our licenses to transact health insurance business in other jurisdictions, which could result in our loss of our commission revenue and harm our business, operating results and financial condition.
+Added: We also use the information provided on our website and otherwise collected by us to publish reports designed to educate consumers, facilitate public debate, and facilitate reform at the state and federal level.
+Added: If the information we provide on our website, through our customer care centers, in our marketing materials or otherwise is not accurate or is construed as misleading, or if we do not properly assist individuals and businesses in purchasing health insurance, members, health insurance carriers and others could attempt to hold us liable for damages, our relationships with health insurance carriers could be terminated or impaired and regulators could attempt to subject us to penalties, force us to
+Added: stop using our websites, marketing material or certain aspects of them, revoke our licenses to transact health insurance business in a particular jurisdiction, and/or compromise the status of our licenses to transact health insurance business in other jurisdictions, which could result in our loss of our commission revenue and harm our business, operating results and financial condition.
In the ordinary course of operating our business, we have received complaints that the information we provided was not accurate or was misleading.
4 unchanged sentences
As a result, whether or not we are able to successfully resolve these claims, they could harm our business, operating results and financial condition.
+Added: Our business could be harmed if we are unable to contact our consumers or market the availability of our products through specific channels.
+Added: We use email and telephone, among other channels, to market our services to potential members and as the primary means of communicating with our existing members.
+Added: The laws and regulations governing the use of email and telephone calls for marketing purposes continue to evolve, and changes in technology, the marketplace or consumer preferences may lead to the adoption of additional laws or regulations or changes in interpretation of existing laws or regulations.
+Added: If new laws or regulations are adopted, or existing laws and regulations are interpreted or enforced, to impose additional restrictions on our ability to send email or telephone messages to our members or potential members, we may not be able to communicate with them in a cost-effective manner.
+Added: In addition to legal restrictions on the use of email, Internet service providers, e-mail service providers and others attempt to block the transmission of unsolicited email, commonly known as “spam.” Many Internet and e-mail service providers have relationships with organizations whose purpose it is to detect and notify the Internet and e-mail service providers of entities that the organization believes is sending unsolicited e-mail.
+Added: If an Internet or e-mail service provider identifies email from us as “spam” as a result of reports from these organizations or otherwise, we can be placed on a restricted list that will block our email to members or potential members.
+Added: We use telephones to communicate with customers and prospective customers and some of these communications may be subject to the Telephone Consumer Protection Act, or TCPA, and other telemarketing laws.
+Added: The TCPA and other laws, including state laws, relating to telemarketing restrict our ability to market using the telephone in certain respects.
+Added: For instance, the TCPA prohibits us from using an automatic telephone dialing system to make certain telephone calls to consumers without prior express consent.
+Added: We have policies in place to comply with the TCPA and other telemarketing laws.
+Added: However, despite our legal compliance, we have in the past and may in the future become subject to claims that we have violated the TCPA.
+Added: The TCPA provides for statutory damages of $500 for each violation and $1,500 for each willful violation.
+Added: In the event that we were found to have violated the TCPA, our business, operating results and financial condition could be harmed.
+Added: In addition, telephone carriers may block or put consumer warnings on calls originating from call centers.
+Added: Consumers increasingly screen their incoming emails and telephone calls, including by using screening tools and warnings, and therefore our members or potential members may not reliably receive our emails or telephone messages.
+Added: If we are unable to communicate effectively by email or telephone with our members and potential members as a result of legislation, blockage, screening technologies or otherwise, our business, operating results and financial condition would be harmed.
+Added: Risks Related to Finance, Accounting and Tax Matters
+Added: Our operating results will be impacted by factors that impact our estimate of the constrained LTV of commissions per approved member.
+Added: Effective January 1, 2018, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASC 606) .
+Added: As a result of the adoption of ASC 606, we recognize revenue for plans approved during the period by applying the latest estimated constrained LTVs for that product.
+Added: Constrained LTVs are estimates and are based on a number of assumptions, which include, but are not limited to, estimates of the conversion rates of approved members into paying members, forecasted average plan duration and forecasted commission rates we expect to receive per approved member's plan.
+Added: These assumptions are based on historical trends and require significant judgment by our management in interpreting those
+Added: trends and in applying the constraints.
+Added: Changes in our historical trends will result in changes to our constrained LTV estimates in future periods and therefore could adversely affect our revenue and financial results in those future periods.
+Added: As a result, negative changes in the factors upon which we estimate constrained LTVs, such as reduced conversion of approved members to paying members, increased health insurance plan terminations or a reduction in the lifetime commission amounts we expect to receive for selling the plan to a member or other changes could harm our business, operating results and financial condition.
+Added: Changes in LTV may result in an increase or a decrease to revenue and a corresponding increase or decrease to commission receivables.
+Added: In addition, if we ultimately receive commission payments that are less than the amount we estimated when we recognized commission revenue, we would need to write off the remaining commission receivable balance, which would adversely impact our business, operating results, and financial condition.
+Added: The rate at which approved members become paying members is a significant factor in our estimation of constrained LTVs.
+Added: To the extent we experience a decline in the rate at which approved members turn into our paying members, our business, operating results, and financial condition would be harmed.
+Added: The forecasted average plan duration is another important factor in our estimation of constrained LTV.
+Added: We receive commissions from health insurance carriers for health insurance plans sold through us.
+Added: When one of these plans is canceled, or if we otherwise do not remain the agent on the policy, we no longer receive the related commission payment.
+Added: Our forecasted average plan duration and health insurance plan termination rate are calculated based on our historical data by plan type.
+Added: As a result, a reduction in our forecasted average plan duration or an inability to produce accurate forecasted average plan duration may adversely impact our business, operating results and financial condition.
+Added: Commission rates are also a significant factor in our estimation of constrained LTVs.
+Added: The commission rates we receive are impacted by a variety of factors, including the particular health insurance plans chosen by our members, the carriers offering those plans, our members’ states of residence, the laws and regulations in those jurisdictions, the average premiums of plans purchased through us and health care reform.
+Added: Our commission revenue per member has in the past decreased, and could in the future decrease, as a result of reductions in contractual commission rates, a change in the mix of carriers whose products we sell during a given period, and increased health insurance plan termination rates, all of which are beyond our control and may occur on short notice.
+Added: To the extent these and other factors cause our commission revenue per member to decline, our revenue may decline and our business, operating results and financial condition would be harmed.
+Added: Given that Medicare-related and individual and family health insurance purchasing is concentrated during enrollment periods, we may experience a shift in the mix of Medicare-related and individual and family health insurance products selected by our members over a short period of time.
+Added: Any reduction in our average commission revenue per member caused by such a shift or otherwise would harm our business, operating results and financial condition.
+Added: The determination of constraints is also a factor that requires significant management judgment.
+Added: Constraints are applied to LTVs for revenue recognition purposes and help ensure that the total estimated lifetime commissions expected to be collected from an approved member's plan are recognized as revenue only to the extent that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved.
+Added: We determine the constraint for each product by comparing prior calculations of LTV to actual cash received and review the reasons for any variations.
+Added: We then apply judgment in assessing whether the difference between historical cash collections and LTV is representative of differences that can be expected in future periods.
+Added: We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future periods including but not limited to commission rates, carrier mix, plan duration, changes in laws and regulations, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship.
+Added: We evaluate the appropriateness of our constraints on an ongoing basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.
+Added: If we underestimate the initial constraint applied to LTVs, we might be required to increase the constraint or record an impairment in a future period which would harm our business, operating results and financial condition.
Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition.
1 unchanged sentence
This credit agreement imposes certain covenants and restrictions on our business and our ability to obtain additional financing.
−Removed: As of September 30, 2020, we had no outstanding debt under our revolving credit facility.
+Added: As of March 31, 2021, we had no outstanding debt under our revolving credit facility.
The credit agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations.
20 unchanged sentences
Any such failure could also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
−Removed: The existence of a material weakness could result in errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information, leading to a decline in our stock price and potential lawsuits against us.
+Added: The existence of a material weakness could result in errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting obligations and cause
+Added: investors to lose confidence in our reported financial information, leading to a decline in our stock price and potential lawsuits against us.
Changes in our provision for income taxes or adverse outcomes resulting from examination of our income or other tax returns or changes in tax legislation could adversely affect our results.
6 unchanged sentences
There may be exposure that the outcomes from these examinations will have an adverse effect on our operating results and financial condition.
−Removed: Our success in selling health insurance is dependent in part on the actions of federal and state governments.
−Removed: Changes in the laws and regulations governing the offer, sale and purchase of health insurance could harm our business and operating results.
−Removed: The laws and regulations governing the offer, sale and purchase of health insurance are complex and subject to change, and future changes may be adverse to our business.
−Removed: For example, a long-standing provision in most applicable state laws that we believe is advantageous to our business is that once health insurance premiums are set by the carrier and approved by state regulators, they are fixed and not generally subject to negotiation or discounting by insurance companies or agents.
−Removed: Additionally, state regulations generally prohibit carriers, agents and brokers from providing financial incentives, such as rebates, to their members in connection with the sale of health insurance.
−Removed: As a result, we do not currently compete with carriers or other agents and brokers on the price of the health insurance plans offered on our website.
−Removed: If these regulations change, we could be forced to reduce prices or provide rebates or other incentives for the health insurance plans sold through our
−Removed: ecommerce platform, which would harm our business, operating results and financial condition.
−Removed: Although commissions do not currently have to be disclosed to the public, if commissions become more regulated and commissions paid to us have to be disclosed, it is possible that health insurance carriers may lower our commission rates, which could reduce our revenue.
−Removed: Additionally, states and the federal government may adopt laws and regulations that impact the types of health insurance coverage available to consumers, the product features and benefits, and the role and compensation of agents and brokers in the sale of health insurance.
−Removed: States have adopted and will continue to adopt new laws and regulations, including in response to health care reform legislation.
−Removed: It is difficult to predict how these new laws and regulations will impact our business.
−Removed: In some cases such laws and regulations could amplify the adverse impacts of health care reform to our business, or states may adopt new requirements that adversely impact our business, operating results and financial condition.
−Removed: For example, certain states have adopted or are contemplating rules and regulations that would either ban the sale of short-term health insurance, limit its duration and renewability, or apply certain aspects of the Affordable Care Act to short-term health insurance, such as the essential health benefits or requiring that short-term health insurance cover pre-existing conditions.
−Removed: Rules and regulations such as these could adversely impact our sale of short-term health insurance for several reasons, including because carriers may exit the market of selling short-term health insurance due to regulatory concerns, determine it is not profitable to sell the plans or increase plan premiums to a degree that reduces consumer demand for them.
−Removed: If we fail to comply with the numerous state insurance laws and regulations that are applicable to the sale of health insurance, our business and operating results could be harmed.
−Removed: We are required to maintain a valid license in each state in which we transact health insurance business and to adhere to sales, documentation and administration practices specific to that state.
−Removed: We must maintain our health insurance licenses to continue selling plans and to continue to receive commissions from health insurance carriers.
−Removed: In addition, each employee who transacts health insurance business on our behalf must maintain a valid license in one or more states.
−Removed: Because we do business in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is difficult and imposes significant costs on our business.
−Removed: Each jurisdiction’s insurance department typically has the power, among other things, to:
−Removed: • grant, limit, suspend and revoke licenses to transact insurance business;
−Removed: • conduct inquiries into the insurance-related activities and conduct of agents and agencies;
−Removed: • require and regulate disclosure in connection with the sale and solicitation of health insurance;
−Removed: • authorize how, by which personnel and under what circumstances insurance premiums can be quoted and published and an insurance policy sold;
−Removed: • approve which entities can be paid commissions from carriers and the circumstances under which they may be paid;
−Removed: • regulate the content of insurance-related advertisements, including web pages, and other marketing practices;
−Removed: • approve policy forms, require specific benefits and benefit levels and regulate premium rates;
−Removed: • impose fines and other penalties;
−Removed: • impose continuing education requirements.
−Removed: Due to the complexity, periodic modification and differing interpretations of state insurance laws and regulations, we may not have always been, and we may not always be, in compliance with them.
−Removed: New state insurance laws, regulations and guidelines also may not be compatible with the sale of health insurance over the Internet or with various aspects of our platform or manner of marketing or selling health insurance plans.
−Removed: Failure to comply with insurance laws, regulations and guidelines or other laws and regulations applicable to our business could result in significant liability, additional department of insurance licensing requirements, required modification of our advertising and business practices, changes to our existing technology or platforms, the limitation, suspension and/or revocation of our licenses in a particular jurisdiction, termination of our relationship with health insurance carriers or loss of commissions and/or our inability to sell health insurance plans, which would harm our business, operating results and financial condition.
−Removed: Moreover, an adverse regulatory action in one jurisdiction could result in penalties and adversely affect our license status, business or reputation in other jurisdictions due to the requirement that adverse regulatory actions in one jurisdiction be reported to other jurisdictions.
−Removed: Even if the allegations in any regulatory or other action against us are proven false, any surrounding negative publicity could harm consumer, marketing partner or health insurance carrier confidence in us, which could significantly damage our brand.
−Removed: Our business could be harmed if we are unable to contact our consumers or market the availability of our products through specific channels.
−Removed: We use email and telephone, among other channels, to market our services to potential members and as the primary means of communicating with our existing members.
−Removed: The laws and regulations governing the use of emails and telephone calls for marketing purposes continue to evolve, and changes in technology, the marketplace or consumer preferences may lead to the adoption of additional laws or regulations or changes in interpretation of existing laws or regulations.
−Removed: If new laws or regulations are adopted, or existing laws and regulations are interpreted or enforced, to impose additional restrictions on our ability to send email or telephone messages to our members or potential members, we may not be able to communicate with them in a cost-effective manner.
−Removed: In addition to legal restrictions on the use of email, Internet service providers, e-mail service providers and others attempt to block the transmission of unsolicited email, commonly known as “spam.” Many Internet and e-mail service providers have relationships with organizations whose purpose it is to detect and notify the Internet and e-mail service providers of entities that the organization believes is sending unsolicited e-mail.
−Removed: If an Internet or e-mail service provider identifies email from us as “spam” as a result of reports from these organizations or otherwise, we can be placed on a restricted list that will block our email to members or potential members.
−Removed: We use telephones to communicate with customers and prospective customers and some of these communications may be subject to the Telephone Consumer Protection Act, or TCPA, and other telemarketing laws.
−Removed: The TCPA and other laws, including state laws, relating to telemarketing restrict our ability to market using the telephone in certain respects.
−Removed: For instance, the TCPA prohibits us from using an automatic telephone dialing system to make certain telephone calls to consumers without prior express consent.
−Removed: We have policies in place to comply with the TCPA and other telemarketing laws.
−Removed: However, despite our legal compliance, we have in the past and may in the future become subject to claims that we have violated the TCPA.
−Removed: The TCPA provides for statutory damages of $500 for each violation and $1,500 for each willful violation.
−Removed: In the event that we were found to have violated the TCPA, our business, operating results and financial condition could be harmed.
−Removed: In addition, telephone carriers may block or put consumer warnings on calls originating from call centers.
−Removed: Consumers increasingly screen their incoming emails and telephone calls, including by using screening tools and warnings, and therefore our members or potential members may not reliably receive our emails or telephone messages.
−Removed: If we are unable to communicate effectively by email or telephone with our members and potential members as a result of legislation, blockage, screening technologies or otherwise, our business, operating results and financial condition would be harmed.
−Removed: Consumers depend upon third-party service providers to access our website and services, and our business and operating results could be harmed as a result of technical difficulties experienced by these service providers.
−Removed: Consumers using our website and accessing our services depend upon Internet, online and other service providers for access to our website and services.
−Removed: Many of these service providers have experienced significant outages, delays and other difficulties in the past and could experience them in the future.
−Removed: Any significant interruption in access to our call centers or our website or increase in our website’s response time as a result of these difficulties could damage our relationship with insurance carriers, marketing partners and existing and potential members and could harm our business, operating results and financial condition.
−Removed: We cannot predict the impact that changing climate conditions, including legal, regulatory and social responses thereto, may have on our business.
−Removed: Global climate change has added, and will continue to add, to the unpredictability, frequency and severity of natural disasters, including but not limited to hurricanes, tornadoes, freezes, droughts, other storms and fires in certain parts of the world.
−Removed: In response, a number of legal and regulatory measures and social initiatives have been introduced in an effort to reduce greenhouse gas and other carbon emissions that are chief contributors to global climate change.
−Removed: We cannot predict the impact that changing climate conditions will have on our business.
−Removed: The legal, regulatory and social responses to climate change could also adversely affect our results of business, operating results and financial conditions.
Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
2 unchanged sentences
A lack of future taxable income would adversely affect our ability to utilize these net operating loss carryforwards.
−Removed: In addition, utilization of the net
−Removed: operating loss carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred, may occur in connection with this offering or that could occur in the future, as required by Section 382 of the Code and similar state provisions.
+Added: In addition, utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Code and similar state provisions.
These ownership change limitations may limit the amount of net operating loss carryforwards and other tax attributes that can be utilized annually to offset future taxable income and tax, respectively.
−Removed: In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points (by value) of the outstanding stock of a company by certain stockholders.
+Added: In general, an “ownership change” as defined by Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points (by value) of the outstanding stock of a company by certain stockholders.
Our ability to use the remaining net operating loss carryforwards may be further limited if we experience a Section 382 ownership change as a result of future changes in our stock ownership.
+Added: Risks Related to our Technology
+Added: Our ability to sell Medicare-related health insurance plans as a health insurance agent depends upon maintenance of functioning information technology systems.
+Added: The success of our Medicare plan customer care center operations is dependent upon information technology systems.
+Added: Many of our Medicare plan members utilize our customer care center in connection with their purchase of a Medicare plan.
+Added: CMS rules require that our health insurance agent employees utilize CMS-approved scripts in connection with the sale of Medicare plans and that we record and maintain the recording of telephonic interactions relating to the sale of Medicare plans.
+Added: We rely on telephone, call recording, customer relationship management and other systems and technology in our Medicare customer care center operations, and we are dependent upon third parties for some of them, including our telephone and call recording systems.
+Added: These systems have failed temporarily in the past and may experience additional disruption due to systems upgrades, power outages, an increase in remote work or other impacts as a result of the COVID-19 pandemic.
+Added: The effectiveness and stability of our Medicare customer care center systems and technology are critical to our ability to sell Medicare plans, particularly during the Medicare enrollment periods, and the failure or interruption of any of these systems and technology or any inability to handle increased volume would harm our business, operating results and financial condition.
+Added: System failures or capacity constraints could harm our business and operating results.
+Added: The performance, reliability and availability of our ecommerce and telephony platforms and underlying network infrastructures are critical to our financial results, our brand and our relationship with members, marketing partners and health insurance carriers.
+Added: Although we regularly attempt to enhance our platforms and system infrastructure, system failures and
+Added: interruptions may occur if we are unable to accurately project the rate or timing of increases in our website or call center traffic or for other reasons, some of which are completely outside our control.
+Added: We could experience significant failures and interruptions, which would harm our business, operating results and financial condition.
+Added: If these failures or interruptions occurred during the Medicare annual enrollment period, the Medicare Advantage open enrollment period or during the open enrollment period under health care reform, the negative impact on us would be particularly pronounced.
+Added: We rely in part upon third-party vendors, including data center, cloud infrastructure, and bandwidth providers, to operate our ecommerce and telephony platforms.
+Added: We cannot predict whether additional network capacity will be available from these vendors as we need it, and our network or our suppliers’ networks might be unable to achieve or maintain a sufficiently high capacity of data transmission.
+Added: Any system failure that causes an interruption in or decreases the responsiveness of our services would impair our revenue-generating capabilities and harm our business and operating results and damage our reputation.
+Added: In addition, any loss of data could result in loss of customers and subject us to potential liability.
+Added: Our facilities and our database and systems are vulnerable to damage or interruption from human error, fire, floods, power loss, telecommunications failures, physical or electronic break-ins, computer viruses, acts of terrorism, other attempts to harm our systems and similar events.
+Added: In addition, our operations are vulnerable to earthquakes, fire, severe weather conditions, including those brought about by climate change, and other natural disasters in the San Francisco Bay Area and elsewhere in Northern California, China, and as well as in other parts of the U.S.
+Added: where we or our outsourced health insurance agents maintain offices.
+Added: We may not be able to adequately protect our intellectual property, which could harm our business and operating results.
+Added: We believe that our intellectual property is an essential asset of our business and that our technology currently gives us a competitive advantage in the distribution of Medicare-related, individual and family and small business health insurance.
+Added: We rely on a combination of copyright, trademark and trade secret laws as well as confidentiality procedures and contractual provisions to establish and protect our intellectual property rights in the United States.
+Added: The efforts we have taken to protect our intellectual property may not be sufficient or effective, and our trademarks may be held invalid or unenforceable.
+Added: Moreover, the law relating to intellectual property is not as developed in China, and our intellectual property rights may not be as respected in China as they are in the United States.
+Added: We may not be effective in policing unauthorized use of our intellectual property, trade secrets and other confidential information, and even if we do detect violations, litigation may be necessary to enforce our intellectual property rights.
+Added: Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive, could divert our management’s attention and may result in a court determining that our intellectual property or other rights are unenforceable.
+Added: If we are not successful in cost-effectively protecting our intellectual property rights, trade secrets and confidential information, our business, operating results and financial condition could be harmed.
+Added: Consumers depend upon third-party service providers to access our website and services, and our business and operating results could be harmed as a result of technical difficulties experienced by these service providers.
+Added: Consumers using our website and accessing our services depend upon Internet, online and other service providers for access to our website and services.
+Added: Many of these service providers have experienced significant outages, delays and other difficulties in the past and could experience them in the future.
+Added: Any significant interruption in access to our call centers or our website or increase in our website’s response time as a result of these difficulties could damage our relationship with insurance carriers, marketing partners and existing and potential members and could harm our business, operating results and financial condition.
Risks Related to Ownership of Our Common Stock
3 unchanged sentences
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results.
−Removed: Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release.
+Added: Accordingly, our
+Added: guidance is only an estimate of what management believes is realizable as of the date of release.
Our actual results have, and may in the future, vary from our guidance and the variations may be material.
9 unchanged sentences
The trading price of our common stock has been volatile and is likely to continue to fluctuate substantially.
−Removed: For the quarter ended September 30, 2020, the closing price of our common stock fluctuated from $61.81 to $114.86 per share.
+Added: For the quarter ended March 31, 2021, the closing price of our common stock fluctuated from $47.85 to $85.09 per share.
The trading price of our common stock depends on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance.
26 unchanged sentences
We have been, and may in the future be, subject to such legal actions.
+Added: The issuance of shares of common stock underlying our Series A preferred stock would dilute the ownership and relative voting power of holders of our common stock and may adversely affect the market price of our common stock.
+Added: The Series A preferred stock is convertible at the option of the holders at any time after May 31, 2021 into shares of common stock based on the then applicable conversion rate as determined in the certificate of designations for the Series A preferred stock, which conversion would dilute the ownership interest of existing holders of our common stock.
+Added: In addition, because holders of our Series A preferred stock are entitled to vote, on an as-converted basis (subject to certain voting limitations and conversion calculations set forth in the certificate of designations for the Series A preferred stock), together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, the issuance of the Series A preferred stock effectively reduces the relative voting power of the holders of our common stock.
+Added: Any sales in the public market of the common stock issuable upon conversion of the Series A preferred stock could adversely affect prevailing market prices of our common stock.
+Added: Pursuant to the investment agreement, holders of our Series A preferred stock will receive customary resale registration rights for common stock issued upon conversion of the Series A preferred stock upon closing.
+Added: Any resale of our common stock would increase the number of shares of our common stock available for public trading.
+Added: Sales by our Series A preferred stockholder of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.
+Added: Our Series A preferred stock has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could adversely affect our liquidity and financial condition, result in the interests of holders of our Series A preferred stock differing from those of our common stockholders and make an acquisition of us more difficult.
+Added: Holders of our Series A preferred stock have (i) a liquidation preference (ii) rights to dividends, which are senior to all of our other equity securities, (iii) redemption rights beginning on April 30, 2027, (iv) the right to require us to repurchase any or all of their Series A preferred stock in connection with certain change of control events, and (v) conversion price adjustments in connection with certain corporate transactions, each subject to the terms, conditions and exceptions contained in the certificate of designations for the Series A preferred stock.
+Added: These dividend and share repurchase and redemption obligations could impact our liquidity and reduce the amount of cash flows available for working capital, capital expenditures, growth opportunities, acquisitions, and other general corporate purposes.
+Added: The terms of our investment agreement with H.I.G., the initial purchaser of our Series A Preferred Stock, could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.
+Added: The preferential rights could also result in divergent interests between H.I.G.
+Added: and holders of our common stock.
+Added: Furthermore, a sale of our company, as a change of control event, may require us to repurchase Series A preferred stock, which could have the effect of making an acquisition of our company more expensive and potentially deterring proposed transactions that may otherwise be beneficial to our stockholders.
+Added: may exercise influence over us, including through its ability to designate up to two directors on our board of directors.
+Added: Our investment agreement with H.I.G.
+Added: contains certain negative operating covenants that will remain in effect for so long as H.I.G.
+Added: continues to own at least 30% of the shares of Series A preferred stock originally issued to it.
+Added: As of the date of this report, H.I.G.
+Added: has conditionally waived certain of these negative operating covenants.
+Added: Further, the investment agreement entitles H.I.G.
+Added: to nominate one individual for election to our board of directors for so long as it continues to own at least 30% of the common stock issuable or issued upon conversion of the Series A preferred stock originally issued to it.
+Added: In addition, if we fail to maintain certain levels of commissions receivable and liquidity, H.I.G.
+Added: will be entitled to nominate one additional director.
+Added: The director designated by H.I.G.
+Added: will also be entitled to serve on committees of our board of directors, subject to applicable law and stock exchange rules.
+Added: Notwithstanding the fact that all directors will be subject to fiduciary duties to us and to applicable law, the interests of the director designated by H.I.G.
+Added: of our Series A preferred stock may differ from the interests of our security holders as a whole or of our other directors.
+Added: As of the date of this report, H.I.G.
+Added: has conditionally waived its director nomination rights.
Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
14 unchanged sentences
Description of Exhibit Form Date
−Removed: 10.1 † Twelfth Amendment to Lease and Acknowledgment to Standard Lease Agreement (Office), dated August 28, 2020, between Carlsen Investments, LLC and eHealthInsurance Services, Inc.
+Added: 3.1 Amended and Restated Certificate of Incorporation of the Registrant
+Added: Registration Statement on Form S-1, as amended (File No.
+Added: 333-133526) April 25, 2006
+Added: 3.2 Certificate of Designations of Series A Preferred Stock, par value $0.001, of eHealth, Inc.
+Added: Current Report on Form 8-K (File No.
+Added: 001-33071) May 3, 2021
+Added: 10.1 Investment Agreement, dated as of February 17, 2021, by and between eHealth, Inc.
+Added: and Echelon Health SPV, LP
+Added: Current Report on Form 8-K (File No.
+Added: 001-33071) February 18, 2021
+Added: 10.2 Cooperation Agreement, dated March 10, 2021 by and between eHealth, Inc.
+Added: and Hudson Executive Capital LP, on behalf of itself and its affiliates and its affiliated funds
+Added: Current Report on Form 8-K
+Added: 001-33071) March 10, 2021
+Added: 10.3* Form of Indemnification Agreement adopted in 2021
+Added: Annual Report on Form 10-K (File No.
+Added: 001-33071) February 26, 2021
+Added: 10.4* Severance Agreement, dated as of February 10, 2021, between Timothy Hannan and eHealth, Inc.
+Added: Annual Report on Form 10-K (File No.
+Added: 001-33071) February 26, 2021
+Added: 10.5* † Severance Agreement, dated as of February 8, 2021, between Phillip Morelock and eHealth, Inc.
+Added: 10.6* † Severance Agreement, dated as of March 15, 2021, between Gregg Ratkovic and eHealth, Inc.
31.1 † Certification of Scott N.
14 unchanged sentences
101.PRE † Inline XBRL Taxonomy Extension Presentation Linkbase Document
−Removed: 104 The cover page from the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2020, formatted in Inline XBRL and contained in Exhibit 101
+Added: 104 The cover page from the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021, formatted in Inline XBRL and contained in Exhibit 101
† Filed herewith.
‡ Furnished herewith.
+Added: * Indicates a management contract or compensatory plan or arrangement.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EHEALTH, INC.
−Removed: November 5, 2020 /s/ Scott N.
+Added: May 10, 2021 /s/ Scott N.
Chief Executive Officer
(Principal Executive Officer)
−Removed: November 5, 2020 /s/ Derek N.
+Added: May 10, 2021 /s/ Derek N.
Chief Financial Officer
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.