eHealth, Inc. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Credit and Interest Rate Risk Our financial instruments that are exposed to concentrations of credit risk principally consist of cash and cash equivalents, marketable securities, accounts receivable, and contract assets – commission receivable. Our cash, cash equivalents, short-term marketable securities, and restricted cash are summarized as follows (in thousands): June 30, 2021 December 31, 2020 Cash and cash equivalents (1) (2) $ 229,260 $ 43,759 Short-term marketable securities (2) 75,830 49,620 Restricted cash 3,354 3,354 Total cash, cash equivalents, short-term marketable securities, and restricted cash $ 308,444 $ 96,733 _________________ (1) We deposit our cash and cash equivalents in accounts with major banks and financial institutions and such deposits are in excess of federally insured limits. We also have deposits with major banks in China that are denominated in both U.S. dollars and Chinese Yuan Renminbi and are not insured by the U.S. federal government. (2) See Note 4 – Fair Value Measurements in our Notes to Condensed Consolidated Financial Statements for more information on our cash and cash equivalents and marketable securities. Our portfolio of available-for-sale debt securities is exposed to credit and interest rate risk. As of June 30, 2021, we invested $75.8 million in marketable securities primarily consisting of commercial paper, agency bonds, and a corporate bond with credit rating of AA or equivalent by S&P Rating and Moody's Investor Services. The maturity of these securities were less than one year. See Note 4 – Fair Value Measurements in our Notes to Condensed Consolidated Financial Statements for further discussion on our available-for-sale debt securities. As of June 30, 2021, our net contract assets consisted of commissions receivable balance of $755.6 million. Our contracts with carriers expose us to credit risk that a financial loss could be incurred if the counterparty does not fulfill its financial obligation. While we are exposed to credit losses due to the non-performance of our counterparties, we consider the risk of this remote. We estimate our maximum credit risk in determining the commissions receivable amount recorded on the balance sheet. We had a $1.8 million allowance for credit losses for our commissions receivable balance as of June 30, 2021. Our total contract assets and accounts receivable as of June 30, 2021 and December 31, 2020 are summarized as follows (in thousands): June 30, 2021 December 31, 2020 Contract assets – commissions receivable – current $ 181,673 $ 219,153 Contract assets – commissions receivable – non-current 573,949 573,252 Accounts receivable 3,534 1,799 Total contract assets and accounts receivable $ 759,156 $ 794,204 Foreign Currency Exchange Risk To date, substantially all of our revenue has been derived from transactions denominated in United States Dollars. We have exposure to adverse changes in exchange rates associated with operating expenses of our foreign operations, which are denominated in Chinese Yuan Renminbi. Foreign currency fluctuations have not had a material impact historically on our results of operations; however, they may in the future. We have not engaged in any foreign currency hedging or other derivative transactions to date. 50