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): March 31, 2022 December 31, 2021 Cash and cash equivalents (1) (2) $ 220,563 $ 81,926 Short-term marketable securities (2) 10,938 41,306 Restricted cash 3,239 3,239 Total cash, cash equivalents, short-term marketable securities, and restricted cash $ 234,740 $ 126,471 _________________ (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 March 31, 2022, we invested $10.9 million in marketable securities primarily consisting of commercial paper 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 March 31, 2022, our net contract assets – commissions receivable balance was $831.2 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 contract 49 assets – commissions receivable balance recognized on the balance sheet. We had a $2.1 million allowance for credit losses for our commissions receivable balance as of March 31, 2022. Our total contract assets and accounts receivable as of March 31, 2022 and December 31, 2021 are summarized as follows (in thousands): March 31, 2022 December 31, 2021 Contract assets – commissions receivable – current $ 204,237 $ 254,821 Contract assets – commissions receivable – non-current 626,941 653,441 Accounts receivable 1,978 5,750 Total contract assets and accounts receivable $ 833,156 $ 914,012 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.