Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Our Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K.
Based on management’s evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the guidelines established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. We reviewed the results of management’s assessment with our Audit Committee.
Ernst & Young LLP, our independent registered public accounting firm, has issued a report on the Company’s internal control over financial reporting as of December 31, 2023, which is presented below.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our chief executive officer and chief financial officer, believes that our disclosure controls and our internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the
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realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of eHealth, Inc.
Opinion on Internal Control over Financial Reporting
We have audited eHealth, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, eHealth, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated February 29, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Francisco, California
February 29, 2024
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ITEM 9B. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During our fiscal quarter ended December 31, 2023, no director or officer, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning our directors, executive officers, compliance with Section 16(a) of the Exchange Act, and corporate governance required by this Item 10 of Form 10-K is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2023.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2023.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 12 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2023.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2023.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by Item 14 of Form 10-K is incorporated herein by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after our fiscal year ended December 31, 2023.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) We have filed the following documents as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
Information in response to this Item is included in Item 8 of Part II of this Annual Report on Form 10-K.
2. Financial Statement Schedules
All schedules are omitted because they are not applicable, not required or because the required information is included in the consolidated financial statements or notes thereto.
3. Exhibits
See Item 15(b) below.
(b) Exhibits – We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanying Index to Exhibits of this Annual Report on Form 10‑K.
(c) Financial Statement Schedule – See Item 15(a) above.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 29, 2024
eHealth, Inc.
/s/ FRANCIS SOISTMAN /s/ JOHN STELBEN
Francis Soistman
Chief Executive Officer
John Stelben
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 29, 2024.
Signature Title
/s/ FRANCIS SOISTMAN Chief Executive Officer
(Principal Executive Officer) and Director
Francis Soistman
/s/ JOHN STELBEN Chief Financial Officer
John Stelben (Principal Financial Officer)
/s/ JOHN DOLAN Chief Accounting Officer
John Dolan (Principal Accounting Officer)
/s/ ANDREA C. BRIMMER Director
Andrea C. Brimmer
/s/ BETH A. BROOKE Director
Beth A. Brooke
/s/ A. JOHN HASS Director
A. John Hass
/s/ ERIN L. RUSSELL Director
Erin L. Russell
/s/ CESAR M. SORIANO Director
Cesar M. Soriano
/s/ AARON C. TOLSON Director
Aaron C. Tolson
/s/ DALE B. WOLF Director
Dale B. Wolf
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EXHIBIT INDEX
Exhibit
Number Incorporation by Reference Herein
Description of Exhibit
Form Date
3.1 Amended and Restated Certificate of Incorporation of the Registrant
Registration Statement on
Form S-1, as amended
(File No. 333-133526) April 25, 2006
3.2 Amended and Restated Bylaws of the Registrant
Current Report on Form 8‑K
(File No. 001-33071) December 19, 2022
3.3 Certificate of Designations of Series A Preferred Stock, par value $0.001, of eHealth, Inc.
Current Report on Form 8‑K
(File No. 001-33071) May 3, 2021
4.1 Form of the Registrant’s Common Stock Certificate
Registration Statement on
Form S-1, as amended
(File No. 333-133526) June 28, 2006
4.2 Description of Capital Stock
Annual Report on Form 10-K
(File No. 001-33071)
March 1, 2022
10.1 Investment Agreement, dated as of February 17, 2021, by and between eHealth, Inc. and Echelon Health SPV, LP
Current Report on Form 8-K
(File No. 001-33071) February 18, 2021
10.2 Credit Agreement, dated February 28, 2022, by and among eHealth, Inc., Blue Torch Finance LLC and the other lenders identified therein
Current Report on Form 8-K
(File No. 001-33071) February 28, 2022
10.2.1 First Amendment to Credit Agreement, dated August 16, 2022, by and among eHealth, Inc., Blue Torch Finance LLC and the lenders identified therein
Current Report on Form 8-K
(File No. 001-33071) August 22, 2022
10.3* Form of Indemnification Agreement
Annual Report on Form 10-K
(File No. 001-33071) February 26, 2021
10.4* Executive Bonus Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) November 7, 2017
10.5* Employment Agreement, dated December 13, 2021, between Fran Soistman and eHealth, Inc.
Current Report on Form 8-K
(File No. 001-33071) December 17, 2021
10.6*
Severance Agreement, dated September 29, 2022 between Gavin Galimi and eHealth, Inc.
Annual Report on Form 10-K
(File No. 001-33071) March 1, 2023
10.7*
Severance Agreement, dated October 20, 2022 between John Stelben and eHealth, Inc.
Annual Report on Form 10-K
(File No. 001-33071) March 1, 2023
10.8*
Form of Deferral Election Form for Newly Eligible Individual with Existing Awards
Quarterly Report on Form 10-Q
(File No. 001-33071) November 6, 2015
10.9*
Form of Deferral Election Form for Eligible Individual for Award to be Granted in the Next Calendar Year
Quarterly Report on Form 10-Q
(File No. 001-33071) November 6, 2015
10.10*
Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071)
November 8, 2022
10.10.1*
Form of Notice of Stock Option Grant and Stock Option Agreement ( Time-Based Vesting) under the Amended and Restated 2014 Equity Incentive Plan
Registration Statement on
Form S-8
(File No. 333-196675) June 11, 2014
10.10.2*
Form of Notice of Stock Option Grant and Stock Option Agreement (People’s Republic of China) under the Amended and Restated 2014 Equity Incentive Plan
Registration Statement on
Form S-8
(File No. 333-196675) June 11, 2014
10.10.3*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Initial Director Grant) under the Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) August 8, 2023
10.10.4*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Annual Director Grant) under the Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) August 8, 2023
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10.10.5*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Time-Based Vesting) under the Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) August 9, 2021
10.10.6*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (People’s Republic of China) under the Amended and Restated 2014 Equity Incentive Plan
Registration Statement on
Form S-8
(File No. 333-196675) June 11, 2014
10.10.7*
Form of Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) under the Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) August 8, 2016
10.10.8*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based Vesting) under the Amended and Restated 2014 Equity Incentive Plan
Quarterly Report on Form 10-Q
(File No. 001-33071) August 8, 2016
10.11*
2020 Employee Stock Purchase Plan
Current Report on Form 8-K
(File No. 001-33071) June 15, 2020
10.12*
Amended and Restated 2021 Inducement Plan
Current Report on Form 8-K
(File No. 001-33071) October 5, 2022
10.12.1*
Form of Notice of Stock Option Grant and Stock Option Agreement (Time-Based Vesting) under the Amended and Restated 2021 Inducement Plan
Current Report on Form 8-K
(File No. 001-33071) September 23, 2021
10.12.2*
Form of Notice of Stock Unit Grant and Stock Unit Agreement ( Time-Based Vesting) under the Amended and Restated 2021 Inducement Plan
Current Report on Form 8-K
(File No. 001-33071) September 23, 2021
10.12.3*
Form of Notice of Stock Option Grant and Stock Option Agreement (Performance-Based Vesting) under the Amended and Restated 2021 Inducement Plan
Current Report on Form 8-K
(File No. 001-33071) September 23, 2021
10.12.4*
Form of Notice of Stock Unit Grant and Stock Unit Agreement (Performance-Based) Vesting under the Amended and Restated 2021 Inducement Plan
Current Report on Form 8-K
(File No. 001-33071) September 23, 2021
21.1*
List of Subsidiaries
Annual Report on Form 10-K
(File No. 001-33071) March 19, 2018
23.1 † Consent of Independent Registered Public Accounting Firm
31.1 † Certification of Francis Soistman, Chief Executive Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 † Certification of J ohn Stelben , Chief Financial Officer of eHealth, Inc., pursuant to Exchange Act Rule 13a‑14(a) and 15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 ‡ Certification of Francis Soistman , Chief Executive Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 ‡ Certification of J ohn Stelben , Chief Financial Officer of eHealth, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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† Compensation Recovery Policy
101.INS † Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH † Inline XBRL Taxonomy Extension Schema Document
101.CAL † Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF † Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB † Inline XBRL Taxonomy Extension Label Linkbase Document
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101.PRE † Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline XBRL and contained in Exhibit 101
† Filed herewith.
‡ Furnished herewith.
* Indicates a management contract or compensatory plan or arrangement.
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