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 – commissions receivable. Our cash, cash equivalents, short-term marketable securities and restricted cash are summarized as follows (in thousands): September 30, 2024 December 31, 2023 Cash and cash equivalents (1)(2) $ 64,032 $ 115,722 Short-term marketable securities (2) 53,750 5,930 Restricted cash 3,090 3,090 Total cash, cash equivalents, short-term marketable securities and restricted cash $ 120,872 $ 124,742 _________________ (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 additional 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 September 30, 2024, we invested $53.8 million in marketable securities primarily consisting of commercial paper and agency bonds. The maturities 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. 48 Table of Contents Our total contract assets and accounts receivable are summarized as follows (in thousands): September 30, 2024 December 31, 2023 Contract assets – commissions receivable – current $ 197,591 $ 244,663 Contract assets – commissions receivable – non-current 616,445 673,514 Accounts receivable 5,864 3,993 Total contract assets and accounts receivable $ 819,900 $ 922,170 As of September 30, 2024, our net contract assets – commissions receivable balance was $814.0 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 this risk to be remote. We estimate our maximum credit risk in determining the contract assets – commissions receivable balance recognized on the balance sheet. We had allowances for credit losses of $1.7 million and $2.1 million as of September 30, 2024 and December 31, 2023, respectively. Foreign Currency Exchange Risk To date, substantially all of our revenue has been derived from transactions denominated in U.S. 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.