What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-29 · 327 added, 480 removed, 828 unchanged (49% of the section changed)

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Consolidated Balance Sheets

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income ( Loss )

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of eHealth, Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

(the Company) as of December 31, 2024, and 2023, the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

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These processes and controls include those covering the models and methods used to calculate LTV, the use of management judgment to determine the constraint applied to LTV, management’s evaluation of any required adjustments to previously recorded LTV estimates, and the completeness and accuracy of the data used in such estimates and calculations.

Our audit procedures also included, among others, evaluating the methodology used and significant assumptions discussed above, and testing the completeness and accuracy of the underlying data used by the Company.

Our audit procedures also included, among others, evaluating the methodologies used and significant assumptions discussed above, and testing the completeness and accuracy of the underlying data used by the Company.

We involved our valuation specialists to assist in our testing of the estimated average plan duration, which includes member attrition assumptions, including performing certain corroborative calculations.

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EHEALTH, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

Year Ended December 31,

2023 2022 2021

Commission $ 461,647 $ 403,924

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General and administrative 89,765 99,363

Amortization of intangible assets — — 536

Impairment, restructuring and other charges 9,475 —

Total operating costs and expenses 508,839 481,945

Loss from operations

Income (loss) from operations

23,571 ( 29,074 )

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Other income, net

9,453 3,951 1,600

Loss before income taxes

Income (loss) before income taxes

19,312 ( 30,595 )

Benefit from income taxes

Provision for (benefit from) income taxes

9,255 ( 2,381 )

Net income (loss)

10,057 ( 28,214 )

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Change in preferred stock redemption value ( 22,768 ) ( 17,336 )

Loss attributable to common stockholders

$ ( 66,515 ) $ ( 119,414 ) $ ( 122,942 )

Loss per share attributable to common stockholders:

Net loss attributable to common stockholders $ ( 34,960 ) $ ( 66,515 )

Net loss per share attributable to common stockholders:

Basic and diluted

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29,335 28,016

Comprehensive loss:

Comprehensive income (loss):

Net income (loss)

$ 10,057 $ ( 28,214 )

Unrealized holding gain (loss) on available-for-sale debt securities, net of tax 10 ( 29 ) ( 49 )

Unrealized holding gain on available for sale debt securities, net of tax

Foreign currency translation adjustments ( 207 ) ( 19 )

Comprehensive loss

Comprehensive income (loss)

$ 9,905 $ ( 28,223 )

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Common Stock Additional Paid-in

Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss

Total Stockholders’ Equity

Shares Amount Shares Amount

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Stock-based compensation — — 24,253 — — — — 24,253

Other comprehensive income, net of tax — — — — — — 40 40

Net loss — — — — — ( 104,375 ) — ( 104,375 )

Balance as of December 31, 2021 38,704 39 755,875 12,016 ( 199,998 ) 193,213 390 749,519

Issuance of common stock in connection with equity incentive plans 1,095 1 1,054 — — — — 1,055

Repurchase of shares to satisfy employee tax withholding obligations — — ( 3,102 ) 399 — — — ( 3,102 )

Dividends and accretion related to convertible preferred stock — — — — — ( 30,692 ) — ( 30,692 )

Issuance of common stock for employee stock purchase program 178 — 1,159 — — — — 1,159

Stock-based compensation — — 22,201 — — — — 22,201

Other comprehensive loss, net of tax — — — — — — ( 9 ) ( 9 )

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Other comprehensive loss, net of tax — — — — — — ( 152 ) ( 152 )

Net loss — — — — — ( 28,214 ) — ( 28,214 )

— — — — — 10,057 — 10,057

Balance as of December 31, 2024 43,225 $ 43 $ 773,371 13,379 $ ( 199,998 ) $ 15,246 $ ( 234 ) $ 588,428

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Year Ended December 31,

2023 2022 2021

Operating activities:

Net income (loss)

$ 10,057 $ ( 28,214 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 1,983 2,540

Amortization of internally developed software 14,355 17,376

Amortization of intangible assets — — 536

Stock-based compensation expense 19,881 23,213

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Proceeds from redemption and maturities of marketable securities 61,420 49,400

Net cash provided by (used in) investing activities ( 15,893 ) 25,861 ( 12,631 )

Net cash used in investing activities ( 48,421 ) ( 15,893 )

Financing activities:

Proceeds from issuance of preferred stock, net of issuance costs — — 214,025

Net proceeds from debt financing — 64,862 —

Payment of debt issuance costs ( 1,050 ) —

Net proceeds from exercise of common stock options and employee stock purchases 354 677

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Payments of preferred stock dividends ( 5,561 ) ( 3,533 )

Net cash provided by (used in) financing activities ( 6,224 ) 63,838 213,241

Net cash used in financing activities ( 9,674 ) ( 6,224 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 64 ) ( 19 )

Net increase (decrease) in cash, cash equivalents and restricted cash ( 28,828 ) 62,475 38,052

Net decrease in cash, cash equivalents and restricted cash ( 76,525 ) ( 28,828 )

Cash, cash equivalents and restricted cash at beginning of period 118,812 147,640

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Cash paid for interest $ 9,232 $ 9,054

Cash refunds from (payments for) income taxes, net

$ ( 327 ) $ ( 529 ) $ 103

Cash payments for income taxes, net $ ( 441 ) $ ( 327 )

The accompanying notes are an integral part of these consolidated financial statements.

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Note 1 – Summary of Business and Significant Accounting Policies

Description of Business – eHealth, Inc., a Delaware corporation, and its consolidated subsidiaries (collectively, “eHealth”) is a leading private online health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions.

Description of Business – eHealth, Inc., a Delaware corporation, and its consolidated subsidiaries (collectively, “eHealth”) is a leading private health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions.

Our mission is to expertly guide consumers through their health insurance enrollment and related options, when, where and how they prefer.

Our platform leverages technology to solve a critical problem in a large and growing market by aiding consumers in what has traditionally been a complex, confusing, and opaque health insurance purchasing process.

Our omnichannel consumer engagement platform differentiates our offering from other brokers and enables consumers to use our services online, by telephone with a licensed insurance agent, or benefit advisor, or through a hybrid online assisted interaction that includes live agent chat and co-browsing capabilities.

Our omnichannel consumer engagement platform differentiates our offering from competitors and enables consumers to use our services online, by telephone with a licensed insurance agent, or benefit advisor, or through a hybrid online assisted interaction that includes live agent chat and co-browsing capabilities.

We have created a consumer-centric marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual, family, small business and other ancillary health insurance products from over 180 health insurance carriers nationwide.

Our plan recommendation tool curates this broad plan selection by analyzing customer health-related information against plan data for insurance coverage fit.

This tool is supported by a unified data platform and is available to our ecommerce customers and our benefit advisors.

We strive to be the most trusted partner to the consumer in their life's journey through the health insurance market.

Our plan recommendation tool curates this broad plan selection by analyzing consumer health-related information against plan data for insurance coverage fit.

This tool is supported by a unified data platform and is available to our ecommerce consumers and our benefit advisors.

We strive to be the most trusted, unbiased, transparent partner to consumers in their journeys through the health insurance market.

Unless otherwise specified or required by the context, references in this Annual Report on Form 10-K to “eHealth,” “the Company,” “we,” “us” or “our” mean eHealth, Inc.

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Certain prior period amounts have been reclassified to conform with our current period presentation.

Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2020, we identified certain errors, including a $ 3.0 million under-recognition of stock-based compensation expense and a $ 1.5 million over-recognition of licensing costs for the year ended December 31, 2020.

We adjusted for these items in the first quarter of 2021 and the adjustments increased our net loss by approximately $ 1.5 million, or $ 0.06 per basic and diluted share, in our Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2021.

These items also increased our net loss by approximately $ 1.5 million, or $ 0.05 per basic and diluted share, on our Consolidated Statements of Comprehensive Loss for the year ended December 31, 2021.

We evaluated the effects of these out-of-period adjustments, both qualitatively and quantitatively, and concluded that the errors and the correction thereof were immaterial both individually and in the aggregate to the current reporting period and the periods in which they originated, including quarterly reporting.

Operating Segments – We report segment information based on how our chief executive officer, who is our chief operating decision maker (“CODM”), regularly reviews our operating results, allocates resources and makes decisions regarding our business operations.

The performance measures of our segments include total revenue and profit (loss).

Our business structure is comprised of two operating segments:

• Employer and Individual

In the fourth quarter of 2023, the Individual, Family and Small Business segment was renamed “Employer and Individual” (“E&I”).

The Employer and Individual segment name change was to the name only and had no impact on our historical financial position, results of operations, cash flow or segment level results previously reported.

The Medicare segment consists primarily of commissions earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans,

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and to a lesser extent, ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision insurance, as well as our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us or pursuant to which we perform other services as marketing and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities.

The E&I segment consists primarily of commissions earned from our sale of individual and family and small business health insurance plans and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, dental, vision, short term disability and long-term disability insurance.

To a lesser extent, the E&I segment includes amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website, our licensing to third parties the use of our health insurance ecommerce technology and our delivery and sale to third parties of individual and family health insurance leads generated by our ecommerce platforms and our marketing activities.

Marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses that are directly attributable to a segment are reported within the applicable segment.

Indirect marketing and advertising, customer care and enrollment and technology and content operating expenses are allocated to each segment based on usage.

Other indirect general and administrative operating expenses are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the two operating segments and are presented as a reconciling item to our consolidated financial results.

Segment profit (loss) is calculated as total revenue for the applicable segment less direct and allocated marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization expense, amortization of intangible assets and impairment, restructuring and other charges.

Beginning in the first quarter of 2024, primarily as a result of vacating excess office space, we modified our methodology used in allocatin g our facilities-r elated expenses to marketing and advertising, customer care and enrollment and technology and content.

As a result, these costs are now reported within the “General and administrative” line in our Consolidated Statements of Comprehensive Income (Loss).

We have recast the Consolidated Statements of Comprehensive Income (Loss) for the prior periods presented to conform to our current methodology.

This resulted in a classification change of expenses from marketing and advertising, customer care and enrollment and technology and content into general and administrative.

There was no impact to total operating costs and expenses, income (loss) from operations, net income (loss) or net loss per share attributable to common stockholders on our Consolidated Statements of Comprehensive Income (Loss).

Estimates and Judgments – The preparation of consolidated financial statements and related disclosures in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the fair value of investments, recoverability of intangible assets, the commissions we expect to collect for each approved member cohort, valuation allowance for deferred income taxes, provision for (benefit from) income taxes and the assumptions used in determining stock-based compensation.

On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the fair value of investments, the commissions we expect to collect for each approved member cohort, valuation allowance for deferred income taxes, uncertain tax positions and the assumptions used in determining stock-based compensation.

We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable.

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Property and Equipment – Property and equipment are stated at cost, less accumulated depreciation and amortization.

Finance lease amortization expenses are included in depreciation expense in our Consolidated Statements of Comprehensive Loss.

Finance lease amortization expenses are included in depreciation expense in our Consolidated Statements of Comprehensive Income (Loss).

Maintenance and minor replacements are expensed as incurred.

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* Lesser of useful life or related lease term

See Note 3 – Supplemental Financial Statement Information of the Notes to Consolidated Financial Statements for additional information regarding our property and equipment.

Leases – We account for leases in accordance with Accounting Standards Codification Topic 842, Leases.

See Note 3 – Supplemental Financial Statement Information for additional information regarding our property and equipment.

Leases – We account for leases in accordance with Accounting Standards Codification (“ASC”) 842, Leases.

We determine if an arrangement is a lease at inception.

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Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As the Company's leases generally do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date.

In determining the present value of lease payments, we utilized the assistance of third-party specialists to assist us in determining our yield curve based upon our credit rating, lease term and adjustment for security.

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

The operating lease ROU asset also includes any lease payments made to the lessor at or before the commencement date and initial direct costs incurred by us and excludes lease incentives received from the lessor.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Goodwill and Intangible Assets – Goodwill represents the excess of the consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business combination.

Our goodwill is allocated among our two segments, (1) Medicare and (2) E&I.

All of our goodwill resulting from our prior business combinations was allocated to the Medicare segment.

Goodwill and intangible assets are considered non-financial assets and therefore, subsequent to their initial recognition are not revalued at fair value each reporting period unless an impairment charge is recognized.

We test our goodwill for impairment on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances indicate that the asset may be impaired.

Factors that we consider in deciding when to perform an impairment test include significant negative industry or economic trends or significant changes or planned changes in our use of the intangible assets.

As of December 31, 2021, we performed a goodwill impairment assessment, which included both qualitative and quantitative assessments.

Our assessment included a comparison of carrying value to an estimated fair value using a market approach based on our market capitalization.

Based on this assessment, we concluded the fair value of our Medicare segment was below the carrying value primarily due to the change in our market valuation and financial performance at the time and recorded a $ 40.2 million impairment of our goodwill, which was recognized in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss.

As a result of this impairment, we had no goodwill balance on our Consolidated Balance Sheets as of December 31, 2023 and 2022.

We must make subjective judgments in determining the independent cash flows that can be related to specific asset groupings.

In addition, we must make subjective judgments regarding the remaining useful lives of assets with finite useful lives.

As the Company's leases generally do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date.

In determining the present value of lease payments, we utilize the assistance of third-party specialists to assist us in determining our yield curve based upon our credit rating, lease term and adjustment for security.

Intangible Assets – Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate a potential reduction in their fair values below their respective carrying amounts.

We must make subjective judgments regarding the remaining useful lives of assets with finite useful lives.

When we determine that the useful life of an asset is shorter than we had originally estimated, we accelerate the rate of amortization over the assets’ new, remaining useful life.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate a potential reduction in their fair values below their respective carrying amounts.

Intangible assets with finite useful lives, which include purchased technology, pharmacy and customer relationships, trade names, and certain trademarks, are amortized over their estimated useful lives.

See Note 3 – Supplemental Financial Statement Information of the Notes to Consolidated Financial Statements for additional information regarding our intangible assets and related impairment.

See Note 3 – Supplemental Financial Statement Information for additional information regarding our intangible assets.

Other Long-Lived Assets – We evaluate other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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• Identification of the performance obligations in the contract.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Determination of the transaction price.

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Commission Revenue.

Our commission revenue results from approval of an application from health insurance carriers, which we define as our customers under ASC 606.

Our commission revenue is primarily comprised of commissions from health insurance carriers which is computed using the estimated constrained lifetime value of commission payments that we expect to receive.

We estimate commission revenue for each insurance product by using a portfolio approach to a group of approved members by plan type and the effective month of the relevant plan, which we refer to as “cohorts.” We recognize revenue for plans approved during the period by applying the latest estimated constrained lifetime value (“LTV”) for that product.

Our commission revenue results from approval of a submitted application from health insurance carriers, which we define as our customers under ASC 606.

Our commission revenue is primarily comprised of commission payments from health insurance carriers and is computed using the estimated constrained lifetime value (“LTV”) of commission payments that we expect to receive.

We recognize adjustment revenue for plans approved in prior periods when changes in assumptions for constrained LTV calculations are made and when there is sufficient evidence demonstrating a trend that is different from the estimated constrained LTV at the time of approval resulting in a change in estimate to expected cash collections.

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The estimated average plan duration used to calculate the LTV for major medical individual and family health insurance plans has been approximately 1.5 to 2 years.

For short term health insurance plan LTVs, the estimated average plan duration has

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

been approximately six months .

For short term health insurance plan LTVs, the estimated average plan duration has been approximately six months .

For all other ancillary health insurance plan LTVs, the estimated average plan duration has historically varied from 1 to 6 years.

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We then apply judgment in assessing whether the variation between historical cash collections and LTV is representative of variations that can be expected in future periods.

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, cancellations of insurance plans offered by health insurance carriers with which we have a relationship, changes in laws and regulations, and changes in the economic environment.

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 contracted commission rates, carrier mix, plan duration, cancellations of insurance plans offered by health insurance carriers with which we have a relationship, changes in laws and regulations, and changes in the economic environment.

We evaluate the appropriateness of our constraints on an annual basis, at least, and update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.

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We continually review and monitor changes in the data used to estimate LTV and compare the cash received for each cohort to our original estimates at the time of approval.

The fluctuations of cash received for each cohort as compared to our estimates and the fluctuations in LTV can be significant and may or may not be indicative of the need to adjust revenue for prior period cohorts.

Changes in LTV may result in an increase or a decrease to revenue and a corresponding increase or decrease to contract assets – commissions receivable.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We analyze these fluctuations and, to the extent we see changes in our estimates of the cash commission collections that we believe are indicative of an increase or decrease to prior period LTVs, we adjust revenue for the affected cohorts at the time such determination is made and when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

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The enhancements to the LTV estimation model provide greater statistical certainty on expected cash collections, particularly for earlier period cohorts where there is more historical data available.

In the first effective plan year of a Medicare Advantage and Medicare Part D prescription drug plan, for which we are the broker of record, we receive a fixed, annual commission payment from insurance carriers generally after the plan is approved by the carrier and becomes effective.

If applicable, after the health insurance carrier approves the application but during the effective year of the plan, we are paid a fixed commission that is prorated for the number of months remaining in the calendar year.

Additionally, if the plan is the first Medicare Advantage or Medicare Part D prescription drug plan issued to the member, we may receive a higher commission rate that covers a full 12-month period, regardless of the month the plan was effective.

Beginning with the second plan year and for as long as the member remains on that plan, we typically receive fixed, monthly commissions for Medicare Advantage and Medicare Part D prescription drug plans and generally continue to receive commissions until either the plan is cancelled or we otherwise do not remain the agent on the plan.

Our commissions also include regular administrative payments related to administrative services we perform.

For individual and family, Medicare Supplement, small business and ancillary plans, our commissions generally represent a flat amount per member per month or a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan.

Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis.

We generally continue to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or we otherwise do not remain the agent on the plan.

For Medicare-related, individual and family and ancillary health insurance plans, our services are complete once a submitted application is approved by the relevant health insurance carrier.

Accordingly, we recognize commission revenue based upon the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application, net of an estimated constraint.

We refer to these as estimated and

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

constrained LTVs for the plan.

Changes in LTV may result in an increase or a decrease to revenue and a corresponding increase or decrease to contract assets – commissions receivable.

In the first effective plan year of a Medicare Advantage and Medicare Part D prescription drug plan, for which we are the broker of record, we receive a fixed, annual commission payment from health insurance carriers generally after the plan is approved by the carrier and becomes effective.

We also receive a fixed commission that is prorated for the remaining number of months in the calendar year, if applicable.

Additionally, if the plan is the first Medicare Advantage or Medicare Part D prescription drug plan issued to the member, either because the beneficiary just became eligible or has previously been covered through Original Medicare, we may receive a higher commission rate that covers a full 12-month period, regardless of the plan’s effective month.

Beginning with the second plan year and for as long as the member remains on that plan, we typically receive fixed, monthly commissions for Medicare Advantage and Medicare Part D prescription drug plans, continuing until either the plan is cancelled or we are no longer the broker of record.

Premium-based commissions are reported to us after the health insurance carrier collects premiums, generally every month.

We continue to receive commissions from the relevant health insurance carrier until the health insurance plan is cancelled or we are no longer the broker of record.

We provide annual services in selling and renewing small business health insurance plans;

therefore, we recognize small business health insurance plan commission revenue at the time the plan is approved by the carrier, and when it renews each year thereafter, equal to the estimated commissions we expect to collect from the plan over the following 12 months.

For our Medicare segment, our commissions may also include certain bonus payments, which are generally based on attaining predetermined target sales levels or other objectives, as determined by the health insurance carriers.

See Note 2 – Revenue of the Notes to Consolidated Financial Statements for additional information regarding our commission revenue.

See Note 2 – Revenue for additional information regarding our commission revenue.

Other Revenue.

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In return, we are typically paid a fee, which is recognized over the period that advertising is displayed, and often a performance fee based on metrics such as submitted health insurance applications, which is recognized when the service has been performed.

We also offer Medicare advertising and other services, which include, among other things, marketing and website development, hosting and maintenance.

We also offer our Medicare advertising program, where we may engage in other activities including marketing.

In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue ratably over the service period as service is performed.

In certain arrangements, we facilitate beneficiary enrollment in Medicare-related health insurance plans with health insurance carriers without remaining the agent of record.

Under these arrangements, we receive one-time fees determined by contract terms and our services are complete once a submitted application is approved by the relevant health insurance carrier.

In our non-broker of record arrangements, we facilitate beneficiary enrollment in Medicare-related health insurance plans with health insurance carriers without becoming the broker of record.

Under these arrangements, we receive one-time fees determined by contract terms.

Our services are complete once the submitted application is approved by the relevant health insurance carrier.

Accordingly, we recognize fee income based upon the fee we expect to receive for selling the plan after the carrier approves an application.

In certain arrangements where we work as captive agents for specific health insurance carriers, we recognize revenue for customer care and enrollment (“CC&E”) and marketing fees paid to us by the health insurance carriers in the period the services are performed.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We also generate revenue from agreements with carriers to perform post enrollment services for members in Medicare-related health insurance plans.

We typically are paid a fixed fee upon completion of the specific service and the revenue is recognized in the period the service was completed.

Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and agents to utilize our technology to power their online quoting, content and application submission processes.

Typically, we are paid a one-time implementation fee, which we recognize on a straight-line basis over the estimated term of the customer relationship, and a performance fee based on metrics such as submitted health insurance applications.

We may generate revenue from our commercial technology licensing, which allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and agents to utilize our technology to power their online quoting, content and application submission processes.

Typically, we are paid a one-time implementation fee, which we recognize on a straight-line basis until the implementation is complete, and a performance fee based on metrics such as submitted health insurance applications.

The performance fees are based on performance criteria.

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Therefore, costs related these compensation plans are expensed as incurred.

Deferred Revenue – Deferred revenue includes deferred fees and amounts billed to or collected from advertising, sponsorship or technology licensing customers in advance of our performing our service for such customers.

Deferred Revenue – Deferred revenue includes deferred fees and amounts collected from advertising, sponsorship or technology licensing customers in advance of our performing our service for such customers.

It also includes the amount by which both unbilled and billed services provided under our technology licensing arrangements exceed the revenue recognized to date.

Cost of Revenue – Included in cost of revenue are payments related to health insurance plans sold to members who were referred to our website by marketing partners with whom we have revenue-sharing arrangements.

In order to enter into a revenue-sharing arrangement, marketing partners must be licensed to sell

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

health insurance in the state where the policy is sold.

In order to enter into a revenue-sharing arrangement, marketing partners must be licensed to sell health insurance in the state where the policy is sold.

Costs related to revenue-sharing arrangements are expensed as the related revenue is recognized.

Marketing and Advertising Expenses – Marketing and advertising expenses consist primarily of member acquisition expenses associated with our direct marketing and marketing partner channels, in addition to compensation and other expenses related to marketing, business development, partner management, public relations and carrier relations personnel who support our offerings.

Our direct channel expenses may consist of costs for direct mail, email marketing, paid keyword search advertising on search engines and paid social platforms, search engine optimization and television and radio advertising.

We recognize direct marketing expenses in our direct member acquisition channel in the period in which they are incurred, including in the period in which the consumer clicks on the advertisement for direct online channels.

Advertising costs incurred in the years ended December 31, 2023, 2022 and 2021 totaled $ 148.7 million, $ 169.1 million, and $ 240.4 million, respectively.

Our direct channel expenses primarily consist of costs for direct mail, email marketing, paid keyword search advertising on search engines and paid social platforms, search engine optimization and television and radio advertising.

Advertising costs for our direct channel are expensed the first time the related advertising takes place and in the period in which the consumer clicks on the advertisement for direct online channels.

Our marketing partner channel expenses primarily consist of fees paid to marketing partners with which we have a relationship.

Advertising costs for our marketing partner channel are expensed as incurred.

Advertising costs incurred in the years ended December 31, 2024 and 2023 totaled $ 164.2 million and $ 148.7 million, respectively.

Research and Development Expenses – Research and development expenses consist primarily of compensation and related expenses incurred for employees on our engineering and technical teams, which are expensed as incurred.

Research and development costs, which totaled $ 13.7 million, $ 12.1 million and $ 10.4 million for the years ended December 31, 2023, 2022 and 2021, respectively, are primarily included in the “Technology and content expense” line in the accompanying Consolidated Statements of Comprehensive Loss.

Research and development costs, which totaled $ 12.4 million and $ 13.7 million for the years ended December 31, 2024 and 2023, respectively, are primarily included in the “Technology and content” line in the accompanying Consolidated Statements of Comprehensive Income (Loss).

Internal-Use Software and Website Development Costs – We capitalize costs of materials, consultants and compensation and benefits costs of employees who devote time to the development of internal-use software and websites during the application development stage.

The amortization expenses of these assets are recorded in technology and content.

Our judgment is required in determining the point at which various projects enter the phases at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized, which is generally 3 years.

For the years ended December 31, 2023, 2022 and 2021, we capitalized internal-use software and website development costs of $ 9.7 million, $ 17.2 million and $ 19.6 million respectively, and recorded amortization expense of $ 17.4 million, $ 17.3 million, and $ 12.9 million, respectively.

The amortization expenses of these assets are recorded in the “Technology and content” line in the accompanying Consolidated Statements of Comprehensive Income (Loss).

Our judgment is required in determining the point at which various projects enter the phases where costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

over which the costs are amortized, which is generally 3 years.

For the years ended December 31, 2024 and 2023, we capitalized internal-use software and website development costs of $ 11.5 million and $ 9.7 million, respectively, and recorded amortization expense of $ 14.4 million and $ 17.4 million, respectively.

Capitalized internal-use software and website development costs are included in other assets on our Consolidated Balance Sheets and were $ 20.7 million and $ 23.6 million as of December 31, 2024 and 2023, respectively.

See Note 5 - Equity of the Notes to Consolidated Financial Statements for the amount of stock-based compensation capitalized for internal-use software.

Stock-Based Compensation – We grant stock-based awards to officers, certain other employees of the Company and non-employee directors of the Company.

See Note 5 - Equity for the amount of stock-based compensation capitalized for internal-use software.

Stock-Based Compensation – We grant stock-based awards to officers, certain other employees of the Company and outside directors.

The stock-based awards have consisted of stock options, restricted stock units and performance-based stock units.

We recognize stock-based compensation expense in the accompanying Consolidated Statements of Comprehensive Loss based on the fair value of our stock-based awards over their respective requisite service periods, typically the vesting period, which is generally four years for service-based awards for employees and one year for non-employee directors or the one-year anniversary of achieving performance criteria for performance-based awards.

We treat service-based awards with graded vesting as a single award.

We recognize stock-based compensation expense ratably based on the fair value of our stock-based awards over their respective requisite service periods, typically the vesting period, which is generally three to four years for service-based awards for employees and one year for outside directors or the one-year anniversary of achieving performance criteria for performance-based awards.

Stock-based compensation expense is recognized net of estimated forfeitures.

Stock Options .

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Expected volatility is determined using a combination of the implied volatility of publicly traded options in our stock and historical volatility of our stock price.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted and Performance-Based Stock Units.

Our restricted stock units consist of service-based awards.

Our restricted stock units consist of service-based award.

Our performance-based stock units are subject to certain performance metrics, which may be market-based or non-market-based financial metrics.

Our market-based performance stock units are contingent upon the attainment of certain stock prices generally over a four-year performance period while non-market-based performance metrics are contingent upon attainment of certain financial performance metrics generally over a one -year performance period.

Our market-based performance stock units are contingent upon the attainment of certain stock prices generally over a four-year performance period.

Our non-market-based performance metrics are contingent upon attainment of certain financial performance metrics generally over a one or two -year performance period.

Performance-based stock units vest on the one-year anniversary of the date of achievement, subject to the employee’s continued service through the vesting date.

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Expected volatility is determined using a combination of the implied volatility of publicly traded options in our stock and historical volatility of our stock price.

The estimated attainment of performance-based awards and related expense are based on the achievement of certain financial targets over a predetermined performance period, subject to continued service through the vesting date and ultimately are subject to the discretion of the Company’s compensation committee.

The assumptions used in calculating the fair value of stock-based payment awards and expected attainment of performance-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment.

Based on the extent to which metrics are achieved, vested units may range from zero and 200 % of the target number of performance-based stock units.

For performance-based stock units that do not contain a market condition, the total amount of compensation expense recognized reflects management’s assessment of the probability that performance goals will be achieved.

A cumulative adjustment is recognized to compensation expense in the current period to reflect any changes in the probability of achievement of performance goals.

The estimated attainment of performance-based awards is also subject to continued service through the vesting date and ultimately are subject to the discretion of the Company’s compensation committee.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We will continue to use judgment in evaluating the expected term and volatility related to our own stock-based awards on a prospective basis and incorporating these factors into the model.

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Our matching contributions to the 401(k) Plan are discretionary and are expensed as incurred.

We recognized expense of $ 3.6

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

million, $ 3.8 million and $ 4.2 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to 401(k) matching contributions.

We recognized expense of $ 4.2 million and $ 3.6 million for the years ended December 31, 2024 and 2023, respectively, related to 401(k) matching contributions.

Income Taxes – We account for income taxes using the liability method.

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We record interest and penalties related to uncertain tax positions as income tax expense in the consolidated financial statements.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Adopted Accounting Pronouncements

We did not adopt any new accounting pronouncements during the year ended December 31, 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted

Segment Reporting (Topic 280) — In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported measure of a segment’s profit or loss.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements and early adoption is permitted.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Income Taxes (Topic 740) — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as additional disclosure on income taxes paid.

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of a segment’s profit or loss.

ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024 and adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements with early adoption permitted.

We have adopted ASU 2023-07 retrospectively in our consolidated financial statements and related disclosures.

See Note 9 - Segment and Geographic Information for additional information .

Recently Issued Accounting Pronouncements Not Yet Adopted

Income Taxes (Topic 740) — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which will require public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as additional disclosure on income taxes paid.

The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2024 for public entities and early adoption is permitted.

We are currently evaluating the impact of adopting of this ASU on our consolidated financial statements and related disclosures.

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) — In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This ASU will require more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement.

The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027.

The ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements and early adoption is permitted.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

EHEALTH, INC.

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Year Ended December 31,

2023 2022 2021

Medicare Advantage $ 394,942 $ 335,849

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Sponsorship and Advertising Revenue 45,481 38,743

Other 6,417 3,150 4,520

Fee-based and Other Revenue 25,282 10,204

Total Other Revenue 70,763 48,947

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Year Ended December 31,

2023 2022 2021

Commission revenue from members approved during the period

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Commission revenue from renewals of small business members during the period

9,973 9,981 8,564

Net commission revenue from members approved in prior periods (1)

14,531 8,727 30,153

Total Employer and Individual segment commission revenue

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(1) These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as adjustments to revenue within the relevant reporting period.

The net adjustment revenue includes both increases as well as reductions in revenue for certain prior period cohorts.

(2) The impact of total net commission revenue from members approved in prior periods for the years ended December 31, 2023, 2022 and 2021 was $ 1.72 , $ 0.23 and $ 0.81 per basic and per diluted share, respectively.

The total reductions to revenue from members approved in prior periods were $ 4.3 million, $ 16.5 million and $ 28.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The net commission revenue from members approved in prior periods, or the net adjustment revenue includes both increases as well as reductions in revenue for certain prior period cohorts.

(2) The after-tax impact of total net commission revenue from members approved in prior periods for the years ended December 31, 2024 and 2023 was $ 0.59 and $ 1.30 per basic and diluted share, respectively.

The total reductions to revenue from members approved in prior periods were $ 5.3 million and $ 4.3 million for the years ended December 31, 2024 and 2023, respectively.

These reductions to revenue primarily relate to the Medicare segment.

Enhancement to LTV Estimation Model

LTV Estimation Model

During 2024, we observed increases in new paying members, stronger constraint release and commission rate increases for our Medicare segment.

Based on our evaluation of the updated LTV models and improved retention and commission rate trends, we recorded $ 18.7 million of net adjustment revenue for the year ended December 31, 2024.

In addition, we continued to observe stronger constraint release and commission retention rate increases in our LTV assessments for the majority of the earlier period cohorts of certain products in our E&I segment and as a result, we recognized $ 4.1 million of net adjustment revenue for the year ended December 31, 2024.

We will continue to monitor our member retention rates as compared to our forecasts and other market factors and evaluate whether any addition or reduction of adjustment revenue shall be recorded as we continue to assess our LTV models in future periods.

During 2023, we observed stronger member retention rates and commission rate increases for our Medicare segment.

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During 2022, we continued to observe stronger member retention rates in our LTV assessments for the majority of the earlier period cohorts of certain products in our E&I segment.

Based on our evaluation of the updated LTV models and retention trends, we recognized $ 8.7 million of net adjustment revenue for the E&I segment for the year ended December 31, 2022.

In addition, we evaluated various market factors related to our Medicare segment and recorded a net adjustment of $( 2.3 ) million for the year ended December 31, 2022, primarily due to declines in LTV in all Medicare products.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2021, despite the extension of the COVID-19 related special enrollment period through August 15, 2021 and an increase in subsidies to certain individuals who purchase qualified health plans, we continued to observe stronger member retention rates in our LTV assessments for the majority of the earlier period cohorts of certain products in our E&I segment.

We recognized $ 30.2 million of net adjustment revenue for the E&I segment for the year ended December 31, 2021.

In addition, we evaluated various market factors related to our Medicare segment and recorded a net adjustment of $( 8.4 ) million for the year ended December 31, 2021, primarily due to decline in LTV of Medicare Supplement and Medicare Part D prescription drug plans.

Note 3 – Supplemental Financial Statement Information

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Total cash, cash equivalents and restricted cash $ 42,287 $ 118,812

As of December 31, 2023 and 2022, we had $ 3.1 million and $ 3.2 million of restricted cash which was classified as a non-current asset on our Consolidated Balance Sheets.

As of December 31, 2024 and 2023, we had $ 3.1 million of restricted cash which was classified as a non-current asset on our Consolidated Balance Sheets.

This amount collateralizes letters of credit related to certain lease commitments.

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As such, we apply an immediate reversion method and revert to historical loss information when computing our credit loss exposure.

Credit loss expenses are assessed quarterly and included in the “General and administrative” line in our Consolidated Statements of Comprehensive Loss.

Credit loss expenses are assessed quarterly and included in the “General and administrative” line in our Consolidated Statements of Comprehensive Income (Loss).

There were no write-offs during the years ended December 31, 2024 and 2023.

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The deposits in China were $ 5.0 million as of December 31, 2024.

See Note 4 – Fair Value Measurements for more information regarding our marketable securities.

See Note 4 – Fair Value Measurements for additional information regarding our marketable securities.

We do not require collateral or other security for either our contract assets or accounts receivable.

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Prepaid software and maintenance contracts $ 5,582 $ 5,328

Prepaid licenses 2,739 1,116

Prepaid expenses 2,405 1,808

Prepaid licenses 2,358 2,739

Prepaid insurance 1,296 1,436

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Prepaid expenses and other current assets $ 12,961 $ 12,044

Property and Equipment – Our property and equipment are summarized as follows (in thousands):

Property and Equipment, net – Our property and equipment, net are summarized as follows (in thousands):

December 31, 2024 December 31, 2023

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Property and equipment, net $ 4,437 $ 4,864

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2023, 2022 and 2021 was $ 2.5 million, $ 3.8 million and $ 5.4 million, respectively.

During 2022, we recognized impairment charges of $ 2.2 million related to computer equipment, office equipment and furniture and leasehold improvements as a result of our sublease and vacating of certain leased office spaces in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss.

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2024 and 2023 was $ 2.0 million and $ 2.5 million, respectively.

During 2024, we recognized $ 0.5 million of property and equipment impairment as a result of impairment charges on certain leased office spaces in the “ Impairment, restructuring and other charges ” line in our Consolidated Statements of Comprehensive Income (Loss).

See Note 11 – Impairment, Restructuring and Other Charges for further discussion on our impairment charge in 2024.

Intangible Assets – As of December 31, 2024 and 2023, our intangible assets subject to amortization had a gross carrying value of $ 17.2 million and life-to-date accumulated amortization and impairment charges of $ 17.2 million.

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We had no amortization expense related to intangible assets for the years ended December 31, 2024 and 2023.

Amortization expense related to intangible assets for the year ended December 31, 2021 was $ 0.5 million.

We recorded $ 6.1 million of impairment charges related to our intangible assets in the “ Impairment, restructuring and other charges ” line in our Consolidated Statements of Comprehensive Loss for the year ended December 31, 2021.

See Note 11 - Impairment, Restructuring and Other Charges for further discussion on our impairment charge in 2021.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 – Fair Value Measurements

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Level 3 Unobservable inputs for the asset or liability.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our financial assets measured at fair value on a recurring basis are summarized below by their classification within the fair value hierarchy as follows (in thousands):

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Commercial paper 10,562 — 10,562 — 10,562

Agency bonds 10,942 — 10,942 — 10,942

Government securities 2,618 — 2,618 — 2,618

Short-term marketable securities

Agency bonds 5,930 — 5,930 — 5,930

Commercial paper 17,799 — 17,799 — 17,799

Government securities 25,244 — 25,244 — 25,244

Total assets measured at fair value $ 71,313 $ 15,090 $ 56,223 $ — $ 71,313

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Commercial paper 86,090 — 86,090 — 86,090

Agency bonds 1,342 — 1,342 — 1,342

Government securities 10,942 — 10,942 — 10,942

Short-term marketable securities

Government securities 5,930 — 5,930 — 5,930

Total assets measured at fair value $ 114,538 $ 11,576 $ 102,962 $ — $ 114,538

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Our money market funds are measured at fair value based on quoted prices in active markets and are classified as Level 1 within the fair value hierarchy.

Our available for sale marketable securities, which include commercial paper and agency bonds with maturities of less than one year, are measured at fair value using quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs and are classified as Level 2 within the fair value hierarchy.

Our available for sale marketable securities, which include commercial paper and government securities with maturities of less than one year, are measured at fair value using quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs and are classified as Level 2 within the fair value hierarchy.

There were no transfers between the hierarchy levels during either of the years ended December 31, 2024 or 2023.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our cash equivalents and available-for-sale debt securities by contractual maturity (in thousands):

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Due in 1 year $ 71,297 $ 71,313 $ 114,577 $ 114,538

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unrealized gains and losses on available-for-sale debt securities that are not credit related are included in accumulated other comprehensive loss and summarized as follows (in thousands):

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Commercial paper 10,565 — ( 3 ) 10,562

Agency bonds 10,940 2 — 10,942

Government securities 2,618 — — 2,618

Short-term marketable securities

Agency bonds 5,929 1 — 5,930

Commercial paper 17,792 7 — 17,799

Government securities 25,232 12 — 25,244

Total $ 71,297 $ 19 $ ( 3 ) $ 71,313

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Commercial paper 86,132 — ( 42 ) 86,090

Agency bonds 1,342 — — 1,342

Government securities

10,940 2 — 10,942

Short-term marketable securities

Government securities

5,929 1 — 5,930

Total $ 114,577 $ 3 $ ( 42 ) $ 114,538

As of December 31, 2023 and 2022, we had 20 and 26 securities in net loss positions, respectively, and their unrealized losses were immaterial individually and in aggregate.

As of December 31, 2024 and 2023, we had 11 and 20 securities, respectively, in a net unrealized loss position that were immaterial individually and in aggregate.

We did not record any credit losses regarding our available-for-sale debt securities during the year ended December 31, 2024 or 2023.

We do not intend to sell these securities and it is more likely than not that we will not be required to sell these securities before the recovery of their amortized cost basis.

We incurred interest income of $ 8.4 million, $ 2.8 million and $ 0.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

We recognized interest income of $ 7.2 million and $ 8.4 million for the years ended December 31, 2024 and 2023, respectively.

Note 5 – Equity

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Such repurchased shares are held in treasury and are presented using the cost method.

2020 Employee Share Purchase Plan – Our Board of Directors adopted in March 2020 and our stockholders approved in June 2020 the 2020 Employee Stock Purchase Plan (“ESPP”).

A total of 0.5 million shares of our common stock are available for sale under the ESPP.

Eligible employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits.

The purchase price per share is equal to the lower of 85 % of the fair market value of our common stock on the offering date or the purchase date.

Employees purchased 0.1 million, 0.2 million and 0.1 million shares of common stock under our ESPP during the years ended December 31, 2023, 2022 and 2021, respectively.

2020 Employee Share Purchase Plan – On June 12, 2024, upon approval at our annual meeting of stockholders, we adopted an amendment to the eHealth, Inc.

2020 Employee Stock Purchase Plan (“ESPP”) to increase the maximum number of shares that may be issued under the ESPP by 0.5 million shares to a total of 1.0 million shares.

Employees purchased 0.1 million shares of common stock under our ESPP during the years ended December 31, 2024 and 2023.

There were 0.5 million shares remaining for purchase under our ESPP as of December 31, 2024.

As of December 31, 2024, there was $ 0.1 million of unrecognized compensation cost related to our employee stock purchase program, expected to be recognized over a weighted average period of 0.4 years.

Equity Plans – On June 12, 2014, upon approval at the Annual Meeting of Stockholders, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”) with 4.5 million shares authorized for issuance.

The 2014 Plan does not include an evergreen provision to automatically increase the number of shares available under it, and any increase in the number of shares authorized for issuance under the 2014 Plan requires stockholder approval.

Also, under the 2014 Plan the following shares are not recycled for future grant under the 2014 Plan:

Equity Plans – As of December 31, 2024, we can award share-based compensation grants under the Amended and Restated 2021 Inducement Plan (the “A&R 2021 Inducement Plan”) and the 2024 Equity Incentive Plan (the “2024 Equity Plan”) (together, the “Equity Plans”).

On June 12, 2024, upon approval at our annual meeting of stockholders, we adopted the 2024 Equity Plan which replaced the Amended and Restated 2014 Equity Incentive Plan (the “2014 Equity Plan”).

Subject to applicable laws, we are permitted to grant awards of stock options, restricted stock units, stock appreciation rights, performance units and performance shares to eligible employees, directors and consultants of ours or any parent or subsidiary corporation of ours under the 2024 Equity Plan.

We have reserved for issuance under the 2024 Equity Plan a number of shares equal to the sum of (i) 1,350,000 shares, plus (ii) up to an additional 300,000 shares reserved for issuance under the 2014 Equity Plan that (A) were reserved but not issued or (B) are subject to equity awards that later expire or otherwise terminate without having been exercised or issued in full or are forfeited to or repurchased by the Company due to failure to vest.

The 2024 Equity Plan does not include an evergreen provision to automatically increase the number of shares available under the plan, and any increase in the number of shares authorized for issuance under the 2024 Equity Plan requires stockholder approval.

Additionally, while shares subject to awards granted under our 2024 Equity Plan which expire or become unexercisable or are forfeited to or repurchased by us due to failure to vest will return to the 2024 Equity Plan share reserve, the following shares will not return to the share reserve for future issuance:

(i) shares used in connection with the exercise of an option and/or stock appreciation right to pay the exercise price or purchase price of such award or satisfy applicable tax withholding obligations;

and (ii) the gross number of shares subject to stock appreciation rights that are exercised.

Furthermore, the 2014 Plan included a provision that prohibits repricing of outstanding stock options or stock appreciation rights and formalized and updated procedures to qualify awards as “performance-based” compensation under Section 162(m) of the Internal Revenue Code in order to preserve full tax deductibility of such awards.

Our stockholders approved an amendment to the 2014 Plan to increase the maximum number of shares that may be issued by 2.5 million shares in 2019 and by 3.0 million in 2022.

The 2014 Plan was further amended on September 29, 2022 to remove certain provisions permitting the Company to provide a reload option (as amended and restated, the “A&R 2014 Plan”).

On September 22, 2021, the Company adopted an inducement plan (the “2021 Inducement Plan”), pursuant to which the Company reserved 0.4 million shares of its common stock (subject to customary adjustments in the event of a change in capital structure of the Company) to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, other than following a bona fide period of non-employment, as an inducement material to the individual's entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules (“Nasdaq Rules”).

In March 2022 and September 2022, the Company amended and restated its 2021 Inducement Plan to reserve an additional 0.5 million and 1.5 million shares of its common stock, respectively (as amended and restated, the “A&R 2021 Inducement Plan”).

The 2021 Inducement Plan and its amendments were approved by our Board of Directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Rules, and the terms and conditions of the A&R 2021 Inducement Plan and awards to be granted thereunder are substantially similar to our stockholder-approved A&R 2014 Plan.

As of December 31, 2023, 2.0 million shares were issued under the A&R 2021 Inducement Plan.

Shares Reserved – We generally issue previously unissued common stock upon the exercise of stock options, the vesting of restricted and performance-based stock units and upon granting of restricted common stock awards;

We generally issue previously unissued common stock upon the exercise of stock options and the vesting of restricted and performance-based stock units.

However, we may reissue previously acquired treasury shares to satisfy these future issuances.

As of December 31, 2024, there were 5.8 million shares reserved for issuance and 2.1 million shares available for grant under the Equity Plans.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shares of authorized but unissued common stock reserved for future issuance were as follows (in thousands):

December 31, 2023 December 31, 2022

Stock options issued and outstanding 218 226

Restricted stock units issued and outstanding 3,105 2,238

Performance-based stock units issued and outstanding 400 242

Shares available for grant 2,810 5,165

Total shares reserved 6,533 7,871

The following table summarizes activity under our A&R 2014 Plan and A&R 2021 Inducement Plan for the year ended December 31, 2023 (in thousands):

Balance at December 31, 2022 (1)

Restricted stock units granted ( 2,413 )

Performance-based stock units granted ( 337 )

Restricted stock units cancelled 283

Performance-based stock units cancelled 104

Options cancelled 8

Balance at December 31, 2023 2,810

(1) Shares available for grant do not include treasury stock shares that could be granted if we determined to do so.

Stock-Based Compensation Expense – The following table summarizes stock-based compensation expense recognized for the years presented below (in thousands):

Year Ended December 31,

2023 2022 2021

Restricted stock units $ 16,081 $ 19,151

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Related tax benefit recognized $ 4,748 $ 5,488

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes stock-based compensation expense by operating function for the years presented below (in thousands):

Year Ended December 31,

2023 2022 2021

Marketing and advertising $ 2,413 $ 2,201

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Total stock-based compensation $ 20,568 $ 24,253

For the years ended December 31, 2023, 2022 or 2021, there was a total of $ 1.0 million, $ 1.9 million and $ 2.6 million, respectively, of stock-based compensation expense capitalized in the internal-use software and website development costs classified under Other assets, which represents a noncash investing activity.

For the years ended December 31, 2024 and 2023, there was a total of $ 0.7 million and $ 1.0 million, respectively, of stock-based compensation expense capitalized in the internal-use software and website development costs classified under Other assets, which represents a noncash investing activity.

Stock Options – The following table summarizes stock option activity (in thousands, except weighted-average exercise price and weighted-average remaining contractual life data):

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Granted — $ —

Exercised — $ —

Forfeited ( 5 ) $ 18.75

Outstanding balance as of December 31, 2024 213 $ 40.15 3.6 $ —

Vested and expected to vest as of December 31, 2023 194 $ 39.48 4.5 $ —

Exercisable as of December 31, 2024 94 $ 39.04 3.3 $ —

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(2) The aggregate intrinsic value is calculated as the product between eHealth’s closing stock price as of December 31, 2024 and 2023 and the exercise price of in-the-money options as of those dates.

The following table provides information pertaining to our stock options for the years presented below (in thousands, except weighted-average fair values):

Year Ended December 31,

2023 2022 2021

Weighted average fair value of options granted n/a n/a $ 41.03

Total fair value of options vested $ 534 $ 835 $ 797

Intrinsic value of options exercised n/a $ 694 $ 5,182

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no options granted during the years ended December 31, 2023 and 2022.

For the options granted during the year ended December 31, 2021, the fair value of stock options granted to employees was estimated using the Black-Scholes option-pricing model and with the following weighted average assumptions for the year presented below:

Year Ended December 31,

Expected term (years) 7.0

Expected volatility 69.1 %

Expected dividend yield —%

Risk-free interest rate 1.3 %

There were no options granted or exercised during the years ended December 31, 2024 and 2023.

As of December 31, 2024, there was $ 0.4 million of total unamortized compensation cost, net of estimated forfeitures, related to stock options, expected to be recognized over a weighted average period of 0.4 years.

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As of December 31, 2024, there was $ 16.4 million of total unamortized compensation cost, net of estimated forfeitures, related to restricted stock units, expected to be recognized over a weighted average period of 2.0 years.

The total fair value of restricted stock units vested during the year ended December 31, 2024 and 2023 was $ 7.7 million and $ 10.0 million, respectively.

Performance-based Stock Units – The following table summarizes performance-based stock unit activity (in thousands, except weighted-average grant date fair value and weighted-average remaining service period data):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted-average fair value of the market-based restricted stock units was determined using the Monte Carlo simulation model using the following weighted average assumptions:

Year Ended December 31,

2023 2022 2021

Expected term (years) 1.1 2.1 2.0

Expected volatility 76.3 % 68.7 % 66.0 %

Expected dividend yield — % — % — %

Risk-free interest rate 4.0 % 2.5 % 0.9 %

Weighted-average grant date fair value $ 4.79 $ 9.66 $ 46.36

As of December 31, 2023, there was $ 1.7 million of total unamortized compensation cost, net of estimated forfeitures, related to performance-based stock units, expected to be recognized over a weighted average period of 2.0 years.

The total fair value of performance-based stock units vested during the year ended December 31, 2024 and 2023 was $ 2.5 million and $ 0.7 million, respectively.

The weighted-average fair value of the market-based performance-based stock units was determined using the Monte Carlo simulation model using the following weighted average assumptions:

Year Ended December 31,

Expected term (years) n/a 1.1

Expected volatility n/a 76.3 %

Expected dividend yield n/a — %

Risk-free interest rate n/a 4.0 %

Weighted-average grant date fair value n/a $ 4.79

Note 6 – Convertible Preferred Stock

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Capital (the “H.I.G.

Investment Agreement”), we issued and sold to H.I.G., in a private placement, 2,250,000 shares of our newly designated Series A convertible preferred stock (the “Series A Preferred Stock”), par value $ 0.001 per share, at an aggregate purchase price of $ 225.0 million on April 30, 2021 (the “Closing Date”).

Investment Agreement”), we issued and sold to H.I.G., in a private placement, 2,250,000 shares of Series A convertible preferred stock (the “Series A Preferred Stock”), par value $ 0.001 per share, at an aggregate purchase price of $ 225.0 million on April 30, 2021 (the “Closing Date”).

We received $ 214.0 million in net proceeds from the private placement with H.I.G., net of sales commissions and certain transaction fees totaling $ 11.0 million.

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The Series A Preferred Stock ranks senior to all other equity securities of the Company with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Dividends – Dividends initially accrued on the Series A Preferred Stock daily at 8 % per annum on the stated value of $ 100 per share (the “Stated Value”), and were payable in kind (“PIK”) beginning on June 30, 2021 through the second anniversary of the Closing Date.

Subsequent to the second anniversary of the Closing Date, dividends continue to accrue at 8 % per annum, with 6 % PIK and 2 % payable in cash in arrears beginning on June 30, 2023.

Dividends compound semiannually and are PIK and payable in cash in arrears, as applicable, on June 30 and December 31 of each year (each a “Dividend Payment Date”).

PIK dividends are cumulative and are added to the Accrued Value.

“Accrued Value” means, as of any date, with respect to any share of Series A Preferred Stock, the sum of the Stated Value per share plus, on each Dividend Payment Date, on a cumulative basis, all accrued PIK dividends that have accrued on such share but that have not previously been added to the Accrued Value.

During the year ended December 31, 2023, we made cash dividend payments in the aggregate amount of $ 3.5 million.

The Series A Preferred Stock participates, on an as-converted basis in all dividends paid to the holders of our common stock.

Conversion Rights – The Series A Preferred Stock is convertible at any time into common stock at a conversion rate equal to (i) the Accrued Value plus accrued PIK dividends that have not yet been added to the Accrued Value, (ii) divided by the conversion price as of the applicable conversion date (the “Conversion Price”).

As of December 31, 2023, the Conversion Price is equal to $ 79.5861 per share.

This Conversion Price is subject to further adjustment and the number of shares of common stock issuable upon conversion of the Series A Preferred Stock is subject to certain limitations, each as set forth in the Certificate of Designations of Series A Preferred Stock, as filed with the Secretary of State of the State of Delaware on April 30, 2021 (the “Certificate of Designations”).

Redemption Put Right – At any time on or after the sixth anniversary of the Closing Date, holders of the Series A Preferred Stock will have the right to cause the Company to redeem all or any portion of the Series A Preferred Stock in cash at an amount equal to the greater of (i) 135 % of the Accrued Value per share as of the redemption date, plus accrued PIK dividends that have not yet been added to the Accrued Value and (ii) the amount per share that would be payable on an as-converted basis on such Series A Preferred Stock at the then-current

Voting Rights — The Series A Preferred Stock votes together with the common stock as a single class on all matters submitted to a vote of the holders of the common stock in accordance with the Certificate of Designations of Series A Preferred Stock, as filed with the Secretary of State of the State of Delaware on April 30, 2021 (the “Certificate of Designations”).

Dividends — The Series A Preferred Stock participates, on an as-converted basis, in all dividends paid to the holders of our common stock.

From April 30, 2021 through June 30, 2023, dividends accrued at 8 % per annum on the stated value of $ 100 per share, payable in kind (“PIK”).

Subsequent to June 30, 2023, dividends accrue at 8 % per annum, with 6 % PIK and 2 % payable in cash in arrears.

Dividends compound semiannually and are PIK and payable in cash in arrears, as applicable, on June 30 and December 31 of each year.

During the year ended December 31, 2024, we made cash dividend payments in an aggregate amount of $ 5.6 million .

PIK dividends are cumulative and are added to the Accrued Value, as defined in the H.I.G.

Investment Agreement.

Board Nomination Rights – As of December 31, 2024, H.I.G.

has designated one member and one board observer to the Company’s Board of Directors.

Conversion Rights — The Series A Preferred Stock is convertible at any time into common stock at a conversion rate (“Conversion Price”) and is subject to further adjustment and the number of shares of common stock issuable upon conversion is subject to certain limitations, each as set forth in the H.I.G.

Investment Agreement.

As of December 31, 2024, the Conversion Price was equal to $ 79.5861 per share.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued Value, plus accrued PIK dividends that have not yet been added to the Accrued Value, and in either case of (i) or (ii) plus any unpaid cash dividends that would have otherwise been settled in cash in connection with such conversion (the greater of (i) and (ii), the “Redemption Price”).

Redemption Call Right – At any time on or after the sixth anniversary of the Closing Date, the Company will have the right (but not the obligation) to redeem out of legally available funds and for cash consideration all (but not less than all) of the Series A Preferred Stock upon at least 30 days prior written notice at an amount equal to the Redemption Price.

Board Nomination Rights – H.I.G.

is entitled to nominate one individual for election to our Board of Directors 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 in the private placement.

Under certain circumstances, H.I.G.

also has the right to nominate an additional individual to our Board of Directors if we fail to maintain certain levels of commissions receivable or liquidity as further discussed below.

Voting Rights – The Series A Preferred Stock will vote together with the common stock as a single class on all matters submitted to a vote of the holders of the common stock (subject to certain voting limitations set forth in, and the terms and conditions of, the Certificate of Designations).

Each holder of Series A Preferred Stock shall be entitled to the number of votes, rounded down to the nearest whole number, equal to the product of (i) the aggregate Accrued Value of the issued and outstanding shares of Series A Preferred Stock divided by $ 69.684 , which is the “Minimum Price” computed in accordance with the Certificate of Designations (as further described below), multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock held by such holder and the denominator of which is the aggregate number of issued and outstanding shares of Series A Preferred Stock.

“Minimum Price” means the lower of:

(i) the Nasdaq Official Closing Price per share of common stock on the Closing Date;

or (ii) the average Nasdaq Official Closing Price per share of common stock for the five trading days immediately prior to the Closing Date.

Holders of Series A Preferred Stock will have one vote per share on any matter on which the holders of the Series A Preferred Stock are entitled to vote separately as a class (subject to certain voting limitations set forth in the Certificate of Designations).

Mandatory Conversion of the Series A Preferred Stock – At any time on or after the third anniversary of the Closing Date, if the volume-weighted average price per share of our common stock is greater than 167.5 % of the then-current Conversion Price for 20 consecutive trading days in a 30 -day trading day period, the Company will have the right to convert all, but not less than all, of the Series A Preferred Stock into common stock at a conversion rate with respect to each share of Series A Preferred Stock of (i) the Accrued Value plus accrued PIK dividends that have not yet been added to the Accrued Value, (ii) divided by the then applicable Conversion Price.

Mandatory Conversion of the Series A Preferred Stock by the Company — At any time on or after the third anniversary of the Closing Date, if the volume-weighted average price per share of our common stock is greater than 167.5 % of the then-current Conversion Price for 20 consecutive trading days in a 30 -day trading day period, the Company has the right to convert all, but not less than all, of the Series A Preferred Stock into common stock at a conversion rate in accordance with the Certificate of Designations.

Redemption Put Right — At any time on or after the sixth anniversary of the Closing Date, holders of the Series A Preferred Stock has the right to cause the Company to redeem all or any portion of the Series A Preferred Stock in cash at an amount equal to the greater of (i) 135 % of the Accrued Value per share as of the redemption date, plus accrued PIK dividends that have not yet been added to the Accrued Value and (ii) the amount per share that would be payable on an as-converted basis on such Series A Preferred Stock at the then-current Accrued Value, plus accrued PIK dividends that have not yet been added to the Accrued Value, and in either case of (i) or (ii) plus any unpaid cash dividends that would have otherwise been settled in cash in connection with such conversion (the greater of (i) and (ii), the “Redemption Price”).

Redemption Call Right — At any time on or after the sixth anniversary of the Closing Date, the Company has the right (but not the obligation) to redeem out of legally available funds and for cash consideration all (but not less than all) of the Series A Preferred Stock upon at least 30 days prior written notice at an amount equal to the Redemption Price.

Covenants and Liquidity Requirements — As long as H.I.G.

continues to own at least 30 % of the Series A Preferred Stock originally issued to it in the private placement, the consent of H.I.G.

will be required for the Company to incur certain indebtedness and to take certain other corporate actions as set forth in the H.I.G.

is required for the Company to incur certain indebtedness and to take certain other corporate actions as set forth in the H.I.G.

Investment Agreement.

In addition, the Company is required to maintain an Asset Coverage Ratio (as defined in the H.I.G.

Investment Agreement) of at least 2.0 x, (the “Minimum Asset Coverage Ratio”), which increased to 2.5 x in August of 2023.

The first measurement date of the 2.5 x Minimum Asset Coverage Ratio was September 30, 2023.

The Company is required to maintain an Asset Coverage Ratio (as defined in the H.I.G.

Investment Agreement), which was 2.5 x from August 2023 onwards.

Additionally, the H.I.G.

4 unchanged sentences

continues to own at least 30 % of the Series A Preferred Stock originally issued to it in the private placement, entitles H.I.G., subject to conditions and restrictions specified therein, to additional rights, including the right to nominate one additional member to the Company’s Board of Directors, the right to approve the Company’s annual budget, the right to approve hiring or termination of certain key executives, and the right to approve the incurrence of certain indebtedness.

As of December 31, 2023, we complied with the Minimum Liquidity Amount.

As of September 30, 2023, we failed to maintain the Minimum Asset Coverage Ratio, which entitles H.I.G.

to the additional rights set forth above.

On March 13, 2024, the Nominating and Corporate Governance Committee of our Board of Directors approved the appointment of a board observer designated by H.I.G.

As of November 30, 2024, we were no longer in compliance with the Minimum Liquidity Amount.

The non-compliance with the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount does not entitle H.I.G.

to accelerate the redemption of the Series A Preferred Stock.

As of December 31, 2024, the estimated Series A Preferred Stock redemption value equals 135 % of the Accrued Value per share as of the redemption date, plus accrued PIK dividends, that have not yet been added to the Accrued Value, which is significantly in excess of the fair value of the common stock into which the Series A Preferred Stock is convertible as of December 31, 2024.

We have elected to apply the accretion method to adjust the carrying value of the Series A Preferred Stock to its redemption value at the earliest date of redemption, April 30, 2027.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts recognized to accrete the Series A Preferred Stock to its estimated redemption value are treated as a deemed dividend and are recorded as a reduction to retained earnings.

Amounts recognized to accrete the Series A Preferred Stock to its estimated redemption value are treated as a deemed dividend and are recorded as a reduction to retained earnings, to the extent available, and if not, are recorded as a reduction to additional-paid-in-capital.

The estimated redemption value will vary in subsequent periods due to the redemption put right described above and we have elected to recognize such changes prospectively.

No shares of Series A Preferred Stock have been converted and the Series A Preferred Stock was convertible into 3.7 million shares of common stock as of December 31, 2024.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the proceeds and changes to our Series A Preferred Stock (in thousands):

6 unchanged sentences

Balance as of December 31, 2024

Accrued paid-in-kind dividends 17,433

Change in preferred stock redemption value 17,336

Balance as of December 31, 2023

Note 7 – Net Loss Per Share Attributable to Common Stockholders

1 unchanged sentence

Year Ended December 31,

2023 2022 2021

Net loss attributable to common stockholders

10 unchanged sentences

$ ( 1.19 ) $ ( 2.37 )

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For each of the years ended December 31, 2024 and 2023, we had securities outstanding that could potentially dilute net loss per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net loss per share as their effect would have been anti-dilutive.

1 unchanged sentence

Year Ended December 31,

2023 2022 2021

Convertible preferred stock 3,548 3,340

Restricted stock units

2,255 1,551 1,075

Performance-based stock units 209 154

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Total 5,834 6,021

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 – Commitments and Contingencies

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Effective January 1, 2023, we began maintaining a substantial portion of our U.S.

employee health insurance benefits on a self-insured basis with up to $ 0.3 million per individual per year and a maximum claim liability of $ 13.6 million.

employee health insurance benefits on a self-insured basis with up to $ 0.3 million per individual per year with the maximum claim liability as of December 31, 2024 of $ 22.5 million.

As a result, we record a self-insurance liability based on claims filed and an estimate of claims incurred but not yet reported.

As of December 31, 2023, we had a self-insurance liability balance of $ 2.5 million in the “Accrued compensation and benefits” line on our Consolidated Balance Sheet.

We had no liability on our Consolidated Balance Sheet as of December 31, 2022 as our employee health insurance coverage was not self-insured at the time.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023 we had a self-insurance liability balance of $ 2.1 million and $ 2.5 million, respectively, in the “Accrued compensation and benefits” line on our Consolidated Balance Sheets.

Contingencies

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Legal costs incurred in connection with the resolution of claims, lawsuits and other contingencies generally are expensed as incurred.

There were no material litigation-related accruals recorded during the years ended or as of December 31, 2023, 2022 and 2021.

The following discussion is limited to the Company's material on-going legal proceedings:

Legal Proceedings

Securities Class Action – On April 8, 2020 and April 30, 2020, two purported class action lawsuits were filed against the Company, its then-chief executive officer, Scott N.

Flanders, its then-chief financial officer, Derek N.

Yu ng, and its then-chief operating officer, David K.

Francis in the United States District Court for the Northern District of California.

The cases are captioned Patel v.

eHealth, Inc., et al., Case No.

5:20-cv-02395 (N.D.

Cal.) and Bertrand v.

eHealth, Inc.

et al., Case No.

4:20-cv-02967 (N.D.

The complaints allege, among other things, that the Company and Messrs.

Flanders, Yung and Francis made materially false and misleading statements and/or failed to disclose material information regarding the Company’s accounting and modeling assumptions, rate of member churn and the Company’s profitability during the alleged class period of March 19, 2018 to April 7, 2020.

The complaints allege that the specified defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) and Rule 10b-5 promulgated thereunder.

The complaints seek compensatory and (in the Patel lawsuit) punitive damages, attorneys’ fees and costs, and such other relief as the court deems proper.

On June 24, 2020, the Court consolidated the above-referenced matters under the caption In re eHealth Securities Litig., Master File No.

4:20-cv-02395-JST (N.D.

The Court also appointed a lead plaintiff and lead counsel for the consolidated matter.

An Amended Complaint was filed on August 25, 2020, which Defendants moved to dismiss on October 23, 2020.

Defendants’ motion, which Plaintiff opposed, was granted in part and denied in part on August 12, 2021.

The Court dismissed Plaintiff’s claims to the extent premised upon alleged misrepresentations or omissions relating to churn, but denied Defendants’ motion with respect to alleged misstatements regarding purported operating costs.

On October 1, 2021, the Company filed an Answer denying in part and admitting in part the remaining allegations and denying any wrongdoing.

On November 11, 2021, Plaintiff’s counsel filed a suggestion of death with respect to the lead plaintiff Billy White.

Plaintiff’s counsel published notice regarding the appointment of a new lead plaintiff on January 17, 2022.

On November 9, 2022, the Court appointed Chicago & Vicinity Laborers’ District Council Pension Fund as the new lead plaintiff and approved plaintiff’s selection of counsel.

On November 29, 2022, the new lead plaintiff and lead plaintiff’s counsel filed a supplement to the amended complaint, replacing the names of the prior lead plaintiff and counsel and incorporating new lead plaintiff’s previously filed certification.

On December 22, 2022, the Company, Mr.

Flanders, and Mr.

Yung moved for judgment on the pleadings as to the remaining claims.

Francis also moved for judgment on the pleadings the same day, and joined the motion by the Company, Mr.

Flanders, and Mr.

The motions for judgment on the pleadings were fully briefed by February 9, 2023, and were scheduled for a hearing on April 13, 2023.

On April 5, 2023, the Court vacated the hearing on the motions and stated its intent to issue a decision based on the parties’ written briefing.

On April 25, 2023, a consortium of putative class members (the “Alger Funds”) filed a motion to intervene in the case, prior to the expiration of the applicable statute of repose, to preserve their individual rights.

On May 5, 2023, a defendants’ statement of non-opposition to Alger Funds’ limited motion to intervene and a stipulation with Alger Funds regarding same were filed.

On September 28, 2023, the Court granted, with leave to amend, the Company’s motion for judgment on the pleadings as to all remaining claims, along with the similar motions of Mr.

Flanders and Mr.

The Court simultaneously dismissed, with prejudice and without leave to amend, all claims against Mr.

On October 23, 2023, plaintiff filed a stipulation of dismissal order and notice, indicating that lead plaintiff would not file an amended complaint or appeal (a) the order granting in part and denying in part the motion to dismiss or (b) the order granting the motion for judgment on the pleadings.

On October 25, 2023, the court

There were no material litigation-related accruals recorded during the years ended December 31, 2024 and 2023.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

entered the stipulated order, dismissing the case without leave to amend, and on November 29, 2023, the Court entered judgment in the Company’s favor.

Derivative Actions – On July 7, 2020, a derivative lawsuit captioned Chernet v.

Flanders et al., Case No.

3:20-cv-04477-SK (N.D.

Cal.) (the “Chernet” matter) was filed in the United States District Court for the Northern District of California.

On October 13, 2020, a derivative lawsuit captioned Lincolnshire Police Pension Fund v.

Flanders et al., Case No.

20CV371555 (Cal.

Ct.) (the “Lincolnshire” matter) was filed in the Superior Court of California, County of Santa Clara.

The complaints were brought against the Company's then-chief executive officer, Mr.

Flanders, its then-chief financial officer, Mr.

Yung, its then-chief operating officer, Mr.

Francis, and the then-current members of the Board of Directors (collectively, the “Individual Defendants”), and name the Company as a nominal defendant.

The complaints allege, among other things, that the Individual Defendants made or caused the Company to make materially false and misleading statements and/or failed to disclose material information regarding the Company’s accounting and modeling assumptions, rate of member churn, profitability and internal controls for the period of March 2018 through the present.

The Chernet and Lincolnshire complaints purport to assert claims for breach of fiduciary duty, unjust enrichment and waste of corporate assets.

The Chernet lawsuit also alleges that the Individual Defendants violated Sections 14(a), 10(b) and 20(a) of the Exchange Act and asserts claims for abuse of control and gross mismanagement.

The Chernet and Lincolnshire complaints seek damages, restitution, attorneys’ fees and costs, and certain measures with respect to the Company's corporate governance and internal procedures, and (in the Lincolnshire lawsuit) equitable and/or injunctive relief.

On August 12, 2020, the court stayed the Chernet matter pending the resolution of the then-anticipated motion to dismiss the consolidated securities class action.

On December 11, 2020, the court stayed the Lincolnshire matter, also pending the resolution of the motion to dismiss in the consolidated securities class action.

On October 5, 2021, a third derivative lawsuit, captioned Badwal v.

Flanders et al., Case No.

4:21-cv-07795 (N.D.

Cal.) (the “Badwal” matter) was filed in the United States District Court for the Northern District of California.

The Badwal complaint purports to assert a claim for breach of fiduciary duty, an insider trading claim, and violations of Section 14(a), 10(b) and 21D of the Exchange Act.

The Badwal complaint seeks damages, declaratory relief, corporate governance measures, equitable and injunctive relief, restitution and disgorgement, and attorneys' fees and costs.

On November 29, 2021, the federal court consolidated the Chernet and Badwal matters under the caption In re eHealth, Inc.

Stockholder Derivative Litigation (the “Federal Derivative Action”).

On August 12, 2021, the court granted-in-part and denied-in-part defendants’ motion to dismiss the securities class action.

In December 2021, the parties entered into a stipulation to further stay the Federal Derivative Action pending the appointment of a new lead plaintiff in the securities class action, which was so ordered by the court on December 14, 2021.

As discussed above, on November 9, 2022, the court appointed a new lead plaintiff in the securities class action.

On December 9, 2022, plaintiffs in the Federal Derivative Action filed a verified consolidated stockholder derivative complaint on behalf of the Company against certain current and former members of its Board of Directors and certain of its officers.

The complaint alleges breaches of fiduciary duties, insider trading, and violations of Sections 14(a), 10(b) and 21D of the Exchange Act.

The complaint seeks damages, declaratory relief, corporate governance measures, equitable and injunctive relief, restitution and disgorgement, and attorneys’ fees and costs.

On January 3, 2023, pursuant to a joint stipulation, the court ordered all proceedings in the Federal Derivative Action stayed pending the resolution of the securities class action.

On July 28, 2023, the Lincolnshire matter was stayed pending the resolution of the securities class action, pursuant to the parties’ stipulation.

On January 10, 2024, the Court entered the parties’ stipulated order voluntarily dismissing the Federal Derivative Action.

Note 9 – Segment and Geographic Information

Reportable Segments

Our operating and reportable segments have been determined in accordance with ASC 280, Segment Reporting .

Our business structure is comprised of two reportable operating segments:

(i) Medicare, and (ii) Employer and Individual (“E&I”).

Our Medicare segment includes operating segments that have been aggregated based on the nature of products and services, types or class of customers, methods used to distribute the products and services, the nature of the regulatory environment and similarity of economic characteristics.

The Medicare segment consists primarily of commissions earned as the broker of record from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans, and to a lesser extent, ancillary products sold to our Medicare-eligible beneficiaries, including but not limited to, dental and vision insurance.

Our commissions may include certain bonus payments, which are generally based on attaining predetermined target sales levels or other objectives, as determined by the health insurance carriers.

The Medicare segment consists of amounts earned in connection with our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us or pursuant to which we perform other services as marketing and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities.

The Medicare segment also generates revenue from our fee-based business process outsourcing services (“BPO”) where we are not the broker of record and cash is collected in advance or in close proximity to when revenue is recognized.

The E&I segment consists primarily of commissions earned from our sale of individual and family plans, including qualified and non-qualified, small business health insurance plans, and ancillary products sold to our non-Medicare-eligible consumers, including but not limited to, dental, vision and short-term insurance.

To a lesser extent, the E&I segment includes amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets on our website as well as our technology licensing activities.

We report segment information based on how our chief executive officer, who is our chief operating decision maker (“CODM”), regularly reviews our operating results, allocates resources and makes decisions regarding our business operation in the annual budget and forecasting process along with evaluation of actual performance.

Our CODM considers budget-to-actual variances on a monthly basis for our segment performance measures when making decisions about allocating capital and personnel to our segments.

These performance measures include total segment revenue and segment gross profit (loss).

Prior to the fourth quarter of 2024, we reported our measure of segment profitability as segment profit (loss).

Accordingly, prior period amounts have been reclassified to conform to the current period presentation, in all material respects.

Segment gross profit (loss) is calculated as total revenue for the applicable segment less variable marketing and advertising expenses, segment CC&E and cost of revenue for the applicable segment.

Variable marketing and advertising expenses represent costs incurred in member acquisition from our direct marketing and marketing partner channels and exclude fixed overhead costs, such as personnel related costs, consulting expenses and other operating costs allocated to the marketing and advertising department.

Segment CC&E expenses include expenses we incur in assisting applicants during the enrollment process and exclude operating costs allocated to the CC&E department.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 – Segment and Geographic Information

Operating Segments

The results of our operating segments are summarized for the periods presented below (in thousands):

Year Ended December 31,

The results of our reportable segments are summarized for the periods presented below (in thousands):

Total revenue

$ 500,638 $ 406,467

Medicare $ 406,467 $ 361,687 $ 471,217

Variable marketing and advertising

( 157,121 ) ( 141,487 )

Medicare CC&E ( 150,613 ) ( 137,910 )

Cost of revenue

( 1,396 ) ( 1,312 )

Medicare segment gross profit

$ 191,508 $ 125,758

Employer and Individual:

Total revenue

Segment profit (loss):

Medicare $ 54,748 $ ( 9,873 ) $ ( 12,079 )

Employer and Individual 25,841 21,438 45,705

Segment profit 80,589 11,565 33,626

Corporate ( 66,534 ) ( 53,238 ) ( 56,325 )

Stock-based compensation expense ( 23,213 ) ( 20,316 ) ( 32,857 )

Depreciation and amortization ( 19,916 ) ( 21,108 ) ( 18,331 )

$ 31,772 $ 46,404

Variable marketing and advertising

( 4,321 ) ( 3,304 )

E&I CC&E ( 10,103 ) ( 9,214 )

Cost of revenue

( 398 ) ( 459 )

E&I segment gross profit

$ 16,950 $ 33,427

Consolidated:

Total revenue

$ 532,410 $ 452,871

Variable marketing and advertising

( 161,442 ) ( 144,791 )

( 160,716 ) ( 147,124 )

Cost of revenue

( 1,794 ) ( 1,771 )

Total segment gross profit

$ 208,458 $ 159,185

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of our segment gross profit (loss) to the Consolidated Statements of Comprehensive Income (Loss) for the periods presented is as follows (in thousands):

Year Ended December 31,

Total segment gross profit

$ 208,458 $ 159,185

Other marketing and advertising (1)

( 29,395 ) ( 27,849 )

Other CC&E (2)

( 2,732 ) ( 2,438 )

Technology and content ( 53,520 ) ( 58,609 )

General and administrative ( 89,765 ) ( 99,363 )

Impairment, restructuring and other charges ( 9,475 ) —

Amortization of intangible assets — — ( 536 )

Interest expense ( 11,159 ) ( 10,974 )

Other income, net 6,900 9,453

Loss before income taxes $ ( 30,595 ) $ ( 106,389 ) $ ( 124,890 )

Income (loss) before income taxes

$ 19,312 $ ( 30,595 )

(1) Other marketing and advertising costs consist of fixed marketing and advertising, previously capitalized labor, depreciation and share-based compensation costs.

(2) Other CC&E costs consist of previously capitalized labor, depreciation and share-based compensation costs.

There were no inter-segment revenue transactions for the periods presented.

8 unchanged sentences

Total $ 26,332 $ 29,700

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant Customers

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Carriers representing 10% or more of our total revenue are summarized as follows.

The majority of the revenue was from the Medicare segment.

Year Ended December 31,

2023 2022 2021

Humana 24 % 27 %

UnitedHealthcare (1)

23 % 22 % 20 %

15 % 12 % 18 %

(1) Percentages include the carriers’ subsidiaries.

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 – Leases

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of less than 1 to 6 years.

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of 1 to 5 years.

Certain of these leases have free or escalating rent payment provisions.

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As of December 31, 2024, we expect to generate a total of $ 12.2 million in future sublease income through January 31, 2030.

Sublease income is recorded on a straight-line basis as a reduction of lease expense in our Consolidated Statements of Comprehensive Loss.

We test right-of-use assets when impairment indicators are present in accordance with the asset impairment provisions of Accounting Standards Codification 360, Property, Plant and Equipment (“ASC 360”).

Our decision to sublease or to vacate a number of our leased office space triggered impairment testing for the underlying right-of-use assets.

We evaluated these right-of-use assets, including leasehold improvements, furniture and fixtures and computer equipment for impairment under ASC 360.

For our impairment tests, we utilized an income approach to value the asset group by performing a discounted cash flow analysis and determined that the net carrying value exceeded the estimated discounted future cash flows based on current market conditions.

As a result, we recorded an $ 11.8 million impairment charge related to operating lease right-of-use assets and property, plant and equipment, which was reflected in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss for the year ended December 31, 2022.

Sublease income is recorded on a straight-line basis as a reduction of lease expense in our Consolidated Statements of Comprehensive Income (Loss).

We test right-of-use assets when impairment indicators are present in accordance with the asset impairment provisions of ASC 360, Property, Plant and Equipment .

As part of our continued cost savings initiatives, we reassessed our occupied leased office space to identify excess space to vacate and potentially sublease.

We also reassessed current market conditions in our previously vacated leased office spaces that have not yet been subleased.

As a result, we determined impairment indicators were present and we performed impairment testing of our right-of-use assets, including leasehold improvements.

We utilized an income approach to value the asset groups by performing a discounted cash flow analysis and determined that for certain leases the net carrying values exceeded the estimated discounted future cash flows expected to be derived from the properties based on Level 3 inputs, including current sublease market rent, future sublease market conditions and the discount rate.

This resulted in $ 7.5 million of impairment charges related to our operating lease right-of-use assets and property, plant and equipment, which was reflected in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2024.

See Note 11 — Impairment, Restructuring and Other Charges for further discussion about our asset impairment charges.

We recorded no impairment charge related to operating lease right-of-use assets and property, plant and equipment during the years ended December 31, 2023 and 2021.

We recorded no impairment charges related to operating lease right-of-use assets and the corresponding property, plant and equipment during the year ended December 31, 2023.

The components of operating lease costs were as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Operating lease expense

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Total operating lease cost $ 3,110 $ 5,702

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental information related to our leases are as follows (in thousands):

Supplemental information related to our leases are as follows (dollars in thousands):

Year Ended December 31,

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Weighted-average discount rate used to recognize operating lease right-of-use-assets 5.7 % 5.7 %

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, maturities of our operating lease liabilities are as follows (in thousands):

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Total $ 28,463

(1) Non-cancellable sublease rent payments for the years ending December 31, 2024, 2025, 2026, 2027, 2028 and thereafter of $ 2.4 million, $ 2.6 million, $ 2.7 million, $ 2.8 million, $ 2.8 million, and $ 1.0 million, respectively, are not included in the table above.

(1) Non-cancellable sublease proceeds for the years ending December 31, 2025, 2026, 2027, 2028, 2029 and thereafter of $ 2.7 million, $ 2.9 million, $ 3.0 million, $ 3.1 million, $ 1.1 million, and $ 0.1 million, respectively, are not included in the table above.

Note 11 – Impairment, Restructuring and Other Charges

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Year Ended December 31,

2023 2022 2021

Asset impairment charges $ 7,479 $ —

Restructuring and reorganization charges 1,996 —

Goodwill and intangible assets impairment — — 46,344

Impairment, restructuring and other charges $ 9,475 $ —

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Asset Impairments

For the year ended December 31, 2024, we recognized non-cash, pre-tax asset impairment charges of $ 7.5 million, related to several of our leased office spaces in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Income (Loss).

These charges were comprised of $ 7.0 million of operating lease right-of-use asset impairments and $ 0.5 million of property and equipment impairment.

Restructuring

Our restructuring and reorganization costs and liabilities consist primarily of severance, transition and other related costs.

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Balance at December 31, 2024 $ —

Asset Impairments

For the year ended December 31, 2022, we recognized a non-cash, pre-tax asset impairment charge of $ 12.1 million related to the subleasing and vacating of several of our office spaces in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss.

The charge primarily consisted of $ 9.6 million of operating lease right-of-use assets impairment and $ 2.2 million of property, plant and equipment impairment.

Restructuring

In the first half of 2022, we eliminated 339 full-time positions, which represented approximately 14 % of our workforce, primarily within our customer care and enrollment group, and to a lesser extent, in our marketing and advertising, technology and content, and general and administrative groups, and, as a result, recorded pre-tax restructuring charges of $ 6.2 million in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss.

In the second half of 2022, we incurred pre-tax restructuring charges of $ 1.3 million for additional eliminated positions.

Substantially all of the restructuring charges have been settled in cash and no equity awards were modified.

As of December 31, 2022, the restructuring accrual of $ 0.4 million was recorded in the “Other current liabilities” line in our Consolidated Balance Sheets.

During the year ended December 31, 2023, we incurred no pre-tax restructuring charges.

As of December 31, 2023, we had no restructuring accrual on our Consolidated Balance Sheets.

In September 2021, we announced the transition of our chief executive officer.

Scott Flanders resigned as a member of our board of directors and chief executive officer, effective October 31, 2021.

We recognized $ 2.4 million in severance costs related to his separation in 2021.

Stock-based compensation expense for the year ended December 31, 2021 was impacted by a $ 4.1 million credit related to forfeited equity awards due to Mr.

Flanders' separation, which was included in the “General and administrative” line in our Consolidated Statements of Comprehensive Loss.

In February 2021, we eliminated 89 full-time positions, primarily in the United States, representing approximately 5 % of our workforce, primarily within our customer care and enrollment group, and to a lesser extent, in our marketing and advertising, technology and content, and general and administrative groups.

Total pre-tax restructuring charges were $ 2.4 million for the year ended December 31, 2021, which primarily related to employee termination benefits.

Substantially all of the restructuring charges resulted in cash expenditures.

The restructuring activities were completed by March 31, 2021.

Goodwill and Intangible Asset Impairments

For the year ended December 31, 2021, we performed an impairment analysis over our goodwill, which included both qualitative and quantitative assessments.

Our goodwill assessment included a comparison of carrying value to an estimated fair value using a market approach based on our market capitalization.

Based on this assessment, we concluded the fair value of our Medicare segment was below the carrying value primarily due to the change in our market valuation at the time and financial performance and recorded a $ 40.2 million impairment of goodwill to write-off our entire goodwill balance.

During the year ended December 31, 2024, we recognized $ 2.0 million of pre-tax restructuring charges in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Income (Loss), primarily related to employee termination benefits as a result of our cost-reduction efforts.

Substantially all of

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2021, we performed an impairment analysis over our intangible assets.

Our analysis included a recoverability test for definite-lived intangible assets and a comparison of carrying value to the estimated fair value.

The fair value of our intangible assets as of December 31, 2021 was estimated using a market approach for certain indefinite-lived intangible assets as well as using the expected future cash flow approach for our definite-lived intangible assets.

Based our assessment, we determined that the fair value of our Medicare segment was below the carrying value as of December 31, 2021 primarily due to the recent change in our market valuation and financial performance.

Therefore, we recorded a $ 6.1 million impairment charge on our Consolidated Statements of Comprehensive Loss related to our intangible assets.

No intangible asset impairment was identified during the years ended December 31, 2023 or 2022.

the restructuring charges were settled in cash and no equity awards were modified.

As of December 31, 2024, we had no restructuring accrual on our Consolidated Balance Sheets.

During the year ended December 31, 2023, we incurred no pre-tax restructuring charges.

Note 12 – Debt

On February 28, 2022, we entered into a term loan credit agreement with Blue Torch Finance LLC, as administrative agent and collateral agent, and other lenders party thereto (the “Original Credit Agreement”).

On August 16, 2022, we entered into an Amendment (the “Amendment”) to the Original Credit Agreement (as amended by the Amendment, the “Credit Agreement”).

The Amendment replaced the LIBOR-based Adjusted Euro currency Rate (as defined in the Original Credit Agreement) with Adjusted Term SOFR (as defined in the Amendment) as a reference rate for loans under the Credit Agreement.

The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes, to refinance our credit agreement with Royal Bank of Canada (“RBC”) and to pay fees and expenses in connection with the entry into the Credit Agreement.

The Credit Agreement provides for a $ 70.0 million secured term loan credit facility.

We incurred closing costs totaling $ 5.1 million , which were recorded as a direct deduction from the face amount of the loan on our Consolidated Balance Sheets.

Total amortization of closing costs, or debt issuance costs, was $ 1.6 million and $ 1.3 million for the years ended December 31, 2023 and 2022, respectively, and is recorded in the “Interest expense” line in our Consolidated Statements of Comprehensive Loss.

On February 28, 2022, we entered into a term loan credit agreement, which provides for a $ 70.0 million secured term loan credit facility, with Blue Torch Finance LLC, as administrative agent and collateral agent, and other lenders party thereto (the “Original Credit Agreement”).

On August 16, 2022, we entered into a first amendment (the “First Amendment”) to the Original Credit Agreement (as amended by the First Amendment, the “First Amended Credit Agreement”).

The First Amendment replaced the LIBOR-based Adjusted Euro currency Rate (as defined in the Original Credit Agreement) with Adjusted Term SOFR (as defined in the First Amendment) as a reference rate for loans under the Original Credit Agreement.

On November 1, 2024, we entered into a second amendment (the "Second Amendment") to the First Amended Credit Agreement (as amended by the First Amendment and the Second Amendment, the “Credit Agreement”), which, among other things, (i) extends the maturity date of the Credit Agreement from February 2025 to February 2026, (ii) removes the "exit fee" contemplated by the Credit Agreement and replaces it with an “applicable premium” that is payable in the event of any voluntary or mandatory prepayment of the loan and (iii) reduces the margin applicable to SOFR loans and the margin applicable to base rate loans.

The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes and to pay fees and expenses in connection with the entry into the Credit Agreement.

In accordance with ASC 470-50, Debt Modification and Extinguishments, the Second Amendment was accounted for as a debt modification.

The $ 1.1 million extension fee paid to the lenders of the Credit Agreement during the quarter ended December 31, 2024 has been recorded as a direct deduction from the face amount of the loan on our Consolidated Balance Sheets.

Similar to the $ 5.1 million of closing costs incurred for the Original Credit Agreement, the extension fee is amortized on a straight-line basis over the remaining term of the Credit Agreement in the “Interest expense” line in o ur Consolidated Statements of Comprehensive Income (Loss) .

Additionally, we paid $ 1.3 million during the quarter ended December 31, 2024 in third-party costs as part of the Second Ame ndment, which is recorded in the “Other income, net” line in our Consolidated Statements of Comprehensive Income (Loss).

For the years ended December 31, 2024 and 2023, total amortization of closing costs, or debt issuance costs, was $ 1.8 million and $ 1.6 million respectively.

There were $ 1.5 million of unamortized issuance costs as of December 31, 2024.

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The carrying value of the loan was $ 68.5 million as of December 31, 2024.

The Original Credit Agreement bore interest, at our option, at either a rate based on the LIBOR for the applicable interest period or a base rate, in each case plus a margin.

The base rate was the highest of the prime rate, the federal funds rates plus 0.50 % and one month adjusted LIBOR plus 1.00 %.

The margin was 7.50 % for LIBOR loans and 6.50 % for base rate loans.

After the Amendment, the loans under the Credit Agreement bear interest, at our option, at either a rate based on the Adjusted Term SOFR or a base rate, in each case plus a margin.

The loans under the Credit Agreement bear interest, at our option, at either a rate based on the Adjusted Term SOFR or a base rate, in each case plus a margin.

The base rate is the highest of the prime rate, the federal funds rate plus 0.50 % and three-month Adjusted Term SOFR plus 1.00 %.

The margin is 7.50 % for Adjusted Term SOFR loans and 6.50 % for base rate loans.

The Second Amendment reduced the margin from 7.50 % to 7.00 % for Adjusted Term SOFR loans and from 6.50 % to 6.00 % for base rate loans.

As of December 31, 2024, the interest rate was 11.78 %.

For the years ended December 31, 2024 and 2023, we incurred interest expense of $ 9.2 million and $ 9.1 million, respectively.

We incurred no interest expense in relation to the Credit Agreement for the year ended December 31, 2021.

Furthermore, as part of the Credit Agreement, we incur a $ 0.3 million fee per annum, payable annually.

1 unchanged sentence

The Credit Agreement matures in February 2026.

We have the right to prepay the loans under the Credit Agreement in whole or in part at any time, subject, in the case of certain mandatory prepayments or any voluntary prepayment of the loans under the Credit Agreement after February 28, 2023, to an exit fee, which right we did not exercise.

We have the right to prepay the loans under the Credit Agreement in whole or in part at any time, subject, to an “applicable premium” that is payable in the event of any voluntary prepayment or certain mandatory prepayments of the loans under the Credit Agreement in an amount equal to 1.00 % of the loans being prepaid, plus, solely in the case of loans prepaid on or prior to March 1, 2025, an additional “make-whole” amount.

Our obligations under the Credit Agreement are guaranteed by certain of our material domestic subsidiaries and substantially all of our assets and the assets of such guarantors, in each case, subject to customary exclusion.

Financial covenants in the Credit Agreement require that we maintain Liquidity (as defined in the Credit Agreement) at or above $ 25.0 million as of the last calendar day of any month.

The Credit Agreement also requires that the outstanding amount as of the last calendar day of any month be less than 50 % of our total contract assets -

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

commissions receivable (i.e., both current and non-current commissions receivable).

Financial covenants in the Credit Agreement require that we maintain Liquidity (as defined in the Credit Agreement) at or above $ 25.0 million as of the last calendar day of any month.

The Credit Agreement also requires that the outstanding amount as of the last calendar day of any month be less than 50 % of our total contract assets - commissions receivable (i.e., both current and non-current commissions receivable).

As of December 31, 2024, we were in compliance with our loan covenants.

On September 17, 2018, we entered into a $ 40.0 million credit agreement with RBC as administrative agent and collateral agent and incurred $ 1.2 million of issuance costs which were capitalized as part of other assets on our Consolidated Balance Sheets.

On December 20, 2019, we amended our revolving credit facility agreement with RBC which increased the borrowing amount from $ 40.0 million to $ 75.0 million and incurred $ 0.5 million of issuance costs which were capitalized in “Other assets” on our Consolidated Balance Sheets.

The maturity date was extended to December 20, 2022.

Total amortization of debt issuance costs for the year ended December 31, 2021 was $ 0.4 million, which was recorded in the “Interest expense” line in our Consolidated Statements of Comprehensive Loss.

As of December 31, 2021, the remaining balance of unamortized issuance costs was $ 0.4 million and we had no outstanding borrowings under our agreement with RBC.

In the first quarter of 2022, in connection with entering into the Credit Agreement, we terminated our credit agreement with RBC and wrote off our remaining related debt issuance cost of $ 0.4 million.

We had no outstanding borrowings under our agreement with RBC at the time of termination.

Note 13 – Income Taxes

The components of our loss before income taxes were as follows (in thousands):

The components of our income (loss) before income taxes were as follows (in thousands):

Year Ended December 31,

2023 2022 2021

United States $ 17,707 $ ( 31,972 )

Foreign 1,605 1,377

Loss before income taxes $ ( 30,595 ) $ ( 106,389 ) $ ( 124,890 )

The federal, state and foreign income tax benefit is summarized as follows (in thousands):

Year Ended December 31,

Income (loss) before income taxes

$ 19,312 $ ( 30,595 )

The federal, state and foreign income tax provision (benefit) is summarized as follows (in thousands):

Year Ended December 31,

Federal $ — $ —

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State 1,605 ( 506 )

Foreign — — —

Total deferred 9,178 ( 2,670 )

Benefit from income taxes $ ( 2,381 ) $ ( 17,667 ) $ ( 20,515 )

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The effective tax rate of our benefit from income taxes differs from the federal statutory rate as follows:

Year Ended December 31,

Provision for (benefit from) income taxes

$ 9,255 $ ( 2,381 )

The effective tax rate of our provision for (benefit from) income taxes differs from the federal statutory rate as follows:

Year Ended December 31,

Statutory rate 21.0 % 21.0 %

6 unchanged sentences

Foreign income tax and income inclusion 0.8 ( 1.5 )

Goodwill impairment — — ( 2.4 )

Prior period adjustment 3.4 —

Other permanent differences 0.2 ( 1.8 )

Effective tax rate 47.9 % 7.8 %

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, together with operating losses and tax credit carryforwards.

7 unchanged sentences

Accruals and reserves 6,442 6,352

Stock-based compensation 1,283 1,387

Fixed assets 982 1,069

Stock-based compensation 759 1,283

Other 2,809 2,279

7 unchanged sentences

Net deferred tax liabilities $ ( 38,870 ) $ ( 29,687 )

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assessing the realizability of our deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible.

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December 31, 2023 4,287 643 ( 42 ) 4,888

December 31, 2021 2,479 3,150 ( 2,415 ) 3,214

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The net operating loss and tax credit carryforwards as of December 31, 2024 are summarized as follows (in thousands):

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Year Ended December 31,

2023 2022 2021

Beginning balance

$ 10,639 $ 9,875

Additions for tax positions of prior years — 162 646

Reductions for tax positions of prior years ( 363 ) —

Lapse of statute of limitations ( 91 ) ( 36 )

2 unchanged sentences

$ 11,133 $ 10,639

EHEALTH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, the total amount of gross unrecognized tax benefits was $ 11.1 million, of which $ 9.8 million, if recognized, would affect our effective tax rate.

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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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data