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What changed in eHealth, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of eHealth, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+566 added−640 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in eHealth, Inc.'s 2025 10-K

566 paragraphs added · 640 removed · 432 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

92 edited+21 added−41 removed42 unchanged
Biggest changeIn our Medicare segment, we have benefited from several trends over the past few years, including: (1) demographic trends, with an average of approximately 10,000 people projected to turn 65 every day for the next several years; (2) the strong value proposition of the Medicare Advantage program, which we believe has provided overall superior health outcomes compared to traditional Medicare; (3) and a wide selection of Medicare Advantage plans that are increasingly offering extra benefits such as gym memberships, medical transportation and nutritional services; (4) the increasing proportion of the Medicare eligible population that is choosing commercial insurance solutions such as Medicare Advantage and Medicare Supplement plans, rather than obtaining healthcare through the Original Medicare program; and (5) consumers’ growing propensity to comparison shop, including for healthcare insurance.
Biggest changeOur Medicare segment has benefited from several long-term trends, including: (1) demographic trends, with an average of approximately 10,000 individuals aging into Medicare daily for the next several years; (2) the strong value proposition of the Medicare Advantage program, which we believe has provided overall superior health outcomes compared to traditional Medicare; (3) a wide selection of Medicare Advantage plans with additional benefits; (4) the increasing proportion of the Medicare eligible population that is choosing commercial insurance solutions such as Medicare Advantage and Medicare Supplement plans, rather than obtaining healthcare through the Original Medicare program; (5) growing consumer propensity to comparison shop, including for healthcare insurance; and (6) increasing shift to mobile-first generations and growing internet adoption among seniors, along with a desire for end-to-end online enrollment.
We generate revenue from agreements with carriers to perform various post-enrollment services for members in Medicare 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.
We generate revenue from agreements with health insurance carriers to perform various post-enrollment services for members in Medicare 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.
We also have introduced MatchMonitor™, a self-service tool that allows members to easily understand the implications of annual notice changes, check if any of their critical benefits are impacted and compare their current plan to other options. Online Application and Enrollment Forms . Health insurance applications vary widely by carrier and state.
We also have introduced MatchMonitor™, a self-service tool that allows members to easily understand the implications of annual notice of changes, check if any of their critical benefits are impacted and compare their current plan to other options. Online Application and Enrollment Forms . Health insurance applications vary widely by carrier and state.
Our systems also have customer relationship management tools that can track each consumer throughout the application process, generate automated emails specific to each consumer. Customer Center. Our customer center enables members to create a secure personal profile that stores their prescription drug regimen, preferred doctors and pharmacies, current coverage, and other relevant data.
Our systems also have customer relationship management tools that can track each consumer throughout the application process and generate automated emails and texts specific to each consumer. Customer Center. Our customer center enables members to create a secure personal profile that stores their prescription drug regimen, preferred doctors and pharmacies, current coverage, and other relevant data.
Revenue Commission Revenue Sources Medicare Segment — In the first effective plan year of a Medicare Advantage or Medicare Part D prescription drug plan for which we are the broker of record, we receive a fixed annual commission from health insurance carriers, generally after the plan is approved by the carrier and the plan becomes effective.
Revenue Commission Revenue Sources Medicare Segment — 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 from health insurance carriers, generally after the plan is approved by the carrier and the plan becomes effective.
Our marketing partner channel comprises a network of partners that drive consumers to our ecommerce platform and advisor enrollment centers. Our partners include affiliate partners, strategic partners and carrier partners. Affiliate partners include lead generators who specialize in traditional direct marketing channels.
Partner Marketing . Our marketing partner channel comprises a network of partners that drive consumers to our ecommerce platform and advisor enrollment centers. Our partners include affiliate partners and strategic partners. Affiliate partners include lead generators who specialize in traditional direct marketing channels.
Our corporate governance guidelines, code of business conduct, audit committee charter, compensation committee charter, and nominating and corporate governance committee charter are available on the governance page of our website at ir.ehealthinsurance.com . The information that can be accessed on or through our websites is not part of this Annual Report on Form 10-K. 18 Table of Contents
Our corporate governance guidelines, code of business conduct, audit committee charter, compensation committee charter, and nominating and corporate governance committee charter are available on the governance page of our website at ir.ehealthinsurance.com . The information that can be accessed on or through our websites is not part of this Annual Report on Form 10-K. 16 Table of Contents
As an insurance agency, we derive our revenue from consideration paid to us by our health insurance carrier partners, who are our customers, for our services through commissions and other forms of compensation. We do not generate revenue directly from the consumers that we help enroll in insurance products on behalf of our health insurance carrier partners.
As a health insurance agency, we derive our revenue from consideration paid to us by our health insurance carrier partners, who are our customers, for our services through commissions and other forms of compensation. We do not generate revenue directly from the consumers that we help enroll in insurance products on behalf of our health insurance carrier partners.
For Medicare Supplement plans that we sell, our commissions generally represent a flat amount per member per month or a percentage of the premium collected by the carrier while the member maintains coverage. Premium-based commissions are reported to us after the health insurance carrier collects premiums, generally every month.
For Medicare Supplement plans that we sell, our commissions from health insurance carriers generally represent a flat amount per member per month or a percentage of the premium amount collected by the carrier while the member maintains coverage. Premium-based commissions are reported to us after the health insurance carrier collects premiums, generally every month.
We generate revenue from our sponsorship and advertising program that allows carriers to purchase advertising space for non-Medicare products on our website and potentially Medicare plan-related advertising on separate websites that we develop, host and maintain. In addition, in connection with our Medicare plan advertising program, we may engage in other activities, including marketing.
We generate revenue from our sponsorship and advertising program that allows carriers to purchase advertising space for non-Medicare products on our website and potentially Medicare plan-related advertising on separate websites that we develop, host and maintain. Additionally, in connection with our Medicare plan advertising program, we may engage in other activities, including marketing.
In addition to our obligations we may have under contracts with health insurance carriers and others regarding the collection, maintenance, protection, use, transmission, disclosure or disposal of sensitive personal information, the use and disclosure of certain data that we collect from consumers is also regulated in some instances by other federal laws, including the Gramm-Leach-Bliley Act (“GLBA”) and state statutes implementing GLBA.
In addition to our obligations we may have under contracts with health insurance carriers and others regarding the collection, maintenance, protection, use, transmission, disclosure or disposal of sensitive personal information, the use and disclosure of certain data that we collect from consumers is also regulated in some 15 Table of Contents instances by other federal laws, including the Gramm-Leach-Bliley Act (“GLBA”) and state statutes implementing GLBA.
Our competitors include government entities, including government-run health insurance exchanges; health insurance carriers; other health insurance agents and brokers; and companies that use the Internet and other means to attract individuals interested in purchasing health insurance and generate revenue by referring these individuals to us or one of our competitors. Other agents and brokers .
Our competitors include government entities, including government-run health insurance exchanges and marketplaces; health insurance carriers; other health insurance agents and brokers; and marketing companies that use the internet and other means to attract individuals interested in purchasing health insurance and generate revenue by referring these individuals to us or one of our competitors. Other agents and brokers .
This data is available to members and our licensed benefit advisors that they contact. After a member creates a customer center account, our technology will import details provided to an agent over the telephone to the account.
This data is available to members and our licensed benefit advisors that they contact. After a member creates a customer center account, our technology will import details provided to an agent over the telephone to the consumer’s online account.
For manager level employees, eHealth introduced a meeting series titled Leaders Leading Leaders, which are virtual monthly gatherings of all eHealth leaders with the goal of providing critical and timely business updates to align organization-based objectives to the company’s strategic objectives and prepare leaders to disseminate vital internal information to their teams.
For manager level employees, eHealth introduced a meeting 14 Table of Contents series titled Leaders Leading Leaders, which are virtual monthly gatherings of all eHealth leaders with the goal of providing critical and timely business updates to align organization-based objectives to the company’s strategic objectives and prepare leaders to disseminate vital internal information to their teams.
Our digital data interface technology integrates our online application process with health insurance carriers’ technology systems, enabling us to deliver our consumers’ applications to health insurance carriers electronically. Our digital interface technology also expedites the loading of insurance product inventory into our various shopping experiences and accelerates the application process by eliminating manual delivery.
Our digital data interface technology integrates our online application process with health insurance carriers’ technology systems, enabling us to deliver our consumers’ applications to health insurance carriers electronically. Our digital interface technology also expedites the loading of insurance product inventory into our various shopping experiences and accelerates the application process by 9 Table of Contents eliminating manual delivery.
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.
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, including approximately 50 Medicare health insurance carriers.
In return for our services, we typically are paid either a flat amount, a monthly amount, or, in our individual and family 7 Table of Contents health insurance sponsorship advertising program, a performance-based fee based on metrics such as submitted health insurance applications. Non-Broker of Record.
In return for our services, we typically are paid either a flat amount, a monthly amount, or, in our individual and family health insurance sponsorship advertising program, a performance fee based on metrics such as submitted health insurance applications. Non-Broker of Record.
Our direct marketing consists of channels that drive consumers to call our advisor enrollment centers directly or access our website, which may include direct mail, search engines such as Google, paid social platforms like Facebook, email marketing, search engine optimization, radio, and television/video (including linear, connect television devices and over the top media). Partner Marketing .
Our direct marketing consists of channels that drive consumers to call our advisor enrollment centers directly or access our website, which may include direct mail, search engines such as Google, 10 Table of Contents paid social platforms like Facebook, email marketing, search engine optimization, radio, and television and video (including linear, connect television devices and over the top media).
They vary depending on the carrier that is offering the plan, the state where the plan was sold and the size of the business. Commission payments are typically made to us every month until either the plan is cancelled or we are no longer the broker of record.
They vary depending on the carrier that is offering the plan, the state where the plan was sold and the size of the business. Commission payments are typically made to us every month until we are no longer the broker of record.
Other Revenue Sources Within our two operating segments, we earn commission revenue, as well as non-commission revenue, or other revenue, which includes online sponsorship and advertising, non-broker of record arrangements, performance of other services, technology licensing and captive arrangements revenue. Online Sponsorship and Advertising.
Other Revenue Sources Within our two operating segments, we earn commission revenue, as well as non-commission revenue, or other revenue, which includes fees related to online sponsorship and advertising, non-broker of record arrangements, technology licensing, captive arrangements and performance of other services. Online Sponsorship and Advertising.
State insurance departments have administrative powers relating to, among other things: regulating premium prices; granting and revoking licenses to transact insurance business; approving individuals and entities to which, and circumstances under which, commissions can be paid; regulating advertising, marketing and trade practices; monitoring broker and agent conduct; and imposing continuing education requirements.
State insurance departments have broad powers relating to, among other things: regulating premium prices; granting and revoking licenses; approving individuals and entities to which, and circumstances under which, commissions can be paid; regulating advertising, marketing and trade practices; monitoring broker and agent conduct; and imposing continuing education requirements.
Our omnichannel consumer engagement platform differentiates our offering from our 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.
Our omnichannel consumer engagement platform differentiates our offering from our competitors and enables consumers, or beneficiaries, to use our services through our self-service online platform, by telephone with a licensed and trained insurance agent, or benefit advisor, or through a hybrid online assisted interaction that includes live agent chat and co-browsing capabilities.
During 2024 and 2023, 60% and 56% , respectively, of our Medicare plan-related applications were submitted during the fourth quarter. As a result, we generate a significant portion of our commission revenue related to new Medicare plan-related enrollments in the fourth quarter.
During 2025 and 2024, 59% and 60% , respectively, of our Medicare plan-related applications were submitted during the fourth quarter. As a result, we generate a significant portion of our commission revenue related to new Medicare plan-related enrollments in the fourth quarter.
With this certification we are poised to continue to deliver secure, compliant and reliable services to our customers. For more information about our cybersecurity risk management and governance, see Part I, Item 1C, Cybersecurity , of this Annual Report on Form 10-K.
With this certification, we intend to continue to deliver secure, compliant and reliable services to our consumers. For more information about our cybersecurity risk management and governance, see Part I, Item 1C, Cybersecurity , of this Annual Report on Form 10-K.
There are many Internet marketing companies and other advertisers that use the Internet and other means to find consumers interested in purchasing health insurance and 13 Table of Contents are compensated for referring those consumers to agents and health insurance carriers. We compete with these companies for individuals who are looking to purchase health insurance.
There are many internet marketing companies and other advertisers that use the internet, field distribution and other means to find consumers interested in purchasing health insurance and are compensated for referring those consumers to agents and health insurance carriers. We compete with these companies for individuals who are looking to purchase health insurance.
We introduced MatchMonitor™, a self-service tool that allows members to easily understand the implications of annual notice changes, check if any of their critical benefits are impacted and compare their current plan to other options. We also developed targeted retention programs for audiences with higher propensity for attrition.
MatchMonitor™, our self-service tool, has allowed members to easily understand the implications of annual notice of changes, check if any of their critical benefits are impacted and compare their current plan to other options. We also developed targeted retention programs for audiences with higher propensity for attrition.
Beginning with the second plan year and 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 which continue until the plan is cancelled or we are no longer the broker of record.
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 we are no longer the broker of record.
In the states where the Federally Facilitated Marketplace (“FFM”) operates as the state health insurance exchange, individuals and families generally are not able to purchase individual and family health insurance outside of the AEP, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.
In states where the Federally Facilitated Marketplace (“FFM”) operates as the state health insurance exchange, individuals and families generally are not able to purchase individual and family health insurance outside of the AEP, unless they qualify for a special enrollment period due to certain qualifying events, such as a loss of employer-sponsored health insurance coverage or relocation.
These ancillary products are offered to individual and family and small business consumers and are also sold on a standalone basis. We generate revenue as a result of commissions we receive from health insurance carriers whose health insurance plans are purchased through us, as well as commission override payments we receive for achieving sales volume thresholds or other objectives.
These ancillary products are offered to individual and family and business consumers and are also sold on a standalone basis. We receive commission payments from health insurance carriers whose health insurance plans are purchased through us, as well as bonus payments we receive for achieving sales volume thresholds or other objectives.
Medicare Advantage and Medicare Part D prescription drug plan pricing is approved by the Centers for Medicare and Medicaid Services (“CMS”), an agency of the United States Department of Health and Human Services, and is not subject to negotiation or discounting by health insurance carriers or our competitors.
Medicare Advantage and Medicare Part D prescription drug plan pricing is approved by the Centers for Medicare and Medicaid Services (“CMS”), an agency of the U.S. Department of Health and Human Services and is 6 Table of Contents not subject to negotiation or discounting by health insurance carriers or our competitors.
The employer market is continuing to evolve towards alternative products such as ICHRAs, in which employers of any size can reimburse employees for some or all of the premiums the employees pay for health insurance they purchase on their own, which is typically an individual market health insurance plan.
The employer market is continuing to shift towards alternative products such as ICHRAs, which allow employers to reimburse employees for some or all of the premiums the employees pay for health insurance they purchase on their own, which is typically an individual market health insurance plan.
We have a technology and content team that is responsible for ongoing enhancements to the features and functionality of our ecommerce platforms, which are critical to maintaining our technology leadership position in the industry. 8 Table of Contents Elements of our platforms include: Plan Comparisons and Recommendations .
We have a technology and content team that is responsible for ongoing enhancements to the features and functionality of our omnichannel customer experience platforms, which are critical to maintaining our technology leadership position in the industry. Elements of our platforms include: Plan Comparisons and Recommendations .
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 continue to receive commissions from the relevant health insurance carrier until we are no longer the broker of record.
It also incentivizes them to return to us when their needs change. • Drive retention through communication — Our customer center allows beneficiaries to track the status of their applications over time through our Application Tracker tool and connects them with us if they have questions. 9 Table of Contents Information Security Information security is an integral part of our business.
It also encourages them to return to us when their needs change. • Tracking of application status — Our customer center allows beneficiaries to track the status of their applications over time through our Application Tracker tool and connects them with us if they have questions. Information Security Information security is an integral part of our business.
As we continue to focus on growth and diversity of our business and expand our technology, we plan to fortify the organizational foundation that supports our health insurance carrier relationships through a strategic approach to health insurance carrier portfolio management. We plan to take a nimble, opportunistic approach to distribution models reflecting evolving carrier needs and regulatory landscape.
As we continue to expand our technology initiatives, we also plan to fortify the organizational foundation that supports our health insurance carrier relationships through a strategic approach to health insurance carrier portfolio management. We plan to take a nimble, opportunistic approach to distribution models reflecting evolving carrier needs and regulatory landscape.
We expect to continue to do so in the future. Violations of federal and state privacy and security laws and other contractual requirements may result in significant liability and expense, damage to our reputation or termination of relationships with government-run health insurance exchanges and our members, marketing partners and health insurance carriers . Marketing Regulations.
Violations of federal and state privacy and security laws and other contractual requirements may result in significant liability and expense, damage to our reputation or termination of relationships with government-run health insurance exchanges and our members, marketing partners and health insurance carriers . Consumer Marketing Regulations.
We utilize various industry-recognized information security frameworks, including SOC-2, Health Information Trust Alliance (HITRUST), National Institute of Standards and Technology, Payment Card Industry Data Security Standard, Center for Internet Security (“CIS”) Controls, and CIS Benchmarks. In 2024, we successfully achieved HITRUST i1 certification for our carrier integration platform.
We utilize various industry-recognized information security frameworks, including SOC-2, Health Information Trust Alliance (HITRUST), National Institute of Standards and Technology (NIST), Payment Card Industry Data Security Standard (PCI DSS), Center for Internet Security (CIS) Controls, and CIS Benchmarks. Since 2024, we have successfully maintained HITRUST i1 certification for our carrier integration platform.
Additionally, if the plan is the first Medicare Advantage or Medicare Part D prescription drug plan issued to the member because either the beneficiary just became eligible for these products or has previously been covered through an Original Medicare program, we may receive a higher commission that covers an entire 12-month period, regardless of the plan’s effective month.
Additionally, if 7 Table of Contents 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 that covers a full 12-month period, regardless of the plan’s effective month.
Improve Member Retention and Conversions on Our Platform while Continuing to Evolve our Telesales Organization Our goal is to build a leadership position in our industry by establishing our omnichannel distribution platform as the gold standard for consumer experience. We believe that success and sustainability of brokers is increasingly determined by consumer satisfaction, retention and other quality tracking metrics.
Our goal is to build a leadership position in our industry by establishing our omnichannel distribution platform as the gold standard for consumer experience. We believe that success and sustainability of brokers is increasingly determined by consumer satisfaction, retention and other quality tracking metrics.
In addition, Medicare Advantage plan enrollees may enroll in another Medicare Advantage plan or disenroll from their Medicare Advantage plan and return to the Original Medicare program only during the Medicare Advantage open enrollment period that generally occurs in the first quarter of the year.
Medicare Advantage enrollees may enroll in another Medicare Advantage plan or return to the Original Medicare only during the Medicare Advantage open enrollment period that generally occurs in the first quarter of the year.
Our platform and services are free to the consumer, and, as an insurance agency, we do not take on underwriting risk. Medicare Segment Our Medicare segment represents the majority of our business and constituted approximately 90% of our revenue in 2024.
Our platform and services are free to the consumer, and, as a health insurance agency, we do not take on underwriting risk. Medicare Segment Our Medicare segment represents the majority of our business and constituted approximately 96% of our revenue in 2025.
In 2024, we introduced additional initiatives, including updating our member onboarding experience, launching our loyalty program, ePerks, and providing personalized communications with our new and existing consumers over a variety of channels meant to foster year-round awareness of eHealth and the services we provide.
Specifically, we have been focusing on several additional initiatives, including updating our member onboarding experience, launching our loyalty program, ePerks, and providing personalized communications with our new and existing consumers over a variety of channels meant to foster year-round awareness of eHealth and the services we provide.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act which became law in March 2010 (as amended, collectively, the “Affordable Care Act”), has heavily impacted our business of selling individual, family and small business insurance plans.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Affordable Care Act”), has significantly impacted our business of selling individual, family and small business insurance plans.
We also utilized a larger number of screeners to help ensure beneficiaries are routed to the appropriate benefit advisor or customer service team member which ultimately reduces call hold times while enhancing the efficiency of our benefit advisors.
We also utilize both human and AI agent screeners to help ensure beneficiaries are routed to the appropriate benefit advisor or customer service team member which ultimately reduces call hold times while enhancing the efficiency of our benefit advisors.
During 2024 and 2023, 42% and 46%, respectively, of our IFP-related applications were submitted during the fourth quarter. As a result, we generate a significant portion of our commission revenue related to individual and family plan-related enrollments in the fourth quarter.
During 2025 and 2024, 43% and 42%, respectively, of our IFP-related applications were submitted during the fourth quarter. As a result, we generate a significant portion of our commission revenue from IFP enrollments in the fourth quarter.
We emphasize to our employees that information security is “everyone’s responsibility.” We are committed to maintaining information security through responsible management, appropriate use, and protection according to relevant legal and regulatory requirements and our contractual relationships. Our head of Information Security is focused on information and systems technology and corporate governance to drive a common security framework practice.
We emphasize to our employees that information security is “everyone’s responsibility.” We are committed to maintaining strong information security practices through responsible management, appropriate use, and protection in accordance with applicable legal and regulatory requirements and our contractual obligations. Our Head of Information Security focuses on information and systems technology and corporate governance to drive a common security framework.
During 2024, we continued enhancing the consumer experience to improve conversion rates across our entire omnichannel platform, regardless of how a consumer first interacts with eHealth or how the final enrollment is made. This includes increasing the effectiveness of our telesales organization through a redesigned hiring, training and career path program.
We continue to focus on enhancing the consumer experience to improve conversion rates across our entire omnichannel platform, regardless of how a consumer first interacts with eHealth or how the final enrollment is made. These efforts include further improving the effectiveness of our telesales organization through a redesigned hiring, training and career path program.
To a lesser extent, the E&I segment also generates other revenue from amounts earned in our online sponsorship program as well as our technology licensing activities. IFP pricing, which is set by the health insurance carrier and approved by state regulators, is not subject to negotiation or discounting by health insurance carriers or our competitors.
To a lesser extent, the E&I segment also generates other revenue from amounts earned in our online sponsorship program as well as our technology licensing activities. IFP pricing is set by health insurance carriers and then reviewed and approved by state regulators before it can be used.
Employer and Individual Segment — The commissions we receive for IFP, small business health insurance plans and ancillary health insurance plans are either a percentage of the premiums consumers pay for those plans or a flat amount per member per month.
Employer and Individual Segment — The commissions we receive for IFP, small business health insurance plans and ancillary health insurance plans are either a percentage of the premium amount collected by the carrier or a flat amount per member per month while the member maintains coverage.
Health insurance carriers have become more experienced in marketing their products directly to consumers, both over the Internet and through more traditional channels, which has resulted in increased competition. Internet marketers and other advertisers .
Health insurance carriers have become more experienced in marketing their products directly to 13 Table of Contents consumers, both over the internet and through more traditional channels, which has resulted in increased competition. ICHRA administrators and benefits platforms.
Health insurance carriers that license our technology typically pay us implementation fees and performance-based fees that are based on metrics such as submitted health insurance applications. Captive Arrangements .
Our technology platform enables health insurance carriers to market and distribute health insurance plans online. Health insurance carriers that license our technology typically pay us implementation fees and performance-based fees that are based on metrics such as the number of submitted health insurance applications. Captive Arrangements .
Our principal executive offices are located at 13620 Ranch Road 620 N, Suite A250, Austin, TX 78717, and our telephone number is (737) 248-2340. 17 Table of Contents Available Information We make available free of charge on the Investor Relations page of our website ( ir.ehealthinsurance.com ) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
Available Information We make available free of charge on the Investor Relations page of our website ( ir.ehealthinsurance.com ) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
HIPAA and regulations adopted pursuant to HIPAA require us to maintain the privacy of individually identifiable health information that we collect on behalf of health insurance carriers, implement measures to safeguard that information and provide notification if there is a breach in the privacy or confidentiality of that information.
For example, we are subject to the Health Insurance Portability and Accountability Act (“HIPAA”), which requires us to maintain the privacy of individually identifiable health information that we collect on behalf of health insurance carriers, implement measures to safeguard that information and provide notification if there is a breach in the privacy or confidentiality of that information.
Failure to comply with obligations and restrictions related to telephone, text message and email marketing could subject us to lawsuits, fines, statutory damages, consent decrees, injunctions, adverse publicity and other losses that could harm our business. Sustainability We published our most recent annual sustainability report in December of 2024.
Failure to comply with obligations and restrictions related to telephone, text message and email marketing could subject us to lawsuits, fines, statutory damages, consent decrees, injunctions, adverse publicity and other losses that could harm our business. Corporate Information We were incorporated in Delaware in November 1997.
We actively market a large selection of Medicare-related health insurance plans and, to a lesser extent, ancillary products such as dental and vision insurance and hospital indemnity plans, to our Medicare-eligible consumers.
We actively market a large selection of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement, and Medicare Part D prescription drug plan, and, to a lesser extent, ancillary products, including but not limited to dental and vision insurance and hospital indemnity plans, to our Medicare-eligible consumers.
Medicare plans are not generally able to be purchased outside of an annual enrollment period that occurs in the fourth quarter of the year, subject to exception for individuals aging into Medicare eligibility and for individuals who qualify for a special enrollment period as a result of certain qualifying events.
We are also subject to similar state requirements with respect to our marketing and sale of Medicare Supplement plans. Medicare plans generally may not be purchased outside of an annual enrollment period that occurs in the fourth quarter, except for individuals aging into Medicare or those who qualify for a special enrollment period as a result of certain qualifying events.
In addition to government action, health insurance carrier expectations relating to privacy and security protections are increasing and evolving. We have incurred significant costs to develop new processes and procedures and to adopt new technology in an effort to comply with privacy and security laws and regulations and carrier expectations and to protect against cyber security risks and security breaches.
We have incurred significant costs to develop new processes and procedures and to adopt new technology to comply with evolving privacy and security laws and regulations and increasing carrier expectations and to protect against cyber security risks and security breaches. We expect to continue to do so in the future.
The Affordable Care Act and related federal regulations have been subject to periodic updates, including changes in available subsidies and arrangements (such as ICHRA, for example) and continue to evolve through the promulgation of executive orders, legislation, regulations and guidance at the federal or state level.
The Affordable Care Act and related federal regulations have been subject to periodic updates, including changes to available subsidies and arrangements such as ICHRAs and continue to evolve through executive orders, legislation, regulations and guidance at both the federal or state levels. We expect the Affordable Care Act, including any future changes, to continue to significantly impact our business.
We plan to maintain our internal telesales benefit advisors year-round, net of natural attrition, and expect to increase our internal benefit advisors’ utilization outside of the enrollment periods by expanding our offerings of ancillary products and carrier call center outsourcing programs. We typically start ramping our telesales capacity during the second quarter, in preparation for the fourth quarter AEP.
Full-time internal benefit advisors represent the majority of our telesales capacity. We aim to maintain our internal benefit advisor workforce year-round, net of natural attrition, and expect to increase utilization outside the enrollment periods by expanding ancillary products offerings and carrier call center outsourcing programs.
Through continued improvements to our online experience and plan recommendation engine, enhancements to agent training and a comprehensive post-enrollment retention strategy, we strive to present beneficiaries with choices that best align with their unique circumstances and assist them in making future decisions should their insurance plan needs or personal circumstances change.
This trend is redefining the competitive landscape in our business and has created significant competitive advantages for agents and brokers that emphasize member experience and collaborate with carriers on attaining quality goals. 12 Table of Contents Through continued improvements to our online experience and plan recommendation engine, enhancements to agent training and a comprehensive post-enrollment retention strategy, we strive to present beneficiaries with choices that best align with their unique circumstances and assist them in making future decisions should their insurance plan needs or personal circumstances change.
Extended open enrollment or special enrollment periods may change the seasonality of our individual and family health insurance business. We incur a significant portion of our marketing and advertising expenses in the fourth quarter as a result of the Medicare AEP and the OEP under the Affordable Care Act.
We also incur a significant portion of our marketing and advertising expenses in the fourth quarter as a result of the Medicare AEP and the OEP under the Affordable Care Act.
These laws govern our collection, use, disclosure, protection and maintenance of the individually identifiable information that we collect from consumers. For example, we are subject to the Health Insurance Portability and Accountability Act (“HIPAA”).
We are subject to various federal and state privacy and security laws, regulations and requirements. These laws govern our collection, use, disclosure, protection and maintenance of the individually identifiable information that we collect from consumers.
The magnitude of new agent hiring is driven by our enrollment growth goals for that year. Our customer care and enrollment expenses are typically highest in the fourth quarter and lowest in the second quarter. Human Capital Resources Employees are our most valuable asset, and we strive to put them first.
We typically start ramping our telesales capacity during the second quarter in preparation for the fourth quarter AEP. The magnitude of new agent hiring is driven by our enrollment growth goals for that year. Our customer care and enrollment expenses are typically highest in the fourth quarter and lowest in the second quarter.
Additional financial information about our company is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.
Additional financial information about our company is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K. 8 Table of Contents Carrier Relationships We have developed strategic relationships with leading health insurance carriers in the United States, enabling us to offer thousands of health insurance plans online.
Advance Our Digital Technology Leadership and Strengthen and Expand Health Insurance Carrier Partnerships We plan to advance our digital technology leadership to better serve our consumers, employees and health insurance carriers by utilizing our artificial intelligence (“AI”) Center of Excellence to help guide and prioritize our AI and technology initiatives for 2025.
Consumers are demonstrating increased proficiency with digital technologies and we plan to continue advancing our digital technology leadership to better serve our consumers, employees and health insurance carriers. For instance, we plan to continue utilizing our AI Center of Excellence to help guide and prioritize our AI and technology initiatives.
Similarly, 6 Table of Contents Medicare Supplement plan pricing is set by the health insurance carrier and approved by state regulators. It is not subject to negotiation or discounting by health insurance carriers or our competitors.
Medicare Supplement plan pricing is also not subject to negotiation or discounting by health insurance carriers or our competitors.
Our human capital strategy focuses on building a company culture and workforce that aligns with our mission, is future-ready and is driven to make a meaningful impact. We continuously review and refine our mechanisms used to hire, develop, evaluate and retain our employees.
Employees are our most valuable asset, and we strive to put them first. We are a creative and collaborative group with a single, shared mission. Our human capital strategy focuses on building a company culture and workforce that aligns with our mission, is future-ready and is driven to make a meaningful impact.
In certain arrangements, we facilitate beneficiary enrollment in Medicare-related health insurance plans with health insurance carriers without becoming the agent 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.
In certain 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 and monthly fees for hours worked by the sales team for enrollments as well as other administrative fees, as determined by contract terms.
Beginning January 1, 2019, CMS revived the Medicare Advantage open enrollment period (“OEP”) during which Medicare Advantage plan enrollees may enroll in another Medicare Advantage plan or disenroll from their Medicare Advantage plan and return to the Original Medicare program. The Medicare Advantage OEP occurs between January 1 and March 31 of each year.
Our Medicare Advantage plan-related commission revenue is also elevated in the first quarter as a result of the Medicare Advantage open enrollment period (“OEP”), which occurs between January 1 and March 31 of each year. The OEP allows Medicare Advantage plan enrollees to switch to another Medicare Advantage plan or return to Original Medicare.
Our Growth Strategies We believe that our consumer-centric omnichannel distribution model provides us competitive strengths in customer engagement and health insurance distribution. It creates opportunities for growth in our core Medicare business and in other areas of the health insurance market.
It creates opportunities for growth in our core Medicare business and in other areas of the health insurance market. We intend to pursue the following strategies to further advance our business.
We are required to maintain valid life and/or health agency and/or agent licenses in each jurisdiction in which we transact health insurance business.
We are required to maintain valid life and/or health agency and/or agent licenses in each jurisdiction in which we transact health insurance business. CMS imposes numerous requirements on health insurance carriers, agents and brokers in the marketing and sale of Medicare Advantage and Medicare Part D prescription drug plans.
We typically enter into contractual agency relationships with health insurance carriers that are non-exclusive and terminable on short notice by either party for any reason.
In many cases, we have back-office integration with major carriers allowing us to submit applications efficiently and cost-effectively, which is an area of competitive differentiation for our business. We typically enter into contractual agency relationships with health insurance carriers that are non-exclusive and terminable on short notice by either party for any reason.
Carrier Relationships We have developed strategic relationships with leading health insurance carriers in the United States, enabling us to offer thousands of health insurance plans online. We have relationships with over 180 Medicare-related, individual and family, employer and ancillary health insurance plan carriers, including large national carriers and well-established regional carriers.
We have relationships with over 180 Medicare-related, individual and family, employer and ancillary health insurance plan carriers, including large national carriers and well-established regional carriers. Many of these major carriers have been selling their products through us for over ten years.
Recent macroeconomic events, including rising consumer prices and interest rates, have led to uncertainty as it pertains to consumer shopping patterns. Given that our core product, Medicare Advantage, is characterized by low premiums, including a large selection of zero premium plans, the demand for our services is relatively minimally impacted by the economic cycles.
Recent macroeconomic factors, including rising consumer prices and interest rates, have affected consumer shopping behavior, though demand for our core product, Medicare Advantage, which is characterized by low or zero premiums, remains relatively resilient throughout the economic cycles.
We currently distribute health insurance plans nationwide. The health insurance industry is heavily regulated. Each of these jurisdictions has its own rules and regulations relating to the offer and sale of health insurance plans, typically administered by a department of insurance.
In addition to federal regulations, each state also has its own rules and regulations governing the offer and sale of health insurance plans, typically administered by the state’s department of insurance.
We expect to continue to focus on evolving our telesales organization to support scale and diversification needs of the business and changing market conditions.
We expect to continue to focus on evolving our telesales organization to support scale and diversification needs of the business and changing market conditions. We invest in our benefit advisors by providing them with improved tools to perform their tasks, to allow them to grow and improve in their roles and to cultivate deeper one-on-one member relationships.
This meeting also facilitates functional leadership growth opportunities and the development of business acumen within our leader pool. We also strive to recognize and reward our talent and are committed to the well-being of our employees.
This meeting also facilitates functional leadership growth opportunities and the development of business acumen within our leader pool. We offer employees competitive compensation, including salary, annual performance-based bonus opportunities, and stock-based compensation, as applicable.
These commissions may include certain bonus payments based on achieving predetermined sales targets or other objectives set by the health insurance carriers.
The commission payments we receive from our health insurance carrier partners may also include certain bonus payments generally based on attaining predetermined target sales or other objectives, as determined by the health insurance carriers.
We recognize fee income based upon the fee we expect to receive for selling the plan after the carrier approves an application. Technology Licensing. We generate revenue from licensing the use of our health insurance ecommerce technology. Our technology platform enables health insurance carriers to market and distribute health insurance plans online.
Our services are complete once the submitted application is approved by the relevant health insurance carrier. Accordingly, we recognize fee income based upon the contract terms after the carrier approves an application. Technology Licensing. We generate revenue from licensing the use of our health insurance ecommerce technology.
In 2024, we earned the Great Place to Work ® Certified recognition, indicating our employees’ satisfaction with our culture, leadership and overall employee experience.
To drive continuous improvement, we perform an external survey in partnership with the global engagement organization, Great Place to Work ® , to benchmark our actions against top-performing organizations. In 2025, we earned the Great Place to Work ® Certified recognition for the second year in a row, indicating our employees’ satisfaction with our culture, leadership and overall employee experience.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that could cause fluctuations in the trading price of our common stock include the following: • price and volume fluctuations in the overall stock market from time to time, including as a result of inflation, or political or geopolitical instability; • volatility in the market prices and trading volumes of our competitors’ shares, including high technology stocks, which have historically experienced high levels of volatility; • any new debt and/or equity financing that we undertake to raise additional capital; • any strategic transaction or partnership that we may enter into; 40 Table of Contents • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including developments relating to the health care industry and the marketing and sale of Medicare plans; • actual or anticipated changes in our operating results or the growth rate of our business; • changes in operating performance and stock market valuations of other technology or insurance brokerage companies generally and of our competitors; • failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • sales of shares of our common stock by us or our stockholders; • announcements by us or our competitors of new products or services; • the public reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • negative publicity about us, including accurate and inaccurate third-party commentary or reports regarding us; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • our ability to control costs, including our operating expenses; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • adverse events or perceptions affecting the U.S. or international financial systems; • the imposition of tariffs or other significant changes in relations between the United States and other countries in which we operate our business; and • general economic conditions, political instability and slow or negative growth of our markets.
Biggest changeFactors that could cause fluctuations in the trading price of our common stock include, among other things: • price and volume fluctuations in the overall stock markets, including as a result of inflation, political or geopolitical instability, or public or market reactions thereto, including any prolonged government shutdown; • volatility in the market prices and trading volumes of shares of companies in our industry, including our competitors, or the broader technology sector; • new debt and/or equity financings that we undertake to raise additional capital; • strategic transactions or partnerships that we may enter into; • new or changes in laws, regulations or regulatory interpretations applicable to our business, including those relating to the health care industry or the marketing and sale of Medicare plans; • actual or anticipated changes in our operating results or business growth; • changes in operating performance and stock market valuations of technology or insurance brokerage companies generally and of our competitors, as well as general market trends affecting these sectors; • changes or discontinuation of coverage by securities analysts, changes in financial estimates by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • sales of shares of our common stock by us or our stockholders, or the perception that such sales may occur; • announcements by us or our competitors regarding new products or services or other material developments; 35 Table of Contents • public reactions to our press releases, other public announcements or our filings with the SEC; • rumors, market speculation or third-party commentary or reports involving us or other companies in our industry, whether accurate or inaccurate; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • our ability to control costs, including our operating expenses; • litigation, regulatory proceedings or government investigations involving us or others in our industry; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • changes in accounting standards, policies, guidelines, interpretations, or principles; • significant change in our management; • adverse events or perceptions affecting the U.S. or international financial systems; • the imposition of tariffs or other significant changes in relations between the United States and other countries in which we operate our business; and • general economic conditions, political instability and slow or negative growth of our markets.
As discussed elsewhere in this Risk Factors section, our contractual relationships with health insurance carriers are typically non-exclusive and terminable on short notice by either party for any reason.
As discussed elsewhere in this Risk Factors section, our contractual relationships with health insurance carriers are typically non-exclusive and terminable by either party on short notice for any reason.
The Medicare annual enrollment period occurs from October 15 to December 7 each year, the individual and family health insurance open enrollment period typically occurs from November 1 through December or January 15 each year for most states, and the Medicare Advantage open enrollment period, during which Medicare-eligible individuals enrolled in a Medicare Advantage plan can switch to the Original Medicare program or switch to a different Medicare Advantage plan, runs from January 1 through March 31 of each year.
The Medicare annual enrollment period occurs from October 15 to December 7 each year, the individual and family health insurance open enrollment period typically occurs from November 1 through December or January 15 each year for most states, and the Medicare Advantage open enrollment period, during which Medicare-eligible individuals enrolled in a Medicare Advantage plan can switch to the Original Medicare program or to a different Medicare Advantage plan, runs from January 1 through March 31 of each year.
Issues relating to the use of new and evolving technologies, such as AI, in our business operations could result in liability, reputational harm and an adverse impact on our operating results and financial condition.
Issues relating to the use of new and evolving technologies, such as AI, in our business operations could result in liability, reputational harm and an adverse impact on our business, operating results and financial condition.
Adverse economic conditions including slow growth, recession, high unemployment, inflation, financial and credit market disruptions, could materially adversely affect our business, operating results and financial condition. Customer and consumer demand for our health insurance plan offerings may be impacted by adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, market volatility or other negative economic factors.
Adverse macroeconomic conditions including slow growth, recession, high unemployment, inflation, financial and credit market disruptions, could materially adversely affect our business, operating results and financial condition. Customer and consumer demand for our health insurance plan offerings may be impacted by adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, market volatility or other negative economic factors.
If a court were to find either exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur significant additional costs associated with resolving such action in other jurisdictions, all of which could harm our business, operating results and financial condition.
Alternatively, if a court were to find either exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur significant additional costs associated with resolving such action in other jurisdictions, all of which could harm our business, operating results and financial condition.
If we experience a decline in cash flow due to any of the factors described in this Risk Factors section or otherwise, we could have difficulty paying interest and principal amounts due on our indebtedness and meeting the financial covenants set forth in our Credit Agreement.
If we experience a decline in cash flow due to any of the factors described in this Risk Factors section or otherwise, we could have difficulty paying interest and principal amounts due on our indebtedness and meeting the financial covenants set forth in our Revolving Credit Agreement.
It would also permit our lender to exercise rights and remedies with respect to all of the collateral that is securing the Credit Agreement, which includes substantially all of our assets. Any such default could materially adversely affect our liquidity and financial condition.
It would also permit our lender to exercise rights and remedies with respect to all of the collateral that is securing the Revolving Credit Agreement, which includes substantially all of our assets. Any such default could materially adversely affect our liquidity and financial condition.
In recent years, we have appointed several new executive officers and other senior leaders across multiple functions, and we may experience additional changes in the future. For example, in 2024, we appointed a new chief revenue officer and a new chief financial officer.
In recent years, we have appointed several new executive officers and other senior leaders across multiple functions, and we may experience additional changes in the future. For example, in 2024 and 2025, we appointed a new chief executive officer, a new chief financial officer and a new chief revenue officer.
As discussed elsewhere in this Risk Factors section, the marketing and sale of Medicare plans are subject to numerous laws, regulations and guidelines at the federal and state level.
In addition, as discussed elsewhere in this Risk Factors section, the marketing and sale of Medicare plans are subject to numerous laws, regulations and guidelines at the federal and state level.
Our corporate governance documents include provisions: • creating a classified Board of Directors whose members serve staggered three-year terms; • authorizing undesignated preferred stock, which could be issued by our Board of Directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • limiting the liability of, and providing indemnification to, our directors and officers; • limiting the ability of our stockholders to call and bring business before special meetings; • requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors; • controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; and • providing our Board of Directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.
Our corporate governance documents include provisions: • creating a classified Board of Directors whose members serve staggered three-year terms; • authorizing undesignated preferred stock, which could be issued by our Board of Directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • limiting the liability of, and providing indemnification to, our directors and officers; • limiting the ability of our stockholders to call and bring business before special meetings; • requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors; 37 Table of Contents • controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; and • providing our Board of Directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.
Any default that is not waived by the lender could result in the acceleration of the obligations under the Credit Agreement and an increase in the applicable interest rate under the credit facility.
Any default that is not waived by the lender could result in the acceleration of the obligations under the Revolving Credit Agreement and an increase in the applicable interest rate under the credit facility.
We have not met the Minimum Asset Coverage Ratio since the September 30, 2023 measurement date and as of November 30, 2024, we were no longer in compliance with the Minimum Liquidity Amount. As of December 31, 2024, H.I.G. continued to own at least 30% of the shares.
We have not met the Minimum Asset Coverage Ratio since the September 30, 2023 measurement date and as of November 30, 2024, we were no longer in compliance with the Minimum Liquidity Amount. As of December 31, 2025, H.I.G. continued to own at least 30% of the shares, and we were in compliance with the Liquidity Covenant.
Investment Agreement, for 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, entitles H.I.G., subject to conditions and restrictions specified therein, to additional rights, including the right to nominate one additional member to our Board of Directors, the right to approve our annual budget, the right to approve the hiring or termination of certain key executives and the right to approve the incurrence of certain indebtedness.
Investment Agreement, for 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, entitles H.I.G., subject to 32 Table of Contents conditions and restrictions specified therein, to additional rights, including the right to nominate one additional member to our Board of Directors, the right to approve our annual budget, the right to approve the hiring or termination of certain key executives and the right to approve the incurrence of certain indebtedness.
The termination of or change in our relationships with health insurance carriers could reduce the products we are able to offer, could result in the loss of commissions for past and future sales and could otherwise harm our business, operating results and financial condition.
The termination of or change in our relationships with health insurance carriers could reduce the products we are able to offer, result in reduced commissions for past or future sales and otherwise harm our business, operating results and financial condition.
Our business success depends on our ability to timely recruit, train and retain qualified licensed insurance agents, or benefit advisors, and other personnel to provide superior customer service and support our strategic initiatives while also controlling our labor costs.
Our business success depends on our ability to timely recruit, train and retain qualified licensed insurance agents, or benefit advisors, and other personnel to provide superior customer service and support our strategic initiatives while also managing our labor costs.
The events of default under the Credit Agreement include, among other things and subject to grace periods in certain instances, payment defaults, cross defaults with certain other material indebtedness, breaches of covenants or representations and warranties, changes in control of our company, certain bankruptcy and insolvency events with respect to us and our subsidiaries, a restriction on all or a material portion of our business and the indictment of us or any subsidiary (or any senior officer thereof), or criminal proceedings against the same, which could result in a forfeiture of a material portion of our and our subsidiaries properties.
The events of default under the Revolving Credit Agreement include, among other things and subject to grace periods in certain instances, payment defaults, cross defaults with certain other material indebtedness, breaches of covenants, material inaccuracies of representations and warranties, changes in control of our company, certain bankruptcy and insolvency events with respect to us and our subsidiaries, a restriction on all or a material portion of our business and the indictment of us or any subsidiary (or any senior officer thereof), or criminal or civil proceedings against the same, which could result in a forfeiture of a material portion of our and our subsidiaries’ properties.
We are, and may in the future become, involved in various legal proceedings and governmental inquiries, including labor and employment-related claims, claims relating to our marketing or sale of health insurance, intellectual property claims and claims relating to our compliance with securities laws. For example, in January 2022, we received a subpoena from the U.S.
We are, and may in the future become, involved in various legal proceedings, litigation, governmental inquiries and enforcement actions, including labor and employment-related claims, claims relating to our marketing or sale of health insurance, intellectual property claims and claims relating to our compliance with securities laws. For example, in January 2022, we received a subpoena from the U.S.
The interests of any director designated by H.I.G. may differ from the interests of our security holders as a whole or of our other directors. If the additional rights are used by H.I.G., it could be distracting to our management and disruptive to our operations or hinder our ability to execute our operational and strategic plans.
The interests of any director designated by H.I.G. may differ from the interests of our security holders as a whole or of our other directors. If the additional rights are used by H.I.G., it could be distracting to our management and disruptive to our operations or 36 Table of Contents hinder our ability to execute our operational and strategic plans.
Due to the timing of Medicare and individual and family health plan annual enrollment periods, which may be subject to change from time to time, our financial results fluctuate and are not comparable from quarter to quarter.
Due to the timing of Medicare and individual and family health plan annual enrollment periods, which may change from time to time, our financial results fluctuate and are not comparable from quarter to quarter.
Some of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, technical, marketing and other resources than we do.
Some of our current and potential competitors may also have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, technical, marketing and other resources than we do.
If we are unsuccessful in our defense in these legal proceedings, we may be forced to pay damages or fines, enter into 29 Table of Contents consent decrees, stop offering our services or change our business practices, any of which would harm our business, operating results and financial condition.
If we are unsuccessful in our defense in these legal proceedings, we may be forced to pay damages or fines, enter into consent decrees, stop offering our services or change our business practices, any of which would harm our business, operating results and financial condition.
Our and our vendors’ facilities, database and systems are vulnerable to damage or interruption from human error, fire, floods, earthquakes and other natural disasters, power loss, telecommunications failures, physical or electronic break-ins, computer viruses, cyberattacks, acts of terrorism, other attempts to harm our systems and similar events.
Our and our vendors’ facilities, databases and systems are also vulnerable to damage or interruption from human error, fire, floods, earthquakes and other natural disasters, power loss, telecommunications failures, physical or electronic break-ins, computer viruses, cyberattacks, acts of terrorism, other attempts to harm our systems and similar events.
Any such failure could also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
Any such failure could also adversely affect management’s periodic evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
Risks Related to Laws and Regulations Changes and developments in the health insurance industry or system, including changes in laws and regulations, could harm our business, operating results and financial condition.
Risks Related to Laws and Regulations Changes and developments in the health care industry or system, including changes in laws and regulations, could harm our business, operating results and financial condition.
Levels of write-down or impairment are impacted by our assessment of the intent to sell securities that have declined in value as well as actual losses as a result of defaults or deterioration in estimates of cash flows.
Levels of write-down or impairment are impacted by our assessment of the intent to sell securities that have 34 Table of Contents declined in value as well as actual losses as a result of defaults or deterioration in estimates of cash flows.
If we are not in compliance, we may not be able to accept information from consumers, and our relationship with health insurance carriers could be adversely impacted or terminated, which would harm our business, operating results and financial condition.
If we are not in compliance, we may not be able to accept information from consumers, and our relationship with carriers could be adversely impacted or terminated, which could harm our business, operating results and financial condition.
Changing our business practices in accordance with new or changed restrictions and challenges could be expensive, time-consuming and disruptive to the Company’s operations, and the Company may not be able to effectively mitigate all adverse impacts from such events. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Changing our business practices in accordance with new or changed restrictions and challenges could be expensive, time-consuming and disruptive to the Company’s operations, and the Company may not be able to effectively mitigate all adverse impacts from such events. 39 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
For example, a long-standing provision in most applicable state laws that we believe is advantageous to our business is that once health insurance premiums are set by the carrier and approved by state regulators, they are fixed and not generally subject to negotiation or discounting by insurance companies or agents.
For example, a long-standing provision in most applicable state laws that we believe benefits our business is that, once health insurance premiums are set by the carrier and approved by state regulators, they are fixed and not generally subject to negotiation or discounting by insurance carriers or agents.
Our business could be harmed if we are not successful in executing on our operational and strategic plans. Our future performance depends in large part upon our ability to execute our operational and strategic plans. Our success depends in large part on our ability to diversify our revenue and scale our business.
Our business could be harmed if we are not successful in executing on our operational and strategic plans. Our performance depends upon our ability to execute our operational and strategic plans. Our success depends on our ability to diversify our revenue and scale our business.
Our operating results are likely to fluctuate as a result of a variety of factors, including the factors described elsewhere in this Risk Factors section, many of which are outside of our control. For example, and among these factors, the assumptions underlying our estimates of commission revenue as required by ASC 606 may vary significantly over time.
Our operating results are likely to fluctuate as a result of a variety of factors, including the factors described elsewhere in this Risk Factors section, many of which are outside of our control. For example, and among these factors, the assumptions underlying our estimates of commission revenue as required by Accounting Standards Codification (“ASC”) 606 may vary significantly over time.
Our ability to refinance our existing or future indebtedness will depend on the capital markets, including prevailing interest rates, and our financial condition and performance, which, among other things, is subject to economic, financial, competitive and other 36 Table of Contents factors beyond our control. In addition, our Credit Agreement and the H.I.G.
Our ability to refinance our existing or future indebtedness will depend on the capital markets, including prevailing interest rates, and our financial condition and performance, which, among other things, is subject to economic, financial, competitive and other factors beyond our control. In addition, our Revolving Credit Agreement and the H.I.G.
As a result, we have traditionally experienced an increase in the number of submitted Medicare-related applications and approved members during the fourth quarter and, to a lesser extent, in the first quarter, and an increase in Medicare plan-related expense, including marketing and advertising expenses, during the third and fourth quarters in connection with the open enrollment periods.
As a result, we have historically experienced an increase in the number of submitted Medicare-related applications and approved members during the fourth quarter and, to a lesser extent, during the first quarter. We also experience an increase in Medicare-related expense, including marketing and advertising expenses, during the third and fourth quarters in connection with the open enrollment periods.
We rely on health insurance carriers to timely and accurately report the commissions earned by us, and we calculate our commission revenue, prepare our financial reports, projections and budgets and direct our marketing and other operating efforts based on the reports we receive from health insurance carriers.
We rely on health insurance carriers to timely and accurately report the commissions we earn, and we calculate our commission revenue, prepare our financial reports, projections and budgets, and direct our marketing and other operating efforts based on the reports we receive from health insurance carriers.
The election of President Trump and Republican control of both houses of Congress may result in significant changes in, and have resulted in uncertainty with respect to, legislation, regulation, implementation and/or repeal of laws and rules related to government health programs, including Medicare, Medicaid and Affordable Care Act.
The election of President Trump and Republican control of both houses of Congress have resulted in significant changes and may continue to create uncertainty with respect to legislation, regulation, implementation and potential repeal of laws and rules related to government health programs, including Medicare, Medicaid and the Affordable Care Act.
Even if we do implement and administer these plans and initiatives in the manner contemplated, our estimated cost savings resulting from them are based on several assumptions that may prove to be inaccurate and, as a result, we cannot assure you that we will realize these cost savings.
Even if we do implement and administer these plans and initiatives in the manner contemplated, our estimated cost savings resulting from them are based on several assumptions that may prove to be inaccurate and, as a result, we may fail to realize these cost savings.
Despite our taking precautions, we cannot guarantee that our facilities and systems, and those of our third-party service providers, will be free of security breaches, cyberattacks, acts of vandalism, computer viruses, malware, misplaced or lost data, programming and/or human errors or other similar events.
Although we take precautions, we cannot guarantee that our facilities and systems, or those of our third-party service providers, will be free from security breaches, cyberattacks, acts of vandalism, computer viruses, malware, misplaced or lost data, programming or human errors, or other similar events.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and our stock price. We have a complex business organization.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and our stock price.
Alternatively, other proposals may increase the role of the private sector in health care but be implemented in ways that reduce eHealth’s role in helping consumers select and enroll in insurance plans.
Other proposals could increase the role of the private sector in health care but may be implemented in ways that reduce our role in helping consumers select and enroll in insurance plans.
Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations or result in material misstatements in our financial statements.
Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, impact our ability to timely meet our periodic reporting obligations or result in material misstatements in our financial statements.
These regulations and the evolving AI regulatory environment could, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs and increase our exposure to claims related to our use of AI. Our business is subject to security risks.
These regulations and the evolving AI regulatory environment could, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions, increase our compliance, governance and research and development costs and increase our exposure to claims related to our use of AI.
Due to our national reach and the large number of carriers whose plans are purchased by our members, the process of changing writing agents has in the past taken, and could take in the future, a significant period of time to complete.
Due to our national reach and the large number of carriers whose plans are purchased by our members, the process of transitioning writing agents has in the past taken, and may take in the future, a significant period of time.
Weak economic condition can adversely impact consumer confidence and spending and materially adversely affect demand for our products and services. In addition, consumer confidence 44 Table of Contents and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.
Weak economic conditions can adversely impact consumer confidence and spending and materially adversely affect demand for our products and services. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.
If a successful claim is made against us and is not covered by our insurance or exceeds our policy limits, our business may be negatively and materially impacted. These fluctuations could have a material adverse effect on our business, operating results and financial condition.
If a successful claim is made against us and is not covered by our insurance or exceeds our policy limits, our business may be negatively and materially impacted. Our exposure to these unexpected costs and losses could have a material adverse effect on our business, operating results and financial condition.
These dividend and share repurchase and redemption obligations could impact our liquidity and reduce the amount of cash flows available for working capital, capital expenditures, growth opportunities, acquisitions, and other general corporate purposes. The H.I.G.
These dividend and share repurchase and redemption obligations could adversely impact our liquidity and reduce cash available for working capital, capital expenditures, growth opportunities, acquisitions, and other corporate purposes. The H.I.G.
Jurisdictions around the world are developing and passing new regulations that apply specifically to the use of AI.
Jurisdictions around the world are developing and enacting new laws and regulations that apply specifically to the use of AI.
Consumers increasingly screen their incoming emails, telephone calls and SMS text messages, including by using screening tools and warnings; therefore, our members or potential members may not reliably receive our messages, whether or not such messages constitute marketing.
Consumers also increasingly screen their incoming emails, telephone calls and SMS text messages, including by using screening technologies; therefore, our members or potential members may not reliably receive our messages, regardless of whether such messages constitute marketing.
The success of our business depends upon the private sector of the U.S. health insurance system, including the Medicare program, which is subject to a changing regulatory environment at both the federal and state level. Changes and developments in the health insurance system and Medicare program in the United States could reduce demand for our services and harm our business.
The success of our business depends upon the private sector of the U.S. health insurance system, including the Medicare program, which is subject to a continuously evolving regulatory environment at both the federal and state levels. Changes and developments in the U.S. health insurance system or Medicare program could reduce demand for our services and harm our business.
Compliance with state and federal privacy-related laws, particularly state legislation such as the California Consumer Privacy Act and its recent amendments, and increasingly robust 30 Table of Contents industry standard security frameworks will result in cost increases due to an increased need for privacy compliance, oversight and monitoring, and the development of new processes to effectuate and demonstrate compliance.
Compliance with state and federal privacy-related laws, particularly state legislation such as the California Consumer Privacy Act and its amendments, and increasingly robust industry standard security frameworks may result in cost increases due to increased needs for privacy compliance, oversight and monitoring, and the development of new processes to effectuate and demonstrate compliance.
If we seek to raise funds through debt or equity financing, those funds may prove to be unavailable, may only be available on terms that are not acceptable to us or may result in significant dilution to our stockholders or higher levels of leverage. Our term loan under the Credit Agreement matures in February 2026.
If we seek to raise funds through debt or equity financing, those funds may prove to be unavailable, may only be available on terms that are not acceptable to us or may result in significant dilution to our stockholders or higher levels of leverage. Our revolving credit facility under the Comvest Agreement matures in December 2028.
In addition, each employee who transacts health insurance business on our behalf must maintain a valid license in one or more states. Because we maintain health insurance licenses to do business in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is difficult and imposes significant costs on our business.
In addition, each employee who transacts health insurance business on our behalf must hold a valid license in one or more states. Because we maintain licenses in all 50 states and the District of Columbia, compliance with health insurance-related laws, rules and regulations is complex and costly.
New laws, regulations and guidelines also may not be compatible with the sale of health insurance over the Internet, with modern technologies such as artificial intelligence, or with various aspects of our platform or manner of marketing or selling health insurance plans.
New laws, regulations and guidelines also may not be compatible with the sale of health insurance over the internet, the use of modern technologies such as artificial intelligence, or certain aspects of our platform or marketing or sale practices.
Furthermore, a sale of our company, as a change of control event, may require us to repurchase Series A Preferred Stock, which could have the effect of making an acquisition of our company more expensive and potentially deterring proposed transactions that may otherwise be beneficial to our stockholders.
Furthermore, a sale of our company, as a change of control event, may require us to repurchase Series A Preferred Stock, which could have the effect of making an acquisition of our company more expensive and could deter transactions that might otherwise benefit our stockholders.
The number of states using the FFM may also decrease in the future, reducing our ability to enroll members through the FFM.
The number of states using the FFM may also decrease over time, reducing our ability to enroll members through the FFM.
These restrictions on the conduct of our business imposed by our lender or H.I.G. could materially adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business and other stockholders.
These restrictions could materially adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business and other stockholders.
We rely in part upon third-party vendors, including cloud infrastructure and bandwidth providers, to operate our ecommerce platform and advisor enrollment centers. Consumers using our website and accessing our services depend upon online, mobile and other service providers for access to our website and services.
We rely in part upon third-party vendors, including cloud infrastructure and bandwidth providers and our telephone and call recording systems providers, to operate our ecommerce platform and advisor enrollment centers. Consumers using our website and accessing our services depend upon online, mobile and other service providers, and our remote employees rely on third-party vendors to access our systems and tools.
Changing our processes could be time-consuming and expensive, and failure to timely implement required changes could result in our inability to sell health insurance plans in a particular jurisdiction or for a particular health insurance carrier or subject us to liability for non-compliance, any of which would damage our business, operating results and financial condition.
Failure to timely implement required changes could result in our inability to sell health insurance plans in a particular jurisdiction or for a particular health insurance carrier or could subject us to liability for non-compliance. Any of these factors could damage our business, operating results and financial condition.
The director designated by H.I.G. is also entitled to serve on committees of our Board of Directors, subject to applicable law and stock exchange rules. H.I.G. nominated Aaron C. Tolson to our Board of Directors. Mr.
The director designated by H.I.G. is also entitled to serve on committees of our Board of Directors, subject to applicable law and stock exchange requirements. The H.I.G.
We have net operating loss carryforwards for federal and state income tax purposes to offset future taxable income. Certain of our federal and state net operating loss carryforwards begin expiring in 2034 and 2025, respectively. A lack of future taxable income would adversely affect our ability to utilize these net operating loss carryforwards.
Certain of our federal and state net operating loss carryforwards begin expiring in 2034 and 2026, respectively. A lack of future taxable income would adversely affect our ability to utilize these net operating loss carryforwards.
Due to the complexity, periodic modification and differing interpretations of insurance laws and regulations, we may not have always been, and we may not always be, in compliance with them.
Given the complexity, periodic modification and differing interpretations of insurance laws and regulations, we may not always have been, and may not always be, in full compliance.
Investment Agreement entitles H.I.G. to nominate one individual for election to our Board of Directors for 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.
Investment Agreement entitles H.I.G. to nominate one board member so long as it owns at least 30% of the common stock issuable or issued upon conversion of the Series A Preferred Stock originally issued to it.
Compliance with these evolving laws and regulations may involve significant costs, cause significant delays in our ability to go to market with new marketing and product initiatives and strategies or require us to change our business practices, which could have an adverse impact on our business, operating results and financial condition.
Compliance with these evolving requirements may involve significant costs, delays our ability to go to market with new marketing and product initiatives and strategies or require us to change our business practices, which could adversely impact our business, operating results and financial condition.
We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member.
For example, we may receive commission payments or other information indicating that a member who was excluded in our estimates for a prior period was in fact active, or that a member who was included in our estimates was not.
If we are unable to successfully attract and convert qualified prospects into members for whom we receive commissions, our business, operating results and financial condition would be harmed.
Any of these events could harm our business, operating results and financial condition. If we are unable to successfully attract and convert qualified prospects into members for whom we receive commissions or fees, our business, operating results and financial condition would be harmed.
Some proposals would seek to eliminate the private marketplace while others would expand a government-sponsored option to a larger population or otherwise increase government oversight or competition in the sector or reduce the fees or commissions payable to brokers under the Medicare program.
Some proposals would seek to eliminate the private marketplace while others would expand government-sponsored options, increase government oversight or competition, or reduce the fees or commissions payable to brokers under the Medicare program.
As a result, negative changes in the factors upon which we estimate constrained LTVs, such as reduced conversion of approved members to paying members, increased health insurance plan terminations or a reduction in the lifetime commission amounts we expect to receive for selling the plan to a member or other changes could harm our business, operating results and financial condition.
As a result, negative changes in the factors upon which we estimate constrained LTVs, such as reduced conversion of approved members to paying members, a decline in the forecasted average plan duration, a reduction in the commission amounts we expect to receive for selling the plan to a member, underestimating the initial constraint applied to LTVs or other changes, could harm our business, operating results and financial condition.
Some of our current and potential competitors have greater brand recognition and significantly greater financial, technical, marketing and other resources than we do, and they may try to replicate our efforts, competitively bid against our branded search terms to redirect traffic seeking our brand, or undertake more extensive marketing campaigns for their brands and services.
Some of our current and potential competitors may have greater brand recognition and significantly greater financial, technical and marketing resources than we do, and they may replicate our strategies, bid against our branded search terms to redirect consumer traffic, or undertake more extensive marketing campaigns.
Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt. Our certificate of incorporation, bylaws, and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our Board of Directors.
Our certificate of incorporation, bylaws, and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our Board of Directors.
In the event that laws, regulations or rules that eliminate or reduce private sources of health insurance or Medicare are adopted, or otherwise act to 27 Table of Contents reduce eHealth’s role in connecting consumers with insurance plans, the demand for our products could be adversely impacted, and our business, operating results and financial condition would be harmed.
If laws, regulations or rules are adopted to eliminate or reduce private sources of health insurance or Medicare plans are adopted, or otherwise reduce our role in connecting consumers with insurance plans, demand for our services could be adversely impacted, and our business, operating results and financial condition could be harmed.
Ensuring that we have adequate internal control over financial reporting and adequate accounting controls and procedures in place to help ensure that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. This process is complicated by the expansion of our business operations and changing accounting requirements.
We operate a complex business, and ensuring that we have adequate internal control over financial reporting and adequate accounting controls and procedures in place to help ensure that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently.
If our AI implementation, deployment or governance is ineffective or inadequate, it could result in incidents that impair the public acceptance of AI use or cause harm to individuals, customers or society, or result in our operations not working as intended or producing unexpected outcomes. Also, use of third party models can pose security and privacy risks.
If our AI implementation, deployment or governance is ineffective or inadequate, incidents may occur that impair the public acceptance of AI use, cause harm to individuals, customers or society, or cause our operations to not function as intended or produce unintended outcomes. Also, the use of third party models may pose security and privacy risks.
Each jurisdiction’s insurance department typically has the power, among other things, to: • grant, limit, suspend and revoke licenses to transact insurance business; • conduct inquiries into the insurance-related activities and conduct of agents and agencies; • require and regulate disclosure in connection with the sale and solicitation of health insurance; • authorize how, by which personnel and under what circumstances insurance premiums can be quoted and published and an insurance policy sold; • approve which entities can be paid commissions from carriers and the circumstances under which they may be paid; • regulate the content of insurance-related advertisements, including web pages, and other marketing practices; • approve policy forms, require specific benefits and benefit levels and regulate premium rates; • impose fines and other penalties; and • impose continuing education requirements.
State insurance departments generally have broad authority to, among other things: • grant, limit, suspend and revoke licenses to transact insurance business; • conduct inquiries into the insurance-related activities and conduct of agents and agencies; • require and regulate disclosure in connection with the sale and solicitation of health insurance; • regulate how, by whom and under what circumstances insurance premiums can be quoted and published and policies sold; 27 Table of Contents • approve which entities may receive commissions from carriers and the circumstances under which they may be paid; • regulate the content of insurance-related advertisements, including websites and other marketing practices; • approve policy forms, require specific benefits and benefit levels, and regulate premium rates; • impose fines and other penalties; and • impose continuing education requirements.
Moreover, an adverse regulatory action in one jurisdiction could result in penalties and adversely affect our license status, business or reputation in other jurisdictions due to the requirement that adverse regulatory actions in one jurisdiction be reported to other jurisdictions.
Any such consequences could harm our business, operating results and financial condition. Moreover, an adverse regulatory action in one jurisdiction could result in penalties and negatively affect our license status, business or reputation in other jurisdictions, due to the requirement that adverse regulatory actions in one jurisdiction be reported to other jurisdictions.
Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.
Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there have been and may continue to be significant changes to U.S. trade policies, treaties and tariffs.
Changes to the laws, regulations and guidelines relating to the sale of health insurance plans and related products and services, their interpretation or the manner in which they are enforced could impact the manner in which we conduct our business, our ecommerce platforms or our sale of Medicare plans and other products, or we could be prevented from operating certain aspects of our revenue-generating activities altogether, which would harm our business, operating results and financial condition.
Changes to the laws, regulations and guidelines, or enforcement practices relating to the sale of health insurance plans or related products and services could impact the manner in which we conduct our business, our ecommerce platforms or our sale of Medicare plans and other products, or restrict certain aspects of our revenue-generating activities, any of which could harm our business, operating results and financial condition.
For these and other reasons, including if current trends in membership cancellation are inconsistent with past cancellation trends that we use to estimate our membership or if carriers subsequently report changes to the commission payments that they previously reported to us, our actual membership could be materially different from our estimates.
As a result, our actual membership could be materially different from our estimates, particularly if current trends in membership cancellation are inconsistent with past cancellation trends that we use to estimate our membership or if carriers subsequently report changes to the commission payments that they previously provided to us.
There may be exposure that the outcomes from these examinations will have an adverse effect on our operating results and financial condition. 37 Table of Contents Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
There may be exposure that the outcomes from these examinations will have an adverse effect on our operating results and financial condition. Our ability to use net operating losses to offset future taxable income may be subject to certain limitations. We have net operating loss carryforwards for federal and state income tax purposes to offset future taxable income.
As a result, health insurance carriers may terminate their relationships with us, or they may require us to take other corrective action if our Medicare product sales, marketing and operations are not in compliance or give rise to too many complaints.
As a result, health insurance carriers may terminate their relationship with us or require us to take corrective actions if our Medicare product sales, marketing and operations are not in compliance with legal requirements or give rise to excessive complaints.
In addition, each state regulates its insurance market, including by regulating the ability of insurance companies to set premiums and prohibiting brokers and agents such as eHealth from competing in certain ways, such as offering price reductions and rebates or marketing in certain ways.
In addition, each state regulates its insurance market, including by regulating the ability of insurance companies to set premiums and restrictions on how brokers and agents such as eHealth may compete, such as prohibitions on offering price reductions and rebates or certain marketing practices.
If we are unable to generate sufficient cash flow or otherwise obtain the funds necessary to make required payments under the Credit Agreement, or if we fail to comply with the requirements of our indebtedness, we could default under our Credit Agreement.
If we are unable to generate sufficient cash flow or otherwise obtain the funds necessary to make required payments, or if we fail to comply with the covenants in the Revolving Credit Agreement, we could be in default.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also conduct regular scans of our technical infrastructure and regular penetration audits to check for vulnerabilities and meet our governance and compliance requirements. Training our employees and contractors is crucial to eHealth’s governance and compliance requirements. All employees and contractors with access to an eHealth IT system are required to complete security awareness training during onboarding and annually thereafter.
Biggest changeOur security policies and procedures are reviewed and updated regularly to address regulatory, industry, and contractual requirements and recommendations and to address new and emerging security threats. We also conduct regular scans of our technical infrastructure and regular penetration tests to check for vulnerabilities. Training our employees and contractors is crucial to eHealth’s governance and compliance requirements.
We regularly assess our compliance with privacy and security requirements and conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
We regularly assess our compliance with privacy and security requirements and conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems vulnerable to such threats.
Our comprehensive data security strategy includes: • Regular critical security assessments such as advanced attack simulations and vulnerability scans. • A Software Development Life Cycle (SDLC) framework to assess applications and related infrastructure before implementation to ensure our security standards are met. • Use of a Role Based Access Control (RBAC) methodology, which defines the access a user receives to eHealth’s information systems based on job function. • Requirements that third-party vendors that host, transmit, or have access to eHealth data comply with our policies and undergo reviews. • Monitoring of security event data and the security industry to flag anomalies and be aware of potential threats. • Dedicated domestic and international liaisons who help ensure that business and functional area employees have easy access to experts for guidance and assistance in mitigating privacy and information protection risks. • Encryption of consumer data both in transit and at rest. • A broad spectrum of technical controls, including data loss prevention, role-based access, application/desktop logging, and data encryption as well as multi-factor authentication and enhanced web application firewall controls.
Our data security strategy includes: • Regular critical security assessments such as advanced attack simulations and vulnerability scans. 40 Table of Contents • A Software Development Life Cycle (SDLC) framework to assess applications and related infrastructure before implementation to ensure our security standards are met. • Use of a Role Based Access Control (RBAC) methodology, which defines the access a user receives to eHealth’s information systems based on job function. • Requirements that third-party vendors that host, transmit, or have access to eHealth data comply with our policies and undergo reviews. • Monitoring of security event data and the security industry to flag anomalies and be aware of potential threats. • Dedicated domestic and international liaisons who help ensure that business and functional area employees have easy access to experts for guidance and assistance in mitigating privacy and information protection risks. • Encryption of consumer data both in transit and at rest. • A broad spectrum of technical controls, including data loss prevention, role-based access, application/desktop logging, and data encryption as well as multi-factor authentication and enhanced web application firewall controls.
We are subject to various federal and state privacy and security laws, regulations, and requirements. These laws govern the collection, use, disclosure, protection, and maintenance of the individually identifiable information that we collect from consumers.
We are subject to various federal and state privacy and security laws, regulations, and requirements that govern the collection, use, disclosure, protection, and maintenance of the individually identifiable information that we collect from consumers.
Governance 46 Table of Contents eHealth’s Board of Directors oversees our enterprise risk management process, including cybersecurity, information security, governance, risk management, and compliance programs and strategies. The Board is responsible for monitoring and assessing strategic risk exposure, and our senior leadership team is responsible for the day-to-day management of the risks that we face.
Governance eHealth’s Board of Directors oversees our enterprise risk management process, including cybersecurity, information security, governance, risk management, and compliance programs and strategies. The Board is responsible for monitoring and assessing strategic risk exposure, and our senior leadership team is responsible for the day-to-day management of the risks that we face.
His security experience also includes a 12-year career at Banc of America Securities and subsequently at Merrill Lynch on their information security teams as Senior Consultant, Systems Engineering & Architecture.
His security experience also includes a 12-year career at Banc of America Securities and subsequently at Merrill Lynch on their information 41 Table of Contents security teams as Senior Consultant, Systems Engineering & Architecture.
We, like any technology company, have experienced cybersecurity incidents in the past. However, as of the date of this Annual Report on Form 10-K, we have not experienced any cybersecurity incidents that have been determined to be material.
As of the date of this Annual Report on Form 10-K, we have not experienced any cybersecurity incidents that have been determined to be material.
Management briefs the Audit Committee periodically about eHealth’s protection programs, focusing on current trends in the environment, incident preparedness, business continuity management, program governance, and program components, including updates on security processes, external testing, and employee training and awareness initiatives. eHealth’s Head of Information Security reports to our Chief Digital Officer (“CDO”) and, with respect to cybersecurity risks, to the Audit Committee of the Board of Directors.
Management briefs the Audit Committee periodically about eHealth’s protection programs, focusing on current trends in the environment, incident preparedness, business continuity management, program governance, and program components, including updates on security processes, external testing, and employee training and awareness initiatives.
Additionally, eHealth has engaged a guided cyber crisis response platform and conducted a mock cyber-attack exercise to build crisis management experience for our senior leadership and cybersecurity teams. We believe this voluntary skill building exercise put our teams in a better position to manage a potential cybersecurity crisis.
Additionally, eHealth has engaged a guided cyber crisis response platform and conducts at least annually a mock cyber-attack exercise to build crisis management experience for our senior leadership team, key functional leaders and the Incident Response Team. We believe this proactive exercise puts eHealth in a better position to manage a potential cybersecurity crisis.
Despite our rigorous efforts, incidents may occur, and we are prepared to deal with them through our formal Incident Response Plan. Events such as human errors, computer viruses or other malicious code, unauthorized access, cyber-attacks, or phishing attempts concern all organizations.
Events such as human errors, computer viruses or other malicious code, unauthorized access, cyber-attacks, or phishing attempts concern all organizations. Our Incident Response Team is trained to contain incidents, mitigate impacts, resolve or remediate issues, and notify affected parties as appropriate.
Due to the increased inherent risk associated with these roles, developers and privileged users are subject to additional security training requirements. 45 Table of Contents Every person with access to eHealth IT systems is required to undergo periodic phishing simulations and receives personalized tools to improve their security behavior.
All employees and contractors with access to an eHealth IT system are required to complete security awareness training during onboarding and annually thereafter. Developers and privileged users are subject to additional security training requirements due to the increased inherent risk associated with these roles.
The Board administers its cybersecurity risk oversight both directly and through its Audit Committee. The Audit Committee is regularly briefed on eHealth’s risk profile issues. These briefings are designed to provide visibility about identifying, assessing, and managing critical risks, audit findings, and management’s risk mitigation strategies.
The Board administers its cybersecurity risk oversight both directly and through its Audit Committee. The Audit Committee is regularly updated on eHealth’s cybersecurity posture and cyber risk profile.
Performance is measured both individually and by functional groups to manage the maturity and improvement of eHealth’s overall security posture. Employees must also acknowledge receipt and understanding of their responsibility to comply with eHealth’s Code of Business Conduct, including the eHealth Information Security and Acceptable Use Policies, during onboarding and annually thereafter.
Employees must also acknowledge receipt and understanding of their responsibility to comply with eHealth’s Code of Business Conduct and Ethics, Information Security Policy and Acceptable Use Policy, during onboarding and annually thereafter. Despite our rigorous efforts, incidents may occur, and eHealth has created a formal Incident Response Plan.
Removed
Furthermore, all employees are required to complete annual privacy and security training. Our security policies and procedures are reviewed and updated regularly to address regulatory, industry, and contractual requirements and recommendations and address new and emerging security threats.
Added
Every person with access to eHealth IT systems is required to undergo periodic phishing simulations and receives personalized tools to improve their security behavior. Performance is measured both individually and by functional groups to manage the maturity and improvement of eHealth’s overall security posture.
Removed
Our Incident Response Team is trained to contain incidents, mitigate impacts, resolve or remediate issues, and notify affected parties as appropriate. The team is made up of key security, privacy, and legal professionals who work with eHealth Technology and Business Teams and our managed security services.
Added
The Incident Response team is comprised of key security, privacy, and legal professionals within the eHealth organization as well as other managed security service providers.
Added
The Audit Committee discusses with Company management critical risks and audit findings and provides oversight with respect to risk mitigation strategies. Our Head of Information Security reports to our Chief Digital & AI Officer (“CDO”) and, with respect to cybersecurity risks, to the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our facilities are adequate to meet our needs for the immediate future, and that should we need additional physical office space, suitable additional space will be available in the future. 47
Biggest changeWe also occupy leased office space in Xiamen, China which supports our technology and content, customer care and enrollment, marketing and advertising and general and administrative operations. We believe that our facilities are adequate to meet our needs for the immediate future, and that should we need additional physical office space, suitable additional space will be available in the future.
ITEM 2. PROPERTIES Our corporate headquarters are located in Austin, Texas, where we lease 26,878 square feet of office space. In addition to our corporate headquarters, we currently lease several other office spaces around the country.
ITEM 2. PROPERTIES Our corporate headquarters are located in Indianapolis, Indiana. In addition to our corporate headquarters, we currently lease several other office spaces around the country.
Removed
We also occupy 40,294 square feet of leased office space in Xiamen, China which supports our technology and content, customer care and enrollment, marketing and advertising and general and administrative operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of February 21, 2025, there were 21 stockholders of record of our common stock (which does not include the number of stockholders holding shares of our common stock in “street name”). Dividend Policy We have never declared or paid any cash dividend on our common stock.
Biggest changeBecause many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. Dividend Policy We have never declared or paid any cash dividend on our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Market under the symbol EHTH.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our common stock is traded on The Nasdaq Global Market under the symbol EHTH. Holders of Record As of February 20, 2026, there were 21 stockholders of record of our common stock.
Added
Stock Performance Graph As a smaller reporting company, we are not required to provide the information requested by this item pursuant to Item 201(e) of Regulation S-K. Issuer Repurchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIFP Plans 2024 compared to 2023 – Total acquisition cost per IFP-equivalent approved member increased $126, or 53% driven by: • a $77, or 43%, increase in CC&E cost per IFP-equivalent due to the overall decline in individual and family plan and short-term plan approved members as well as a higher number of benefit advisors than in the same period last year, and • a $49, or 80%, increase in variable marketing cost per IFP-equivalent approved member, primarily due to unfavorable channel mix. 56 Table of Contents Results of Operations The following table sets forth our operating results and related percentage of total revenue for the years presented below (dollars in thousands): Year Ended December 31, 2024 2023 Revenue: Commission $ 461,647 87 % $ 403,924 89 % Other 70,763 13 % 48,947 11 % Total revenue 532,410 100 % 452,871 100 % Operating costs and expenses (1) Cost of revenue 1,794 — % 1,771 — % Marketing and advertising 190,837 36 % 172,640 38 % Customer care and enrollment 163,448 31 % 149,562 33 % Technology and content 53,520 10 % 58,609 13 % General and administrative 89,765 17 % 99,363 22 % Impairment, restructuring and other charges 9,475 2 % — — % Total operating costs and expenses 508,839 96 % 481,945 106 % Income (loss) from operations 23,571 4 % (29,074) (6) % Interest expense (11,159) (2) % (10,974) (2) % Other income, net 6,900 1 % 9,453 2 % Income (loss) before income taxes 19,312 4 % (30,595) (7) % Benefit from (provision for) income taxes 9,255 2 % (2,381) (1) % Net income (loss) $ 10,057 2 % $ (28,214) (6) % ____________ (1) Operating costs and expenses include the following amounts of stock-based compensation expense (in thousands): Year Ended December 31, 2024 2023 Marketing and advertising $ 2,413 $ 2,201 Customer care and enrollment 1,845 2,287 Technology and content 3,331 4,498 General and administrative 12,292 14,227 Total stock-based compensation expense $ 19,881 $ 23,213 Revenue Our commission revenue, other revenue and total revenue are summarized as follows (dollars in thousands): Change 2024 2023 $ % Commission $ 461,647 $ 403,924 $ 57,723 14 % % of total revenue 87 % 89 % Other 70,763 48,947 21,816 45 % % of total revenue 13 % 11 % Total revenue $ 532,410 $ 452,871 $ 79,539 18 % 57 Table of Contents 2024 compared to 2023 – Commission revenue increased $57.7 million, or 14%, in 2024 compared to 2023 due to: • a $71.9 million, or 20%, increase in commission revenue from the Medicare segment driven by: ◦ a 26% increase in Medicare Advantage plan approved members, ◦ improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement plans, ◦ partially offset by lower net adjustment revenue from prior period enrollments, which was $18.7 million in 2024 compared to $33.5 million in 2023, and ◦ decreases in approved membership for both Medicare Supplement and Medicare Part D plans. • a $14.2 million, or 32%, decrease in commission revenue from the E&I segment primarily driven by: ◦ lower net adjustment revenue from prior period enrollments, which was $4.1 million in 2024 compared to $14.5 million in 2023, ◦ a 24%, 9% and 30% decrease in individual and family plan, ancillary product and small business approved members, respectively, ◦ partially offset by a 17% and 14% improvement in constrained LTV of commissions per approved member for dental and vision plans, respectively.
Biggest changeIFP Plans 2025 compared to 2024 – Total acquisition cost per IFP-equivalent approved member increased $50, or 14%, driven by a $19, or 7%, increase in CC&E cost per IFP-equivalent and a $31, or 28%, increase in variable marketing cost per IFP-equivalent approved member, primarily driven by the overall decline in individual and family plan and short-term plan approved members. 50 Table of Contents Results of Operations The following table sets forth our operating results and related percentage of total revenue for the years presented below (dollars in thousands): Year Ended December 31, 2025 2024 Revenue: Commission $ 497,955 90 % $ 461,647 87 % Other 56,053 10 % 70,763 13 % Total revenue 554,008 100 % 532,410 100 % Operating costs and expenses (1) Marketing and advertising 181,240 33 % 192,631 36 % Customer care and enrollment 162,885 29 % 163,448 31 % Technology and content 51,829 9 % 53,520 10 % General and administrative 89,555 16 % 89,765 17 % Impairment, restructuring and other charges 2,010 — % 9,475 2 % Total operating costs and expenses 487,519 88 % 508,839 96 % Income from operations 66,489 12 % 23,571 4 % Interest expense (10,761) (2) % (11,159) (2) % Other income, net 2,998 1 % 6,900 1 % Income before income taxes 58,726 11 % 19,312 4 % Provision for income taxes 18,682 3 % 9,255 2 % Net income $ 40,044 7 % $ 10,057 2 % ____________ (1) Operating costs and expenses include the following amounts of stock-based compensation expense (in thousands): Year Ended December 31, 2025 2024 Marketing and advertising $ 2,268 $ 2,413 Customer care and enrollment 1,221 1,845 Technology and content 2,552 3,331 General and administrative 9,002 12,292 Total stock-based compensation expense $ 15,043 $ 19,881 Revenue Our commission revenue, other revenue and total revenue are summarized as follows (dollars in thousands): Change 2025 2024 $ % Commission $ 497,955 $ 461,647 $ 36,308 8 % % of total revenue 90 % 87 % Other 56,053 70,763 (14,710) (21) % % of total revenue 10 % 13 % Total revenue $ 554,008 $ 532,410 $ 21,598 4 % 51 Table of Contents 2025 compared to 2024 – Commission revenue increased $36.3 million, or 8%, in 2025 compared to 2024 due to: • a $44.6 million, or 10%, increase in commission revenue from the Medicare segment driven by: ◦ higher net adjustment revenue from prior period enrollments, which was $43.0 million in 2025 compared to $18.7 million in 2024, ◦ improved constrained LTV of commissions per approved member for all Medicare products, ◦ a significant increase in hospital indemnity plan approved members, and ◦ partially offset by a 7% decrease in Medicare plan approved members. • a $8.3 million, or 28%, decrease in commission revenue from the E&I segment primarily driven by: ◦ a 25% and 35% decrease in individual and family plan and short-term health plan approved members, respectively, along with lower constrained LTV of commissions for these products, ◦ lower net adjustment revenue from prior period enrollments, which was $1.4 million in 2025 compared to $4.1 million in 2024, and ◦ partially offset by a 5%, 1% and 9% improvement in constrained LTV of commissions per approved member for dental, vision and small business plans, respectively.
Seasonality See Item 1 , Business – Seasonality, for information regarding seasonal impacts on our business and financial condition and results of operations. Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S.
Seasonality See Item 1 , Business, for information regarding seasonal impacts on our business and financial condition and results of operations. Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S.
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.
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.
Through December 31, 2024, we had not declared or paid any cash dividends to common stockholders, and we do not expect to pay any in the foreseeable future. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of our stock options.
Through December 31, 2025, we had not declared or paid any cash dividends to common stockholders, and we do not expect to pay any in the foreseeable future. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of our stock options.
Segment gross profit (loss) is calculated as total revenue for the applicable segment less variable marketing and advertising, segment CC&E and cost of revenue for the applicable segment.
Segment gross profit (loss) is calculated as total revenue for the applicable segment less variable marketing and advertising expenses, segment CC&E expenses and cost of revenue for the applicable segment.
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 plans.
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 and hospital indemnity plans.
Overview We are 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.
Overview We are 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, or beneficiaries, through their health insurance enrollment and related options, when, where, and how they prefer.
Investment Agreement, for 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, entitles H.I.G., subject to the 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.
Investment Agreement, for 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, entitles H.I.G., subject to the 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 59 Table of Contents approve hiring or termination of certain key executives and the right to approve the incurrence of certain indebtedness.
We also maintained $3.1 million in restricted cash as of December 31, 2024 and 2023. Material Cash Requirements Our material cash requirements include our operating leases and service and licensing obligations. See Note 10 – Leases in our Notes to Consolidated Financial Statements for details of our operating lease obligations.
We also maintained $3.1 million in restricted cash as of December 31, 2025 and 2024. Material Cash Requirements Our material cash requirements include our operating leases and service and licensing obligations. See Note 10 – Leases in our Notes to Consolidated Financial Statements for details of our operating lease obligations.
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 65 Table of Contents Series A Preferred Stock nor is it expected to materially impact our ability to generate and obtain adequate amounts of cash to meet our short-term or long-term requirements.
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 nor is it expected to materially impact our ability to generate and obtain adequate amounts of cash to meet our short-term or long-term requirements.
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.
Our omnichannel consumer engagement platform differentiates our offering from competitors and enables consumers to use our services through our self-service online platform, by telephone with a licensed and trained 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.
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, including approximately 50 Medicare health insurance carriers.
To the extent we determine through confirmations from a health insurance carrier that a commission payment is delayed 54 Table of Contents or is inaccurate as of the date of estimation, we adjust the estimated membership to also reflect the number of members for whom we expect to receive or to refund a commission payment.
To the extent we determine through confirmations from a health insurance carrier that a commission payment is delayed or is inaccurate as of the date of estimation, we adjust the estimated membership to also reflect the number of members for whom we expect to receive or to refund a commission payment.
See Note 6 – Convertible Preferred Stock in our Notes to Consolidated Financial Statements for information regarding our preferred stock transaction in 2021 . We also had $3.1 million and $3.1 million in restricted cash as of December 31, 2024 and 2023, respectively.
See Note 6 – Convertible Preferred Stock in our Notes to Consolidated Financial Statements for information regarding our preferred stock transaction in 2021 . We also had $3.1 million in restricted cash as of December 31, 2025 and 2024.
The E&I segment consists primarily of commissions earned from our sale of individual and family plans, including both 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.
The E&I segment consists primarily of commissions earned from our sale of individual and family plans, including both qualified and non-qualified plans, employer plans, which include small business health insurance plans and ICHRAs, and ancillary products sold to our non-Medicare-eligible consumers, including but not limited to, dental, vision and short-term insurance.
As of December 31, 2024 and 2023, we had a total of 13.4 million and 12.8 million shares held in treasury stock, respectively. This included 2.7 million and 2.1 million shares, respectively, as of December 31, 2024 and 2023 that were repurchased to satisfy tax withholding obligations and 10.7 million shares previously repurchased as of December 31, 2024 and 2023.
As of December 31, 2025 and 2024, we had a total of 13.8 million and 13.4 million shares held in treasury stock, respectively. This included 3.1 million and 2.7 million shares, respectively, as of December 31, 2025 and 2024 that were repurchased to satisfy tax withholding obligations and 10.7 million shares previously repurchased as of December 31, 2025 and 2024.
Cash used from changes in net operating assets and liabilities during 2024 primarily consisted of increases of $81.9 million in contract assets – commissions receivable, $12.8 million in accounts receivable and $4.2 million in prepaid expenses, partially offset by a decrease of $16.2 million in accounts payable.
Cash used from changes in net operating assets and liabilities during 2024 primarily consisted of increases of $81.9 million in contract assets – commissions receivable, $12.8 million in accounts receivable and $4.2 million in prepaid expenses, partially offset by an increase of $16.2 million in accounts payable.
We recognize positive adjustments to revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. See Segment Information below and Note 2 – Revenue in our Notes to Consolidated Financial Statements for more information on commission revenue.
We recognize positive adjustments to revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. See Segment Information below and Note 1 – Summary of Business and Significant Accounting Policies and Note 2 – Revenue in our Notes to Consolidated Financial Statements for more information on commission revenue.
Stock-Based Compensation We recognize stock-based compensation expense in the accompanying Consolidated Statements of Comprehensive Income (Loss) 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 We recognize stock-based compensation expense in the accompanying Consolidated Statements of Comprehensive Income 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.
In 2023, the effective tax rate was lower than the statutory tax rate due to stock-based compensation adjustments and changes to the valuation allowance, offset by state tax and research and development tax credits. 61 Table of Contents Segment Information 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 in the annual budget and forecasting process along with evaluation of actual performance.
In 2024, the effective tax rate was higher than the statutory tax rate due to stock-based compensation adjustments and state taxes, offset by research and development tax credits. 55 Table of Contents Segment Information 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 in the annual budget and forecasting process along with evaluation of actual performance.
We recognize expenses in our direct marketing acquisition channel in the period in which they are incurred, including in the period in which the consumer clicks on the advertisement for 58 Table of Contents direct online channels.
We recognize direct marketing expenses in our direct marketing 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.
Our impairment, restructuring and other charges are summarized as follows (dollars in thousands): Change 2024 2023 $ % Impairment, restructuring and other charges $ 9,475 $ — $ 9,475 * % of total revenue 2 % — % ______________ * Percentage calculated is not meaningful. 2024 compared to 2023 – We incurred $9.5 million in impairment, restructuring and other charges for the year ended December 31, 2024 compared to no impairment, restructuring and other charges for the same period in 2023.
Our impairment, restructuring and other charges are summarized as follows (dollars in thousands): Change 2025 2024 $ % Impairment, restructuring and other charges $ 2,010 $ 9,475 $ (7,465) (79) % % of total revenue — % 2 % ______________ * Percentage calculated is not meaningful. 2025 compared to 2024 – We incurred $2.0 million in impairment, restructuring and other charges for the year ended December 31, 2025 compared to $9.5 million for the same period in 2024.
Our principal uses of cash in recent periods have been funding working capital, purchases of short-term investments, the satisfaction of tax withholding obligations in connection with the settlement of restricted stock units, making payments on our operating lease obligations and service and licensing obligations and complying with our debt servicing requirements and preferred stock dividend payment obligations. 64 Table of Contents Cash and Cash Equivalents Our cash, cash equivalents, and short-term marketable securities are summarized as follows (in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 39,197 $ 115,722 Short-term marketable securities 43,043 5,930 Total cash, cash equivalents, and short-term marketable securities $ 82,240 $ 121,652 Cash equivalents, which are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily consist of commercial paper, money market funds and agency bonds.
Our principal uses of cash in recent periods have been funding working capital, purchases of short-term investments, the satisfaction of tax withholding obligations in connection with the settlement of restricted stock units, making payments on our operating lease obligations and service and licensing obligations and complying with our debt servicing requirements and preferred stock dividend payment obligations. 58 Table of Contents Cash and Cash Equivalents Our cash, cash equivalents, and short-term marketable securities are summarized as follows (in thousands): December 31, 2025 December 31, 2024 Cash and cash equivalents $ 73,725 $ 39,197 Short-term marketable securities 3,495 43,043 Total cash, cash equivalents, and short-term marketable securities $ 77,220 $ 82,240 Cash equivalents, which are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily consist of commercial paper, money market funds and government securities.
Impairment, Restructuring and Other Charges Our impairment, restructuring and other charges consist primarily of severance, transition and other related costs and goodwill and intangible asset impairment charges.
Impairment, Restructuring and Other Charges Our impairment, restructuring and other charges consist primarily of severance, transition and other related costs and impairment charges.
The charges consisted of $7.5 million of impairment related to several of our leased office spaces, which included $7.0 million of operating lease right-of-use asset impairments and $0.5 million of property and equipment impairments.
The charges in 2024 consisted of $7.5 million of impairment related to several of our leased office spaces, specifically consisting of $7.0 million of operating lease right-of-use asset impairments and $0.5 million of property and equipment impairments.
Our commission revenue is influenced by a number of factors including but not limited to: • the number of individuals on applications for Medicare-related, individual and family, small business and ancillary health insurance plans that are approved by the relevant health insurance carriers; 51 Table of Contents • the number of approved members for Medicare-related, individual and family, small business and ancillary health insurance plans from whom we have received an initial commission payment; and • the constrained lifetime value (“LTV”) of approved members for Medicare-related, individual and family and ancillary health insurance plans we sell, as well as the estimated annual value of approved members for small business plans we sell.
Our commission revenue is influenced by a number of factors including but not limited to: • the number of individuals on applications for Medicare-related, individual and family, small business and ancillary health insurance plans that are approved by the relevant health insurance carriers; • the number of approved members for Medicare-related, individual and family, small business and ancillary health insurance plans from whom we have received an initial commission payment; and • the constrained lifetime value (“LTV”) of approved members for Medicare-related, individual and family and ancillary health insurance plans we sell, as well as the estimated annual value of approved members for small business plans we sell. 45 Table of Contents Approved Members Approved members represent the number of individuals on submitted applications, or submissions, which were approved by the relevant insurance carrier for the identified product during the current period.
Cash Activities Our cash flows for the years ended December 31, 2024 and 2023 are summarized as follows (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (18,366) $ (6,692) Net cash used in investing activities (48,421) (15,893) Net cash used in financing activities (9,674) (6,224) 66 Table of Contents Operating Activities Net cash used in operating activities primarily consists of net income (loss), adjusted for certain non-cash items, including deferred income taxes, stock-based compensation expense, depreciation and amortization, amortization of intangible assets and internally developed software, other non-cash items, and the effect of changes in working capital and other activities.
Cash Activities Our cash flows for the years ended December 31, 2025 and 2024 are summarized as follows (in thousands): Year Ended December 31, 2025 2024 Net cash used in operating activities $ (25,345) $ (18,366) Net cash provided by (used in) investing activities 25,432 (48,421) Net cash provided by (used in) financing activities 34,288 (9,674) 61 Table of Contents Operating Activities Net cash used in operating activities primarily consists of net income (loss), adjusted for certain non-cash items, including deferred income taxes, stock-based compensation expense, depreciation and amortization, amortization of intangible assets and internally developed software, other non-cash items, and the effect of changes in working capital and other activities.
The numerator used to calculate each member acquisition metric discussed above is the portion of the respective operating expenses for CC&E and marketing and advertising that is directly related to member acquisition for our sale of Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans (collectively, “Medicare Plans”) and for all individual and family major medical plans and short-term health insurance plans (collectively, “IFP Plans”), respectively, for which we are the broker of record.
Variable marketing costs exclude fixed overhead costs, such as personnel related costs, consulting expenses, and other operating costs allocated to the marketing and advertising department. 49 Table of Contents The numerator used to calculate each member acquisition metric discussed above is the portion of the respective operating expenses for CC&E and marketing and advertising that is directly related to member acquisition for our sale of Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans (collectively, “Medicare Plans”) and for all individual and family major medical plans and short-term health insurance plans (collectively, “IFP Plans”), respectively, for which we are the broker of record.
Short-term obligations were $9.2 million for leases and $8.2 million for service and licensing as of December 31, 2024. Long-term obligations were $22.8 million for leases and $4.8 million for service and licensing as of December 31, 2024. We expect to fund these obligations through our existing cash and cash equivalents and cash generated from operations.
Short-term obligations were $8.4 million for leases and $10.6 million for service and licensing as of December 31, 2025. Long-term obligations were $15.2 million for leases and $3.5 million for service and licensing as of December 31, 2025. We expect to fund these obligations through our existing cash and cash equivalents and cash generated from operations.
Investment Agreement and the term loan we obtained on February 28, 2022 under the Credit Agreement, and expected cash collections will be sufficient to fund our operations for at least 12 months after the filing date of this Annual Report on Form 10-K.
Investment Agreement and the proceeds we obtained on December 31, 2025 under the Revolving Credit Agreement, and expected cash collections will be sufficient to fund our operations for at least 12 months after the filing date of this Annual Report on Form 10-K.
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 small business plans, we recognize 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.
Investment Agreement”), we issued and sold 2,250,000 shares of Series A convertible preferred stock (“Series A Preferred Stock”) at an aggregate purchase price of $225.0 million to H.I.G. in a private placement and received $214.0 million net proceeds on April 30, 2021. During the year ended December 31, 2024, we paid cash dividends in the aggregate amount of $5.6 million.
Investment Agreement”), we issued and sold 2,250,000 shares of Series A convertible preferred stock (“Series A Preferred Stock”) at an aggregate purchase price of $225.0 million to H.I.G. in a private placement and received $214.0 million net proceeds on April 30, 2021.
In 2024, the effective tax rate was higher than the statutory tax rate due to stock-based compensation adjustments and state tax, offset by research and development tax credits. Year Ended December 31, 2023 – For the year ended December 31, 2023, we recorded a benefit from income taxes of $2.4 million representing an effective tax rate of 7.8%.
In 2025, the effective tax rate was higher than the statutory tax rate due to state taxes and stock-based compensation adjustments, offset by research and development tax credits. Year Ended December 31, 2024 – For the year ended December 31, 2024, we recorded a provision for income taxes of $9.3 million representing an effective tax rate of 47.9%.
Year Ended December 31, 2023 – Net cash used in financing activities of $6.2 million during 2023 was primarily attributable to $3.5 million of preferred stock cash dividends and $3.3 million of cash used for share repurchases to satisfy employee tax withholding obligations.
Year Ended December 31, 2024 – Net cash used in financing activities of $9.7 million during 2024 was primarily attributable to $5.6 million of preferred stock cash dividends, $3.4 million of cash used for share repurchases to satisfy employee tax withholding obligations and $1.1 million for payment of debt issuance costs.
Given the number of months required to observe non-payment of commissions in order to confirm cancellations, we estimate the number of members who are active on insurance policies as of a specified date.
Given the number of months required to observe non-payment of commissions in order to confirm cancellations, especially as some of our members pay their premiums less frequently than monthly, we estimate the number of members who are active on insurance policies as of a specified date.
Year Ended December 31, 2024 – Net cash used in investing activities of $48.4 million during 2024 mainly consisted of $97.0 million used to purchase marketable securities and $10.8 million of capitalized internal-use software and website development costs, partially offset by $61.4 million of proceeds from redemption and maturities of marketable securities.
Year Ended December 31, 2025 – Net cash provided by investing activities of $25.4 million during 2025 mainly consisted of $114.8 million of proceeds from redemption and maturities of marketable securities, partially offset by $74.0 million used to purchase marketable securities and $13.1 million of capitalized internal-use software and website development costs.
Provision for (Benefit from) Income Taxes Our provision for (benefit from) income taxes is summarized as follows (dollars in thousands): Change 2024 2023 $ % Provision for (benefit from) income taxes $ 9,255 $ (2,381) $ 11,636 (489) % Effective tax rate 47.9 % 7.8 % Year Ended December 31, 2024 – For the year ended December 31, 2024, we recorded a provision for income taxes of $9.3 million representing an effective tax rate of 47.9%.
Provision for Income Taxes Our provision for income taxes is summarized as follows (dollars in thousands): Change 2025 2024 $ % Provision for income taxes $ 18,682 $ 9,255 $ 9,427 102 % Effective tax rate 31.8 % 47.9 % Year Ended December 31, 2025 – For the year ended December 31, 2025, we recorded a provision for income taxes of $18.7 million representing an effective tax rate of 31.8%.
Our other income, net is summarized as follows (dollars in thousands): Change 2024 2023 $ % Other income, net $ 6,900 $ 9,453 $ (2,553) (27) % % of total revenue 1 % 2 % 2024 compared to 2023 – Other income, net was $6.9 million in 2024 compared to other income, net of $9.5 million in 2023.
Our other income, net is summarized as follows (dollars in thousands): Change 2025 2024 $ % Other income, net $ 2,998 $ 6,900 $ (3,902) (57) % % of total revenue 1 % 1 % 2025 compared to 2024 – Other income, net was $3.0 million in 2025 compared to other income, net of $6.9 million in 2024.
Year Ended December 31, 2023 – Net cash used in investing activities of $15.9 million during 2023 mainly consisted of $54.5 million used to purchase marketable securities and $8.7 million of capitalized internal-use software and website development costs, partially offset by $49.4 million of proceeds from redemption and maturities of marketable securities. 67 Table of Contents Financing Activities Year Ended December 31, 2024 – Net cash used in financing activities of $9.7 million during 2024 was primarily attributable to $5.6 million of preferred stock cash dividends, $3.4 million of cash used for share repurchases to satisfy employee tax withholding obligations and $1.1 million for payment of debt issuance costs.
Year Ended December 31, 2024 – Net cash used in investing activities of $48.4 million during 2024 mainly consisted of $97.0 million used to purchase marketable securities and $10.8 million of capitalized internal-use software and website development costs, partially offset by $61.4 million of proceeds from redemption and maturities of marketable securities. 62 Table of Contents Financing Activities Year Ended December 31, 2025 – Net cash provided by financing activities of $34.3 million during 2025 was primarily attributable to $122.2 million of proceeds from the Revolving Credit Facility, net of costs, partly offset by $70.7 million in repayment of the term loan credit facility, $9.2 million for payment of debt issuance costs, $5.9 million of preferred stock cash dividends and $2.4 million of cash used for share repurchases to satisfy employee tax withholding obligations.
We also incurred $2.0 million of restructuring charges which primarily related to employee termination benefits as a result of our continued cost-reduction efforts during the first half of fiscal 2024. 60 Table of Contents Interest Expense Interest expense primarily consists of interest expense and amortization of debt issuance costs related to our Credit Agreement.
We also incurred $2.0 million of restructuring charges which were primarily related to employee termination benefits as a result of cost-reduction efforts during the first quarter of 2024. 54 Table of Contents Interest Expense Interest expense primarily consists of interest expense and amortization of debt issuance costs related to term loan credit facility with Blue Torch Finance LLC.
(2) The constraints applied to the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained LTV of commissions for approved members recognized for Medicare Advantage, Medicare Supplement and Medicare Part D were 5.5%, 9% and 7%, respectively, for the year ended December 31, 2024 and 7%, 9% and 7%, respectively, for the year ended December 31, 2023. 2024 compared to 2023 – The changes in constrained LTV of commissions per approved member consisted of: • a 4% increase in Medicare Advantage plans, primarily driven by a decrease in constraint due to a decline in volatility and the observed increase in LTV trends as well as an improved ratio of approved members who became paying members, partially offset by less favorable retention trends for 2024 cohorts compared to 2023 cohorts; • a 22% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix as well as favorable retention; • a 22% decrease in Medicare Part D plans, primarily driven by unfavorable carrier and contract mix, partially offset by improved retention; • a 1% decrease in non-qualified health plans primarily driven by unfavorable retention trends; • a 2% increase in qualified health plans primarily due to favorable carrier and contract mix; • a 7% decrease in short-term health plans primarily due to unfavorable retention as a result of the regulatory change that decreased term limits for short-term health plans; and • a 17%, 14% and 2% increase in dental, vision and small business plans, respectively, primarily driven by favorable carrier and contract mix. 53 Table of Contents Estimated Membership Estimated membership represents the estimated number of members active as of the date indicated based on the number of members for whom we have received or applied a commission payment during the period of estimation as well as the number of approved members during the period of estimation from whom we expect to receive commission payments.
(2) The constraints applied to the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained LTV of commissions for approved members recognized for Medicare Advantage, Medicare Supplement and Medicare Part D were 5.5%, 4.0% and 7.0%, respectively, for the year ended December 31, 2025 and 5.5%, 9.0% and 7.0%, respectively, for the year ended December 31, 2024. 2025 compared to 2024 – The changes in constrained LTV of commissions per approved member primarily consisted of: • a 6% increase in Medicare Advantage plans, primarily driven by more favorable retention assumptions for 2025 cohorts compared to 2024 cohorts and an increase in the ratio of approved members who became paying members, slightly offset by an unfavorable cohort mix; • a 31% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix, favorable retention assumptions for 2025 cohorts compared to 2024 cohorts and a decrease in the constraint from 9% to 4% due to observed LTV trends; • a 27% increase in Medicare Part D plans, primarily driven by favorable carrier and contract mix; • a 6% decrease in non-qualified health plans primarily driven by unfavorable retention assumptions for 2025 cohorts compared to 2024 cohorts; • a 4% decrease in qualified health plans primarily due to an increase in the constraint from 4% to 10% as a result of observed unfavorable retention trends along with a less favorable carrier and contract mix, partly offset by more favorable retention assumptions for 2025 cohorts compared to 2024 cohorts; • a 26% decrease in short-term health plans primarily due to unfavorable retention assumptions year-over-year, primarily as a result of the regulatory change that decreased term limits for short-term health plans; • a 5% increase in dental plans primarily driven by favorable carrier and contract mix; and 47 Table of Contents • a 9% increase in small business plans primarily driven by favorable cohort mix and carrier and contract mix, partly offset by unfavorable retention assumptions for 2025 cohorts compared to 2024 cohorts.
The estimated grant date fair value of our stock options is determined using the Black-Scholes-Merton pricing model and a single option award approach. The weighted-average expected term for stock options granted is calculated using historical option exercise behavior. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date stock price.
The weighted-average expected term for stock options granted is calculated using historical option exercise behavior. The dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date stock price.
As a result, this could affect our effective tax rate and the amount of income tax expense we record, and pay, in future periods. 70 Table of Contents Recent Accounting Pronouncements See Note 1 – Summary of Business and Significant Accounting Policies in our Notes to Consolidated Financial Statements for the recently issued accounting standards that could have an effect on us.
Recent Accounting Pronouncements See Note 1 – Summary of Business and Significant Accounting Policies in our Notes to Consolidated Financial Statements for the recently issued accounting standards that could have an effect on us. 65 Table of Contents
We incur CC&E expenses in assisting applicants during the enrollment process. Variable marketing costs represent costs incurred in member acquisition from our direct marketing and marketing partner channels. Variable marketing costs exclude fixed overhead costs, such as personnel related costs, consulting expenses, and other operating costs allocated to the marketing and advertising department.
We incur CC&E expenses in assisting applicants during the enrollment process. Variable marketing costs represent costs incurred in member acquisition from our direct marketing and marketing partner channels.
Failure to maintain the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount as of the date or the time period required by the H.I.G.
Investment Agreement) of at least 2.5x (the “Minimum Asset Coverage Ratio”) and a Minimum Liquidity Amount (as defined in the H.I.G. Investment Agreement). Failure to maintain the Minimum Asset Coverage Ratio or the Minimum Liquidity Amount as of the date or the time period required by the H.I.G.
During the year ended December 31, 2024, there were no significant changes to our critical accounting policies and estimates. Revenue Recognition and Contract Assets - Commissions Receivable Commission Revenue – Our commission revenue results from approval of a submitted application from health insurance carriers, which we define as our customers under ASC 606.
During the year ended December 31, 2025, there were no significant changes to our critical accounting policies and estimates. Revenue Recognition and Contract Assets - Commissions Receivable Commission Revenue – We earn commission revenue from the sale of insurance policies for which we are the broker of record, when a submitted insurance application is approved by the health insurance carriers.
We estimate commission revenue for each insurance product by 68 Table of Contents 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 estimate constrained LTV of commissions 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 initial revenue for plans approved during the period by applying the latest estimated constrained LTV of commissions for that product.
The following table shows estimated membership by product as of the periods presented below: As of December 31, 2024 2023 % Change Medicare (1) Medicare Advantage 690,874 622,896 11 % Medicare Supplement 96,894 110,826 (13) % Medicare Part D 210,917 210,876 — % Total Medicare 998,685 944,598 6 % Individual and Family (1) 78,452 86,452 (9) % Ancillary (1) 173,760 180,741 (4) % Small Business (2) 42,899 46,225 (7) % Total Estimated Membership 1,293,796 1,258,016 3 % __________________ (1) To estimate the number of members on Medicare-related, individual and family, and ancillary health insurance plans, we take the respective sum of (i) the number of members for whom we have received or applied a commission payment for a month that may be up to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the period being estimated); and (ii) the number of approved members over that period (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and for estimated member cancellations).
Various circumstances could cause the assumptions and estimates that we make in connection with estimating our membership to be inaccurate, which would cause our membership estimates to be inaccurate. 48 Table of Contents The following table shows estimated membership by product as of the dates presented below: As of December 31, 2025 2024 % Change Medicare (1) Medicare Advantage 691,129 690,874 — % Medicare Supplement 93,913 96,894 (3) % Medicare Part D 177,108 210,917 (16) % Total Medicare 962,150 998,685 (4) % Individual and Family (1) 64,936 78,452 (17) % Ancillary (1) 187,895 173,760 8 % Small Business (2) 35,772 42,899 (17) % Total Estimated Membership 1,250,753 1,293,796 (3) % __________________ (1) To estimate the number of members on Medicare-related, individual and family, and ancillary health insurance plans, we take the respective sum of (i) the number of members for whom we have received or applied a commission payment for a month that may be up to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the period being estimated); and (ii) the number of approved members over that period (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and for estimated member cancellations).
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).
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). Our business structure is comprised of two operating segments: • Medicare; and • Employer and Individual.
Cash used from changes in net operating assets and liabilities during 2023 primarily consisted of increases of $33.6 million in contract assets – commissions receivable and $1.9 million in prepaid expenses as well as a decrease of $3.4 million in accrued marketing expenses, partially offset by increases of $20.1 million in accrued compensation and benefits.
Cash used from changes in net operating assets and liabilities during 2025 primarily consisted of increases of $123.0 million in contract assets – commissions receivable and $4.7 million in prepaid expenses and a decrease of $2.9 million in accrued compensation and benefits, partially offset by decreases of $9.1 million in accounts receivable and an increase of $5.0 million in accounts payable.
Adjustments for non-cash items primarily consisted of $23.2 million of stock-based compensation expense and $17.4 million of amortization of internally developed software and $2.5 million in depreciation and amortization expense, partially offset by $2.7 million in deferred income taxes.
Adjustments for non-cash items primarily consisted of $18.4 million in deferred income taxes, $15.0 million of stock-based compensation expense and $11.9 million of amortization of internally developed software.
Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and short-term marketable securities of $82.2 million. During the year ended December 31, 2024, our operating cash outflow was $18.4 million, as summarized below. We have historically financed our operations primarily through cash generated from our operations, equity issuances and debt financing.
During the year ended December 31, 2025, our operating cash outflow was $25.3 million, as summarized below. We have historically financed our operations primarily through cash generated from our operations, equity issuances and debt financing.
Stock-based compensation expense is recognized net of estimated forfeitures. We estimate a forfeiture rate to calculate the stock-based compensation for all of our awards. We evaluate the appropriateness of the forfeiture rate based on historical forfeiture, analysis of employee turnover, and other factors.
We estimate a forfeiture rate to calculate the stock-based compensation for all of our awards. We evaluate the appropriateness of the forfeiture rate based on historical forfeiture, analysis of employee turnover, and other factors. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
We evaluate the appropriateness of our constraints on an annual basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed.
We evaluate the appropriateness of our constraints on an annual basis, and we update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed. Additionally, we continuously monitor cash collections and performance for each existing cohort and assess these results in relation to our most recently booked estimates.
Our customer care and enrollment expenses are summarized as follows (dollars in thousands): Change 2024 2023 $ % Customer care and enrollment $ 163,448 $ 149,562 $ 13,886 9 % % of total revenue 31 % 33 % 2024 compared to 2023 – Customer care and enrollment expenses increased by $13.9 million, or 9%, in 2024 compared to 2023.
Our customer care and enrollment expenses are summarized as follows (dollars in thousands): Change 2025 2024 $ % Customer care and enrollment $ 162,885 $ 163,448 $ (563) — % % of total revenue 29 % 31 % 2025 compared to 2024 – Customer care and enrollment expenses decreased by $0.6 million, or roughly flat, in 2025 compared to 2024.
Year Ended December 31, 2023 – Net cash used in operating activities of $6.7 million during 2023 was, primarily driven by a net loss of $28.2 million and changes in net operating assets and liabilities of $19.6 million, partially offset by adjustments for non-cash items of $41.2 million.
Year Ended December 31, 2025 – Net cash used in operating activities of $25.3 million during 2025 was primarily driven by changes in net operating assets and liabilities of $114.9 million, partially offset by adjustments for non-cash items of $49.5 million and net income of $40.0 million.
Employer and Individual Segment 2024 compared to 2023 – Revenue from our E&I segment decreased $14.6 million, or 32%, in 2024 compared to 2023, primarily driven by a $14.2 million decrease in commission revenue as a result of: • lower net adjustment revenue year-over-year, which was $4.1 million in 2024 compared to $14.5 million in 2023; and • a 24%, 9% and 30% decline in individual and family plan, ancillary plan and small business plan approved members, respectively, compared to the same period in 2023.
Employer and Individual Segment 2025 compared to 2024 – Revenue from our E&I segment decreased $9.0 million, or 28%, in 2025 compared to 2024, primarily driven by a $8.3 million decrease in commission revenue primarily as a result of: • lower net adjustment revenue year-over-year, which was $1.4 million in 2025 compared to $4.1 million in 2024; and • a $4.9 million decline in commission revenue from members approved during the period primarily due to a 25% and 35% decline in individual and family plan and short term health plan approved members, respectively, along with lower constrained LTV of commissions for these products, compared to the same period in 2024.
The change was primarily driven by $1.3 million of third-party fees in 2024 as a result of entering into a second amendment of our Credit Agreement and a decrease of $1.2 million in interest income as a result of less favorable short-term investment rates.
The change was primarily driven by a decrease of $3.3 million in interest income as a result of less favorable short-term investment rates and having fewer short-term marketable securities than in 2024.
Availability and Use of Cash We believe our current cash, cash equivalents and short-term marketable securities, including the proceeds from the equity financing we obtained on April 30, 2021 under the H.I.G.
See Note 12 – Debt in our Notes to Consolidated Financial Statements for additional information regarding the term loan credit facility with Blue Torch Finance LLC. Availability and Use of Cash We believe our current cash, cash equivalents and short-term marketable securities, including the proceeds from the equity financing we obtained on April 30, 2021 under the H.I.G.
Our general and administrative expenses are summarized as follows (dollars in thousands): Change 2024 2023 $ % General and administrative $ 89,765 $ 99,363 $ (9,598) (10) % % of total revenue 17 % 22 % 2024 compared to 2023 – General and administrative expenses decreased by $9.6 million, or 10%, in 2024 compared to 2023, primarily due to decreases of $3.3 million in facilities and other operating costs, $2.4 million in personnel related costs due to lower headcount, $2.1 million in professional fees, and $1.9 million in stock-based compensation expense.
Our general and administrative expenses are summarized as follows (dollars in thousands): Change 2025 2024 $ % General and administrative $ 89,555 $ 89,765 $ (210) — % % of total revenue 16 % 17 % 2025 compared to 2024 – General and administrative expenses decreased by $0.2 million, or roughly flat, in 2025 compared to 2024, primarily due to a $3.3 million decrease in stock based compensation expense, a $1.3 million decrease in facilities and other operating expenses and a $0.6 million decrease in other expenses, partly offset by an increase of $5.0 million in personnel and compensation costs, primarily related to higher medical costs and costs associated with our CEO transition.
The majority of our members who terminate their policies do so by discontinuing their premium payments to the carrier or notifying the carrier directly and do not inform us of the cancellation. Also, some of our members pay their premiums less frequently than monthly.
Health insurance carriers bill and collect insurance premiums paid by our members. The majority of our members who terminate their policies do so by discontinuing their premium payments to the carrier or notifying the carrier directly and do not inform us of the cancellation. Therefore, we depend on carriers and others for membership data.
Cost of Revenue Cost of revenue consists of 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 health insurance in the state where the policy is sold.
Marketing and advertising expenses also include cost of revenue, which consists of 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.
(2) Other CC&E costs consist of previously capitalized labor, depreciation and share-based compensation costs. 63 Table of Contents Medicare Segment 2024 compared to 2023 – Revenue from our Medicare segment increased $94.2 million, or 23%, in 2024 compared to 2023, primarily driven by: • a $71.9 million increase in Medicare segment commission revenue due to: ◦ a $59.1 million increase in Medicare Advantage plan commission revenue, driven by 26% growth in Medicare Advantage plan approved members and improved constrained LTV of commissions per approved Medicare Advantage member, ◦ partially offset by lower net adjustment revenue which was $18.7 million in 2024 compared to $33.5 million in 2023. • a $19.8 million increase in Medicare segment fee-based revenue driven by growth in our fee-based BPO arrangements.
(2) Other CC&E costs consist of previously capitalized labor, depreciation and share-based compensation costs. 57 Table of Contents Medicare Segment 2025 compared to 2024 – Revenue from our Medicare segment increased $30.6 million, or 6%, in 2025 compared to 2024, primarily driven by: • a $44.6 million increase in Medicare segment commission revenue due to: ◦ higher net adjustment revenue which was $43.0 million in 2025 compared to $18.7 million in 2024, ◦ a $20.3 million increase in commission revenue from members approved during the period primarily due to improved constrained LTV of commissions per approved member for all Medicare products and a significant increase in hospital indemnity plan approved members, partially offset by a decrease in approved members across all Medicare products. • a $14.0 million decrease in Medicare segment non-commission revenue primarily driven by a decrease in our sponsorship and advertising revenue.
The estimated grant date fair value of market-based performance awards is determined using the Monte-Carlo simulation model and requires the input of subjective assumptions. The estimated fair value for non-market-based performance stock units is estimated on the date of grant based on the current market price of our common shares.
The estimated fair value for non-market-based performance stock units is estimated on the date of grant based on the current market price of our common shares. The estimated grant date fair value of our stock options is determined using the Black- 64 Table of Contents Scholes-Merton pricing model and a single option award approach.
Approved Members Approved members represent the number of individuals on submitted applications, or submissions, which were approved by the relevant insurance carrier for the identified product during the current period. The applications may be submitted in either the current period or prior periods. Not all approved members ultimately become paying members.
The applications may be submitted in either the current period or prior periods. Not all approved members ultimately become paying members.
We often are made aware of policy cancellations and group size changes at the time of annual renewal and update our membership statistics accordingly in the period they are reported. 2024 compared to 2023 – Total estimated membership increased 3% as of December 31, 2024 compared to December 31, 2023 due to: • a 6% increase in Medicare estimated membership year over year, driven by: ◦ an 11% increase in Medicare Advantage plans, primarily due to an increase in Medicare Advantage approved applications, ◦ partially offset by a 13% decrease in Medicare Supplement plans, driven by a decrease in approved members primarily due to the shift of some broker of record arrangements to fee-based arrangement within our Amplify platform, which are not included in estimated membership; • a 9% decline in individual and family plan estimated membership year over year due to a decrease in non-qualified health plan approved applications; • a 4% decline in overall ancillary plan estimated membership year over year, primarily due to a decline in approved applications across several ancillary products; and • a 7% decline in small business plan estimated membership year over year, primarily due to a decrease in approved applications.
We often are made aware of policy cancellations and group size changes at the time of annual renewal and update our membership statistics accordingly in the period they are reported. 2025 compared to 2024 – Total estimated membership declined 3% as of December 31, 2025 compared to December 31, 2024 primarily due to: • a 4% decrease in Medicare estimated membership year over year, driven by: ◦ a 3% and 16% decrease in Medicare Supplement and Medicare Part D plans, respectively, driven by a decrease in approved members, while Medicare Advantage estimated membership remained flat, with new approved members being offset through member switching activity during this past AEP; • a 17% decline in both individual and family plan and small business plan estimated membership year over year due to a decrease in approved applications; and • an 8% increase in overall ancillary plan estimated membership year over year, primarily due to an increase in approved applications for the hospital indemnity plans.
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. 62 Table of Contents Our operating segment revenue and segment gross profit (loss) are summarized as follows (in thousands): Change 2024 2023 $ % Medicare: Total revenue $ 500,638 $ 406,467 $ 94,171 23 % Variable marketing and advertising (157,121) (141,487) (15,634) (11) % Medicare CC&E (150,613) (137,910) (12,703) (9) % Cost of revenue (1,396) (1,312) (84) (6) % Medicare segment gross profit $ 191,508 $ 125,758 $ 65,750 52 % Employer and Individual: Total revenue $ 31,772 $ 46,404 $ (14,632) (32) % Variable marketing and advertising (4,321) (3,304) (1,017) (31) % E&I CC&E (10,103) (9,214) (889) (10) % Cost of revenue (398) (459) 61 13 % E&I segment gross profit $ 16,950 $ 33,427 $ (16,477) (49) % Consolidated: Total revenue $ 532,410 $ 452,871 $ 79,539 18 % Variable marketing and advertising (161,442) (144,791) (16,651) (12) % Segment CC&E (160,716) (147,124) (13,592) (9) % Cost of revenue (1,794) (1,771) (23) (1) % Total segment gross profit $ 208,458 $ 159,185 $ 49,273 31 % 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, 2024 2023 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) — Interest expense (11,159) (10,974) Other income, net 6,900 9,453 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.
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. 56 Table of Contents Our operating segment revenue and segment gross profit are summarized as follows (in thousands): Change 2025 2024 $ % Medicare: Total revenue $ 531,213 $ 500,638 $ 30,575 6 % Variable marketing and advertising (147,081) (157,121) 10,040 6 % Medicare CC&E (151,092) (150,613) (479) — % Cost of revenue (1,002) (1,396) 394 28 % Medicare segment gross profit $ 232,038 $ 191,508 $ 40,530 21 % Employer and Individual: Total revenue $ 22,795 $ 31,772 $ (8,977) (28) % Variable marketing and advertising (4,356) (4,321) (35) (1) % E&I CC&E (9,378) (10,103) 725 7 % Cost of revenue (331) (398) 67 17 % E&I segment gross profit $ 8,730 $ 16,950 $ (8,220) (48) % Consolidated: Total revenue $ 554,008 $ 532,410 $ 21,598 4 % Variable marketing and advertising (151,437) (161,442) 10,005 6 % Segment CC&E (160,470) (160,716) 246 — % Cost of revenue (1,333) (1,794) 461 26 % Total segment gross profit $ 240,768 $ 208,458 $ 32,310 15 % A reconciliation of our segment gross profit to the Consolidated Statements of Comprehensive Income for the periods presented is as follows (in thousands): Year Ended December 31, 2025 2024 Total segment gross profit $ 240,768 $ 208,458 Other marketing and advertising (1) (28,470) (29,395) Other CC&E (2) (2,415) (2,732) Technology and content (51,829) (53,520) General and administrative (89,555) (89,765) Impairment, restructuring and other charges (2,010) (9,475) Interest expense (10,761) (11,159) Other income, net 2,998 6,900 Income before income taxes $ 58,726 $ 19,312 _______ (1) Other marketing and advertising costs consist of fixed marketing and advertising, previously capitalized labor, depreciation and share-based compensation costs.
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.
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.
The H.I.G. Investment Agreement also provides certain redemption rights on or after April 2027. In addition, the Company is required to maintain an Asset Coverage Ratio (as defined in the H.I.G. Investment Agreement) of at least 2.5x (the “Minimum Asset Coverage Ratio”) and a Minimum Liquidity Amount (as defined in the H.I.G. Investment Agreement).
During the year ended December 31, 2025, we paid cash dividends in the aggregate amount of $5.9 million to the holder of our convertible preferred stock. The H.I.G. Investment Agreement also provides certain redemption rights on or after April 2027. In addition, the Company is required to maintain an Asset Coverage Ratio (as defined in the H.I.G.
Since the LTV for any product fluctuates from period to period, the weight given to each product was determined based on their relative LTVs at the time of our adoption of ASC 606. 55 Table of Contents The following table shows the CC&E cost per approved member and variable marketing cost per approved member metrics for the periods presented below: Year Ended December 31, 2024 2023 % Change Medicare Plans: CC&E cost per MA-equivalent approved member (1) $ 349 $ 443 (21) % Variable marketing cost per MA-equivalent approved member (1) 406 449 (10) % Total acquisition cost per MA-equivalent approved member $ 755 $ 892 (15) % IFP Plans: CC&E cost per IFP-equivalent approved member (2) $ 256 $ 179 43 % Variable marketing cost per IFP-equivalent approved member (2) 110 61 80 % Total acquisition cost per IFP-equivalent approved member $ 366 $ 240 53 % _____________ (1) We calculate the number of MA-equivalent approved members by adding the total number of approved Medicare Advantage and Medicare Supplement members and 25% of the total number of approved Medicare Part D members during the periods presented.
The following table shows the CC&E cost per approved member and variable marketing cost per approved member metrics for the periods presented below: Year Ended December 31, 2025 2024 % Change Medicare Plans: CC&E cost per MA-equivalent approved member (1) $ 353 $ 349 1 % Variable marketing cost per MA-equivalent approved member (1) 396 406 (2) % Total acquisition cost per MA-equivalent approved member $ 749 $ 755 (1) % IFP Plans: CC&E cost per IFP-equivalent approved member (2) $ 275 $ 256 7 % Variable marketing cost per IFP-equivalent approved member (2) 141 110 28 % Total acquisition cost per IFP-equivalent approved member $ 416 $ 366 14 % _____________ (1) We calculate the number of MA-equivalent approved members by adding the total number of approved Medicare Advantage and Medicare Supplement members and 25% of the total number of approved Medicare Part D members during the periods presented.
Technology and Content Technology and content expenses consist primarily of compensation and benefits costs for personnel associated with developing and enhancing our website technology as well as maintaining our website.
Technology and Content Technology and content expenses consist primarily of compensation and benefits costs for personnel associated with developing and enhancing our website technology as well as maintaining our website. A portion of our technology and content group is located at our wholly owned subsidiary in China, where technology development costs are generally lower than in the United States.
General and Administrative General and administrative expenses include compensation and benefits costs for personnel working in our executive, finance, investor relations, government affairs, legal, compliance, human resources, facilities and internal information technology departments. These expenses also include fees paid for outside professional services, including audit, tax, legal, government affairs, and information technology fees.
These expenses also include fees paid for outside professional services, including audit, tax, legal, government affairs, and information technology fees.
We estimate the commissions we expect to collect by evaluating various factors, including but not limited to estimating conversion of an approved member to a paying member, forecasting average plan duration and forecasting the commission amounts likely to be received per member.
Our LTVs are based on a number of assumptions, including but not limited to estimating the conversion rate of an approved member to a paying member, forecasting average plan duration, which is the average length of time paying members are active on their plans, and forecasting the commission amounts likely to be received per member.
As of December 31, 2024, the carrying value of the loan under the Credit Agreement was $68.5 million and we were in compliance with our loan covenants. See Note 12 – Debt in our Notes to Consolidated Financial Statements for additional information regarding the Credit Agreement.
See Note 12 – Debt in our Notes to Consolidated Financial Statements for additional information regarding the Revolving Credit Agreement. Term Loan Credit Agreement As discussed above, in connection with the execution of the Revolving Credit Facility, we terminated our $70.0 million secured term loan credit facility with Blue Torch Finance LLC on December 31, 2025.
The following table shows approved members by product for the years presented: Year Ended December 31, 2024 2023 % Change Medicare Medicare Advantage 366,160 290,712 26 % Medicare Supplement 13,822 17,386 (20) % Medicare Part D 27,896 29,378 (5) % Total Medicare 407,878 337,476 21 % Individual and Family 20,671 27,318 (24) % Ancillary 51,556 56,789 (9) % Small Business 5,351 7,613 (30) % Total Approved Members 485,456 429,196 13 % 2024 compared to 2023 – Total approved members grew 13% in 2024 compared to 2023, driven by: • a 21% increase in Medicare approved members driven by: ◦ a 26% increase in Medicare Advantage approved members, due to a 31% increase in Medicare Advantage broker of record submissions primarily as a result of increased consumer demand due to market disruptions during 2024, the strength of our Company rebrand, increased variable marketing spend and an increased number of benefit advisors with improved telesales conversion rates year-over-year, ◦ partially offset by a 20% and 5% decline in Medicare Supplement and Medicare Part D approved members, respectively, primarily caused by the shift of some Medicare Supplement broker of record arrangements to fee-based arrangements within our Amplify platform and a shift away from standalone Medicare Part D plans. • a 24% and 30% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume as we focused on implementing operational enhancements in our E&I segment; and • a 9% decline in ancillary approved members primarily due to declines in dental and short-term approved members. 52 Table of Contents Estimated Constrained Lifetime Value of Commissions Per Approved Member The following table shows our estimated constrained LTV of commissions per approved member by product for the years presented below: Year Ended December 31, 2024 2023 % Change Medicare (1)(2) Medicare Advantage $ 1,088 $ 1,049 4 % Medicare Supplement 1,090 891 22 % Medicare Part D 172 220 (22) % Individual and Family (1) Non-Qualified Health Plans 377 380 (1) % Qualified Health Plans 378 370 2 % Ancillary (1) Short-term 156 167 (7) % Dental 127 109 17 % Vision 83 73 14 % Small Business (1) 235 230 2 % __________ (1) Constrained LTV of commissions per approved member for Medicare, individual and family and ancillary plans represents commissions estimated to be collected over the estimated life of an approved member’s plan after applying constraints in accordance with our revenue recognition policy.
The following table shows approved members by product for the years presented: Year Ended December 31, 2025 2024 % Change Medicare Medicare Advantage 356,831 366,160 (3) % Medicare Supplement 11,606 13,822 (16) % Medicare Part D 10,233 27,896 (63) % Total Medicare 378,670 407,878 (7) % Individual and Family 15,520 20,671 (25) % Ancillary 72,215 51,556 40 % Small Business 5,052 5,351 (6) % Total Approved Members 471,457 485,456 (3) % 2025 compared to 2024 – Total approved members declined 3% in 2025 compared to 2024, driven by: • a 7% decrease in Medicare approved members driven by: ◦ a 3% decrease in Medicare Advantage approved members, due to an 8% decline in Medicare Advantage broker of record submissions as a result of decreased marketing spend in response to the 2025 CMS regulations impacting dual-eligible enrollment rules, as well as an intentional reduction in lower margin marketing channels during the fourth quarter, partially offset by increased consumer demand during the Medicare Advantage OEP in the first quarter of 2025, ◦ a 16% decrease in Medicare Supplement approved members primarily due to the shift—beginning in the second quarter of 2024—of some Medicare Supplement broker of record arrangements to fee-based arrangements within our Amplify platform, which are not reflected as approved members, partially offset by a 39% increase in approved members in the fourth quarter of 2025 compared to the same period last year as a result of efficiencies and improvements made to grow Medicare Supplement during this past AEP, and ◦ a 63% decrease in Medicare Part D approved members primarily driven by regulatory changes that adversely impacted standalone Medicare Part D plan economics and availability, resulting in beneficiaries shifting away from standalone Medicare Part D plans toward Medicare Advantage plans that include prescription drug coverage. • a 25% and 6% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume from shifts in our marketing channel mix and current market conditions, including a decline in qualified health plans from the expiration of the government subsidies; and • a 40% increase in ancillary approved members primarily due to targeted growth in hospital indemnity plans, partially offset by declines in short-term and dental plan approved members. 46 Table of Contents Estimated Constrained Lifetime Value of Commissions Per Approved Member The following table shows our estimated constrained LTV of commissions per approved member by product for the years presented below: Year Ended December 31, 2025 2024 % Change Medicare (1)(2) Medicare Advantage $ 1,154 $ 1,088 6 % Medicare Supplement 1,430 1,090 31 % Medicare Part D 219 172 27 % Individual and Family (1) Non-Qualified Health Plans 354 377 (6) % Qualified Health Plans 363 378 (4) % Ancillary (1) Short-term 115 156 (26) % Dental 133 127 5 % Vision 84 83 1 % Small Business (1) 255 235 9 % __________ (1) Constrained LTV of commissions per approved member for Medicare, individual and family and ancillary plans represents commissions estimated to be collected over the estimated life of an approved member’s plan after applying constraints in accordance with our revenue recognition policy.
Other revenue increased $21.8 million, or 45%, in 2024 compared to 2023. This increase was driven by the expansion of our fee-based BPO arrangements, as well as an increase in sponsorship revenue. Net adjustment revenue consists of increases in revenue for certain prior period cohorts as well as reductions in revenue for certain prior period cohorts.
Other revenue decreased $14.7 million, or 21%, in 2025 compared to 2024, primarily driven by the decrease in sponsorship and advertising revenue. Net adjustment revenue consists of increases and decreases to revenue for certain prior period cohorts.
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated attainment of performance-based awards and related expense is based on the achievement of certain financial targets over a predetermined performance period, subject to the discretion of the Company's 69 Table of Contents compensation committee.
The estimated attainment of performance-based awards and related expense is based on the achievement of certain financial targets over a predetermined performance period, subject to the discretion of the Company's compensation committee. The estimated grant date fair value of market-based performance awards is determined using the Monte-Carlo simulation model and requires the input of subjective assumptions.
Summary of Selected Metrics We rely upon certain metrics to estimate and recognize commission revenue, evaluate our business performance and facilitate strategic planning.
Additionally, we plan to provide meaningful improvement in our operating cash flows, focus on our direct branded marketing channels to attract higher-margin enrollments and continue our cost savings efforts to preserve our profitability. Summary of Selected Metrics We rely upon certain metrics to estimate and recognize commission revenue, evaluate our business performance and facilitate strategic planning.
Our interest expense is summarized as follows (dollars in thousands): Change 2024 2023 $ % Interest expense $ (11,159) $ (10,974) $ (185) (2) % % of total revenue (2) % (2) % 2024 compared to 2023 – Interest expense increased by $0.2 million, or 2%, primarily driven by higher debt issuance cost amortization as a result of entering into a second amendment of our Credit Agreement and a slight increase in debt interest expense as a result of higher interest rates as compared to 2023.
Our interest expense is summarized as follows (dollars in thousands): Change 2025 2024 $ % Interest expense $ (10,761) $ (11,159) $ 398 4 % % of total revenue (2) % (2) % 2025 compared to 2024 – Interest expense decreased by $0.4 million, or 4%, primarily driven by a $1.0 million decrease in debt interest expense due to lower interest rates as compared to 2024, partly offset by a $0.7 million termination fee paid as a result of the early termination of the term loan credit agreement with Blue Torch Finance LLC during 2025.
Accordingly, prior period amounts have been reclassified to conform to the current period presentation, in all material respects. Our business structure is comprised of two operating segments: • Medicare; and • Employer and Individual. Our CODM does not separately evaluate assets by segment, with the exception of commissions receivable, and therefore assets by segment are not presented.
Our CODM does not separately evaluate assets by segment, with the exception of commissions receivable, and therefore assets by segment are not presented.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item. 71 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item. 66 Table of Contents

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