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What changed in CLOVER HEALTH INVESTMENTS, CORP. /DE's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CLOVER HEALTH INVESTMENTS, CORP. /DE'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.

+319 added−319 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-03)

Top changes in CLOVER HEALTH INVESTMENTS, CORP. /DE's 2025 10-K

319 paragraphs added · 319 removed · 248 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+15 added−8 removed134 unchanged
Biggest changeThe image below represents an example of the Clover Assistant interface: 9 We believe the key features that differentiate our Clover Assistant platform from other healthcare technology include the following: Enables intuitive data-driven, personalized and actionable insights Clover Assistant aggregates and structures millions of data points per day, derived from a variety of data sets, such as claims data, medical charts, medication data, diagnostic data, and data generated from electronic health records ("EHR"), across dozens of typically siloed and inconsistently formatted data feeds.
Biggest change(2) “Clover Assistant Use and Diagnosis and Progression of Chronic Kidney Disease” www.cloverhealth.com/clinicalcare/ckd; “Clover Assistant Use and Diagnosis, Treatment, and Progression of Diabetes” www.cloverhealth.com/clinicalcare/diabetes; “Driving Clinical Excellence in Chronic Disease: Counterpart Assistant’s Role in Heart Failure Care” https://cdn.counterparthealth.com/whitepapers/2025_05_chf_whitepaper.pdf; “Counterpart Assistant Drives Clinical Excellence”, for detailed methodology and the HEDIS performance of the broader industry visit, please see here; “Driving Clinical Excellence in Chronic Disease: Counterpart Assistant’s Role in Chronic Obstructive Pulmonary Disease Care” https://cdn.counterparthealth.com/whitepapers/2025_08_copd_whitepaper.pdf; “Bridging the Divide: Counterpart Assistant Use by PCPs in Underserved Chronic Disease Populations Associated with Earlier Diagnosis and Less Frequent Hospitalization” https://cdn.counterparthealth.com/whitepapers/counterpart-sedn.pdf We believe the key features that differentiate our Clover Assistant platform from other healthcare technology include the following: Enables intuitive data-driven, personalized and actionable insights Clover Assistant aggregates and structures millions of data points per day, derived from a variety of data sets, such as claims data, medical charts, medication data, diagnostic data, and data generated from electronic health records ("EHR"), across dozens of typically siloed and inconsistently formatted data feeds.
We calculate our Insurance BER by taking the total of Insurance net medical expenses incurred and quality improvements, and dividing that total by premiums earned on a net basis, in a given period.
We calculate our BER by taking the total of Insurance net medical expenses incurred and quality improvements, and dividing that total by premiums earned on a net basis, in a given period.
This external offering aims to equip clinician users with the Company's already built, clinician-centric, and AI-powered care management platform. Strategically, Counterpart Health, Inc., a subsidiary of Clover Health, aims to extend the benefits of data-driven proven technology and personalized care to a wider audience, enabling enhanced patient outcomes and reduced healthcare costs across the nation.
This external offering aims to equip clinician users with the Company's already built, clinician-centric, and AI-powered care management platform. Strategically, Counterpart Health, Inc., a subsidiary of Clover Health, aims to extend the benefits of proven data-driven technology and personalized care to a wider audience, enabling enhanced patient outcomes and reduced healthcare costs across the nation.
Clover Assistant platform synthesizes comprehensive, longitudinal sets of data, generates clinically-focused machine learning, artificial intelligence, and rules-based insights, and drives action by surfacing the most relevant, personalized information to providers designed to assist them in the early identification and management of disease. Our platform's excellence is centered on this three-pronged approach: • Synthesis.
The Clover Assistant platform synthesizes comprehensive, longitudinal sets of data, generates clinically-focused machine learning, artificial intelligence, and rules-based insights, and drives action by surfacing the most relevant, personalized information to providers designed to assist them in the early identification and management of disease. Our platform's excellence is centered on this three-pronged approach: • Synthesis.
Our open network design is particularly attractive compared to our competitors' usual narrow networks. • Step four: Through our subsidiary, Counterpart Health, we aim to extend the benefits of our data-driven technology platform to a wider audience of healthcare providers outside our MA plan, and enable enhanced patient outcomes and reduced healthcare costs on a nationwide scale. ◦ Complementary offering to drive growth & profitability ◦ New SaaS & Tech-Enabled Services revenue streams with low startup costs ◦ More clinicians empowered with AI-power proven technology 13 Our Strengths We believe our mission-aligned business model, powered by Clover Assistant, enables us to deliver significant value to the entire healthcare ecosystem.
Our open network design is particularly attractive compared to our competitors' usual narrow networks. • Step four: Through our subsidiary, Counterpart Health, we aim to extend the benefits of our data-driven technology platform to a wider audience of healthcare providers outside our MA plan, and enable enhanced patient outcomes and reduced healthcare costs on a nationwide scale. ◦ Complementary offering to drive growth & profitability ◦ New SaaS & Tech-Enabled Services revenue streams with low startup costs ◦ More clinicians empowered with AI-power proven technology Our Strengths We believe our mission-aligned business model, powered by Clover Assistant, enables us to deliver significant value to the entire healthcare ecosystem.
We aim to make Clover Assistant available to physicians in ways that best suit them and their practices. Delivers differentiated plan performance The Clover Assistant platform is designed to enable our mission-aligned business model to drive the empowerment of providers and improve care for beneficiaries while contributing to improved margins for our MA plans.
We aim to make Clover Assistant available to physicians in ways that best suit them and their practices. 10 Delivers differentiated plan performance The Clover Assistant platform is designed to enable our mission-aligned business model to drive the empowerment of providers and improve care for beneficiaries while contributing to improved margins for our MA plans.
Further, the Company's references to website URLs are intended to be inactive textual references only. 21 Channels for Disclosure of Information Investors and others should note that we routinely announce material information to investors and the marketplace using filings with the SEC, press releases, public conference calls, presentations, webcasts and our investor relations website.
Further, the Company's references to website URLs are intended to be inactive textual references only. Channels for Disclosure of Information Investors and others should note that we routinely announce material information to investors and the marketplace using filings with the SEC, press releases, public conference calls, presentations, webcasts and our investor relations website.
In addition, our plans with open network designs make it easier for our members to see providers outside our network, which can generate new leads for us to deploy Clover Assistant with an increasing pool of providers. • Step three: Powered by Clover Assistant's strong unit economics, deploy best-in-class plans.
In addition, our plans with open network designs make it easier for our members to see providers outside our network, which can generate new leads for us to deploy Clover Assistant with an increasing pool of providers. 12 • Step three: Powered by Clover Assistant's strong unit economics, deploy best-in-class plans.
A number of states, including states in which we operate, have adopted their own false claims acts and whistleblower provisions that are similar to the FCA. Companies in the healthcare and related benefits industry, including ours, frequently are subject to actions brought under the FCA or similar state laws. State laws and regulation Healthcare regulation.
A number of states, including states in which we operate, have adopted their own false claims acts and whistleblower provisions that are similar to the FCA. Companies in the healthcare and related benefits industry, including ours, frequently are subject to actions brought under the FCA or similar state laws. 19 State laws and regulation Healthcare regulation.
They provide for financial penalties and, in certain cases, criminal penalties for individuals, including employees, for privacy violations. In addition, OCR performs compliance audits in order to proactively enforce the HIPAA privacy and security standards and, as a result, may conduct audits of health plans, providers and other parties to enforce HIPAA compliance.
They provide for financial penalties and, in certain cases, criminal penalties for individuals, including employees, for privacy or security violations. In addition, OCR performs compliance audits in order to proactively enforce the HIPAA privacy and security standards and, as a result, may conduct audits of health plans, providers and other parties to enforce HIPAA compliance.
Such regulations may also inhibit our ability to acquire an insurance company should we wish to do so in the future. Corporate practice of medicine and fee-splitting laws. Certain of our subsidiaries function as direct medical service providers and, as such, are subject to additional laws and regulations.
Such regulations may also inhibit our ability to acquire an insurance company should we wish to do so in the future. 20 Corporate practice of medicine and fee-splitting laws. Certain of our subsidiaries function as direct medical service providers and, as such, are subject to additional laws and regulations.
There are laws and regulations that set specific standards for delivery of services, appeals, grievances and payment of claims, adequacy of healthcare professional networks, fraud prevention, protection of consumer health information, pricing and underwriting practices, and covered benefits and services. 20 Changes of control.
There are laws and regulations that set specific standards for delivery of services, appeals, grievances and payment of claims, adequacy of healthcare professional networks, fraud prevention, protection of consumer health information, pricing and underwriting practices, and covered benefits and services. Changes of control.
Health insurers, HMOs, and healthcare providers that transmit health information electronically are included in HIPAA's definition of "Covered Entities." Regulations promulgated to implement HIPAA and the Health Information Technology for Economic and Clinical Health Act ("HITECH") also require that "business associates" (e.g., entities that perform functions or provide services involving the use or disclosure of protected health information to health plans and providers, such as electronic claims clearinghouses, print and fulfillment vendors and consultants acting for or on behalf of Covered Entities be contractually obligated to meet HIPAA standards.
Health insurers, HMOs, and healthcare providers that transmit health information electronically are included in HIPAA's Privacy Rule definition of "Covered Entities." Regulations promulgated to implement HIPAA and the Health Information Technology for Economic and Clinical Health Act ("HITECH") also require that "business associates" (e.g., entities that perform functions or provide services involving the use or disclosure of protected health information on behalf of health plans and providers, such as electronic claims clearinghouses, print and fulfillment vendors and consultants acting for or on behalf of Covered Entities be contractually obligated to meet HIPAA standards.
We pursue the registration of our domain names, trademarks, and service marks in the United States and in certain locations outside the United States. 16 Human Capital Our vision is made possible through the efforts put forth by our teams.
We pursue the registration of our domain names, trademarks, and service marks in the United States and in certain locations outside the United States. Human Capital Our vision is made possible through the efforts put forth by our teams.
We continually monitor market trends and adjust our programs to ensure our total rewards offering remains competitive and meaningful. 17 Government Regulation We work diligently to ensure compliance with all applicable laws and regulations affecting our business.
We continually monitor market trends and adjust our programs to ensure our total rewards offering remains competitive and meaningful. Government Regulation We work diligently to ensure compliance with all applicable laws and regulations affecting our business.
We are also required to file a variety of reports stipulated by each state in which we are licensed. These reports can be financial or informational in nature. At December 31, 2024, our PPO plans were licensed in 45 states and the District of Columbia and were not licensed in Michigan, New Hampshire, New York, North Carolina, and Vermont.
We are also required to file a variety of reports stipulated by each state in which we are licensed. These reports can be financial or informational in nature. At December 31, 2025, our PPO plans were licensed in 45 states and the District of Columbia and were not licensed in Michigan, New Hampshire, New York, North Carolina, and Vermont.
We are also subject to CMS audits related to our compliance with CMS contracts, the performance of the plan, adherence to governing rules and regulations, and the quality of care we provide to Medicare beneficiaries, among other areas. For example, CMS currently conducts Risk Adjustments Data Validation audits of a subset of MA contracts for each contract year.
We are also subject to CMS audits related to our compliance with CMS contracts, the performance of the plan, adherence to governing rules and regulations, and the quality of care we provide to Medicare beneficiaries, among other areas. For example, CMS currently conducts Risk Adjustments Data Validation audits of MA contracts for each contract year.
This model focuses on relieving providers of additional administrative burdens, empowering them to spend more time on care. Clover offers high-quality healthcare for our Medicare beneficiaries We believe our software-powered, primary care-centric approach addresses key systemic issues in healthcare, improving the quality of care and making care more affordable and accessible, regardless of a patient's socioeconomic status or geography.
This model focuses on relieving providers of additional administrative burdens, empowering them to spend more time on care. 13 Clover offers high-quality healthcare for our Medicare members We believe our software-powered, primary care-centric approach addresses key systemic issues in healthcare, improving the quality of care and making care more affordable and accessible, regardless of a patient's socioeconomic status or geography.
Laws in all 50 states require businesses to provide notices to affected individuals whose personal information has been disclosed as a result of a data breach, and certain states require notifications for data breaches involving individually identifiable health information.
Laws in all 50 states require businesses to provide notices to affected individuals whose personal information has been disclosed as a result of a data breach, and certain states require notifications for data breaches involving individually identifiable health information or protected health information.
HIPAA does not preempt state laws that provide more stringent privacy protection than those provided for under HIPAA; as such, we may be subject to additional state privacy laws in the states in which we operate.
HIPAA does not preempt state laws that provide more stringent privacy protection than those provided for under HIPAA; as such, we may be subject to additional state privacy laws in the states in which we operate that are more privacy protective than HIPAA.
We have made it a priority to work with Medicare beneficiaries in underserved markets. This includes MA members diagnosed with at least two chronic diseases, as well as members living in communities that fall within the top five deciles of what the government defines as areas of socioeconomic deprivation.
We have made it a priority to work with Medicare eligible seniors in underserved markets. This includes MA members diagnosed with at least two chronic diseases, as well as members living in communities that fall within the top five deciles of what the government defines as areas of socioeconomic deprivation.
We strive to attract and retain highly qualified talent from different skillsets, professional backgrounds and industries in support of our range of businesses from technology to healthcare. Bringing together motivated, inquisitive and mission-oriented talent has provided us with a strategic advantage and is key to our success.
We strive to attract and retain highly qualified talent from different skill sets, professional backgrounds and industries in support of our range of businesses from technology to healthcare. Bringing together motivated, inquisitive and mission-oriented talent has provided us with a strategic advantage and is key to our success.
We also use certain social media channels as a means of disclosing information about the Company and our products to our customers, investors and the public, including @CloverHealth and #CloverHealth on X (formerly known as Twitter), and the LinkedIn accounts of our Chief Executive Officer, Andrew Toy and Chief Financial Officer, Peter Kuipers.
We also use certain social media channels as a means of disclosing information about the Company and our products to our customers, investors and the public, including @CloverHealth and #CloverHealth on X, and the LinkedIn accounts of our Chief Executive Officer, Andrew Toy and Chief Financial Officer, Peter Kuipers.
The substantial majority of our members are enrolled in our open network plans, meaning that our members need not worry about verifying whether their Medicare provider is in or out of our network, as they pay the same amount in either case. • Clover Assistant is the ultimate assistant.
The substantial majority of our members are enrolled in our open network plans, meaning that our members need not worry about verifying whether their primary care provider is in or out of our network, as they pay the same amount in either case. • Clover Assistant is the ultimate assistant.
Original Medicare is expected to grow from $427 billion to $602 billion over the same period. 8 Our Technology Platform: Clover Assistant For a given patient, we aim to equip physicians utilizing Clover Assistant with synthesized sets of collated and actionable data, to identify, manage and subsequently treat disease burdens earlier.
Original Medicare is expected to grow from $475 billion to $630 billion over the same period. 8 Our Technology Platform: Clover Assistant For a given patient, we aim to equip physicians utilizing Clover Assistant with synthesized sets of collated and actionable data, to identify, manage and subsequently treat disease burdens earlier.
Below is a snapshot of several clinical programs we offer: • Clover Home Care . Home-based care management for our most complex and highest acuity patients. • Supportive Care . Advanced care planning support and palliative care for patients with limited life expectancy. • Readmission Prevention Program .
Below is a snapshot of several clinical programs we offer: • Clover In-Home Care . Home-based care management for our most complex and highest acuity patients. • Supportive Care . Advanced care planning support and palliative care for patients with limited life expectancy. • Welcome Home Program .
In August 2018, we opened an office in Hong Kong, which has since grown to a team of 49 employees. Building Future Leaders We seek to empower our employees to do their best work and aim to provide a variety of in-house and external resources to help them achieve their maximum potential.
In August 2018, we opened an office in Hong Kong, which now has a team of 41 employees. Building Future Leaders We seek to empower our employees to do their best work and aim to provide a variety of in-house and external resources to help them achieve their maximum potential.
Clover Assistant identifies opportunities for improvement in clinical quality gaps, including those prioritized by CMS' Star Ratings Program (plan performance measures that drive bonus payments for plan providers), such as prescription drug adherence, regular cancer screenings and the annual flu shot.
Clover Assistant identifies opportunities for improvement in clinical quality gaps, including those prioritized by Centers for Medicare & Medicaid Services' ("CMS") Star Ratings Program (plan performance measures that drive bonus payments for plan providers), such as prescription drug adherence, regular cancer screenings and the annual flu shot.
At January 1, 2025, we operated our MA plans in five states and 200 counties. 7 We complement our wide-network physicians and their patients with our longitudinal home-based primary care program for our highest acuity members, Clover Home Care, powered by Clover Assistant. This program covers the most medically complex patients, often with advanced comorbidities.
At January 1, 2026, we operated our MA plans in five states and 203 counties. 7 We complement our wide-network physicians and their patients with our longitudinal home-based primary care program for our highest acuity members, Clover Home Care, powered by Clover Assistant. This program covers the most medically complex patients, often with advanced co-morbidities.
Approximately 68 million people were enrolled in Medicare in 2024. That number is expected to rise, equating to approximately $1.5 trillion in total expenditures by 2030. Within Medicare, the MA market made up approximately $503 billion of annual spend in 2024 and is expected to grow to approximately $857 billion by 2030.
Approximately 70 million people were enrolled in Medicare in 2025. That number is expected to rise, equating to approximately $1.5 trillion in total expenditures by 2030. Within Medicare, the MA market made up approximately $545 billion of annual spend in 2025 and is expected to grow to approximately $916 billion by 2030.
Our differentiated approach can be summarized as follows: (1) Represents full year 2024 MCR and BER ratios for Clover Health, as well as most recent results of other public companies with “Traditional MA Plan” approaches that have reported results as of the time of filing of this Form 10-K. (2) Insurance Benefits expense ratio (“BER”) is a non-GAAP financial measure.
Our differentiated approach can be summarized as follows: (1) Represents full year 2025 Benefits expense ratio (“BER”) for Clover Health, as well as most recent results of other public companies with “Traditional MA Plan” approaches that have reported results as of the time of this publication. BER is a non-GAAP financial measure.
Clover strives to provide a collaborative and supportive work environment, competitive market compensation and benefits programs and growth opportunities that empower our employees to deliver positive outcomes for beneficiaries. At December 31, 2024, we had 570 employees with approximately 87% in the U.S. and 9% in Hong Kong with the remaining 4% dispersed in various countries.
Clover strives to provide a collaborative and supportive work environment, competitive market compensation and benefits programs and growth opportunities that empower our employees to deliver positive outcomes for beneficiaries. At December 31, 2025, we had 724 employees with approximately 93% in the U.S. and 6% in Hong Kong with the remaining less than 1% dispersed in various countries.
Additional Products Built on Clover Assistant Platform Clover Assistant is designed to be scalable across a myriad of use cases. The platform is designed to surface the most relevant information for a specific context so that any users of the platform can make more informed decisions at the most actionable opportunity available. Use cases include: • Office/virtual visits.
The platform is designed to surface the most relevant information for a specific context so that any users of the platform can make more informed decisions at the most actionable opportunity available. Use cases include: • Office/virtual visits.
Our annual performance management cycle includes a 360 calibration review for employees at all levels as we believe it provides the most holistic and meaningful snapshot on performance.
Our evolving performance management process supports a culture of transparency, engagement and continuous feedback. Our annual performance management cycle includes a 360 calibration review for employees at all levels as we believe it provides the most holistic and meaningful snapshot on performance.
These plans are created by employee’s hiring managers and reviewed by our Hiring Committee, with the goal of providing structure to onboarding and defining key wins and early successes as they join Clover. The onboarding plans also provide opportunities for check-ins, feedback and re-prioritization of workload.
These plans are created by employee’s hiring managers and reviewed by our Hiring Committee, with the goal of providing structure to onboarding and defining key wins and early successes as they join Clover.
These three aspects of Clover Assistant—Synthesis, Insight, and Action—form a self-contained software improvement virtuous cycle. As providers take action based on our data insights, we receive rich feedback data in real time. We then input this data back into our data and insight layers, creating a loop of bi-directional information exchange.
These three aspects of Clover Assistant (Synthesis, Insight, and Action) form a self-contained software improvement virtuous cycle. As providers take action based on our data insights, we receive rich feedback data in real time.
(1) Our data shows that since 2021, MCRs for members enrolled in our In-Home Care program (highest acuity population) have decreased over a three year period. 12 Our Strategy Broadly speaking, our strategy can be summarized as follows: By utilizing Clover Assistant to raise the standard of care of providers, we are able to target a broad spectrum of markets, including traditionally underserved markets that are generally not viable for others because those markets often lack large, integrated providers, commonly relied on by MA insurers, that are willing to assume the financial responsibility for patient care.
Our Strategy Broadly speaking, our strategy can be summarized as follows: By utilizing Clover Assistant to raise the standard of care of providers, we are able to target a broad spectrum of markets, including traditionally underserved markets that are generally not viable for others because those markets often lack large, integrated providers, commonly relied on by MA insurers, that are willing to assume the financial responsibility for patient care.
Our Competition The physician enablement space is highly competitive, and there are many players competing within the technology space as well as within segments of Medicare such as MA and Original Medicare.
Our Competition The physician enablement space is highly competitive, and there are many players competing within the technology space as well as within segments of Medicare such as MA and Original Medicare. We compete in certain segments within the healthcare market, including MA plans as well as other healthcare technology platforms.
We also enter into co-branding arrangements with providers and other provider institutions. We market or may market our plans through a number of channels including, but not limited to, direct mail, marketing materials in providers' offices, the Internet, telesales, and free marketing channels provided by the U.S. government, such as the Medicare Plan Finder.
We market or may market our plans through a number of channels including, but not limited to, direct mail, marketing materials on our website and on the Internet, telesales, and free marketing channels provided by the U.S. government, such as the Medicare Plan Finder.
Many states require holders of personal information to maintain safeguards and take certain actions in response to a data breach, such as maintaining reasonable security measures and providing prompt notification of the breach to affected individuals and the state's attorney general. 18 In particular, regulations promulgated pursuant to HIPAA impose a number of obligations on issuers of health insurance coverage and health benefit plan sponsors.
Many states require holders of personal information to maintain safeguards and take certain actions in response to a data breach, such as maintaining reasonable security measures and providing prompt notification of the breach to affected individuals and the state's attorney general.
Clover Health has published data demonstrating the technology’s impact on Medication Adherence, as well as the earlier identification and management of Diabetes and Chronic Kidney Disease. 10 The following features of our clinical care capabilities provide significant value to providers and our beneficiaries: Providers are provided with data-driven and actionable insights for each patient For a given patient, a provider utilizing Clover Assistant may experience any of the following: • Synthesized sets of collated, actionable data.
The following features of our clinical care capabilities provide significant value to providers and our beneficiaries: Providers are provided with data-driven and actionable insights for each patient For a given patient, a provider utilizing Clover Assistant may experience any of the following: • Synthesized sets of collated, actionable data.
Although our compliance programs are designed to meet all statutory and regulatory requirements, our policies and procedures are frequently under review and subject to updates, and our training and education programs continue to evolve. 19 The federal Anti-Kickback Statute and related regulations have been interpreted to prohibit the knowing and willful payment, solicitation, offering, or receipt of any form of remuneration (including kickbacks, bribes, and rebates) in return for the referral of federal healthcare program patients or any item or service that is reimbursed, in whole or in part, by any federal healthcare program.
The federal Anti-Kickback Statute and related regulations have been interpreted to prohibit the knowing and willful payment, solicitation, offering, or receipt of any form of remuneration (including kickbacks, bribes, and rebates) in return for the referral of federal healthcare program patients or any item or service that is reimbursed, in whole or in part, by any federal healthcare program.
The Star rating system considers a variety of measures adopted by CMS, including the quality of preventative services, chronic illness management, compliance, and overall customer satisfaction. Please see Item 7, "Management Discussion and Analysis, CMS Star Ratings" of this Report for an overview of the Company's recent Star ratings adjustments.
The Star rating system considers a variety of measures adopted by CMS, including the quality of preventative services, chronic illness management, compliance, and overall customer satisfaction.
This technology is a cloud-based software platform, that curates medical records from over 100 data sources and provides physicians with access to data-driven insights and personalized care recommendations for the patients.
This helps us execute our strategy by enabling physicians to detect, identify, and manage chronic diseases better than they otherwise could. This technology is a cloud-based software platform that curates data from over 100 sources and provides physicians with access to data-driven insights and personalized care recommendations for the patients.
Our innovative approach to preventive care empowers providers to spend more time understanding their patient and personalized, evidence-based guidelines and helps reduce the incidence of high-cost events that drive the largest share of healthcare expenditures. 14 Clover Assistant Architecture Clover Assistant is a differentiated, scalable platform that is able to combine data synthesis and insight generation to provide unique and actionable insights to providers.
Our innovative approach to preventive care empowers providers to spend more time understanding their patients and personalized, evidence-based guidelines and helps reduce the incidence of high-cost events that drive the largest share of healthcare expenditures.
It supports, for example, our in-home primary care program enabling lengthy interactions for our lives under Clover management with the most advanced illnesses or complex conditions.
It supports, for example, our in-home primary care program enabling lengthy interactions for our lives under Clover management with the most advanced illnesses or complex conditions. It also supports in-home programs targeting patients who have been recently discharged from hospitals or who do not receive regular care from a PCP.
We also face competition from Original Medicare providers and health insurance companies. We also face competition in the physician enablement space from offerings and tools that allow providers to offer value-based care, offerings such as EHRs and other tools that promote high physician enablement, and any other product or tool designed to enable a physician to improve care.
Our competitors generally include large, national insurers, such as United Health, Aetna, Humana, Centene, and Elevance Health that provide MA plans, as well as regional-based companies or health plans that provide MA plans, including Blue Cross Blue Shield affiliates, Alignment Health, and Devoted Health, Oscar Health, hospital systems and provider-based organizations. 15 We also face competition in the physician enablement space from offerings and tools that allow providers to offer value-based care, offerings such as EHRs and other tools that promote high physician enablement, and any other product or tool designed to enable a physician to improve care.
Privacy, security, and data standards regulation There are numerous state and federal laws and regulations related to the privacy and security of health information.
Please see Item 7, "Management Discussion and Analysis, CMS Star Ratings" of this Report for an overview of the Company's recent Star ratings adjustments. 17 Privacy, security, and data standards regulation There are numerous state and federal laws and regulations related to the privacy and security of health information.
In addition, states have begun to enact more comprehensive privacy laws and regulations addressing consumer rights relating to data use and disclosure, confidentiality, transparency, and cybersecurity. Violations by us of federal and state privacy and security laws and other contractual requirements may result in significant liability and expense, damage to our reputation and the termination of relationships with our customers.
In addition, states have begun to enact more comprehensive privacy laws and regulations addressing consumer rights relating to data use and disclosure, confidentiality, transparency, and cybersecurity.
Our strategy is to improve the care of our Medicare beneficiaries, develop wide physician networks, and provide technology to help empower physicians. Our proprietary software platform, Clover Assistant (licensed externally as Counterpart Assistant) helps us execute this strategy by enabling physicians to detect, identify, and manage chronic diseases better than they otherwise could.
Our strategy is to improve the care of our Medicare Advantage ("MA") members, develop wide physician networks, and provide technology to help empower physicians. Our proprietary software platform, Clover Assistant (licensed externally as Counterpart Assistant), supports clinical real-time decision making at the point of care by equipping the clinical with data and insights.
Courts may also adopt the standards for fair information practices ("FIPs") promulgated by the FTC, which concern consumer notice, choice, security, and access. Consumer protection laws require us to publish statements to our lives under management that describe how we handle personal information and choices they may have about the way we handle personal information.
These issues can include claims made in privacy policies around how consumer health data will be used or disclosed. Consumer protection laws require us to publish statements to our lives under management that describe how we handle personal information and choices they may have about the way we handle personal information.
It also supports in-home programs targeting patients who have been recently discharged from hospitals or who do not receive regular care from a PCP. 15 Sales and Marketing We market our MA plans through a broad range of activities and through an extensive network of insurance brokers and field marketing organizations.
Sales and Marketing We market our MA plans through a broad range of activities and through an extensive network of insurance brokers and field marketing organizations. We also enter into co-branding arrangements with providers and other provider institutions.
We face competition from incumbent MA sponsors, many of whom are developing their own technology or partnering with third-party technology providers to drive improvements in care. Our competitors include large, national insurers, such as UnitedHealth, Aetna, Humana, Cigna, Centene, and Elevance Health, as well as regional plans such as Blue Cross Blue Shield affiliates, Alignment Health, and Devoted Health.
Competition in our market involves rapidly changing technologies, evolving regulatory requirements and industry expectations, new product offerings and constantly evolving beneficiary and provider preferences and user requirements. We face competition from incumbent MA sponsors, many of whom are developing their own technology or partnering with third-party technology providers to drive improvements in care.
Ensuring our teams have a variety of avenues to provide feedback in a safe way has been core to our ethos. Our evolving performance management process supports a culture of transparency, engagement and continuous feedback.
The onboarding plans also provide opportunities for check-ins, feedback and re-prioritization of workload. 16 Employee Engagement & Feedback We believe giving, receiving and acting on feedback makes us better colleagues. Ensuring our teams have a variety of avenues to provide feedback in a safe way has been core to our ethos.
Clover has in place policies designed to ensure compliance with guidelines promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and all data in transit and at rest are encrypted. Data transfers, including API calls to and from third parties are authenticated via password, token, or two-way multiple transport layer security.
Clover has in place policies designed to ensure compliance with guidelines promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). We have implemented a formal information security and privacy program that aligns to third-party frameworks and certifications (including HITRUST and SOC 2), and we maintain programmatic, auditable controls to support those certifications.
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Across all three prongs of our platform, Clover Assistant is designed to ensure data integrity and security to protect our users' and patients' information, identities, and privacy. As such, we have invested significantly in data protection and have in place strict data protection protocols.
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Please refer to the Company's Key Performance Measures included in Part II, Item 7 of this Form 10-K , for a reconciliation of BER to Insurance Net medical claims incurred, net, the most directly comparable GAAP measure.
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Clover discourages and minimizes local data storage as a deterrence against physical device and data loss. Clover Assistant data is stored in the cloud, with backups across Amazon Web Services and the Google Cloud Platform and secured by centralized identity access and management.
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We are continuing external commercialization efforts through Counterpart Health, to bring Clover's care model to more plans and providers nationwide. Counterpart Health is not yet significant to our overall business or results of operations. We remain focused on increasing total lives on Counterpart Health alongside Clover's growing Medicare Advantage Plan.
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We compete in certain segments within the healthcare market, including MA plans as well as other healthcare technology platforms, and intend to enter into others, including other models offered by CMS. Competition in our market involves rapidly changing technologies, evolving regulatory requirements and industry expectations, new product offerings and constantly evolving beneficiary and provider preferences and user requirements.
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The image below represents an example of the Clover Assistant interface: 9 Our vision is to empower every physician with Clover Assistant technology to identify, manage, and treat chronic diseases earlier. We've published multiple white papers on the impact of Clover Assistant in real-world clinical settings.
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In 2024, we conducted a comprehensive talent review of our director-level and above employees to gain insights into our bench of talent in senior roles. Additionally, we initiated a leadership development skills coaching program with an external vendor tailored for mid-level managers across Clover.
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The image below shows the findings from our previously published papers: (1) This analysis focuses on performance by non-SNP PPO plans with over 2,000 lives as of September 1, 2025 on HEDIS measures applicable to non-SNPs that were used for CMS’s MY 2024 Star ratings, applying the measure ranges used by CMS.
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This program aims to enhance critical competencies essential for driving performance, making sound decisions, and fostering a collaborative culture within the organization. Throughout the year, several key leaders participated in executive coaching engagements and leadership development activities facilitated by external partners.
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Clover Health has published data demonstrating the technology’s impact on Medication Adherence, Congestive Heart Failure, Chronic Obstructive Pulmonary Disease, and in Underserved Populations as well as the earlier identification and management of Diabetes and Chronic Kidney Disease.
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Furthermore, we introduced a new tool designed to assist employees and managers in crafting individual development plans to support their ongoing growth beyond 2024. Employee Engagement & Feedback We believe giving, receiving and acting on feedback makes us better colleagues.
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Powered by Clover Assistant, we provide longitudinal care via various care delivery programs for our most at-risk members.
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In 2024, we deepened our investment in our performance management and survey tool by focusing on individual development plans by equipping managers and employees with better tools to support conversations related to setting meaningful career goals, encouraging every employee to establish a structured path for growth.
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Clover Assistant Architecture Clover Assistant is a differentiated, scalable platform that is able to combine data synthesis and insight generation to provide unique and actionable insights to providers.
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Additionally, we matured our survey strategy to provide more actionable insights across the employee experience in areas like leadership, support, culture and overall employee experience. By refining our approach to pulse surveys, our annual engagement survey, and performance feedback, we aim to create a more responsive, data-informed environment that fosters both individual and organizational growth.
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We then input this data back into our data and insight layers, creating a loop of bi-directional information exchange. 14 Across all three prongs of our platform, Clover Assistant is designed and operated to preserve the confidentiality, integrity and availability of users’ and patients’ information in accordance with applicable law and recognized industry standards.
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Product-level security for Clover Assistant is governed by a dedicated product security function that works in coordination with corporate information security to design and operate controls appropriate for our clinical and customer-facing services.
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Our security program includes continuous monitoring, vulnerability management and remediation, periodic penetration and risk assessments, incident response and business continuity planning, and ongoing employee security awareness and testing. Additional Products Built on Clover Assistant Platform Clover Assistant is designed to be scalable across a myriad of use cases.
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In particular, regulations promulgated pursuant to HIPAA impose a number of obligations on covered entities, including issuers of health insurance coverage and health benefit plan sponsors.
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Courts may also adopt the standards for fair information practices promulgated by the FTC, which concern consumer notice, choice, security, and access. The FTC Act, Section 5 prohibits unfair or deceptive practices, which includes investigation and enforcement of misleading or deceptive claims made by companies.
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Violations by us of applicable federal and state privacy and security laws and other contractual requirements may result in significant liability and expense, damage to our reputation and the termination of relationships with our customers. 18 There are federal and state laws that govern specific types of health information, including but not limited to substance use disorder information, mental health information, and reproductive health information. 42 CFR Part 2 governs the confidentiality of substance use disorder information at the federal level, and recent regulatory efforts have better aligned use and disclosure of Part 2 information with PHI, regulated by HIPAA.
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Some states have also enacted condition-specific health privacy laws that restrict the use or disclosure of specific types of information, and to the extent applicable, the Company must comply with those requirements. (See e.g. Washington’s My Health My Data Law) Such laws must be reviewed for applicability to the Company and impose additional obligations to those of HIPAA.
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Although our compliance programs are designed to meet all statutory and regulatory requirements, our policies and procedures are frequently under review and subject to updates, and our training and education programs continue to evolve.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny provision in our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Biggest changeAny provision in our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock. 53 Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America, as the exclusive forums for certain disputes between us and our stockholders, which will restrict our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
We may not be able to successfully execute on these initiatives, strategies, and operating plans even if we are able to successfully execute on these initiatives, we may not fully realize the expected potential benefits, including achieving cost savings, better plan economics and more affordable healthcare.
We may not be able to successfully execute on these initiatives, strategies, and operating plans, and even if we are able to successfully execute on these initiatives, we may not fully realize the expected potential benefits, including achieving cost savings, better plan economics and more affordable healthcare.
Our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our client base and results of operations.
Our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our client base and results of operations.
Our ability to attract and retain members may be impacted by several factors, including, without limitation: • lack of brand recognition for our MA plans; • difficulties developing strategic co-marketing relationships; • general lack of shopping for plans by MA eligible beneficiaries; • shifting consumer preferences, including a preference by members to enroll with an MA plan sponsored by the insurer of the commercial plan in which they enrolled before they became eligible for Medicare, and a preference by members to enroll in various special needs plans, which we do not offer; • a failure to effectively compete and offer low cost and high value plans; • difficulties establishing an attractive network in new markets; • regulatory changes affecting the overall pool of MA eligible beneficiaries; and • difficulties growing our provider networks and contracting with providers and medical facilities on competitive terms.
Our ability to attract and retain members may be impacted by several factors, including, without limitation: • lack of brand recognition for our MA plans; • difficulties developing strategic co-marketing relationships; • general lack of shopping for plans by MA eligible members; • shifting consumer preferences, including a preference by members to enroll with an MA plan sponsored by the insurer of the commercial plan in which they enrolled before they became eligible for Medicare, and a preference by members to enroll in various special needs plans, which we do not offer; • a failure to effectively compete and offer low cost and high value plans; • difficulties establishing an attractive network in new markets; • regulatory changes affecting the overall pool of MA eligible members; and • difficulties growing our provider networks and contracting with providers and medical facilities on competitive terms.
Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock. 52 Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations. In general, under Section 382 of the U.S.
Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock. Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations. In general, under Section 382 of the U.S.
Penalties for failure to comply with a requirement of HIPAA vary significantly depending on the nature of violation and could include civil monetary or criminal penalties. HIPAA also authorizes state attorneys general to file suit on behalf of their residents. Courts are able to award damages, costs and attorneys' fees related to violations of HIPAA in such cases.
Penalties for failure to comply with a requirement of HIPAA may vary significantly depending on the nature of violation and could include civil monetary or criminal penalties. HIPAA also authorizes state attorneys general to file suit on behalf of their residents. Courts are able to award damages, costs and attorneys' fees related to violations of HIPAA in such cases.
" Our future performance depends in part on increasing the lifetime value of enrollments, which are realized over several years, and utilizing our clinical care capabilities to improve the quality of care for our members. Any failure to do so could negatively affect our financial condition and results of operations, including our ability to achieve or increase profitability.
" 22 Our future performance depends in part on increasing the lifetime value of enrollments, which are realized over several years, and utilizing our clinical care capabilities to improve the quality of care for our members. Any failure to do so could negatively affect our financial condition and results of operations, including our ability to achieve or increase profitability.
If one or more equity research analysts cease coverage of our company, or fail to regularly publish reports on us, the demand for our Class A common stock could decrease, which in turn could cause our trading price or trading volume to decline. Applicable insurance laws may make it difficult to effect a change of control.
If one or more equity research analysts cease coverage of our company, or fail to regularly publish reports on us, the demand for our Class A common stock could decrease, which in turn could cause our trading price or trading volume to decline. 52 Applicable insurance laws may make it difficult to effect a change of control.
Any such errors, failures, vulnerabilities, or bugs may not be found until after new features, integrations, or capabilities have been released. 31 Furthermore, we will need to ensure that our platform can scale to meet the evolving needs of users, particularly as we expand our business and provider user base.
Any such errors, failures, vulnerabilities, or bugs may not be found until after new features, integrations, or capabilities have been released. Furthermore, we will need to ensure that our platform can scale to meet the evolving needs of users, particularly as we expand our business and provider user base.
We attempt to address these risks by requiring subcontractors who handle member information to sign business associate agreements which contractually require those subcontractors to adequately safeguard personal health data to the same extent that applies to us and in some cases by requiring such subcontractors to undergo third-party security examinations.
We attempt to address these risks by requiring such vendors and subcontractors who handle member information to sign business associate agreements which contractually require those vendors subcontractors to adequately safeguard personal health data to the same extent that applies to us and in some cases by requiring such subcontractors to undergo third-party security examinations.
These requirements may also inhibit our ability to acquire an insurance company should we wish to do so in the future. 54 Certain provisions in our corporate charter documents and under Delaware law may prevent or hinder attempts by our stockholders to change our management or to acquire a controlling interest in us.
These requirements may also inhibit our ability to acquire an insurance company should we wish to do so in the future. Certain provisions in our corporate charter documents and under Delaware law may prevent or hinder attempts by our stockholders to change our management or to acquire a controlling interest in us.
Large indemnity payments could adversely affect our business, results of operations, and financial condition. Our failure to satisfy NASDAQ's continued listing standards could result in a delisting of our Class A common stock, which could limit investors' ability to make transactions in our Class A common stock and subject us to additional trading restrictions.
Large indemnity payments could adversely affect our business, results of operations, and financial condition. 48 Our failure to satisfy NASDAQ's continued listing standards could result in a delisting of our Class A common stock, which could limit investors' ability to make transactions in our Class A common stock and subject us to additional trading restrictions.
Our competitors generally include large, national insurers, such as United Health, Aetna, Humana, Cigna, Centene, and Elevance Health that provide MA plans, as well as regional-based companies or health plans that provide MA plans, including Blue Cross Blue Shield affiliates, Alignment Health, Devoted Health, Oscar Health, hospital systems and provider-based organizations.
Our competitors generally include large, national insurers, such as United Health, Aetna, Humana, Centene, and Elevance Health that provide MA plans, as well as regional-based companies or health plans that provide MA plans, including Blue Cross Blue Shield affiliates, Alignment Health, Devoted Health, Oscar Health, hospital systems and provider-based organizations.
Because some patent applications may not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application; that technology would infringe a third-party patent once that patent is issued. 47 We also rely on unpatented internally-developed technology.
Because some patent applications may not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application; that technology would infringe a third-party patent once that patent is issued. We also rely on unpatented internally-developed technology.
In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our members and provider users, as our partners may no longer facilitate the enrollment of Medicare-eligible beneficiaries into, or the effective and efficient operations of, our business or the adoption of Clover Assistant by providers.
In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our members and provider users, as our partners may no longer facilitate the enrollment of Medicare-eligible members into, or the effective and efficient operations of, our business or the adoption of Clover Assistant by providers.
These federal and state laws and regulations include, but are not limited to HIPAA, as amended by HITECH, which we refer to collectively as HIPAA, and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (the "CPRA"), which took effect on January 1, 2023 (the “CCPA”).
These federal and state laws and regulations include, but are not limited to HIPAA, as amended by HITECH, which we refer to collectively as HIPAA, and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act, which took effect on January 1, 2023 (the “CCPA”).
Any failure to meet and address these competitive factors would harm our business, results of operations, and financial condition. We compete with larger companies that may have stronger brands, and consolidation among competitors would increase competition.
Any failure to meet and address these competitive factors would harm our business, results of operations, and financial condition. 27 We compete with larger companies that may have stronger brands, and consolidation among competitors would increase competition.
If our professional employees fail to maintain their required licenses or comply with state licensing laws related to the practice of medicine or provision of other healthcare services, it could disrupt the provision of in-home care services and/or result in negative publicity and loss of confidence in our services which could damage our brands, and our business, results of operations, and financial condition could be negatively impacted. 36 We rely on third-party providers for computing infrastructure, network connectivity, and other technology-related services needed to deliver our technology platform and products.
If our professional employees fail to maintain their required licenses or comply with state licensing laws related to the practice of medicine or provision of other healthcare services, it could disrupt the provision of in-home care services and/or result in negative publicity and loss of confidence in our services which could damage our brands, and our business, results of operations, and financial condition could be negatively impacted. 35 We rely on third-party providers for computing infrastructure, network connectivity, and other technology-related services needed to deliver our technology platform and products.
Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management's attention from the operation of our business, and result in adverse publicity. 44 If Clover Assistant were to become subject to regulation by the FDA and we were unable to obtain the required approval or comply with these regulations, our business, results of operations, financial condition, and prospects may be materially and adversely affected.
Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management's attention from the operation of our business, and result in adverse publicity. 43 If Clover Assistant were to become subject to regulation by the FDA and we were unable to obtain the required approval or comply with these regulations, our business, results of operations, financial condition, and prospects may be materially and adversely affected.
Additionally, the number of l ives under Clover management is critical to our success, and we are continually executing several growth initiatives, strategies, and operating plans designed to maintain or increase the number of Lives under Clover Management.
Additionally, the number of l ives under Clover management is critical to our success, and we are continually executing several growth initiatives, strategies, and operating plans designed to maintain or increase the number of l ives under Clover management.
Comprehensive statutes and regulations govern the manner in which we are compensated for providing coverage for our members, our contractual relationships with our providers, vendors and beneficiaries, our marketing activities and other aspects of our operations.
Comprehensive statutes and regulations govern the manner in which we are compensated for providing coverage for our members, our contractual relationships with our providers, vendors and members, our marketing activities and other aspects of our operations.
If an unexpected reduction in payments, inadequate government funding, significantly delayed payments for Medicare programs or similar events were to occur, our business, results of operations, and financial condition could be materially and adversely affected. 41 Our business also depends upon the public and private sector of the U.S. insurance system, which is subject to a changing regulatory environment.
If an unexpected reduction in payments, inadequate government funding, significantly delayed payments for Medicare programs or similar events were to occur, our business, results of operations, and financial condition could be materially and adversely affected. 40 Our business also depends upon the public and private sector of the U.S. insurance system, which is subject to a changing regulatory environment.
Factors that may contribute to the variability of our operating results include: • the timing of the enrollment periods and related sales and marketing expenses; • the timing of risk adjustments; • the addition or loss of large hospital and healthcare systems in our provider network, including due to acquisitions or consolidations of such systems; • the timing of recognition of revenues, including possible delays in the recognition of revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • our ability to effectively manage the size and composition of our clinical programs relative to the level of demand for services from our members; • the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare systems, or strategic partners; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; • the timing and/or delays in rolling out technology or platform updates; • technical difficulties or interruptions in Clover Assistant; • our ability to increase provider adoption of Clover Assistant; • our ability to market, sell and deploy Counterpart Assistant through our subsidiary Counterpart Health; • breaches of information security or privacy, and any associated fines or penalties or damage to our reputation; • our ability to hire and retain qualified personnel; • changes in the structure of healthcare provider and payment systems; • the incoming presidential administration, and changes in the legislative or regulatory environment, including with respect to healthcare, telehealth, privacy, or data protection, artificial intelligence, or enforcement by government regulators, including fines, orders, sanctions, or consent decrees; • the cost and potential outcomes of ongoing or future regulatory audits, investigations, or litigation; • changes in our and our competitors' pricing policies; and • changes in business or macroeconomic conditions.
Factors that may contribute to the variability of our operating results include: • the timing of the enrollment periods and related sales and marketing expenses; • the timing of risk adjustments; • the addition or loss of large hospital and healthcare systems in our provider network, including due to acquisitions or consolidations of such systems; • the timing of recognition of revenues, including possible delays in the recognition of revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • our ability to effectively manage the size and composition of our clinical programs relative to the level of demand for services from our members; • the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare systems, or strategic partners; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; • the timing and/or delays in rolling out technology or platform updates; • technical difficulties or interruptions in Clover Assistant; • our ability to increase provider adoption of Clover Assistant; • our ability to market, sell and deploy Counterpart Assistant through our subsidiary Counterpart Health; • breaches of information security or privacy, and any associated fines or penalties or damage to our reputation; • our ability to hire and retain qualified personnel; • changes in the structure of healthcare provider and payment systems; • changes in the legislative or regulatory environment, including with respect to healthcare, telehealth, privacy, or data protection, AI, or enforcement by government regulators, including fines, orders, sanctions, or consent decrees; • the cost and potential outcomes of ongoing or future regulatory audits, investigations, or litigation; • changes in our and our competitors' pricing policies; and • changes in business or macroeconomic conditions.
As such, we believe that quarter-to-quarter and year-to-year comparisons of our operating results may not be meaningful and should not be relied upon as an indication of our future performance. 33 Market, regulatory and political conditions, including global economic conditions, rates of inflation and political developments in the United States and abroad, may have adverse consequences on our business, financial condition and share price.
As such, we believe that quarter-to-quarter and year-to-year comparisons of our operating results may not be meaningful and should not be relied upon as an indication of our future performance. 32 Market, regulatory and political conditions, including global economic conditions, rates of inflation and political developments in the United States and abroad, may have adverse consequences on our business, financial condition and share price.
These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns, and adopt more aggressive pricing or payment policies that could allow them to build larger beneficiary bases or provider networks than we have. Our competitors may also provide more desirable products or services or take better care of their beneficiaries.
These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns, and adopt more aggressive pricing or payment policies that could allow them to build larger beneficiary bases or provider networks than we have. Our competitors may also provide more desirable products or services or take better care of their members.
A number of factors could potentially negatively affect provider adoption and use of Clover Assistant, including, but not limited to: • difficulties convincing providers of the value, benefits, and usefulness of Clover Assistant, and continued physician participation in the Clover Assistant program, particularly in markets where we have fewer members; • our failure to integrate with EHR systems; • our failure to attract, effectively train and retain effective sales and marketing personnel; • our failure to market, sell and deploy Counterpart Assistant; • our failure to develop or expand relationships with strategic partners; • our failure to capitalize on co-branding opportunities; • delays in implementation of CMS interoperability requirements; • difficulties in scheduling meetings with providers, and providing demonstrations and trainings related to Clover Assistant; • our failure to compete effectively against alternative products or services, including overcoming perceptions that existing systems, including EHR systems, are similar and adequate, or that Clover Assistant will increase administrative burdens; • technical or other problems impacting availability or reliability of the platform, including limited broadband access in certain rural areas; • difficulties for members in accessing their providers and a corresponding decrease in the number of primary care visits; • privacy and communication, safety, security or other similar concerns; • adverse changes in our platform that are mandated by, or that we elect to make, to address legislation, regulatory authorities or litigation; • poor user experiences; and • the lack of brand recognition.
A number of factors could potentially negatively affect provider adoption and use of Clover Assistant, including, but not limited to: • difficulties convincing providers of the value, benefits, and usefulness of Clover Assistant, and continued physician participation in the Clover Assistant program, particularly in markets where we have fewer members; • our failure to integrate with EHR systems; • our failure to attract, effectively train and retain effective sales and marketing personnel; • our failure to market, sell and deploy Counterpart Assistant; • our failure to develop or expand relationships with strategic partners; • our failure to capitalize on co-branding opportunities; • experiencing unfavorable shifts in perception of Clover Assistant; • delays in implementation of CMS interoperability requirements; • difficulties in scheduling meetings with providers, and providing demonstrations and trainings related to Clover Assistant; • our failure to compete effectively against alternative products or services, including overcoming perceptions that existing systems, including EHR systems, are similar and adequate, or that Clover Assistant will increase administrative burdens; • technical or other problems impacting availability or reliability of the platform and frustrating the experience of members or providers, including limited broadband access in certain rural areas; • difficulties for members in accessing their providers and a corresponding decrease in the number of primary care visits; • privacy and communication, safety, security or other similar concerns; • adverse changes in our platform that are mandated by, or that we elect to make, to address legislation, regulatory authorities or litigation; • poor user experiences; and • lack of brand recognition.
New competitors or alliances may emerge that have greater market share, a larger member base, a stronger and larger provider network, more widely adopted proprietary technologies, greater ability to care for their beneficiaries, greater marketing expertise, or greater financial resources and larger sales forces than we have, which could put us at a competitive disadvantage.
New competitors or alliances may emerge that have greater market share, a larger member base, a stronger and larger provider network, more widely adopted proprietary technologies, greater ability to care for their members, greater marketing expertise, or greater financial resources and larger sales forces than we have, which could put us at a competitive disadvantage.
Suits filed under the FCA, known as qui tam actions, can be brought by any individual on behalf of the government and such individuals, commonly known as "whistleblowers," may share in any amounts paid by the entity to the government in fines or settlement; • state insurance holding company laws and regulations pertaining to licensing and plan solvency requirements; 43 • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs; • similar state law provisions pertaining to anti-kickback, self-referral, and false claims issues, some of which may apply to items or services reimbursed by any third-party payer; • state laws that prohibit general business corporations, such as us, from engaging in the corporate practice of medicine, controlling physicians' medical decisions or engaging in some practices such as splitting fees with physicians; • the provision of the ACA that requires MA plans to spend at least 85% of premium dollars on medical care; • federal and state laws that govern our relationships with pharmaceutical manufacturers, wholesalers, pharmacies, members, and consumers; • federal and state legislative proposals and/or regulatory activity that could adversely affect pharmacy benefit industry practices, including the management and breadth of provider networks; the regulation of the development and use of drug formularies and/or maximum allowable cost list pricing; and regulations or regulatory activity increasing the regulation of prescription drug pricing, imposing additional rights to access to drugs for individuals enrolled in healthcare benefit plans or reducing the cost of such drugs to those individuals, imposing requirements relating to the receipt or required disclosure of rebates from pharmaceutical manufacturers, and restricting the use of average wholesale prices; • laws that regulate debt collection practices; • a provision of the Social Security Act that imposes civil and criminal penalties on healthcare providers who fail to disclose or refund known overpayments; and federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; • federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, and to report certain changes in their operations to the agencies that administer these programs; • federal and state laws governing the ways in which we communicate with members and market our services, including the Telephone Consumer Protection Act, the Controlling the Assault of Non-Solicited Pornography, and Marketing Act; • with respect to our non-U.S. operations, we are subject to regulation in the jurisdictions in which those operations are organized or in which we conduct business as well as U.S. laws that regulate the conduct and activities of U.S. based businesses operating abroad, such as the export controls laws or the FCPA.
Suits filed under the FCA, known as qui tam actions, can be brought by any individual on behalf of the government and such individuals, commonly known as "whistleblowers," may share in any amounts paid by the entity to the government in fines or settlement; • state insurance holding company laws and regulations pertaining to licensing and plan solvency requirements; • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs; 42 • similar state law provisions pertaining to anti-kickback, self-referral, and false claims issues, some of which may apply to items or services reimbursed by any third-party payer; • state laws that prohibit general business corporations, such as us, from engaging in the corporate practice of medicine, controlling physicians' medical decisions or engaging in some practices such as splitting fees with physicians; • the provision of the ACA that requires MA plans to spend at least 85% of premium dollars on medical care; • federal and state laws that govern our relationships with pharmaceutical manufacturers, wholesalers, pharmacies, members, and consumers; • the “One Big Beautiful Bill Act,” which impacts funding and eligibility to federal healthcare programs, particularly Medicaid; • federal and state legislative proposals and/or regulatory activity that could adversely affect pharmacy benefit industry practices, including the management and breadth of provider networks; the regulation of the development and use of drug formularies and/or maximum allowable cost list pricing; and regulations or regulatory activity increasing the regulation of prescription drug pricing, imposing additional rights to access to drugs for individuals enrolled in healthcare benefit plans or reducing the cost of such drugs to those individuals, imposing requirements relating to the receipt or required disclosure of rebates from pharmaceutical manufacturers, and restricting the use of average wholesale prices; • laws that regulate debt collection practices; • a provision of the Social Security Act that imposes civil and criminal penalties on healthcare providers who fail to disclose or refund known overpayments; and federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; • federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, and to report certain changes in their operations to the agencies that administer these programs; • federal and state laws governing the ways in which we communicate with members and market our services, including the Telephone Consumer Protection Act, the Controlling the Assault of Non-Solicited Pornography, and Marketing Act; • with respect to our non-U.S. operations, we are subject to regulation in the jurisdictions in which those operations are organized or in which we conduct business as well as U.S. laws that regulate the conduct and activities of U.S. based businesses operating abroad, such as the export controls laws or the FCPA.
The levels of U.S. federal government spending are difficult to predict and are subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.
The levels of U.S. federal government spending are difficult to predict and are subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the current presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.
Additionally, multiple claims against us could render it difficult or costly to obtain insurance for our affiliated professional entities, which could negatively impact our ability to staff our clinical programs and other operations. 34 Our international operations pose certain risks to our business that may be different from risks associated with our domestic operations.
Additionally, multiple claims against us could render it difficult or costly to obtain insurance for our affiliated professional entities, which could negatively impact our ability to staff our clinical programs and other operations. 33 Our international operations pose certain risks to our business that may be different from risks associated with our domestic operations.
As a result, Medicare Advantage and Part D plans that achieve higher Star Ratings may have a competitive advantage over plans with lower Star Ratings. 42 The Star Ratings system considers various measures adopted by CMS, including, among others, quality of care, preventative services, chronic illness management and member satisfaction.
As a result, Medicare Advantage and Part D plans that achieve higher Star Ratings may have a competitive advantage over plans with lower Star Ratings. 41 The Star Ratings system considers various measures adopted by CMS, including, among others, quality of care, preventative services, chronic illness management and member satisfaction.
The use of AI technologies presents emerging ethical, legal and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, regulatory investigations, and/or legal liability. 32 Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis and could fall below the expectations of investors and securities analysts due to a number of factors, some of which are beyond our control, resulting either in volatility or a decline in the price of the shares of our Class A common stock.
The use of AI technologies presents emerging ethical, legal and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, regulatory investigations, and/or legal liability. 31 Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis and could fall below the expectations of investors and securities analysts due to a number of factors, many of which are beyond our control, resulting either in volatility or a decline in the price of the shares of our Class A common stock.
We use machine learning and artificial intelligence technologies as part of our Clover Assistant platform, and we are making investments in expanding our artificial intelligence capabilities in our products, services, and tools, including ongoing deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using AI technologies, including, for example, generative AI.
We use machine learning and AI technologies as part of our Clover Assistant platform, and we are making investments in expanding our AI capabilities in our products, services, and tools, including ongoing deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using AI technologies, including, for example, generative AI.
Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. 35 We conduct business in various jurisdictions and we are subject to significant expenses and risks related to compliance with state licensure requirements, which could impact our business and results of operations.
Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. 34 We conduct business in various jurisdictions and we are subject to significant expenses and risks related to compliance with state licensure requirements, which could impact our business and results of operations.
If we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders' ownership would be diluted. 39 If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.
If we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders' ownership would be diluted. 38 If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.
Reinsurance subsidies represent payments for CMS' portion of claims costs that exceed the member's out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent payments from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries.
Reinsurance subsidies represent payments for CMS' portion of claims costs that exceed the member's out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent payments from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income members.
See the section entitled "—If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows." Our future performance also depends on utilizing our clinical care capabilities to improve the quality of care for our members so that they remain members.
See the risk factor entitled "If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows." Our future performance also depends on utilizing our clinical care capabilities to improve the quality of care for our members so that they remain members.
CMS' risk adjustment model bases a portion of the total CMS reimbursement payments on various clinical and demographic factors, including hospital inpatient diagnoses, diagnosis data from hospital outpatient facilities and provider visits, gender, age, and Medicaid eligibility.
CMS's risk adjustment model bases a portion of the total CMS reimbursement payments on various clinical and demographic factors, including hospital inpatient diagnoses, diagnosis data from hospital outpatient facilities and provider visits, gender, age, and Medicaid eligibility.
Similar laws are now in effect in more than ten other states and have been adopted or proposed in additional states and at the federal level. If passed, such laws may have potentially conflicting requirements that would make compliance challenging.
Similar laws are now in effect in more than fifteen other states and have been adopted or proposed in additional states and at the federal level. If passed, such laws may have potentially conflicting requirements that would make compliance challenging.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, higher cost of human capital, geopolitical uncertainty and instability, including heightened rates of inflation, higher interest rates, changes in tax and trade policies and uncertainty about economic stability.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, higher cost of human capital, geopolitical uncertainty and instability, including inflation, fluctuations in interest rates, changes in tax and trade policies and uncertainty about economic stability.
See the section entitled "— We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all." If we are unable to successfully address these risks and challenges as we encounter them, our business may be harmed, which could negatively affect the value of our common stock.
See the risk factor entitled " We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all." If we are unable to successfully address these risks and challenges as we encounter them, our business may be harmed, which could negatively affect the value of our common stock.
We and our affiliated professional entities may be subject to professional liability claims and, if these claims are successful, substantial damage awards. With respect to Clover Home Care, the direct provision of healthcare services by certain of our subsidiaries involves risks arising from medical malpractice claims relating to the delivery of healthcare and related services.
We and our affiliated professional entities may be subject to professional liability claims and, if these claims are successful, substantial damage awards. With respect to Clover Care Services (Clover's in-home care offering), the direct provision of healthcare services by certain of our subsidiaries involves risks arising from medical malpractice claims relating to the delivery of healthcare and related services.
In addition, continued growth in our beneficiary and provider base could place additional demands on our Clover Assistant platform and our technical operations infrastructure and could cause or exacerbate slowdowns or interrupt the availability of our platform and operations.
In addition, continued growth in our member and provider base could place additional demands on our Clover Assistant platform and our technical operations infrastructure and could cause or exacerbate slowdowns or interrupt the availability of our platform and operations.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, the listing standards of NASDAQ and other applicable securities rules and regulations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of NASDAQ and other applicable securities rules and regulations.
See the section entitled " —If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows.
See the risk factor entitled " If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows.
See the sections entitled “— Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential or health information or the confidential or health information of our members, providers, or other third parties, could damage our reputation and brands, and substantially harm our business and results of operations ” and —" Our use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations.
See the risk factors entitled " Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential or health information or the confidential or health information of our members, providers, or other third parties, could damage our reputation and brands, and substantially harm our business and results of operations" and " Our use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations.
The promotion of our brands, including in our relatively new brand of Counterpart Assistant, may require us to make substantial investments, and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become increasingly difficult and expensive.
The promotion of our brands, including in Counterpart Assistant, may require us to make substantial investments, and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become increasingly difficult and expensive.
See the section entitled "— Our business activities are highly regulated, and new and proposed government regulation or legislative reforms could increase our cost of doing business and reduce our number of members, profitability, and liquidity." 40 Litigation and audits, investigations or reviews by governmental authorities or regulators may result in substantial costs and may divert management's attention and resources, which may substantially harm our business, financial condition, and results of operations.
See the risk factor entitled "— Our business activities are highly regulated, and new and proposed government regulation or legislative reforms could increase our cost of doing business and reduce our number of members, profitability, and liquidity." 39 Litigation and audits, investigations or reviews by governmental authorities or regulators may result in substantial costs and may divert management's attention and resources, which may substantially harm our business, financial condition, and results of operations.
Our business may be affected by conditions and trends in the financial markets and general economic and political conditions, including the new presidential administration and Congress.
Our business may be affected by conditions and trends in the financial markets and general economic and political conditions, including the current presidential administration and Congress.
Although the share repurchase program is intended to enhance long-term shareholder value, we cannot provide assurance that this will occur.
Although any share repurchase program is intended to enhance long-term shareholder value, we cannot provide assurance that this will occur.
We have direct operations in Hong Kong and Canada, as well as contracted operations in various other countries . We may in the future expand our operations to other countries. Substantially all of our software research and development is performed internationally, by internal resources and a variety of offshore vendors in locations such as Hong Kong and elsewhere.
We have direct operations in Hong Kong and Canada, as well as contracted operations in various other countries . We may in the future expand our operations to other countries. A significant portion of our software research and development is performed internationally, by internal resources and a variety of offshore vendors in locations such as Hong Kong and elsewhere.
New health information standards, whether implemented pursuant to HIPAA, state or federal legislative action or otherwise, could have a significant effect on the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant.
New health information standards, whether implemented pursuant to HIPAA, state or federal legislative action or otherwise, including state and federal AI laws, could have a significant effect on the manner in which we must handle healthcare related data, and the cost of complying with those standards could be significant.
Competition from these and other new entrants may intensify as the FFS market develops and business models evolve to address it. In addition, as we enter into new markets, we may compete with regional start-up companies that offer MA plans.
Competition from these and other new entrants may intensify as the fee-for-service market develops and business models evolve to address it. In addition, as we enter into new markets, we may compete with regional start-up companies that offer MA plans.
Volatility or declines in our trading price could make it more difficult to attract and retain talent, adversely impact employee retention and morale, and may require us to issue more equity to incentivize team members, which could dilute stockholders. 49 Overall, there are various factors, some of which are beyond our control, that could negatively affect the market price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock, including the following; • overall performance of the equity markets and the economy as a whole; • changes in the financial guidance we may provide to the public or our failure to meet this guidance; • actual or anticipated changes in our growth rate relative to that of our competitors; • changes in the anticipated future size or growth rate of our addressable markets; • announcements of new products and services, technological and platform updates or enhancements, or of acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments, by us or by our competitors; • disruptions to Clover Assistant or our other technology; • additions or departures of board members, management or key personnel; • failure of securities analysts to initiate or 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; • rumors and market speculation involving us or other companies in our industry; • research or reports that securities analysts or others publish about us or our business; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to Medicare; • lawsuits threatened or filed against us or investigations by governmental authorities; • other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; • health epidemics, such as pandemics, influenza, and other highly communicable diseases; and • sales of shares of our Class A common stock by us or our stockholders.
Overall, there are various factors, some of which are beyond our control, that could negatively affect the market price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock, including the following; • overall performance of the equity markets and the economy as a whole; • changes in the financial guidance we may provide to the public or our failure to meet this guidance; • actual or anticipated changes in our growth rate relative to that of our competitors; • changes in the anticipated future size or growth rate of our addressable markets; • announcements of new products and services, technological and platform updates or enhancements, or of acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments, by us or by our competitors; • disruptions to Clover Assistant or our other technology; • additions or departures of board members, management or key personnel; • failure of securities analysts to initiate or 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; • rumors and market speculation involving us or other companies in our industry; • research or reports that securities analysts or others publish about us or our business; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to Medicare; • lawsuits threatened or filed against us or investigations by governmental authorities; • other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; • health epidemics, such as pandemics, influenza, and other highly communicable diseases; and • sales of shares of our Class A common stock by us or our stockholders.
During fiscal year 2024, we received written notice from the Nasdaq Stock Market LLC ("NASDAQ") notifying us that, for 30 consecutive business days, the bid price for our Class A common stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).
In the past, we have received written notice from the Nasdaq Stock Market LLC ("NASDAQ") notifying us that, for 30 consecutive business days, the bid price for our Class A common stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).
Due to the time lag between when medical services are actually rendered by our providers and when we receive, process and pay a claim for those medical services, our medical care costs include estimates of our incurred but not reported ("IBNR") claims.
Our failure to estimate incurred but not reported claims accurately would affect our results of operations. Due to the time lag between when medical services are actually rendered by our providers and when we receive, process and pay a claim for those medical services, our medical care costs include estimates of our incurred but not reported ("IBNR") claims.
This could in turn harm our business, results of operations, and financial condition. Additionally, as the number of providers using Clover Assistant grows, we will need to hire additional support personnel to provide efficient product support at scale. If we are unable to provide such support, our business, results of operations, financial condition, and reputation could be harmed.
This could in turn harm our business, results of operations, and financial condition. Additionally, as the number of providers using Clover Assistant grows, we will need to hire additional support personnel to provide efficient product support at scale.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. At December 31, 2024, our directors, executive officers, and their affiliates held in the aggregate 72.0% of the voting power of our capital stock.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. At December 31, 2025, our directors, executive officers, and their affiliates held in the aggregate 71.2% of the voting power of our capital stock.
We have incurred net losses of $46.3 million, $210.1 million, and $254.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, and as of December 31, 2024 we had an accumulated deficit of approximately $2.2 billion.
We have incurred net losses of $85.5 million, $46.3 million, and $210.1 million for the years ended December 31, 2025, 2024, and 2023, respectively, and as of December 31, 2025 we had an accumulated deficit of approximately $2.3 billion.
Furthermore, we may not be able to sustain profitability in subsequent periods. Our cash flow from operations was negative for the years ended December 31, 2023, and 2022, and we may not generate positive cash flow from operations in any given period.
Furthermore, we may not be able to sustain profitability in subsequent periods. Our cash flows from operations were negative for the years ended December 31, 2025 and 2023 and positive for the year ended December 31, 2024, and we may not generate positive cash flow from operations in any given period.
At December 31, 2024, approximately 91% of our members, most of whom were in two metropolitan areas, were residents of New Jersey.
At December 31, 2025, approximately 87% of our members, most of whom were in two metropolitan areas, were residents of New Jersey.
So long as 65,240,552 shares of Class B common stock remain outstanding, the holders of our Class B common stock will be able to control the outcome of matters submitted to a stockholder vote.
So long as 67,520,048 shares of Class B common stock remain outstanding, the holders of our Class B common stock will be able to control the outcome of matters submitted to a stockholder vote.
Accordingly, if we are unable to retain our members and realize a significant lifetime value for our enrollments in line with our projections, we may not be able to generate sufficient revenues to offset our losses and expenses, which would adversely affect our business, financial condition, and results of operations and our ability to achieve or increase profitability in the future. 23 If adoption and use of Clover Assistant is lower than we expect, our growth may slow or stall.
Accordingly, if we are unable to retain our members and realize a significant lifetime value for our enrollments in line with our projections, we may not be able to generate sufficient revenues to offset our losses and expenses, which would adversely affect our business, financial condition, and results of operations and our ability to achieve or increase profitability in the future.
At December 31, 2024, our directors and officers and their affiliated entities collectively owned approximately 22.7% of the total outstanding shares of Class A and Class B common stock.
At December 31, 2025, our directors and officers and their affiliated entities collectively owned approximately 23.9% of the total outstanding shares of Class A and Class B common stock.
This could adversely impact our financial condition and results of operations. 29 If we are not successful at converting the opportunities presented by new distribution channels and access to local markets, we may not be able to grow our number of members or our plans as quickly as we need to, or at all.
If we are not successful at converting the opportunities presented by new distribution channels and access to local markets, we may not be able to grow our number of members or our plans as quickly as we need to, or at all.
When the time to choose an MA plan comes, Medicare-eligible consumers may also choose to stay with the same insurer that was offered by their employer instead of transitioning to our insurance plan.
When the time to choose an MA plan comes, Medicare-eligible consumers may also choose to stay with the same insurer that was offered by their employer instead of transitioning to our insurance plan. In those instances, consumers may opt not to purchase an MA plan from us.
If our sales and marketing representatives fail to achieve their objectives, our lives under Clover management could decrease or may not increase at levels that are in line with our expectations.
If our sales and marketing representatives fail to achieve their objectives, our lives under Clover management could decrease or may not increase at levels that are in line with our expectations. This could adversely impact our financial condition and results of operations.
At December 31, 2024, we had approximately $1,523.5 million of federal NOL carryforwards. The federal NOL carryforwards created subsequent to the year ended December 31, 2017, of $1,268.7 million can be carried forward indefinitely with the exception of net operating losses for the insurance companies, while the remaining federal NOL carryforwards of $295.1 million begin to expire in 2033.
At December 31, 2025, we had approximately $1,577.7 million of federal NOL carryforwards. The federal NOL carryforwards created subsequent to the year ended December 31, 2017, of $1,328.5 million can be carried forward indefinitely with the exception of net operating losses for the insurance companies, while the remaining federal NOL carryforwards of $249.2 million begin to expire in 2035.
There is also a risk that due to statutory or regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. We have recorded a full valuation allowance against the deferred tax assets attributable to our NOLs.
There is also a risk that due to statutory or regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.
Considering these factors, even if our MA plans and technology platform are more effective than those of our competitors, current or potential members may purchase competitive plans in lieu of purchasing our health plans, or providers may adopt competing technology platforms in lieu of Clover Assistant.
Considering these factors, even if our MA plans and technology platform are more effective than those of our competitors, current or potential members may purchase competitive plans in lieu of purchasing our health plans, or providers may adopt competing technology platforms in lieu of Clover Assistant. Any such events could adversely affect our business, financial condition, and results of operations.
While we believe we have adequately reviewed our assumptions and estimates regarding these complex and wide-ranging programs under Medicare Advantage and Medicare Part D, including those related to collectability of receivables and establishment of liabilities, actual results may be materially different from our assumptions and estimates and could have a material adverse effect on our business, financial condition, and results of operations.
While we believe we have adequately reviewed our assumptions and estimates regarding these complex and wide-ranging programs under Medicare Advantage and Medicare Part D, including those related to collectability of receivables and establishment of liabilities, actual results may be materially different from our assumptions and estimates and could have a material adverse effect on our business, financial condition, and results of operations. 24 CMS's risk adjustment payment system makes our revenues and profitability difficult to predict and could result in material retroactive adjustments to our results of operations.
We devote significant resources to protect against security breaches, and we may need to devote significantly more resources in the future to address problems caused by breaches, including notifying affected subscribers and responding to any resulting litigation.
We devote significant resources to protect against security breaches, and we may need to devote significantly more resources in the future to address problems caused by breaches, including notifying affected subscribers and responding to any resulting litigation. Any such use of resources would divert resources from the growth and expansion of our business.
The pool of qualified personnel with experience working in the healthcare market, and particularly MA, is limited. The incentives to attract, retain, and motivate employees provided by our stock options and other equity awards, or by other compensation arrangements, may not be effective. As such, we may not be successful in continuing to attract and retain qualified personnel.
The incentives to attract, retain, and motivate employees provided by our stock options and other equity awards, or by other compensation arrangements, may not be effective. As such, we may not be successful in continuing to attract and retain qualified personnel.
In addition, certain markets in the United States are dominated by a few providers or facilities, have a limited number of providers in a particular specialty or have a limited number of facilities, which may make it particularly difficult for us to enter into such markets and compete effectively.
That could have a material adverse effect on our business, financial condition, and results of operations. 26 In addition, certain markets in the United States are dominated by a few providers or facilities, have a limited number of providers in a particular specialty or have a limited number of facilities, which may make it particularly difficult for us to enter into such markets and compete effectively.
As a result, we may not fully understand the impact of Clover Assistant on our future business and long-term prospects. Our continued long-term success depends on maintaining and continuing to improve Clover Assistant and the margins we generate from its operations over time in the markets we currently serve or potential future markets.
Our continued long-term success depends on maintaining and continuing to improve Clover Assistant and the margins we generate from its operations over time in the markets we currently serve or potential future markets.
If we do not successfully develop widespread brand recognition and maintain and enhance our reputation, our business may not grow and we could lose our relationships with providers or members, which would harm our business, financial condition, and results of operations. 30 If we do not continue to innovate and provide services that are useful to our members and providers, we may not remain competitive, and our business, financial condition, and results of operations could suffer.
If we do not successfully develop widespread brand recognition and maintain and enhance our reputation, our business may not grow and we could lose our relationships with providers or members, which would harm our business, financial condition, and results of operations.
Errors, failures, vulnerabilities, or bugs have in the past, and may in the future, occur in Clover Assistant, especially when updates are deployed or new features, integrations, or capabilities are rolled out.
The software technology underlying and integrating with Clover Assistant is inherently complex and may contain material defects or errors. Errors, failures, vulnerabilities, or bugs have in the past, and may in the future, occur in Clover Assistant, especially when updates are deployed or new features, integrations, or capabilities are rolled out.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI. 45 In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA-covered entities or business associates for compliance with the HIPAA Privacy and Security Standards.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be severely harmed. 38 Moreover, we believe that a critical element of our ability to successfully attract, train and retain qualified personnel is our corporate culture, which we believe fosters innovation, collaboration and a focus on execution, all in an environment of high ethical standards.
Moreover, we believe that a critical element of our ability to successfully attract, train and retain qualified personnel is our corporate culture, which we believe fosters innovation, collaboration and a focus on execution, all in an environment of high ethical standards.
If Clover Assistant is not adopted as quickly as we anticipate in the markets in which we operate, we may be unable to collect and provide valuable actionable data to providers treating our members in such markets, which could prevent us from driving significant reductions in MCR for our members in such markets.
Furthermore, if we are unable to address the needs of providers using Clover Assistant, if providers are dissatisfied with Clover Assistant, or if new alternative solutions effectively compete with us, providers may decline to use Clover Assistant. 23 If Clover Assistant is not adopted as quickly as we anticipate in the markets in which we operate, we may be unable to collect and provide valuable actionable data to providers treating our members in such markets, which could prevent us from driving significant reductions in MCR for our members in such markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+14 added−11 removed0 unchanged
Biggest changeThe cybersecurity team is made aware of security risks and incidents by various means including our SIEM, assessments, audit, threat feeds, and security team connections and network. 56 Depending on the circumstances, information regarding cybersecurity risks and incidents may be elevated from the CISO and his team through a variety of different channels, including risk response forms as part of our formal security risk process, discussions with the Audit Committee and reports to the Board on a quarterly basis.
Biggest changeDepending on the circumstances, cybersecurity matters may be elevated from the CISO to senior management, the Audit Committee, and the Board through established reporting channels, including risk assessments, incident reports, and quarterly updates.
Removed
Item 1C. Cybersecurity. Risk Management and Strategy Due to the sensitivity of the personal information, including protected health information, or PHI, that the Company and its subsidiaries store and transmit, in the ordinary course of business, identifying, assessing, and managing material cybersecurity risks is an important component of the Company’s overall cybersecurity and enterprise risk management program.
Added
Item 1C. Cybersecurity. Cybersecurity Risk Management, Strategy, and Governance The Company’s Board of Directors (the “Board”) oversees the Company’s enterprise risk management program, including risks related to cybersecurity. The Board has delegated primary oversight of cybersecurity risk management to its Audit Committee.
Removed
We maintain a cybersecurity program based on the National Institute of Standards and Technology Cybersecurity Framework’s guidance and HIPAA, which applies to the Company and each of its subsidiaries.
Added
The Audit Committee regularly reviews the adequacy and effectiveness of the Company’s cybersecurity program, including policies, internal controls, and risk management processes related to information security and data protection.
Removed
The cybersecurity program seeks to protect the enterprise against threats from cybersecurity risks, to comply with applicable laws and regulations, and to establish and enhance our processes for responding to cybersecurity events.
Added
The Audit Committee and the full Board receive periodic reports from management, including the Company’s Chief Information Security Officer (the “CISO”), regarding the Company’s cybersecurity posture, risk assessment activities, emerging threat landscape, and mitigation efforts.
Removed
Among other things, the program includes the following components: • security event monitoring and detection; • extended detection and response; • vulnerability scanning; • security awareness and privacy training for personnel; • phishing simulations; and • a cybersecurity incident response team. The Company also engages third-party vendors and consultants, respectively, to perform audits and penetration tests.
Added
These reports address, among other topics, artificial intelligence–related security considerations, security awareness and training, internal and third-party risk management, incident response and disaster recovery readiness, identity and access management, HIPAA Security Rule compliance, phishing and social engineering risks, security monitoring, vulnerability and application security management, governance and policy maturity, data protection, and cloud security.
Removed
The Company and its subsidiaries’ third-party service providers collect, process, and store certain information, including PII, PHI, or other confidential and proprietary information. We maintain a third-party vendor security risk management program to assess the cybersecurity risk and measures taken by such service providers. The program includes a third-party risk assessor, security risk reports, and formal business owner risk response.
Added
Management’s Role in Cybersecurity Risk Management The Company’s CISO is responsible for the design, implementation, and ongoing management of the Company’s cybersecurity program, including security policies, standards, incident response, and remediation activities, in accordance with applicable legal and regulatory requirements.
Removed
During the period covered by this report, the Company has not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Added
The cybersecurity program is designed to identify, assess, manage, and mitigate risks to the confidentiality, integrity, and availability of the Company’s information systems and sensitive data. The cybersecurity organization is supported by personnel with experience across healthcare, technology, and regulated industries and is informed by internal monitoring, independent assessments, audits, threat intelligence, and security tooling.
Removed
Risks from cybersecurity threats, however, in the future may, among other things, cause material disruptions to our or our subsidiaries’ operations, which may materially affect our liquidity, results of operations and financial condition, as well as damage our reputation.
Added
Cybersecurity risks and incidents are identified through a combination of automated monitoring systems, risk assessments, internal reporting mechanisms, and external intelligence sources. 54 The Company has implemented an automated, AI-assisted compliance and evidence management capability designed to support continuous monitoring, control validation, and documentation in connection with internal controls, regulatory compliance, and audit readiness.
Removed
For additional information related to risks from cybersecurity threats, please refer to Item 1.A. — “Risks Related to Our Business and Industry — Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential or health information or the confidential or health information of our members, providers, or other third parties, could damage our reputation and brands, and substantially harm our business and results of operations. ” Governance The Company’s Board of Directors (the “Board”) oversees the Company’s overall risk management program, and has assigned oversight of cybersecurity risk management to its Audit Committee.
Added
These capabilities are intended to enhance efficiency and visibility into control performance; however, they are subject to inherent limitations and operate under ongoing human oversight. Artificial Intelligence–Related Security Considerations The Company increasingly utilizes artificial intelligence–enabled technologies within its operations and also evaluates risks associated with the use of AI by third-party vendors and service providers.
Removed
The Audit Committee reviews the adequacy and effectiveness of the Company’s cybersecurity policies and internal controls regarding information and cybersecurity, and together with the full Board, regularly receives reports from our management, including our Chief Information Security Officer (the “CISO”) on cybersecurity matters, including, but not limited to: AI Security, Security Awareness, Internal Risk, Third-Party Risk, IR / DR Readiness, Access Control IAM/PAM, HIPAA Security Rule Compliance, Phishing, Security Monitoring, Vulnerability Management, Application Security, Governance, Data Security, and Cloud Security.
Added
AI-related security and governance risks are considered as part of the Company’s broader cybersecurity and enterprise risk management processes. These considerations include, among other factors, risks related to data integrity, model governance, access controls, third-party dependencies, and the potential misuse of AI-enabled systems.
Removed
The Company’s CISO is responsible for developing and managing the cybersecurity program, including security incident response, remediation, and setting security policy and standards required by applicable law or regulation. The CISO holds a dual-accredited Executive MBA, and Certified Information Security Manager ("CISM"), Certified Information Systems Auditor ("CISA") and Certified Data Privacy Solutions Engineer ("CDPSE") certifications.
Added
The Company’s approach to identifying and managing AI-related security risks is informed by recognized industry frameworks, including the NIST Artificial Intelligence Risk Management Framework, as appropriate to the Company’s use of AI-enabled technologies.
Removed
The security team holds multiple certifications including but not limited to CISSP, CRISC, CCSFP, and AWS CP, a bug bounty hall of fame member, and a range of experience with different firms. The CISO is informed by the cybersecurity team about the prevention, detection, mitigation, and remediation of cybersecurity incidents through general communications, and reporting.
Added
The Company’s use of automated and AI-assisted tools within its cybersecurity and compliance functions is intended to enhance monitoring, risk identification, and control validation; however, such technologies are subject to inherent limitations and require ongoing human oversight. The Company continues to evaluate its AI-related risk management practices as technologies, threat vectors, and regulatory expectations evolve.
Added
Risk Escalation and Reporting Cybersecurity risks and incidents are evaluated through a formal risk management process and escalated as appropriate based on severity, potential impact, and materiality considerations.
Added
Fraud, Waste, and Abuse Monitoring In addition, the Company began implementing a cybersecurity monitoring program, operated by the Company’s cybersecurity organization, in coordination with the Company’s other fraud, waste, and abuse and compliance functions. As implementation progresses, the program is intended to evaluate provider, member, and vendor activity for indicators of potential credential exposure or misuse.
Added
The program is designed to strengthen detection capabilities, reduce financial and compliance risk, and support the integrity of Company systems and data. Subsidiary-Specific Oversight The Company has established dedicated cybersecurity resources for Counterpart Health, a subsidiary of Clover Health, to ensure that cybersecurity risk management practices are aligned with enterprise standards while addressing subsidiary-specific operational and clinical considerations. Item 2.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeInformation concerning legal proceedings can be found in Note 13 "Commitments and Contingencies" to the consolidated financial statements included in Part II, Item 8 of this Form 10-K, which information is incorporated by reference into this item. Item 4. Mine Safety Disclosures. Not applicable. 57 Part II
Biggest changeInformation concerning legal proceedings can be found in Note 13 "Commitments and Contingencies" to the consolidated financial statements included in Part II, Item 8 of this Form 10-K, which information is incorporated by reference into this item. Item 4. Mine Safety Disclosures. Not applicable. 55 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed3 unchanged
Biggest changeAs of December 31, 2024, there was $18.2 million available for repurchase. The Company had no share repurchases during the three months ended December 31, 2024. Unregistered Sales of Equity Securities and Use of Proceeds None. 58 Performance Graph Item 6. [Reserved.] 59
Biggest changeRepurchases were made through a combination of open market purchases and accelerated share repurchases. As of December 31, 2025, there was zero dollars available under the program for share repurchases. The Company repurchased zero shares during the three months ended December 31, 2025. Unregistered Sales of Equity Securities and Use of Proceeds None. Performance Graph 56 Item 6. [Reserved.] 57
Dividend Policy We have not declared or paid any dividends on shares of common stock and does not intend to pay dividends in the foreseeable future. The declaration, amount, and payment of any future dividend will be at the sole discretion of our Board, and the Board may reduce or discontinue entirely the payment of such dividends at any time.
Dividend Policy We have not declared or paid any dividends on shares of common stock and do not intend to pay dividends in the foreseeable future. The declaration, amount, and payment of any future dividend will be at the sole discretion of our Board, and the Board may reduce or discontinue entirely the payment of such dividends at any time.
Holders At February 24, 2025, there were 340 holders of record of our Class A common stock and 309 holders of record of our Class B common stock. Such figures do not include beneficial owners holding our securities through nominee names.
Holders At February 20, 2026, there were 346 holders of record of our Class A common stock and 309 holders of record of our Class B common stock. Such figures do not include beneficial owners holding our securities through nominee names.
Removed
Repurchases may be made through open market purchases or accelerated share repurchases. The exact number of shares to be repurchased by the Company, if any, is not guaranteed. Depending on market conditions and other factors, these repurchases may be commenced or suspended at any time or periodically without prior notice.

Item 7. Management's Discussion & Analysis

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

57 edited+17 added−31 removed36 unchanged
Biggest changeWe seek to improve care and lower costs for our members by empowering providers with intuitive data-driven, personalized insights to support treatment of members through our software platform, Clover Assistant. 61 The following table presents key financial measures for the periods indicated: Year Ended December 31, 2024 2023 Total PMPM (1) Total PMPM (1) (amounts in thousands, except PMPM amounts) Insurance members at period end (#) 82,664 N/A 81,205 N/A Premiums earned, gross $ 1,345,280 $ 1,392 $ 1,236,213 $ 1,250 Premiums earned, net $ 1,344,881 $ 1,391 $ 1,235,769 $ 1,250 Insurance medical claim expense incurred, gross $ 1,012,905 $ 1,048 $ 1,004,454 $ 1,016 Insurance net medical claims incurred $ 1,010,289 $ 1,045 $ 1,003,683 $ 1,015 Medical care ratio, gross 75.3 % N/A 81.3 % N/A Medical care ratio, net 75.1 % N/A 81.2 % N/A Benefits expense ratio, gross 81.3 % N/A 86.5 % N/A Benefits expense ratio, net 81.2 % N/A 86.5 % N/A Adjusted SG&A $ 294,713 N/A $ 297,508 N/A Adjusted EBITDA $ 70,091 N/A $ (41,555) N/A Adjusted Net income (loss) from continuing operations $ 68,243 N/A $ (48,883) N/A (1) Calculated per member per month ("PMPM") figures are based on the applicable amount divided by member months in the given period.
Biggest changeThe following table presents key financial measures for the periods indicated: Year ended December 31, 2025 2024 Total PMPM (1) Total PMPM (1) (dollar amounts in thousands, except PMPM amounts) Consolidated: Total revenues $ 1,924,308 $ 1,498 $ 1,371,131 $ 1,418 Net medical claims incurred $ 1,568,406 $ 1,221 $ 1,006,327 $ 1,041 Consolidated Gross profit $ 355,902 $ 277 $ 364,804 $ 377 Adjusted SG&A $ 334,207 $ 260 $ 294,713 $ 305 Adjusted EBITDA $ 21,695 $ 17 $ 70,091 $ 73 Adjusted Net income from continuing operations $ 19,989 $ 16 $ 68,243 $ 71 Insurance Segment: Insurance members at period end (#) 113,803 N/A 82,664 N/A Premiums earned, net $ 1,891,732 $ 1,472 $ 1,344,881 $ 1,391 Insurance Net medical claims incurred $ 1,618,219 $ 1,259 $ 1,010,289 $ 1,045 Insurance Benefits expense ratio 90.9 % N/A 81.2 % N/A Normalized Insurance benefits expense ratio 91.5 % N/A 84.2 % N/A (1) Calculated per member per month ("PMPM") figures are based on the applicable amount divided by member months in the given period.
Premiums earned, net represents the earned portion of our premiums earned, gross, less the earned portion that is ceded to third-party reinsurers under our reinsurance agreements.
Premiums earned, net Premiums earned, net represents the earned portion of our premiums earned, gross, less the earned portion that is ceded to third-party reinsurers under our reinsurance agreements.
We calculate our Insurance BER by taking the total of Insurance net medical expenses incurred and quality improvements, and dividing that total by premiums earned on a net basis, in a given period. Quality improvements include expenses associated with activities that improve health outcomes, as defined by the U.S.
We calculate our BER by taking the total of Insurance net medical expenses incurred and quality improvements, and dividing that total by premiums earned on a net basis, in a given period. Quality improvements include expenses associated with activities that improve health outcomes, as defined by the U.S.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 of $0.6 million was primarily due to $203.4 million provided from the sale and maturity of investment securities. This was offset by $201.2 million used to purchase investments.
Net cash provided by investing activities for the year ended December 31, 2024, of $0.6 million was primarily due to $203.4 million provided from the sale and maturity of investment securities. This was offset by $201.2 million used to purchase investments.
We believe our Insurance BER is useful to management, investors, and others because it offers a clearer and more accurate representation of our investment in healthcare quality and member engagement, and gives a comprehensive view of costs related to maintaining and improving the quality of care of our members, which is crucial for sustaining member satisfaction and adherence to treatment regimens.
We believe our BER is useful to management, investors, and others because it offers a clearer and more accurate representation of our investment in healthcare quality and member engagement, and gives a comprehensive view of costs related to maintaining and improving the quality of care of our members, which is crucial for sustaining member satisfaction and adherence to treatment regimens.
Premiums are earned in the period in which members are entitled to receive services, and are net of estimated uncollectible amounts, retroactive membership adjustments, and any adjustments to recognize rebates under the minimum benefit ratios required under the ACA. We earn premiums through our plans offered under contracts with CMS.
Premiums are earned in the period in which members are entitled to receive services, and are net of estimated uncollectible amounts, retroactive membership adjustments, and any adjustments to recognize rebates under the minimum benefit ratios required under the ACA. 59 We earn premiums through our plans offered under contracts with CMS.
Actuarial standards require the use of assumptions based on moderately adverse experience, and as such, a provision for adverse deviation ("PAD") is recognized on current reserves and released on prior reserves.
Actuarial standards require the use of assumptions based on moderately adverse experience, and as such, a provision for adverse deviation is recognized on current reserves and released on prior reserves.
These commitments are associated with contracts that were enforceable and legally binding at December 31, 2024, and that specified all significant terms, including fixed or minimum serves to be used, fixed, minimum, or variable price provisions, and the approximate timing of the actions under the contracts.
These commitments are associated with contracts that were enforceable and legally binding at December 31, 2025, and that specified all significant terms, including fixed or minimum serves to be used, fixed, minimum, or variable price provisions, and the approximate timing of the actions under the contracts.
The discussion should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024, contained in this Annual Report on Form 10-K (the "Form 10-K").
The discussion should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025, contained in this Annual Report on Form 10-K (the "Form 10-K").
Department of Health and Human Services ("HHS"), as well as those directly tied to enhancing healthcare quality, such as the Company's spend on health information technology, wellness and prevention programs, initiatives to reduce hospital readmissions, and our clinically focused Member Rewards program.
Department of Health and Human Services ("HHS"), as well as those directly tied to enhancing healthcare quality, such as the Company's spend on health information technology, wellness and prevention programs, initiatives to reduce hospital readmissions, and our clinically focused Member Rewards program for the current year.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 14, 2024. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this Form 10-K.
For a discussion of these items and comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see Item 7.
For a discussion of these items and comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see Item 7.
The following discussion and analysis does not include certain items related to the year ended December 31, 2023, including year-to-year comparisons between the year ended December 31, 2023 and the year ended December 31, 2022.
The following discussion and analysis does not include certain items related to the year ended December 31, 2024, including year-to-year comparisons between the year ended December 31, 2024 and the year ended December 31, 2023.
There were no other material cash requirements from known contractual obligations and commitments at December 31, 2024. For additional information regarding our remaining estimated contractual obligations and commitments, see Note 13 "Commitments and Contingencies" and Note 22 "Discontinued Operations" in the accompanying notes to the consolidated financial statements included in this Form 10-K.
There were no other material cash requirements from known contractual obligations and commitments at December 31, 2025. For additional information regarding our remaining estimated contractual obligations and commitments, see Note 13 "Commitments and Contingencies" in the accompanying notes to the consolidated financial statements included in this Form 10-K.
Clover Health's management team uses these non-GAAP financial measures in assessing Clover Health's performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to generally accepted accounting principles in the United States ("GAAP"), and the methods we use to compute them may differ from the methods used by other companies.
Clover Health's management team uses these non-GAAP financial measures in assessing Clover Health's performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP, and the methods we use to compute them may differ from the methods used by other companies.
Unregulated Entities At December 31, 2024 and December 31, 2023, total restricted and unrestricted cash, cash equivalents, and investments for the parent company, Clover Health Investments, Corp., and unregulated subsidiaries were $151.5 million and $136.8 million, respectively, with the increase at December 31, 2024 primarily reflecting cash provided by operating activities.
Unregulated Entities At December 31, 2025 and December 31, 2024, total restricted and unrestricted cash, cash equivalents, and investments for the parent company, Clover Health Investments, Corp., and unregulated subsidiaries were $122.0 million and $151.5 million, respectively, with the increase at December 31, 2024 primarily reflecting cash provided by operating activities.
Material cash requirements from known contractual obligations and commitments at December 31, 2024 include operating lease obligations of $2.3 million.
Material cash requirements from known contractual obligations and commitments at December 31, 2025 include operating lease obligations of $2.7 million.
At December 31, 2024 and 2023, total restricted and unrestricted cash, cash equivalents, and investments were $437.6 million and $417.3 million, respectively. These totals consist of $243.1 million and $228.6 million at December 31, 2024 and December 31, 2023, respectively, that specifically relate to available-for-sale and held-to-maturity investment securities.
At December 31, 2025 and 2024, total restricted and unrestricted cash, cash equivalents, and investments were $319.9 million and $437.6 million, respectively. These totals consist of $224.6 million and $243.1 million at December 31, 2025 and December 31, 2024, respectively, that specifically relate to available-for-sale and held-to-maturity investment securities.
Because our reserving practice is to consistently recognize the actuarial best estimate using an assumption of moderately adverse conditions as required by actuarial standards, there is a reasonable possibility that there could be variances between actual completion factors and those assumed in our December 31, 2024 and 2023 unpaid claim estimates.
Because our reserving practice is to consistently recognize the actuarial best estimate using an assumption of moderately adverse conditions as required by actuarial standards, there is a reasonable possibility that there could be variances between actual completion factors and those assumed in our December 31, 2025 and 2024 unpaid claim estimates, which may impact results of operations in the period such differences are recognized.
Our primary uses of cash from operating activities are payments for medical benefits and payments of operating expenses. For the year ended December 31, 2024, Net cash provided by operating activities was $82.5 million, which reflects a Net loss from continuing operations of $46.3 million. Non-cash activities primarily included a $114.3 million charge to Stock-based compensation expense.
For the year ended December 31, 2024, Net cash provided by operating activities was $82.5 million, which reflects a Net loss from continuing operations of $46.3 million. Non-cash activities primarily included a $114.3 million charge to Stock-based compensation expense, and a $0.5 million Loss on investment.
At December 31, 2024, we operated our MA plans in five states and 200 counties, with 82,664 members. 2024 Highlights 2025 Annual Election Period Results On January 13, 2025, the Company announced a 27% year-over-year growth of its MA membership during the most recent Annual Election Period ("AEP").
At December 31, 2025, we operated our MA plans in five states and 200 counties, with 113,803 members. 2025 Highlights 2026 Annual Election Period Results On January 14, 2026, the Company announced a 53% year-over-year growth of its MA membership during the most recent Annual Election Period.
For a detailed discussion of our regulatory requirements, including aggregate statutory capital and surplus as well as dividends paid from the subsidiaries to the parent, please refer to Notes 19 "Dividend Restrictions", 20 "Statutory Equity and Income", and 21 "Regulatory Matters" to the consolidated financial statements included in this Form 10-K, as well as in Part I.
For a detailed discussion of our regulatory requirements, including aggregate statutory capital and surplus as well as dividends paid from the subsidiaries to the parent, please refer to Notes 20 "Dividend Restrictions", 21 "Statutory Equity and Income", and 22 "Regulatory Matters" to the consolidated financial statements included in this Form 10-K, as well as in Part I. 64 Cash Flows The following table summarizes our consolidated cash flows for the years ended December 31, 2025 and 2024.
Non-GAAP Financial Measures We use non-GAAP measures in this Form 10-K, including Insurance BER, Adjusted SG&A and Adjusted EBITDA. These non-GAAP financial measures are provided to enhance the reader's understanding of Clover Health's past financial performance and our prospects for the future.
Non-GAAP Financial Measures We use non-GAAP measures in this Form 10-K, including Consolidated Gross profit, Adjusted SG&A, Adjusted EBITDA, and Adjusted Net income from continuing operations, and Insurance Benefits expense ratio ("BER") and Normalized Insurance BER. These non-GAAP financial measures are provided to enhance the reader's understanding of Clover Health's past financial performance and our prospects for the future.
Net cash provided by investing activities for the year ended December 31, 2023, of $140.0 million was primarily due to $316.2 million provided from the sale and maturity of investment securities. This was offset by $175.6 million used to purchase investments.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2025 of $4.1 million was primarily due to $211.2 million provided from the sale and maturity of investment securities. This was offset by $205.1 million used to purchase investments.
Year ended December 31, 2024 2023 (in thousands) Cash Flows Data: Net cash provided by (used in) operating activities from continuing operations $ 82,450 $ (35,148) Net cash provided by investing activities 565 140,013 Net cash used in financing activities (17,361) (5,070) Increase in cash, cash equivalents, and restricted cash from continuing operations $ 65,654 $ 99,795 Cash Requirements Our cash requirements within the next twelve months include medical claims payable, accounts payable and accrued liabilities, current liabilities, purchase commitments, and other obligations.
Year ended December 31, 2025 2024 (in thousands) Cash Flows Data: Net cash (used in) provided by operating activities from continuing operations $ (66,934) $ 82,450 Net cash provided by investing activities 4,076 565 Net cash used in financing activities (53,384) (17,361) (Decrease) increase in cash, cash equivalents, and restricted cash from continuing operations $ (116,242) $ 65,654 Cash Requirements Our cash requirements within the next twelve months include medical claims payable, accounts payable and accrued liabilities, current liabilities, purchase commitments, and other obligations.
IBNR represents a substantial portion of our unpaid claims, as reflected below: Year ended December 31, 2024 2023 Total % Total % (dollars in thousands) IBNR $ 131,230 83.9 % $ 121,961 89.0 % Other unpaid claims 19,862 12.7 10,261 7.5 Claims adjustment expense 5,304 3.4 4,878 3.6 Total unpaid claims and claims adjustment expense $ 156,396 100.0 % $ 137,100 100.0 % Management determines the unpaid claims and claims adjustment expense with a supplemental perspective provided by a third-party actuarial firm.
IBNR represents a substantial portion of our unpaid claims, as reflected below: Year ended December 31, 2025 2024 Total % Total % (dollars in thousands) IBNR $ 115,071 75.1 % $ 131,230 83.9 % Other unpaid claims 34,166 22.3 19,862 12.7 Claims adjustment expense 4,013 2.6 5,304 3.4 Total unpaid claims and claims adjustment expense $ 153,250 100.0 % $ 156,396 100.0 % 66 Management determines the unpaid claims and claims adjustment expense with a supplemental perspective provided by a third-party actuarial firm.
We believe that Adjusted Net income (loss) from continuing operations is helpful to investors in assessing the Company’s financial performance in the same manner as our management and our board of directors.
Adjusted Net income from continuing operations is a key measure used by our management team and the board of directors to understand and evaluate our operating performance and trends. We believe that Adjusted Net income from continuing operations is helpful to investors in assessing the Company’s financial performance in the same manner as our management and our board of directors.
For a description of these non-GAAP financial measures, including the reasons management uses such measures, and the reconciliations of these non-GAAP financial measures to the comparable GAAP measures, please see "Benefits expense ratio, gross and net", "Adjusted SG&A" and "Adjusted EBITDA" below. 63 Benefits expense ratio, gross and net. Benefits expense ratio ("Insurance BER") is a non-GAAP financial measure.
For a description of these non-GAAP financial measures, including the reasons management uses such measures, and the reconciliations of these non-GAAP financial measures to the comparable GAAP measures, please see "Consolidated Gross profit", "Adjusted SG&A", "Adjusted EBITDA", Adjusted Net income from continuing operations, and "Benefits expense ratio & Normalized benefits expense ratio" below.
The table below provides a reconciliation of Total SG&A, a GAAP financial measure, to Adjusted SG&A, a non-GAAP measure: Year ended December 31, 2024 2023 (in thousands) Salaries and benefits $ 232,454 $ 257,157 General and administrative expenses 176,480 183,089 Total SG&A (GAAP) 408,934 440,246 Adjustments Stock-based compensation (114,331) (140,931) Non-recurring legal expenses and settlements 110 (1,807) Adjusted SG&A (non-GAAP) $ 294,713 $ 297,508 Total revenues (GAAP) $ 1,371,131 $ 1,260,543 Adjusted SG&A (non-GAAP) as a percentage of Total revenues 21 % 24 % Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure defined by us as net loss from continuing operations before depreciation and amortization, loss on investment, interest expense, change in fair value of warrants, stock-based compensation, premium deficiency reserve benefit, restructuring costs, impairment of goodwill and other intangible assets, and non-recurring legal expenses and settlements.
The table below provides a reconciliation of Total SG&A, a GAAP financial measure, to Adjusted SG&A, a non-GAAP measure: Year ended December 31, 2025 2024 (in thousands) Salaries and benefits $ 225,475 $ 232,454 General and administrative expenses 214,270 176,480 Total SG&A (GAAP) 439,745 408,934 Adjustments: Stock-based compensation (103,657) (114,331) Non-recurring legal expenses and settlements (1,881) 110 Adjusted SG&A (non-GAAP) $ 334,207 $ 294,713 Total revenues (GAAP) $ 1,924,308 $ 1,371,131 Adjusted SG&A (non-GAAP) as a percentage of Total revenues 17.4 % 21.5 % Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure defined by us as net loss from continuing operations before depreciation and amortization, loss on investment, interest expense, change in fair value of warrants, stock-based compensation, premium deficiency reserve expense, restructuring (recoveries) costs, impairment of goodwill and other intangible assets, and non-recurring legal expenses and settlements.
Historically, we have financed our operations primarily from the proceeds we received through premiums earned under our MA plans. We expect that our cash, cash equivalents, restricted cash, investments, and our current projections of cash flows, taken together, will be sufficient to meet our projected operating and regulatory requirements for the next 12 months based on our current plans.
We expect that our cash, cash equivalents, restricted cash, investments, and our current projections of cash flows, taken together, will be sufficient to meet our projected operating and regulatory requirements for the next 12 months based on our current plans.
Contractual Obligations and Commitments We believe that funds from projected future operating cash flows, cash, cash equivalents, and investments will be sufficient for future operations and commitments, and for capital acquisitions and other strategic transactions, over at least the next 12 months.
Financing Arrangements There have been no material changes to our financing arrangements at December 31, 2025. 65 Contractual Obligations and Commitments We believe that funds from projected future operating cash flows, cash, cash equivalents, and investments will be sufficient for future operations and commitments, and for capital acquisitions and other strategic transactions, over at least the next 12 months.
The table below provides a reconciliation of Net loss from continuing operations, a GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure: Year ended December 31, 2024 2023 (in thousands) Net loss from continuing operations (GAAP): $ (46,266) $ (210,148) Adjustments Interest expense — 7 Depreciation and amortization 1,331 2,509 Change in fair value of warrants 50 86 Loss on investment 467 4,726 Stock-based compensation 114,331 140,931 Premium deficiency reserve benefit — (7,239) Restructuring costs 288 9,821 Non-recurring legal expenses and settlements (110) 1,807 Impairment of goodwill and other intangible assets — 15,945 Adjusted EBITDA (non-GAAP) $ 70,091 $ (41,555) 65 Adjusted Net income (loss) from continuing operations Adjusted Net income (loss) from continuing operations is a non-GAAP financial measure defined by us as net loss from continuing operations before stock-based compensation, premium deficiency reserve benefit, restructuring costs, non-recurring legal expenses and settlement, and impairment of goodwill and other intangible assets.
The table below provides a reconciliation of Net loss from continuing operations, a GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure: Year ended December 31, 2025 2024 (in thousands) Net loss from continuing operations (GAAP): $ (85,549) $ (46,266) Adjustments: Depreciation and amortization 1,686 1,331 Change in fair value of warrants 20 50 Loss on investment — 467 Stock-based compensation 103,657 114,331 Restructuring costs — 288 Non-recurring legal expenses and settlements 1,881 (110) Adjusted EBITDA (non-GAAP) $ 21,695 $ 70,091 61 Adjusted Net income from continuing operations Adjusted Net income from continuing operations is a non-GAAP financial measure defined by us as net loss from continuing operations before stock-based compensation, premium deficiency reserve benefit, restructuring costs, non-recurring legal expenses and settlement, and impairment of goodwill and other intangible assets.
The Company entered 2025 with over 100,000 members, approximately 95% of whom are enrolled in Clover’s flagship PPO plans. Geographic Presence Beginning in 2025, our MA plans will be available in a total of 200 counties and 5 states.
The Company entered 2026 with over 153,000 members, over 97% of whom are enrolled in the Company's flagship PPO plans. Geographic Presence Beginning in 2026, our MA plans will be available in a total of 203 counties and five states.
Insurance net medical claims incurred are our medical expenses and consist of the costs of claims, including the costs incurred for claims net of amounts ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential catastrophic losses. These expenses generally vary based on the total number of members and their utilization rate of our services.
We enter into reinsurance contracts to limit our exposure to potential catastrophic losses. These expenses generally vary based on the total number of members and their utilization rate of our services.
On October 10, 2024, the Company announced that CMS had increased the Star rating of its PPO Medicare Advantage plans to 4.0 Stars for 2025, which will affect payment year 2026.
CMS Star Ratings On October 9, 2025, the Company announced that CMS has decreased the Star rating of its PPO Medicare Advantage plans to 3.5 Stars for Star rating year 2026, which will affect payment year 2027. Additionally, CMS increased the rating of Clover’s HMO MA plan to 4.0 Stars.
Premiums anticipated to be received within twelve months based on the documented diagnostic criteria of our members are estimated and included in revenues for the period, including the member months for which the payment is designated by CMS. 62 Premiums ceded is the amount of premiums earned, gross ceded to reinsurers.
We receive premiums from CMS on a monthly basis based on our actuarial bid and the risk-adjustment model used by CMS. Premiums anticipated to be received within twelve months based on the documented diagnostic criteria of our members are estimated and included in revenues for the period, including the member months for which the payment is designated by CMS.
Ceded earned premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded earned premium is impacted by the level of our premiums earned, gross and any decision we make to adjust our reinsurance agreements. Insurance gross medical claims incurred.
The volume of our ceded earned premium is impacted by the level of our premiums earned, gross and any decision we make to adjust our reinsurance agreements. Insurance net medical claims incurred Insurance net medical claims incurred are our medical expenses and consist of the costs of claims, including the costs incurred for claims net of amounts ceded to reinsurers.
For further information, see Note 2 "Summary of Significant Accounting Policies" to the consolidated financial statements included in this Form 10-K. 70 Net Medical Claims Incurred Insurance net medical claims incurred is recognized in the period in which services are provided and includes paid claims and an estimate of the cost of services that have been incurred but not yet reported ("IBNR") and certain other unpaid claims and adjustments.
Net Medical Claims Incurred Insurance net medical claims incurred is recognized in the period in which services are provided and includes paid claims and an estimate of the cost of services that have been incurred but not yet reported ("IBNR") and certain other unpaid claims and adjustments.
The table below provides a reconciliation of Net medical claims incurred and Premiums earned, net, both of which are GAAP measures, to Insurance BER, a non-GAAP measure.
The tables below provide reconciliations of Insurance Net medical claims incurred, net and Premiums earned, net which are GAAP measures, to Insurance BER and Normalized Insurance BER, which represent non-GAAP measures.
Any member who joins a Clover plan after July 1 in a given year is considered a new member for the entirety of the following calendar year. We view our number of members and associated PMPM premiums earned and medical claim expenses, in the aggregate and on a PMPM basis, as useful metrics to assess our financial performance.
We view our number of members and associated PMPM premiums earned and medical claim expenses, in the aggregate and on a PMPM basis, as useful metrics to assess our financial performance.
We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions. We believe that the presentation of such metrics is useful to management and counterparties to model the performance of healthcare companies such as Clover.
We review several key performance measures, discussed below, to evaluate our business and results, measure performance, identify trends, formulate plans, and make strategic decisions.
Liquidity and Capital Resources We manage our liquidity and financial position in the context of our overall business strategy. We continually forecast and manage our cash, investments, working capital balances, and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility.
We continually forecast and manage our cash, investments, working capital balances, and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility. Historically, we have financed our operations primarily from the proceeds we received through premiums earned under our MA plans.
Our regulated insurance subsidiaries have not paid dividends to the parent, and applicable insurance laws restrict the ability of our regulated insurance subsidiary to declare and pay dividends to the parent.
Our use of operating cash derived from our unregulated subsidiaries is generally not restricted by departments of insurance (or comparable state regulatory agencies). Our regulated insurance subsidiaries have not paid dividends to the parent, and applicable insurance laws restrict the ability of our regulated insurance subsidiary to declare and pay dividends to the parent.
Cash, cash equivalents, and investments at the parent company were $146.8 million and $74.0 million at December 31, 2024 and December 31, 2023, respectively.
Cash, cash equivalents, and investments at the parent company were $107.2 million and $146.8 million at December 31, 2025 and December 31, 2024, respectively. Our unregulated subsidiaries held $14.8 million and $4.8 million of cash, cash equivalents, restricted cash, and investments at December 31, 2025 and December 31, 2024, respectively.
Premiums earned, net Premiums earned, net increased $109.1 million, or 9%, to $1,344.9 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily due to an increase in our risk adjustment revenue driving favorability as a result of the Company focusing on member retention.
The remaining increase was due to an increase in our risk adjustment revenue as a result of the Company's high member retention rate. Other income Other income increased $6.3 million, or 24%, to $32.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Net medical claims incurred Net medical claims incurred remained materially consistent for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Salaries and benefits Salaries and benefits decreased $24.7 million, or 10%, to $232.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Salaries and benefits Salaries and benefits decreased $7.0 million, or 3%, to $225.5 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Our unregulated subsidiaries held $4.8 million and $62.8 million of cash, cash equivalents, restricted cash, and investments at December 31, 2024 and December 31, 2023, respectively. 68 Regulated Entities At December 31, 2024 and December 31, 2023 total cash, cash equivalents, restricted cash, and investments for our regulated subsidiaries were $286.1 million and $280.5 million, respectively.
Regulated Entities At December 31, 2025 and December 31, 2024 total cash, cash equivalents, restricted cash, and investments for our regulated subsidiaries were $197.9 million and $286.1 million, respectively. Additionally, our regulated insurance subsidiaries held $178.1 million and $243.1 million of available-for-sale and held-to-maturity investment securities at December 31, 2025 and December 31, 2024, respectively.
Refer to Note 22 "Discontinued Operations" in the accompanying notes to the consolidated financial statements included in this Form 10-K for additional information. Key Performance Measures Starting in the first quarter of 2024, we manage our operations based on one reportable segment: Insurance. Through our Insurance segment, we provide PPO and HMO plans to Medicare Advantage members in several states.
Currently over 97% of our insurance members are members of our PPO Medicare Advantage Plans. Key Performance Measures We manage our operations based on one reportable segment: Insurance. Through our Insurance segment, we provide PPO and HMO plans to Medicare Advantage members in several states.
For additional information regarding our investing activities, please refer to Note 3 "Investment Securities" to our consolidated financial statements included in this Form 10-K. 69 Financing Activities Net cash used in financing activities for the year ended December 31, 2024 of $17.4 million was primarily the result of the acquisition of $16.5 million in Treasury stock and repurchases of $1.8 million of Class A Common stock.
Net cash used in financing activities for the year ended December 31, 2024 of $17.4 million was primarily the result of was primarily the result of cash paid for shares withheld related to stock-based compensation totaling $16.5 million and class A common share repurchases totaling $1.8 million.
Year ended December 31, Change between 2024 and 2023 2024 2023 ($) (%) (in thousands) Revenues Premiums earned, net (Net of ceded premiums of $399 and $444 for the years ended December 31, 2024 and 2023, respectively) $ 1,344,881 $ 1,235,769 $ 109,112 8.8 % Other income 26,250 24,774 1,476 6.0 Total revenues 1,371,131 1,260,543 110,588 8.8 Operating expenses Net medical claims incurred 1,006,327 1,004,590 1,737 0.2 Salaries and benefits 232,454 257,157 (24,703) (9.6) General and administrative expenses 176,480 183,089 (6,609) (3.6) Impairment of goodwill and other intangible assets — 15,945 (15,945) * Premium deficiency reserve benefit — (7,239) 7,239 * Depreciation and amortization 1,331 2,509 (1,178) (47.0) Restructuring costs 288 9,821 (9,533) (97.1) Total operating expenses 1,416,880 1,465,872 (48,992) (3.3) Loss from continuing operations (45,749) (205,329) 159,580 (77.7) Change in fair value of warrants 50 86 (36) (41.9) Interest expense — 7 (7) * Loss on investment 467 4,726 (4,259) (90.1) Net loss from continuing operations $ (46,266) $ (210,148) $ 163,882 (78.0) % Net income (loss) from discontinued operations (Note 22 ) 3,257 (3,213) 6,470 * Net loss $ (43,009) $ (213,361) $ 170,352 (79.8) % * Not presented because the current or prior period amount is zero or the amount for the line item changed from a gain to a loss (or vice versa) and thus yields a result that is not meaningful.
Year ended December 31, Change between 2025 and 2024 2025 2024 ($) (%) (in thousands) Revenues: Premiums earned, net (Net of ceded premiums of $375 and $399 for the years ended December 31, 2025 and 2024, respectively) $ 1,891,732 $ 1,344,881 $ 546,851 40.7 % Other income 32,576 26,250 6,326 24.1 Total revenues 1,924,308 1,371,131 553,177 40.3 Operating expenses: Net medical claims incurred 1,568,406 1,006,327 562,079 55.9 Salaries and benefits 225,475 232,454 (6,979) (3.0) General and administrative expenses 214,270 176,480 37,790 21.4 Depreciation and amortization 1,686 1,331 355 26.7 Restructuring costs — 288 (288) * Total operating expenses 2,009,837 1,416,880 592,957 41.8 Loss from continuing operations (85,529) (45,749) (39,780) 87.0 Change in fair value of warrants 20 50 (30) (60.0) Loss on investment — 467 (467) * Net loss from continuing operations $ (85,549) $ (46,266) $ (39,283) 84.9 % Net income from discontinued operations (Note 16 ) — 3,257 (3,257) * Net loss $ (85,549) $ (43,009) $ (42,540) 98.9 % * Not presented because the current or prior period amount is zero or the amount for the line item changed from a gain to a loss (or vice versa) and thus yields a result that is not meaningful.
Member months represents the number of months members are enrolled in a Clover Health plan in the period. Membership and associated premiums earned and medical claim expenses. We define new and returning members on a calendar year basis. Any member who is active on July 1 of a given year is considered a returning member in the following year.
Any member who is active on July 1 of a given year is considered a returning member in the following year. Any member who joins a Clover plan after July 1 in a given year is considered a new member for the entirety of the following calendar year.
From time to time, we enter into reinsurance contracts to limit our exposure to potential losses as well as to provide additional capacity for growth. Under these agreements, the "reinsurer," agrees to cover a portion of the claims of another insurer, i.e., us, the "primary insurer," in return for a portion of their premium.
Under these agreements, the "reinsurer," agrees to cover a portion of the claims of another insurer, i.e., us, the "primary insurer," in return for a portion of their premium. Ceded earned premiums are earned over the reinsurance contract period in proportion to the period of risk covered.
Through our Insurance segment, we provide PPO and HMO plans to members in several states.
We believe that the presentation of such metrics is useful to management and counterparties to model the performance of healthcare companies such as Clover. 58 Through our Insurance segment, we provide PPO and HMO plans to members in several states.
For the year ended December 31, 2023, Net cash used in operating activities was $35.1 million, which reflects a Net loss from continuing operations of $210.1 million.
Our primary uses of cash from operating activities are payments for medical benefits and payments of operating expenses. For the year ended December 31, 2025, Net cash used in operating activities was $66.9 million, which reflects a Net loss from continuing operations of $85.5 million. Non-cash activities primarily included a $103.7 million charge to Stock-based compensation expense.
Year ended December 31, 2024 2023 (in thousands) Net loss from continuing operations (GAAP) $ (46,266) $ (210,148) Adjustments Stock-based compensation 114,331 140,931 Premium deficiency reserve benefit — (7,239) Restructuring costs 288 9,821 Non-recurring legal expenses and settlements (110) 1,807 Impairment of goodwill and other intangible assets — 15,945 Adjusted Net income (loss) from continuing operations (non-GAAP) $ 68,243 $ (48,883) 66 Results of Operations Comparison of the Years ended December 31, 2024 and 2023 The following table summarizes our consolidated results of operations for the years ended December 31, 2024 and 2023.
Year ended December 31, 2025 2024 (in thousands) Net loss from continuing operations (GAAP) $ (85,549) $ (46,266) Adjustments: Stock-based compensation 103,657 114,331 Restructuring costs — 288 Non-recurring legal expenses and settlements 1,881 (110) Adjusted Net income from continuing operations (non-GAAP) $ 19,989 $ 68,243 Insurance Benefits expense ratio & Normalized Insurance Benefits expense ratio Insurance Benefits expense ratio ("BER") and Normalized Insurance Benefits expense ratio are non-GAAP financial measures.
Other income Other income increased $1.5 million, or 6%, to $26.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily attributable to an increase in net investment income due to a higher interest rate environment as compared to the prior period.
Premiums earned, net Premiums earned, net increased $546.9 million, or 41%, to $1,891.7 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to an increase in our average members over the period, which increased approximately 33%.
This decrease was primarily driven by a decrease in share-based compensation related costs. 67 General and administrative expenses General and administrative expenses decreased $6.6 million, or 4%, to $176.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease was primarily driven by a decrease in legal, consulting and contractor related costs.
This decrease was primarily attributable to lower variable incentive compensation and stock-based compensation, partially offset by higher base salaries driven by headcount growth. 63 General and administrative expenses General and administrative expenses increased $37.8 million, or 21%, to $214.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Removed
CMS Star Ratings In October 2023, CMS initially released the Company’s 2024 Star ratings, which related to the 2022 measurement year and would have impacted the 2025 payment year.
Added
We seek to improve care and lower costs for our members by empowering providers with intuitive data-driven, personalized insights to support treatment of members through our software platform, Clover Assistant.
Removed
For both of the Company's plans (PPO and HMO), CMS had awarded a rating of 3.0 Stars for the measurement year 2022, which represented a 0.5 Star rating decrease for both plans from the 2021 measurement year.
Added
Member months represents the number of months members are enrolled in a Clover Health plan in the period. Total revenues Total revenues represents the sum of Premiums earned, net and Other income for a given period.
Removed
Subsequently, on June 14, 2024, the Company announced that CMS had recalculated the Company's 2024 Star ratings for its PPO Medicare Advantage plans for the 2025 payment year, and had increased such plans’ rating by 0.5 Star, to a revised rating of 3.5 Stars.
Added
Premiums earned, net reflects the earned portion of premiums under our Medicare Advantage contracts with CMS, net of premiums ceded to reinsurers and inclusive of risk adjustment revenue. Other income primarily consists of investment income and other ancillary revenues.
Removed
Pursuant to CMS’s Medicare Advantage Star ratings system, CMS annually awards between 1.0 and 5.0 Stars to Medicare Advantage plans based on performance in several categories. In the calendar year 2024, the Company was paid on the basis of 3.5 Stars for both our PPO and HMO plans.
Added
We believe Total revenues is a useful measure of the overall scale and growth of our business, as it captures the aggregate economic inflows generated from our Insurance operations and related activities.
Removed
In payment year 2026, the Company expects to experience a general 5% quality bonus increase in benchmark rates as a result of its PPO contract being rated 4.0 Stars, in accordance with CMS regulations.
Added
Management uses Total revenues to evaluate period-over-period growth, assess the impact of membership levels and risk adjustment performance, analyze revenue trends relative to medical cost and operating expense trends, and support strategic planning and capital allocation decisions. Membership and associated premiums earned and medical claim expenses We define new and returning members on a calendar year basis.
Removed
Increased quality bonus payments enable the Company to further reinvest in more competitive benefits, which the Company believes will deliver greater value to its members while fueling continued membership growth. Additionally, CMS increased the rating of Clover’s HMO MA plan to 3.5 Stars.
Added
Premiums ceded is the amount of premiums earned, gross ceded to reinsurers. From time to time, we enter into reinsurance contracts to limit our exposure to potential losses as well as to provide additional capacity for growth.
Removed
As discussed earlier, as of December 31, 2024, over 95% of the Company's insurance members are members of our PPO Medicare Advantage Plans. 60 Counterpart Health During the second quarter of 2024, the Company launched Counterpart Health, Inc., or ("Counterpart Health"), a subsidiary of the Company which houses a new software-as-a-service and tech enabled services solution to bring the power of Counterpart Assistant technology to external payors and providers serving the Medicare eligible population.
Added
Consolidated Gross profit Consolidated Gross profit represents net loss from continuing operations before salaries and benefits, general and administrative expenses, depreciation and amortization, premium deficiency reserve expense, restructuring costs, impairment of goodwill and other intangible assets, interest expense, change in fair value of warrants, and loss on investment.
Removed
This external offering aims to equip clinician users with our already built, clinician-centric, and AI-powered care management platform. Strategically, Counterpart Health aims to extend the benefits of data-driven proven technology and personalized care to a wider audience, enabling enhanced patient outcomes and reduced healthcare costs across the nation.
Added
We believe that Consolidated Gross profit provides management, investors, and others a useful view of consolidated business performance and is much more informative of operational results. Accordingly, we believe that Consolidated Gross profit provides investors and others useful information to understand and evaluate our operating results in the same manner as our management and our board of directors.
Removed
Counterpart Health is complementary to Clover Health, and enables the Company to deploy and expand the reach of its existing technology asset for new potential growth and high margin business opportunities, with low startup costs. Revenue from our Counterpart Health SaaS and tech enabled services is included within Other income on our consolidated statements of operations and comprehensive loss.
Added
Year ended December 31, 2025 2024 (in thousands) Net loss from continuing operations (GAAP): $ (85,549) $ (46,266) Adjustments: Salaries and benefits 225,475 232,454 General and administrative expenses 214,270 176,480 Depreciation and amortization 1,686 1,331 Restructuring costs — 288 Change in fair value of warrants 20 50 Loss on investment — 467 Consolidated Gross profit (Non-GAAP) $ 355,902 $ 364,804 60 Adjusted SG&A Adjusted Salaries and benefits plus General and Administrative expenses ("SG&A") is a non-GAAP financial measure defined by us as total SG&A less stock-based compensation and non-recurring legal expenses and settlements.
Removed
ACO REACH We previously participated as a Direct Contracting Entity ("DCE") in the Centers for Medicare and Medicaid Services ("CMS") Accountable Care Organization Realizing Equity, Access, and Community Health Model ("ACO REACH Model" or "ACO REACH").
Added
Furthermore, Normalized Insurance BER adjusts out activity related to prior period development. Prior period development refers to changes in the Company’s Insurance Revenue and Insurance Medical claims levels from previous periods. Management believes that Normalized Insurance BER presents a clearer representation of performance during the current period being presented.
Removed
On December 1, 2023, the Company notified CMS that it will no longer participate as a REACH ACO in connection with the 2024 performance year. The remaining activity recognized during 2024 directly relates to prior performance years with CMS.
Added
Year ended December 31, 2025 2024 (in thousands) Net medical claims incurred, net (GAAP) $ 1,618,219 $ 1,010,289 Adjustments: Quality improvements 100,572 81,144 Insurance Benefits expense (non-GAAP) $ 1,718,791 $ 1,091,433 Premiums earned, net (GAAP) $ 1,891,732 $ 1,344,881 Insurance Benefits expense ratio (non-GAAP) 90.9 % 81.2 % Adjustments: Prior period development 0.6 3.0 Normalized Insurance Benefits expense ratio (non-GAAP) 91.5 % 84.2 % 62 Results of Operations Comparison of the Years ended December 31, 2025 and 2024 The following table summarizes our consolidated results of operations for the years ended December 31, 2025 and 2024.
Removed
As of January 1, 2024, this line of business met the definition of discontinued operations, and prior period amounts have been updated to conform to the current period presentation. At December 31, 2024, the Company did not anticipate any further material activity related to its discontinued operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+4 added−2 removed3 unchanged
Biggest changeTreasury fixed maturity securities. At December 31, 2024, none of our fixed maturity securities portfolio was unrated or rated below investment grade. 71 Inflation Risk The United States economy continues to be impacted by inflation.
Biggest changeTreasury fixed maturity securities. At December 31, 2025, none of our fixed maturity securities portfolio was unrated or rated below investment grade. Inflation Risk The United States economy has experienced elevated levels of inflation in recent years, and while inflation has moderated from prior peaks, it remains above historical norms and the Federal Reserve’s long-term target.
Removed
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of Operating expenses as a percentage of Total revenues if the premiums earned or other payments we receive from CMS do not increase with these increased costs.
Added
Ongoing inflationary pressures and changes in interest rates could adversely affect our operating results if increases in medical costs, prescription drug prices, provider reimbursement rates, employee compensation, or other operating expenses are not fully offset by corresponding increases in Medicare Advantage benchmark rates or other forms of reimbursement.
Removed
We continue to monitor the potential impacts from inflation and are prepared to respond to inflationary pressures as necessary. 72
Added
As a Medicare Advantage insurer, we are required to submit bids to CMS based on projected medical and administrative costs for future contract periods, which limits our ability to adjust pricing in the near term in response to unanticipated inflationary trends.
Added
In addition, inflationary conditions and interest rate volatility may affect the fair value and returns of our investment portfolio, which consists primarily of fixed-income securities, and could contribute to volatility in accumulated other comprehensive income or impact statutory capital levels of our regulated insurance subsidiaries.
Added
Prolonged inflationary conditions could place pressure on margins, liquidity, or capital if cost trends or market conditions evolve unfavorably relative to reimbursement adjustments. 67

Other CLOV 10-K year-over-year comparisons