2021 Annual Report

Annual Report 2021

eHealth, Inc. (Nasdaq: EHTH) is a leading health insurance marketplace powered by a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstance. Our platform leverages technology to solve a critical problem in a large and growing market by aiding consumers in what has traditionally been a complex, confusing and opaque health insurance purchasing process.

Our omni-channel consumer engagement platform enables consumers to use our services online, by telephone with a licensed insurance agent or through a hybrid online assisted interaction. We have created a consumer-centric marketplace that offers broad choice of insurance products, including thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from approximately 200 health insurance carriers across all fifty states and the District of Columbia. We strive to be the most trusted partner to the consumer in their life's journey through the health insurance market.

Dear Fellow Stockholders,

Having joined eHealth as CEO in 2021, I am providing my first annual report at an important inflection point for the Company. Helping Americans find a health plan that meets their budget and circum-stances is a massive sector opportunity with no clear market leader. eHealth is in a unique position to leverage recent process improve-ments and transform its operations to better serve consumers and capture leadership of our sector.

With four decades of healthcare industry experience, I joined eHealth based on my deep appreciation for the Company's unique customer-centric platform and a strong belief in the significant opportunities ahead. We are harnessing powerful secular trends including an expanding Medicare population and the growing popularity of Medicare Advantage. Consumers across all demographics appreciate choice and the ability to comparison shop, but they need help evaluating the volume and complexity of plan options.

FRAN SOISTMANChief Executive Officer

The eHealth omni-channel platform is a strong competitive advantage at a time when seniors are increasingly comfortable using the internet for research, shopping and social interaction - a trend accelerated by the pandemic that many expect will be permanent. Each year, the number of seniors shopping for health care online grows.

In 2021, eHealth invested in deep process improvements to deliver higher-quality, longer-lasting enrollments. This initiative is based on the recognition that we must focus both on volume and sustainability of enrollments in order to deliver maximum value to both consum-ers and shareholders.

In 2022, we have undertaken a transformation initiative to dramatical-ly improve our cost structure and make our operations more efficient, while delivering high-quality enrollments to our carrier partners.

Like peer companies across our sector, we have faced challenges. However, we strongly believe that eHealth is unique in our approach to confronting and overcoming setbacks. We also believe the steps we've taken to improve efficiency and customer service position eHealth to seize market leadership in the large rapidly growing sector providing omni-channel enrollment support to tens of mil-lions of American consumers.

2021 INVESTMENTS IN THE CUSTOMER EXPERIENCE

In 2021 we made a number of strategic investments aimed at im-proving the quality and long-term value of our enrollments in our Medicare business. This includes a quick and decisive shift from a telesales model mostly made up of vendor agents, to a predomi-nantly proprietary sales force, and a major upgrade of our call center technology to a cloud-based platform.

We believe these changes are essential to the long-term success of our company. Early results are positive and we have received recognition from carrier partners on the quality of enrollments that we are producing.

However, disruption related to training and transition negatively impacted our 2021 enrollment volumes and acquisition costs, contributing to a year-over-year decline in our Medicare enrollments, revenue and profitability. Looking ahead, we are committed to rapid assimilation of the process improvements, cost management and improving margins.

Our unassisted online business continues to be a bright spot, demonstrating strong year-over-year growth in 2021 and expanding its contribution to the overall enrollment mix. We continue to observe favorable retention rates in this channel and improvement in the rate of conversion of online visitors. We believe this success reflects enhancements to user experience on our e-commerce platform and customers' becoming increasingly comfortable transacting online.

Our year-end balance sheet remained solid with $123.2 million in cash, cash equivalents and marketable securities; $254.8 million in short-term commissions receivable expected to be collected over the next 12 months and $653.4 million in long-term commissions receivable.

We also took important steps to strengthen our senior leadership team. In September, Christine Janofsky joined as our new Chief Financial Officer, bringing more than 20 years of finance and insurance experience. In March of 2022, we hired Roman Rariy as our Chief Operating Officer and Chief Transformation Officer to lead our efforts to enhance operational performance.

Key 2021 Metrics:

• •Revenue of $538.2 million

• •Adjusted EBITDA of $(22.7) million1

• •Net loss of $(104.4) million

• •Cash and marketable securities at year-end of $123.2 million

• •Commissions receivable at year-end of $908.2 million

• •Estimated paying Medicare membership grew 10% to 959K members at year-end

• •New Medicare approved applications of 501K

• •21% of Medicare applications submitted online with no agent assistance

2022 STRATEGIC VISION AND PRIORITIESeHealth entered the new year with an improved product offering and a sharp focus on transforming our operations to improve prof-itability while continuously improving the quality and sustainability of our enrollments. To reach these goals, we are committed to the following priorities:

1. Transforming our cost structure and operational efficiency.A joint effort between our finance team and operational leaders targets significant cost savings while preserving our competitive edge and focusing on initiatives with the highest in-period ROIs. This is expected to result in a slowing of our year-over-year growth rate in 2022. We expect to retuto more accelerated growth in 2023 on a substantially improved cost and operational foundation, and more effective distribution channels.

(1) Adjusted EBITDA is calculated by excluding paid-in-kind dividends and change in preferred stock redemption value, interest income and expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, restructuring and reorganization charges, amortization of intangible assets, other income (expense), impairment charges, and other non-recurring charges to GAAP net income (loss) attributable to common stockholders. Other non-recurring charges to GAAP net income (loss) attributable to common stockholders may include transaction expenses in connection with capital raising transactions (whether debt, equity or equity-linked) and acquisitions, whether or not consummated, purchase price adjustments and the cumulative effect of a change in accounting principles. A reconciliation between Adjusted EBITDA and GAAP net loss is included in Appendix A to our 2022 proxy statement.

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eHealth Inc. published this content on 04 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2022 21:29:04 UTC.