Health Net 2005 Annual Report Download - page 3

PART I
Item 1. Business.
General
We are an integrated managed care organization that delivers managed health care services through health
plans and government sponsored managed care plans. We operate and conduct our businesses through
subsidiaries of Health Net, Inc., which is among the nation’s largest publicly traded managed health care
companies. In this Annual Report on Form 10-K, unless the context otherwise requires, the terms “Company,”
“Health Net,” “we,” “us,” and “our” refer to Health Net, Inc. and its subsidiaries.
Our health plans and government contracts subsidiaries provide health benefits through our health
maintenance organizations (“HMOs”), insured preferred provider organizations (“PPOs”) and point-of-service
(“POS”) plans to approximately 6.3 million individuals in 27 states and the District of Columbia through group,
individual, Medicare, Medicaid, TRICARE and Veterans Affairs programs. Our behavioral health subsidiary
provides mental health benefits to approximately 7.3 million individuals in all 50 states. Our subsidiaries also
offer managed health care products related to prescription drugs and offer managed health care product
coordination for multi-region employers and administrative services for medical groups and self-funded benefits
programs. In addition, we own health and life insurance companies licensed to sell exclusive provider
organization (“EPO”), PPO, POS and indemnity products, as well as auxiliary non-health products such as life
and accidental death and dismemberment, dental, vision, behavioral health and disability insurance, in 46 states
and the District of Columbia.
Our executive offices are located at 21650 Oxnard Street, Woodland Hills, California 91367, and our
Internet web site address is www.healthnet.com.
We make available free of charge on or through our Internet web site, www.healthnet.com, our annual report
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and all amendments to those
reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with,
or furnish it to, the Securities and Exchange Commission (“SEC”). Copies of our Corporate Governance
Guidelines, Code of Business Conduct and Ethics and charters for the Audit Committee, Compensation
Committee, Governance Committee and Finance Committee of our Board of Directors are also available on our
Internet web site. We will provide electronic or paper copies free of charge upon request.
Segment Information
We currently operate within two reportable segments, Health Plan Services and Government Contracts, each
of which is described below. For additional financial information regarding our reportable segments, see “Results
of Operations” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operation” and Note 15 in the Notes to Consolidated Financial Statements included as part of this Annual Report
on Form 10-K.
Health Plan Services Segment
Our Health Plan Services segment includes the operations of our commercial, Medicare and Medicaid health
plans in Arizona, California, Connecticut, New Jersey, New York and Oregon, the operations of our health and
life insurance companies and our behavioral health and pharmaceutical services subsidiaries. In addition,
beginning January 1, 2006, we commenced expansion of our commercial business in the State of Washington. As
of December 31, 2005, we had approximately 3.3 million at-risk and 0.1 million administrative services only
(“ASO”) members in our Health Plan Services segment.
Managed Health Care Operations
We offer a full spectrum of managed health care products and services. Our strategy is to offer to employers
and individuals a wide range of managed health care products and services that, among other things, provide
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