Health Net 2005 Annual Report Download - page 9

services internationally. Its international EAP targets domestic customers with employees in other
countries.
•Health care services integration: MHN is piloting an expanded workplace service offering to members
of Health Net-affiliated medical plans. Services include integrated disease management, telephonic
behavior coaching and return-to-work programs.
•Aggressive market-facing initiatives: MHN has continued to develop its product and service offering as
well as its customer base. For example, It’s Your Life - MHN’s member-exclusive behavioral change
promotion program - now includes new health and wellness tools for, among other things, weight
management, nutrition, smoking cessation. Other new programs include innovative developments for
coping with anger management, sexual harassment, substance abuse, DUI and other critical behavioral
health issues.
In addition, MHN has been proactive in responding to national disasters, such as Hurricane Katrina. MHN
has acted as a first responder in many instances, deploying counselors at specific impacted sites to provide
information on available resources and to provide special psychosocial support as needed. For Hurricane Katrina,
MHN counselors were on site within 24 hours after counseling support was requested.
MHN’s products and services were being provided to over 7.3 million individuals as of December 31, 2005,
with approximately 1.9 million individuals under risk-based programs, approximately 2.4 million individuals
under self-funded programs and approximately 3.0 million individuals under EAPs.
In 2005, MHN’s total revenues were $223 million. Of that amount, $149 million represented revenues from
business with MHN affiliates and $74 million represented revenues from non-affiliate business.
Dental and Vision. As a result of the sale of our dental and vision subsidiaries in 2003, we no longer
underwrite or administer stand-alone dental and vision products. We continue to make available to our current
and prospective members in Arizona, California and Oregon, private label dental products through a strategic
relationship with SafeGuard Health Enterprises, Inc. (“SafeGuard”) and private label vision products through a
strategic relationship with EyeMed Vision Care LLC (“EyeMed”). The stand-alone dental products are
underwritten and administered by SafeGuard companies and the stand alone vision products are underwritten by
Fidelity Security Life Insurance Company and administered by EyeMed affiliated companies.
Government Contracts Segment
Our Government Contracts segment includes our TRICARE contract for the North Region and other health
care related government contracts that we administer for the U.S. Department of Defense (the “Department of
Defense”) and the U.S. Department of Veterans Affairs. Certain components of these contracts are subcontracted
to unrelated third parties.
Approximately 42% of our revenues relate to federal, state and local government health care coverage
programs such as TRICARE and our Medicaid and Medicare programs (which are included as part of our Health
Plan Services segment). Under government-funded health programs, the government payor typically determines
premium and reimbursement levels. Contracts under these programs are generally subject to frequent change,
including changes which may reduce the number of persons enrolled or eligible, reduce the revenue received by
us or increase our administrative or health care costs under such programs. The amount of government
receivables set forth in our consolidated financial statements represents our best estimate of the government’s
liability to us under TRICARE and other federal government contracts. In general, government receivables are
estimates and are subject to government audit and negotiation. See “Item 1A. Risk Factors—A significant
reduction in revenues from the government programs in which we participate could have an adverse effect on our
business, financial condition and results of operations.”
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