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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December 31, 2013
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from to
Commission File Number: 1-12718
HEALTH NET, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-4288333
(State or Other Jurisdiction
of Incorporation or Organization) (I.R.S. Employer
Identification No.)
21650 Oxnard Street, Woodland Hills, CA 91367
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (818) 676-6000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $.001 par value The New York Stock Exchange
Rights to Purchase Series A Junior Participating Preferred Stock The New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes No
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 28, 2013 was $2,480,717,493
(which represents 77,960,952 shares of Common Stock held by such non-affiliates multiplied by $31.82, the closing sales price of such
stock on the New York Stock Exchange on June 28, 2013).
The number of shares outstanding of the registrant’s Common Stock as of February 24, 2014 was 80,011,208 (excluding 70,980,801
shares held as treasury stock). Documents Incorporated By Reference
Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement for its 2014
Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the year
ended December 31, 2013.

Table of contents

  • Page 1
    ... (I.R.S. Employer Identification No.) 21650 Oxnard Street, Woodland Hills, CA (Address of Principal Executive Offices) 91367 (Zip Code) Registrant's Telephone Number, Including Area Code: (818) 676-6000 Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Common Stock...

  • Page 2
    ...Item 8-Financial Statements and Supplementary Data...Item 9-Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...Item 9A-Controls and Procedures...Item 9B-Other Information...PART III. Item 10-Directors, Executive Officers of the Registrant and Corporate Governance...

  • Page 3
    ... our Board of Directors are also available on our Internet website. We will provide electronic or paper copies free of charge upon request. Please direct your written request to Investor Relations, Health Net, Inc., 21650 Oxnard Street, Woodland Hills, California 91367, or contact Investor Relations...

  • Page 4
    ...of our California membership is in HMO plans. PPO Plans: Our preferred provider organization or PPO plans offer coverage for services received from any health care provider, with benefits generally paid at a higher level when care is received from a participating network provider. Coverage typically...

  • Page 5
    ... the premium revenue we receive from our HMO, POS, PPO and EPO products. In California, we generally utilize a "capitation" payment model. Under a capitation payment model, we pay a provider group a fixed amount per member on a regular basis, usually monthly, and the provider group accepts the risk...

  • Page 6
    .... Our Arizona health plan operations are conducted by our subsidiaries, Health Net of Arizona, Inc., Health Net Access, Inc. and Health Net Life Insurance Company ("HNL"). Our commercial membership in Arizona was 108,227 including 5,186 tailored network members, as of December 31, 2013. Our Medicare...

  • Page 7
    ... Arizona. California To enroll in our Medi-Cal products, an individual must be eligible for Medicaid benefits in accordance with California's regulatory requirements. The State of California's Department of Health Care Services ("DHCS") pays us a monthly fee for the coverage of our Medicaid members...

  • Page 8
    ... Medi-Cal members resided in Los Angeles County, representing approximately 51% of our Medi-Cal membership. Approximately 51% of our total California state health programs membership is in Los Angeles county. In November 2012, we entered into a state-sponsored health plans rate settlement agreement...

  • Page 9
    ...appeals, provider network establishment, and utilization management functions. HNCS will also perform care coordination, case management services, and health risk assessments, and develop individualized care plans for enrollees. We do not currently provide all the benefits required for participation...

  • Page 10
    ... 2014, we have enrolled approximately 136,000 active new individual members through the California, Arizona and Oregon exchanges, including 85,000 in our Silver tier HMO product, CommunityCareSM. We believe the exchanges represent a significant new commercial business opportunity for the company and...

  • Page 11
    ...lowest cost for Health Net members. HNPS contracts with national health care providers, vendors, drug manufacturers and pharmacy distribution networks (directly and indirectly through a third party vendor), oversees pharmacy claims and administration, reviews and evaluates new FDA-approved drugs for...

  • Page 12
    ... companies. DBP also administers dental products and coverage we provide to our members in Oregon and Washington. Liberty Dental Plans of California, Inc. serves as the underwriter and administrator for the dental services we provide to our Medi-Cal and Healthy Families program enrollees. Vision...

  • Page 13
    ... Community Care Program In September 2013, the Department of Veterans Affairs ("VA") awarded HNFS a contract under its new Patient Centered Community Care program ("PC3 Program"). This new PC3 Program provides eligible veterans coordinated, timely access to care through a comprehensive network...

  • Page 14
    ... provider group. Depending on state law, we could be liable for such claims. In our PPO plans, members are not required to select a primary care physician and generally do not require prior authorization for specialty care. For services provided under our PPO products and the out-of-network benefits...

  • Page 15
    ... their service areas. These hospital contracts generally have multi-year terms or annual terms with automatic renewals and provide for payments on a variety of bases, including capitation, per diem rates, case rates and discounted fee-forservice schedules. Covered hospital-based care for our members...

  • Page 16
    ... monthly premiums, including changes in benefit design to address employer group needs and anticipated health care utilization rates as forecast by us based on the demographic composition of, and our prior experience in, our service areas. Premiums are also affected by applicable state and federal...

  • Page 17
    ... believe that managing health care costs is an essential function for a managed care company. Among the medical management techniques we utilize to contain the growth of health care costs are pre-authorization or certification for outpatient and inpatient hospitalizations and a concurrent review of...

  • Page 18
    ...to certain exceptions. The ACA also requires the establishment of state-run or federally facilitated "exchanges" where individuals and small groups may purchase health coverage. We are participating as QHPs in the currently operating exchanges in California, Oregon and Arizona, with the initial open...

  • Page 19
    ... Secretary of HHS); limiting Medicare Advantage payment rates; increasing mandated "essential health benefits" in some lines of business; specifying certain actuarial value and cost-sharing requirements; eliminating medical underwriting for medical insurance coverage decisions, including "guaranteed...

  • Page 20
    ... requirement that large employers provide coverage to full-time employees or pay a penalty, along with related reporting requirements, and the requirement that federal and state small business health option program exchanges be able to facilitate employee choice among multiple health plans, due to...

  • Page 21
    ... must be followed by states with respect to these programs. Medicaid is administered at the federal level by CMS.In October 2011, CMS approved certain elements of California's 2011-2012 budget proposals to reduce Medi-Cal provider reimbursement rates as authorized by California Assembly Bill 97 (AB...

  • Page 22
    ...Access Health Net of California Health Net Community Solutions Health Net Health Plan of Oregon Health Net Life Insurance Company (Arizona, Washington and California PPO) MHN Arizona Department of Insurance Arizona Health Care Cost Containment System (AHCCCS) California Department of Managed Health...

  • Page 23
    ...These employees perform a variety of functions, including, among other things, provision of administrative services for employers, providers and members; negotiation of agreements with physician groups, hospitals, pharmacies and other health care providers; handling of claims for payment of hospital...

  • Page 24
    ... for coverage of Medicare-eligible individuals and our contracts with California state agencies for federally-subsidized Medicaid and CHIP programs. Medicare premiums accounted for 27%, 27% and 25% of our Western Region Operations segment health plan services premium revenues in 2013, 2012 and 2011...

  • Page 25
    ... costs; regulatory issues with federal and state agencies including, but not limited to, the California Department of Managed Health Care, the Centers for Medicare & Medicaid Services, the Office of Civil Rights of the U.S. Department of Health and Human Services and state departments of insurance...

  • Page 26
    ... year to total net premiums written for the U.S. health insurance industry, subject to certain exceptions. We expect to make our first payment of the health insurer fee in 2014. We currently estimate our allocable share of the health insurer fee payable in 2014, based upon 2013 premiums, will be...

  • Page 27
    ...including increasing medical and other health care costs, and could materially adversely affect our business, cash flows, financial condition and results of operations. In addition, while the ACA does also present significant new business opportunities for us, we and other health insurance companies...

  • Page 28
    ... to require prior approval for individual and small group rates by the CDI has qualified for the 2014 ballot. In addition, state exchange boards in California have the ability to limit the number of plans and negotiate the price of coverage sold on these exchanges and to limit the service areas in...

  • Page 29
    ... on health insurers and increase our role in processing enrollments and plan changes and handling customer inquiries beyond what was initially anticipated. In addition, while we have adapted our products and sales practices to the new direct-to-consumer channel opened by the exchanges, on a going...

  • Page 30
    ... applicable to the individual and small group markets that took effect in 2014 and will shape the economics of health care coverage both within and outside the exchanges. These risk adjustment provisions will effectively transfer funds from health plans with relatively lower risk enrollees to plans...

  • Page 31
    ... of hospital and other provider contracts, coupled with continued consolidation of physician, hospital and other provider groups, may result in increased health care costs or limit our ability to negotiate favorable rates. Government-imposed limitations on Medicare and Medicaid reimbursement have...

  • Page 32
    ... financial results. For example, if medical costs increased by 1% without a proportional change in related revenues for our health plan products, our annual pre-tax income for 2013 would have been reduced by approximately $89 million. The inability to accurately forecast and manage our health care...

  • Page 33
    ... and federally facilitated exchanges has and may continue to encourage new market participants and lead to increased competition in the individual and small group markets. There also is a risk that our customers may decide to perform for themselves functions or services currently provided by...

  • Page 34
    ... policy language and benefits, appeals and grievances with respect to benefit determinations, provider contracting, utilization management, issuance and termination of policies, claims payment practices and a wide variety of other regulations relating to the development and operation of health plans...

  • Page 35
    ... membership, increase costs or adversely affect our ability to bring new products to market as forecasted. See "-A significant reduction in revenues from the government programs in which we participate or other changes to these programs could have a material adverse effect on our business, financial...

  • Page 36
    ...the information exchange between us and these third parties will allow us to efficiently manage member care, which may adversely affect our results of operations, particularly as our Medi-Cal membership increases through, among other things, Medicaid expansion. Dual eligibles will have the option to...

  • Page 37
    ... or reimbursement levels by the government payor, such as Medicare Advantage payment rates as provided in the ACA, delays payments to us or increases premiums by less than our costs increase. If we are unable to make offsetting adjustments through supplemental premiums and changes in benefit plans...

  • Page 38
    In addition, the reimbursement rates we receive from federal and state governments relating to our governmentfunded health care coverage programs may be subject to change. For example, on April 1, 2013, CMS announced final 2014 Medicare Advantage benchmark payment rates for 2014 Medicare Advantage ...

  • Page 39
    ... business, accounting for approximately 27% of our total premium revenue in our Western Region Operations reportable segment in 2013 and an expected 22% in 2014. The ACA includes, among other things, provisions that significantly reduce the government's Medicare payment rates. For more information...

  • Page 40
    ... in the Star Ratings system are changed annually and Star Ratings thresholds are based on performance of Medicare Advantage plans nationally. For the 2014 Star rating (2015 payment year), our California HMO and Oregon PPO contracts with CMS were measured at 4.0 Stars, our Arizona HMO was measured at...

  • Page 41
    ... utilize claims submissions, medical records and other medical data as provided by health care providers as the basis for payment requests that we submit to CMS under the risk adjustment model for our Medicare Advantage contracts. CMS and the Office of Inspector General for HHS periodically perform...

  • Page 42
    ...as claims by members alleging failure to pay for or provide health care, poor outcomes for care delivered or arranged, improper rescission, termination or non-renewal of coverage, and insufficient payments for out-of-network services. These legal actions also include claims brought against companies...

  • Page 43
    ... are not limited to, information technology infrastructure and applications solutions providers, medical management providers, claims administration providers, billing and enrollment providers, third party providers of actuarial services, call center providers and specialty service providers. We are...

  • Page 44
    ...% of total commercial risk membership as of December 31, 2013, compared with 35% as of December 31, 2012. For additional information on our tailored network products and innovative provider relationships, see "Item 1. Business-Segment Information-Western Region Operations Segment-Managed Health Care...

  • Page 45
    ... risk. In the case of our CommunityCare product offering we have a hybrid fee arrangement, which includes direct fee for service (FFS) payment to certain providers. For additional detail on the risk adjustment program and how the ACA and related proposals and initiatives are changing the health care...

  • Page 46
    ... position of hospitals and other providers and, as a result, could adversely affect our contracted rates with such parties and increase our medical costs. High unemployment rates and significant employment layoffs and downsizings may also impact the number of enrollees in managed care programs and...

  • Page 47
    ... from the government programs in which we participate or other changes to these programs could have a material adverse effect on our business, financial condition or results of operations" for additional information regarding proposals to reduce California's Medi-Cal provider reimbursement rates and...

  • Page 48
    ...the health insurer fee and the reinsurance, risk adjustment and risk corridors programs. Among other things, we have been required to define and implement new billing and payment capabilities and support new requests from third parties and government agencies for data collection and reporting. These...

  • Page 49
    putative class action lawsuits brought in federal and state courts on behalf of individuals who claim to have been affected by this incident and the matter remains under review by certain regulatory agencies. See "Item 3. Legal Proceedings" and "-We face risks related to litigation, which, if ...

  • Page 50
    ... the competitive position of insurance companies and managed care companies. We believe our claims paying ability and financial strength ratings also are important factors in marketing our products to certain of our customers. In addition, our debt ratings impact both the cost and availability of...

  • Page 51
    ... managed care, legislative or regulatory actions, political developments, litigation or threatened litigation, health care cost trends, proposed premium increases, pricing trends, reductions in government reimbursement, competition, earnings, proposed changes in or the introduction of new government...

  • Page 52
    ... done in recent years to price for the expanded benefits required by, and the fees, taxes and assessments imposed by, the ACA or to respond to any increase in medical cost trends. In addition, health care, health care reform and its implementation and related health care reform proposals have been...

  • Page 53
    ... agents for sales in the large group, small group and individual markets, and we have implemented similar reductions in those markets in California and Arizona. In addition, the implementation of certain provisions of the ACA, including the exchanges, will open new distribution channels to customers...

  • Page 54
    ... to, among other things, increased utilization of health care services and the associated increased health care costs due to increased in-patient and out-patient hospital costs, disruption of information and payment systems and the cost of any anti-viral or other medication used to treat affected...

  • Page 55
    ... of self-insured customers; failure to protect our proprietary information; and failure of our corporate governance policies or procedures. Item 1B. Unresolved Staff Comments. None. Item 2. Properties. We lease office space for our principal executive offices in Woodland Hills, California, which is...

  • Page 56
    ..., non-medical counseling at U.S. military installations throughout the country. On June 14, 2011, two former MFLCs filed a putative class action in the Superior Court of the State of Washington for Pierce County against Health Net, Inc., MHNGS, and MHN Services d/b/a MHN Services Corporation (also...

  • Page 57
    ... the terms of the Settlement Agreement, which would cover all individuals whose personal information was identified as being on the unaccounted-for server drives, class members who did not previously accept our offer of the credit monitoring and related services described above would be eligible to...

  • Page 58
    ... litigation regarding, the health care industry's business practices, including, without limitation, information privacy, premium rate increases, utilization management, appeal and grievance processing, rescission of insurance coverage and claims payment practices. In addition, in the ordinary...

  • Page 59
    ... Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The following table sets forth the high and low sales prices of the Company's common stock, par value $.001 per share, on The New York Stock Exchange ("NYSE") since January 2012. High Calendar Quarter...

  • Page 60
    ... 31, 2013 was $280.0 million. For additional information on our stock repurchase program, see Note 9 to our consolidated financial statements. Under our various stock option and long-term incentive plans, employees and non-employee directors may elect for the Company to withhold shares to satisfy...

  • Page 61
    ... Peer Group Index ...$ All historical performance data reflects the performance of each company's stock only and does not include the historical performance data of acquired companies. The preceding graph and related information are being furnished solely to accompany this Annual Report on Form 10...

  • Page 62
    ... financial statements and notes thereto contained elsewhere in this Annual Report on Form 10-K. Year Ended December 31, 2013 REVENUES: Health plan services premiums ...Government contracts ...Net investment income ...Administrative services fees and other income ...Divested operations and services...

  • Page 63
    ... December 31, 2012 were impacted by pretax costs of $35.6 million related to our G&A cost reduction efforts, a $5.0 million expense related to the early termination of a medical management contract and $1.3 million in litigation-related expenses net of an insurance reimbursement. For 2011, includes...

  • Page 64
    ... TRICARE, and Veterans Affairs programs. We also offer behavioral health, substance abuse and employee assistance programs, managed health care products related to prescription drugs, managed health care product coordination for multi-region employers, and administrative services for medical groups...

  • Page 65
    ... of service ("POS") and preferred provider organization ("PPO") premiums from employer groups and individuals and from Medicare recipients who have purchased supplemental benefit coverage (which premiums are based on a predetermined prepaid fee), Medicaid revenues based on multi-year contracts to...

  • Page 66
    ...tax on high premium insurance policies; requiring premium rate reviews in certain lines of business; stipulating a minimum medical loss ratio (as adopted by the Secretary of HHS); limiting Medicare Advantage payment rates; increasing mandated "essential health benefits" in some lines of business; 64

  • Page 67
    ... to low-income individuals who purchase insurance through federally facilitated exchanges; a number of cases challenging the rule that all health plans must provide contraceptive services; and legislative changes to the ACA, such as with respect to delaying the collection of reinsurance fees...

  • Page 68
    ... in our Cal MediConnect program is scheduled to begin no earlier than April 1, 2014. See "-Results of Operations-Western Region Operations Reportable Segment-California Coordinated Care Initiative" for more information. 2013 Financial Performance Summary Health Net's financial performance in 2013 is...

  • Page 69
    ... 31, 2013, 2012 and 2011. Year Ended December 31, 2013 2012 2011 (Dollars in thousands, except per share data) Revenues Health plan services premiums ...$ 10,377,073 572,266 Government contracts ...69,613 Net investment income...34,791 Administrative services fees and other income...- Divested...

  • Page 70
    ... in the year ended December 31, 2012. As of December 31, 2013 and 2012, respectively, we had no Medicare stand-alone prescription drug plan members. In the year ended December 31, 2013, we reported net income of $170.1 million or $2.12 per diluted share as compared to net income of $122.1 million or...

  • Page 71
    ... the TRICARE North Region, which was a risk-based contract, to the new T-3 contract, which is a cost reimbursement plus fixed fee contract. For additional information on our T-3 contract, see "-Government Contracts Reportable Segment" and Note 2 to our consolidated financial statements. Health plan...

  • Page 72
    ... 31, 2013 2012 (Dollars in millions) Reconciliation of Adjusted Days Claims Payable: (1) Reserve for Claims and Other Settlements-GAAP ...Less: Capitation, Provider and Other Claim Settlements and MAPD Payables ...(2) Reserve for Claims and Other Settlements-Adjusted...(3) Health Plan Services Cost...

  • Page 73
    ... operation varies from the statutory federal rate of 35% for the year ended December 31, 2012 due to state income taxes and the release of a valuation allowance against deferred tax assets for capital loss carryforwards, which were utilized upon the gain on sale of the Medicare PDP business. 71

  • Page 74
    ..., 2013 2012 2011 2013 v 2012 Increase/ (Decrease) % Change 2012 v 2011 Increase/ (Decrease) % Change (Membership in thousands) California Large Group ...Small Group and Individual ...Commercial Risk...Medicare Advantage...Medi-Cal/Medicaid ...Total California ...Arizona Large Group ...Small Group...

  • Page 75
    ...-Cal contract for Los Angeles County is scheduled to expire in April 2019. For additional information on our settlement agreement with DHCS, see "-State-Sponsored Health Plans Rate Settlement Agreement" below. Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Total Western Region...

  • Page 76
    ... County. Los Angeles County is a "two-plan model" County whereby Medi-Cal benefits are provided by a commercial plan, Health Net, and a local initiative plan, L.A. Care. L.A. Care is a public agency that serves low-income persons in Los Angeles County through health coverage programs such as MediCal...

  • Page 77
    ... the California Coordinated Care Initiative in Los Angeles and San Diego Counties may prove to be unsuccessful for a number of reasons." State-Sponsored Health Plans Rate Settlement Agreement On November 2, 2012, our wholly owned subsidiaries, Health Net of California, Inc. and Health Net Community...

  • Page 78
    Western Region Operations Segment Results Year Ended December 31, 2013 2012 2011 (Dollars in thousands, except PMPM data) Commercial premiums...$ Medicare premiums ...Medicaid premiums ...Health plan services premiums...Net investment income ...Administrative services fees and other income ...Total...

  • Page 79
    ... 31, 2013 as compared to the year ended December 31, 2012 primarily due to a settlement related to a pharmacy contract and Medicaid revenue from the State of California related to the administration of the primary care physician parity reimbursement mandated by the ACA. Health Plan Services Expenses...

  • Page 80
    ... to the repositioning of our large group commercial business, lower utilization and changes in product and geographic mix as well as the absence of the adverse prior period development that was recorded in 2012. The Medicare Advantage MCR in in our Western Region Operations segment was 90.6 percent...

  • Page 81
    ...358 in the same period of 2011. This percentage change decrease in the 2012 premium yield compared to that in 2011 was due to higher percentage of members enrolled in our tailored network products. Commercial health care costs PMPM in our Western Region Operations segment increased by 9.1 percent to...

  • Page 82
    ... a straight-line basis over the option period, when the fees become fixed and determinable. The T-3 members are served by our network and out-of-network providers in accordance with the T-3 contract. We pay health care costs related to these services to the providers and are later reimbursed by the...

  • Page 83
    ... primarily due to the impact of the new T-3 contract for the TRICARE North Region, under which health care costs and related reimbursements are excluded from our consolidated statement of operations as a result of moving from a risk-based contract to a cost reimbursement plus fixed fee contract. 81

  • Page 84
    ...Services reportable segment was closed out effective January 1, 2013 as discussed below. 2013 Year Ended December 31, 2012 (Dollars in thousands) 2011 Health plan services premiums ...$ Net investment income...Administrative services fees and other income...Divested operations and services revenue...

  • Page 85
    ... flow problems and other financial difficulties, it could, in turn, adversely impact membership in our plans. For example, our customers may modify, delay or cancel plans to purchase our products, may reduce the number of individuals to whom they provide coverage, or may make changes in the mix of...

  • Page 86
    ... fund existing obligations, repurchase shares of our common stock, introduce new products and services, enter into new lines of business and continue to operate and develop health care-related businesses as we may determine to be appropriate at least for the next twelve months. We regularly evaluate...

  • Page 87
    ... DHCS related to our California Medicaid business, including $150.9 million received for Medi-Cal rate changes. Our operating cash flow was also impacted by $47.9 million in premium tax payments made in 2013. Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 Net cash provided by...

  • Page 88
    ... deposit accounting and are comprised of health care cost payments and reimbursements for the T-3 contract, catastrophic reinsurance subsidy, low-income member cost sharing subsidy and the coverage gap discount under the Medicare Part D program, and pass-through items related to our Medicaid program...

  • Page 89
    ...both (1) a change of control of Health Net, Inc. and (2) a below investment grade rating by any two of Fitch, Inc., Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, within a specified period, we will be required to make an offer to purchase the Senior Notes at a price equal to...

  • Page 90
    ... under state laws and regulations. Management believes that as of December 31, 2013, all of our active health plans and insurance subsidiaries met their respective regulatory requirements relating to maintenance of minimum capital standards, surplus requirements and adequate reserves for claims in...

  • Page 91
    ... 31, 2013. We have entered into long-term agreements to receive services related to disease management, case management, wellness, pharmacy benefit management, pharmacy claims processing services and health quality/risk scoring enhancement services with external third-party service providers. The...

  • Page 92
    ...plan services premium revenues generally include HMO, POS and PPO premiums from employer groups and individuals and from Medicare recipients who have purchased supplemental benefit coverage (for which premiums are based on a predetermined prepaid fee), Medicaid revenues based on multi-year contracts...

  • Page 93
    ... 40% in 2013, 2012 and 2011, respectively, of our health plan services premium revenues were generated under Medicare and Medicaid/Medi-Cal contracts. These revenues are subject to audit and retroactive adjustment by the respective fiscal intermediaries. Laws and regulations governing these programs...

  • Page 94
    ... are in relation to the estimate of total claims for a given period. Therefore, an increase in completion factor percent results in a decrease in the remaining estimated reserves for claims. (b) Impact due to change in annualized medical cost trend used to estimate the per member per month cost for...

  • Page 95
    ... to a change in our profitability estimates include premium yield and health care cost trend assumptions, risk share terms and non-performance of a provider under a capitated agreement resulting in membership reverting to fee-for-service arrangements with other providers. Contracts are grouped in...

  • Page 96
    ... with members, health care providers, and other entities or individuals, as well as audits by government agencies and elected officials that relate to our services and/or business practices that expose us to potential losses. We recognize an estimated loss, which may represent damages, assessment of...

  • Page 97
    ... is reported separately from deferred tax assets and liabilities and classified as current or noncurrent based upon the expected period of payment. In 2014, due to the impact of the non-deductibility, for federal income tax purposes, of the health insurer fee, we expect our effective income tax rate...

  • Page 98
    ... of publicly traded companies in a similar line of business, and reviewing the underlying financial performance including estimating discounted cash flows. The following table presents the expected cash outflows relating to market risk sensitive debt obligations as of December 31, 2013. These cash...

  • Page 99
    ... information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized...

  • Page 100
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Health Net, Inc. Woodland Hills, California We have audited the internal control over financial reporting of Health Net, Inc. and subsidiaries (the "Company") as of December 31, 2013, based on criteria...

  • Page 101
    Item 9B. Other Information. None. 99

  • Page 102
    ... Registrant and Corporate Governance. The information required by this Item as to (1) directors and executive officers of the Company and (2) compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth in the Company's definitive proxy statement for its 2014 Annual Meeting of...

  • Page 103
    ... reference and filed as part of this Annual Report on Form 10-K. 2. Financial Statement Schedule The financial statement schedule listed on the accompanying Index to Consolidated Financial Statements set forth on page F-1 and covered by the Report of Independent Registered Public Accounting Firm are...

  • Page 104
    ... to be signed on its behalf by the undersigned thereunto duly authorized. HEALTH NET, INC. By: /s/ JOSEPH C. CAPEZZA Joseph C. Capezza Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 105
    ... part of this Annual Report on Form 10-K: Consolidated Financial Statements Report of Independent Registered Public Accounting Firm...Consolidated Statements of Operations for each of the three years in the period ended December 31, 2013...Consolidated Statements of Comprehensive Income for each of...

  • Page 106
    ... FIRM To the Board of Directors and Stockholders of Health Net, Inc. Woodland Hills, California We have audited the accompanying consolidated balance sheets of Health Net, Inc. and subsidiaries (the "Company") as of December 31, 2013 and 2012, and the related consolidated statements of operations...

  • Page 107
    HEALTH NET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) 2013 Year Ended December 31, 2012 2011 Revenues Health plan services premiums...$ Government contracts...Net investment income ...Administrative services fees and other income ...Divested operations...

  • Page 108
    HEALTH NET, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Year Ended December 31, 2013 2012 2011 Net income ...Other comprehensive income before tax: Unrealized (losses) gains on investments available-for-sale: Unrealized holding (losses) gains arising during the ...

  • Page 109
    HEALTH NET, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data) December 31, 2013 2012 ASSETS Current Assets: Cash and cash equivalents ...$ 433,155 Investments-available-for-sale (amortized cost: 2013-$1,602,456, 20121,567,020 $1,753,931) ...Premiums receivable, net of ...

  • Page 110
    ...of January 1, 2012 ...Net income...Other comprehensive income ...Exercise of stock options and vesting of restricted stock units ...Share-based compensation expense...Tax benefit related to equity compensation plans...Repurchases of common stock ...Balance as of January 1, 2013 ...Net income...Other...

  • Page 111
    HEALTH NET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) 2013 Year Ended December 31, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net income...$ 170,126 $ 122,063 $ 72,120 Adjustments to reconcile net income to net cash provided by operating activities: Amortization and ...

  • Page 112
    ...group, individual, Medicare, Medicaid ("Medi-Cal" in California), the United States Department of Defense ("Department of Defense" or "DoD"), including TRICARE, and Veterans Affairs programs. Our subsidiaries also offer managed health care products related to behavioral health and prescription drugs...

  • Page 113
    ... plan services premium revenues generally include HMO, POS and PPO premiums from employer groups and individuals and from Medicare recipients who have purchased supplemental benefit coverage, for which premiums are based on a predetermined prepaid fee, Medicaid revenues based on multi-year contracts...

  • Page 114
    ... SPD and non-SPD members for periods prior to 2012. Retroactive rate adjustments for our SPD and non-SPD members were not material for the year ended December 31, 2011. In addition, our state-sponsored health care programs in California, including Medi-Cal, Healthy Families, Seniors and Persons with...

  • Page 115
    ... for shared risk and pay-for-performance bonuses, whereby the Company and the medical groups share in the variance between actual costs and predetermined goals. Additionally, we contract with certain hospitals to provide hospital care to enrolled members on a capitated basis. Our HMOs also contract...

  • Page 116
    ... the Government Contracts reportable segment. The TRICARE members are served by our network and out-of-network providers in accordance with the T-3 contract. We pay health care costs related to these services to the providers and are later reimbursed by the DoD for such payments. Under the terms of...

  • Page 117
    ...the government. Government contracts revenue and expenses included the impact from underruns and overruns relative to our target cost under the applicable contracts. Our previous TRICARE contract for the North Region included a target cost and underwriting fee for reimbursed health care costs, which...

  • Page 118
    ...For more information regarding the sale of our Medicare PDP business, see Note 3. We continue to provide prescription drug benefits as part of our Medicare Advantage offerings. Our Medicare Advantage Plus Prescription Drug ("MAPD") plans cover both prescription drugs and medical care. Health Net has...

  • Page 119
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) collection of discount payments from pharmaceutical manufacturers and payments to Health Net based on prescription drug event data. CMS Risk Share-Premiums from CMS are subject to risk corridor provisions which compare costs ...

  • Page 120
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Checks outstanding, net of deposits are classified as accounts payable and other liabilities in the consolidated balance sheets and the changes are reflected in the line item net increase (decrease) in checks outstanding, net of...

  • Page 121
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed using the straight-line method over the lesser of estimated useful lives of the various classes...

  • Page 122
    ...-line method over their estimated lives are as follows: Gross Carrying Amount Weighted Average Life (in years) Accumulated Amortization (Dollars in millions) Net Balance As of December 31, 2013: Provider networks...$ Customer relationships and other ...$ As of December 31, 2012: Provider networks...

  • Page 123
    ... employer group premiums within each of our plans accounted for 16%, 17% and 18% of our health plan services premium revenues for the years ended December 31, 2013, 2012 and 2011, respectively. The federal government is the primary customer of our Government Contracts reportable segment representing...

  • Page 124
    ...our Medi-Cal contract for Los Angeles County is scheduled to expire in April 2019. For additional information on our Agreement with DHCS, see "Health Plan Services Revenue Recognition" above in this Note 2. Earnings Per Share Basic earnings per share excludes dilution and reflects net income divided...

  • Page 125
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Our accumulated other comprehensive income (loss) for the years ended December 31, 2013, 2012 and 2011 is as follows: Unrealized Gains (Losses) on investments available-for-sale Accumulated Other Comprehensive Income (loss) ...

  • Page 126
    ... We provide services in certain states which require premium taxes to be paid by us based on membership or billed premiums. These taxes are paid in lieu of or in addition to state income taxes and totaled $124.4 million in 2013, $51.6 million in 2012 and $62.1 million in 2011. The 2013 premium tax...

  • Page 127
    ... based upon the expected period of payment. See Note 11 for additional disclosures. Note 3-Sale of Medicare PDP Business and Northeast Business Sale of Medicare PDP Business On April 1, 2012, our subsidiary Health Net Life Insurance Company ("HNL") sold substantially all of the assets, properties...

  • Page 128
    ... services and/or claims servicing agreements and any revenues and expenses related to the run-out, are reported as part of divested operations and services revenue and expenses. During the year ended December 31, 2012, we recorded no adjustment to the loss on sale of Northeast health plan...

  • Page 129
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) As of December 31, 2013 and 2012, the amortized cost, gross unrealized holding gains and losses, and fair value of our current investments available-for-sale and our investments available-for-sale-noncurrent, after giving effect...

  • Page 130
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) As of December 31, 2013, the contractual maturities of our current investments available-for-sale and our investments available-for-sale-noncurrent were as follows: Amortized Cost Estimated Fair Value Current: Due in one year ...

  • Page 131
    ... shows the number of our individual securities-current that have been in a continuous loss position at December 31, 2013: Less than 12 Months 12 Months or More Total Asset-backed securities...U.S. government and agencies...Obligations of states and other political subdivisions ...Corporate debt...

  • Page 132
    ..., at the Company's option, at either (a) the base rate (which is a rate per annum equal to the greatest of (i) the federal funds rate plus one-half of one percent, (ii) Bank of America, N.A.'s "prime rate" and (iii) the Eurodollar Rate (as such term is defined in the credit facility) for a one-month...

  • Page 133
    ... both (1) a change of control of Health Net, Inc. and (2) a below investment grade rating by any two of Fitch, Inc., Moody's Investors Service, Inc. and Standard & Poor's Ratings Services within a specified period, we will be required to make an offer to purchase the Senior Notes at a price equal to...

  • Page 134
    ...approach. Level 3 also includes a state-sponsored health plans settlement account deficit asset estimated at fair value based on the income approach. See Note 2 for additional information on our state-sponsored health plans rate settlement agreement. In certain cases, the inputs used to measure fair...

  • Page 135
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following tables present information about our assets and liabilities measured at fair value on a recurring basis at December 31, 2013 and 2012, and indicate the fair value hierarchy of the valuation techniques utilized by ...

  • Page 136
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Level 1 Level 2current Level 2noncurrent Level 3 Total As of December 31, 2012 Assets: Cash and cash equivalents ...$ Investments-available-for-sale Asset-backed debt securities: Residential mortgage-backed securities ...$...

  • Page 137
    ... FINANCIAL STATEMENTS-(Continued) The changes in the balances of Level 3 financial assets for the years ended December 31, 2013 and 2012 were as follows (dollars in millions): Year Ended December 31, 2013 StateSponsored Health Plans Settlement Account Deficit 2012 AvailableFor-Sale Investments...

  • Page 138
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The changes in the balance of the Level 3 financial liability for the years ended December 31, 2013 and 2012 were as follows (dollars in millions): Year Ended December 31, 2013 2012 Embedded Contractual Derivative Opening ...

  • Page 139
    ... changes in the balances of Level 3 financial assets and liabilities that are fair valued on a non-recurring basis for the year ended December 31, 2012 were as follows (dollars in millions): Deferred revenue related to transitionrelated services provided in connection with Medicare PDP business sale...

  • Page 140
    ... Region reporting unit State-sponsored health plans settlement account deficit $ 7.2 Monte Carlo Simulation Approach $ 565.9 Income Approach Discount Rate 10.0% - 10.0% (10.0%) $ 62.9 Income Approach Discount Rate 1.135% - 1.135% (1.135%) Fair Value as of December 31, 2012 Valuation...

  • Page 141
    ... not limited to restricted stock, restricted stock units ("RSUs") and performance share units ("PSUs") have been granted to certain employees, officers and non-employee directors under the Plans. The grant of a single RSU or PSU under our 2006 Long-Term Incentive Plan reduces the number of shares of...

  • Page 142
    ... 31, 2013 and 2012, we made no grants of stock options. A summary of option activity under our various plans as of December 31, 2013, and changes during the year then ended is presented below: Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Number of Options...

  • Page 143
    ... our various plans as of December 31, 2013, and changes during the year then ended is presented below: Number of Restricted Stock Units and Performance Share Units Weighted Average Grant-Date Fair Value Weighted Average Purchase Price Weighted Average Remaining Contractual Term (Years) Aggregate...

  • Page 144
    ... 28.6 1.60 Under the Plans, employees and non-employee directors may elect for the Company to withhold shares to satisfy minimum statutory federal, state and local tax withholding and/or exercise price obligations, as applicable, arising from the exercise of stock options. For certain other equity...

  • Page 145
    ... market transactions, including pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares of stock repurchased will depend on a variety of factors, including the stock price, corporate...

  • Page 146
    ...postretirement defined benefit health care and life insurance plans that provide postretirement medical and life insurance benefits to directors, key executives, employees and dependents who meet certain eligibility requirements. The Health Net of California Retiree Medical and Life Benefits Plan is...

  • Page 147
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following table sets forth the plans' obligations and funded status at December 31: Pension Benefits 2013 2012 Other Benefits 2013 2012 (Dollars in millions) Change in benefit obligation: Benefit obligation, beginning of ...

  • Page 148
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Components of net periodic benefit cost recognized in our consolidated statements of operations as general and administrative expense for years ended December 31: 2013 Pension Benefits 2012 2011 2013 Other Benefits 2012 2011 (...

  • Page 149
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects for the ...

  • Page 150
    ... December 31: 2013 2012 2011 Statutory federal income tax rate ...State and local taxes, net of federal income tax effect...Valuation allowance (release) against capital losses, net operating losses or tax credits ...Non-deductible compensation...Tax exempt interest income ...Sale of subsidiaries...

  • Page 151
    ... increased by a net $3.6 million, primarily resulting from a change in our investment portfolio to an unrealized loss position. The unrealized losses could produce capital losses that we expect would be subject to limitations on use for state tax reporting. For 2013, 2012 and 2011 the income...

  • Page 152
    ...interest and any applicable penalties which could be assessed related to unrecognized tax benefits in income tax provision expense. Accrued interest and penalties are included within the related tax liability in the consolidated balance sheet. During 2013, 2012 and 2011, ($0.3) million, $1.7 million...

  • Page 153
    ...-Keene Health Care Service Plan Act of 1975, as amended, our California health plans are regulated by the California Department of Managed Health Care ("DMHC") and must comply with certain minimum capital or tangible net equity requirements. Our non-California health plans as well as our insurance...

  • Page 154
    ..., non-medical counseling at U.S. military installations throughout the country. On June 14, 2011, two former MFLCs filed a putative class action in the Superior Court of the State of Washington for Pierce County against Health Net, Inc., MHNGS, and MHN Services d/b/a MHN Services Corporation (also...

  • Page 155
    ... 2012 Northern District of California suit alleges misclassification under the FLSA on behalf of a nationwide class, as well under several state laws on behalf of MFLCs who worked in California, New Mexico, Hawaii, Kentucky, New York, Nevada, and North Carolina. On October 24, 2013, the parties...

  • Page 156
    ... litigation regarding, the health care industry's business practices, including, without limitation, information privacy, premium rate increases, utilization management, appeal and grievance processing, rescission of insurance coverage and claims payment practices. In addition, in the ordinary...

  • Page 157
    ...a credit adjusted risk-free interest rate of 3.26%. We lease an office space in Woodland Hills, California that is used for operations in our Western Region Operations and Government Contracts reportable segments under an operating lease agreement. The lease expires on December 31, 2014 and does not...

  • Page 158
    ... 31, 2013. We have entered into long-term agreements to receive services related to disease management, case management, wellness, pharmacy benefit management, pharmacy claims processing services and health quality/risk scoring enhancement services with external third-party service providers. As...

  • Page 159
    ... and Government Contracts. Effective January 1, 2013, we closed out our Divested Operations and Services segment as discussed below. Our Western Region Operations reportable segment includes the operations of our commercial, Medicare and Medicaid health plans, our health and life insurance companies...

  • Page 160
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Presented below are segment data for the three years ended December 31, 2013, 2012 and 2011. 2013 Western Region Operations Government Contracts Divested Operations and Services (Dollars in millions) Corporate/ Other/ ...

  • Page 161
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 2011 Western Region Operations Government Contracts Divested Operations and Services Corporate/ Other/ Eliminations Total (Dollars in millions) Revenues from external sources...$ Intersegment revenues ...Net investment income...

  • Page 162
    ... the heading "Health Plan Services Health Care Cost" for more information. (d) Includes claims payable, provider dispute reserve, and other claims-related liabilities. (e) Includes accrued capitation, shared risk settlements, provider incentives and other reserve items. (f) Our IBNR estimate also...

  • Page 163
    ... FINANCIAL STATEMENTS-(Continued) The following table shows the Company's health plan services expenses for the years ended December 31: Health Plan Services 2012 (Dollars in millions) 2013 2011 Total incurred fee for service claims ...Capitated expenses and shared risk ...Pharmacy and...

  • Page 164
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 2012 March 31 June 30 September 30 December 31 (Dollars in millions, except per share data) Total revenues...Health plan services costs...Government contracts costs...(Loss) income from continuing operations before income taxes...

  • Page 165
    SUPPLEMENTAL SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2013 2012 2011 REVENUES: Net investment income...$ Other income (loss) ...Administrative service fees ......

  • Page 166
    ... FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Year Ended December 31, 2013 2012 2011 Net income ...Other comprehensive income before tax: Unrealized (losses) gains on investments available-for-sale...

  • Page 167
    SUPPLEMENTAL SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED BALANCE SHEETS (Amounts in thousands) December 31, 2013 December 31, 2012 ASSETS Current Assets: Cash and cash equivalents ...$ Investments-available for sale...Other assets......

  • Page 168
    ... SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2013 2012 2011 NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES ...$ CASH FLOWS FROM INVESTING ACTIVITIES: Sales...

  • Page 169
    ... INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. NOTE TO CONDENSED FINANCIAL STATEMENTS Note 1-Basis of Presentation Health Net, Inc.'s ("HNT") investment in subsidiaries is stated at cost plus equity in undistributed earnings (losses) of subsidiaries. HNT's share of net income...

  • Page 170
    ...Oxford Health Plans, LLC and UnitedHealth Group Incorporated (filed as Exhibit 2.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-12718) and incorporated herein by reference). Asset Purchase Agreement, dated as of January 6, 2012, between Health Net Life...

  • Page 171
    ... herein by reference). Form of Nonqualified Stock Option Agreement utilized for eligible employees of Health Net, Inc. under the 2006 Long-Term Incentive Plan, as amended (filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-12718) and...

  • Page 172
    ... No. 1-12718) and incorporated herein by reference). Form of Performance Share Award Agreement utilized for eligible employees of Health Net, Inc. (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (File No. 1-12718) and incorporated herein by...

  • Page 173
    ...). Amendment Number One to the Health Net, Inc. Deferred Compensation Plan Trust Agreement between Health Net, Inc. and Union Bank of California, adopted January 1, 2001 (filed as Exhibit 10.49 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-12718...

  • Page 174
    ...). Credit Agreement, dated as of October 24, 2011, by and among Health Net, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto from time to time (filed as Exhibit 10 to the Company's Current Report on Form 8-K filed with the...

  • Page 175
    ... to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-12718) and incorporated herein by reference). Amendment No. 3 to Master Services Agreement, dated August 9, 2012, by and between Health Net, Inc. and Cognizant Technology Solutions US Corporation (filed as...

  • Page 176
    ... Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Jay M. Gellert, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Health Net, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state...

  • Page 177
    ....2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Joseph C. Capezza, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Health Net, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material...

  • Page 178
    ...-Oxley Act of 2002 In connection with the Annual Report of Health Net, Inc. (the "Company") on Form 10-K for the year ending December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Jay M. Gellert, as Chief Executive Officer of the Company, and...