Health Net 2013 Annual Report Download - page 140
Download and view the complete annual report
Please find page 140 of the 2013 Health Net annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130 -
131 -
132 -
133 -
134 -
135 -
136 -
137 -
138 -
139 -
140 -
141 -
142 -
143 -
144 -
145 -
146 -
147 -
148 -
149 -
150 -
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
 |
 |
HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-36
The following tables present quantitative information about Level 3 Fair Value Measurements (dollars in
millions):
Fair Value as of
December 31,
2013 Valuation
Technique(s) Unobservable Input Range (Weighted Average)
Embedded
contractual
derivative asset $ 7.2
Monte Carlo
Simulation
Approach
Health Net Health Care
Expenditures -3.34% — 7.34% (2.20%)
National Health Care
Expenditures -0.77% — 9.46% (3.63%)
Goodwill - Western
Region reporting
unit $ 565.9 Income
Approach Discount Rate 10.0% — 10.0% (10.0%)
State-sponsored
health plans
settlement account
deficit $ 62.9 Income
Approach Discount Rate 1.135% — 1.135% (1.135%)
Fair Value as of
December 31,
2012 Valuation
Technique(s) Unobservable Input Range (Weighted Average)
Embedded
contractual
derivative asset $ 11.2
Monte Carlo
Simulation
Approach
Health Net Health Care
Expenditures -1.7% — 0.8% -(0.4%)
National Health Care
Expenditures 3.7% — 3.7% (3.7%)
Embedded
contractual
derivative liability $ 3.2
Monte Carlo
Simulation
Approach
Health Net Health Care
Expenditures -0.3% — 10.1% (4.9%)
National Health Care
Expenditures -0.1% — 7.3% (3.3%)
Goodwill - Western
Region reporting
unit $ 565.9 Income
Approach Discount Rate 9.0% — 9.0% (9.0%)
Lease impairment
obligation $ 7.4 Income
Approach Discount Rate 3.26% — 3.26% (3.26%)
Valuation policies and procedures are managed by our finance group, which regularly monitors fair value
measurements. Fair value measurements, including those categorized within Level 3, are prepared and reviewed on a
quarterly basis and any third-party valuations are reviewed for reasonableness and compliance with the Fair Value
Measurement Topic of the Accounting Standards Codification. Specifically, we compare prices received from our
pricing service to prices reported by the custodian or third-party investment advisors and we perform a review of the
inputs, validating that they are reasonable and observable in the marketplace, if applicable. For our embedded
contractual derivative asset and liability, we use internal historical and projected health care expenditure data and the
national health care expenditures as reflected in the National External Trend Standards, which is published by CMS, to
estimate the unobservable inputs. The growth rates in each of these health care expenditures are modeled using the
Monte Carlo simulation approach and the resulting value is discounted to the valuation date. We estimate our recurring