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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, 2014
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 30, 2014 was $3,265,069,381
(which represents 78,600,611 shares of Common Stock held by such non-affiliates multiplied by $41.54, the closing sales price of such
stock on the New York Stock Exchange on June 30, 2014).
The number of shares outstanding of the registrant’s Common Stock as of February 23, 2015 was 76,903,375 (excluding 76,238,167
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 2015
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, 2014.

Table of contents

  • Page 1
    ... 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, $.001 par value Name of each exchange...

  • Page 2
    ... TO FORM 10-K Page PART I. Item 1-Business...General...Segment Information ...Provider Relationships ...Additional Information Concerning Our Business ...Government Regulation ...Intellectual Property...Employees...Dependence Upon Customers...Shareholder Rights Plan...Potential Acquisitions and...

  • Page 3
    .... Please direct your written request to Investor Relations, Health Net, Inc., 21650 Oxnard Street, Woodland Hills, California 91367, or contact Investor Relations by telephone at (818) 676-6000. We have included our and the SEC's Internet website addresses throughout this Annual Report on Form 10...

  • 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
    ...EPO or HSP plans that utilize tailored networks. We assume both underwriting and administrative expense risk in return for the premium revenue we receive from our HMO, POS, PPO/EOA and HSP products. In California, under a capitation payment model, we pay a provider group a fixed amount per member on...

  • Page 6
    ... 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 7
    ...insurance program that provides health care services for low-income individuals residing in California, and is financed by the state of California and the federal government. As of December 31, 2014, through HNCS, we had Medi-Cal operations in 12 California counties: Fresno, Kern, Kings, Los Angeles...

  • Page 8
    ... coordinate medical, behavioral health, long-term institutional, and home- and community-based services for dual eligibles through a single health plan, and requires that all Medi-Cal beneficiaries in participating counties join a Medi-Cal managed care health plan to receive their Medi-Cal benefits...

  • Page 9
    ... individuals and small groups may purchase health coverage. California and Oregon received approval by the U.S. Department of Health and Human Services ("HHS") and began operating state-run exchanges in 2013. HHS operates the exchange in Arizona. We currently participate as Qualified Health Plans...

  • Page 10
    ... with third parties), as well as managed care products related to cost containment for hospitals, health plans and other entities as part of our Western Region Operations segment. Pharmacy Benefit Management We provide pharmacy benefit management ("PBM") services to Health Net members through our...

  • Page 11
    ... for the vision services we provide to our Medi-Cal enrollees in California and Medicaid enrollees in Arizona. Government Contracts Segment Our Government Contracts segment includes our government-sponsored managed care federal contract with the DoD under the TRICARE program in the North Region and...

  • Page 12
    ... plan. Under TRICARE Prime, enrollees pay an enrollment fee (which is zero for active duty service members and their families) and select a primary care physician from our contracted provider network. The primary care physicians are responsible for making referrals to specialists and hospitals...

  • Page 13
    ... or results of operations." Patient Centered Community Care Program In September 2013, VA awarded HNFS a contract under its new Patient Centered Community Care ("PC3") program. The PC3 program provides eligible veterans coordinated, timely access to care through a comprehensive network of non-VA...

  • Page 14
    ... to pay 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 of our POS products, we ordinarily reimburse physicians...

  • Page 15
    ... four plans and Health Net account for approximately 82% of the insured commercial and Medicare market in California. Based on the number of 2014 enrollees, Kaiser is the largest managed health care company in California and Anthem Blue Cross of California is the largest PPO provider in California...

  • Page 16
    ... things, provide us with certain consulting, technology and administrative services in the following areas: claims management, membership and benefits configuration, customer contact center services, information technology, quality assurance, appeals and grievance services, and non-clinical medical...

  • Page 17
    ... and the new ACA-mandated exchanges. For our group health business, we market our products and services utilizing a three-step process. We first market to potential employer groups, group insurance brokers and consultants. We then provide information directly to employees once the employer has...

  • Page 18
    ...by our information management systems assists us in, among other things, pricing our services, monitoring utilization and other cost factors, processing provider claims, billing our customers on a timely basis, identifying accounts for collection and detecting fraud, security threats and other risks...

  • Page 19
    ... the health insurer fee. The ACA also required 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 and Arizona. For further information on...

  • Page 20
    ... medical underwriting for medical insurance coverage decisions, including "guaranteed availability" with respect to individual and group coverage; limiting the ability of health plans to vary premiums based on assessments of underlying risk in the individual and small group markets; increasing...

  • Page 21
    ... regulatory risks associated with our Medicare business. Medicaid and Related Legislation. Federal law has also implemented other health programs that are partially funded by the federal government, such as the Medicaid program (known as Medi-Cal in California). Our Medicaid programs are regulated...

  • Page 22
    ... of certain benefit plans and employer groups, including the availability of legal remedies under state law. Regulations established by the U.S. Department of Labor provide additional rules for claims payment and member appeals under health care plans governed by ERISA. Other Federal Regulations. We...

  • Page 23
    ...Health Net Community Solutions, Inc. Health Net Health Plan of Oregon, Inc. Health Net Life Insurance Company Managed Health Network Arizona Department of Insurance Arizona Health Care Cost Containment System California Department of Managed Health Care California Department of Health Care Services...

  • Page 24
    ... and our contracts with California state agencies for the federally-subsidized Medicaid program and the dual eligibles demonstration under the CCI. Medicare premiums accounted for 23%, 27% and 27% of our Western Region Operations segment health plan services premium revenues in 2014, 2013 and 2012...

  • Page 25
    ... price of such Right, that number of shares of Common Stock having a market value of two times such exercise price. In addition, and subject to certain exceptions contained in the Rights Agreement, in the event that we are acquired in a merger or other business combination in which the Common Stock...

  • Page 26
    ... with federal and state agencies including, but not limited to, the California Department of Managed Health Care and Department of Health Care Services, the Arizona Health Care Cost Containment System, the Centers for Medicare & Medicaid Services, the Office of Civil Rights of the U.S. Department of...

  • Page 27
    .... In September 2014, we paid the federal government a lump sum of $141.4 million for our portion of the health insurer fee based on 2013 net premiums written. We currently estimate that our allocable share of the health insurer fee payable in 2015, based upon 2014 premiums, will be approximately...

  • Page 28
    ... 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 29
    ...effect on our business, financial condition or results of operations." 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 which Qualified Health Plans ("QHPs") in...

  • Page 30
    ... in our California health plans. Under this model, third party intermediaries assume responsibility for certain utilization management and care coordination responsibilities, including the collection of encounter data. We have been refining our health plan infrastructure and provider network to help...

  • Page 31
    ... the ACA's health insurance exchanges will continue to be a success. The ACA required the establishment of state-run or federally facilitated "exchanges" where individuals and small groups may purchase health coverage. We currently participate as QHPs in the exchanges in California and Arizona. Our...

  • Page 32
    ... our members. Many of these costs, including costs associated with physician and hospital care, new medical technology and prescription drugs, for example, are rising. The total amount of health care costs we incur is affected by the number and type of individual services we provide and the cost of...

  • Page 33
    ... rate increases. The federal government and some states in which we do business have also required prior regulatory approval of premium rate increases and/or have subjected such increases to heightened scrutiny, such as third-party review. For example, the CDI and Department of Managed Health Care...

  • Page 34
    ... relative medical risk a health plan incurs in the individual and small group market. Since the risk value is based on a health plan's score relative to the industry and enrollment growth of new populations with limited cost experience under ACA, we may be required to accrue additional liabilities...

  • Page 35
    ... working to build alliances with provider groups and other stakeholders in the health care system through shared risk arrangements, including Accountable Care Organizations ("ACOs"), that have seen increasing support as state and federal governments and the health care industry seek to improve the...

  • Page 36
    ... agencies. Our HMO and insurance subsidiaries are subject to regulations relating to cash reserves, minimum net worth, premium rates, approval of policy language and benefits, appeals and grievances with respect to benefit determinations, provider contracting, utilization management, issuance and...

  • Page 37
    ... business. The Cognizant MSA covers a broad range of consulting, technological and administrative services in claims management, membership and benefits configuration, customer contact center services, information technology, quality assurance, appeals and grievance services, and medical management...

  • Page 38
    ...that 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 have the option to...

  • Page 39
    ... 61% of our total revenues in the year ended December 31, 2014 relate to federal, state and local government health care coverage or counseling programs, such as Medicare, Medicaid, TRICARE and MFLC. Nearly all of the revenues in our Government Contracts reportable segment, which does not...

  • Page 40
    ... Contracts Reportable Segment." 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, 2014, CMS announced final 2015 Medicare Advantage benchmark payment...

  • Page 41
    ... business, accounting for approximately 23% of our total premium revenue in our Western Region Operations reportable segment in 2014 and an expected 19% in 2015. The ACA includes, among other things, provisions that significantly reduce the government's Medicare payment rates. For more information...

  • Page 42
    ...can be modified by CMS annually and Star Ratings thresholds are based on performance of Medicare Advantage plans nationally. For the 2015 Star rating (2016 payment year), our California HMO and Oregon HMO and PPO contracts with CMS were measured at 4.0 Stars. Our Arizona HMO contract was measured at...

  • Page 43
    ... operations are in the state of California, with a high concentration of operations and members in Los Angeles County, and we now participate in the Medicaid program in Arizona. Medicaid expansion and our participation in the dual eligibles demonstration has further increased our concentration in...

  • Page 44
    ...Medicare programs and the associated risks. On February 4, 2015, we received a notice from the Arizona Health Care Cost Containment System ("AHCCCS"), Division of Health Care Management ("DHCM") that stated that we were in violation of its contract for Acute Care Medicaid services in Maricopa County...

  • Page 45
    ... insufficient payments for out-of-network services. These legal actions also include claims brought against companies in general, including, but not limited to employment and employment discrimination-related suits, employee benefit claims, wage and hour claims, including, without limitation, cases...

  • Page 46
    ...exchanges will continue to be a success," "-Our participation in the dual eligibles demonstration portion of the California Coordinated Care Initiative in Los Angeles and San Diego Counties may prove to be unsuccessful for a number of reasons," and "-Government programs represent an increasing share...

  • Page 47
    ... adversely affected. We contract with hospitals, provider groups and other providers as a means to provide access to health care services for our members, to manage health care costs and utilization and to help ensure the delivery of quality care. In any particular market, providers could refuse to...

  • Page 48
    ... per member per month and the provider group accepts the risk of the frequency and cost of member utilization of professional services, and in some cases, institutional services. Provider groups that enter into capitation fee arrangements generally contract with primary care physicians, specialists...

  • Page 49
    ...contain medical costs and health care related expenditures could adversely affect state and federal budgets, including California's, resulting in reduced or delayed reimbursements or payments in our federal and state government-funded health care coverage programs, including Medicare and Medi-Cal or...

  • Page 50
    ... of operations." In addition, continued state and federal budgetary pressures could cause new or higher levels of assessments or taxes for our commercial programs, such as surcharges on select feefor-service and capitated medical claims or premium taxes on insurance companies and HMOs, and could...

  • Page 51
    ...processed by our information management systems assists us in, among other things, pricing our services, monitoring utilization and other cost factors, processing provider claims, billing our customers on a timely basis and identifying accounts for collection. Our customers and providers also depend...

  • Page 52
    ...regulations related to the state-based and federally facilitated exchanges, the assessment and collection of 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...

  • Page 53
    ... 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 future...

  • Page 54
    ... 31, 2014, our available-for-sale investment securities were approximately $1.8 billion. The value of fixed-income securities is highly sensitive to fluctuations in short- and long-term interest rates, with the value decreasing as such rates increase and increasing as such rates decrease. These...

  • Page 55
    ... other companies in our industry raise premium rates by more than has been 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...

  • Page 56
    ... control. In addition, the uncertainties associated with federal and state health care reform, challenging economic conditions and our potential participation in new government programs or the provision of new services and/or benefits to new populations, among other things, may make it particularly...

  • Page 57
    ... the government's actions and the responsiveness of public health agencies and insurance companies, a large-scale public health epidemic or future acts of bio-terrorism could lead to, among other things, increased utilization of health care services and the associated increased health care costs due...

  • Page 58
    ...medical costs or those 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...

  • Page 59
    ... Family Life Counseling (formerly Military and Family Life Consultants) program. 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 60
    ... regulations applicable to our business, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, rules relating to pre-authorization penalties, payment of out-of-network claims, timely review of grievances and appeals, and timely and accurate payment of claims...

  • Page 61
    ... to pay dividends depends on distributions received from our subsidiaries, which are subject to regulatory net worth requirements and additional state regulations which may restrict the declaration of dividends by HMOs, insurance companies and licensed managed health care plans. The payment of...

  • Page 62
    ... statements. Under our various stock option and long-term incentive plans, in certain circumstances, employees and nonemployee 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...

  • Page 63
    ... based on their strong presence in the Medicaid market: Molina Healthcare, Inc., Centene Corporation and WellCare Health Plans, Inc. The Company believes those additions will help the peer group more appropriately reflect the Company's current mix of business, which has experienced rapid growth in...

  • Page 64
    Indexed Total Return (Stock Price Plus Reinvested Dividends) Name Health Net...Standard & Poor's 500 Index...Industry Peer Group Index (Current Peers) ...Industry Peer Group Index (Prior Year Peers)...12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 $ $ $ $ 100.00 100.00 100.00 100....

  • Page 65
    ... in this Annual Report on Form 10-K. Year Ended December 31, 2014 REVENUES: Health plan services premiums ...Government contracts ...Net investment income ...Administrative services fees and other income ...Divested operations and services revenue ...Total revenues...INCOME SUMMARY (1): Income from...

  • Page 66
    ... 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 67
    ... health plan services are provided under our Western Region Operations reportable segment, which includes the operations primarily conducted in California, Arizona, Oregon and Washington for our commercial, Medicare, Medicaid and dual eligibles health plans, our health and life insurance companies...

  • Page 68
    ... management, provider network access and other administrative services. Health plan services expense generally includes medical and related costs for health services provided to our members, including physician services, hospital and related professional services, outpatient care, and pharmacy...

  • Page 69
    ... Region Operations Segment-Medicaid and Related Products." Public Health Insurance Exchanges The ACA also required the establishment of state-run or federally facilitated "exchanges" where individuals and small groups may purchase health coverage. We currently participate as Qualified Health Plans...

  • Page 70
    ... ended December 31, 2014 were impacted by fees imposed under the ACA, including $141.4 of amortization of the deferred cost of the annual non-deductible health insurer fee calculated on 2013 net premiums written (the "health insurer fee"). In September 2014, we paid the federal government a lump sum...

  • Page 71
    ... Department of Health Care Services ("DHCS") adult Medicaid expansion members under the Medicaid program in California ("Medi-Cal") requires rebate payments to or from DHCS depending on MLRs for this population. In addition, our Medicaid contract with the state of Arizona contains profit sharing...

  • Page 72
    ... for the health insurer fee and $97.6 million in other ACA fees. See Note 2 to our consolidated financial statements under the heading "Accounting for Certain Provisions of the ACA" for additional information. An $88.5 million pretax asset impairment primarily related to our assets held for sale in...

  • Page 73
    ..., 2014, 2013 and 2012. Year Ended December 31, 2014 2013 2012 (Dollars in thousands, except per share data) Revenues Health plan services premiums ...$13,361,170 $10,377,073 603,975 572,266 Government contracts ...45,166 69,613 Net investment income...(1,725) 34,791 Administrative services fees and...

  • Page 74
    ... primarily due to services provided for the PC3 Program. For additional information see "-Government Contracts Reportable Segment". Our general and administrative (G&A) expenses increased by $468.7 million, or 43 percent, in the year ended December 31, 2014, primarily due to ACA related fees of $97...

  • Page 75
    ... and Medicare Advantage Prescription Drug ("MAPD") payables/costs from the Claims Reserve and Health Plan Costs. Management believes that adjusted DCP provides useful information to investors because the adjusted DCP calculation excludes from both Claims Reserve and Health Plan Costs amounts related...

  • Page 76
    ... adversely impacted by the health insurer fee required by the ACA. The $141.4 million that we paid in 2014 for the health insurer fee is not deductible for federal income tax purposes and in many state jurisdictions. The non-deductible health insurer fee increased our effective tax rate for the year...

  • Page 77
    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. 75

  • Page 78
    ...31, 2014 2013 2012 2014 v 2013 Increase/ (Decrease) % Change 2013 v 2012 Increase/ (Decrease) % Change (Membership in thousands) California Large Group ...Small Group ...Individual ...Commercial ...Medicare Advantage...Medi-Cal/Medicaid ...Dual Eligibles ...Total California ...Arizona Large Group...

  • Page 79
    ... cap on member auto assignment under the contract effective as of February 13, 2015 until further notice. See "Item 1A. Risk Factors" for additional information on these sanctions. We are the sole commercial plan contractor with DHCS to provide Medi-Cal services in Los Angeles County, California. As...

  • Page 80
    ... medical, behavioral health, long-term institutional, and home- and community-based services for dual eligibles through a single health plan, and will require that all Medi-Cal beneficiaries in participating counties join a Medi-Cal managed care health plan to receive their Medi-Cal benefits...

  • Page 81
    ..., we estimate that Health Net will receive approximately 47% and 20-25% of the passively enrolled dual eligibles in Los Angeles County and San Diego County, respectively. The financial performance of the Cal MediConnect Contract is included in the calculation of the settlement account that was...

  • Page 82
    ... Medicaid premiums...4,755,897 Dual Eligibles premiums...117,937 Health plan services premiums...13,361,170 Net investment income ...45,166 Administrative services fees and other income ...(1,725) Total revenues...13,404,611 Health plan services...Premium tax ...Health insurer fee ...Other ACA fees...

  • Page 83
    ... sharing payable to the state of Arizona under our Arizona Medicaid contract. Accordingly, Medicaid premium revenue was reduced by $225.3 million for the year ended December 31, 2014 related to MLR rebates. (see Note 2 to our consolidated financial statements, under the heading "Health Plan Services...

  • Page 84
    ... in 2013 was primarily due to better performance in our group accounts that allowed us to absorb the impact of the health insurer fee, a higher percentage of individual enrollment in our membership mix, and moderate health care cost trends. The Medicare Advantage MCR in our Western Region Operations...

  • Page 85
    ... 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 Health plan services expenses in our Western Region...

  • Page 86
    ... rate adjustments primarily related to prior periods, the impact of the reinstated Medicaid premium taxes that increased our Medicaid premium revenues, and retrospective adjustments to premium revenues related to our state-sponsored health plans rate settlement agreement. For additional information...

  • Page 87
    ... one state covering approximately 3,696 enrollees. Government Contracts Segment Membership 2014 2013 2012 (Membership in thousands) Membership under T-3 TRICARE contract... 2,837 2,851 2,883 Under the T-3 contract for the TRICARE North Region, we provide administrative services to approximately...

  • Page 88
    ... with providing services under the Claims Servicing Agreements. Corporate/Other The following table summarizes the Corporate/Other segment for the years ended December 31, 2014, 2013 and 2012: 2014 Year Ended December 31, 2013 2012 (Dollars in thousands) Costs included in health plan services costs...

  • Page 89
    ...and prior contracts for the TRICARE North Region, was $150.5 million and $194.0 million as of December 31, 2014 and December 31, 2013, respectively. The timing of collection of such receivables from the federal and state governments and agencies is impacted by government audits as well as government...

  • Page 90
    ...shall fulfill its obligations for the 2014 benefit year by using funds collected for the 2015 benefit year prior to making payments on 2015 obligations. Our net payable balance for the risk adjustment program related to the premium stabilization provisions of the ACA was $72.4 million as of December...

  • Page 91
    ... in 2012. This increase was primarily due to the timing of the payments received in 2013 from 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...

  • Page 92
    ... 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 passthrough items related to our Medicaid program...

  • Page 93
    ...event of the occurrence of 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...

  • Page 94
    ... by these subsidiaries to pay our obligations. The maximum amount of dividends that can be paid by our insurance company subsidiaries without prior approval of the applicable state insurance departments is subject to restrictions relating to statutory surplus, statutory income and unassigned surplus...

  • Page 95
    ... 31, 2014. 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 96
    ... Report on Form 10-K. Health Plan Services Health 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...

  • Page 97
    ... liabilities including capitation payable, shared risk settlements, provider disputes, provider incentives and other reserves for our Western Region Operations reporting segment. Because reserves for claims include various actuarially developed estimates, our actual health care services expenses...

  • Page 98
    ... 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 99
    ... member premium depending on the member's income level in relation to the Federal Poverty Level. We recognize the premium subsidy evenly over the contract period and report it as part of health plan services premium revenue. Cost Sharing Subsidy-For qualifying low-income members, HHS will reimburse...

  • Page 100
    ...and sharing the risk for allowable costs with the federal government. Variances from the target exceeding certain thresholds may result in HHS making additional payments to us or require us to make payments to HHS. We estimate and recognize adjustments to our health plan services premium revenue for...

  • Page 101
    ...health care providers, and other entities or individuals, as well as audits or investigations 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...

  • Page 102
    ...and Used We test long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset...

  • Page 103
    ... and liabilities and classified as current or noncurrent based upon the expected period of payment. In 2015, due to the non-deductibility of the health insurer fee for federal income tax purposes, we expect our fullyear effective income tax rate will exceed 50%. See "Overview-Health Care Reform...

  • Page 104
    ...disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our...

  • Page 105
    ... inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Deloitte & Touche, LLP, the independent registered public accounting firm that audited the financial statements included in this Annual Report on Form 10-K, has issued...

  • Page 106
    ... 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, 2014, based on criteria...

  • Page 107
    Item 9B. Other Information. None. 105

  • Page 108
    ...for its 2015 Annual Meeting of Stockholders (the "Proxy Statement"), which will be filed with the SEC within 120 days of December 31, 2014. Such information is incorporated herein by reference and made a part hereof. We have adopted a Code of Business Conduct and Ethics that applies to our employees...

  • Page 109
    ... set forth on page F-1 and covered by the Report of Independent Registered Public Accounting Firm are incorporated into this Item 15(a) by 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...

  • Page 110
    ...be signed on its behalf by the undersigned thereunto duly authorized. HEALTH NET, INC. By: /S / JAMES E. WOYS James E. Woys Chief Financial and Operating Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 111
    ...are filed as 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, 2014...Consolidated Statements of Comprehensive Income...

  • Page 112
    ... 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, 2014 and 2013, and the related consolidated statements of income, comprehensive...

  • Page 113
    ... per share data) 2014 Year Ended December 31, 2013 2012 Revenues Health plan services premiums...$ Government contracts...Net investment income ...Administrative services fees and other income ...Divested operations and services revenue ...Total revenues ...Expenses Health plan services (excluding...

  • Page 114
    HEALTH NET, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Year Ended December 31, 2014 2013 2012 Net income ...Other comprehensive income before tax: Unrealized gains (losses) on investments available-for-sale: Unrealized holding gains (losses) arising during the ...

  • Page 115
    ... Liabilities: Reserves for claims and other settlements...$ 1,896,035 $ 984,075 71,988 72,098 Health care and other costs payable under government contracts...96,106 123,969 Unearned premiums...880,374 397,036 Accounts payable and other liabilities...2,944,503 1,577,178 Total current liabilities...

  • Page 116
    ...Loss) Common Stock Shares Balance as 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...

  • Page 117
    ... assets...Amounts receivable/payable under government contracts ...39,754 Reserves for claims and other settlements ...911,960 Accounts payable and other liabilities ...517,742 Net cash provided by operating activities...776,001 CASH FLOWS FROM INVESTING ACTIVITIES: Sales of investments ...441...

  • Page 118
    ...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 119
    ... benefit coverage, for which premiums are based on a predetermined prepaid fee, Medicaid revenues based on multi-year contracts to provide care to Medicaid recipients, revenue under Medicare risk contracts to provide care to enrolled Medicare recipients and revenue under our dual eligible members...

  • Page 120
    ...for the commercial health plans under the ACA, there is also a medical loss ratio corridor for the California Department of Health Care Services ("DHCS") adult Medicaid expansion members under the state Medicaid program in California ("Medi-Cal") beginning in 2014 and covering an 18-month period. If...

  • Page 121
    .... Additionally, we contract with certain hospitals to provide hospital care to enrolled members on a capitated basis. Our HMOs also contract with hospitals, physicians and other providers of health care, pursuant to discounted fee-for-service arrangements, hospital per diems, and case rates under...

  • Page 122
    ...new customer populations, variation in benefit utilization, disease outbreaks, changes in provider reimbursement, fluctuations in medical cost trend, variation in claim submission patterns and variation in claims processing speed and payment patterns, changes in technology that provide faster access...

  • Page 123
    ... 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 the T-3 contract, we are not the primary obligor...

  • Page 124
    ... 31, 2014, 2013 and 2012, respectively. In September 2013, the U.S. Department of Veterans Affairs ("VA") awarded us a contract under its new Patient Centered Community Care program ("PC3 Program"). The PC3 Program provides eligible veterans coordinated, timely access to care through a comprehensive...

  • Page 125
    ... over the contract period and reported as part of health plan services premium revenue. Low-Income Premium Subsidy-For qualifying low-income members, CMS will reimburse Health Net, on the member's behalf, some or all of the monthly member premium depending on the member's income level in relation to...

  • Page 126
    ...compensation cost that has been charged against income under our various long-term incentive plans was $28.3 million, $29.9 million and $28.9 million during the years ended December 31, 2014, 2013 and 2012, respectively. The total income tax benefit recognized in the income statement for share-based...

  • Page 127
    ..., which increase the estimated useful life of an asset, are capitalized. Upon the sale or retirement of assets, the recorded cost and the related accumulated depreciation are removed from the accounts, and any gain or loss on disposal is reflected in operations. We periodically assess long-lived...

  • Page 128
    ...the Western Region Operations reporting unit with and without the impact of the business to be sold. Our measurement of fair values is based on a combination of the discounted total consideration expected to be received in connection with the services and asset sale agreements, income approach based...

  • Page 129
    ...health care providers, and other entities or individuals, as well as audits or investigations 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...

  • Page 130
    ... 31, 2014, 2013, and 2012, respectively. We are the sole commercial plan contractor with DHCS to provide Medi-Cal services in Los Angeles County, California. In 2014 and 2013, revenue from our Medi-Cal contract in Los Angeles County was approximately 55% and 46% of our total Medicaid premium revenue...

  • Page 131
    ... (depreciation) after tax on investments available-for-sale and prior service cost and net loss related to our defined benefit pension plan (see Note 10). Our accumulated other comprehensive income (loss) for the years ended December 31, 2014, 2013 and 2012 is as follows: Unrealized Gains...

  • Page 132
    ...million attributable to periods prior to 2013, as general and administrative expense. In addition, the State of California increased Medicaid premium revenues in an amount equal to the increase in the premium taxes. As a result, we recorded $92.8 million in health plan services premiums for the year...

  • Page 133
    ... insurance exchanges ("exchanges") where individuals and small groups may purchase health insurance coverage under regulations established by U.S. Department of Health and Human Services ("HHS"). We currently participate in exchanges in Arizona and California. Effective January 1, 2014, the ACA...

  • Page 134
    ... member premium depending on the member's income level in relation to the Federal Poverty Level. We recognize the premium subsidy evenly over the contract period and report it as part of health plan services premium revenue. Cost Sharing Subsidy-For qualifying low-income members, HHS will reimburse...

  • Page 135
    ... recorded as administrative services fees and other income in 2013 and for the three months ended March 31, 2014. Recorded payments on a grossed-up basis by recording Medi-Cal payments received as premium revenue and estimated Medi-Cal claim payments as health care costs (incurred claims), each via...

  • Page 136
    ... to us in the following areas: claims management, membership and benefits configuration, customer contact center services, information technology, quality assurance, appeals and grievance services and non-clinical medical management support. In addition, we have entered into an asset purchase...

  • Page 137
    ... to provide prescription drug benefits as part of our Medicare Advantage plan offerings. In addition, we provided Medicare PDP transition-related services to CVS Caremark in connection with the transaction prior to December 31, 2012, and certain transition-related services were provided in 2013. We...

  • Page 138
    ... and reported as other comprehensive income, net of income tax effects. The cost of investments sold is determined in accordance with the specific identification method, and realized gains and losses are included in net investment income. We periodically assess our available-for-sale investments...

  • Page 139
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 2013 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Carrying Value (Dollars in millions) Current: Asset-backed securities ...U.S. government and agencies ...Obligations of states and other ...

  • Page 140
    ... shows the number of our individual securities-current that have been in a continuous loss position at December 31, 2014: 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 141
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following table shows the number of our individual securities-noncurrent that have been in a continuous loss position through December 31, 2014: Less than 12 Months 12 Months or More Total Asset-backed securities......

  • Page 142
    ... terms and conditions, limitations (subject to specified exclusions) on our and our subsidiaries' ability to incur debt; create liens; engage in certain mergers, consolidations and acquisitions; sell or transfer assets; enter into agreements that restrict the ability to pay dividends or make...

  • Page 143
    ...event of the occurrence of 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...

  • Page 144
    ... approach. Level 3 also includes a statesponsored 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 145
    ... government and agencies: U.S. Treasury securities...U.S. Agency securities ...Obligations of states and other political subdivisions...Corporate debt securities...Total investments at fair value...Embedded contractual derivative...State-sponsored health plans settlement account deficit ...Total...

  • Page 146
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Level 1 Level 2current Level 2noncurrent Level 3 Total As of December 31, 2013 Assets: Cash and cash equivalents ...Investments-available-for-sale Asset-backed debt securities: Residential mortgage-backed securities ......

  • Page 147
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The changes in the balances of Level 3 financial assets for the years ended December 31, 2014 and 2013 were as follows (dollars in millions): Year Ended December 31, 2014 StateSponsored Health Plans Settlement Account Deficit ...

  • Page 148
    ... techniques utilized by us to determine such fair values and the related impairment loss for the year ended December 31, 2014 (dollars in millions): Total Asset Impairment for the Year Months Ended December 31, 2014 Level 3 Property and equipment, net ...$ Goodwill allocated to sale of business...

  • Page 149
    ... Region reporting unit State-sponsored health plans settlement account deficit $ 7.2 Monte Carlo Simulation Approach $ 565.9 Income Approach Income Approach Discount Rate 10.0% - 10.0% (10.0%) $ 62.9 Discount Rate 1.135% - 1.135% (1.135%) Valuation policies and procedures are managed...

  • Page 150
    ... the year ended December 31, 2014 the compensation cost that has been charged against income under our various stock option and long-term incentive plans ("the Plans") was $28.3 million. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $10...

  • Page 151
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) During the years ended December 31, 2014, 2013 and 2012, we made no grants of stock options. The following table provides the total intrinsic value of options exercised during the years ended December 31: 2014 18,608,206 2013 3,...

  • Page 152
    ...32,321 0.93 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 153
    ... price of such Right, that number of shares of Common Stock having a market value of two times such exercise price. In addition, and subject to certain exceptions contained in the Rights Agreement, in the event that we are acquired in a merger or other business combination in which the Common Stock...

  • Page 154
    ...2, 2011, our Board of Directors authorized our stock repurchase program pursuant to which a total of $300 million of our outstanding common stock could be repurchased. On March 8, 2012, our Board of Directors approved a $323.7 million increase to our stock repurchase program and on December 16, 2014...

  • Page 155
    ... participants. Under these plans, we pay a percentage of the costs of medical, dental and vision benefits during retirement. The plans include certain cost-sharing features such as deductibles, co-insurance and maximum annual benefit amounts that vary based principally on years of credited service...

  • Page 156
    ...of net periodic benefit cost recognized in our consolidated statements of operations as general and administrative expense for years ended December 31: 2014 Pension Benefits 2013 2012 2014 Other Benefits 2013 2012 (Dollars in millions) Service cost...$ Interest cost...Amortization of prior service...

  • Page 157
    ... 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 year ended December 31, 2014: 1-Percentage Point Increase 1-Percentage Point Decrease (Dollars in millions) Effect on total of service and...

  • Page 158
    ... Future Benefit Payments We estimate that benefit payments related to our pension and postretirement health and life plans over the next ten years will be as follows: Pension Benefits Other Benefits (Dollars in millions) 2015...$ 2016...2017...2018...2019...Years 2019-2024...Note 11-Income Taxes...

  • Page 159
    ... ACA. Our health insurance industry fee payment of $141.4 million in 2014 was not deductible for federal income tax purposes and in many state jurisdictions. See Note 2, under the heading "Accounting for Certain Provisions of the ACA-Premium-based Fee on Health Insurers" for additional information...

  • Page 160
    ...23.3) 198.6 During 2014, our total valuation allowance decreased by a net $10 million, primarily resulting from the expiration of a $6 million state capital loss carryforward upon which the valuation allowance was based. For 2014, 2013 and 2012 the income tax benefit realized from share-based award...

  • Page 161
    ... 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 2014, 2013 and 2012, ($1.9) million, ($0.3) million...

  • Page 162
    ... 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 subsidiaries must comply with their respective state's minimum regulatory capital requirements. As necessary, we make...

  • Page 163
    ... Family Life Counseling (formerly Military and Family Life Consultants) program. 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 164
    ... regulations applicable to our business, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, rules relating to pre-authorization penalties, payment of out-of-network claims, timely review of grievances and appeals, and timely and accurate payment of claims...

  • Page 165
    ... 31, 2014. 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 166
    ..., and the total estimated future commitments under the agreement were approximately $25.4 million. We have also entered into contracts with our health care providers and facilities, the federal government, other IT service companies and other parties within the normal course of our business for the...

  • Page 167
    ... of our commercial, Medicare, Medicaid and dual eligibles health plans, our health and life insurance companies, our pharmaceutical services subsidiaries and certain operations of our behavioral health subsidiaries. These operations are conducted primarily in California, Arizona, Oregon and...

  • Page 168
    ... segment data for the three years ended December 31, 2014, 2013 and 2012. 2014 Western Region Operations Government Contracts Corporate/Other/ Eliminations Total (Dollars in millions) Revenues from external sources...$ Intersegment revenues ...Net investment income ...Administrative services fees...

  • Page 169
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 2012 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 170
    ... 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 171
    ...new products offered or programs administered under the ACA. The following table shows the Company's health plan services expenses for the years ended December 31: Health Plan Services 2013 (Dollars in millions) 2014 2012 Total incurred fee for service claims ...Capitated expenses and shared risk...

  • Page 172
    HEALTH NET, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 2013 March 31 June 30 September 30 December 31 (Dollars in millions, except per share data) Total revenues...$ 2,797.0 2,268.7 Health plan services costs...125.5 Government contracts costs...Income from continuing operations 81...

  • Page 173
    ...SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2014 2013 2012 REVENUES: Net investment (loss) income ...$ Other income ...Administrative service fees ...Total revenues...

  • Page 174
    ... OF REGISTRANT (PARENT COMPANY ONLY) HEALTH NET, INC. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Year Ended December 31, 2014 2013 2012 Net income ...Other comprehensive income before tax: Unrealized gains (losses) on investments available-for-sale: Unrealized holding gains...

  • Page 175
    ... notes payable-long term ...Long term debt ...Other liabilities...Total Liabilities ...Commitments and contingencies Stockholders' Equity: Common stock ...Additional paid-in capital ...Treasury common stock, at cost ...Retained earnings...Accumulated other comprehensive income...Total Stockholders...

  • Page 176
    ... 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, 2014 2013 2012 NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES ...$ CASH FLOWS FROM INVESTING ACTIVITIES: Sales...

  • Page 177
    ... 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 (loss) of its...

  • Page 178
    ...Bouchard (filed as Exhibit 10.1 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). Transition Services, Separation Agreement and Release of All Claims, dated as of October 20, 2014, by and between Health Net, Inc...

  • Page 179
    ... 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 180
    ....44 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). Form of Restricted Stock Unit Agreement utilized for non-employee directors of Health Net, Inc. under the 2006 Long-Term Incentive Plan (filed as Exhibit 10...

  • Page 181
    ... Director Stock Option Plan (filed as Exhibit 10.43 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-12718) and incorporated herein by reference). Health Net, Inc. 2005 Long-Term Incentive Plan (filed as Exhibit 10.3 to the Company's Current Report on Form...

  • Page 182
    ... party thereto from time to time (filed as Exhibit 10 to the Company's Current Report on Form 8-K filed with the SEC on October 28, 2011 (File No. 1-12718) and incorporated herein by reference). Master Agreement, dated August 19, 2008, between Health Net, Inc. and International Business Machines...

  • Page 183
    ... Number Description ^10.72 Amendment No. 4 to the Master Services Agreement, dated January 1, 2014, by and between Health Net, Inc. and International Business Machines Corporation (filed as Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2014 (File...

  • Page 184
    ... Number Description 101 The following materials from Health Net, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations for the years ended December 31, 2014, December 31, 2013...

  • Page 185
    ... 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 a material fact necessary to make the statements made...

  • Page 186
    ...Sarbanes-Oxley Act of 2002 I, James E. Woys, 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 a material fact necessary to make the statements made, in...

  • Page 187
    ...-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, 2014 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...