Health Net 2014 Annual Report Download - page 132

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-22
The following table shows reclassifications out of accumulated other comprehensive income and the affected
line items in the consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012:
Year Ended December 31,
Affected line item in the
Consolidated
Statements of
Operations
2014 2013 2012
(Dollars in millions)
Unrealized gains on investments
available-for-sale......................... $ 2.7 $ 24.0 $ 36.7 Net investment income
2.7 24.0 36.7 Total before tax
0.9 8.4 12.8 Tax expense
1.8 15.6 23.9 Net of tax
Amortization of defined benefit
pension items:
Prior-service cost................... (0.4) (0.1)(0.1) (a)
Actuarial gains (losses)......... (0.2) (2.5)(4.1) (a)
(0.6) (2.6)(4.2) Total before tax
(0.2) (1.0)(1.6) Tax benefit
(0.4) (1.6)(2.6) Net of tax
Total reclassifications for the
period........................................... $ 1.4 $ 14.0 $ 21.3 Net of tax
_________
(a) These accumulated other comprehensive income components are included in the computation of net periodic
pension cost.
Taxes Based on Premiums
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 $191.2 million in 2014,
$124.4 million in 2013 and $51.6 million in 2012. The 2013 premium tax expense includes Medicaid premium taxes
reinstated in June 2013 retroactive to July 1, 2012 (see "Medicaid Premium Taxes" below for additional information).
These amounts are recorded in general and administrative expenses on our consolidated statements of operations.
Medicaid Premium Taxes
On June 27, 2013, the State of California reinstated premium taxes retroactive to July 1, 2012 for plans
participating in Medi-Cal. As a result of this reinstatement, for the year ended December 31, 2013, we recorded $92.8
million, including $20.2 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 ended December 31, 2013. For the
year ended December 31, 2014, we recorded $157.1 million in Medicaid premium taxes and a corresponding $157.1
million in health plan services premiums. These Medicaid premium taxes are currently authorized by the State of
California through July 1, 2016.