Health Net 2015 Annual Report Download - page 11

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Indemnity Insurance Products
We offer insured PPO, EPO and indemnity products as “stand-alone” products and as part of multiple option
products in various markets. These products are offered by our health and life insurance subsidiaries, which are licensed
to sell insurance in 49 states and the District of Columbia. Through these subsidiaries, we also offer auxiliary non-
health products such as life, accidental death and dismemberment, dental, vision and behavioral health insurance. Our
health and life insurance products are provided throughout most of our service areas.
Other Specialty Services and Products
We offer pharmacy benefits, behavioral health, dental and vision products and services (mostly through strategic
relationships 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 subsidiary,
Health Net Pharmaceutical Services (“HNPS”). As of December 31, 2015, HNPS provided integrated PBM services to
approximately 3.1 million Health Net members who have pharmacy benefits, including approximately 264,000 of our
Medicare members and approximately 22,000 of our dual eligibles members.
HNPS manages these benefits in an effort to achieve the highest quality outcomes at the 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 safety and efficacy and manages data collection
efforts to facilitate our health plans' disease management programs. In addition, HNPS provides affiliated health plans
various services including development of benefit designs, cost and trend management, sales and marketing support,
and management delivery systems. HNPS outsources certain capital and labor-intensive functions of pharmacy benefit
management, such as claims processing, mail order services and pharmacy network services.
Behavioral Health
We administer and arrange for behavioral health benefits and services through our subsidiary, Managed Health
Network, Inc., and its subsidiaries (collectively “MHN”). MHN offers behavioral health, and substance abuse programs
on an insured and self-funded basis to groups in various states, and these programs and services are included as a
standard part of most of our commercial health plans. MHN's benefits and services are also sold in conjunction with
other commercial and Medicare products and on a stand-alone basis to unaffiliated health plans and employer groups. In
addition, MHN administers employee assistance programs (“EAPs”) for groups in several states. Through our EAPs, we
assess and refer employees of employer groups to a variety of non-medical services and information designed to
improve workplace productivity. MHN also holds contracts with the U.S. Department of State (“State Department”) and
the U.S. Agency for International Development (“USAID”) to provide EAP counseling services tailored for State
Department and USAID employees and family members while posted overseas. In addition, effective January 1, 2014,
we are required to administer certain mental health outpatient benefits to all our Medi-Cal members, including those
newly eligible as a result of Medicaid expansion.
MHN's products and services were provided to approximately 6.2 million individuals as of December 31, 2015,
with approximately 139,000 individuals under risk-based programs, approximately 2.9 million individuals under self-
funded programs and approximately 3.2 million individuals under EAPs, including those who are also covered under
other MHN programs. In 2015, MHN's total revenues were $37.4 million. Of that amount, $1.0 million represented
revenues from business with MHN affiliates and $36.4 million represented revenues from non-affiliate business. The
foregoing excludes results and information related to MHN's administration and monitoring of the non-medical
counseling program for the Department of Defense under the DoD sponsored Military Family and Life Counseling
(“MFLC”) program formerly Military Family and Life Consultant program, which is reported in our Government
Contracts reportable segment. See “—Government Contracts Segment—Other Department of Defense Contracts.”
Dental and Vision
We do not underwrite or administer stand-alone dental or vision products other than the stand-alone dental
products that we underwrite in Oregon and Washington. During 2015 our current and prospective group plan members
in Arizona and California had the option to elect private label dental products through a strategic relationship with
Dental Benefit Providers, Inc. (“DBP”) and private label vision products through a strategic relationship with EyeMed
Vision Care LLC (“EyeMed”). Those stand-alone dental products were underwritten and administered by DBP