Table of ~~operations, and financial condition.~~Contents

We may also pursue opportunistic partnerships and acquisitions to allow us to provide better health care options for our members as well as to augment existing operations, and we may be in discussions with respect to one or more partnerships or acquisitions at any given time. For example, in 2020 we entered into a partnership with Cigna to exclusively service commercial health plans to small businesses, for which we made a significant investment in financial and other resources. Partnerships or other acquisition opportunities that we enter into may not perform as well as expected, may not achieve timely profitability or expected synergies, may expose us to additional liability, or may limit our ability to offer products in certain insurance markets and geographic regions.

We also pursue opportunities to monetize our platform, including through + Oscar arrangements, such as our recent arrangement with Health First. We may not be able to perform these platform arrangements as well as expected, and these arrangements may pose operational challenges, may not achieve timely profitability, may expose us to additional liability, or may limit our ability to offer products in certain insurance markets and geographic regions.

~~We expect that, for the foreseeable future, our growth strategy will focus on opportunities to grow our membership in existing and new markets and states and to monetize our platform.~~ Pursuing our growth strategy requires significant capital expenditures, the allocation of valuable management and operational resources, and the hiring of additional personnel, and may strain our operations and our financial and management controls and reporting systems and procedures. We have experienced and may in the future continue to experience attrition, which may further exacerbate these challenges. If we are unable to effectively execute our growth strategy and effectively manage our ~~growth,~~operations, systems and controls, our results of operations and financial condition could be materially and adversely affected.

We have a history of losses, and we may not achieve or maintain profitability in the future.

We have not been profitable since our inception in 2012 and had an accumulated deficit of ~~$1.4~~$2.0 billion and ~~$1.8~~$2.1 billion as of December 31, ~~2020~~2021 and ~~September 30, 2021,~~March 31, 2022 respectively. We incurred net losses of ~~$406.8 million, $212.7~~$571.4 million and ~~$373.2~~$77.3 million in the ~~year~~years ended December 31, ~~2020~~2021 and the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, respectively. We expect to make significant investments to further market, develop, and expand our business, including by hiring additional personnel, continuing to develop our full stack technology platform, ~~and~~ member engagement engine and operations, acquiring more members, maintaining existing members and investing in partnerships, collaborations and ~~acquisitions. In addition,~~acquisitions, including through our +Oscar platform. The commissions we ~~expect~~offer to ~~continue~~brokers could also increase significantly as we compete to ~~increase our headcount in the coming years.~~attract new members. As a public company, we also incur significant legal, accounting, compliance, and other expenses that we did not incur as a private company. ~~The commissions we offer~~We expect to ~~brokers could also increase significantly as we compete to attract new members. We will~~ continue to make such investments to grow our business. Despite these investments, we may not succeed in increasing our revenue or managing our costs on the timeline that we expect or in ~~an amount~~amounts sufficient to ~~lower~~reduce our net loss and ultimately become profitable. Moreover, if our revenue declines, we may not be able to reduce costs in a timely manner because many of our costs are fixed, at least in the short-term. If we are unable to manage our costs

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effectively, this may limit our ability to optimize our business model, acquire new members, enter into +Oscar platform arrangements and grow our revenues. Accordingly, despite our best efforts to do so, we may not achieve or maintain profitability, and we may continue to incur significant losses in the future.

Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows.

We set our premiums in advance of each policy year based on competitive factors in each market in which we participate as well as a projection of future expenses. As a result, the profitability of our insurance business depends, to a significant degree, on our ability to accurately estimate and effectively manage our medical expenses and administrative costs.

Numerous factors impact our ability to accurately estimate and control our medical expenses, many of which are not within our control, including, but not limited to:

•changes in health care regulations and practices, including subregulatory guidance, regulations, or statutes that govern individual, small group, or Medicare Advantage plans, or the Health Insurance Marketplaces;

•changes in medical utilization rates, including as a result of COVID-19;

•increases in the costs of healthcare facilities and services, medical devices and pharmaceuticals, including as a result of macroeconomic inflationary effects;

•changes in our member mix, the geographic concentration of our members, and the distribution of members among our plans;

•lack of credible data in new markets or with respect to new plan offerings;

•initiation of new Special Enrollment Periods or other unexpected healthcare market developments;

•the end of the temporary suspension of eligibility recertification for Medicaid recipients in response to the COVID-19 pandemic, which will likely result in an increase in healthcare exchange participation;

•the broader competitive landscape;

•the occurrence of natural disasters, terrorism, major epidemics, pandemics (including related to COVID-19 and its variants), and the potential effects of climate change;

•continued inequity and racial discrimination in the U.S. health care system, and the resulting physical and mental health costs in broader society;

•the introduction and adoption of new or costly medical technologies and pharmaceuticals; and

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•provider fraud.

The public health emergency (“PHE”) extension for COVID-19 expires in July 2022, with Medicaid redeterminations expected to begin in August 2022. It is possible, however, that the PHE could be further extended, which would further delay Medicaid redetermination implementation. Once the PHE extension ends and Medicaid redetermination begins, we expect there could be an increase to our membership as well as increased pressure on our underwriting margin.

Due to the time lag between when services are actually rendered by providers and when we receive, process, and pay a claim for those services, our medical expenses include a provision for claims incurred but not paid. Given the uncertainties inherent in making estimates for such provisions, there can be no assurance that our claims liability estimate will be adequate, and any adjustments to the estimate may unfavorably impact, potentially in a material way, our reported results of operations and financial condition. Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results.

We also incur substantial administrative costs, particularly distribution costs and the costs of hiring and retaining personnel. External factors, including general economic conditions such as inflation and unemployment levels, are generally beyond our control and could further reduce our ability to accurately estimate and effectively control our administrative expenses. Furthermore, regulatory changes or developments may require us to change our existing practices with respect to broker commissions and could potentially result in a substantial increase in related costs or limit our ability to manage those costs in the future. Any such increase could cause our actual results to differ, potentially materially, from our prior expectations. As a result of our market expansion, expansion of our plan offerings and growth of our membership, our anticipated medical expenses and administrative costs are subject to additional uncertainty.

From time to time in the past, our actual results have varied from those expected, particularly in times of significant changes in the number of our members. If it is determined that our estimates are significantly different than actual results, our results of operations and financial position could be adversely affected.

Any potential repeal of, changes to, or judicial challenges to the ACA and its regulations, could materially and adversely affect our business, results of operations, and financial condition.

The enactment of the ACA in March 2010 transformed the U.S. health care delivery system through a series of complex initiatives; however, the ACA continues to face judicial challenges, as well as efforts to repeal or change certain of its significant provisions. For the ~~year~~years ended December 31, 2021 and 2020, ~~and the three and nine months ended September 30, 2021,~~ approximately ~~95%, 97%~~98%, and ~~97%~~95%, respectively, of our revenue was derived from sales of health plans subject to regulation under the ACA, primarily comprised of policies directly purchased by individuals and families and secondarily comprised of policies purchased by small employers and provided to their employees as a benefit. Consequently, changes to, or repeal of, portions or the entirety of the ACA and its regulations, as well as judicial interpretations in response to legal and other constitutional challenges, could materially and adversely affect our business and financial position, results of operations, or cash flows. Even if the ACA is not amended or repealed, elected and appointed officials could continue to propose changes impacting the ACA, which could materially and adversely affect our business, results of operations, and financial condition.

The ~~ACA’s provisions include the establishment of Health Insurance Marketplaces. The~~ ACA also established significant subsidies to support the purchase of health insurance by individuals, in the form of advanced premium tax credits, or APTCs, available through Health Insurance Marketplaces. The American Rescue Plan added additional APTCs for individuals at every household income level for 2021 and 2022. During the ~~year~~years ended December 31, ~~2020~~2021 and ~~the three and nine months ended September 30, 2021,~~2020, the direct policy premiums of approximately ~~60%, 76%~~73% and ~~72%~~60%, respectively, of our members were subsidized by APTCs. Additionally, the ACA implemented certain requirements for insurers, including changes to Medicare Advantage payments and a minimum MLR provision that requires insurers to pay rebates to consumers when insurers do not meet or exceed specified annual MLR thresholds. The ACA also established anti-discrimination protections on the basis of race, color, national origin, sex, age, and disability, which may impact the manner in which health insurers receiving any form of federal financial assistance design and implement their benefit packages. Further, the ACA imposes significant fees, assessments, and taxes on us and other health insurers, plans and other industry participants. As of September 30, 2021, we offered Individual plans through the Health Insurance Marketplaces in 18 states, which represented approximately 86% of our total membership.

There have been significant efforts to repeal, or limit implementation of, certain provisions of the ACA. Such initiatives include repeal of the individual mandate effective in 2019, as well as easing of the regulatory restrictions placed on short-term limited duration insurance and association health plans, some or all of which may provide fewer benefits than the traditional ACA-mandated insurance benefits. The Supreme Court in June 2021 held in ~~Texas v. United States of America~~ that the states and individuals that brought the lawsuit challenging the ACA’s individual mandate did not have standing to challenge the law, effectively ending this most recent challenge to the constitutionality of the ACA. Nevertheless, the perceived uncertainty and possible changes in the Health Insurance Marketplaces could result in reduced participation from individuals seeking insurance coverage and possible non-renewal of existing policies. Because we rely on the Health Insurance Marketplaces to promote our Individual and some of our Small Group products and increase membership, reduced participation in such marketplaces could materially and adversely impact our business, financial condition, and results of operations. Also, althoughAlthough individuals would still be able to purchase coverage, possibly through marketplaces that continue to be maintained by certain states or by purchasing coverage directly from an insurer, the elimination or reduction of APTCs or other subsidies would make such coverage unaffordable to some individuals and could thereby reduce overall ~~membership.~~participation in the Health Insurance Marketplaces and our membership, which could have a significant adverse effect on our business and future operations, and our results of operations and financial condition. Further, the federal government’s continued refusal to fund cost sharing subsidies could additionally impact Health Insurance Marketplace enrollment. These market and political dynamics may increase the risk that our Health Insurance Marketplace products will be selected by individuals who have a higher risk profile or utilization rate or lower subsidization rate than we anticipated when we established the pricing for products on Health Insurance Marketplaces, possibly leading to financial losses.

~~Future changes~~There have been significant efforts to ~~the ACA and other potential changes involving the functioning~~repeal, or limit implementation of, certain provisions of the ~~Health Insurance Marketplaces as a result of new legislation, regulation, or executive action, could materially impact our business, results of operations, and financial condition.~~

~~Our profitability depends, to a significant degree, on our ability to accurately estimate and effectively manage our medical expenses. Because the premiums are set in advance~~ACA. Such initiatives include repeal of the ~~policy year based~~individual mandate effective in 2019, as well as easing of the regulatory restrictions placed on ~~a projection~~short-term limited duration insurance and association health plans, some or all of ~~future expenses, our overall~~which may provide fewer benefits than the traditional ACA-mandated insurance benefits. The ACA has also been subject to multiple judicial challenges of its

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~~financial results are sensitive to~~constitutionality. The perceived uncertainty and possible changes in our medical expenses. For example, if our medical expenses for the policy year 2020 had been one percentage point higher, this would have resulted in an approximately $13.6 million increase in our net loss after taking into account risk adjustment determinationsstate and ~~reinsurance. Changes in health care regulations~~federal legislation and practices, the level of utilization of health care services, hospital and pharmaceutical costs, and to the broader competitive landscape, disasters, the potential effects of climate change, major epidemics, pandemics, or newly emergent viruses (such as COVID-19 and its variants), continued inequity and racial discrimination in the U.S. health care system, and the resulting physical and mental health costs in broader society, new medical technologies, new pharmaceuticals, increases in provider fraud, and other external factors, including general economic conditions such as inflation and unemployment levels, are generally beyond our control and could reduce our ability to accurately estimate and effectively control the costs of providing health benefits.

Due to the time lag between when services are actually rendered by providers and when we receive, process, and pay a claim for those services, our medical expenses include a provision for claims incurred but not paid. We are continuously enhancing our process for estimating claims liability, which we monitor and refine on a monthly basis as claims receipts, payment information, and inpatient acuity information becomes available. As more complete information becomes available, we adjust the amount of the estimate, and include the changes in estimates in expenses in the period in which the changes are identified. Given the uncertainties inherent in such estimates, there can be no assurance that our claims liability estimate will be adequate, and any adjustments to the estimate may unfavorably impact, potentially in a material way, our reported results of operations and financial condition. Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results.

Additionally, when we expand our product offerings, we have limited information with which to develop our anticipated claims liability. Changes to (or new or revised interpretations of) subregulatory guidance, regulations, or statutes that govern Health Insurance Marketplaces ~~including, but not limited~~could result in reduced participation from individuals seeking insurance coverage and possible non-renewal of existing policies. Because we rely on the Health Insurance Marketplaces, any changes to ~~those governing eligibility criteria, Special Enrollment Periods, and minimum benefits requirements, may pose difficulty~~the ACA that result in ~~estimating our claims liability.~~

~~From time to time in the past, our actual results have varied from those expected, particularly in times of significant~~reduced membership, or other changes in ~~the number of~~healthcare law and regulation, could materially and adversely impact our ~~members. If it is determined that our estimates are significantly different than actual results, our~~business, financial condition, and results of ~~operations and financial position could be adversely affected.~~operations.

Risks Related to the Regulatory Framework that Governs Us

Our business activities are subject to ongoing, complex, and evolving regulatory obligations, and to continued regulatory review, which result in significant additional expense and the diversion of our management’s time and efforts. If we fail to comply with regulatory requirements, or are unable to meet performance standards applicable to our business, our operations could be disrupted or we may become subject to significant penalties.

We operate in a highly regulated industry and we must comply with numerous and complex state and federal laws and regulations to operate our business, including requirements to maintain or renew our regulatory approvals or obtain new regulatory approvals to sell insurance and to sell specific health plans.

The ~~National Association of Insurance Commissioners, or~~ NAIC has adopted the Annual Financial Reporting Model Regulation, or the Model Audit Rule, which, where adopted by states, requires expanded governance practices, risk and solvency assessment reporting, and filing of periodic financial and operating reports. Most states have adopted these or similar measures to expand the scope of regulations relating to corporate governance and internal control activities of ~~health maintenance organizations, or~~ HMOs and insurance companies. We are also required to notify, or obtain approval from, federal and/or state regulatory authorities prior to taking various actions as a business, including making changes to our network, service offerings, and the coverage of our health plans, as well as prior to entering into relationships with certain vendors and health organizations.Delays in obtaining or failure to obtain or maintain these approvals could reduce our revenue or increase our costs. Existing or future laws and rules could also require or lead us to take other actions such as changing our business practices, and could increase our liability.

The ACA implemented certain requirements for insurers, including changes to Medicare Advantage payments and a minimum MLR provision that requires insurers to pay rebates to consumers when insurers do not meet or exceed specified annual MLR thresholds. The ACA also established anti-discrimination protections on the basis of race, color, national origin, sex, age, and disability, which may impact the manner in which health insurers receiving any form of federal financial assistance design and implement their benefit packages. Further, the ACA imposes significant fees, assessments, and taxes on us and other health insurers, plans and other industry participants. Additionally, there are numerous steps federal and state regulators require for continued implementation of the ACA including the annual federal updates to implementing market regulations via the Notice of Benefit and Payment Parameters. If we fail to effectively implement or appropriately adjust our operational and strategic initiatives with respect to the implementation of health care reform, or do not do so as effectively as our competitors, our results of operations may be materially and adversely affected.

We also offer Medicare Advantage plans, which requires us to comply with a myriad of rules, regulations, and subregulatory guidance, as well as third party and publicly administered performance standards. In urbanized areas, Medicare Advantage plans must be capable of enrolling at least 5,000 beneficiaries. CMS can waive this minimum enrollment requirement for the first three years of the contract. If we fail to enroll the minimum number of beneficiaries, CMS may elect not to renew our Medicare Advantage contracts. In addition, a portion of each Medicare Advantage plan’s reimbursement is tied to the plan’s Star Rating, as published by CMS, with those plans receiving a rating of four (4.0) or more stars eligible for quality-based bonus payments. A plan’s Star Rating affects its image in the market, and plans that achieve higher Star Ratings are able to offer enhanced benefits and market more effectively and, as a result, may have a competitive advantage over plans with lower Star Ratings. Medicare Advantage plans with Star Ratings of less than three (3.0) stars for three consecutive years are denoted as “low performing” plans on the CMS website and in the CMS “Medicare and You” handbook and CMS has the authority to terminate the Medicare Advantage contracts for such plans. For plan year 2022, only one of our Medicare Advantage plans was eligible to receive a full Star Rating, and it received an overall rating of 3.0 Stars, with a health plan Star Rating of 2.5 Stars, and a drug plan Star Rating of 4.0 Stars. We also received a drug plan Star Rating of 3.0 Stars for another Medicare Advantage plan. The Star Rating system is subject to change annually by CMS, which may make it more difficult to achieve and maintain favorable Star Ratings in the future. Our health insurance subsidiaries’ operating results, premium revenue, and benefit offerings will likely depend significantly on their Star Ratings, and there can be no assurances that we will be successful in achieving favorable Star Ratings or maintaining or improving our Star Ratings once achieved.

Similarly, health care accreditation entities such as the National Committee for Quality Assurance (“NCQA”), evaluate health plans based on various criteria, including effectiveness of care and member satisfaction. Health insurers seeking

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accreditation from NCQA must pass a rigorous, comprehensive review, and must annually report their performance. If we fail to achieve and maintain accreditation from agencies, such as NCQA, we could lose the ability to offer our health plans on Health Insurance Marketplaces, or in certain jurisdictions, which would materially and adversely affect our results of operations, financial position, and cash flows.

In addition, in each of the markets in which we operate, we are regulated by the relevant insurance and/or health and/or human services, or other government departments that oversee the activities of insurance and/or healthcare organizations providing or arranging to provide services to Medicare Advantage members, Health Insurance Marketplace enrollees, or otherbeneficiaries. For example, our health insurance subsidiaries must comply with minimum statutory capital and other financial solvency requirements, such as deposit and surplus requirements, and related reporting requirements, as well as price transparency requirements that mandate publication or disclosure of information related to the pricing or costs of covered items or services. In December 2020, Congress passed the No Surprises Act, which requires health insurers to hold members harmless for out-of-network costs in certain circumstances, and requires that insurers and healthcare providers work to agree on out-of-network reimbursement, including through utilizing the independent dispute resolution process outlined in the No Surprises Act or a similar process established under applicable state law. The No Surprises Act is effective January 1, 2022. Many states have enacted separate legislation addressing balance billing or surprise medical bills. These laws and regulations vary in their approach, resulting in different impacts on the health care system as a whole. Our health insurance subsidiaries must also comply with numerous statutes and regulations governing the sale, marketing, and administration of insurance. We have in the past, and we may in the future, fail to take actions mandated by federal and/or state laws or regulations with respect to changes in our health benefits, the health insurance policies for which individuals are eligible, proposed or actual premiums, and/or other aspects of individuals’ health insurance coverage. Such failures may result in our having to take corrective action, including making remediation payments to our members or paying fines to regulators, and may subject us to negative publicity.Any such failures could also negatively impact our ability to service our existing +Oscar platform arrangements and enter into new arrangements.

~~In each~~Changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program, could materially and adversely harm our business and operating results.

Our business is within the public and private sectors of the markets in which we operate, we are regulated by the relevant insurance and/or health and/or human services, or other government departments that oversee the activities of insurance and/or health care organizations providing or arranging to provide services to Medicare Advantage members, Health Insurance Marketplace enrollees, or other

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~~beneficiaries. For example, our~~U.S. health insurance ~~subsidiaries must comply with minimum statutory capital~~system, which are evolving quickly and ~~other~~subject to a changing regulatory environment, and our future financial ~~solvency requirements, such as deposit and surplus requirements, and related reporting requirements. Our~~performance will depend in part on growth in the market for private health insurance, ~~subsidiaries must also comply with numerous statutes and regulations governing the sale, marketing, and administration of insurance. Additionally,~~as well as our ~~health insurance subsidiaries may be required~~ability to ~~maintain dedicated personnel and physical offices in certain jurisdictions where we operate.~~adapt to regulatory developments.

The ~~frequent enactment of, amendments~~healthcare regulatory landscape can change unpredictably and rapidly due to or changes in ~~interpretations of laws~~political party legislative majorities or executive branch administrations at the state or federal level in the United States and ~~regulations~~ could, among other things:

•require us to restructure our relationships with providers within our network;

•require us to contract with additional providers at unfavorable terms;

•require us to cover certain forms of care provided by out-of-network providers at rates or levels indicated by rule or statute;

•require us to implement changes to our ~~health care~~healthcare services and types of coverage, or prevent us from innovating and ~~evolving;~~implementing technology solutions;

•require us to provide healthcare coverage to a higher risk population without the opportunity to adjust our premiums;

•require us to implement costly processes and compliance infrastructure;

•require us to make changes that restrict revenue and enrollment growth;

•increase our sales, marketing, and administrative ~~costs;~~ costs, including costs attributable to broker commissions;

•impose additional capital and surplus ~~requirements;~~ requirements, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding;

•make it more difficult to obtain regulatory approvals to operate our business or maintain existing regulatory approvals;

•prevent or delay us from entering into new service areas or product lines; and

•increase or change our liability to members in the event of malpractice by our contracted providers.

~~The evolving regulatory landscape requires a significant investment of time~~

Changes and ~~resources to ensure compliance with new and changing laws and regulations. In addition, changes~~developments in ~~political party legislative majorities or executive branch administrations at~~ the ~~state or federal level~~health insurance system in the United States ~~may change the attitude towards health care programs and result in changes to the existing legislative or regulatory environment.~~

The federal government periodically considers reducing or reallocating the amount of money it spends for Medicare. Furthermore, Medicare remains subject to the automatic spending reductions imposed by the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012, subject to a 2% cap, which was extended by subsequent legislative amendments through 2030, with the exception of a temporary suspension from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken. We anticipate this and any future similar initiatives will require government agencies to find funding alternatives, which may result in reductions in funding for programs, contraction of covered benefits, and limited or no premium rate increases, or premium rate decreases.

Additionally, the taxes and fees that we are required to pay to federal, state, and local governments may increase due to several factors, including: enactment of, changes to, or interpretations of, tax laws and regulations, audits by governmental authorities, and geographic expansions into higher taxing jurisdictions.

~~The governmental health care programs~~states in which we ~~participate are subject to a myriad of rules, regulations,~~operate could also reduce demand for our services and ~~subregulatory guidance, as well as third party and publicly administered performance standards.~~harm our business. For example, certain elected officials have introduced proposals for some form of a ~~portion of each Medicare Advantage plan’s reimbursement is tied to the plan’s Star Rating, as published by CMS, with those plans receiving a rating of four (4.0)~~single public or ~~more stars eligible for quality-based bonus payments. A plan’s Star Rating affects its image in the market,~~quasi-public agency that organizes healthcare financing, but under which healthcare delivery would remain private, and ~~plans that achieve higher Star ratings are able to offer enhanced benefits and market more effectively and, as a result, may~~certain states have a competitive advantage over plans with lower Star Ratings. Medicare Advantage plans with Star Ratings of less than three (3.0) stars for three consecutive years are denoted as “low performing” plans on the CMS websiteproposed, and in ~~the CMS “Medicare~~some cases passed, legislation creating a public option for individual and ~~You” handbook and CMS has the authority to terminate the Medicare Advantage contracts for such plans. Only one of our Medicare Advantage~~small group plans was eligible to receive a full Star rating for 2022, and it received an overall rating of 3.0 Stars, with a health plan Star rating of 2.5 Stars, and a drug plan Star rating of 4.0 Stars. We also received a drug plan Star rating of 3.0 Stars for another Medicare Advantage plan.The Star Rating system is subject to change annually by CMS, which may make it more difficult to achieve and maintain favorable Star Ratings in the future. Our health insurance subsidiaries’ operating results, premium revenue, and benefit offerings will likely depend significantly on their Star Ratings, and there can be no assurances that we will be successful in achieving favorable Star Ratings or maintaining or improving our Star Ratings once achieved. Similarly, health care accreditation agencies such as the National Committee for Quality Assurance, or NCQA, evaluate health plans based on various criteria, including effectiveness of care and member satisfaction. Health insurers seeking accreditation from NCQA must pass a rigorous, comprehensive review, and must annually report their performance. If we fail to achieve and maintain accreditation from agencies, such as NCQA, we could lose the ability to offer our health plans on Health Insurance Marketplaces, or in certain jurisdictions, which would materially and adversely affect our results of operations, financial position, and cash flows..

Additionally, there are numerous steps federal and state regulators require for continued implementation of the ACA. If we fail to effectively implement or appropriately adjust our operational and strategic initiatives with respect to the implementation of health care reform, or do not do so as effectively as our competitors, our results of operations may be materially and adversely affected.

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~~Although~~

As the regulatory and legislative environments within which we ~~strive~~operate are evolving, we may not be able to ~~comply~~ensure timely compliance with ~~all existing regulations~~such changes due to limited resources. Furthermore, we may face challenges prioritizing the allocation of resources between implementing systems responsive to new legislative or regulatory requirements, focusing on growth-related operations and implementing management systems and controls related to ~~meet performance standards applicable~~being a public company.

In addition, changes to government policies not specifically targeted to the healthcare industry, such as a change in tax laws and the corporate tax rate or government spending cuts, could have significant impacts on our business, ~~failure to meet these requirements could result in~~results of operations, financial fines, inability to obtain new regulatory approvals to sell insurance or health plans, inability to obtain regulatory approval to expand our geographic service area, inability to obtain new regulatory approvals to offer administrative services, revocation of existing licenses to offer insurance or administrative services, other penalties,condition and ~~reputational harm.~~liquidity.

If we fail to comply with applicable privacy, security, and data laws, regulations and standards, including with respect to third-party service providers that utilize sensitive personal information on our behalf, or applicable consumer protection laws, our business, reputation, results of operations, financial position, and cash flows could be materially and adversely affected.

As part of our normal operations, we collect, receive, use, maintain, handle, transmit, process, and retain, which collectively in this risk factor we refer to as “Process” or “Processing,” personal, sensitive and other confidential information about individuals. We are subject to various federal and state laws and rules regarding the ~~collection, use, disclosure, storage, transmission, and destruction~~Processing of confidential information about individuals. ~~For example, we are subject to~~These laws and regulations include, among others, the Health Insurance Portability and Accountability Act of 1996, ~~or HIPAA, and~~as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (together “HIPAA”) and the California Consumer Privacy Act of 2018 (“CCPA”).

HIPAA imposes privacy, security and breach notification obligations on “covered entities,” including certain healthcare providers, health plans and healthcare clearinghouses, and their respective “business associates” that Process individually identifiable health information for or ~~HITECH, which require us~~on behalf of a covered entity, as well as their covered subcontractors with respect to ~~protect~~safeguarding the privacy, security and ~~confidentiality~~transmission of ~~medical records and protected~~individually identifiable health information, or PHI, that we collect, disseminate, maintain, and use. HIPAA applies national privacy and security standards for PHI to covered entities, including health insurers and certain types of health care providers, and their service providers that access, create, receive, use, or maintain PHI, known as business associates.information. HIPAA requires covered entities and business associates to develop and maintain policies and procedures ~~governing PHI that is used or disclosed,~~with respect to the protection of, use and disclosure of protected health information (“PHI”), and to implement administrative, physical, and technical safeguards to protect PHI, including PHI ~~maintained, used, and disclosed~~Processed in electronic ~~form. These safeguards include employee training, identifying business associates with whom covered entities need~~form, and to ~~enter into HIPAA-compliant contractual arrangements, and various other measures. Health~~adhere to certain notification requirements in the event of a breach of unsecured PHI.

Additionally, under HIPAA, health insurers and other covered entities are also required to report ~~impermissible uses or disclosures~~breaches of PHI to affected individuals ~~and~~without unreasonable delay, not to exceed 60 days following discovery of the ~~U.S. Department of Health and Human Services, or HHS, unless the~~breach by a covered entity ~~demonstrates through a risk assessment that there is low probability~~or its agents. Notification also must be made to the ~~PHI has been compromised,~~HHS-OCR and ~~to notify the~~prominent media outlets in any states where 500 or more people are impacted by ~~any unauthorized release or use of or access to PHI.~~the breach. Ongoing ~~implementation~~review and oversight of these measures involves significant time, effort, and expense. While we undertake substantial efforts to secure the PHI that we maintain, use, and disclose in electronic form, a cyber-attack or other intrusion that bypasses our information security systems causing an information security breach, loss of PHI, confidential member information, or other data subject to privacy laws or a material disruption of our operational systems could result in a material adverse impact on our business, along with potentially substantial fines and penalties.

~~HIPAA and HITECH also established new enforcement mechanisms and enhanced penalties for failure~~Entities that are found to ~~comply with specific standards relating to the privacy, security, and electronic transmission of PHI. If a person knowingly or intentionally obtains or discloses PHI~~be in violation of HIPAA ~~requirements,~~as the result of a breach of unsecured PHI or following a complaint about privacy practices or an audit by the U.S. Department of Health and Human Services (“HHS”), may be subject to significant civil, criminal and administrative fines and penalties ~~may~~and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. HIPAA also ~~be imposed. HIPAA~~ authorizes state Attorneys General to file suit ~~under HIPAA~~ on behalf of ~~state~~their residents. Courts ~~can~~may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, ~~violations,~~ its standards have been used as the basis for a duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI. It is possible that Congress may enact additional legislation in the future to increase the amount or application of penalties, and to create a private right of action under HIPAA, which could entitle patients to seek monetary damages for violations of the privacy rules. Additionally, proposed changes to HIPAA regulations are currently under consideration. The proposed HIPAA changes aim to improve care coordination and data sharing. The implementation measures necessary to implement the final rule are currently unknown as the final rule has not been released.

~~State laws may apply~~In addition, we are subject to our collection, use, handling, processing, destruction, disclosure, and storage of personal information as well. States have begun enacting more comprehensive privacy laws and regulations addressing consumer rights to data protection or transparency that may affect our privacy and security practices. For example, the California Consumer Privacy Act of 2018, or the CCPA, which became effective as of January 1, ~~2020,~~2020. The CCPA gives California residents expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.

Additionally, a new California ballot initiative, the ~~California Privacy Rights Act, or “CPRA,”~~CPRA, was passed in November 2020. Effective starting on January 1, 2023, the CPRA imposes additional obligations on companies covered by the

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legislation and will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. The effects of the CCPA and the CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation. The CCPA and CPRA contain exemptions to which our business is subject, such as for medical information governed by the California Confidentiality of Medical Information Act, and for PHI collected by a covered entity or business associate governed by the privacy, security, and breach notification rule established pursuant to ~~HIPAA and HITECH, but the precise interpretation and application~~

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HIPAA; however, information we hold about individual residents of California that is not ~~yet clear.~~subject to such exceptions would be subject to the CCPA and CPRA.

Certain other state laws also regulate issues related to privacy, security and use of personal ~~information. In addition,~~information, and we ~~also~~ expect ~~more~~ states to continue to enact legislation similar to the CCPA ~~which~~and CPRA that provides consumers with new privacy rights and increases the privacy and security obligations of entities handling certain personal information of such consumers. ~~The~~For example, laws similar to the CCPA ~~has prompted~~and CPRA have passed in Virginia and Colorado, and have been proposed in other states and at the federal level, reflecting a ~~number of proposals for new federal and state-level~~trend toward more stringent privacy ~~legislation.~~legislation in the United States Such ~~proposed~~ legislation ~~if enacted,~~ may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies. ~~For example,~~

We are also subject to other laws, regulations and industry standards that govern our business practices, including the ~~Virginia~~Telephone Consumer ~~Data~~ Protection Act (“TCPA”), which restricts the use of automated tools and technologies to communicate with wireless telephone subscribers or communications services consumers generally, the ~~CDPA, signed~~CAN-SPAM Act, which regulates the transmission of marketing emails, and the PCI Data Security Standard, which is a multifaceted security standard that is designed to protect credit card account data as mandated by ~~the Governor on March 2, 2021 and effective January 1, 2023, gives Virginia residents expanded rights~~PCI entities. We may become subject to ~~access and creates additional obligations on companies covered by the legislation.~~

~~With~~claims that we have violated these laws and ~~regulations, such as HIPAA and the CCPA, imposing relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations to~~standards, based on our or our vendors’ past, present, or future Processing business practices, which could have an adverse impact on our business ~~we may face challenges in addressing their requirements~~ and ~~making necessary changes~~reputation, subject us to our policies and practices, and may incur significant costs and expenses in our effort to do so. For example, the increased consumer control over the sharing of personal information under the CCPA may affect members’ ability to share such personal information with us, fines and/or ~~may~~ require us to ~~delete or remove member information from~~change our ~~records or data sets, which may create considerable costs or loss of revenue for our organization.~~business practices.

The regulatory framework governing the ~~collection, processing, storage, use and sharing~~Processing of certain information, particularly financial and other personal information, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations. It is possible that these laws, regulations and standards may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our services and platform capabilities. We may face challenges in addressing current and evolving requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in our effort to do so. Any failure or perceived failure by us, or any third parties with which we do business, to comply with our posted privacy policies, changing consumer expectations, evolving laws, rules and regulations, industry standards, or contractual obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time and other resources or the incurrence of significant fines, penalties or other liabilities. In addition, any such action, particularly to the extent we were found to be guilty of violations or otherwise liable for damages, would damage our reputation and adversely affect our business, financial condition and results of operations.

~~We cannot yet fully determine the impact these or future laws, rules, regulations~~As we expand our customer base and ~~industry standards~~enter into +Oscar platform arrangements, we may ~~have on our business or operations. Any such laws, rules, regulations and industry standards may be inconsistent among different jurisdictions,~~become subject to ~~differing interpretations or may conflict with our current or future practices. Additionally, our customers may be subject to differing~~an increasingly complex array of data privacy ~~laws, rules~~ and legislation, which may mean that they require us to be bound by varying contractual requirements applicable to certain other jurisdictions. Adherence to such contractual requirements may impact our collection, use, processing, storage, sharing and disclosure of various types of information and may mean we become bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters that may further change assecurity laws ~~rules~~ and regulations, ~~evolve. Complying with these requirements~~further increasing our cost of compliance and ~~changing our policies~~doing business. Differing laws in each jurisdiction in which we do business and ~~practices~~changes to existing laws and regulations may ~~be onerous and costly, and we may not be able to respond quickly or effectively to regulatory, legislative and other developments. These changes may in turn~~also impair our ability to offer our existing or planned features, products and services ~~and/or~~and increase our cost of doing business. ~~As we expand our customer base, these requirements may vary from customer to customer, further increasing the cost of compliance and doing business.~~

Our business and operations are also subject to federal, state, and local consumer protection laws governing marketing communications, including the Telephone Consumer Protection Act, or TCPA, which places restrictions on the use of automated tools and technologies to communicate with wireless telephone subscribers or communications services consumers generally and the CAN-SPAM Act, which regulates the transmission of marketing emails. A recent Supreme

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~~Court decision in~~ ~~Facebook v. Duguid~~ ~~narrowed the definition of “autodialer”, but existing TCPA consent requirements remain intact.~~

In addition, certain of our businesses are also subject to the Payment Card Industry, or PCI, Data Security Standard, which is a multifaceted security standard that is designed to protect credit card account data as mandated by PCI entities. We rely on vendors to assist us with PCI matters and to ensure PCI compliance. Despite our compliance efforts, we may become subject to claims that we have violated the PCI DSS or other requirements of the payment card brands, based on past, present, or future business practices, which could have an adverse impact on our business and reputation, subject us to fines and/or have a negative impact on our ability to accept credit card payments.

In addition, any failure or perceived failure by us to maintain posted privacy policies which are accurate, comprehensive and fully implemented, and any violation or perceived violation of our privacy-, data protection-, or information security-related obligations to members, users, or other third parties or any of our other legal obligations relating to privacy, data protection, or information security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others, and could result in significant liability, loss of relationships with key third parties, including telecommunications carriers, social media networks, and other data providers, or cause our consumers to lose trust in us, which could have material impact on our revenue and operations.

Despite our best attempts to maintain adherence to information privacy and security best practices, as well as compliance with applicable laws, rules, and contractual requirements, our facilities and systems, and those of our third-party service providers, may be vulnerable to privacy or security breaches, acts of vandalism or theft, malware, ransomware, or other forms of cyber-attack, misplaced or lost data including paper or electronic media, programming and/or human errors, or other similar events. In the past, we have experienced, and disclosed to applicable regulatory authorities, data breaches resulting in disclosure of confidential or PHI. Although none of these data breaches have resulted in any material financial loss or penalty to date, future data breaches could require us to expend significant resources to remediate any damage, interrupt our operations and damage our reputation, subject us to state or federal agency review and could also result in regulatory enforcement actions, material fines and penalties, litigation or other actions which could have a material adverse effect on our business, reputation and results of operations, financial position, and cash flows.

Changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program, could materially and adversely harm our business and operating results.

Our business is within the public and private sectors of the U.S. health insurance system, which are evolving quickly and subject to a changing regulatory environment, and our future financial performance will depend in part on growth in the market for private health insurance, as well as our ability to adapt to regulatory developments. Changes and developments in the health insurance system in the United States could reduce demand for our services and harm our business. For example, there has been an ongoing national debate relating to the health insurance system in the United States. Certain elected officials have introduced proposals to expand the Medicare program, ranging from proposals that would create a new single-payer national health insurance program for all United States residents, replacing virtually all other sources of public and private insurance, to more incremental approaches, such as lowering the age of eligibility for the Medicare program, expanding Medicare to a larger population, or creating a new public health insurance option that would compete with private insurers. These and other possible modifications, challenges to the constitutionality of the ACA or components of the ACA, or a repeal or replacement of the ACA may have a material adverse effect on our business, reputation and results of operations, financial position, and cash flows.

~~Additionally, proposals to establish a single-payer or government-run health care system at the state level are regularly introduced in states in which we operate, such as New York and California.In June 2021, Colorado passed legislation creating a public option for individual and small group plans.~~ The perceived uncertainty and possible changes in state and federal legislation and Health Insurance Marketplaces could result in reduced participation from individuals seeking insurance coverage and possible non-renewal of existing policies.

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We are subject to extensive fraud, waste, and abuse laws that may require us to take remedial measures or give rise to lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Because we receive payments from federal governmental agencies, we are subject to various laws commonly referred to as “fraud, waste, and abuse” laws, including the federal Anti-Kickback Statute, the federal Physician Self-Referral Law, or Stark Law, and the ~~federal~~ False Claims Act ~~or FCA.~~(“FCA”). These laws permit the Department of Justice ~~or DOJ,~~(“DOJ”), the HHS Office of Inspector General ~~or OIG,~~(“OIG”), CMS, and other enforcement authorities to institute a claim, action, investigation, or other proceeding against us for violations and, depending on the facts and circumstances, to seek treble damages, criminal and civil fines, penalties, and assessments. Violations of these laws can also result in exclusion, debarment, temporary or permanent suspension from participation in government ~~health care~~healthcare programs, the institution of corporate integrity agreements ~~or CIAs,~~(“CIAs”), and/or other heightened monitoring of our operations. Liability under such statutes and regulations may arise, among other things, if we knew, or it is determined that we should have known, that information we provided to form the basis for a claim for government payment was false or fraudulent, or that we were out of compliance with program requirements considered material to the government’s payment decision. On December 2, 2020, the OIG published further modifications to the federal Anti-Kickback Statute. Under the final rules, OIG added safe harbor protections under the Anti-Kickback Statute for certain coordinated care and value-based arrangements among clinicians, providers, and others. We continue to evaluate what effect, if any, these rules will have on our business.

Fraud, waste and abuse prohibitions encompass a wide range of activities, including, but not limited to, kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a healthcare provider, payments made to excluded providers, and improper marketing and

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beneficiary inducements. The DOJ and the OIG have continuously increased their scrutiny of ~~health care~~healthcare payors and providers, and Medicare Advantage insurers, under the FCA, in particular, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry. In particular, there has recently been increased scrutiny by the government on health insurers’ diagnosis coding and risk adjustment practices, particularly for Medicare Advantage plans. In some proceedings involving Medicare Advantage plans, there have been allegations that certain financial arrangements with providers violate other laws governing fraud and abuse, such as the federal Anti-Kickback Statute. We expect this trend to continue. In addition, under applicable regulatory requirements and our policies, we must take appropriate measures to determine whether there is credible evidence that any of our members, particularly those who receive federal subsidies, were enrolled by brokers without their authorization. In such cases, we conduct certain outreach procedures under our policies and refer instances of potentially unauthorized enrollment to the appropriate authorities for potential rescission, which may also entail retroactive adjustment of membership numbers. Our failure to take appropriate measures to refer cases of fraud, waste and abuse to the relevant authorities when we are required to do so may subject us to corrective actions, including regulatory enforcement, fines and penalties, adverse publicity and other effects that could materially harm our business.

CMS and the OIG also perform RADV audits of health insurance plans to validate the coding practices of, and supporting documentation maintained by, health care providers, and such audits have in the past and may in the future result in adjustments to risk transfer payments. RADV audits may also result in fines, corrective action plans, or other adverse action by CMS. On November 24, 2020, CMS issued a final rule that amends the RADV program by: (i) revising the methodology for error rate calculations beginning with the 2019 benefit year; and (ii) changing the way CMS applies RADV results to risk adjustment transfers beginning with the 2020 benefit year. According to CMS, these changes are designed to give insurers more stability and predictability with respect to the RADV program and promote fairness in how health insurers receive adjustments. However, the future impact of these changes remains unclear, and such changes may ultimately increase financial recoveries from the government’s ability to retrospectively claw back or recover funds from health insurers.

Health insurers are required to maintain compliance programs to prevent, detect and remediate fraud, waste, and abuse, and are often the subject of fraud, waste, and abuse investigations and audits. We perform ongoing monitoring of our compliance with CMS risk adjustment requirements and other applicable laws. We also monitor our provider payment practices and relationships with other third parties whose products and services we reimburse (e.g., pharmaceutical manufacturers) to ensure compliance with applicable laws, including, but not limited to, the federal Anti-Kickback Statute. While we believe our compliance efforts and relationships with providers and other third parties comply with applicable laws, we may be subject to audits, reviews, and investigations of our practices and arrangements by government agencies.

We are periodically subject to government audits, including CMS RADV audits of our ACA and Medicare Advantage Plans to validate diagnostic data, patient claims and financial reporting, and audits of our Medicare Part D plans by the Medicare Part D Recovery Audit Contractor (“RAC”) programs authorized by the ACA. These audits could result in significant adjustments in payments made to our health plans, which could adversely affect our financial condition and results of operations. If we fail to report and correct errors discovered through our own auditing procedures or during a RADV or RAC audit, or otherwise fail to comply with applicable laws and regulations, we could be subject to fines, civil penalties or other sanctions which could have a material adverse effect on our ability to participate in these programs, and on our financial condition, cash flows and results of operations. On November 24, 2020, CMS issued a final rule that amends the RADV program by: (i) revising the methodology for error rate calculations beginning with the 2019 benefit year; and (ii) changing the way CMS applies RADV results to risk adjustment transfers beginning with the 2020 benefit year. According to CMS, these changes are designed to give insurers more stability and predictability with respect to the RADV program and promote fairness in how health insurers receive adjustments. However, the future impact of these changes remains unclear, and CMS and OIG policies and procedures for conducting RADV audits remain subject to change. These changes and any future changes to the RADV program may ultimately increase financial recoveries from health insurers resulting from the government’s ability to retrospectively claw back or recover funds.

The regulations, contractual requirements, and policies applicable to participants in government ~~health care~~healthcare programs are complex and subject to change. Moreover, many of the laws, rules, and regulations in this area have not been ~~well-~~

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~~interpreted~~well-interpreted by applicable regulatory agencies or the courts. Additionally, the significant increase in actions brought under the FCA’s “whistleblower” or “qui tam” provisions, which allow private individuals to bring actions on behalf of the government, has caused greater numbers of ~~health care~~healthcare companies to have to defend a false claim action, pay fines, or agree to enter into a CIA to avoid being excluded from Medicare and other state and federal health care programs as a result of an investigation arising out of such action. Health plans and providers often seek to resolve these types of allegations through settlement for significant and material amounts, even when they do not acknowledge or admit liability, to avoid the uncertainty of treble damages that may be awarded in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent decree or settlement agreement, including, for example, CIAs, deferred prosecution agreements, or non-prosecution agreements. If we are subject to liability under qui tam or other actions or settlements, our business, financial condition, cash flows, or results of operations could be adversely affected.

We anticipate continued scrutiny by the OIG and the DOJ in the areas of COVID-19-related fraud, waste, and abuse, including the use of telehealth and telemedicine-based treatment, and we may be subject to audits, reviews and investigations of our COVID-19 and telehealth coverage and payment practices and arrangements by government agencies. For example, Acting DOJ Assistant Attorney General Nicholas McQuaid issued a statement on March 26, 2021, reiterating the DOJ’s civil and criminal enforcement efforts to combat COVID-19 fraud, and the DOJ site is rife with examples of recent enforcement efforts.

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Risks Related to our Business

If we are unable to arrange for the delivery of quality care, and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks, or if we are unable to enter into cost-effective contracts with such providers, our profitability could be adversely affected.

Our profitability depends, in large part, upon our ability to contract at competitive prices with hospitals, physicians, and other health care providers, such that we can provide our members with access to competitive provider networks at affordable prices. Our ~~provider~~ arrangements with ~~primary care physicians, specialists, hospitals, and other~~ health care providers generally may be terminated or not renewed by either party without cause upon prior written notice. If a provider agreement were terminated, such termination could adversely impact the adequacy of our network to service ourmembers, and may put us at risk of non-compliance with applicable federal and state laws. We cannot provide any assurance that we will be able to continue to renew our existing contracts or enter into new contracts on a timely basis or under favorable terms enabling us to service our members profitably. Health care providers within our provider networks may not properly manage the costs of services, maintain financial solvency or avoid disputes with other providers or their federal and state regulators. Any of these events could have a material adverse effect on the provision of services to our members and our operations.

In any particular market or geography, physicians and other health care providers could refuse to contract, demand higher payments, demand favorable contract terms, or take other actions that could result in higher medical costs or difficulty in meeting regulatory or accreditation requirements, among other things. In some markets and geographies, certain health care providers, particularly hospitals, physician/hospital organizations, or multi-specialty physician groups, may have significant positions or near monopolies that could result in diminished bargaining power on our part. In addition, physicians, hospitals and other health care providers may, consolidate or merge, or form or enter into accountable care organizations, clinically integrated networks, independent practice associations, practice management companies (which aggregate physician practices for administrative efficiency and marketing leverage), and other organizational structures, which may adversely impact our relationships with these providers or affect the way that we price our products and estimate our costs.Any such impacts might require us to incur costs to change our operations. Health care providers in our provider networks may also consolidate or merge into hospital systems, resulting in a reduction of providers in our network and in the competitive environment. In addition, if these providers refuse to contract with us, use their market position to negotiate contracts unfavorable to us oroperations, place us at a competitive disadvantage, or materially and adversely affect our ability to market products or to be profitable in those ~~areas could be materially and adversely affected. Moreover, the~~areas.

The insolvency of one of our partners or providers, including providers with which we have a fixed PMPM capitation arrangement or those which we have transitioned to a value-based care model, could expose us to material liabilities. Providers may be unable or unwilling to pay claims they have incurred with third party providers in connection with referral services provided to our members. Depending on state law, we may be held liable for such unpaid referral claims even though the delegated provider has contractually assumed such ~~risk. Additionally, competitive pressures~~risk, or ~~regulatory considerations~~we may ~~force us~~opt to pay such claims even when we have no ~~legal~~ obligation to do so ~~or we may be unable~~due to ~~recoup previously paid claims when the delegated provider becomes insolvent.~~competitive pressures. Such liabilities incurred or losses suffered as a result of provider insolvency or other circumstances could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

From time to time, health care providers assert, or threaten to assert, claims seeking to terminate provider agreements. If a provider agreement were terminated, such termination could adversely impact the adequacy of our network to service our

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members, and may put us at risk of non-compliance with applicable federal and state laws. If we are unable to retain our current provider contract terms or enter into new provider contracts timely or on favorable terms, our profitability may be harmed. In addition, from time to time, we are subject to class action or other lawsuits by health care providers with respect to claims payment procedures, reimbursement policies, network participation, or similar matters. ~~In addition, regardless~~Regardless of whether any such lawsuits brought against us are successful or have merit, they will be time-consuming and costly, and could have an adverse impact on our reputation. As a result, under such circumstances, we may be unable to operate our business effectively.

Some providers that render services to our members are not contracted with our health insurance subsidiaries. While our health insurance subsidiaries are required to meet various federal and state requirements regarding the size and composition of our participating provider networks, our business model is based, in the Individual and Medicare Advantage markets, and for certain of our Small Group plans, on contracting with selected health care systems and other providers, not all systems and providers in a given area. This allows us to work more closely with high quality health care systems that engage with us using our technology. That approach, however, makes it possible that our members will receive emergency services, or other services which we are required to cover by law or by the terms of our health plans, from providers who are not contracted with our health insurance subsidiaries. This situation is more likely for our members than for members who choose a plan from a competitor of ours with a broader network. In those cases, there is no pre-established contractual understanding between the provider and our health insurance subsidiary about the amount of compensation that is due to the provider. In some states, and under federal law for our business subject to the No Surprises Act and our Medicare Advantage business, the amount of compensation is defined by law or ~~regulation, but in most instances, it is either not defined or it is established by a standard that is not unambiguously translatable into dollars.~~regulation. In ~~such instances, providers may claim they are underpaid for their services, and may either litigate or arbitrate their dispute with~~certain situations, our health insurance ~~subsidiary. Additionally, many states require us~~subsidiaries are required to hold our members harmless for out-of-network costs, and to work directly with health care providers within the confines of state law or the No Surprises Act’s dispute resolution process to agree on reimbursement. Reimbursement for these out-of-network costs ~~which~~ can be significant. It is difficult to predict the amount we may have to pay to out-of-network

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providers. The uncertainty of the amount to pay to such providers and the possibility of subsequent adjustment of the payment could materially and adversely affect our business, financial condition, cash flows, or results of operations.

Our revenue depends on the direct policy premiums we collect from members who obtain health care services from a limited number of in-network providers, and the loss of any of these providers could result in a material reduction of our membership, which would adversely impact our revenue and operating results.

The result of risk adjustment programs may impact our revenue, add operational complexity, and introduce additional uncertainties that have a material adverse effect on our results of operations, financial condition, and cash flows.

The Individual, Small Group, and Medicare Advantage markets we serve employ risk adjustment programs that impact the revenue we recognize for our enrolled membership. As a result of the variability in the mechanics of the program itself, or of certain factors that go into the development of the risk transfers we recognize, such as risk scores, and other market-level factors where applicable, the actual amount of revenue could be materially more or less than our estimates. Consequently, our estimate of our health plans’ risk scores for any period, and any resulting change in our accrual of revenues related thereto, could have a material adverse effect on our results of operations, financial condition, and cash flows. The data provided to CMS to determine the risk score are subject to audit by CMS even several years after the annual settlements occur. If the risk adjustment data we submit are found to incorrectly overstate the health risk of our members, we may be required to refund funds previously received by us and/or be subject to penalties or sanctions, including potential liability under the FCA, which could be significant and would reduce our revenue in the year that repayment or settlement is required. Further, if the data we provide to CMS incorrectly understates the health risk of our members, we might be underpaid for the care that we must provide to our members, which could have a negative impact on our results of operations and financial condition.

Significant delays in our receipt of direct policy premiums, including as a result of regulatory restrictions on policy cancellations and non-renewals, could have a material adverse effect on our business operations, cash flows, or earnings.

We currently derive substantially all of our revenue from direct policy premiums and recognize premium revenue over the period that coverage is effective. For the year ended December 31, 2020 and the three and nine months ended September 30, 2021, approximately 40%, 24% and 28% of our direct policy premiums, respectively, were collected directly from our members, and approximately 60%, 76% and 72% of our direct policy premiums, respectively, were collected from CMS as part of the APTC program. There can be no assurance that we will receive premiums in advance of or by the end of a given coverage period. Moreover, actions taken by state and federal governments could increase the likelihood of delay in our receipt of premiums. For example, in response to the COVID-19 pandemic, state insurance departments, including in states in which we operate, issued guidelines, recommendations, and moratoria around policy cancellations and non-renewals due to non-payment. ~~In certain states, departments urged insurers to consider actions that included relaxing due dates for~~

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premium payments, extending grace periods, waiving late fees and penalties, and allowing premium payment plans to avoid a lapse in coverage. Certain states also prohibited insurers from terminating plans due to non-payment until a specified date. If such ~~guidelines, recommendations,~~or similar measures were to be reintroduced and ~~moratoria were~~ to remain in place for an extended period ~~of time or if similar measures were introduced~~ due to a resurgence of COVID-19 or for other reasons, including unanticipated public health or economic crises, our receipt of premiums, if any, could be significantly delayed, which could have a material adverse effect on our business, operations, cash flows, or earnings.

The federal government also periodically considers reducing or reallocating the amount of money it spends for Medicare. Medicare remains subject to the automatic spending reductions imposed by the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012. This includes aggregate reductions of Medicare payments to providers and reduced payments to several types of Medicare providers, which will remain in effect through 2030. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) had temporarily suspended sequestration to Medicare from May 1, 2020, through March 31, 2022, and limited Medicare payment reductions to 1% from April 1, 2022, through June 30, 2022. The cuts will scale up to 2% per fiscal year on July 1, 2022 and an additional 4% Medicare reimbursement reduction is slated for 2023. We anticipate these and any future similar initiatives will require government agencies to find funding alternatives,

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which may result in reductions in funding for programs, contraction of covered benefits, and limited or no premium rate increases, or premium rate decreases.

We make virtual health care services available to our members through Oscar Medical Group, in which we do not own any equity or voting interest, and our virtual care availability may be disrupted if our arrangements with providers like the Oscar Medical Group become subject to legal challenges.

Pursuant to state corporate practice of medicine laws, many states in which we operate through our subsidiaries limit the practice of medicine to licensed individuals or professional organizations owned by licensed individuals, and business corporations generally may not exercise control over the medical decisions of physicians. Statutes and regulations, including the interpretation and enforcement of such statutes and regulations, relating to the corporate practice of medicine, fee-splitting between physicians and referral sources, and similar issues, vary widely from state to state. ~~As of September 30, 2021, Oscar Management Corporation, one of our subsidiaries, has~~We have management services agreements with ~~three~~four physician-owned professional corporations, known collectively as the Oscar Medical Group. Each of the professional corporations comprising the Oscar Medical Group is wholly owned by ~~one~~a single physician licensed in California, Florida, New York and New ~~York~~Jersey, who oversees the operation of the Oscar Medical Group in ~~his~~her capacity as ~~President~~president and sole director of each Oscar Medical Group professional corporation. HeThis physician also serves as a consultant to Oscar Management Corporation. ~~Ownership of the professional corporations comprising the Oscar Medical Group is in the process of being transferred to another physician.~~ Under the terms of the management services agreements between Oscar Management Corporation and the Oscar Medical Group, the Oscar Medical Group retains sole responsibility for all medical decisions, as well as for hiring and managing physicians and other licensed health care providers, developing operating policies and procedures, and implementing professional standards and controls. We believe that our services operations comply with applicable state statutes and regulations regarding corporate practice of medicine, fee-splitting, and similar issues. However, regulatory authorities and other parties may assert that, despite the management services agreements and other arrangements through which we operate, we are engaged in the prohibited corporate practice of medicine, that our arrangements constitute unlawful fee-splitting, or that other similar issues exist. To that end, manyMany of the laws, rules, and regulations with respect to corporate practice of medicine are ambiguous and have not been well-interpreted by applicable regulatory agencies or the courts. Moreover, ~~we cannot predict whether~~ changes ~~will~~can be made to existing laws, regulations, or interpretations, or ~~whether~~ new ~~ones will~~laws can be enacted or adopted, which could cause us to be out of compliance with these requirements. Despite the management services agreements and other arrangements we have with Oscar Medical Group, regulatory authorities and other parties may assert that we are engaged in the prohibited corporate practice of medicine, that our arrangements with Oscar Medical Group constitute unlawful fee-splitting, or that other similar issues exist. If that were to occur, we could be subject to civil and/or criminal penalties, our agreements could be found legally invalid and unenforceable (in whole or in part), or we could be required to terminate or restructure our contractual arrangements, any of which could have a material adverse effect on our results of operations, financial position, or cash flows. State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services that are currently available to our members.

Our health insurance subsidiaries have entered into provider participation agreements with the Oscar Medical Group that enable the Oscar Medical Group to participate in Oscar’s provider network. While we expect that our relationship with the Oscar Medical Group will continue, a material change in our relationship with the Oscar Medical Group, whether resulting from a dispute among the entities or the loss of these relationships or contracts with the Oscar Medical Group, may temporarily disrupt our ability to provide virtual health care services to our members or through our +Oscar platform arrangements and could harm our business.

Our limited operating history makes it difficult to evaluate our current business performance, implementation of our business model, and our future prospects.

We launched our business in 2012 and have a limited operating history. As of September 30, 2021, our insurance subsidiaries operate in 18 states, 15 of which we expanded to since 2017. We plan to offer health insurance to individuals and families in three new states for the 2022 plan year.Due to our limited operating history and the rapid growth we have experienced since we began operations, there is greater uncertainty in estimating our operating results, and our historical results may not be indicative of, or comparable to, our future results. In addition, we have limited data to validate key aspects of our business model, including our growth strategy. For example, ~~in 2020 we entered into an exclusive strategic partnership with Cigna to offer differentiated health solutions to small businesses. As~~as a relatively new entrant in ~~this~~the small group market, we have limited experience and are unable to predict whether we will be able to effectively and consistently provide solutions that are tailored to the budgets of small businesses and to the health needs of their employees. We cannot provide any assurance that the data we collect will provide useful measures for evaluating our business model. Moreover, we cannot provide any assurance that partnerships or joint ventures we enter into in the future will perform as well as historical

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partnerships or expectations. Our inability to adequately assess our performance and growth could have a material adverse effect on our brand, reputation, business, financial condition, and results of operations.

~~Our revenue depends on the direct policy premiums we collect from members who obtain health care services from a limited number~~

Table of ~~in-network providers, and the loss of any of these providers could result in a material reduction of our membership, which would adversely impact our revenue and operating results.~~

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Almost all of our revenue depends on the direct policy premiums we collect from members or from the federal government on behalf of our members who obtain health care services from a limited number of providers with whom we contract. We generally manage our provider contracts on a state-by-state basis, entering into separate contracts in each state with local affiliates of a particular provider, such that no one local provider contract receives a majority of our allowed medical costs for services rendered to our members. When aggregating the payments we make to each provider through its local affiliates, AdventHealth, Tenet Healthcare Corporation, and HCA Healthcare accounted for a total of approximately 11%, 8%, and 7%, respectively, of total allowable medical costs for the year ended December 31, 2020, AdventHealth, HCA Healthcare, and Tenet Healthcare Corporation accounted for a total of approximately 19%, 10% and 6%, respectively, of total allowable medical costs for the three months ended September 30, 2021, and AdventHealth, HCA Healthcare, and Tenet Healthcare Corporation accounted for approximately 18%, 10% and 6%, respectively, of total allowable medical costs for the nine months ended September 30, 2021. We believe that a majority of our revenue will continue to be derived from direct policy premiums obtained from members who receive services from a concentrated number of providers. These providers may terminate or seek to terminate their contracts with us in the future. The sudden loss of any of our providers or the renegotiation of any of our provider contracts could adversely impact our reputation or the quality of our provider networks, which could result in a loss of a membership that adversely affects our revenue and operating results. In the ordinary course of business, we engage in active discussions and renegotiations with providers in respect of the terms of our provider contracts. Certain of our providers may seek to renegotiate or terminate their agreements with us for a variety of reasons, including in response to higher-than-expected health care costs and other market dynamics or financial pressures. These discussions could result in reductions to the fees and changes to the scope of services contemplated by our original provider agreements and, consequently, could negatively impact our revenues, business, and prospects.

The ongoing COVID-19 pandemic could significantly increase our costs of operation due to unanticipated changes in law or regulation, population morbidity, or utilization behaviors, adversely impact our operational effectiveness, and heighten the risks we face in our ~~business, including those discussed in this Quarterly Report on Form 10-Q.~~business.

In December 2019, a novel strain of coronavirus, SARS-CoV-2, was identified in Wuhan, China. Since then, SARS-CoV-2, and the resulting disease, COVID-19, has spread rapidly to almost every country in the world and all 50 states within the United States. The COVID-19 pandemic continues to evolve and the impact of COVID-19 and its variants, and the actions taken to contain ~~its~~their spread or address ~~its~~their impact, could have a material adverse effect on our operations and financial results.

We seek to ensure our direct policy premiums appropriately account for anticipated changes in utilization. However, our ability to do so accurately is limited by the changing nature of COVID-19 infection rates, the mutation of the COVID-19-causing virus into more infectious strains, uncertainties relating to the widespread administration of COVID-19 vaccines, the effectiveness of those vaccines against novel virus strains, and the evolving clinical understanding of COVID-19’s post-acute, long-term impacts on health. We have experienced depressed non-COVID-19 related medical costs since 2020 as a result of the pandemic’s impact on the way our members utilize care. As vaccination rates have increased nationally, members have begun to resume their utilization of healthcare, resulting in increased medical claims expenses. However, this trend may reverse if vaccination rates stall, COVID-19 variants continue to proliferate, or COVID-19 vaccines are not effective against new strains or become less effective over time. Additionally, as a result of legislative mandates and trends, we may be unable to fully implement clinical initiatives to manage health care costs and chronic conditions of our members and appropriately document their health risks and diagnoses to substantiate payments we may be entitled to under federal and state risk adjustment programs.

There are also uncertainties associated with the costs of COVID-19-related care, including vaccines and booster shots and their administration, ~~as well as the adoption rate of vaccines and booster shots~~ for our covered population. The costs associated with our members who receive COVID-19 vaccines may be greater than we expect if, for example, subsidies for COVID-19 vaccinations are reduced.

Additionally, the long-term health impacts of SARS-CoV-2 infection causing COVID-19 are not yet well known or understood. If a ~~large-scale COVID-19 outbreak resulted in a~~ significant number of our members ~~needing~~who have contracted COVID-19 need unanticipated ongoing post-acute care, such as regular physical, occupational, or respiratory therapy, additional pharmaceutical

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intervention, or care for increased frequency of other illness resulting from a COVID-19-weakened immune system, our business could be materially adversely impacted due to an unanticipated increase in covered medical expenses.

~~State~~As a result of the COVID-19 pandemic, the federal government, states and ~~federal governments~~regulatory agencies have enacted laws and promulgated regulatory changes requiring us to relax premium collection practices, imposing additional coverage requirements, modifying enrollment and ~~cover health care~~disenrollment standards, and mandating additional workplace procedures that, in each case, have increased our costs ~~for members for which we would not typically~~and limited our operational flexibility. We may be ~~responsible. For example, the Families First Coronavirus Response Act (the FFCRA), as amended by the CARES Act, requires member health care~~required to incur additional expenses ~~incurred during a visit~~ to ~~evaluate the need for or obtain COVID-19 diagnostic testing~~comply with such changes and requirements without being able to be borne entirely by us. Certain states, such as New York and New Jersey, require us to cover all costs of members’ receipt of medical care via telemedicine from any in-network provider. New large-scale outbreaks of COVID-19 and its variants may result in additional regulation inmodify our states of operation, which could limit our ability to collect unpaid premiums. In addition, we have expanded benefit coverage in areas such as COVID-19 care and testing, telemedicine, and pharmacy benefits; offered additional enrollment opportunities to those who previously declined employer-sponsored offerings; extended certain premium payment terms for customers experiencing financial hardship; simplified administrative practices; and accelerated payments to care providers, all with the aim of assisting our customers, providers and members in addressing the impacts of the COVID-19 pandemic.current rates. Such measures and any further steps taken by us could adversely impact our financial results.

The spread and impact of COVID-19 and its variants, or actions taken to mitigate this spread, could also have a material and adverse effect on our ability to operate effectively, including as a result of the complete or partial closure of facilities or labor shortages. Disruptions in public and private infrastructure, including communications, availability of in-person sales and marketing channels, financial services and supply chains, could materially and adversely disrupt our normal business operations. We have ~~transitioned most of~~provided our employee population the option to work in a remote work environment in an effort to mitigate the spread of COVID-19, as have a number of our third-party service providers, which may exacerbate certain risks to our business, including increased risk of phishing and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information about us or our members or other third-parties.

The outbreak of COVID-19 has also severely impacted global economic activity, and further outbreaks may adversely impact our members, partners and service providers, and cause significant volatility in the financial markets. These developments may adversely affect the timing of member premium or commercial service fee collections and corresponding payments, the ability of third parties to provide services to us, the value of our investment portfolio, and our access to capital.

We are continuing to monitor the spread of COVID-19, changes to our covered services, the ongoing costs and business impacts of dealing with COVID-19, including the potential costs and impacts associated with lifting, or reimposing restrictions on movement and economic activity and related risks. The extent of this impact will depend on future developments, which are highly uncertain and cannot be predicted at this time, including, but not limited to, the transmission rate, introduction of new strains of COVID-19, duration and spread of the outbreak, its severity, the extent and effectiveness of the actions taken to contain the spread of the virus and address its impacts, including vaccine approval, effectiveness, availability, administration and adoption, and how quickly and to what extent normal economic and operating conditions can resume. The ultimate impact of the COVID-19 pandemic on our business, results of operations, financial position, and cash flows is uncertain as the pandemic continues to evolve globally, but such impacts could be material to our business, results of operations, financial position and cash flows.

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We utilize quota share reinsurance to reduce our capital and surplus requirements and protect against downside risk on medical claims. If regulators do not approve our reinsurance agreements for this purpose, or if we cannot negotiate renewals of our quota share arrangements on acceptable terms, or at all, enter into new agreements with reinsurers, or otherwise obtain capital through debt or equity financings, our capital position would be negatively impacted, and we could fall out of compliance with applicable regulatory requirements.

We enter into quota share reinsurance arrangements to reduce our ~~risk and~~ capital and surplus requirements, which enables us to more efficiently deploy capital to finance our ~~growth. For 2020, we utilized quota share reinsurance arrangements with Axa France Vie~~growth, and Berkshire Hathaway Specialty Insurance Company, and for 2021, we entered into quota share reinsurance arrangements with Axa France Vie and Canada Life. We have terminated our reinsurance arrangements with Canada Life, effective as of April 1, 2021.to obtain protection against downside risk on medical claims. Our reinsurers are entitled to a portion of our premiums, but also share financial responsibility for health care costs incurred by our members. Under our reinsurance arrangements for 2021 with Axa France Vie, which each have terms of three years, all premiums and claims ceded under our quota share arrangements are shared proportionally with Axa France Vie. Our decisions on claims payments are binding on the reinsurer with the exception of any payments by us that are not required to be made under the member’s policy.

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The amount of business ceded under our reinsurance arrangements can vary significantly from year to year. ~~Further, if~~Because reinsurers are entitled to a portion of our premiums under our quota share reinsurance arrangements, changes in the amount of premiums ceded under these arrangements may directly impact our net premium and/or net income estimates. Reductions in the amount of premiums ceded under quota share reinsurance arrangements may result in an increase to our minimum capital and surplus requirements, and an increase in corresponding capital contributions made by Holdco to our health insurance subsidiaries.

If our reinsurers consistently and successfully dispute our obligations to make a claim payment under a given policy, if we cannot renegotiate renewals of ~~any of~~ our quota share reinsurance arrangements on acceptable terms, if we are unable to enter into ~~such~~reinsurance arrangements with ~~additional~~other reinsurers, or if ~~such~~our reinsurance arrangements are not approved by any of our regulators (or if our regulators take a different view, whether prospectively or retroactively, with respect to the capital treatment of our reinsurance agreements), we may ~~not have sufficient~~need to raise additional capital ~~and surplus~~ to comply with applicable regulatory requirements, ~~and~~which could be costly. For example, we estimate that had we not had any quota share reinsurance arrangements in place, the insurance subsidiaries would have been required to hold approximately $450.7 million of additional capital as of March 31, 2022, which Holdco would have been required to fund. If we are not able to comply with our funding requirements, we would have to enter into a corrective action plan or cease operations in jurisdictions where we could not comply with such requirements. Termination of our reinsurance arrangements would also increase our exposure to volatility in medical claims.

While our financial reporting is based on U.S. GAAP, our ability to receive capital reserve credit for a particular state subsidiary ~~due to~~for our reinsurance agreements is determined by Statutory Accounting Principles, which are dependent upon state-specific laws and regulations, as interpreted and applied by state insurance regulators. In some states we are required to seek approval in advance of entering into reinsurance agreements; in others we are not, which means that we may learn of regulators’ concerns after the effective date of certain reinsurance agreements. From time to time, we include state-specific provisions in, or subsequently make state-specific amendments to, our reinsurance agreements to reflect capital reserve credit requirements imposed by particular state regulators. The net economic effect of such provisions or amendments may not be commercially favorable, and in some instances we have chosen, and may in the future choose, not to enter into certain types of reinsurance agreements, not to seek statutory reserve credit under certain agreements, or to terminate existing agreements rather than include provisions or make amendments required by a particular state in order to receive statutory reserve credit.

Because reinsurers are entitled to a portion of our premiums under our quota share reinsurance arrangements, changes in the amount of premiums ceded under these arrangements directly impacts our net premium and net income estimates. Furthermore, reductions in the amount of premiums ceded under quota share reinsurance arrangements, may result in an increase to our minimum capital and surplus requirements, and an increase in corresponding capital contributions made by Holdco to our health insurance subsidiaries.

Our reinsurance arrangements also subject us to various obligations, representations, and warranties with respect to the reinsurers. Reinsurance does not relieve us of liability as an insurer. We remain obligated to pay our members’ health care claims, even if a reinsurer defaults on obligations to us under the reinsurance arrangement. Although we regularly evaluate the financial condition of reinsurers to minimize exposure to significant losses from reinsurer insolvencies, reinsurers may become financially unsound. If a reinsurer fails to meet its obligations under the reinsurance contract or if the liabilities exceed any applicable loss limit, we remain responsible for covering the claims on the reinsured policies.

~~We also rely on debt and equity~~ Additionally, our exposure under reinsurance arrangements may at times be disproportionately concentrated with a single reinsurer. Although we regularly evaluate the financial condition of reinsurers to ~~help fund subsidiary surplus requirements, as well as pay our operating expenses and capital expenditures or fund acquisitions. In the event we need access for such purposes, our ability~~minimize exposure to ~~obtain such capital~~significant losses from reinsurer insolvencies, reinsurers may ~~be limited and it may come at significant cost.~~become financially unsound.

We are subject to risks associated with our geographic ~~concentration, including unanticipated changes in population morbidity, which could significantly increase utilization rates and medical costs.~~concentration.

~~Large-scale changes in health care utilization or increases in medical costs can take many forms and may be associated with widespread natural disasters,~~ ~~illness, or medical conditions.~~ The states in which we operate that have the largest concentrations of revenues include Florida, ~~California~~Texas, Georgia and ~~Texas.~~California. Due to the geographic concentration of our business, we are exposed to heightened risks of potential losses resulting from unfavorable changes in the regulatory environment for healthcare, increased competition, and other regional ~~factors. For example,~~ factors in these states, including the following:

•unforeseen changes affecting the cost of living, other benefit costs, and reimbursement rates;

•natural disasters, such as a major earthquake, wildfire, or ~~hurricane, affecting regions~~hurricane;

•the outbreak of an epidemic or ~~states in which we operate, could have a significant impact on the health of a large number of our covered members. Other conditions that could impact our members include~~ pandemic, including due to new viruses such as COVID-19 and its variants

•a virulent influenza ~~season or epidemic or pandemic,~~ season;

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•newly emergent mosquito-borne illnesses, such as the Zika virus, the West Nile virus, or the ~~Chikungunya virus, or new viruses such as COVID-19~~Chikugunya virus; and ~~its variants. In addition, federal and state law enforcement officials have issued warnings in the past, and may do so in the future, about potential~~

•terrorist activity involving biological or other weapons of mass destruction.

~~All~~The occurrence of any of these ~~conditions,~~events could result in increased utilization or medical costs in these states or any other geographic area where our membership becomes concentrated in the future, and ~~others,~~ could therefore have a significant impact on the health of the population of wide-spread areas. We seek to ensure our premiums appropriately account for anticipated changes in utilization, including seasonal items, such as the flu. However, if any of the regions or states in which we operate were to experience a large-scale natural disaster, a viral epidemic or pandemic, a significant terrorism attack, or some other large-scale event affecting the health of a large number of our members, utilization rates and our covered medical expenses in such regions or states would rise, which could have a

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~~material~~disproportionately adverse effect on our ~~business, financial condition, cash flows, or results of operations. Additionally,~~operating results. States experiencing such ~~natural disasters, epidemics, or pandemics could lead to regulatory changes which~~events may ~~force~~enact laws and regulations that require us to cover health care costs for members for which we would not typically be ~~responsible. For example, states experiencing pandemics or natural disasters~~responsible, such as ~~wildfires and hurricanes may promulgate emergency regulations~~ requiring ~~insurers~~us to relax prior authorization requirements, remove prescription drug refill limitations, and cover out-of-network care. In addition, as a result of our geographic concentration, we face heightened exposure to the other risk factors described herein to the extent such risk factors disproportionately materialize in or impact the regions in which our operations are concentrated.

We are subject to risks associated with outsourcing services and functions to third parties.

We contract with third-party vendors and service providers who provide services to us and our subsidiaries to help with our internal administrative functions, as well as third-party vendors and service providers who help us administer our products and plans. For example, ~~CaremarkPCS Health provides certain prescription benefit~~Oscar delegates pharmacy claims and network management ~~disease management, and specialty pharmacy services with respect~~ to ~~our health plans.~~a Pharmacy Benefit manager (PBM), CVS/Caremark. In New Jersey, we contract with QualCare, which provides us with access to its network, which represents a significant portion of our medical network in New Jersey, and various network management services. The partial or complete loss of a vendor or other third-party relationship could cause a material disruption to our business and make it difficult and costly to provide services and products that our regulators and members expect, which could have a material adverse effect on our financial condition, cash flows, and results of operations.

Some of these third-parties have direct access to our systems in order to provide their services to us and operate the majority of our communications, network, and computer hardware and software. For example, we currently offer our products through our website and online app using Amazon Web Services, Inc. (“AWS”), ~~or AWS,~~ platforms for cloud computing, a provider of cloud infrastructure services, and the Google Cloud Platform ~~or GCP.~~(“GCP”). Our operations depend on protecting the virtual cloud infrastructure hosted in AWS and GCP by maintaining its configuration, architecture, and interconnection specifications, as well as the information stored in these cloud platforms and which third-party internet service providers transmit. We also engage with other third parties, including Atlassian Corporation Plc and inContact, Inc. for our product offerings and internal operations. In the event that ~~either our AWS or GCP~~a service agreement with a third-party vendor that we rely upon is terminated, or there is a lapse of service, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in ~~meeting key~~our operations and service ~~obligations~~ to our members and business partners, as well as delays and additional expense in arranging new facilities and services, which could harm our business, results of operations, and financial condition.

Other third-parties that have access to our systems and member information, or provide services that help with our administrative functions include Atlassian Corporation Plc, or Atlassian, which provides a reporting and project management tool called Jira for certain of our health insurance subsidiaries to launch and track investigations, make changes to member information, and communicate efficiently with departments within Oscar, and inContact, Inc., or inContact, which provides cloud-based contact center software solutions that we use to engage with members. The Oscar platform also integrates various third-party applications, including Google LLC, or Google, Workplace applications, such as Gmail, Hangouts, Calendar, and Drive.

Our arrangements with third-party vendors and service providers may make our operations vulnerable if those third parties fail to satisfy their obligations to us, including their obligations to maintain and protect the security and confidentiality of our information and data, or the information and data relating to our members or customers. We are also at risk of a data security incident involving a vendor or third party, which could result in a breakdown of such third party’s data protection processes or cyber-attackers gaining access to our infrastructure through the third party. To the extent that a vendor or third party suffers a data security incident that compromises its operations, we could incur significant costs and possible service interruption. In addition, we may have disagreements with our third-party vendors or service providers regarding relative responsibilities for any such failures or incidents under applicable business associate agreements or other applicable outsourcing agreements. Any contractual remedies and/or indemnification obligations we may have for vendor or service provider failures or incidents may not be adequate to fully compensate us for any losses suffered as a result of any vendor’s failure to satisfy its obligations to us or under applicable law. Our vendor and service provider arrangements could be adversely impacted by changes in vendors’ or service providers’ operations or financial condition, or other matters outside of our control. Violations of, or noncompliance with, laws and/or regulations governing our business or noncompliance with contract terms by third-party vendors and service providers could increase our exposure to liability to our members, providers, or other third parties, or could result in sanctions and/or fines from the regulators that oversee our business. In turn, this could increase the costs associated with the operation of our business or have an adverse impact on our business and reputation. Moreover, if these vendor and service provider relationships were terminated for any reason, we may not be able to find alternative partners in a timely manner or on acceptable financial terms, and may incur significant costs and/or experience significant disruption to our operations in connection with any such vendor or service provider transition. As a

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result, we may not be able to meet the full demands of our members or customers and, in turn, our business, financial condition, and results of operations may be harmed. In addition, we may not fully realize the anticipated economic and other benefits from our outsourcing projects or other relationships we enter into with third-party vendors and service providers, as a result of unanticipated delays in transitioning our operations to the third-party vendor or service provider, such third-party vendor or service provider’s noncompliance with contract terms, unanticipated costs or expenses, or violations of laws and/or

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regulations, or otherwise. This could result in substantial costs or other operational or financial problems that could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Adverse market conditions may result in our investment portfolio suffering losses or reduce our ability to meet our financing needs, which could materially and adversely affect our results of operations or liquidity.

We maintain a significant investment portfolio of cash equivalents and primarily short-term investments in a variety of securities, which are subject to general credit, liquidity, market, and interest rate risks and will decline in value if interest rates increase or one of the issuers’ credit ratings is reduced. As a result, we may experience a reduction in value or loss of our investments, which could have a materially adverse effect on our results of operations, liquidity, and financial condition.

In addition, during periods of increased volatility, adverse securities and credit markets may exert downward pressure on the availability of liquidity and credit capacity for certain issuers. We need liquidity to pay our operating expenses, make payments on our indebtedness, if any, and pay capital expenditures. The principal sources of our cash receipts are premiums, administrative fees, investment income, proceeds from borrowings and proceeds from the issuance of capital stock. Our access to additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the volume of trading activities, the availability of credit to our industry, our credit ratings and credit capacity, as well as the possibility that customers or lenders could develop a negative perception of our long- or short-term financial prospects. Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us. If one or a combination of these factors were to occur, our internal sources of liquidity may prove to be insufficient and, in such case, we may not be able to successfully obtain additional financing on favorable terms, or at all.

~~If state regulators do not approve payments of dividends and distributions by our subsidiaries to us, we may not have sufficient funds to implement our business strategy.~~

As we operate as one or more holding companies and we principally generate revenue through our health insurance subsidiaries, we are regulated under state insurance holding company laws. Although most of our subsidiaries are not currently profitable, in the future, if they become profitable or if our current levels of reserves and capital become excessive, we may make requests for dividends and distributions from our subsidiaries to fund our operations. In addition to state corporate law limitations, these subsidiaries are subject to more stringent laws and regulations that may restrict the ability to pay or limit the amount of dividends and distributions that can be paid to us without prior approval of, or notification to, state regulators, including mandatory statutory capital and surplus requirements. As we become profitable, we may increasingly rely on distributions from our subsidiaries, and if regulators were to deny our subsidiaries’ requests to pay dividends, the funds available to us would be limited, which could harm our ability to implement our business strategy.

From time to time, we may become involved in costly and time-consuming litigation and regulatory audits and actions, which require significant attention from our management.

From time to time, we are a defendant in lawsuits and the subject of regulatory actions, and are subject to audits, reviews, assessments and investigations relating to our business, including, without limitation, claims by members alleging failure to provide coverage or pay for or authorize payment for health care, claims related to non-payment or insufficient payments for ~~out-of-network~~ services by providers, claims of trademark and other intellectual property infringement, claims alleging bad faith or unfair business practices, claims relating to sales, marketing and other business practices, inquiries regarding our submission of risk adjustment data, enforcement actions by state regulatory bodies alleging non-compliance with state law, financial and market conduct examinations by state regulatory bodies, and claims related to the imposition of new taxes, including, but not limited to, claims that may have retroactive application. Certain of the Company’s health insurance subsidiaries have been or are currently undergoing review by state regulators, including for, among other matters, compliance with applicable laws and regulations and reviews of financial condition. We also may receive subpoenas and other requests for information from various federal and state agencies, regulatory authorities, state Attorneys General, committees, subcommittees, and members of the U.S. Congress and other state, federal, and international governmental authorities. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have a material adverse impact on our business and financial position, results of operations, and/or cash flows, and may affect our reputation and brand. In addition, regardless of the outcome of any litigation or regulatory proceedings, investigations, audits, or reviews, responding to such

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matters is costly and time consuming, and requires significant attention from our management, and could, therefore, harm our business and financial position, results of operations or cash flows. Insurance may not cover such claims, may not provide sufficient payments to cover all of the costs to resolve one or more such claims, and may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments, and settlements exceed insured levels, could adversely affect our results of operations and cash flows, thereby harming our business.

The regulations and contractual requirements applicable to us and other market participants are complex and subject to change, making it necessary for us to invest significant resources in complying with our regulatory and contractual requirements. Ongoing vigorous legal enforcement and the highly technical regulatory scheme mean that our compliance efforts in this area will continue to require significant resources, and we may not always be successful in ensuring appropriate compliance by our Company, employees, consultants, or vendors, for whose compliance or lack thereof we may be held responsible and liable. Regulatory audits, investigations, and reviews could result in significant or material changes to our business practices, including increased capital requirements, and also could result in significant or material premium refunds, fines, penalties, civil liabilities, criminal liabilities, or other sanctions, including marketing and enrollment sanctions, suspension or exclusion from participation in government programs, imposition of heightened monitoring by our federal or state regulators, and suspension or loss of licensure if we are determined to be in violation of applicable laws or regulations. Any of these audits, reviews, or investigations could have a material adverse effect on our financial position, results of operations, or business, or could result in significant liabilities and negative publicity for our Company.

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We rely on the experience and expertise of our Co-Founders, senior management team, highly-specialized technology and insurance experts, key technical employees, and other highly skilled personnel.

Our success depends upon the continued service of Mario Schlosser, our Co-Founder, Chief Executive Officer and a member of our board of directors, and Joshua Kushner, our Co-Founder, Vice Chairman and a member of our board of directors, the members of our senior management team, highly-specialized technology and insurance experts, and key technical employees, as well as ~~our ability to continue to attract and retain additional~~other highly qualified personnel. ~~Our future success depends on~~We also depend upon our continuing ability to identify, hire, develop, motivate, retain, and integrate additional highly skilled personnel ~~for all areas of~~to support our ~~business.~~growth. If we are unable to attract ~~the requisite~~and retain qualified personnel, our business and prospects may be adversely affected.

Each of our Co-Founders, members of our senior management team, specialized technology and insurance experts, key technical personnel, and other employees could terminate their relationship with us at any time. The loss of ~~our Co-Founders or any other member of our senior management team, specialized technology and insurance experts, or~~ key personnel might significantly delay or prevent the achievement of our strategic business objectives and could harm our business. In addition, much of our essential technology and infrastructure are custom-made for our business by our personnel. The loss of key technology personnel, including members of management, as well as our engineering and product development personnel, could disrupt our operations and harm our business. We also rely on a small number of highly-specialized insurance experts, the loss of any one of whom could also have a disproportionate impact on our business. ~~Competition~~We face significant competition for personnel across all areas of our business, and we may not be able to replace key personnel in ~~our industry for qualified employees is intense.~~ a timely manner or at all.

Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining, motivating and ~~motivating~~incentivizing our existing employees. Job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Fluctuations in the price of our Class A common stock may make it more difficult or costly to use equity compensation to hire new employees and to retain, motivate, and incentivize existing employees. For example, from the completion of our IPO through ~~September 30,~~December 31, 2021, our closing stock price ranged from a high of $36.77 to a low of ~~$12.25.~~$7.62. As such, the underlying value of the equity awards held by our employees also fluctuates. Additionally, if and when the stock options or other equity awards are substantially vested, employees under such equity arrangements may be more likely to leave, particularly when the underlying shares have ~~seen a value appreciation.~~appreciated.

~~We face significant competition for personnel, including in New York, where our headquarters is located, and including in particular technology-focused personnel.~~ To attract and retain top talent, ~~we have to offer, and believe~~ we will need to continue to offer competitive compensation and benefits packages, including equity compensation. We may also need to increase our employee compensation levels in response to competitor actions. If we are unable to retain highly qualified personnel or hire new employees quickly enough to meet our needs, or otherwise fail to effectively manage our hiring needs or successfully integrate new hires, including our recently hired management team members, our efficiency, ability to ~~meet forecasts~~execute our growth strategy and our employee morale, productivity, and retention could suffer, which in turn could have an adverse effect on our business, results of operations, and financial condition.

If we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches that disrupt our information systems or operations, or result in the dissemination of sensitive personal

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or confidential information, we could suffer increased costs, exposure to significant liability, adverse regulatory consequences, reputational harm, loss of business, and other serious negative consequences.

Our information technology systems and safety control systems are subject to a growing number of threats from computer programmers, hackers, and other adversaries that may be able to penetrate our network security and misappropriate our confidential information or that of third parties, create system disruptions, or cause damage, security issues, or shutdowns. They also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our systems or otherwise exploit security vulnerabilities. Because the techniques used to circumvent, gain access to, or sabotage security systems, can be highly sophisticated and change frequently, they often are not recognized until launched against a target, and may originate from less regulated and remote areas around the world. We may be unable to anticipate these techniques or implement adequate preventive measures, resulting in potential data loss and damage to our systems. As cyber threats continue to evolve, we may be required to expend additional resources to further enhance our information security measures, develop additional protocols and/or investigate and remediate any information security vulnerabilities.

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Our systems and facilities are also subject to compromise from internal threats such as improper action by employees, including malicious insiders, or by vendors, counterparties, and other third parties with otherwise legitimate access to our systems. Our policies, employee training (including security awareness training), procedures, and technical safeguards may not prevent all improper access to our network or proprietary or confidential information by employees, vendors, counterparties, or other third parties. Our systems and facilities ~~may~~are also be vulnerable to security incidents or security attacks, ransomware attacks, malware, or other forms of cyber-attack, acts of vandalism or theft, misplaced or lost data, human errors, or other similar events that could negatively affect our systems, and our and our members’ data. In the past, we have experienced, and third-party service providers who process information on our behalf have experienced, and disclosed to applicable regulatory authorities, data breaches resulting in disclosure of confidential information or PHI. Although none of these data breaches have resulted in any material financial loss or penalty to date, future data breaches could require us to expend significant resources to remediate any damage, interrupt our operations and damage our reputation, subject us to state or federal agency review and could also result in regulatory enforcement actions, material fines and penalties, litigation or other actions which could have a material adverse effect on our business, reputation and results of operations, financial position, and cash flows. Additionally, our third-party service providers who process information on our behalf may cause security breaches for which we are potentially liable.

Moreover, we face the ongoing challenge of managing access controls in a complex environment. The process of enhancing our protective measures can itself create a risk of systems disruptions and security issues. Given the breadth of our operations, including through our +Oscar technology platform, and the increasing sophistication of cyber-attacks, a particular incident could occur and persist for an extended period of time before being detected. The extent of a particular cyber-attack and the steps that we may need to take to investigate the attack may take a significant amount of time and resources before such an investigation could be completed and full and reliable information about the incident is known. During such time, the extent of any harm or how best to remediate it might not be known, which could further increase the risks, costs, and consequences of a data security incident.

In addition, our systems must be routinely updated, patched, and upgraded to protect against known vulnerabilities. The volume of new software vulnerabilities has increased substantially, as has the importance of patches and other remedial measures. In addition to remediating newly identified vulnerabilities, previously identified vulnerabilities must also be updated. We are at risk that cyber-attackers exploit these known vulnerabilities before they have been addressed. The complexity of our systems and platforms, the increased frequency at which vendors are issuing security patches to their products, our need to test patches, and, in some instances, coordinate with third-parties before they can be deployed, all could further increase our risks.

As part of our normal operations, we and our partners and other third parties with whom we collaborate routinely collect, process, store, and transmit large amounts of data, including PHI subject to HIPAA and other federal and state laws and regulations, as well as proprietary or confidential information relating to our business or third parties, including our members, providers, and vendors. Any compromise or perceived compromise of the security of our systems or the systems of one or more of our vendors or service providers could damage our reputation and brand, cause the termination of relationships with our members, result in disruption or interruption to our business operations, marketing partners and carriers, reduce demand for our services, and subject us to significant liability and expense, as well as regulatory action and lawsuits, which would harm our business, operating results, and financial condition. The CCPA, in particular, includes a private right of action for California consumers whose CCPA-covered personal information is impacted by a data security incident resulting from a company’s failure to maintain reasonable security procedures and, hence, may result in civil litigation in the event of a data breach impacting such information. Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and, in any event, insurance coverage would not address the reputational damage that could result from a security incident or any regulatory actions or litigation that may result. In addition, in the event that additional data security laws are implemented, we may not be able to timely comply with such requirements, or such requirements may not be compatible with our current processes.

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If we are unable to integrate and manage our information systems effectively, our operations could be disrupted.

Our operations depend significantly on effective information systems. The information gathered and processed by our information systems assists us in, among other things, generating forecasts used for strategic decisions and pricing, monitoring utilization and other cost factors, processing provider claims, detecting fraud, and providing data to our regulators. Our ~~health care~~healthcare providers also depend upon our information systems for membership verifications, claims status, and other information. We partner with third parties, including Amazon, Atlassian, inContact, and Google, to support our information technology systems. Our information systems and applications require continual maintenance, upgrading, and enhancement to meet our current and expected operational needs and regulatory requirements. If we underestimate the need to expand or experience difficulties with the transition to or from information systems or do not appropriately plan, integrate, maintain, enhance, or expand our information systems, we could suffer, among other things, operational disruptions, loss of

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existing members and difficulty in attracting new members, regulatory enforcement, and increases in administrative expenses. In addition, if our providers, brokers and members do not utilize the technology we deploy to them, we may not be able to efficiently and cost-effectively operate our business. Our ability to integrate and manage our information systems may also be impaired as the result of events outside our control, including acts of nature, such as earthquakes or fires, or acts of terrorism. Also, we may from time to time obtain significant portions of our systems-related or other services or facilities from independent third parties, which may make our operations vulnerable if such third parties discontinue such services or fail to perform adequately.

Real or perceived errors, failures or bugs in our systems, website, or app could impair our operations, damage our reputation and brand, and harm our business and operating results.

Our continued success is dependent on our systems, applications, and software continuing to operate and to meet the changing needs of our members and users. We rely on our technology and engineering staff and vendors to successfully implement changes to, and maintain, our systems and services in an efficient and secure manner. Like all information systems and technology, our website and online app may contain material errors, failures, vulnerabilities, or bugs, particularly when new features or capabilities are released, any of which could lead to interruptions, delays, or website or online app shutdowns, or could cause loss of critical data, or the unauthorized disclosure, access, acquisition, alteration or use of personal or other confidential information.

A significant impact on the performance, reliability, security, and availability of our systems, software, or services may harm our reputation and brand, impair our ability to operate, retain existing members, or attract new members, and expose us to legal claims and government action, each of which could have a material adverse impact on our financial condition, results of operations, and growth prospects.

If state regulators do not approve payments of dividends and distributions by our health insurance subsidiaries to us, we may not have sufficient funds to implement our business strategy.

We may not be able to utilize our net operating loss carryforwards ~~or NOLs,~~(“NOLs”), to offset future taxable income for U.S. federal income tax purposes, which could adversely affect our cash flows.

As of ~~December~~March 31, ~~2020,~~2022, we had federal income tax NOLs of ~~$1.05~~$1.71 billion available to offset our future taxable income, if any, prior to consideration of annual limitations that may be imposed under Section 382 of the U.S. Internal Revenue Code of 1986, as amended ~~or the Code,~~(the “Code”) or otherwise. Of our NOLs, approximately ~~$792.1 million~~$1.06 billion of losses will expire between 2032 and ~~2039,~~2042, and ~~$253.9~~$655 million of losses can be carried forward indefinitely.

We may be unable to use our NOLs, as we do not have a history of positive earnings. In addition, under Section 382 of the Code, if a corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to use its pre-ownership change NOLs to offset its post-ownership change income may be limited. We ~~completed an analysis~~regularly assess potential NOL limitations under Section 382, and determined that ~~our NOLs are subject to limitations based on changes in~~an ownership ~~that~~change occurred in ~~2016, and we~~2016; however the corresponding limitation amount did not impact the ultimate pre-change NOL available for use. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If we undergo another ownership change, ~~we may incur additional limitations on~~ our ability to utilize our NOLs existing at the time of the ownership change ~~prior to their expiration.~~may be limited. Future regulatory changes could also limit our ability to utilize our NOLs. To the extent we are not able to offset future taxable income with our NOLs, our cash flows may be adversely affected.

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Failure to secure, protect, or enforce our intellectual property rights could harm our business, results of operations, and financial condition.

Our commercial success is dependent in part on protecting our core technologies, intellectual property assets, and proprietary rights (such as source code, information, data, processes, and other forms of information, know-how, and technology). We rely on a combination of copyrights, trademarks, service marks, trade secret laws, and contractual restrictions to establish and protect our intellectual property. However, there are steps that we have not yet taken to protect our intellectual property on a global basis. For example, we do not have any patents, which limits our ability to deter patent infringement claims by competitors and other third parties who may hold or obtain patents. Additionally, the steps that we have already taken to protect our intellectual property may not be sufficient or effective, and our confidentiality, non-disclosure, or invention assignment agreements with employees, consultants, partners, or other parties may be breached and may otherwise not be effective in establishing our rights in intellectual property and in controlling access to our proprietary information. Even if we do detect violations, we may need to engage in litigation to enforce our rights.

We currently hold various domain names relating to our brand, including HiOscar.com. We also engage a third-party vendor to monitor fictitious sites that may purport to be us. Failure to protect our domain names could adversely affect our reputation and brand, and make it more difficult for users to find our website and our online app. We may be unable, without significant cost or at all, to prevent third parties from diverting traffic from or acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary rights.

While we take precautions designed to protect our intellectual property, it may still be possible for competitors and other unauthorized third parties to copy our technology and use our proprietary brand, content, and information to create or enhance competing solutions and products, which could adversely affect our competitive position in our rapidly evolving and highly competitive industry. Some license provisions that protect against unauthorized use, copying, decompiling, transfer, and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries, and the remedies for such events may not be sufficient to compensate for such breaches. We enter into confidentiality and invention assignment agreements with our employees and consultants, and enter into confidentiality agreements with our third-party providers and strategic partners. We cannot assure you that these agreements will be effective in controlling access to, and use and distribution of, our platform and proprietary information. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. Such arrangements may limit our ability to protect, maintain, enforce, or commercialize such intellectual property rights. If we are unable to prevent the unauthorized use or exploitation of our intellectual property, the value of our brand, content, and other intangible assets may be diminished, competitors may be able to more effectively mimic our service and methods of operations, the perception of our business and service to members, and potential members, may become confused, and our ability to attract customers may be adversely affected. Any inability or failure to protect our intellectual property could adversely impact our business, results of operations, and financial condition.

We have filed, and may continue in the future to file, applications to protect certain of our innovations and intellectual property. We do not know whether any of our applications will result in the issuance of a patent, trademark, or copyright, as applicable, or whether the examination process will require us to narrow our claims. In addition, we may not receive competitive advantages from the rights granted under our intellectual property. Our existing intellectual property, and any intellectual property granted to us, or that we otherwise acquire in the future, may be contested, circumvented, or invalidated, and we may not be able to detect or prevent third parties from infringing our rights to our intellectual property. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty. In addition, given the costs, effort, and risks of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, we may choose not to seek patent protection for certain innovations. Any failure to adequately obtain such patent protection, or other intellectual property protection, could later prove to adversely impact our business.

We may be required to spend significant resources in order to monitor, protect, and defend our intellectual property rights, and some violations may be difficult or impossible to detect. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of our intellectual property. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform, or harm our reputation or brand. In addition,

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we may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be on commercially reasonable terms, or at all, and could adversely affect our ability to compete or require us to rebrand or otherwise modify our offerings, which could further exhaust our resources. Furthermore, we may

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also be obligated to indemnify our members or business partners in connection with any such litigation and to obtain licenses.

Risks Related to our Indebtedness

Restrictions imposed by our Revolving Credit Facility may materially limit our ability to operate our business and finance our future operations or capital needs.

The terms of our senior secured credit agreement with Wells Fargo Bank, National Association as administrative agent, and certain other lenders for the Revolving Credit Facility in the aggregate principal amount of $200 million, may restrict us and our subsidiaries from engaging in specified types of transactions. These covenants, subject to certain limitations and exceptions, restrict our ability, and that of our subsidiaries, to, among other things:

•incur indebtedness;

•incur certain liens;

•enter into sale and lease-back transactions;

•make investments, loans, advances, guarantees and acquisitions;

•consolidate, merge or sell or otherwise dispose of assets;

•pay dividends or make other distributions on equity interests, or redeem, repurchase or retire equity interests;

•enter into transactions with affiliates;

•alter the business conducted by us and our subsidiaries; and

•change our or their fiscal year.

A breach of any of these covenants, or any other covenant in the documents governing our Revolving Credit Facility, could result in a default or event of default under our Revolving Credit Facility. In the event of any event of default under our Revolving Credit Facility, the applicable lenders or agents could elect to terminate borrowing commitments and declare all borrowings and loans outstanding thereunder, if any, together with accrued and unpaid interest and any fees and other obligations, to be immediately due and payable. In addition, or in the alternative, the applicable lenders or agents could exercise their rights under the security documents to be entered into in connection with our Revolving Credit Facility. We will pledge substantially all of our assets as collateral securing our Revolving Credit Facility and any such exercise of remedies on any material portion of such collateral would likely materially adversely affect our business, financial condition or results of operations.

If we were unable to repay or otherwise refinance these borrowings and loans when due, and the applicable lenders proceeded against the collateral granted to them to secure that indebtedness, we may be forced into bankruptcy or liquidation. In the event the applicable lenders accelerate the repayment of any future borrowings, we may not have sufficient assets to repay that indebtedness. Any acceleration of future borrowings under our Revolving Credit Facility or other outstanding indebtedness would also likely have a material adverse effect on us.

Pursuant to our Revolving Credit Facility, we are required to comply with certain financial covenants to maintain a minimum dollar threshold of direct policy premiums (as defined in the Revolving Credit Facility), a maximum combined ratio (as defined in the Revolving Credit Facility) and minimum liquidity (as defined in the Revolving Credit Facility). Our ability to borrow under our Revolving Credit Facility depends on our compliance with these financial covenants. Events beyond our control, including changes in general economic and business conditions, may affect our ability to satisfy the financial covenants. We cannot assure you that we will satisfy the financial covenants in the future, or that our lenders will waive any failure to satisfy the financial covenants.

Changes in the method pursuant to which ~~the London Interbank Offered Rate, or~~ LIBOR is determined and the transition to other benchmarks may adversely affect our results of operations.

LIBOR and certain other “benchmarks” have been the subject of continuing national, international, and other regulatory guidance and proposals for reform. These reforms may cause such benchmarks to perform differently than in the past or have other consequences which cannot be predicted. ~~In July 2017,~~A portion of our indebtedness bears interest at variable interest rates, primarily based on LIBOR, which may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the ~~United Kingdom’s Financial Conduct Authority, which regulates~~past or cause other unanticipated consequences. Some tenors of LIBOR ~~publicly~~were discontinued on December 31, 2021. Although we expect that the capital and debt markets will cease to use LIBOR as a benchmark in the near future and the administrator of LIBOR has announced ~~that it intends~~its intention to ~~stop persuading~~extend the publication of most tenors of LIBOR for U.S. dollars through June 30, 2023, we cannot predict whether or ~~compelling banks to submit~~when LIBOR ~~rates after~~

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2021. To identify a successor rate for U.S. dollar LIBOR, the Alternative Reference Rates Committee or ARRC, a U.S. based group convened by the Federal Reserve Board and the Federal Reserve Bank of New York, was formed. The ARRC is comprised of a diverse set of private sector entities and a wide array of official-sector entities, banking regulators, and other financial sector regulators. The ARRC has identifiedwill actually cease to be available, whether the Secured Overnight ~~Financing~~Funding Rate, or SOFR, aswill become the market benchmark in its ~~preferred alternative rate for LIBOR. SOFR is~~place or what impact such a ~~measure~~transition may have on our business, financial condition and results of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. Financial regulators in the United Kingdom, the European Union, Japan, and Switzerland also have formed working groups with the aim of recommending alternatives to LIBOR denominated in their local currencies. Although SOFR appears to be the preferred replacement rate for U.S. dollar LIBOR, it is unclear if other benchmarks may emerge or if other rates will be adopted outside of the United States.operations.

The Revolving Loan Facility has interest rate payments determined directly or indirectly based on LIBOR. Uncertainty regarding the continued use and reliability of LIBOR as a benchmark interest rate could adversely affect the performance of LIBOR relative to its historic values. The Revolving Loan Facility contains “hardwired” benchmark replacement provisions with “early opt-in” triggers that permit the replacement of LIBOR prior to the phasing out of published LIBOR rates. The benchmark replacement language contemplates the use of an alternative benchmark rate to be selected by the Administrative Agent. Even if financial instruments are transitioned to alternative benchmarks, such as SOFR, successfully, the new benchmarks are likely to differ from LIBOR, and our interest expense associated with our outstanding indebtedness or any future indebtedness we incur may increase. Further, transitioning to an alternative benchmark rate, such as SOFR, may result in us incurring significant expense and legal risks, as renegotiation and changes to documentation may be required in effecting the transition. Any alternative benchmark rate may be calculated differently than LIBOR and may increase the interest expense associated with our existing or future indebtedness.

Any of these occurrences could materially and adversely affect our borrowing costs, financial condition, and results of operations.

Our debt obligations contain restrictions that impact our business and expose us to risks that could materially adversely affect our liquidity and financial condition.

As of ~~September 30,~~December 31, 2021, we had no outstanding indebtedness. Subsequent to December 31, 2021, our indebtedness has increased due to our issuance in February 2022 of the 2031 Notes, in a private placement. We may incur additional indebtedness in the future, including borrowings under the Revolving Credit Facility. ~~Our future~~Such indebtedness, including borrowings, if any, under the Revolving Credit Facility, could have significant effects on our business, such as:

•limiting our ability to borrow additional amounts to fund capital expenditures, acquisitions, debt service requirements, execution of our growth strategy and other purposes;

•limiting our ability to make investments, including acquisitions, loans and advances, and to sell, transfer or otherwise dispose of assets;

•requiring us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our borrowings, which would reduce availability of our cash flow to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes;

•making us more vulnerable to adverse changes in general economic, industry and competitive conditions, in government regulation and in our business by limiting our ability to plan for and react to changing conditions;

•placing us at a competitive disadvantage compared with our competitors that have less debt; and

•exposing us to risks inherent in interest rate fluctuations because our borrowings are at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates.

~~In addition,~~Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 2031 Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. If the assumptions underlying our cash flow projections are incorrect, for example, due to unexpected impacts of the ongoing COVID-19 pandemic, we may not be able to generate sufficient cash flow from our operations to repay our existing or future indebtedness when it becomes due and to meet our other cash needs. If we are ~~not able~~unable to ~~pay our borrowings under future indebtedness as they become due,~~generate such cash flow, we will be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. WeIn addition to the restrictions imposed by our Revolving Credit Facility, the Investment Agreement that we entered into in connection with our issuance of the 2031 Notes contains covenants, which, subject to certain conditions, limitations and exceptions, restrict our ability to refinance our indebtedness and incur additional indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in our other indebtedness becoming immediately payable in full. Due to such restrictions or other factors, we may not be able to refinance our ~~future~~ debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it may negatively affect our business, financial condition and results of operations. In addition, we may be subject to prepayment penalties depending on when we repay our future indebtedness, including any borrowings under the Revolving Credit Facility, which amounts could be material.

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We may be unable to raise the funds necessary to repurchase our outstanding 2031 Notes for cash following a fundamental change or on the optional repurchase dates, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the 2031 Notes or pay cash upon their conversion.

Noteholders may, subject to certain conditions described in the Indenture governing the 2031 Notes, require us to repurchase their 2031 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest, if any. Additionally, pursuant to the Investment Agreement, after the fifth anniversary of the Closing Date of the 2031 Notes, the initial holders of the 2031 Notes have the right to require us to repurchase all of their 2031 Notes for cash, on each of June 30, 2027, June 30, 2028, June 30, 2029 and June 30, 2030 (each, a “Repurchase Date”); provided that, among other conditions, a repurchase notice is delivered to the trustee under the Indenture no later than the later of (i) 120 days prior to the applicable Repurchase Date and (ii) 10 business days following the date on which we file our Annual Report on Form 10-K for the prior year. Furthermore, upon conversion, we will satisfy part or all of our conversion obligation in cash unless we elect to settle conversions solely in shares of our common stock. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2031 Notes or pay any cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2031 Notes or pay any cash amounts due upon conversion. Our failure to repurchase the 2031 Notes or pay any cash amounts due upon conversion when required will constitute a default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2031 Notes.

Provisions in the Indenture governing the 2031 Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the 2031 Notes and the Indenture could make a third-party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change (as defined in the Indenture governing the 2031 Notes), then noteholders will have the right to require us to repurchase their 2031 Notes for cash. In addition, if a takeover constitutes a make-whole fundamental change (as defined in the Indenture governing the 2031 Notes), then we may be required to temporarily increase the conversion rate. In either case, and in other cases, our obligations under the 2031 Notes and the Indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.

Risks Related to Ownership of Our Class A Common Stock

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The dual class structure of our common stock will have the effect of concentrating voting control with Thrive Capital and our Co-Founders for the foreseeable future, which will limit the ability of our other investors to influence corporate matters, including the election of directors and the approval of any change of control transaction.

Our Class B common stock has 20 votes per share, and our Class A common stock has one vote per share. As of ~~September 30, 2021,~~March 31, 2022, the holders of our outstanding Class B common stock, which consist of Thrive Capital and our Co-Founders, beneficially own ~~21.1%~~22.6% of our outstanding capital stock and hold ~~82.8%~~82.9% of the voting power of our outstanding capital ~~stock.~~stock (assuming the exercise of all options to acquire shares of Class B common stock and the conversion of the 2031 Notes, in each case that are beneficially owned as of March 31, 2022). Thrive Capital and Joshua Kushner (as the sole managing member of the Thrive General Partners), in particular, beneficially own ~~18.0%~~19.6% of our outstanding capital stock and hold 75.5% of the voting power of our outstanding capital stock as of ~~September 30, 2021.~~March 31, 2022. Because of the 20-to-one voting ratio between our Class B common stock and Class A common stock, the holders of Class B common stock, in particular Thrive Capital and Joshua Kushner (as the sole managing member of the Thrive General Partners), collectively control over a majority of the combined voting power of all of our Class A common stock and Class B common stock and therefore will continue to be able to control all matters submitted to our stockholders for approval until a significant portion of such shares of outstanding Class B common stock have been converted to shares of Class A common stock. This concentrated control limits or precludes the ability of our other investors to influence corporate matters for the foreseeable future. For example, Thrive Capital and our Co-Founders have sufficient voting power to determine the outcome with respect to elections of directors, amendments to our certificate of incorporation, amendments to our bylaws that are subject to a stockholder vote, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans, and approval of any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction requiring stockholder approval for the foreseeable future. In addition, this concentrated control may also prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders. This control may also adversely affect the market price of our Class A common stock.

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Because Thrive Capital’s and our Co-Founders’ interests may differ from those of our other stockholders, actions that Thrive Capital and our Co-Founders take with respect to us, as significant stockholders, may not be favorable to our other stockholders, including holders of our Class A common stock.

Thrive Capital and its affiliates engage in a broad spectrum of activities. In the ordinary course of its business activities, Thrive Capital and its affiliates may engage in activities where their interests conflict with our interests or those of our other stockholders. Thrive Capital or one of its affiliates may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, Thrive Capital may have an interest in us pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment in us, even though such transactions might involve risks to you.

Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions. As among the individual holders of Class B common stock, the conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term (and decreasing the relative voting power of those holders of Class B common stock who transfer their shares).

We cannot predict the effect our dual class structure may have on the market of our Class A common stock.

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock, in adverse publicity, or in other adverse consequences. For example, certain index providers, such as S&P Dow Jones, have announced restrictions on including companies with multiple-class share structures in certain of their indices, including the S&P 500. Accordingly, our dual class share structure would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track those indices may not invest in our Class A common stock. These policies are relatively new and it is unclear what effect, if any, they will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that they may depress valuations, as compared to similar companies that are included. ~~Because of the dual class structure of our common stock, we will likely be excluded from certain indices and we cannot assure that other stock indices will not take similar actions.~~ Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

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We anticipate incurring substantial stock-based compensation expense related to performance-based awards, including particularly the Founders Awards, which may have an adverse effect on our financial condition and results of operations and may result in substantial dilution

We have in the past and may in the future grant performance-based awards, as a result of which we may incur substantial stock-based compensation expenses and may expend substantial funds to satisfy tax withholding and remittance obligations.For example, in connection with our IPO, we granted to Mario Schlosser and Joshua Kushner, our Co-Founders, an aggregate of 6,344,779 long-term performance-based ~~RSUs, or PSUs,~~restricted stock units (“PSUs”), which we refer to as the Founders Awards.

Mr. Schlosser’s Founders Award consists of PSUs that cover 4,229,853 shares of Class A common stock, and Mr. Kushner’s Founders Award consists of PSUs that cover 2,114,926 shares of Class A common stock. Each Founders Award will be eligible to vest based on the achievement of five pre-determined stock price goals ranging from $90.00 to $270.00 per share over a seven-year period following the closing of our IPO. Half of each Founders Award will become earned based on the achievement of such stock price goals (measured as a volume-weighted average stock price over 180 days) at any time between the second and seventh anniversaries of the closing of our IPO. The remaining half of each Founders Award also will become earned based on achieving the same stock price goals, but the period for measuring the achievement of those goals will be scaled between the second and seventh anniversaries of the closing of our IPO. Any PSUs that become earned PSUs will vest on an applicable vesting date between the third and seventh anniversaries of the closing of our IPO. Any PSUs that do not vest prior to or on the seven-year anniversary of the grant date automatically will be terminated without consideration. The PSUs are subject to certain vesting acceleration terms. We will continue to record substantial stock-compensation expense for the Founders Awards. As of ~~September 30, 2021,~~March 31, 2022, the amount of unrecognized compensation expense for the PSUs is ~~$78.0~~$67.5 million, which is expected to be recognized over a weighted-average period of ~~4.0~~3.59 years.

In addition, any PSUs subject to the Founders Awards that are earned and vest will be settled in shares of Class A common stock as soon as practicable after becoming vested. As a result, a potentially large number of shares of Class A common stock will be issuable if the applicable vesting conditions are satisfied, which would dilute your ownership of us.

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We are a “controlled company” within the meaning of the rules of NYSE and, as a result, we rely on exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

As of September 30, 2021, Thrive Capital and Joshua Kushner (as the sole managing member of the Thrive General Partners) control approximately 75.5% of the combined voting power of our outstanding capital stock. As a result, weWe are a “controlled company” within the meaning of the corporate governance standards of the ~~NYSE.~~New York Stock Exchange (“NYSE”). Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

•the requirement that a majority of the board of directors consist of independent directors;

•the requirement that our nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

•the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

•the requirement for an annual performance evaluation of our nominating and corporate governance and compensation committees.

We currently are not relying on these exemptions, except for the exemption from the requirement that ~~each of~~ our nominating and corporate governance ~~committee and compensation~~ committee be composed entirely of independent directors. However, as long as we remain a “controlled company,” we may elect in the future to take advantage of any of these other exemptions. As a result of any such election, our board of directors may not have a majority of independent directors, our compensation committee may not consist entirely of independent directors, and our directors may not be nominated or selected by independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

We do not intend to pay dividends on our Class A common stock for the foreseeable future.

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We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors, subject to applicable laws, and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, industry trends, and other factors that our board of directors may deem relevant. Any such decision also will be subject to compliance with contractual restrictions and covenants in the agreements governing our current indebtedness. In addition, our ability to pay dividends in the future depends on the earnings and distributions of funds from our health insurance subsidiaries. Applicable state insurance laws restrict the ability of such health insurance subsidiaries to declare stockholder dividends and require our health insurance subsidiaries to maintain specified levels of statutory capital and surplus. The Revolving Credit Facility contains restrictions on our ability to pay dividends. Moreover, we may incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on our Class A common stock. As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends could also adversely affect the market price of our Class A common stock.

We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.

Our ~~Amended Charter~~amended and restated certificate of incorporation filed in connection with our IPO (the “Amended Charter”) authorizes us to issue one or more series of preferred stock. Our board of directors will have the authority to determine the powers, designations, preferences, and relative, participating, optional or other special rights, and the qualifications, limitations, or restrictions thereof, of the shares of preferred stock and to fix the number of shares constituting any series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend, and other rights superior to the rights of our Class A common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our Class A common stock at a premium to the market price, and may materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock.

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Future sales and issuances of our Class A common stock or rights to purchase our Class A common stock, including pursuant to our equity incentive plans, or other equity securities or securities convertible into our Class A common stock, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our Class A common stock to decline.

We have filed a registration ~~statement~~statements with the SEC on Form S-8 to register shares of our Class A common stock issued or reserved for issuance under ~~the~~our 2012 Stock Plan, 2021 Incentive Award Plan, 2022 Employment Inducement Incentive Award Plan, and ~~ESPP.~~Employee Stock Purchase Plan and expect to file additional registration statements on Form S-8 in the future. Subject to the satisfaction of vesting conditions, ~~and the expiration of lock-up agreements,~~ shares issued pursuant to or registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction. From time to time in the future, we may also issue additional shares of our Class A common stock, Class B common stock or securities convertible into Class A common stock pursuant to a variety of transactions, including acquisitions. The issuance by us of additional shares of our Class A common stock or securities convertible into our Class A common stock would dilute ~~your~~the ownership of ~~us,~~our existing stockholders, and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. ~~As of September 30, 2021, a total of 174,056,898 shares of our Class A common stock and 35,115,807shares of Class B common stock are issued and outstanding.~~

All of the shares of Class A common stock sold in our IPO are freely tradable without restriction or further registration under the Securities Act, except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, ~~or Rule 144,~~ may be sold only in compliance with certain limitations.

~~Now that contractual lock-up restrictions on resale have ended, the~~ The market price of our shares of Class A common stock could drop significantly if the holders of such restricted shares sell them or are perceived by the market as intending to sell

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them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock or other securities.

~~The JOBS Act allows us~~We are no longer an emerging growth company and the reduced compliance requirements applicable to ~~postpone the date by which we must comply with certain laws and regulations intended~~emerging growth companies no longer apply to protect investors, and to reduce the amount of information we provide in our reports filed with the SEC. We cannot be certain if this reduced disclosure will make our Class A common stock less attractive to investors.us.

~~The JOBS Act is intended to reduce the regulatory burden on “emerging~~We no longer qualify as an emerging growth ~~companies.” As~~company as defined in the ~~JOBS~~Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and as such we no longer are entitled to rely on exemptions from certain compliance requirements that are applicable to companies that are emerging growth companies. As a ~~public company whose initial public offering of common equity securities occurs after December 8, 2011, and whose annual net revenues~~result, subject to certain grace periods, we are ~~less than $1.07 billion will, in general, qualify as an “emerging growth company” until the earliest of:~~now required to:

•~~the last day of its fiscal year following the fifth anniversary of the date of its initial~~engage an independent registered public ~~offering of common equity securities;~~

•~~the last day of its fiscal year in which it has annual gross revenue of $1.07 billion or more;~~

•~~the date~~accounting firm to provide an attestation report on ~~which it has, during the previous three-year period, issued more than $1.07 billion in nonconvertible debt; and~~

• the date on which it is deemed to be a “large accelerated filer,” which will occur at such time as the company (1) has an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of its most recently completed second fiscal quarter, (2) has been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months, and (3) has filed at least one annual reportour internal controls over financial reporting pursuant to ~~the Exchange Act.~~

~~Under this definition, we currently qualify as an “emerging growth company” . For so long as we are an “emerging growth company,” we will, among other things:~~

•~~not be required to comply with the auditor attestation requirements of~~ Section 404(b) of the Sarbanes-Oxley Act ~~or Section 404(b);~~of 2002;

•~~not be required to hold a nonbinding advisory stockholder vote on~~submit certain executive compensation ~~pursuant~~matters to ~~Section 14A(a) of the Exchange Act;~~

•~~not be required to seek~~ stockholder ~~approval of any golden parachute payments not previously approved pursuant to Section 14A(b) of the Exchange Act;~~

•~~be exempt from the requirement of the PCAOB regarding the communication of critical audit matters in the auditor’s report on the financial statements;~~advisory votes; and

•~~be subject to reduced~~disclose a compensation discussion and analysis, including disclosure ~~obligations~~ regarding certain executive compensation ~~in our periodic reports~~related items such as the correlation between executive compensation and ~~proxy statements.~~performance and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth companyWe are no longer able to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period and, as a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. We cannot predict if investors will find our Class A common stock less attractive as a result of our decisioncontinue to take advantage of ~~some~~cost savings associated with the JOBS Act. Furthermore, if the additional requirements applicable to non-emerging growth companies divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or ~~all~~increase our net loss and may require us to reduce costs in other areas of our business. We cannot predict or estimate the ~~reduced disclosure requirements above. If some investors find~~amount or timing of additional costs we may incur to respond to these requirements. Furthermore, if we are unable to satisfy our ~~Class A~~obligations as a non-emerging growth company, we could be subject to delisting of our common stock, ~~less attractive as a result, there may be a less active trading market for our Class A common stock~~fines, sanctions and ~~our stock price may be more volatile.~~other regulatory action and potentially civil litigation

Table of September 30, 2021, we have exceeded the maximum annual revenue threshold for “emerging growth companies” and expect that we will lose “emerging growth company” status as of December 31, 2021. As a result, we will be required to comply with public company disclosure requirements applicable to registrants that have exited “emerging growth company” status, including the implementation of previously deferred accounting pronouncements, as of December 31, 2021.Contents

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and depress the market price of our Class A common stock.

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Our Amended Charter, ~~Amended Bylaws,~~amended and restated bylaws filed in connection with our IPO (the "Amended Bylaws"), and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors. Among others, our Amended Charter and Amended Bylaws include the following provisions:

•a dual class structure that provides our holders of Class B common stock with the ability to control the outcome of matters requiring stockholder approval;

•limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;

•advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;

•a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders;

•a forum selection clause, which means certain litigation can only be brought in Delaware;

•no authorization of cumulative voting, which limits the ability of minority stockholders to elect director candidates;

•certain amendments to our certificate of incorporation will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class;

•amendments to our bylaws by our stockholders will require the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class;

•the authorization of undesignated or “blank check” preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders and which may be used to create a “poison pill”;

•newly created directorships are filled by a majority of directors then in office; and

•the approval of two-thirds of the then outstanding voting power of our capital stock, voting as a single class, is required to remove a director.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law ~~or the DGCL,~~(the “DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations for a period of 3 years following the time that such stockholder became an interested stockholder, unless (i) prior to the time such stockholder became an interested stockholder, the board approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned 85% of the voting stock of the Company outstanding at the time the transaction commenced (excluding certain shares) or (iii) following board approval, the business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not owned by such interested stockholder.

The insurance laws in most states require regulatory review and approval of a change in control of our domestic insurers. “Control” generally means the possession, direct or indirect, of the power to direct, or cause the direction of, the management and policies of an insurer, whether through the ownership of voting securities, by contract, or otherwise. The state statutes usually presume that control exists if a person or company, directly or indirectly, owns, controls, or holds the power to vote ten percent (10%) or more of the voting securities of an insurer or a parent company, but some states may presume control at a lower percentage. This presumption can then be rebutted by a showing that control does not exist. Accordingly, a change in control could trigger regulatory review and approval in one or more states in which we operate.

Any provision of our Amended Charter, Amended Bylaws, Delaware law, or applicable state insurance law that has the effect of delaying, preventing, or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

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Our Amended Charter provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, and federal district courts are the sole and exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our Amended Charter provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action, suit, or proceeding brought on our behalf; (b)

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any action, suit, or proceeding asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers or other employees or stockholders to us or to our stockholders, creditors, or other constituents; (c) any action, suit, or proceeding asserting a claim arising pursuant to the DGCL, our Amended Charter or Amended Bylaws, or as to which the DGCL confers exclusive jurisdiction on the Court of Chancery of the State of Delaware; or (d) any action, suit, or proceeding asserting a claim governed by the internal affairs doctrine; provided that the exclusive forum provisions will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction.

Our Amended Charter further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts are the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our current or former directors, officers, or other employees or stockholders, which may discourage such lawsuits against us and our current or former directors, officers, and other employees or stockholders. Alternatively, if a court were to find the choice of forum provisions contained in our Amended Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and results of operations.

General Risk Factors

The obligations associated with being a public company require significant resources and management attention, and we have and will continue to incur increased costs as a result of being a public company.

As a public company, we face increased legal, accounting, administrative, and other costs and expenses that we did not incur as a private ~~company, and which have not been reflected in our historical consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.~~company. We ~~have already started to incur, and~~ expect to continue to incur significant costs related to operating as a public company. We are subject to the Exchange Act, the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the ~~PCAOB,~~Public Company Accounting Oversight Board (the “PCAOB”), and the rules and standards of the NYSE, each of which imposes additional reporting and other obligations on public companies. As a public company, we are required to, among others:

•prepare, file, and distribute annual, quarterly, and current reports with respect to our business and financial condition;

•prepare, file, and distribute proxy statements and other stockholder communications;

•expand the roles and duties of our Board and committees thereof, and management;

•hire additional financial and accounting personnel and other experienced accounting and finance staff with the expertise to address complex accounting matters applicable to public companies;

•institute more comprehensive financial reporting and disclosure compliance procedures;

•~~involve and retain to a greater degree~~utilize outside counsel and accountants to assist us with the activities listed above;

•enhance our investor relations function;

•establish new internal policies, including those relating to trading in our securities and disclosure controls and procedures;

•comply with ~~our exchange’s~~NYSE’s listing standards; and

•comply with the Sarbanes-Oxley Act.

These rules and regulations and changes in laws, regulations, and standards relating to corporate governance and public disclosure, which have created uncertainty for public companies, ~~have and~~ will continue to increase our legal and financial compliance costs and make some activities more time consuming and costly. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Our

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investment in compliance with existing and evolving regulatory requirements has and will continue to result in increased administrative expenses and a diversion of management’s time and attention from revenue-generating activities to

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compliance activities, which could have a material adverse effect on our business, financial condition, and results of operations.

In addition, the need to establish the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, which could prevent us from improving our business, financial condition, and results of operations. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition, and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

~~We also expect that being~~Being a public company and complying with applicable rules and regulations ~~will make~~also makes it more difficult and more expensive for us to obtain director and officer liability ~~insurance, and we may be required to accept reduced policy limits and coverage, or incur substantially higher costs to obtain the same or similar coverage.~~insurance. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers.

AsWe have identified a ~~public reporting company, we are subject to rules and regulations established from time to time by the SEC regarding~~material weakness in our internal control over financial reporting. If we are unable to remediate the material weakness in a timely manner, identify additional material weaknesses in the future or otherwise fail to ~~establish and~~ maintain effective internal control over financial reporting, our ability to comply with applicable laws and ~~disclosure controls~~regulations and ~~procedures, we may not be able to~~ accurately and timely report our financial results, ~~or report them in a timely manner.~~and our access to the capital markets, could be adversely affected.

We are a public reporting company subject to the rules and regulations established from time to time by the SEC and the NYSE. These rules and regulations ~~will~~ require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company are likely to continue to place a considerable strain on our financial and management systems, processes, and controls, as well as on our personnel.

In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting. Section 404(a) of the Sarbanes-Oxley Act, or Section 404(a), requires that, beginning with our second annual report following our IPO, management assess and report annually on the effectiveness of our internal control over financial reporting, and ~~identify any material weaknesses in our internal control over financial reporting. Although Section 404(b) requires~~ our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act and, consequently, will not be required to comply with SEC rules that implement Section 404(b) until such time as we are no longer treated as an “emerging growth company.” We could potentially qualify as an “emerging growth company” until as late as the fifth anniversary of the completion of our IPO.reporting.

~~If our senior management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls,~~As disclosed in Part II - Item 9A, “Controls and ~~our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness~~Procedures,” of our ~~internal control over financial reporting at such time as it is required to do so, and~~Annual Report on Form 10-K, we identified material weaknesses in our internal control over financial reporting ~~are identified,~~related to information technology general controls. As a result, we ~~could be subject to regulatory scrutiny,~~concluded that our disclosure controls and procedures were not effective as of December 31, 2021. A material weakness is a ~~loss~~deficiency, or a combination of ~~public and investor confidence, and to litigation from investors and stockholders, which could have~~deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material ~~adverse effect on our business and our stock price. In addition, if we do not maintain adequate~~misstatement in a company’s annual or interim financial ~~and management personnel, processes, and controls, we may~~statements will not be ~~able to manage our business effectively~~prevented or ~~accurately report our financial performance~~detected on a timely ~~basis,~~basis. The material weaknesses identified in Item 9A in our Annual Report on Form 10-K did not result in any misstatement of our financial statements. We have begun implementation of a remediation plan for the material weakness.

We can give no assurance that our efforts will remediate the material weakness in our internal control over financial reporting, or that additional material weaknesses will not be identified in the future. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting, which may necessitate additional implementation and evaluation time. If the steps we take do not remediate the material weakness in a timely manner, or if we fail to implement and maintain effective internal control over financial reporting, there could be errors in our annual or interim consolidated financial statements that could result in a restatement of our financial statements, and could cause us to fail to meet our reporting obligations and restrict our access to capital markets, any of which could diminish investor confidence in us and cause a decline in the price of our Class A common ~~stock price~~stock.

Additionally, ineffective internal control over financial reporting could expose us to an increased risk of financial reporting fraud and ~~adversely affect our business, financial condition,~~the misappropriation of assets and ~~results of operations. Failure to comply with the Sarbanes-Oxley Act could potentially~~ subject us to ~~sanctions~~potential delisting from the NYSE or ~~investigations by the SEC, the exchange upon which our securities are listed or~~to other regulatory ~~authorities, which would require~~investigations and civil or criminal sanctions. If we are unable to remediate the material weakness in a timely manner, or if additional material weaknesses exist or are discovered in the future, and we are unable to remediate any such material weaknesses, our reputation, results of operations and financial ~~and management resources.~~condition could suffer.

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If securities analysts do not continue to publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

The trading market for our Class A common stock depends in part on the research and reports that third-party securities analysts publish about our company and our industry. If we are unable to continue to attract research coverage, or if one or more analysts cease coverage of our company, we could lose visibility in the market. In addition, one or more of these

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analysts could downgrade our Class A common stock or issue other negative commentary about our company or our industry. As a result of one or more of these factors, the trading price of our Class A common stock could decline.

If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline.

We may, but are not obligated to, provide public guidance on our expected operating and financial results for future periods. Any such guidance will be comprised of forward-looking statements subject to the risks and uncertainties described in this ~~Quarterly Report,~~report, and in our other public filings and public statements. Our actual results may not always be in line with or exceed any guidance we have provided, especially in times of economic uncertainty. If, in the future, our operating or financial results for a particular period do not meet any guidance we provide or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our Class A common stock may decline. Even if we do issue public guidance, there can be no assurance that we will continue to do so in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser~~

~~Purchase of Equity Securities by the Issuer or an Affiliated Purchaser~~

The following table sets forth all purchases of shares of our Class A common stock made during the three months ended September 30, 2021 by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act.

Period
(a) Total Number of Shares Purchased(1)
(b) Average Price Paid per Share
(c) Total Number of Shares of Class A Common Stock Purchased as Part of Publicly Announced Plans or Programs(2)
(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2)
July 1, 2021 through July 31, 2021 —
$ — —
$ —
August 1, 2021 through August 31, 2021 2,358,403 $ 13.5752 —
$ —
September 1, 2021 through September 30, 2021 2,396,819 $ 17.7751 —
$ —
Total 4,755,222 $ 15.6922 —
$ —

~~(1)~~All shares in column (a) were purchased by funds affiliated with Joshua Kushner, the Vice Chairman of our board of directors, in open-market transactions. Mr. Kushner may be deemed to be an “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act.

~~(2)We have not adopted or announced a plan or program to purchase shares of our Class A common stock.~~

~~Use of Proceeds~~

On March 5, 2021, we completed our IPO, in which we issued and sold 36,391,946 shares of our Class A Common Stock. All shares sold were registered pursuant to a registration statement on Form S-1 (File No. 333-252809), as amended (the “Registration Statement”), declared effective by the SEC on March 2, 2021.

~~Table of Contents~~

The net proceeds from our IPO have been used in part to repay in full outstanding borrowings, including fees and expenses, under our Term Loan Facility, with the remainder maintained in cash, cash equivalents and investment grade, interest-bearing instruments. There has been no material change in the expected use of the net proceeds from our IPO as described in our Prospectus.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~On May 9, 2022, Joel Cutler resigned from the Company’s Board of Directors, effective immediately. In his time with Oscar, Mr. Cutler became deeply invested in the Company’s mission of making healthcare accessible and affordable for all, and is proud to have been part of this important work. His resignation was related to health considerations and not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Item 6. Exhibits

Incorporated by Reference Filed/
Furnished
Herewith
Exhibit
Number Exhibit Description Form File No. Exhibit Filing
Date
3.1
Amended and Restated Certificate of Incorporation of Oscar Health, Inc.
8-K 001-40154 3.1 3/8/2021
3.2
Amended and Restated Bylaws of Oscar Health Inc.
8-K 001-40154 3.2 3/8/2021
4.1
Specimen Common Stock Certificate of Oscar Health, Inc.
S-1/A 333-252809 4.1 2/22/2021
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
*
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
*
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
**
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
**
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101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *
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104 Cover Page Interactive Data File (as formatted as *

Table of Contents

Incorporated by Reference

Filed/
Furnished
Herewith

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

3.1

Amended and Restated Certificate of Incorporation of Oscar Health, Inc.

8-K

001-40154

3.1

3/8/2021

3.2

Amended and Restated Bylaws of Oscar Health Inc.

8-K

001-40154

3.2

3/8/2021

4.1

Specimen Common Stock Certificate of Oscar Health, Inc.

S-1/A

333-252809

4.1

2/22/2021

4.2

Indenture, dated as of February 3, 2022, between Oscar Health, Inc. and U.S. Bank National Association, as Trustee.

8-K

001-40154

4.2

2/4/2022

10.1

Investment Agreement, dated as of January 27, 2022, by and among Oscar Health, Inc. and Oasis FD Holdings, LP., Thrive Capital Partners VII Growth, L.P., Claremount VII Associates, L.P., LionTree Investment Fund, L.P. and Tenere Capital Master Fund, LP.

8-K

001-40154

10.1

1/28/2022

10.2

Credit Agreement, dated as of February 21, 2021, as amended by the First Amendment to Credit Agreement, dated as of February 27, 2022, by and among Oscar Health, Inc., as borrower, the several lenders from time to time parties thereto, and Wells Fargo Bank, National Association, as administrative agent, among others.

8-K

001-40154

10.2

1/28/2022

10.3

Consulting Agreement, dated as of March 7, 2022, by and between Oscar Health, Inc. and Meghan Joyce

10.4

Oscar Health, Inc. 2022 Employment Inducement Incentive Award Plan

S-8

333-264205

99.1

4/8/2022

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document

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Inline XBRL Taxonomy Extension Schema Document

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Inline XBRL Taxonomy Extension Definition Linkbase Document

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* Filed herewith.

** Furnished herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	OSCAR HEALTH, INC.

Date: ~~November 12, 2021~~May 11, 2022	By:	/s/ Mario Schlosser
		Mario Schlosser
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 12, 2021~~May 11, 2022	By:	/s/ R. Scott Blackley
		R. Scott Blackley
		Chief Financial Officer
		(Principal Financial Officer)

Date: May 11, 2022	By:	/s/ Victoria Baltrus
		Victoria Baltrus
		Chief Accounting Officer ~~and~~
		(Principal Accounting Officer)

8573


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.00001 par value per share	OSCR	New York Stock Exchange


Class of Stock						Shares Outstanding as of April 30, 2022
Class A Common Stock, par value $0.00001 per share						175,891,348
Class B Common Stock, par value $0.00001 per share						35,115,807


		Page
FORWARD-LOOKING STATEMENTS		3
B AS IS OF PRESENTATION		5
PART I - FINANCIAL INFORMATION		~~Page number~~
Item 1.	Financial Statements (unaudited)
	Consolidated Balance ~~Sheet~~Sheets	7
	Consolidated Statement s of Operations	8
	Consolidated ~~Statement~~Statements of ~~Operations~~Comprehensive Income	9
	Consolidated ~~Comprehensive Income~~Statement s of Changes in Equity (Deficit)	10
	Consolidated Statement ~~of Convertible Preferred Stock and Stockholders' Equity (Deficit)~~	11s
	~~Consolidated Statement~~ of Cash Flows	1312

	Notes to Consolidated Financial Statements
	Note 1 - Organization	1514
	Note 2 - Recent Accounting Pronouncements	1615
	Note 3 - ~~Premiums Earned~~Revenue Recognition	1615
	Note 4 - Reinsurance	16
	Note 5 - Business Arrangements	17
	Note 56 - Restricted Cash and Restricted Deposits	18
	Note 67 - Investments	18
	Note 78 - Fair Value	20
	Note 9 - Benefits Payable	21
	Note 81 0 - ~~Benefits Payable~~Long-Term Debt	22
	Note 91 1 - ~~Debt and Warrants~~Earnings (Loss) per Share	24
	Note 101 2 - ~~Convertible Preferred Stock~~ Related Party Transactions	2524
	Note ~~11 - Stockholders' Equity~~1	263
	~~Note 12 - Stock-Based Compensation~~	28
	~~Note 13 - Earnings (Loss) per Share~~	30
	~~Note 14 - Variable Interest Entities~~	30
	~~Note 15~~ - Commitments and Contingencies	3125


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3326
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5039
Item 4.	Controls and Procedures	5140

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	5242
Item 1A.	Risk Factors	5242
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8371
Item 3.	Defaults Upon Senior Securities	8471
Item 4.	Mine Safety Disclosures	8471
Item 5.	Other Information	8471
Item 6.	Exhibits	8471

SIGNATURES		8573


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets:	Assets:					Assets:
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,076,699	$	826,326	Cash and cash equivalents	$	2,068,632	$	1,103,995
Short-term investments	Short-term investments	586,954		366,387		Short-term investments	810,002		587,086
Premium and other receivables		117,534		65,322
Premiums and accounts receivable						Premiums and accounts receivable	157,298		138,414
Risk adjustment transfer receivable	Risk adjustment transfer receivable	43,099		31,157		Risk adjustment transfer receivable	50,615		40,659
Accrued investment income	Accrued investment income	3,086		1,862		Accrued investment income	2,584		3,782
Balances due from reinsurance programs		413,789		579,393
Reinsurance recoverable						Reinsurance recoverable	585,688		431,990
Total current assets	Total current assets	2,241,161		1,870,447		Total current assets	3,674,819		2,305,926
Property, equipment, and capitalized software, net	Property, equipment, and capitalized software, net	43,376		35,812		Property, equipment, and capitalized software, net	48,607		46,611
Long-term investments	Long-term investments	838,273		325,740		Long-term investments	502,149		844,476
Restricted deposits	Restricted deposits	27,757		26,478		Restricted deposits	27,198		28,085
Other assets	Other assets	18,828		13,136		Other assets	97,153		95,957
Net deferred tax asset	Net deferred tax asset	485		493		Net deferred tax asset	595		595
Total Assets		$	3,169,880	$	2,272,106
Total assets						Total assets	$	4,350,521	$	3,321,650

Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)
Liabilities and Stockholders' Equity						Liabilities and Stockholders' Equity
Current Liabilities:	Current Liabilities:					Current Liabilities:
Benefits payable	Benefits payable	$	497,324	$	311,914	Benefits payable	$	761,329	$	513,582
Risk adjustment transfer payable	Risk adjustment transfer payable	613,230		716,370		Risk adjustment transfer payable	1,166,059		794,398
Premium deficiency reserve	Premium deficiency reserve	69,432		84,571		Premium deficiency reserve	26,041		29,246
Unearned premiums	Unearned premiums	56,175		71,904		Unearned premiums	74,700		75,044
Accounts payable and accrued liabilities		159,196		137,524
Accounts payable and other liabilities						Accounts payable and other liabilities	220,516		234,788
Reinsurance payable	Reinsurance payable	221,311		343,313		Reinsurance payable	392,235		205,231
Total current liabilities	Total current liabilities	1,616,668		1,665,596		Total current liabilities	2,640,880		1,852,289
Long-term debt	Long-term debt	—		142,487		Long-term debt	297,416		—
Warrant liabilities		—		15,005
Other liabilities						Other liabilities	77,058		76,839
Total liabilities	Total liabilities	$	1,616,668	$	1,823,088	Total liabilities	3,015,354		1,929,128
Commitments and contingencies (Note 15)		0		0
Convertible Preferred Stock, $0.00001 par value; 407,156,831 shares authorized; 400,904,302 shares issued and outstanding as of December 31, 2020		—		1,744,911
Stockholders' Equity (Deficit)
Preferred stock, $0.00001 par value; 82,500,000 shares authorized, none issued or outstanding as of September 30, 2021		—		—
Class A common stock, $0.00001 par value; 825,000,000 shares authorized, 174,056,898 shares issued and outstanding as of September 30, 2021		2		—
Class B common stock, $0.00001 par value; 82,500,000 shares authorized, 35,115,807 shares issued and outstanding as of September 30, 2021		—		—
Series A common stock, $0.00001 par value, 680,000,000 shares authorized; 8,291,917 issued and outstanding as of December 31, 2020; Series B common stock, $0.00001 par value, 69,487,963 shares authorized; 23,162,654 shares issued and outstanding as of December 31, 2020; Series C common stock, $0.00001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020		—		2
Treasury stock (314,600 shares as of September 30, 2021 and December 31, 2020)		(2,923)		(2,923)
Commitments and contingencies (Note 13)						Commitments and contingencies (Note 13)	0		0
Stockholders' Equity						Stockholders' Equity
Preferred stock, $0.00001 par value; 82,500,000 shares authorized, none issued or outstanding as of March 31, 2022 and December 31, 2021						Preferred stock, $0.00001 par value; 82,500,000 shares authorized, none issued or outstanding as of March 31, 2022 and December 31, 2021	—		—
Class A common stock, $0.00001 par value; 825,000,000 shares authorized, 175,808,779 shares issued and outstanding as of March 31, 2022 and 175,212,223 shares issued and outstanding as of December 31, 2021						Class A common stock, $0.00001 par value; 825,000,000 shares authorized, 175,808,779 shares issued and outstanding as of March 31, 2022 and 175,212,223 shares issued and outstanding as of December 31, 2021	2		2
Class B common stock, $0.00001 par value; 82,500,000 shares authorized, 35,115,807 shares issued and outstanding as of March 31, 2022 and December 31, 2021						Class B common stock, $0.00001 par value; 82,500,000 shares authorized, 35,115,807 shares issued and outstanding as of March 31, 2022 and December 31, 2021	—		—
Treasury stock (314,600 shares as of March 31, 2022 and December 31, 2021)						Treasury stock (314,600 shares as of March 31, 2022 and December 31, 2021)	(2,923)		(2,923)
Additional paid-in capital	Additional paid-in capital	3,356,406		133,255		Additional paid-in capital	3,422,033		3,393,533
Accumulated deficit	Accumulated deficit	(1,800,290)		(1,427,106)		Accumulated deficit	(2,074,864)		(1,999,712)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	17		879		Accumulated other comprehensive income (loss)	(12,206)		(3,671)
Total Stockholders’ Equity (Deficit)		1,553,212		(1,295,893)
Total Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)		$	3,169,880	$	2,272,106
Total Oscar Health, Inc. stockholders' equity						Total Oscar Health, Inc. stockholders' equity	1,332,042		1,387,229
Noncontrolling interests						Noncontrolling interests	3,125		5,293
Total stockholders’ equity						Total stockholders’ equity	1,335,167		1,392,522
Total liabilities and stockholders' equity						Total liabilities and stockholders' equity	$	4,350,521	$	3,321,650


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Revenue	Revenue									Revenue
Premiums before ceded reinsurance	Premiums before ceded reinsurance	$	673,460	$	414,505	$	2,007,486	$	1,232,493	Premiums before ceded reinsurance	$	1,315,064	$	610,099
Reinsurance premiums ceded	Reinsurance premiums ceded	(231,717)		(315,360)		(669,047)		(934,373)		Reinsurance premiums ceded	(359,663)		(241,562)
Premiums earned	Premiums earned	441,743		99,145		1,338,439		298,120		Premiums earned	955,401		368,537
Investment income and other revenue		2,236		2,555		4,209		7,008
Administrative services revenue										Administrative services revenue	18,493		341
Investment income (loss) and other revenue										Investment income (loss) and other revenue	(1,129)		510
Total revenue	Total revenue	443,979		101,700		1,342,648		305,128		Total revenue	972,765		369,388

Operating Expenses	Operating Expenses									Operating Expenses
Claims incurred, net	Claims incurred, net	453,576		85,392		1,141,503		225,120		Claims incurred, net	734,566		268,048
Other insurance costs	Other insurance costs	111,302		38,674		285,929		119,222		Other insurance costs	165,402		79,837
General and administrative expenses	General and administrative expenses	61,267		36,546		175,240		104,379		General and administrative expenses	74,664		64,572
Federal and state assessments	Federal and state assessments	35,453		20,469		102,841		61,724		Federal and state assessments	69,867		30,515
Health insurance industry fee		—		4,813		—		14,438

Premium deficiency reserve release	Premium deficiency reserve release	(4,675)		(4,064)		(15,139)		(4,326)		Premium deficiency reserve release	(3,205)		(9,543)
Total operating expenses	Total operating expenses	656,923		181,830		1,690,374		520,557		Total operating expenses	1,041,294		433,429
Loss from operations	Loss from operations	(212,944)		(80,130)		(347,726)		(215,429)		Loss from operations	(68,529)		(64,041)
Interest expense	Interest expense	398		—		4,323		—		Interest expense	4,221		3,697
Other expenses										Other expenses	3,053		—
Loss on extinguishment of debt	Loss on extinguishment of debt	—		—		20,178		—		Loss on extinguishment of debt	—		20,178
Loss before income taxes	Loss before income taxes	(213,342)		(80,130)		(372,227)		(215,429)		Loss before income taxes	(75,803)		(87,916)
Income tax (benefit) provision		(597)		(998)		957		1,526
Income tax provision										Income tax provision	1,517		965
Net loss	Net loss	$	(212,745)	$	(79,132)	$	(373,184)	$	(216,955)	Net loss	(77,320)		(88,881)
Less: Net loss attributable to noncontrolling interests										Less: Net loss attributable to noncontrolling interests	(2,168)		—
Net loss attributable to Oscar Health, Inc.										Net loss attributable to Oscar Health, Inc.	$	(75,152)	$	(88,881)

Earnings (Loss) per Share	Earnings (Loss) per Share									Earnings (Loss) per Share
Net loss per share, basic and diluted		$	(1.02)	$	(2.72)	$	(2.21)	$	(7.50)
Net loss per share attributable to Oscar Health, Inc., basic and diluted										Net loss per share attributable to Oscar Health, Inc., basic and diluted	$	(0.36)	$	(1.00)
Weighted average common shares outstanding, basic and diluted	Weighted average common shares outstanding, basic and diluted	208,159,343		29,042,932		168,585,157		28,941,215		Weighted average common shares outstanding, basic and diluted	210,547,696		88,865,726


		Convertible Preferred Stock		Common Stock (Series A/Series B)		Class A		Class B													Class A						Class B
		Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Treasury Stock	Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity (Deficit)			Shares			Amount			Shares			Amount			Treasury Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Total Stockholders' Equity (Deficit)
December 31, 2020		400,904,302	1,744,911	31,409,202	2	—	—	—	—	(2,923)	133,255		(1,427,106)		879			(1,295,893)
Conversion of pre-IPO shares to Class A and Class B common stock		(400,904,302)	(1,744,911)	(31,409,202)	(2)	130,280,651	1	35,115,807	—	—	1,744,911		—		—			1,744,910
Issuance of common stock upon IPO, net of underwriting discount		—	—	—	—	36,391,946	1	—	—	—	1,338,874		—		—			1,338,875
Issuance of common stock upon exercise of warrants and call options		—	—	—	—	1,115,973	—	—	—	—	37,071		—		—			37,071
Issuance of common stock upon exercise of options		—	—	—	—	4,272,060	—	—	—	—	29,805		—		—			29,805
December 31, 2021												December 31, 2021		175,212,223		$	2		35,115,807			$	—		$	(2,923)		$	3,393,533		$	(1,999,712)		$	(3,671)		$	5,293		$	1,392,522
Issuance of common stock from equity incentive plans												Issuance of common stock from equity incentive plans		596,556		—			—			—			—			560			—			—			—			560
Stock-based compensation expense	Stock-based compensation expense	—	—	—	—	—	—	—	—	—	19,115		—		—			19,115		Stock-based compensation expense	—			—			—			—			—			27,690			—			—	—	27,690
Joint venture contribution												Joint venture contribution		—		—			—			—			—			250			—			—			—			250
Unrealized gains (losses) on investments, net	Unrealized gains (losses) on investments, net	—	—	—	—	—	—	—	—	—	—		—		(275)			(275)		Unrealized gains (losses) on investments, net	—			—			—			—			—						—			(8,535)	—	(8,535)
Net loss	Net loss	—	—	—	—	—	—	—	—	—	—		(87,371)		—			(87,371)		Net loss	—			—			—			—			—			—			(75,152)			—	(2,168)	(77,320)
March 31, 2021		—	—	—	—	172,060,630	2	35,115,807	—	(2,923)	3,303,031		(1,514,477)		604			1,786,237
Issuance of common stock upon exercise of options		—	—	—	—	393,581	—	—	—	—	3,033		—		—			3,033
Stock-based compensation expense		—	—	—	—	—	—	—	—	—	18,273		—		—			18,273
Unrealized gains (losses) on investments, net		—	—	—	—	—	—	—	—	—	—		—		(644)			(644)
Net loss		—	—	—	—	—	—	—	—	—	—		(73,068)		—			(73,068)
June 30, 2021		—	—	—	—	172,454,211	2	35,115,807	—	(2,923)	3,324,337		(1,587,545)		(40)			1,733,831
Issuance of common stock from equity incentive plans		—	—	—	—	1,602,687	—	—	—	—	11,429		—		—			11,429
Stock-based compensation expense		—	—	—	—	—	—	—	—	—	20,640		—		—			20,640
Unrealized gains (losses) on investments, net		—	—	—	—	—	—	—	—	—	—		—		57			57
Net loss		—	—	—	—	—	—	—	—	—	—		(212,745)		—			(212,745)
September 30, 2021		—	—	—	—	174,056,898	2	35,115,807	—	(2,923)	3,356,406		(1,800,290)		17			1,553,212
March 31, 2022												March 31, 2022		175,808,779		$	2		35,115,807			$	—		$	(2,923)		$	3,422,033		$	(2,074,864)		$	(12,206)		$	3,125		$	1,335,167


Supplemental Disclosures:	Supplemental Disclosures:					Supplemental Disclosures:
Interest payments	Interest payments	$	3,994	$	—	Interest payments	$	261	$	3,553
Income tax payments		$	936	$	1,918

Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	Conversion of redeemable convertible preferred stock to common stock upon initial public offering	$	1,744,914	$	—	Conversion of redeemable convertible preferred stock to common stock upon initial public offering	$	—	$	1,744,914
Net exercise of preferred stock warrants to preferred stock upon initial public offering	Net exercise of preferred stock warrants to preferred stock upon initial public offering	$	28,248	$	—	Net exercise of preferred stock warrants to preferred stock upon initial public offering	$	—	$	28,248
Adjustment to fair value of preferred stock warrant liability upon initial public offering	Adjustment to fair value of preferred stock warrant liability upon initial public offering	$	13,243	$	—	Adjustment to fair value of preferred stock warrant liability upon initial public offering	$	—	$	13,243


		Three Months Ended				Nine Months Ended				Three Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020				March 31, 2022		March 31, 2021
		(in thousands)										(in thousands)
Direct policy premiums	Direct policy premiums	$	895,407	$	584,811	$	2,554,296	$	1,737,267		Direct policy premiums	$	1,656,421	$	820,814
Assumed premiums	Assumed premiums	3,830		—		9,426		—			Assumed premiums	24,790		2,411
Direct and assumed premiums		899,237		584,811		2,563,722		1,737,267
Direct and Assumed Policy Premiums											Direct and Assumed Policy Premiums	1,681,211		823,225
Risk adjustment	Risk adjustment	(225,777)		(170,306)		(556,236)		(504,774)			Risk adjustment	(366,147)		(213,126)
Premiums before ceded reinsurance	Premiums before ceded reinsurance	673,460		414,505		2,007,486		1,232,493			Premiums before ceded reinsurance	1,315,064		610,099
Reinsurance premiums ceded	Reinsurance premiums ceded	(231,717)		(315,360)		(669,047)		(934,373)			Reinsurance premiums ceded	(359,663)		(241,562)
Total premiums earned	Total premiums earned	$	441,743	$	99,145	$	1,338,439	$	298,120		Total premiums earned	$	955,401	$	368,537


		September 30, 2021									March 31, 2022
		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value			Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
		(in thousands)									(in thousands)
U.S. treasury and agency securities	U.S. treasury and agency securities	$	859,612	$	246	$	(105)	$	859,753	U.S. treasury and agency securities	$	860,983	$	243	$	(6,796)	$	854,430
Corporate notes	Corporate notes	466,189		114		(244)		466,059		Corporate notes	366,231		5		(5,080)		361,156
Municipalities										Municipalities	37,312		—		(511)		36,801
Certificate of deposit	Certificate of deposit	26,623		—		—		26,623		Certificate of deposit	37,924		—		—		37,924
Commercial paper	Commercial paper	35,538		—		—		35,538		Commercial paper	21,840		—		—		21,840
Municipalities		37,285		1		(32)		37,254
Total	Total	$	1,425,247	$	361	$	(381)	$	1,425,227	Total	$	1,324,290	$	248	$	(12,387)	$	1,312,151


	March 31, 2022
	Number of Securities	Fair Value		Gross Unrealized Losses
		(in thousands)
U.S. treasury and agency securities	98	$	631,329	$	(6,796)
Corporate notes	393	357,359		(5,078)


Municipalities	102	$	36,801	(511)
Total	593	$	1,025,489	$	(12,385)


		September 30, 2021									March 31, 2022
		(Level 1)		(Level 2)		(Level 3)		Total Fair Value Measurement			Level 1		Level 2		Level 3		Total
		(in thousands)									(in thousands)
Assets										Assets
Cash equivalents										Cash equivalents	$	26,219	$	22,476	$	—	$	48,695
Investments	Investments									Investments
U.S. treasury and agency securities	U.S. treasury and agency securities	$	—	$	859,753	$	—	$	859,753	U.S. treasury and agency securities	$	56,448	$	797,982	$	—	$	854,430
Corporate notes	Corporate notes	—		466,059		—		466,059		Corporate notes	—		361,156		—		361,156
Municipalities										Municipalities	—		21,840		—		21,840
Certificates of deposit										Certificates of deposit	—		37,924		—		37,924
Commercial paper	Commercial paper	—		35,538		—		35,538		Commercial paper	—		36,801		—		36,801
Certificate of deposit		—		26,623		—		26,623
Municipalities		—		37,254		—		37,254
Total		$	—	$	1,425,227	$	—	$	1,425,227

Restricted investments										Restricted investments
U.S. treasury securities										U.S. treasury securities	$	—	$	5,838	0		$	5,838
Total Assets										Total Assets	$	82,667	$	1,284,017	$	—	$	1,366,684


	As of March 31, 2022
	Benefits Payable		Unallocated Claims Adjustment Expense		Total
	(in thousands)
Benefits payable, beginning of the period	$	513,582	$	9,101	$	522,683
Less: Reinsurance recoverable	159,180		—		159,180
Benefits payable, beginning of the period, net	$	354,402	$	9,101	$	363,503

Claims incurred and CAE
Current year	$	751,347	$	42,018	$	793,365
Prior years	(16,781)		—		(16,781)
Total claims incurred and CAE, net	$	734,566	$	42,018	$	776,584

Claims paid and CAE
Current year	$	426,168	$	28,517	$	454,685
Prior years	141,107		9,101		150,208
Total claims and CAE paid, net	$	567,275	$	37,618	$	604,893

Benefits and CAE payable, end of period, net	$	521,693	$	13,501	$	535,194
Add: Reinsurance recoverable	239,636		—		239,636
Benefits and CAE payable, end of period	$	761,329	$	13,501	$	774,830


		As of September 30, 2021							As of March 31, 2021
		Benefits Payable		Unallocated Claims Adjustment Expense		Total			Benefits Payable		Unallocated Claims Adjustment Expense		Total
		(in thousands)							(in thousands)
Benefits payable, beginning of the period	Benefits payable, beginning of the period	$	311,914	$	5,509	$	317,423	Benefits payable, beginning of the period	$	311,914	$	5,509	$	317,424
Less: Reinsurance recoverable	Less: Reinsurance recoverable	132,658		—		132,658		Less: Reinsurance recoverable	132,658		—		132,658
Benefits payable, beginning of the period, net	Benefits payable, beginning of the period, net	$	179,256	$	5,509	$	184,765	Benefits payable, beginning of the period, net	$	179,256	$	5,509	$	184,766

Claims incurred and CAE	Claims incurred and CAE							Claims incurred and CAE
Current year	Current year	$	1,151,734	$	43,239	$	1,194,973	Current year	$	273,203	$	16,262	$	289,465
Prior years	Prior years	(10,231)		—		(10,231)		Prior years	(5,155)		—		(5,155)
Total claims incurred and CAE, net	Total claims incurred and CAE, net	$	1,141,503	$	43,239	$	1,184,742	Total claims incurred and CAE, net	$	268,048	$	16,262	$	284,310

Claims paid and CAE	Claims paid and CAE							Claims paid and CAE
Current year	Current year	$	885,043	$	34,428	$	919,471	Current year	$	167,112	$	9,943	$	177,055
Prior years	Prior years	100,091		5,509		105,600		Prior years	2,219		5,509		7,728
Total claims and CAE paid, net	Total claims and CAE paid, net	$	985,134	$	39,937	$	1,025,071	Total claims and CAE paid, net	$	169,331	$	15,452	$	184,783

Benefits and CAE payable, end of period, net	Benefits and CAE payable, end of period, net	$	335,625	$	8,811	$	344,436	Benefits and CAE payable, end of period, net	$	277,974	$	6,319	$	284,293
Add: Reinsurance recoverable	Add: Reinsurance recoverable	161,699		—		161,699		Add: Reinsurance recoverable	80,092		—		80,092
Benefits and CAE payable, end of period	Benefits and CAE payable, end of period	$	497,324	$	8,811	$	506,135	Benefits and CAE payable, end of period	$	358,066	$	6,319	$	364,385


	As of September 30, 2020
	Benefits Payable		Unallocated Claims Adjustment Expense		Total
	(in thousands)
Benefits payable, beginning of the period	$	156,557	$	3,009	$	159,566
Less: Reinsurance recoverable	76,183		—		76,183
Benefits payable, beginning of the period, net	$	80,374	$	3,009	$	83,383

Claims incurred and CAE
Current year	$	232,686	$	33,262	$	265,948
Prior years	(7,566)		—		(7,566)
Total claims incurred and CAE, net	$	225,120	$	33,262	$	258,382

Claims paid and CAE
Current year	$	189,281	$	28,410	$	217,691
Prior years	30,835		3,009		33,844
Total claims and CAE paid, net	$	220,116	$	31,419	$	251,535

Benefits and CAE payable, end of period, net	$	85,378	$	4,852	$	90,230
Add: Reinsurance recoverable	191,134		—		191,134
Benefits and CAE payable, end of period	$	276,512	$	4,852	$	281,364



Warrant Type	Issue Date	Warrants Issued	Issue Price		Maximum No. of Preferred Stock Issuable	Warrants Outstanding as of 12/31/20	Warrants Outstanding as of 9/30/21
Series AA Warrant	2013	629,152	$	0.56	629,152	629,152	—
Series A8 Warrant	2017	166,666	$	6.75	166,666	166,666	—
Series A9 Warrant	2018	416,666	$	7.13	416,666	416,666	—
Series A11 Call Options	2020	4,143,028	$	6.02	4,143,028	12,732	—
						1,225,216


	December 31, 2020		September 30, 2021
Preferred Stock Series	Preferred Stock Outstanding (pre-split)	Preferred Stock Converted to Common Stock (Series A/B) (pre-split)	Preferred Stock Outstanding

A	41,913,800	(41,913,800)	—
A1	1,371,010	(1,371,010)	—
AA	22,379,980	(22,379,980)	—
AAA	36,109,790	(36,109,790)	—
A4	23,142,080	(23,142,080)	—
A5	29,189,760	(29,189,760)	—
A6	29,942,474	(29,942,474)	—
A7	6,265,845	(6,265,845)	—
A8	56,434,363	(56,434,363)	—
A9	23,177,793	(23,177,793)	—
AA-9	11,820,502	(11,820,502)	—
A10	53,877,952	(53,877,952)	—
A11	49,678,169	(49,678,169)	—
A12	15,600,784	(15,600,784)	—
Total	400,904,302	(400,904,302)	—


	September 30, 2021
	Number of Options	Weighted Average Exercise Price		Weighted Average Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)

Options Outstanding - December 31, 2020	41,115,486	$	9.19	7.59	$	279,477
Options granted	2,477,088	$	22.49
Options exercised	(5,990,310)	$	7.36		$	106,326
Options canceled	(2,417,301)	$	18.12
Options Outstanding - September 30, 2021	35,184,963	$	10.21	7.17	$	265,197
Options Exercisable at September 30, 2021	21,844,883	$	8.37	6.23	$	197,406



	~~September 30, 2021~~
~~Term in years~~	~~6.03 years~~
~~Dividend rate~~	—	%
~~Risk free rate of return~~	~~0.86~~	%
~~Volatility~~	~~41.63~~	%


	RSUs
	Number of Shares	Weighted Average Grant Date Fair Value

Outstanding RSUs at December 31, 2020	1,555,666	$	15.82
RSUs granted	7,103,359	$	17.82
RSUs vested	(246,907)	$	23.31
RSUs canceled	(165,017)	$	21.71
Outstanding RSUs at September 30, 2021	8,247,101	$	17.20


	PSU
	Number of Shares	Weighted Average Grant Date Fair Value

Outstanding PSUs at December 31, 2020	—	$	—
PSUs granted	7,082,432	$	14.37
PSUs canceled	—	$	—
Outstanding PSUs at September 30, 2021	7,082,432	$	14.37


	% of Premiums Ceded under Quota Share Reinsurance
	Three Months Ended				Nine Months Ended
Reinsurance	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Axa France Vie	32	%	34	%	32	%	32	%
Berkshire Hathaway Specialty Insurance Company	—	%	46	%	—	%	48	%
Canada Life Assurance Company(1)	—	%	—	%	3	%	—	%
Total Premiums Ceded	32	%	80	%	36	%	80	%


Membership by Offering
	As of September 30,
	2021	2020
Individual and Small Group	582,236	418,268
Medicare Advantage	3,881	1,850
Cigna + Oscar (1)	8,167	—
Total	594,284	420,118


Financial Results Summary

		Three Months Ended
		March 31, 2022		March 31, 2021
	(in thousands)
Premiums before ceded reinsurance		$	1,315,064	$	610,099
Reinsurance premiums ceded		(359,663)		(241,562)
Premiums earned		$	955,401	$	368,537
Total revenue		$	972,765	$	369,388
Total operating expenses		$	1,041,294	$	433,429
Net loss		$	(77,320)	$	(88,881)



	As of March 31,
Membership by Offering	2022	2021
Individual and Small Group	1,032,768	535,001
Medicare Advantage	4,607	3,628
Cigna + Oscar (1)	36,220	3,591
Total	1,073,595	542,220


Period	(a) Total Number of Shares Purchased(1)	(b) Average Price Paid per Share		(c) Total Number of Shares of Class A Common Stock Purchased as Part of Publicly Announced Plans or Programs(2)	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2)
July 1, 2021 through July 31, 2021	—	$	—	—	$	—
August 1, 2021 through August 31, 2021	2,358,403	$	13.5752	—	$	—
September 1, 2021 through September 30, 2021	2,396,819	$	17.7751	—	$	—
Total	4,755,222	$	15.6922	—	$	—