Document_and_Entity_Informatio
Document and Entity Information Document | 6 Months Ended | ||
Jun. 30, 2014 | Aug. 01, 2014 | Dec. 31, 2013 | |
Entity Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'Health Net Inc | ' | ' |
Entity Central Index Key | '0000916085 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 80,305,185 | ' |
Treasury Stock, Shares | 71,251,000 | 71,252,061 | 70,704,000 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues | ' | ' | ' | ' |
Health plan services premiums | $3,261,878 | $2,578,874 | $6,143,223 | $5,210,943 |
Government contracts | 154,083 | 139,942 | 298,173 | 274,454 |
Net investment income | 12,043 | 17,143 | 23,145 | 46,694 |
Administrative services fees and other income | -6,612 | 2,472 | -4,214 | 3,377 |
Total revenues | 3,421,392 | 2,738,431 | 6,460,327 | 5,535,468 |
Expenses | ' | ' | ' | ' |
Health plan services (excluding depreciation and amortization) | 2,763,179 | 2,191,918 | 5,165,521 | 4,460,654 |
Government contracts | 133,208 | 127,400 | 265,182 | 252,875 |
General and administrative | 344,734 | 291,437 | 705,757 | 536,672 |
Selling | 64,002 | 57,769 | 128,154 | 116,330 |
Depreciation and amortization | 9,641 | 9,514 | 19,304 | 18,953 |
Interest | 7,826 | 8,365 | 15,647 | 16,653 |
Total expenses | 3,322,590 | 2,686,403 | 6,299,565 | 5,402,137 |
Income from operations before income taxes | 98,802 | 52,028 | 160,762 | 133,331 |
Income tax (benefit) provision | -22,065 | 18,545 | 11,108 | 49,798 |
Net income | $120,867 | $33,483 | $149,654 | $83,533 |
Net income per share: | ' | ' | ' | ' |
Basic | $1.51 | $0.42 | $1.87 | $1.05 |
Diluted | $1.49 | $0.42 | $1.85 | $1.04 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic | 80,250 | 79,367 | 80,026 | 79,438 |
Diluted | 81,218 | 80,085 | 81,070 | 80,287 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income (loss) | $120,867 | $33,483 | $149,654 | $83,533 |
Unrealized gains (losses) on investments available-for-sale: | ' | ' | ' | ' |
Unrealized holding gains (losses) arising during the period | 23,520 | -65,763 | 51,908 | -74,853 |
Less: Reclassification adjustments for gains included in earnings | -1,928 | -5,647 | -2,236 | -22,936 |
Unrealized gains (losses) on investments available-for-sale, net | 21,592 | -71,410 | 49,672 | -97,789 |
Defined benefit pension plans: | ' | ' | ' | ' |
Prior service cost arising during the period | 0 | 0 | 0 | 0 |
Net loss arising during the period | 0 | 0 | 0 | 0 |
Less: Amortization of prior service cost and net loss included in net periodic pension cost | 150 | 643 | 300 | 1,286 |
Defined benefit pension plans, net | 150 | 643 | 300 | 1,286 |
Other comprehensive income (loss) before tax | 21,742 | -70,767 | 49,972 | -96,503 |
Income tax expense (benefit) related to components of other comprehensive income | 7,683 | -24,882 | 17,556 | -33,910 |
Other comprehensive income (loss), net of tax | 14,059 | -45,885 | 32,416 | -62,593 |
Comprehensive income (loss) | $134,926 | ($12,402) | $182,070 | $20,940 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $603,097 | $433,155 |
Investments-available-for-sale (amortized cost: 2014-$1,662,725, 2013-$1,602,456) | 1,668,943 | 1,567,020 |
Premiums receivable, net of allowance for doubtful accounts (2014-$631, 2013-$643) | 849,089 | 430,012 |
Amounts receivable under government contracts | 193,043 | 194,041 |
Other receivables | 183,795 | 68,919 |
Deferred taxes | 81,293 | 94,060 |
Other assets | 259,878 | 132,683 |
Total current assets | 3,839,138 | 2,919,890 |
Property and equipment, net | 209,385 | 201,395 |
Goodwill | 565,886 | 565,886 |
Other intangible assets, net | 13,229 | 13,842 |
Deferred taxes | 9,530 | 5,793 |
Investments-available-for-sale-noncurrent (amortized cost: 2014-$808, 2013-$67,943) | 652 | 59,768 |
Other noncurrent assets | 139,205 | 162,551 |
Total Assets | 4,777,025 | 3,929,125 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ' | ' |
Reserves for claims and other settlements | 1,488,322 | 984,075 |
Health care and other costs payable under government contracts | 94,195 | 72,098 |
Unearned premiums | 130,905 | 123,969 |
Accounts payable and other liabilities | 496,349 | 397,036 |
Total current liabilities | 2,209,771 | 1,577,178 |
Senior notes payable | 399,402 | 399,300 |
Borrowings under revolving credit facility | 100,000 | 100,000 |
Deferred taxes | 22,376 | 10,409 |
Other noncurrent liabilities | 223,595 | 213,427 |
Total Liabilities | 2,955,144 | 2,300,314 |
Commitments and contingencies | ' | ' |
Stockholders’ Equity: | ' | ' |
Preferred stock ($0.001 par value, 10,000 shares authorized, none issued and outstanding) | 0 | 0 |
Common stock ($0.001 par value, 350,000 shares authorized; issued 2014-151,555 shares; 2013-150,224 shares) | 152 | 150 |
Additional paid-in capital | 1,406,768 | 1,377,624 |
Treasury common stock, at cost (2014-71,251 shares of common stock; 2013-70,704 shares of common stock) | -2,197,890 | -2,179,744 |
Retained earnings | 2,613,302 | 2,463,648 |
Accumulated other comprehensive loss | -451 | -32,867 |
Total Stockholders’ Equity | 1,821,881 | 1,628,811 |
Total Liabilities and Stockholders’ Equity | $4,777,025 | $3,929,125 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Premiums receivable, allowance for doubtful accounts | $631 | $643 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 151,555,000 | 150,224,000 |
Treasury stock, shares | 71,251,000 | 70,704,000 |
Current [Member] | ' | ' |
Investments available for sale, amortized cost | 1,662,725 | 1,602,456 |
Noncurrent [Member] | ' | ' |
Investments available for sale, amortized cost | $808 | $67,943 |
Consolidated_Statements_Of_Sto
Consolidated Statements Of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Common Stock Held In Treasury [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2012 | $1,557,030,000 | $149,000 | $1,329,000,000 | ($2,092,625,000) | $2,293,522,000 | $26,984,000 |
Balance, shares at Dec. 31, 2012 | ' | 148,727,000 | ' | -67,426,000 | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Net income (loss) | 83,533,000 | ' | ' | ' | 83,533,000 | ' |
Other comprehensive income (loss), net of tax | -62,593,000 | ' | ' | ' | ' | -62,593,000 |
Exercise of stock options and vesting of restricted stock units | 16,205,000 | 1,000 | 16,204,000 | ' | ' | ' |
Exercise of stock options and vesting of restricted stock units, shares | ' | 1,325,000 | ' | ' | ' | ' |
Share-based compensation expense | 16,877,000 | ' | 16,877,000 | ' | ' | ' |
Tax benefit (detriment) related to equity compensation plans | -1,332,000 | ' | -1,332,000 | ' | ' | ' |
Repurchases of common stock | -85,496,000 | ' | ' | -85,496,000 | ' | ' |
Repurchases of common stock, shares | ' | ' | ' | -3,229,000 | ' | ' |
Balance at Jun. 30, 2013 | 1,524,224,000 | 150,000 | 1,360,749,000 | -2,178,121,000 | 2,377,055,000 | -35,609,000 |
Balance, shares at Jun. 30, 2013 | ' | 150,052,000 | ' | -70,655,000 | ' | ' |
Balance at Dec. 31, 2013 | 1,628,811,000 | 150,000 | 1,377,624,000 | -2,179,744,000 | 2,463,648,000 | -32,867,000 |
Balance, shares at Dec. 31, 2013 | ' | 150,224,000 | ' | -70,704,000 | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Net income (loss) | 149,654,000 | ' | ' | ' | 149,654,000 | ' |
Other comprehensive income (loss), net of tax | 32,416,000 | ' | ' | ' | ' | 32,416,000 |
Exercise of stock options and vesting of restricted stock units | 12,100,000 | 2,000 | 12,098,000 | ' | ' | ' |
Exercise of stock options and vesting of restricted stock units, shares | ' | 1,331,000 | ' | ' | ' | ' |
Share-based compensation expense | 15,700,000 | ' | 15,700,000 | ' | ' | ' |
Tax benefit (detriment) related to equity compensation plans | 1,346,000 | ' | 1,346,000 | ' | ' | ' |
Repurchases of common stock | -18,146,000 | ' | ' | -18,146,000 | ' | ' |
Repurchases of common stock, shares | ' | ' | ' | -547,000 | ' | ' |
Balance at Jun. 30, 2014 | $1,821,881,000 | $152,000 | $1,406,768,000 | ($2,197,890,000) | $2,613,302,000 | ($451,000) |
Balance, shares at Jun. 30, 2014 | ' | 151,555,000 | ' | -71,251,000 | ' | ' |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | $149,654 | $83,533 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Amortization and depreciation | 19,304 | 18,953 |
Share-based compensation expense | 15,700 | 16,877 |
Deferred income taxes | 3,476 | 12,748 |
Excess tax benefit on share-based compensation | -1,354 | -430 |
Net realized (gain) loss on investments | -2,236 | -22,936 |
Other changes | 15,926 | 15,524 |
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | ' | ' |
Premiums receivable and unearned premiums | -412,141 | -232,780 |
Other current assets, receivables and noncurrent assets | -216,808 | 27,481 |
Amounts receivable/payable under government contracts | 33,597 | 29,051 |
Reserves for claims and other settlements | 504,247 | -24,887 |
Accounts payable and other liabilities | 188,343 | -57,604 |
Net cash provided by (used in) operating activities | 297,708 | -134,470 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Sales of investments | 192,250 | 573,406 |
Maturities of investments | 43,679 | 51,414 |
Purchases of investments | -228,437 | -559,442 |
Purchases of property and equipment | -29,956 | -26,765 |
Sales (purchases) of restricted investments and other | 760 | -2,589 |
Net cash (used in) provided by investing activities | -21,704 | 36,024 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from exercise of stock options and employee stock purchases | 6,472 | 8,173 |
Excess tax benefit on share-based compensation | 1,354 | 430 |
Repurchases of common stock | -12,518 | -77,464 |
Borrowings under financing arrangements | 0 | 323,000 |
Repayment of borrowings under financing arrangements | 0 | -298,000 |
Net increase (decrease) in checks outstanding, net of deposits | 0 | 75,552 |
Customer funds administered | -101,370 | 6,263 |
Net cash (used in) provided by financing activities | -106,062 | 37,954 |
Net increase (decrease) in cash and cash equivalents | 169,942 | -60,492 |
Cash and cash equivalents, beginning of period | 433,155 | 340,110 |
Cash and cash equivalents, end of period | 603,097 | 279,618 |
SUPPLEMENTAL CASH FLOWS DISCLOSURE: | ' | ' |
Interest paid | 14,754 | 15,499 |
Income taxes paid | $59,324 | $34,006 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
BASIS OF PRESENTATION | |
Health Net, Inc. prepared the accompanying unaudited consolidated financial statements following the rules and regulations of the Securities and Exchange Commission ("SEC") for interim reporting. In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “Company,” “Health Net,” “we,” “us,” and “our” refer to Health Net, Inc. and its subsidiaries. As permitted under those rules and regulations, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted if they substantially duplicate the disclosures contained in the annual audited financial statements. The accompanying unaudited consolidated financial statements should be read together with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2013 ("Form 10-K"). | |
We are responsible for the accompanying unaudited consolidated financial statements. These consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results in accordance with GAAP. In accordance with GAAP, we make certain estimates and assumptions that affect the reported amounts. Actual results could differ from those estimates and assumptions. In addition, revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be indicative of those for the full year. |
Significant_Accounting_Policie
Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Significant Accounting Policies | ' | ||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash equivalents include all highly liquid investments with maturity of three months or less when purchased. We had no checks outstanding, net of deposits as of June 30, 2014 and December 31, 2013. Checks outstanding, net of deposits are classified as accounts payable and other liabilities in the consolidated balance sheets and the changes are reflected in the line item net increase (decrease) in checks outstanding, net of deposits within the cash flows from financing activities in the consolidated statements of cash flows. | |||||||||||||||||
Investments | |||||||||||||||||
Investments classified as available-for-sale, which consist primarily of debt securities, are stated at fair value. Unrealized gains and losses are excluded from earnings and reported as other comprehensive income, net of income tax effects. The cost of investments sold is determined in accordance with the specific identification method and realized gains and losses are included in net investment income. We analyze all debt investments that have unrealized losses for impairment consideration and assess the intent to sell such securities. If such intent exists, impaired securities are considered other-than-temporarily impaired. Management also assesses if we may be required to sell the debt investments prior to the recovery of amortized cost, which may also trigger an impairment charge. If securities are considered other-than-temporarily impaired based on intent or ability, we assess whether the amortized costs of the securities can be recovered. If management anticipates recovering an amount less than the amortized cost of the securities, an impairment charge is calculated based on the expected discounted cash flows of the securities. Any deficit between the amortized cost and the expected cash flows is recorded through earnings as a charge. All other temporary impairment changes are recorded through other comprehensive income. During the three and six months ended June 30, 2014 and 2013, respectively, no losses were recognized from other-than-temporary impairments. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The estimated fair value amounts of cash equivalents, investments available-for-sale, premiums and other receivables, notes receivable and notes payable have been determined by using available market information and appropriate valuation methodologies. The carrying amounts of cash equivalents approximate fair value due to the short maturity of those instruments. Fair values for debt and equity securities are generally based upon quoted market prices. Where quoted market prices were not readily available, fair values were estimated using valuation methodologies based on available and observable market information. Such valuation methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly traded companies in a similar line of business, and reviewing the underlying financial performance including estimating discounted cash flows. The carrying value of premiums and other receivables, long-term notes receivable and nonmarketable securities approximates the fair value of such financial instruments. The fair value of notes payable is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt with the same remaining maturities. The fair value of our fixed-rate borrowings was $440.5 million and $434.5 million as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014 and December 31, 2013, the fair value of our variable-rate borrowings under our revolving credit facility was $100.0 million and $100.0 million, respectively. The fair value of our fixed-rate borrowings was determined using the quoted market price, which is a Level 1 input in the fair value hierarchy. The fair value of our variable-rate borrowings was estimated to equal the carrying value because the interest rates paid on these borrowings were based on prevailing market rates. Since the pricing inputs are other than quoted prices and fair value is determined using an income approach, our variable-rate borrowings are classified as a Level 2 in the fair value hierarchy. See Notes 6 and 7 for additional information regarding our financing arrangements and fair value measurements, respectively. | |||||||||||||||||
Health Plan Services Revenue Recognition | |||||||||||||||||
Health plan services premium revenues generally include HMO, POS and PPO premiums from employer groups and individuals and from Medicare recipients who have purchased supplemental benefit coverage, for which premiums are based on a predetermined prepaid fee, Medicaid revenues based on multi-year contracts to provide care to Medicaid recipients, and revenue under Medicare risk contracts to provide care to enrolled Medicare recipients. Revenue is recognized in the month in which the related enrollees are entitled to health care services. Premiums collected in advance of the month in which enrollees are entitled to health care services are recorded as unearned premiums. Under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), commercial health plans with medical loss ratios on fully insured products, as calculated as set forth in the ACA, that fall below certain targets are required to rebate ratable portions of their premiums annually. We classify the estimated rebates, if any, as a reduction to Health plan services premiums in our consolidated statement of operations. In addition, certain provisions of the ACA became effective January 1, 2014, including an annual insurance industry premium-based assessment and the establishment of federally facilitated, state and federal partnership or state-based health insurance exchanges coupled with premium stabilization programs including a three-year commercial reinsurance fee. See below in this Note 2 under the heading "Accounting for Certain Provisions of the ACA" for additional information. | |||||||||||||||||
Our Medicare Advantage contracts are with the Centers for Medicare & Medicaid Services ("CMS"). CMS deploys a risk adjustment model which apportions premiums paid to all health plans according to health severity and certain demographic factors. This risk adjustment model results in periodic changes in our risk factor adjustment scores for certain diagnostic codes, which then result in changes to our health plan services premium revenues. Because the recorded revenue is based on our best estimate at the time, the actual payment we receive from CMS for risk adjustment reimbursement settlements may be materially different than the amounts we have initially recognized on our financial statements. The change in our estimate for the risk adjustment revenue related to prior years in the three and six months ended June 30, 2014 increased health plan services premium revenues by $4.4 million and $20.0 million, respectively. The change in our estimate for the risk adjustment revenue related to prior years in the three and six months ended June 30, 2013 was not significant. | |||||||||||||||||
Our revenue from the state Medicaid program in California ("Medi-Cal"), including seniors and persons with disabilities ("SPD") programs, and other state-sponsored health programs are subject to certain retroactive rate adjustments based on expected and actual health care costs. For the three and six months ended June 30, 2014, retroactive rate adjustments for our SPD and non-SPD members for periods prior to 2014 were not significant. For the three months ended June 30, 2013, we had no premium revenues recognized as a result of retroactive rate adjustments. For the six months ended June 30, 2013, we recognized $42.2 million of premium revenue as a result of retroactive rate adjustments for our SPD and non-SPD members for periods prior to 2013. | |||||||||||||||||
In addition, our state-sponsored health care programs in California, including Medi-Cal, SPD programs, the dual eligibles demonstration portion of the California Coordinated Care Initiative that began in April 2014 and Medicaid expansion under federal health care reform, are subject to retrospective premium adjustments based on certain risk sharing provisions included in our state-sponsored health plans rate settlement agreement described below. We estimate and recognize the retrospective adjustments to premium revenue based upon experience to date under our state-sponsored health care programs contracts. The retrospective premium adjustment is recorded as an adjustment to premium revenue and other noncurrent assets. | |||||||||||||||||
On November 2, 2012, we entered into a state-sponsored health plans rate settlement agreement (the "Agreement") with the California Department of Health Care Services ("DHCS") to settle historical rate disputes with respect to our participation in the Medi-Cal program, for rate years prior to the 2011–2012 rate year. As part of the Agreement, DHCS agreed, among other things, to (1) an extension of all of our Medi-Cal managed care contracts existing as of the date of the Agreement for an additional five years from their then existing expiration dates; (2) retrospective premium adjustments on all of our state-sponsored health care programs, including Medi-Cal, SPDs, our participation in the dual eligibles demonstration portion of the California Coordinated Care Initiative that began in April 2014 and Medi-Cal expansion populations (our “state-sponsored health care programs”), which are tracked in a settlement account as discussed in more detail below; and (3) compensate us should DHCS terminate any of our state-sponsored health care programs contracts early. | |||||||||||||||||
Effective January 1, 2013, the settlement account (the "Account") was established with an initial balance of zero. The balance in the Account is adjusted annually to reflect retrospective premium adjustments for each calendar year (referenced in the Agreement as a "deficit" or "surplus"). A deficit or surplus will result to the extent our actual pretax margin (as defined in the Agreement) on our state-sponsored health care programs is below or above a predetermined pretax margin target. The amount of any deficit or surplus is calculated as described in the Agreement. Cash settlement of the Account will occur on December 31, 2019, except that under certain circumstances the DHCS may extend the final settlement for up to three additional one-year periods (as may be extended, the "Term"). In addition, the DHCS will make an interim partial settlement payment to us if it terminates any of our state-sponsored health care programs contracts early. Upon expiration of the Term, if the Account is in a surplus position, then no monies are owed to either party. If the Account is in a deficit position, then DHCS shall pay the amount of the deficit to us. In no event, however, shall the amount paid by DHCS to us under the Agreement exceed $264 million or be less than an alternative minimum amount as defined in the Agreement. | |||||||||||||||||
We estimate and recognize the retrospective adjustments to premium revenue based upon experience to date under our state-sponsored health care programs contracts. The retrospective premium adjustment is recorded as an adjustment to premium revenue and other noncurrent assets. As of June 30, 2014, we had calculated and recorded a deficit of $9.6 million, net of a valuation discount in the amount of $0.6 million (see Note 7), reflecting our cumulative estimated retrospective premium adjustment to the Account based on our actual pretax margin for the period beginning on January 1, 2013 and ending on June 30, 2014. As of December 31, 2013, we had calculated and recorded a deficit of $62.9 million, net of a valuation discount in the amount of $4.4 million, reflecting our estimated retrospective premium adjustment to the Account based on our actual pretax margin for the year ended December 31, 2013. As a result of the change in the deficit calculated during the three and six months ended June 30, 2014, our health plan services premium revenue was reduced by $40.4 million and $53.3 million for the three and six months ended June 30, 2014, respectively. For the three and six months ended June 30, 2013, we had recorded increases in our health plan services premium revenue of $14.6 million and $35.4 million, respectively, as a result of the deficit calculated under the state settlement agreement as of June 30, 2013. | |||||||||||||||||
Health Plan Services Health Care Cost | |||||||||||||||||
The cost of health care services is recognized in the period in which services are provided and includes an estimate of the cost of services that have been incurred but not yet reported. Such costs include payments to primary care physicians, specialists, hospitals and outpatient care facilities, and the costs associated with managing the extent of such care. Our health care cost also can include from time to time remediation of certain claims as a result of periodic reviews by various regulatory agencies. | |||||||||||||||||
We estimate the amount of the provision for health care service costs incurred but not yet reported ("IBNR") in accordance with GAAP and using standard actuarial developmental methodologies based upon historical data including the period between the date services are rendered and the date claims are received and paid, denied claim activity, expected medical cost inflation, seasonality patterns and changes in membership, among other things. | |||||||||||||||||
Our IBNR best estimate also includes a provision for adverse deviation, which is an estimate for known environmental factors that are reasonably likely to affect the required level of IBNR reserves. This provision for adverse deviation is intended to capture the potential adverse development from known environmental factors such as our entry into new geographical markets, changes in our geographic or product mix, the introduction of new customer populations, variation in benefit utilization, disease outbreaks, changes in provider reimbursement, fluctuations in medical cost trend, variation in claim submission patterns and variation in claims processing speed and payment patterns, changes in technology that provide faster access to claims data or change the speed of adjudication and settlement of claims, variability in claims inventory levels, non-standard claims development, and/or exceptional situations that require judgmental adjustments in setting the reserves for claims. | |||||||||||||||||
We consistently apply our IBNR estimation methodology from period to period. Our IBNR best estimate is made on an accrual basis and adjusted in future periods as required. Any adjustments to the prior period estimates are included in the current period. As additional information becomes known to us, we adjust our assumptions accordingly to change our estimate of IBNR. Therefore, if moderately adverse conditions do not occur, evidenced by more complete claims information in the following period, then our prior period estimates will be revised downward, resulting in favorable development. However, any favorable prior period reserve development would increase current period net income only to the extent that the current period provision for adverse deviation is less than the benefit recognized from the prior period favorable development. If moderately adverse conditions occur and are more acute than we estimated, then our prior period estimates will be revised upward, resulting in unfavorable development, which would decrease current period net income. For the three and six months ended June 30, 2014, we had $3.7 million and $26.6 million, respectively, in net favorable reserve developments related to prior years. The amount for the three months ended June 30, 2014 consisted of $1.1 million in unfavorable prior year development primarily due to the existence of moderately adverse conditions and a release of $4.8 million of the provision for adverse deviation held at December 31, 2013. The amount for the six months ended June 30, 2014 consisted of $24.2 million in unfavorable prior year development primarily due to the existence of moderately adverse conditions and a release of $50.8 million of the provision for adverse deviation held at December 31, 2013. We believe that the $1.1 million and $24.2 million unfavorable developments for the three and six months ended June 30, 2014, respectively, were due to unanticipated benefit utilization in our commercial business arising from dates of service in the fourth quarter of 2013 as a result of an uncertain environment related to the ACA. As part of our best estimate for IBNR, the provision for adverse deviation recorded as of June 30, 2014 and December 31, 2013 were $67.1 million and $53.4 million, respectively. For the three and six months ended June 30, 2013, the reserve developments related to prior years, when considered together with the provision for adverse deviation recorded as of June 30, 2013, did not have a material impact on our operating results or financial condition. | |||||||||||||||||
The majority of the IBNR reserve balance held at each quarter-end is associated with the most recent months' incurred services because these are the services for which the fewest claims have been paid. The degree of uncertainty in the estimates of incurred claims is greater for the most recent months' incurred services. Revised estimates for prior periods are determined in each quarter based on the most recent updates of paid claims for prior periods. Estimates for service costs incurred but not yet reported are subject to the impact of changes in the regulatory environment, economic conditions, changes in claims trends, and numerous other factors. Given the inherent variability of such estimates, the actual liability could differ significantly from the amounts estimated. | |||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, investments and premiums receivable. All cash equivalents and investments are managed within established guidelines, which provide us diversity among issuers. Concentrations of credit risk with respect to premiums receivable are limited due to the large number of payers comprising our customer base. The federal government is the primary customer of our Government Contracts reportable segment with fees and premiums associated with this customer accounting for approximately 97% of our Government Contracts revenue. In addition, the federal government is a significant customer of our Western Region Operations reportable segment as a result of our contract with CMS for coverage of Medicare-eligible individuals. Furthermore, our Medicaid revenue is currently derived from our participation in Medi-Cal through our relationship with DHCS, and beginning in the fourth quarter of 2013, in Arizona through our contract with the Arizona Health Care Cost Containment System ("AHCCCS"). The DHCS is a significant customer of our Western Region Operations reportable segment. | |||||||||||||||||
Comprehensive Income | |||||||||||||||||
Comprehensive income includes all changes in stockholders’ equity (except those arising from transactions with stockholders) and includes net income (loss), net unrealized appreciation (depreciation) after tax on investments available-for-sale and prior service cost and net loss related to our defined benefit pension plan. | |||||||||||||||||
Our accumulated other comprehensive income (loss) for the three and six months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Unrealized Gains (Losses) on investments available-for-sale | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income (loss) | |||||||||||||||
Three Months Ended June 30: | (Dollars in millions) | ||||||||||||||||
Balance as of April 1, 2013 | $ | 20.9 | $ | (10.6 | ) | $ | 10.3 | ||||||||||
Other comprehensive loss before reclassifications | (42.6 | ) | — | (42.6 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (3.7 | ) | 0.4 | (3.3 | ) | ||||||||||||
Other comprehensive (loss) income for the three months ended June 30, 2013 | (46.3 | ) | 0.4 | (45.9 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of April 1, 2014 | $ | (10.0 | ) | $ | (4.5 | ) | $ | (14.5 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 15.2 | — | 15.2 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (1.3 | ) | 0.1 | (1.2 | ) | ||||||||||||
Other comprehensive income for the three months ended June 30, 2014 | 13.9 | 0.1 | 14 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
Six Months Ended June 30: | |||||||||||||||||
Balance as of January 1, 2013 | $ | 38 | $ | (11.0 | ) | $ | 27 | ||||||||||
Other comprehensive (loss) income before reclassifications | (48.5 | ) | — | (48.5 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (14.9 | ) | 0.8 | (14.1 | ) | ||||||||||||
Other comprehensive (loss) income for the six months ended June 30, 2013 | (63.4 | ) | 0.8 | (62.6 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of January 1, 2014 | $ | (28.3 | ) | $ | (4.6 | ) | $ | (32.9 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 33.7 | — | 33.7 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (1.5 | ) | 0.2 | (1.3 | ) | ||||||||||||
Other comprehensive income for the six months ended June 30, 2014 | 32.2 | 0.2 | 32.4 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
The following table shows reclassifications out of accumulated other comprehensive income and the affected line items in the consolidated statements of operations for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
Three months ended June 30, | Six months ended | Affected line item in the Consolidated Statements of Operations | |||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Unrealized gains on investments available-for-sale | $ | 1.9 | $ | 5.7 | $ | 2.2 | $ | 23 | Net investment income | ||||||||
1.9 | 5.7 | 2.2 | 23 | Total before tax | |||||||||||||
0.6 | 2 | 0.7 | 8.1 | Tax expense | |||||||||||||
1.3 | 3.7 | 1.5 | 14.9 | Net of tax | |||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||
Prior-service cost | (0.1 | ) | — | (0.2 | ) | — | (a) | ||||||||||
Actuarial gains (losses) | — | (0.7 | ) | (0.1 | ) | (1.3 | ) | (a) | |||||||||
(0.1 | ) | (0.7 | ) | (0.3 | ) | (1.3 | ) | Total before tax | |||||||||
— | (0.3 | ) | (0.1 | ) | (0.5 | ) | Tax benefit | ||||||||||
(0.1 | ) | (0.4 | ) | (0.2 | ) | (0.8 | ) | Net of tax | |||||||||
Total reclassifications for the period | $ | 1.2 | $ | 3.3 | $ | 1.3 | $ | 14.1 | Net of tax | ||||||||
_________ | |||||||||||||||||
(a) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share excludes dilution and reflects net income divided by the weighted average shares of common stock outstanding during the periods presented. Diluted earnings per share is based upon the weighted average shares of common stock and dilutive common stock equivalents (this reflects the potential dilution that could occur if stock options were exercised and restricted stock units ("RSUs") and performance share units ("PSUs") were vested) outstanding during the periods presented. | |||||||||||||||||
The inclusion or exclusion of common stock equivalents arising from stock options, RSUs and PSUs in the computation of diluted earnings per share is determined using the treasury stock method. For the three and six months ended June 30, 2014, respectively, 968,000 shares and 1,044,000 shares of dilutive common stock equivalents were outstanding and were included in the computation of diluted earnings per share. For the three and six months ended June 30, 2013, respectively, 718,000 shares and 849,000 shares of dilutive common stock equivalents were outstanding and were included in the computation of diluted earnings per share. | |||||||||||||||||
For the three and six months ended June 30, 2014, respectively, an aggregate of 782,000 shares and 786,000 shares of common stock equivalents were considered anti-dilutive and were not included in the computation of diluted earnings per share. For the three and six months ended June 30, 2013, respectively, an aggregate of 1,075,000 shares and 1,630,000 shares of common stock equivalents were considered anti-dilutive and were not included in the computation of diluted earnings per share. Stock options expire at various times through November 2018. | |||||||||||||||||
In May 2011, our Board of Directors authorized a stock repurchase program for the repurchase of up to $300 million of our outstanding common stock (our "stock repurchase program"). On March 8, 2012, our Board of Directors approved a $323.7 million increase to our stock repurchase program. As of December 31, 2013 and June 30, 2014, the remaining authorization under our stock repurchase program was $280.0 million. See Note 5 for more information regarding our stock repurchase program. | |||||||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||||||
We performed our annual impairment test on our goodwill and other intangible assets as of June 30, 2014 for our Western Region Operations reporting unit and also re-evaluated the useful lives of our other intangible assets. No goodwill impairment was identified. We also determined that the estimated useful lives of our other intangible assets properly reflected the current estimated useful lives. | |||||||||||||||||
The carrying amount of goodwill by reporting unit is as follows: | |||||||||||||||||
Western | Total | ||||||||||||||||
Region | |||||||||||||||||
Operations | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Balance as of December 31, 2013 | $ | 565.9 | $ | 565.9 | |||||||||||||
Balance as of June 30, 2014 | $ | 565.9 | $ | 565.9 | |||||||||||||
Due to the many variables inherent in the estimation of a business’s fair value and the relative size of recorded goodwill, changes in assumptions may have a material effect on the results of our impairment test. The discounted cash flows and market participant valuations (and the resulting fair value estimates of the Western Region Operations reporting unit) are sensitive to changes in assumptions including, among others, certain valuation and market assumptions, our ability to adequately incorporate into our premium rates the future costs of premium-based assessments imposed by the ACA, and assumptions related to the achievement of certain administrative cost reductions and the profitable implementation of California's Coordinated Care Initiative, which includes the dual eligibles demonstration. Changes to any of these assumptions could cause the fair value of our Western Region Operations reporting unit to be below its carrying value. As of June 30, 2014 and June 30, 2013, the ratio of the fair value of our Western Region Operations reporting unit to its carrying value was approximately 190% and 149%, respectively. | |||||||||||||||||
The intangible assets that continue to be subject to amortization using the straight-line method over their estimated lives are as follows: | |||||||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||||||
Carrying | Amortization | Balance | Average Life | ||||||||||||||
Amount | (in years) | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
As of June 30, 2014: | |||||||||||||||||
Provider networks | $ | 41.5 | $ | (36.3 | ) | $ | 5.2 | 18.9 | |||||||||
Customer relationships and other | 29.5 | (21.5 | ) | 8 | 11.1 | ||||||||||||
$ | 71 | $ | (57.8 | ) | $ | 13.2 | |||||||||||
As of December 31, 2013: | |||||||||||||||||
Provider networks | $ | 40.5 | $ | (35.7 | ) | $ | 4.8 | 19.4 | |||||||||
Customer relationships and other | 29.5 | (20.5 | ) | 9 | 11.1 | ||||||||||||
$ | 70 | $ | (56.2 | ) | $ | 13.8 | |||||||||||
Estimated annual pretax amortization expense for other intangible assets for each of the next five years ending December 31 is as follows (dollars in millions): | |||||||||||||||||
Year | Amount | ||||||||||||||||
2014 | $ | 3 | |||||||||||||||
2015 | 2.8 | ||||||||||||||||
2016 | 2.2 | ||||||||||||||||
2017 | 2.2 | ||||||||||||||||
2018 | 2.1 | ||||||||||||||||
Restricted Assets | |||||||||||||||||
We and our consolidated subsidiaries are required to set aside certain funds that may only be used for certain purposes pursuant to state regulatory requirements. We have discretion as to whether we invest such funds in cash and cash equivalents or other investments. As of June 30, 2014 and December 31, 2013, the restricted cash and cash equivalents balances totaled $1.8 million and $5.3 million, respectively, and are included in other noncurrent assets. Investment securities held by trustees or agencies were $23.8 million and $23.8 million as of June 30, 2014 and December 31, 2013, respectively, and are included in investments available-for-sale. | |||||||||||||||||
Accounting for Certain Provisions of the ACA | |||||||||||||||||
Premium-based Fee on Health Insurers | |||||||||||||||||
The ACA mandated significant reforms to various aspects of the U.S. health insurance industry. Among other things, the ACA imposes an annual premium-based fee on health insurers (the "health insurance industry fee") for each calendar year beginning on or after January 1, 2014 which is not deductible for federal income tax purposes and in many state jurisdictions. The fee will be levied based on a ratio of an insurer's net health insurance premiums written for the previous calendar year compared to the U.S. health insurance industry total. We are required to estimate a liability for our portion of the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the calendar year that it is payable. | |||||||||||||||||
We will pay the federal government approximately $148 million in September 2014 for our portion of the health insurance industry fee in accordance with the ACA. We have recorded a liability for this fee in other current liabilities with an offsetting deferred cost in other current assets in our consolidated financial statements. Our general and administrative expense for the three and six months ended June 30, 2014 includes amortization of the deferred cost of $37.8 million and $74.1 million, respectively. The balance of the remaining deferred cost asset was approximately $74.1 million as of June 30, 2014. | |||||||||||||||||
Public Health Insurance Exchanges | |||||||||||||||||
The ACA requires the establishment of state-based, state and federal partnership or federally facilitated health insurance exchanges ("exchanges") where individuals and small groups may purchase health insurance coverage under regulations established by U.S. Department of Health and Human Services ("HHS"). We currently participate in exchanges in Arizona, California and Oregon. Effective January 1, 2014, the ACA includes permanent and temporary premium stabilization provisions for transitional reinsurance, permanent risk adjustment, and temporary risk corridors (collectively referred to as the "3Rs"), which are applicable to those insurers participating inside, and in some cases outside, of the exchanges. | |||||||||||||||||
Member Related Components | |||||||||||||||||
Member Premium—We receive a monthly premium from members. The member premium, which is fixed for the entire plan year, is recognized evenly over the contract period and reported as part of health plan services premium revenue. | |||||||||||||||||
Premium Subsidy—For qualifying low-income members, HHS will reimburse us, on the member’s behalf, some or all of the monthly member premium depending on the member’s income level in relation to the Federal Poverty Level. We recognize the premium subsidy evenly over the contract period and report it as part of health plan services premium revenue. | |||||||||||||||||
Cost Sharing Subsidy—For qualifying low-income members, HHS will reimburse us, on the member’s behalf, some or all of a member’s cost sharing amounts (e.g., deductible, co-pay/coinsurance). The amount paid for the member by HHS is dependent on the member’s income level in relation to the Federal Poverty Level. We receive prospective payments on a monthly basis, and they represent a cost reimbursement that is finalized and settled after the end of the year. The cost sharing subsidy is accounted for as deposit accounting. | |||||||||||||||||
3Rs: Reinsurance, Risk Adjustment and Risk Corridor | |||||||||||||||||
Our accounting estimates are impacted as a result of the provisions of the ACA, including the 3Rs. The substantial influx of previously uninsured individuals into the new health insurance exchanges under the ACA could make it more difficult for health insurers, including us, to establish pricing accurately, at least during the early years of the exchanges. The 3Rs are intended to mitigate some of the risks around pricing and lack of information surrounding the previously uninsured. We will experience premium adjustments to our health plan services premium revenues and health plan services expenses based on changes to our estimated amounts related to the 3Rs, which may be significant at times. Such estimated amounts may differ materially from actual amounts ultimately received or paid under the provisions, which may have a material impact on our consolidated results of operations and financial condition. | |||||||||||||||||
Reinsurance—The transitional reinsurance program requires us to make reinsurance contributions for calendar years 2014 through 2016 to a state or HHS established reinsurance entity based on a national contribution rate per covered member as determined by HHS. While all commercial medical plans, including self-funded plans, are required to fund the reinsurance entity, only fully-insured non-grandfathered plans in the individual commercial market will be eligible for recoveries if individual claims exceed a specified threshold. Accordingly, we account for transitional reinsurance contributions associated with all commercial medical health plans other than non-grandfathered individual plans as an assessment in general and administrative expenses in our consolidated statement of income. We account for contributions made by individual commercial plans which are subject to recoveries as contra-health plan services premium revenue, and we account for any recoveries as contra-health plan services expense in our consolidated statements of income with a corresponding current or long-term receivable or payable. We recorded $77.5 million and $110.6 million of reinsurance recovery as contra-health plan services expense for the three and six months ended June 30, 2014, respectively, and the balance included in other receivables as of June 30, 2014 was $110.6 million. | |||||||||||||||||
Risk Adjustment—The risk adjustment provision applies to individual and small group business both within and outside the exchange and requires measurement of the relative health status risk of each insurer’s pool of insured enrollees in a given market. The risk adjustment provision then operates to transfer funds from insurers whose pools of insured enrollees have a lower-than-average risk scores to those insurers whose pools have greater-than-average risk scores. Our estimate for the risk adjustment incorporates our pricing and demographic assumptions, the distribution of our newly enrolled membership in terms of geography, metal tiers, and age bands, and what we believe are the market averages in terms of premium and risk scores. As part of our ongoing estimation process, we consider information as it becomes available at interim dates along with our actuarially determined expectations, and we update our estimates incorporating such information as appropriate. | |||||||||||||||||
We estimate and recognize adjustments to our health plan services premium revenue for the risk adjustment provision by projecting our ultimate premium for the calendar year. Such estimated calendar year amounts are recognized ratably during the year and are revised each period to reflect current experience. We record receivables or payables and classify the amounts as current or long-term in the consolidated balance sheets based on the timing of expected settlement. Our risk adjustment estimate was $30.1 million for each of the three and six months ended June 30, 2014 and was recorded as a reduction to health plan services premiums and as a corresponding payable included in accounts payable and other liabilities. | |||||||||||||||||
Risk Corridor—The temporary risk corridor program will be in place for three years and applies to individual and small group business operating both inside and outside of the exchanges. The risk corridor provisions limit health insurers' gains and losses by comparing allowable medical costs to a target amount, each defined/prescribed by HHS, and sharing the risk for allowable costs with the federal government. Variances from the target exceeding certain thresholds may result in HHS making additional payments to us or require us to make payments to HHS. | |||||||||||||||||
We estimate and recognize adjustments to our health plan services premium revenue for the risk corridor provision by projecting our ultimate premium for the calendar year. Such estimated calendar year amounts are recognized ratably during the year and are revised each period to reflect current experience, including changes in risk adjustment and reinsurance recoverables. We record receivables or payables and classify the amounts as current or long-term in the consolidated balance sheets based on the timing of expected settlement. For the three and six months ended June 30, 2014,we recorded $18.6 million and $27.3 million, respectively, of increases to risk corridor receivable as health plan services premium revenue, and the balance in other noncurrent assets as of June 30, 2014 was $27.3 million. | |||||||||||||||||
The final reconciliation and settlement with HHS of the premium and cost sharing subsidies and the amounts related to the 3Rs for the current year will be completed in the following year with HHS. | |||||||||||||||||
Section 1202 of ACA | |||||||||||||||||
Section 1202 of the ACA mandates increases in Medicaid payment rates for primary care in calendar years 2013 and 2014. The final rule had been in effect since January 1, 2013. The provisions of section 1202 impact our 1.4 million Medi-Cal members in California and 45,000 Medicaid members in Arizona. DHCS, the agency that regulates the Medi-Cal program, initially implemented a reimbursement methodology with no underwriting risk to the managed care plans ("MCPs") in 2013. Subsequently, DHCS changed the reimbursement methodology during the second quarter of 2014, and this change transferred full underwriting risk to the MCPs. | |||||||||||||||||
For the periods prior to this reimbursement methodology change, i.e., the year ended December 31, 2013 and the three months ended March 31, 2014, we accounted for the provisions of section 1202 on an administrative services only basis since it transferred no underwriting risk to the MCPs, and recorded the receipts and payments on a net basis. | |||||||||||||||||
Following the change in reimbursement methodology, we have full underwriting risk for 2013, including both utilization and unit cost risk. Accordingly, for the second quarter of 2014, with respect to our Medi-Cal business, we have: | |||||||||||||||||
• | Reversed $7.9 million previously recorded as administrative services fees and other income in 2013 and for the three months ended March 31, 2014. | ||||||||||||||||
• | Recorded payments on a grossed-up basis by recording Medi-Cal payments received as premium revenue and estimated Medi-Cal claim payments as health care costs (incurred claims), each via retroactive adjustments to premium revenues and health care costs. See the Three Months Ended June 30, 2014 - Full Risk column in the table below. | ||||||||||||||||
• | Recorded retrospective premium revenue adjustments based upon the state settlement agreement (see Note 2 - "Health Plan Services Revenue Recognition" above). | ||||||||||||||||
The financial statement impact of the section 1202 reimbursement methodology change is summarized in the table below. We have not recorded any premium revenue or health care costs for 2014 incurred services as we do not have sufficient information to make a reasonable estimate as of June 30, 2014. | |||||||||||||||||
Recorded In | |||||||||||||||||
Year Ended December 31, 2013 | Three Months Ended March 31, 2014 | Three Months Ended June 30, 2014 | |||||||||||||||
(Dollars in millions) | No Risk | No Risk | Full Risk | ||||||||||||||
Health plan services premiums | $ | 4.4 | $ | — | $ | 154.7 | |||||||||||
Health plan services expenses | — | — | 144 | ||||||||||||||
General and administrative expenses | 4.4 | — | — | ||||||||||||||
Administrative services fees and other income | 6.5 | 1.4 | (7.9 | ) | |||||||||||||
Pretax income | $ | 6.5 | $ | 1.4 | $ | 2.8 | |||||||||||
Recently Issued Accounting Pronouncement | |||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. To meet the objectives of the new guidance, the FASB amended the Accounting Standards Codification and created a new Topic 606, Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance requires various qualitative and quantitative disclosures in order to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this ASU are effective retrospectively for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We will evaluate the impact of this ASU on our consolidated financial statements. |
Segment_Information
Segment Information | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting Information, Additional Information [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
Our reportable segments are comprised of Western Region Operations and Government Contracts. Our Western Region Operations reportable segment includes the operations of our commercial, Medicare, Medicaid and dual eligibles health plans, our health and life insurance companies, our pharmaceutical services subsidiaries and certain operations of our behavioral health subsidiaries. These operations are conducted primarily in California, Arizona, Oregon and Washington. Our Government Contracts reportable segment includes government-sponsored managed care and administrative services contracts through the TRICARE program, the Department of Defense Military and Family Life Counseling ("MFLC") program and certain other health care-related government contracts. | ||||||||||||||||
The financial results of our reportable segments are reviewed on a monthly basis by our chief operating decision maker ("CODM"). We continuously monitor our reportable segments to ensure they reflect how our CODM manages our company. | ||||||||||||||||
We evaluate performance and allocate resources based on segment pretax income. Our assets are managed centrally and viewed by our CODM on a consolidated basis; therefore, they are not allocated to our segments and our segments are not evaluated for performance based on assets. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 2), except that intersegment transactions are not eliminated. | ||||||||||||||||
We also have a Corporate/Other segment that is not a business operating segment. It is added to our reportable segments to provide a reconciliation to our consolidated results. The Corporate/Other segment includes costs that are excluded from the calculation of segment pretax income because they are not managed within the segments and are not directly identified with a particular operating segment. Accordingly, these costs are not included in the performance evaluation of our reportable segments by our CODM. In addition, certain charges, including but not limited to those related to our continuing efforts to address scale issues as well as asset impairments, are reported as part of Corporate/Other. | ||||||||||||||||
Our segment information for the three and six months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Western Region | Government | Corporate/Other/ | Total | |||||||||||||
Operations | Contracts | Eliminations | ||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three months ended June 30, 2014 | ||||||||||||||||
Revenues from external sources | $ | 3,267.30 | $ | 154.1 | $ | — | $ | 3,421.40 | ||||||||
Intersegment revenues | 3.1 | — | (3.1 | ) | — | |||||||||||
Segment pretax income (loss) | 80.7 | 21.4 | (3.3 | ) | 98.8 | |||||||||||
Three months ended June 30, 2013 | ||||||||||||||||
Revenues from external sources | $ | 2,598.50 | $ | 139.9 | $ | — | $ | 2,738.40 | ||||||||
Intersegment revenues | 2.8 | — | (2.8 | ) | — | |||||||||||
Segment pretax income (loss) | 46.8 | 18.1 | (12.9 | ) | 52 | |||||||||||
Six months ended June 30, 2014 | ||||||||||||||||
Revenues from external sources | $ | 6,162.10 | $ | 298.2 | $ | — | $ | 6,460.30 | ||||||||
Intersegment revenues | 6.1 | — | (6.1 | ) | — | |||||||||||
Segment pretax income (loss) | 133.7 | 34.5 | (7.4 | ) | 160.8 | |||||||||||
Six months ended June 30, 2013 | ||||||||||||||||
Revenues from external sources | $ | 5,261.00 | $ | 274.5 | $ | — | $ | 5,535.50 | ||||||||
Intersegment revenues | 5.7 | — | (5.7 | ) | — | |||||||||||
Segment pretax income (loss) | 119.1 | 27.1 | (12.9 | ) | 133.3 | |||||||||||
Our health plan services premium revenue by line of business is as follows: | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Dollars in millions) | ||||||||||||||||
Commercial premium revenue | $ | 1,377.50 | $ | 1,298.60 | $ | 2,641.60 | $ | 2,624.00 | ||||||||
Medicare premium revenue | 757.2 | 688.6 | 1,512.40 | 1,395.00 | ||||||||||||
Medicaid premium revenue | 1,121.90 | 591.7 | 1,983.90 | 1,191.90 | ||||||||||||
Dual Eligibles premium revenue | 5.3 | — | 5.3 | — | ||||||||||||
Total health plan services premiums | $ | 3,261.90 | $ | 2,578.90 | $ | 6,143.20 | $ | 5,210.90 | ||||||||
Investments
Investments | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||
Investments | ' | ||||||||||||||||||||||||
INVESTMENTS | |||||||||||||||||||||||||
Investments classified as available-for-sale, which consist primarily of debt securities, are stated at fair value. Unrealized gains and losses are excluded from earnings and reported as other comprehensive income, net of income tax effects. The cost of investments sold is determined in accordance with the specific identification method, and realized gains and losses are included in net investment income. We periodically assess our investments available-for-sale for other-than-temporary impairment. Any such other-than-temporary impairment loss is recognized as a realized loss, which is recorded through earnings, if related to credit losses. | |||||||||||||||||||||||||
During the three and six months ended June 30, 2014 and 2013, we recognized no losses from other-than-temporary impairments of our cash equivalents and available-for-sale investments. | |||||||||||||||||||||||||
We classified $0.7 million and $59.8 million as investments available-for-sale-noncurrent as of June 30, 2014 and December 31, 2013, respectively, because we did not intend to sell and we believed it may take longer than one year for such impaired securities to recover. This classification does not affect the marketability or the valuation of the investments, which are reflected at their market values as of June 30, 2014 and December 31, 2013. | |||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, the amortized cost, gross unrealized holding gains and losses, and fair value of our current investments available-for-sale and our investments available-for-sale-noncurrent, after giving effect to other-than-temporary impairments, were as follows: | |||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||
Amortized | Gross | Gross | Carrying | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Holding | Holding | ||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Asset-backed securities | $ | 421.7 | $ | 4.1 | $ | (3.7 | ) | $ | 422.1 | ||||||||||||||||
U.S. government and agencies | 23.7 | — | — | 23.7 | |||||||||||||||||||||
Obligations of states and other political subdivisions | 728.1 | 10.1 | (7.1 | ) | 731.1 | ||||||||||||||||||||
Corporate debt securities | 489.2 | 4.7 | (1.9 | ) | 492 | ||||||||||||||||||||
$ | 1,662.70 | $ | 18.9 | $ | (12.7 | ) | $ | 1,668.90 | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Asset-backed securities | $ | 0.8 | $ | — | $ | (0.1 | ) | $ | 0.7 | ||||||||||||||||
$ | 0.8 | $ | — | $ | (0.1 | ) | $ | 0.7 | |||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Amortized | Gross | Gross | Carrying | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Holding | Holding | ||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Asset-backed securities | $ | 394.7 | $ | 3.4 | $ | (8.7 | ) | $ | 389.4 | ||||||||||||||||
U.S. government and agencies | 23.7 | — | — | 23.7 | |||||||||||||||||||||
Obligations of states and other political subdivisions | 734.3 | 5.9 | (30.3 | ) | 709.9 | ||||||||||||||||||||
Corporate debt securities | 449.8 | 3.6 | (9.4 | ) | 444 | ||||||||||||||||||||
$ | 1,602.50 | $ | 12.9 | $ | (48.4 | ) | $ | 1,567.00 | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Asset-backed securities | $ | 1.3 | $ | — | $ | (0.2 | ) | $ | 1.1 | ||||||||||||||||
Obligations of states and other political subdivisions | 53.4 | — | (6.3 | ) | 47.1 | ||||||||||||||||||||
Corporate debt securities | 13.2 | — | (1.6 | ) | 11.6 | ||||||||||||||||||||
$ | 67.9 | $ | — | $ | (8.1 | ) | $ | 59.8 | |||||||||||||||||
As of June 30, 2014, the contractual maturities of our current investments available-for-sale and our investments available-for-sale-noncurrent were as follows: | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Current: | (Dollars in millions) | ||||||||||||||||||||||||
Due in one year or less | $ | 58 | $ | 58.2 | |||||||||||||||||||||
Due after one year through five years | 325.2 | 328.6 | |||||||||||||||||||||||
Due after five years through ten years | 417.3 | 422.3 | |||||||||||||||||||||||
Due after ten years | 440.5 | 437.7 | |||||||||||||||||||||||
Asset-backed securities | 421.7 | 422.1 | |||||||||||||||||||||||
Total current investments available-for-sale | $ | 1,662.70 | $ | 1,668.90 | |||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Noncurrent: | (Dollars in millions) | ||||||||||||||||||||||||
Asset-backed securities | 0.8 | 0.7 | |||||||||||||||||||||||
Total noncurrent investments available-for-sale | $ | 0.8 | $ | 0.7 | |||||||||||||||||||||
Proceeds from sales of investments available-for-sale during the three and six months ended June 30, 2014 were $125.8 million and $192.3 million, respectively. Gross realized gains and losses totaled $2.2 million and $0.3 million, respectively, for the three months ended June 30, 2014, and $3.4 million and $1.2 million, respectively, for the six months ended June 30, 2014. Proceeds from sales of investments available-for-sale during the three and six months ended June 30, 2013 were $218.6 million and $573.4 million, respectively. Gross realized gains and losses totaled $7.0 million and $1.4 million, respectively, for the three months ended June 30, 2013, and $24.5 million and $1.6 million, respectively, for the six months ended June 30, 2013. | |||||||||||||||||||||||||
The following tables show our investments’ fair values and gross unrealized losses for individual securities that have been in a continuous loss position through June 30, 2014 and December 31, 2013. These investments are interest-yielding debt securities of varying maturities. We have determined that the unrealized loss position for these securities is primarily due to market volatility. Generally, in a rising interest rate environment, the estimated fair value of fixed income securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of fixed income securities would be expected to increase. These securities also may be negatively impacted by illiquidity in the market. | |||||||||||||||||||||||||
The following table shows our current investments' fair values and gross unrealized losses for individual securities that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 45.9 | $ | (0.1 | ) | $ | 151.7 | $ | (3.6 | ) | $ | 197.6 | $ | (3.7 | ) | ||||||||||
Obligations of states and other political subdivisions | 37.4 | (0.2 | ) | 301.9 | (6.9 | ) | 339.3 | (7.1 | ) | ||||||||||||||||
Corporate debt securities | 42.4 | (0.1 | ) | 96.1 | (1.8 | ) | 138.5 | (1.9 | ) | ||||||||||||||||
$ | 125.7 | $ | (0.4 | ) | $ | 549.7 | $ | (12.3 | ) | $ | 675.4 | $ | (12.7 | ) | |||||||||||
The following table shows our noncurrent investments' fair values and gross unrealized losses for individual securities that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | — | $ | — | $ | 0.7 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | |||||||||||
$ | — | $ | — | $ | 0.7 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | ||||||||||||
The following table shows the number of our individual securities-current that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than | 12 Months | Total | |||||||||||||||||||||||
12 Months | or More | ||||||||||||||||||||||||
Asset-backed securities | 19 | 58 | 77 | ||||||||||||||||||||||
Obligations of states and other political subdivisions | 26 | 129 | 155 | ||||||||||||||||||||||
Corporate debt securities | 41 | 91 | 132 | ||||||||||||||||||||||
86 | 278 | 364 | |||||||||||||||||||||||
The following table shows the number of our individual securities-noncurrent that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than | 12 Months | Total | |||||||||||||||||||||||
12 Months | or More | ||||||||||||||||||||||||
Asset-backed securities | — | 1 | 1 | ||||||||||||||||||||||
— | 1 | 1 | |||||||||||||||||||||||
The following table shows our current investments’ fair values and gross unrealized losses for individual securities that have been in a continuous loss position through December 31, 2013: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 225.3 | $ | (7.9 | ) | $ | 22.5 | $ | (0.8 | ) | $ | 247.8 | $ | (8.7 | ) | ||||||||||
U.S. government and agencies | 4 | — | — | — | 4 | — | |||||||||||||||||||
Obligations of states and other political subdivisions | 453.5 | (23.5 | ) | 79.7 | (6.8 | ) | 533.2 | (30.3 | ) | ||||||||||||||||
Corporate debt securities | 242.8 | (9.0 | ) | 6.7 | (0.4 | ) | 249.5 | (9.4 | ) | ||||||||||||||||
$ | 925.6 | $ | (40.4 | ) | $ | 108.9 | $ | (8.0 | ) | $ | 1,034.50 | $ | (48.4 | ) | |||||||||||
The following table shows the fair values and gross unrealized losses for our individual securities-noncurrent that have been in a continuous loss position through December 31, 2013: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 0.5 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | $ | 1.2 | $ | (0.2 | ) | ||||||||||
Obligations of states and other political subdivisions | 17.4 | (2.2 | ) | 29.6 | (4.1 | ) | 47 | (6.3 | ) | ||||||||||||||||
Corporate debt securities | 7.5 | (0.9 | ) | 4.1 | (0.7 | ) | 11.6 | (1.6 | ) | ||||||||||||||||
$ | 25.4 | $ | (3.2 | ) | $ | 34.4 | $ | (4.9 | ) | $ | 59.8 | $ | (8.1 | ) | |||||||||||
Stock_Repurchase_Program
Stock Repurchase Program | 6 Months Ended |
Jun. 30, 2014 | |
Class of Stock Disclosures [Abstract] | ' |
Stock Repurchase Program | ' |
STOCK REPURCHASE PROGRAM | |
On May 2, 2011, our Board of Directors authorized our stock repurchase program pursuant to which a total of $300 million of our outstanding common stock could be repurchased. On March 8, 2012, our Board of Directors approved a $323.7 million increase to our stock repurchase program. | |
Subject to the approval of our Board of Directors, we may repurchase our common stock under our stock repurchase program from time to time in privately negotiated transactions, through accelerated stock repurchase programs or open market transactions, including pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended. The timing of any repurchases and the actual number of shares of stock repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations, and other market and economic conditions. Our stock repurchase program may be suspended or discontinued at any time. | |
During the three months ended June 30, 2013, we made no share repurchases and during the six months ended June 30, 2013, we repurchased approximately 2.7 million shares of our common stock for aggregate consideration of $70.0 million under our stock repurchase program. As of December 31, 2013, the remaining authorization under our stock repurchase program was $280.0 million. During the three and six months ended June 30, 2014, we made no share repurchases under our stock repurchase program. The remaining authorization under our stock repurchase program as of June 30, 2014 was $280.0 million. |
Financing_Arrangements
Financing Arrangements | 6 Months Ended | |
Jun. 30, 2014 | ||
Financing Arrangements [Abstract] | ' | |
Financing Arrangements | ' | |
FINANCING ARRANGEMENTS | ||
Revolving Credit Facility | ||
In October 2011, we entered into a $600 million unsecured revolving credit facility due in October 2016, which includes a $400 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swing line loans (which sublimits may be increased in connection with any increase in the credit facility described below). In addition, we have the ability from time to time to increase the credit facility by up to an additional $200 million in the aggregate, subject to the receipt of additional commitments. As of June 30, 2014, $100.0 million was outstanding under our revolving credit facility, and the maximum amount available for borrowing under the revolving credit facility was $491.0 million (see "—Letters of Credit" below). | ||
Amounts outstanding under our revolving credit facility bear interest, at the Company’s option, at either (a) the base rate (which is a rate per annum equal to the greatest of (i) the federal funds rate plus one-half of one percent, (ii) Bank of America, N.A.’s “prime rate” and (iii) the Eurodollar Rate (as such term is defined in the credit facility) for a one-month interest period plus one percent) plus an applicable margin ranging from 45 to 105 basis points or (b) the Eurodollar Rate plus an applicable margin ranging from 145 to 205 basis points. The applicable margins are based on our consolidated leverage ratio, as specified in the credit facility, and are subject to adjustment following the Company’s delivery of a compliance certificate for each fiscal quarter. | ||
Our revolving credit facility includes, among other customary terms and conditions, limitations (subject to specified exclusions) on our and our subsidiaries’ ability to incur debt; create liens; engage in certain mergers, consolidations and acquisitions; sell or transfer assets; enter into agreements that restrict the ability to pay dividends or make or repay loans or advances; make investments, loans, and advances; engage in transactions with affiliates; and make dividends. In addition, we are required to be in compliance at the end of each fiscal quarter with a specified consolidated leverage ratio and consolidated fixed charge coverage ratio. As of June 30, 2014, we were in compliance with all covenants under the revolving credit facility. | ||
Our revolving credit facility contains customary events of default, including nonpayment of principal or other amounts when due; breach of covenants; inaccuracy of representations and warranties; cross-default and/or cross-acceleration to other indebtedness of the Company or our subsidiaries in excess of $50 million; certain ERISA-related events; noncompliance by the Company or any of our subsidiaries with any material term or provision of the HMO Regulations or Insurance Regulations (as each such term is defined in the credit facility) in a manner that could reasonably be expected to result in a material adverse effect; certain voluntary and involuntary bankruptcy events; inability to pay debts; undischarged, uninsured judgments greater than $50 million against us and/or our subsidiaries that are not stayed within 60 days; actual or asserted invalidity of any loan document; and a change of control. If an event of default occurs and is continuing under the revolving credit facility, the lenders thereunder may, among other things, terminate their obligations under the facility and require us to repay all amounts owed thereunder. | ||
Letters of Credit | ||
Pursuant to the terms of our revolving credit facility, we can obtain letters of credit in an aggregate amount of $400 million and the maximum amount available for borrowing is reduced by the dollar amount of any outstanding letters of credit. As of June 30, 2014 and December 31, 2013, we had outstanding letters of credit of $9.0 million and $7.5 million, respectively, resulting in a maximum amount available for borrowing of $491.0 million and $492.5 million, respectively. As of June 30, 2014 and December 31, 2013, no amounts had been drawn on any of these letters of credit. | ||
Senior Notes | ||
In 2007, we issued $400 million in aggregate principal amount of 6.375% Senior Notes due 2017 ("Senior Notes"). The indenture governing the Senior Notes limits our ability to incur certain liens, or consolidate, merge or sell all or substantially all of our assets. In the event of the occurrence of both (1) a change of control of Health Net, Inc. and (2) a below investment grade rating by any two of Fitch, Inc., Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, we will be required to make an offer to purchase the Senior Notes at a price equal to 101% of the principal amount of the Senior Notes plus accrued and unpaid interest to the date of repurchase. As of June 30, 2014, no default or event of default had occurred under the indenture governing the Senior Notes. | ||
The Senior Notes may be redeemed in whole at any time or in part from time to time, prior to maturity at our option, at a redemption price equal to the greater of: | ||
• | 100% of the principal amount of the Senior Notes then outstanding to be redeemed; or | |
• | the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable treasury rate plus 30 basis points | |
plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the redemption date. | ||
Each of the following will be an Event of Default under the indenture governing the Senior Notes: | ||
• | failure to pay interest for 30 days after the date payment is due and payable; provided that an extension of an interest payment period by us in accordance with the terms of the Senior Notes shall not constitute a failure to pay interest; | |
• | failure to pay principal or premium, if any, on any note when due, either at maturity, upon any redemption, by declaration or otherwise; | |
• | failure to perform any other covenant or agreement in the notes or indenture for a period of 60 days after notice that performance was required; | |
• | (A) our failure or the failure of any of our subsidiaries to pay indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least $50 million, at the later of final maturity and the expiration of any related applicable grace period and such defaulted payment shall not have been made, waived or extended within 30 days after notice or (B) acceleration of the maturity of indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least $50 million, if that acceleration results from a default under the instrument giving rise to or securing such indebtedness for money borrowed and such indebtedness has not been discharged in full or such acceleration has not been rescinded or annulled within 30 days after notice; or | |
• | events in bankruptcy, insolvency or reorganization of our Company. | |
Our Senior Notes payable balances were $399.4 million as of June 30, 2014 and $399.3 million as of December 31, 2013. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ' | |||||||||||||||||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||||||||||||||||||
We record certain assets and liabilities at fair value in the consolidated balance sheets and categorize them based upon the level of judgment associated with the inputs used to measure their fair value and the level of market price observability. We also estimate fair value when the volume and level of activity for the asset or liability have significantly decreased or in those circumstances that indicate when a transaction is not orderly. | ||||||||||||||||||||||||||||||||
Investments measured and reported at fair value using Level inputs are classified and disclosed in one of the following categories: | ||||||||||||||||||||||||||||||||
Level 1—Quoted prices are available in active markets for identical investments as of the reporting date. The types of investments included in Level 1 include U.S. Treasury securities and listed equities. We do not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably impact the quoted price. | ||||||||||||||||||||||||||||||||
Level 2—Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models and/or other valuation methodologies that are based on an income approach. Examples include, but are not limited to, multidimensional relational model, option adjusted spread model, and various matrices. Specific pricing inputs include quoted prices for similar securities in both active and non-active markets, other observable inputs such as interest rates, yield curve volatilities, default rates, and inputs that are derived principally from or corroborated by other observable market data. Investments that are generally included in this category include asset-backed securities, corporate bonds and loans, and state and municipal bonds. | ||||||||||||||||||||||||||||||||
Level 3—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation using assumptions that market participants would use, including assumptions for risk. Level 3 includes an embedded contractual derivative asset and/or liability held by the Company estimated at fair value. Significant inputs used in the derivative valuation model include the estimated growth in Health Net health care expenditures and estimated growth in national health care expenditures. The growth in these expenditures was modeled using a Monte Carlo simulation approach. Level 3 also includes a state-sponsored health plans settlement account deficit asset estimated at fair value based on the income approach. See Note 2 for additional information on our state-sponsored health plans rate settlement agreement. | ||||||||||||||||||||||||||||||||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. | ||||||||||||||||||||||||||||||||
The following tables present information about our assets and liabilities measured at fair value on a recurring basis at June 30, 2014 and December 31, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (dollars in millions): | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 2- | Level 3 | Total | ||||||||||||||||||||||||||||
noncurrent | ||||||||||||||||||||||||||||||||
As of June 30, 2014: | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 603.1 | $ | — | $ | — | $ | — | $ | 603.1 | ||||||||||||||||||||||
Investments—available-for-sale | ||||||||||||||||||||||||||||||||
Asset-backed debt securities: | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | — | $ | 218.3 | $ | — | $ | — | $ | 218.3 | ||||||||||||||||||||||
Commercial mortgage-backed securities | — | 124.4 | 0.7 | — | 125.1 | |||||||||||||||||||||||||||
Other asset-backed securities | — | 79.4 | — | — | 79.4 | |||||||||||||||||||||||||||
U.S. government and agencies: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | 23.7 | — | — | — | 23.7 | |||||||||||||||||||||||||||
U.S. Agency securities | — | — | — | — | — | |||||||||||||||||||||||||||
Obligations of states and other political subdivisions | — | 731.1 | — | — | 731.1 | |||||||||||||||||||||||||||
Corporate debt securities | — | 492 | — | — | 492 | |||||||||||||||||||||||||||
Total investments at fair value | $ | 23.7 | $ | 1,645.20 | $ | 0.7 | $ | — | $ | 1,669.60 | ||||||||||||||||||||||
Embedded contractual derivative | — | — | — | 13.3 | 13.3 | |||||||||||||||||||||||||||
State-sponsored health plans settlement account deficit | — | — | — | 9.6 | 9.6 | |||||||||||||||||||||||||||
Total assets at fair value | $ | 626.8 | $ | 1,645.20 | $ | 0.7 | $ | 22.9 | $ | 2,295.60 | ||||||||||||||||||||||
Level 1 | Level 2 | Level 2- | Level 3 | Total | ||||||||||||||||||||||||||||
noncurrent | ||||||||||||||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 433.2 | $ | — | $ | — | $ | — | $ | 433.2 | ||||||||||||||||||||||
Investments—available-for-sale | ||||||||||||||||||||||||||||||||
Asset-backed debt securities: | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | — | $ | 203.5 | $ | 0.4 | $ | — | $ | 203.9 | ||||||||||||||||||||||
Commercial mortgage-backed securities | — | 144.1 | 0.7 | — | 144.8 | |||||||||||||||||||||||||||
Other asset-backed securities | — | 41.8 | — | — | 41.8 | |||||||||||||||||||||||||||
U.S. government and agencies: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | 23.7 | — | — | — | 23.7 | |||||||||||||||||||||||||||
U.S. Agency securities | — | — | — | — | — | |||||||||||||||||||||||||||
Obligations of states and other political subdivisions | — | 709.9 | 47.1 | — | 757 | |||||||||||||||||||||||||||
Corporate debt securities | — | 444 | 11.6 | — | 455.6 | |||||||||||||||||||||||||||
Total investments at fair value | $ | 23.7 | $ | 1,543.30 | $ | 59.8 | $ | — | $ | 1,626.80 | ||||||||||||||||||||||
Embedded contractual derivative | — | — | — | 7.2 | 7.2 | |||||||||||||||||||||||||||
State-sponsored health plans settlement account deficit | — | — | — | 62.9 | 62.9 | |||||||||||||||||||||||||||
Total assets at fair value | $ | 456.9 | $ | 1,543.30 | $ | 59.8 | $ | 70.1 | $ | 2,130.10 | ||||||||||||||||||||||
We had no financial liabilities fair valued on a recurring basis as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||
We had no transfers between Levels 1 and 2 of financial assets or liabilities that are fair valued on a recurring basis during the three and six months ended June 30, 2014 and 2013. In determining when transfers between levels are recognized, our accounting policy is to recognize the transfers based on the actual date of the event or change in circumstances that caused the transfer. | ||||||||||||||||||||||||||||||||
The changes in the balances of Level 3 financial assets for the three months ended June 30, 2014 and 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | |||||||||||||||||||||||||
Opening balance | $ | — | $ | 11.4 | $ | 50 | $ | 61.4 | $ | — | $ | 10.9 | $ | 20.8 | $ | 31.7 | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | — | 1.9 | (40.4 | ) | (38.5 | ) | — | (0.1 | ) | 14.6 | 14.5 | |||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases/additions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issues | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Sales | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Closing balance | $ | — | $ | 13.3 | $ | 9.6 | $ | 22.9 | $ | — | $ | 10.8 | $ | 35.4 | $ | 46.2 | ||||||||||||||||
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
The changes in the balances of Level 3 financial assets for the six months ended June 30, 2014 and 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | |||||||||||||||||||||||||
Opening balance | $ | — | $ | 7.2 | $ | 62.9 | $ | 70.1 | $ | 0.2 | $ | 11.2 | $ | — | $ | 11.4 | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | — | 6.1 | (53.3 | ) | (47.2 | ) | — | (0.4 | ) | 35.4 | 35 | |||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases/additions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issues | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Sales | — | — | — | — | (0.2 | ) | — | — | (0.2 | ) | ||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Closing balance | $ | — | $ | 13.3 | $ | 9.6 | $ | 22.9 | $ | — | $ | 10.8 | $ | 35.4 | $ | 46.2 | ||||||||||||||||
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
The changes in the balances of Level 3 financial liability for the three and six months ended June 30, 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Three months ended June 30, 2013 | Six months ended June 30, 2013 | |||||||||||||||||||||||||||||||
Embedded Contractual Derivative | ||||||||||||||||||||||||||||||||
Opening balance, April 1 and January 1 | $ | 4.2 | $ | 3.2 | ||||||||||||||||||||||||||||
Transfers into Level 3 | — | — | ||||||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | ||||||||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | 0.6 | 1.6 | ||||||||||||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | ||||||||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases | — | — | ||||||||||||||||||||||||||||||
Issues | — | — | ||||||||||||||||||||||||||||||
Sales | — | — | ||||||||||||||||||||||||||||||
Settlements | — | — | ||||||||||||||||||||||||||||||
Closing balance | $ | 4.8 | $ | 4.8 | ||||||||||||||||||||||||||||
We had no assets or liabilities fair valued on a non-recurring basis during the three and six months ended June 30, 2014 or for the year ended December 31, 2013. | ||||||||||||||||||||||||||||||||
The following tables present quantitative information about Level 3 Fair Value Measurements as of June 30, 2014 and December 31, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||
Fair Value as of | Valuation Technique(s) | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||||||||
30-Jun-14 | ||||||||||||||||||||||||||||||||
Embedded contractual derivative asset | $ | 13.3 | Monte Carlo Simulation Approach | Health Net Health Care Expenditures | -5.58 | % | — | 8.13% | -1.64% | |||||||||||||||||||||||
National Health Care Expenditures | -1.13 | % | — | 10.95% | -2.52% | |||||||||||||||||||||||||||
Goodwill - Western Region reporting unit | $ | 565.9 | Income Approach | Discount Rate | 9 | % | — | 9.00% | -9.00% | |||||||||||||||||||||||
State-sponsored health plans settlement account deficit | $ | 9.6 | Income Approach | Discount Rate | 1.135 | % | — | 1.14% | -1.13% | |||||||||||||||||||||||
Fair Value as of | Valuation Technique(s) | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||||||
Embedded contractual derivative asset | $ | 7.2 | Monte Carlo Simulation Approach | Health Net Health Care Expenditures | -3.34 | % | — | 7.34% | -2.20% | |||||||||||||||||||||||
National Health Care Expenditures | -0.77 | % | — | 9.46% | -3.63% | |||||||||||||||||||||||||||
Goodwill - Western Region reporting unit | $ | 565.9 | Income Approach | Discount Rate | 10 | % | — | 10.00% | -10.00% | |||||||||||||||||||||||
State-sponsored health plans settlement account deficit | $ | 62.9 | Income Approach | Discount Rate | 1.135 | % | — | 1.14% | -1.13% | |||||||||||||||||||||||
Valuation policies and procedures are managed by our finance group, which regularly monitors fair value measurements. Fair value measurements, including those categorized within Level 3, are prepared and reviewed on a quarterly basis and any third-party valuations are reviewed for reasonableness and compliance with the Fair Value Measurement Topic of the Accounting Standards Codification. Specifically, we compare prices received from our pricing service to prices reported by the custodian or third-party investment advisers, and we perform a review of the inputs, validating that they are reasonable and observable in the marketplace, if applicable. For our embedded contractual derivative asset and liability, we use internal historical and projected health care expenditure data and the national health care expenditures as reflected in the National External Trend Standards, which is published by CMS, to estimate the unobservable inputs. The growth rates in each of these health care expenditures are modeled using the Monte Carlo simulation approach, and the resulting value is discounted to the valuation date. We estimate our recurring Level 3 state-sponsored health plans settlement account deficit asset using the income approach based on discounted cash flows. We estimate our non-recurring Level 3 asset and liability and goodwill for our Western Region Operations reporting unit using the income approach based on discounted cash flows. | ||||||||||||||||||||||||||||||||
The significant unobservable inputs used in the fair value measurement of our embedded contractual derivative are the estimated growth in Health Net health care expenditures and the estimated growth in national health care expenditures. Significant increases (decreases) in the estimated growth in Health Net health care expenditures or decreases (increases) in the estimated growth in national health expenditures would result in a significantly lower (higher) fair value measurement. The significant unobservable input used in the fair value measurement of our state-sponsored health plans settlement account deficit asset is our discount rate. Significant increases (decreases) in the discount rate would result in a significantly lower (higher) fair value measurement. |
Legal_Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Legal Proceedings | ' |
LEGAL PROCEEDINGS | |
Overview | |
We record reserves and accrue costs for certain legal proceedings and regulatory matters to the extent that we determine an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While such reserves and accrued costs reflect our best estimate of the probable loss for such matters, our recorded amounts may differ materially from the actual amount of any such losses. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings, which may be exacerbated by various factors, including but not limited to that they may involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; involve a large number of parties, claimants or regulatory bodies; are in the early stages of the proceedings; involve a number of separate proceedings, each with a wide range of potential outcomes; or result in a change of business practices. Further, there may be various levels of judicial review available to the Company in connection with any such proceeding in the event damages are awarded or a fine or penalty is assessed. As of the date of this report, amounts accrued for legal proceedings and regulatory matters were not material. However, it is possible that in a particular quarter or annual period our financial condition, results of operations, cash flow and/or liquidity could be materially adversely affected by an ultimate unfavorable resolution of or development in legal and/or regulatory proceedings, including those described below in this Note 8 under the headings “Military and Family Life Counseling Program Putative Class and Collective Actions” and “Litigation and Investigations Related to Unaccounted-for Server Drives,” depending, in part, upon our financial condition, results of operations, cash flow or liquidity in such period, and our reputation may be adversely affected. Except for the regulatory and legal proceedings discussed in this Note 8 under the headings “Military and Family Life Counseling Program Putative Class and Collective Actions” and “Litigation and Investigations Related to Unaccounted-for Server Drives,” management believes that the ultimate outcome of any of the regulatory and legal proceedings that are currently pending against us should not have a material adverse effect on our financial condition, results of operations, cash flow and liquidity. | |
Military and Family Life Counseling Program Putative Class and Collective Actions | |
We are a defendant in three related litigation matters pending in the United States District Court for the Northern District of California (the “Northern District of California”) relating to the independent contractor classification of counselors (“MFLCs”) who contracted with our subsidiary, MHN Government Services, Inc. (“MHNGS”), to provide short-term, non-medical counseling at U.S. military installations throughout the country under our Military and Family Life Counseling (formerly Military and Family Life Consultants) program. | |
On June 14, 2011, two former MFLCs filed a putative class action in the Superior Court of the State of Washington for Pierce County against Health Net, Inc., MHNGS, and MHN Services d/b/a MHN Services Corporation (also a subsidiary), on behalf of themselves and a proposed class of current and former MFLCs who have performed services as independent contractors in the state of Washington from June 14, 2008 to the present. Plaintiffs claim that MFLCs were misclassified as independent contractors under Washington law and are entitled to the wages and overtime pay that they would have received had they been classified as non-exempt employees. Plaintiffs seek unpaid wages, overtime pay, statutory penalties, attorneys’ fees and interest. We moved to compel the case to arbitration, and the court denied the motion on September 30, 2011. We appealed the decision. The Washington Supreme Court affirmed the trial court’s decision on August 15, 2013. On February 26, 2014, we removed this case to the United States District Court for the Western District of Washington, pursuant to the Class Action Fairness Act. | |
On May 15, 2012, the same two MFLCs who filed the Washington action, as well as 12 other named plaintiffs, filed a proposed collective action lawsuit against the same defendants in the United States District Court for the Western District of Washington on behalf of themselves and other current and former MFLCs who have performed services as independent contractors nationwide from May 15, 2009 to the present. They allege misclassification under the federal Fair Labor Standards Act (“FLSA”) and seek unpaid wages, unpaid benefits, overtime pay, statutory penalties, attorneys’ fees and interest. They also seek penalties under California Labor Code section 226.8. The court has since transferred the case to the Northern District of California to relate it to a virtually identical suit filed on October 2, 2012 against MHNGS and Managed Health Network, Inc. (“MHN”) (also a subsidiary). | |
The third October 2012 suit alleges misclassification under the FLSA on behalf of a nationwide class, as well under several state laws on behalf of MFLCs who worked in California, New Mexico, Hawaii, Kentucky, New York, Nevada, and North Carolina. On October 24, 2013, the parties agreed to toll the statutes of limitations for overtime violations in the following states: Alaska, Colorado, Illinois, Maine, Maryland, Massachusetts, Montana, New Jersey, North Dakota, Ohio, and Pennsylvania. | |
On November 1, 2012, we moved to compel arbitration in the Northern District of California, and the court denied the motion on April 3, 2013. We noticed our appeal of that decision to the United States Court of Appeals for the Ninth Circuit on April 8, 2013. On April 25, 2013, the district court granted Plaintiffs’ motion for conditional FLSA collective action certification to allow notice to be sent to the FLSA collective action members. The court stayed all other proceedings pending an outcome in the Ninth Circuit appeal, which has not yet been scheduled for hearing. | |
On March 28, 2014, the original Washington case was transferred to the Northern District of California to relate it to the two FLSA suits pending there. On April 11, 2014, we moved to stay the suit pending the Ninth Circuit appeal. We also filed two alternative motions seeking an order to either compel the case to arbitration or dismiss Plaintiffs’ class claims and California Labor Code section 226.8 claims. On June 3, 2014, the court granted our motion to stay, and denied the later alternative motions without prejudice to renewal after the stay is lifted. | |
We intend to vigorously defend ourselves against these claims; however, these proceedings are subject to many uncertainties. | |
Litigation and Investigations Related to Unaccounted-for Server Drives | |
We are a defendant in three related litigation matters pending in California state and federal courts relating to information security issues. On January 21, 2011, International Business Machines Corp. ("IBM"), which handles our data center operations, notified us that it could not locate several hard disk drives that had been used in our data center located in Rancho Cordova, California. We have since determined that personal information of approximately two million former and current Health Net members, employees and health care providers is on the drives. Commencing on March 14, 2011, we provided written notification to the individuals whose information is on the drives. To help protect the personal information of affected individuals, we offered them two years of free credit monitoring services, in addition to identity theft insurance and fraud resolution and restoration of credit files services, if needed. | |
On March 18, 2011, a putative class action relating to this incident was filed against us in the U.S. District Court for the Central District of California (the "Central District of California"), and similar actions were later filed against us in other federal and state courts in California. A number of those actions were transferred to and consolidated in the U.S. District Court for the Eastern District of California (the "Eastern District of California"), and the two remaining actions are currently pending in the Superior Court of California, County of San Francisco ("San Francisco County Superior Court") and the Superior Court of California, County of Sacramento ("Sacramento County Superior Court"). The consolidated amended complaint in the federal action pending in the Eastern District of California was filed on behalf of a putative class of over 800,000 of our current or former members who received the written notification, and also named IBM as a defendant. It sought to state claims for violation of the California Confidentiality of Medical Information Act and the California Customer Records Act, and sought statutory damages of up to $1,000 for each class member, as well as injunctive and declaratory relief, attorneys’ fees and other relief. On August 29, 2011, we filed a motion to dismiss the consolidated complaint. On January 20, 2012, the district court issued an order dismissing the consolidated complaint on the grounds that the plaintiffs lacked standing to bring their action in federal court. On April 20, 2012, an amended complaint with a new plaintiff was filed against us, but no longer asserted claims against IBM. The amended complaint asserted the same causes of action and sought the same relief as the earlier complaint. On June 18, 2012, we filed a motion to dismiss the amended complaint. | |
The San Francisco County Superior Court proceeding was instituted on March 28, 2011, and is brought on behalf of a putative class of California residents who received the written notification, and seeks to state similar claims against us, as well as claims for violation of California's Unfair Competition Law, and seeks similar relief. We moved to compel arbitration of the two named plaintiffs’ claims. The court granted our motion as to one of the named plaintiffs and denied it as to the other. We have appealed the latter ruling, but subsequently dismissed the appeal. Thereafter, the plaintiff as to whom our motion to compel arbitration was granted filed a petition for a writ of mandate with the California Court of Appeal seeking review of that ruling. On July 9, 2012, the Court of Appeal issued a peremptory writ of mandate directing the Superior Court to vacate its order granting the motion to compel arbitration and to enter an order denying the motion to compel. | |
The Sacramento County Superior Court proceeding was instituted on April 3, 2012, and is brought on behalf of a putative class of California members whose information was contained on the unaccounted for drives. The action contains the same claims and seeks the same relief as the case pending in the Eastern District of California. On June 18, 2012, we filed a demurrer seeking dismissal of this complaint. | |
In July 2013, we entered into a settlement agreement (the “Settlement Agreement”) with the plaintiffs in the three putative class actions described above. On October 23, 2013, counsel for the named plaintiffs filed a motion for preliminary approval of the Settlement Agreement with the Sacramento County Superior Court. The Court granted that motion on November 21, 2013. On June 23, 2014, the court granted final approval of the settlement. As a result of the settlement, each of the three putative class actions described above will be dismissed with prejudice, and all class members who did not opt out will release all claims they may have related to or arising from the unaccounted-for server drives. Under the terms of the Settlement Agreement, which covers all individuals whose personal information was identified as being on the unaccounted-for server drives, class members who did not previously accept our offer of the credit monitoring and related services described above are eligible to receive such credit monitoring and related services for a period of two years at no cost to them. Class members who previously accepted our original offer are eligible to receive one additional year of such services. In addition, under the Settlement Agreement, class members are eligible to receive reimbursement for certain unreimbursed losses arising from identity theft during a specified time period, up to a cap of $50,000 per class member, and $2 million in the aggregate. The Settlement Agreement also provides that we will continue our ongoing activities to enhance our information security measures, including the encryption of data at rest on our servers and storage area networks. We are also responsible for the payment of the court's award of fees and expenses to plaintiffs' counsel in the amount of approximately $2.3 million. Finally, we will be responsible for the costs of administering the Settlement Agreement. We do not expect that the terms of the Settlement Agreement will have a material impact on our consolidated financial statements. | |
We also have been informed that the incident involving the unaccounted-for server drives is under investigation by the California Department of Managed Health Care ("DMHC"). | |
Miscellaneous Proceedings | |
In the ordinary course of our business operations, we are subject to periodic reviews, investigations and audits by various federal and state regulatory agencies, including, without limitation, CMS, DMHC, the Office of Civil Rights of HHS and state departments of insurance, with respect to our compliance with a wide variety of rules and regulations applicable to our business, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, rules relating to pre-authorization penalties, payment of out-of-network claims, timely review of grievances and appeals, and timely and accurate payment of claims, any one of which may result in remediation of certain claims, contract termination, the loss of licensure or the right to participate in certain programs, and the assessment of regulatory fines or penalties, which could be substantial. From time to time, we receive subpoenas and other requests for information from, and are subject to investigations by, such regulatory agencies, as well as from state attorneys general. There also continues to be heightened review by regulatory authorities of, and increased litigation regarding, the health care industry’s business practices, including, without limitation, information privacy, premium rate increases, utilization management, appeal and grievance processing, rescission of insurance coverage and claims payment practices. | |
In addition, in the ordinary course of our business operations, we are party to various other legal proceedings, including, without limitation, litigation arising out of our general business activities, such as contract disputes, employment litigation, wage and hour claims, including, without limitation, cases involving allegations of misclassification of employees and/or failure to pay for off-the-clock work, real estate and intellectual property claims, claims brought by members or providers seeking coverage or additional reimbursement for services allegedly rendered to our members, but which allegedly were denied, underpaid, not timely paid or not paid, and claims arising out of the acquisition or divestiture of various business units or other assets. We also are subject to claims relating to the performance of contractual obligations to providers, members, employer groups and others, including the alleged failure to properly pay claims and challenges to the manner in which we process claims, and claims alleging that we have engaged in unfair business practices. In addition, we are subject to claims relating to information security incidents and breaches, reinsurance agreements, rescission of coverage and other types of insurance coverage obligations and claims relating to the insurance industry in general. We are, and may be in the future, subject to class action lawsuits brought against various managed care organizations and other class action lawsuits. | |
We intend to vigorously defend ourselves against the miscellaneous legal and regulatory proceedings to which we are currently a party; however, these proceedings are subject to many uncertainties. In some of the cases pending against us, substantial non-economic or punitive damages are being sought. | |
Potential Settlements | |
We regularly evaluate legal proceedings and regulatory matters pending against us, including those described above in this Note 8, to determine if settlement of such matters would be in the best interests of the Company and its stockholders. The costs associated with any settlement of the various legal proceedings and regulatory matters to which we are or may be subject from time to time, including those described above in this Note 8, could be substantial and, in certain cases, could result in a significant earnings charge or impact on our cash flow in any particular quarter in which we enter into a settlement agreement and could have a material adverse effect on our financial condition, results of operations, cash flow and/or liquidity and may affect our reputation. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
INCOME TAXES | |
The effective income tax rate from operations was (22.3)% and 35.6% for the three months ended June 30, 2014 and 2013, respectively, and 6.9% and 37.3% for the six months ended June 30, 2014 and 2013, respectively. For the three and six months ended June 30, 2014, our effective tax rate was impacted by the health insurer fee which became effective under the ACA. The fee is not deductible for federal income tax purposes and in many state jurisdictions. The impacts of the non-deductibility of the health insurer fee for the three and six months ended June 30, 2014 were increases to our effective tax rate of 13.7 and 14.0 percentage points, respectively. The health insurer fee is effective for calendar years beginning after December 31, 2013 and is payable in 2014. See Note 2, under the heading "Accounting for Certain Provisions of the ACA—Premium-based Fee on Health Insurers" for additional information regarding the health insurer fee. Other items which cause our effective tax rate to differ from the statutory federal tax rate of 35% for the three and six months ended June 30, 2014 include state income taxes, tax-exempt interest and non-deductible compensation. | |
During the three months ended June 30, 2014, we recorded a $72.6 million tax benefit, net of adjustments to our reserve for uncertain tax benefits, as a result of a worthless stock loss. The loss was incurred with respect to the stock of Health Net of the Northeast, Inc., the former parent company of subsidiaries sold to United Health Group in 2009. The amount and character of the loss could be challenged by the taxing authorities, and as such, we increased our reserve for uncertain tax positions by $11.0 million as of June 30, 2014. |
Subsequent_Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Event | ' |
SUBSEQUENT EVENT | |
On August 6, 2014, we entered into a letter of intent with Cognizant Technology Solutions ("Cognizant") for a comprehensive services agreement. The consummation of the proposed transaction is subject to the completion of final, definitive documentation, which we expect to negotiate and execute before the end of the third quarter of 2014, as well as subsequent required regulatory approval. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policy) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash equivalents include all highly liquid investments with maturity of three months or less when purchased. We had no checks outstanding, net of deposits as of June 30, 2014 and December 31, 2013. Checks outstanding, net of deposits are classified as accounts payable and other liabilities in the consolidated balance sheets and the changes are reflected in the line item net increase (decrease) in checks outstanding, net of deposits within the cash flows from financing activities in the consolidated statements of cash flows. | |||||||||||||||||
Investments | ' | ||||||||||||||||
Investments | |||||||||||||||||
Investments classified as available-for-sale, which consist primarily of debt securities, are stated at fair value. Unrealized gains and losses are excluded from earnings and reported as other comprehensive income, net of income tax effects. The cost of investments sold is determined in accordance with the specific identification method and realized gains and losses are included in net investment income. We analyze all debt investments that have unrealized losses for impairment consideration and assess the intent to sell such securities. If such intent exists, impaired securities are considered other-than-temporarily impaired. Management also assesses if we may be required to sell the debt investments prior to the recovery of amortized cost, which may also trigger an impairment charge. If securities are considered other-than-temporarily impaired based on intent or ability, we assess whether the amortized costs of the securities can be recovered. If management anticipates recovering an amount less than the amortized cost of the securities, an impairment charge is calculated based on the expected discounted cash flows of the securities. Any deficit between the amortized cost and the expected cash flows is recorded through earnings as a charge. All other temporary impairment changes are recorded through other comprehensive income. During the three and six months ended June 30, 2014 and 2013, respectively, no losses were recognized from other-than-temporary impairments. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The estimated fair value amounts of cash equivalents, investments available-for-sale, premiums and other receivables, notes receivable and notes payable have been determined by using available market information and appropriate valuation methodologies. The carrying amounts of cash equivalents approximate fair value due to the short maturity of those instruments. Fair values for debt and equity securities are generally based upon quoted market prices. Where quoted market prices were not readily available, fair values were estimated using valuation methodologies based on available and observable market information. Such valuation methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly traded companies in a similar line of business, and reviewing the underlying financial performance including estimating discounted cash flows. The carrying value of premiums and other receivables, long-term notes receivable and nonmarketable securities approximates the fair value of such financial instruments. The fair value of notes payable is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt with the same remaining maturities. The fair value of our fixed-rate borrowings was $440.5 million and $434.5 million as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014 and December 31, 2013, the fair value of our variable-rate borrowings under our revolving credit facility was $100.0 million and $100.0 million, respectively. The fair value of our fixed-rate borrowings was determined using the quoted market price, which is a Level 1 input in the fair value hierarchy. The fair value of our variable-rate borrowings was estimated to equal the carrying value because the interest rates paid on these borrowings were based on prevailing market rates. Since the pricing inputs are other than quoted prices and fair value is determined using an income approach, our variable-rate borrowings are classified as a Level 2 in the fair value hierarchy. See Notes 6 and 7 for additional information regarding our financing arrangements and fair value measurements, respectively. | |||||||||||||||||
Health Plan Services Revenue Recognition | ' | ||||||||||||||||
Health Plan Services Revenue Recognition | |||||||||||||||||
Health plan services premium revenues generally include HMO, POS and PPO premiums from employer groups and individuals and from Medicare recipients who have purchased supplemental benefit coverage, for which premiums are based on a predetermined prepaid fee, Medicaid revenues based on multi-year contracts to provide care to Medicaid recipients, and revenue under Medicare risk contracts to provide care to enrolled Medicare recipients. Revenue is recognized in the month in which the related enrollees are entitled to health care services. Premiums collected in advance of the month in which enrollees are entitled to health care services are recorded as unearned premiums. Under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), commercial health plans with medical loss ratios on fully insured products, as calculated as set forth in the ACA, that fall below certain targets are required to rebate ratable portions of their premiums annually. We classify the estimated rebates, if any, as a reduction to Health plan services premiums in our consolidated statement of operations. In addition, certain provisions of the ACA became effective January 1, 2014, including an annual insurance industry premium-based assessment and the establishment of federally facilitated, state and federal partnership or state-based health insurance exchanges coupled with premium stabilization programs including a three-year commercial reinsurance fee. See below in this Note 2 under the heading "Accounting for Certain Provisions of the ACA" for additional information. | |||||||||||||||||
Our Medicare Advantage contracts are with the Centers for Medicare & Medicaid Services ("CMS"). CMS deploys a risk adjustment model which apportions premiums paid to all health plans according to health severity and certain demographic factors. This risk adjustment model results in periodic changes in our risk factor adjustment scores for certain diagnostic codes, which then result in changes to our health plan services premium revenues. Because the recorded revenue is based on our best estimate at the time, the actual payment we receive from CMS for risk adjustment reimbursement settlements may be materially different than the amounts we have initially recognized on our financial statements. The change in our estimate for the risk adjustment revenue related to prior years in the three and six months ended June 30, 2014 increased health plan services premium revenues by $4.4 million and $20.0 million, respectively. The change in our estimate for the risk adjustment revenue related to prior years in the three and six months ended June 30, 2013 was not significant. | |||||||||||||||||
Our revenue from the state Medicaid program in California ("Medi-Cal"), including seniors and persons with disabilities ("SPD") programs, and other state-sponsored health programs are subject to certain retroactive rate adjustments based on expected and actual health care costs. For the three and six months ended June 30, 2014, retroactive rate adjustments for our SPD and non-SPD members for periods prior to 2014 were not significant. For the three months ended June 30, 2013, we had no premium revenues recognized as a result of retroactive rate adjustments. For the six months ended June 30, 2013, we recognized $42.2 million of premium revenue as a result of retroactive rate adjustments for our SPD and non-SPD members for periods prior to 2013. | |||||||||||||||||
In addition, our state-sponsored health care programs in California, including Medi-Cal, SPD programs, the dual eligibles demonstration portion of the California Coordinated Care Initiative that began in April 2014 and Medicaid expansion under federal health care reform, are subject to retrospective premium adjustments based on certain risk sharing provisions included in our state-sponsored health plans rate settlement agreement described below. We estimate and recognize the retrospective adjustments to premium revenue based upon experience to date under our state-sponsored health care programs contracts. The retrospective premium adjustment is recorded as an adjustment to premium revenue and other noncurrent assets. | |||||||||||||||||
On November 2, 2012, we entered into a state-sponsored health plans rate settlement agreement (the "Agreement") with the California Department of Health Care Services ("DHCS") to settle historical rate disputes with respect to our participation in the Medi-Cal program, for rate years prior to the 2011–2012 rate year. As part of the Agreement, DHCS agreed, among other things, to (1) an extension of all of our Medi-Cal managed care contracts existing as of the date of the Agreement for an additional five years from their then existing expiration dates; (2) retrospective premium adjustments on all of our state-sponsored health care programs, including Medi-Cal, SPDs, our participation in the dual eligibles demonstration portion of the California Coordinated Care Initiative that began in April 2014 and Medi-Cal expansion populations (our “state-sponsored health care programs”), which are tracked in a settlement account as discussed in more detail below; and (3) compensate us should DHCS terminate any of our state-sponsored health care programs contracts early. | |||||||||||||||||
Effective January 1, 2013, the settlement account (the "Account") was established with an initial balance of zero. The balance in the Account is adjusted annually to reflect retrospective premium adjustments for each calendar year (referenced in the Agreement as a "deficit" or "surplus"). A deficit or surplus will result to the extent our actual pretax margin (as defined in the Agreement) on our state-sponsored health care programs is below or above a predetermined pretax margin target. The amount of any deficit or surplus is calculated as described in the Agreement. Cash settlement of the Account will occur on December 31, 2019, except that under certain circumstances the DHCS may extend the final settlement for up to three additional one-year periods (as may be extended, the "Term"). In addition, the DHCS will make an interim partial settlement payment to us if it terminates any of our state-sponsored health care programs contracts early. Upon expiration of the Term, if the Account is in a surplus position, then no monies are owed to either party. If the Account is in a deficit position, then DHCS shall pay the amount of the deficit to us. In no event, however, shall the amount paid by DHCS to us under the Agreement exceed $264 million or be less than an alternative minimum amount as defined in the Agreement. | |||||||||||||||||
We estimate and recognize the retrospective adjustments to premium revenue based upon experience to date under our state-sponsored health care programs contracts. The retrospective premium adjustment is recorded as an adjustment to premium revenue and other noncurrent assets. As of June 30, 2014, we had calculated and recorded a deficit of $9.6 million, net of a valuation discount in the amount of $0.6 million (see Note 7), reflecting our cumulative estimated retrospective premium adjustment to the Account based on our actual pretax margin for the period beginning on January 1, 2013 and ending on June 30, 2014. As of December 31, 2013, we had calculated and recorded a deficit of $62.9 million, net of a valuation discount in the amount of $4.4 million, reflecting our estimated retrospective premium adjustment to the Account based on our actual pretax margin for the year ended December 31, 2013. As a result of the change in the deficit calculated during the three and six months ended June 30, 2014, our health plan services premium revenue was reduced by $40.4 million and $53.3 million for the three and six months ended June 30, 2014, respectively. For the three and six months ended June 30, 2013, we had recorded increases in our health plan services premium revenue of $14.6 million and $35.4 million, respectively, as a result of the deficit calculated under the state settlement agreement as of June 30, 2013. | |||||||||||||||||
Health Plan Services Health Care Cost | ' | ||||||||||||||||
Health Plan Services Health Care Cost | |||||||||||||||||
The cost of health care services is recognized in the period in which services are provided and includes an estimate of the cost of services that have been incurred but not yet reported. Such costs include payments to primary care physicians, specialists, hospitals and outpatient care facilities, and the costs associated with managing the extent of such care. Our health care cost also can include from time to time remediation of certain claims as a result of periodic reviews by various regulatory agencies. | |||||||||||||||||
We estimate the amount of the provision for health care service costs incurred but not yet reported ("IBNR") in accordance with GAAP and using standard actuarial developmental methodologies based upon historical data including the period between the date services are rendered and the date claims are received and paid, denied claim activity, expected medical cost inflation, seasonality patterns and changes in membership, among other things. | |||||||||||||||||
Our IBNR best estimate also includes a provision for adverse deviation, which is an estimate for known environmental factors that are reasonably likely to affect the required level of IBNR reserves. This provision for adverse deviation is intended to capture the potential adverse development from known environmental factors such as our entry into new geographical markets, changes in our geographic or product mix, the introduction of new customer populations, variation in benefit utilization, disease outbreaks, changes in provider reimbursement, fluctuations in medical cost trend, variation in claim submission patterns and variation in claims processing speed and payment patterns, changes in technology that provide faster access to claims data or change the speed of adjudication and settlement of claims, variability in claims inventory levels, non-standard claims development, and/or exceptional situations that require judgmental adjustments in setting the reserves for claims. | |||||||||||||||||
We consistently apply our IBNR estimation methodology from period to period. Our IBNR best estimate is made on an accrual basis and adjusted in future periods as required. Any adjustments to the prior period estimates are included in the current period. As additional information becomes known to us, we adjust our assumptions accordingly to change our estimate of IBNR. Therefore, if moderately adverse conditions do not occur, evidenced by more complete claims information in the following period, then our prior period estimates will be revised downward, resulting in favorable development. However, any favorable prior period reserve development would increase current period net income only to the extent that the current period provision for adverse deviation is less than the benefit recognized from the prior period favorable development. If moderately adverse conditions occur and are more acute than we estimated, then our prior period estimates will be revised upward, resulting in unfavorable development, which would decrease current period net income. For the three and six months ended June 30, 2014, we had $3.7 million and $26.6 million, respectively, in net favorable reserve developments related to prior years. The amount for the three months ended June 30, 2014 consisted of $1.1 million in unfavorable prior year development primarily due to the existence of moderately adverse conditions and a release of $4.8 million of the provision for adverse deviation held at December 31, 2013. The amount for the six months ended June 30, 2014 consisted of $24.2 million in unfavorable prior year development primarily due to the existence of moderately adverse conditions and a release of $50.8 million of the provision for adverse deviation held at December 31, 2013. We believe that the $1.1 million and $24.2 million unfavorable developments for the three and six months ended June 30, 2014, respectively, were due to unanticipated benefit utilization in our commercial business arising from dates of service in the fourth quarter of 2013 as a result of an uncertain environment related to the ACA. As part of our best estimate for IBNR, the provision for adverse deviation recorded as of June 30, 2014 and December 31, 2013 were $67.1 million and $53.4 million, respectively. For the three and six months ended June 30, 2013, the reserve developments related to prior years, when considered together with the provision for adverse deviation recorded as of June 30, 2013, did not have a material impact on our operating results or financial condition. | |||||||||||||||||
The majority of the IBNR reserve balance held at each quarter-end is associated with the most recent months' incurred services because these are the services for which the fewest claims have been paid. The degree of uncertainty in the estimates of incurred claims is greater for the most recent months' incurred services. Revised estimates for prior periods are determined in each quarter based on the most recent updates of paid claims for prior periods. Estimates for service costs incurred but not yet reported are subject to the impact of changes in the regulatory environment, economic conditions, changes in claims trends, and numerous other factors. Given the inherent variability of such estimates, the actual liability could differ significantly from the amounts estimated. | |||||||||||||||||
Concentrations of Credit Risk | ' | ||||||||||||||||
Concentrations of Credit Risk | |||||||||||||||||
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, investments and premiums receivable. All cash equivalents and investments are managed within established guidelines, which provide us diversity among issuers. Concentrations of credit risk with respect to premiums receivable are limited due to the large number of payers comprising our customer base. The federal government is the primary customer of our Government Contracts reportable segment with fees and premiums associated with this customer accounting for approximately 97% of our Government Contracts revenue. In addition, the federal government is a significant customer of our Western Region Operations reportable segment as a result of our contract with CMS for coverage of Medicare-eligible individuals. Furthermore, our Medicaid revenue is currently derived from our participation in Medi-Cal through our relationship with DHCS, and beginning in the fourth quarter of 2013, in Arizona through our contract with the Arizona Health Care Cost Containment System ("AHCCCS"). The DHCS is a significant customer of our Western Region Operations reportable segment. | |||||||||||||||||
Comprehensive Income | ' | ||||||||||||||||
Comprehensive Income | |||||||||||||||||
Comprehensive income includes all changes in stockholders’ equity (except those arising from transactions with stockholders) and includes net income (loss), net unrealized appreciation (depreciation) after tax on investments available-for-sale and prior service cost and net loss related to our defined benefit pension plan. | |||||||||||||||||
Our accumulated other comprehensive income (loss) for the three and six months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Unrealized Gains (Losses) on investments available-for-sale | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income (loss) | |||||||||||||||
Three Months Ended June 30: | (Dollars in millions) | ||||||||||||||||
Balance as of April 1, 2013 | $ | 20.9 | $ | (10.6 | ) | $ | 10.3 | ||||||||||
Other comprehensive loss before reclassifications | (42.6 | ) | — | (42.6 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (3.7 | ) | 0.4 | (3.3 | ) | ||||||||||||
Other comprehensive (loss) income for the three months ended June 30, 2013 | (46.3 | ) | 0.4 | (45.9 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of April 1, 2014 | $ | (10.0 | ) | $ | (4.5 | ) | $ | (14.5 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 15.2 | — | 15.2 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (1.3 | ) | 0.1 | (1.2 | ) | ||||||||||||
Other comprehensive income for the three months ended June 30, 2014 | 13.9 | 0.1 | 14 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
Six Months Ended June 30: | |||||||||||||||||
Balance as of January 1, 2013 | $ | 38 | $ | (11.0 | ) | $ | 27 | ||||||||||
Other comprehensive (loss) income before reclassifications | (48.5 | ) | — | (48.5 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (14.9 | ) | 0.8 | (14.1 | ) | ||||||||||||
Other comprehensive (loss) income for the six months ended June 30, 2013 | (63.4 | ) | 0.8 | (62.6 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of January 1, 2014 | $ | (28.3 | ) | $ | (4.6 | ) | $ | (32.9 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 33.7 | — | 33.7 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (1.5 | ) | 0.2 | (1.3 | ) | ||||||||||||
Other comprehensive income for the six months ended June 30, 2014 | 32.2 | 0.2 | 32.4 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
The following table shows reclassifications out of accumulated other comprehensive income and the affected line items in the consolidated statements of operations for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
Three months ended June 30, | Six months ended | Affected line item in the Consolidated Statements of Operations | |||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Unrealized gains on investments available-for-sale | $ | 1.9 | $ | 5.7 | $ | 2.2 | $ | 23 | Net investment income | ||||||||
1.9 | 5.7 | 2.2 | 23 | Total before tax | |||||||||||||
0.6 | 2 | 0.7 | 8.1 | Tax expense | |||||||||||||
1.3 | 3.7 | 1.5 | 14.9 | Net of tax | |||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||
Prior-service cost | (0.1 | ) | — | (0.2 | ) | — | (a) | ||||||||||
Actuarial gains (losses) | — | (0.7 | ) | (0.1 | ) | (1.3 | ) | (a) | |||||||||
(0.1 | ) | (0.7 | ) | (0.3 | ) | (1.3 | ) | Total before tax | |||||||||
— | (0.3 | ) | (0.1 | ) | (0.5 | ) | Tax benefit | ||||||||||
(0.1 | ) | (0.4 | ) | (0.2 | ) | (0.8 | ) | Net of tax | |||||||||
Total reclassifications for the period | $ | 1.2 | $ | 3.3 | $ | 1.3 | $ | 14.1 | Net of tax | ||||||||
_________ | |||||||||||||||||
(a) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic earnings per share excludes dilution and reflects net income divided by the weighted average shares of common stock outstanding during the periods presented. Diluted earnings per share is based upon the weighted average shares of common stock and dilutive common stock equivalents (this reflects the potential dilution that could occur if stock options were exercised and restricted stock units ("RSUs") and performance share units ("PSUs") were vested) outstanding during the periods presented. | |||||||||||||||||
The inclusion or exclusion of common stock equivalents arising from stock options, RSUs and PSUs in the computation of diluted earnings per share is determined using the treasury stock method. For the three and six months ended June 30, 2014, respectively, 968,000 shares and 1,044,000 shares of dilutive common stock equivalents were outstanding and were included in the computation of diluted earnings per share. For the three and six months ended June 30, 2013, respectively, 718,000 shares and 849,000 shares of dilutive common stock equivalents were outstanding and were included in the computation of diluted earnings per share. | |||||||||||||||||
For the three and six months ended June 30, 2014, respectively, an aggregate of 782,000 shares and 786,000 shares of common stock equivalents were considered anti-dilutive and were not included in the computation of diluted earnings per share. For the three and six months ended June 30, 2013, respectively, an aggregate of 1,075,000 shares and 1,630,000 shares of common stock equivalents were considered anti-dilutive and were not included in the computation of diluted earnings per share. Stock options expire at various times through November 2018. | |||||||||||||||||
In May 2011, our Board of Directors authorized a stock repurchase program for the repurchase of up to $300 million of our outstanding common stock (our "stock repurchase program"). On March 8, 2012, our Board of Directors approved a $323.7 million increase to our stock repurchase program. As of December 31, 2013 and June 30, 2014, the remaining authorization under our stock repurchase program was $280.0 million. See Note 5 for more information regarding our stock repurchase program. | |||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||||||
We performed our annual impairment test on our goodwill and other intangible assets as of June 30, 2014 for our Western Region Operations reporting unit and also re-evaluated the useful lives of our other intangible assets. No goodwill impairment was identified. We also determined that the estimated useful lives of our other intangible assets properly reflected the current estimated useful lives. | |||||||||||||||||
The carrying amount of goodwill by reporting unit is as follows: | |||||||||||||||||
Western | Total | ||||||||||||||||
Region | |||||||||||||||||
Operations | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Balance as of December 31, 2013 | $ | 565.9 | $ | 565.9 | |||||||||||||
Balance as of June 30, 2014 | $ | 565.9 | $ | 565.9 | |||||||||||||
Due to the many variables inherent in the estimation of a business’s fair value and the relative size of recorded goodwill, changes in assumptions may have a material effect on the results of our impairment test. The discounted cash flows and market participant valuations (and the resulting fair value estimates of the Western Region Operations reporting unit) are sensitive to changes in assumptions including, among others, certain valuation and market assumptions, our ability to adequately incorporate into our premium rates the future costs of premium-based assessments imposed by the ACA, and assumptions related to the achievement of certain administrative cost reductions and the profitable implementation of California's Coordinated Care Initiative, which includes the dual eligibles demonstration. Changes to any of these assumptions could cause the fair value of our Western Region Operations reporting unit to be below its carrying value. As of June 30, 2014 and June 30, 2013, the ratio of the fair value of our Western Region Operations reporting unit to its carrying value was approximately 190% and 149%, respectively. | |||||||||||||||||
The intangible assets that continue to be subject to amortization using the straight-line method over their estimated lives are as follows: | |||||||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||||||
Carrying | Amortization | Balance | Average Life | ||||||||||||||
Amount | (in years) | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
As of June 30, 2014: | |||||||||||||||||
Provider networks | $ | 41.5 | $ | (36.3 | ) | $ | 5.2 | 18.9 | |||||||||
Customer relationships and other | 29.5 | (21.5 | ) | 8 | 11.1 | ||||||||||||
$ | 71 | $ | (57.8 | ) | $ | 13.2 | |||||||||||
As of December 31, 2013: | |||||||||||||||||
Provider networks | $ | 40.5 | $ | (35.7 | ) | $ | 4.8 | 19.4 | |||||||||
Customer relationships and other | 29.5 | (20.5 | ) | 9 | 11.1 | ||||||||||||
$ | 70 | $ | (56.2 | ) | $ | 13.8 | |||||||||||
Estimated annual pretax amortization expense for other intangible assets for each of the next five years ending December 31 is as follows (dollars in millions): | |||||||||||||||||
Year | Amount | ||||||||||||||||
2014 | $ | 3 | |||||||||||||||
2015 | 2.8 | ||||||||||||||||
2016 | 2.2 | ||||||||||||||||
2017 | 2.2 | ||||||||||||||||
2018 | 2.1 | ||||||||||||||||
Restricted Assets | ' | ||||||||||||||||
Restricted Assets | |||||||||||||||||
We and our consolidated subsidiaries are required to set aside certain funds that may only be used for certain purposes pursuant to state regulatory requirements. We have discretion as to whether we invest such funds in cash and cash equivalents or other investments. As of June 30, 2014 and December 31, 2013, the restricted cash and cash equivalents balances totaled $1.8 million and $5.3 million, respectively, and are included in other noncurrent assets. Investment securities held by trustees or agencies were $23.8 million and $23.8 million as of June 30, 2014 and December 31, 2013, respectively, and are included in investments available-for-sale. | |||||||||||||||||
Accounting for Certain Provisions of the ACA | ' | ||||||||||||||||
Accounting for Certain Provisions of the ACA | |||||||||||||||||
Premium-based Fee on Health Insurers | |||||||||||||||||
The ACA mandated significant reforms to various aspects of the U.S. health insurance industry. Among other things, the ACA imposes an annual premium-based fee on health insurers (the "health insurance industry fee") for each calendar year beginning on or after January 1, 2014 which is not deductible for federal income tax purposes and in many state jurisdictions. The fee will be levied based on a ratio of an insurer's net health insurance premiums written for the previous calendar year compared to the U.S. health insurance industry total. We are required to estimate a liability for our portion of the health insurance industry fee and record it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized ratably to expense over the calendar year that it is payable. | |||||||||||||||||
We will pay the federal government approximately $148 million in September 2014 for our portion of the health insurance industry fee in accordance with the ACA. We have recorded a liability for this fee in other current liabilities with an offsetting deferred cost in other current assets in our consolidated financial statements. Our general and administrative expense for the three and six months ended June 30, 2014 includes amortization of the deferred cost of $37.8 million and $74.1 million, respectively. The balance of the remaining deferred cost asset was approximately $74.1 million as of June 30, 2014. | |||||||||||||||||
Public Health Insurance Exchanges | |||||||||||||||||
The ACA requires the establishment of state-based, state and federal partnership or federally facilitated health insurance exchanges ("exchanges") where individuals and small groups may purchase health insurance coverage under regulations established by U.S. Department of Health and Human Services ("HHS"). We currently participate in exchanges in Arizona, California and Oregon. Effective January 1, 2014, the ACA includes permanent and temporary premium stabilization provisions for transitional reinsurance, permanent risk adjustment, and temporary risk corridors (collectively referred to as the "3Rs"), which are applicable to those insurers participating inside, and in some cases outside, of the exchanges. | |||||||||||||||||
Member Related Components | |||||||||||||||||
Member Premium—We receive a monthly premium from members. The member premium, which is fixed for the entire plan year, is recognized evenly over the contract period and reported as part of health plan services premium revenue. | |||||||||||||||||
Premium Subsidy—For qualifying low-income members, HHS will reimburse us, on the member’s behalf, some or all of the monthly member premium depending on the member’s income level in relation to the Federal Poverty Level. We recognize the premium subsidy evenly over the contract period and report it as part of health plan services premium revenue. | |||||||||||||||||
Cost Sharing Subsidy—For qualifying low-income members, HHS will reimburse us, on the member’s behalf, some or all of a member’s cost sharing amounts (e.g., deductible, co-pay/coinsurance). The amount paid for the member by HHS is dependent on the member’s income level in relation to the Federal Poverty Level. We receive prospective payments on a monthly basis, and they represent a cost reimbursement that is finalized and settled after the end of the year. The cost sharing subsidy is accounted for as deposit accounting. | |||||||||||||||||
3Rs: Reinsurance, Risk Adjustment and Risk Corridor | |||||||||||||||||
Our accounting estimates are impacted as a result of the provisions of the ACA, including the 3Rs. The substantial influx of previously uninsured individuals into the new health insurance exchanges under the ACA could make it more difficult for health insurers, including us, to establish pricing accurately, at least during the early years of the exchanges. The 3Rs are intended to mitigate some of the risks around pricing and lack of information surrounding the previously uninsured. We will experience premium adjustments to our health plan services premium revenues and health plan services expenses based on changes to our estimated amounts related to the 3Rs, which may be significant at times. Such estimated amounts may differ materially from actual amounts ultimately received or paid under the provisions, which may have a material impact on our consolidated results of operations and financial condition. | |||||||||||||||||
Reinsurance—The transitional reinsurance program requires us to make reinsurance contributions for calendar years 2014 through 2016 to a state or HHS established reinsurance entity based on a national contribution rate per covered member as determined by HHS. While all commercial medical plans, including self-funded plans, are required to fund the reinsurance entity, only fully-insured non-grandfathered plans in the individual commercial market will be eligible for recoveries if individual claims exceed a specified threshold. Accordingly, we account for transitional reinsurance contributions associated with all commercial medical health plans other than non-grandfathered individual plans as an assessment in general and administrative expenses in our consolidated statement of income. We account for contributions made by individual commercial plans which are subject to recoveries as contra-health plan services premium revenue, and we account for any recoveries as contra-health plan services expense in our consolidated statements of income with a corresponding current or long-term receivable or payable. We recorded $77.5 million and $110.6 million of reinsurance recovery as contra-health plan services expense for the three and six months ended June 30, 2014, respectively, and the balance included in other receivables as of June 30, 2014 was $110.6 million. | |||||||||||||||||
Risk Adjustment—The risk adjustment provision applies to individual and small group business both within and outside the exchange and requires measurement of the relative health status risk of each insurer’s pool of insured enrollees in a given market. The risk adjustment provision then operates to transfer funds from insurers whose pools of insured enrollees have a lower-than-average risk scores to those insurers whose pools have greater-than-average risk scores. Our estimate for the risk adjustment incorporates our pricing and demographic assumptions, the distribution of our newly enrolled membership in terms of geography, metal tiers, and age bands, and what we believe are the market averages in terms of premium and risk scores. As part of our ongoing estimation process, we consider information as it becomes available at interim dates along with our actuarially determined expectations, and we update our estimates incorporating such information as appropriate. | |||||||||||||||||
We estimate and recognize adjustments to our health plan services premium revenue for the risk adjustment provision by projecting our ultimate premium for the calendar year. Such estimated calendar year amounts are recognized ratably during the year and are revised each period to reflect current experience. We record receivables or payables and classify the amounts as current or long-term in the consolidated balance sheets based on the timing of expected settlement. Our risk adjustment estimate was $30.1 million for each of the three and six months ended June 30, 2014 and was recorded as a reduction to health plan services premiums and as a corresponding payable included in accounts payable and other liabilities. | |||||||||||||||||
Risk Corridor—The temporary risk corridor program will be in place for three years and applies to individual and small group business operating both inside and outside of the exchanges. The risk corridor provisions limit health insurers' gains and losses by comparing allowable medical costs to a target amount, each defined/prescribed by HHS, and sharing the risk for allowable costs with the federal government. Variances from the target exceeding certain thresholds may result in HHS making additional payments to us or require us to make payments to HHS. | |||||||||||||||||
We estimate and recognize adjustments to our health plan services premium revenue for the risk corridor provision by projecting our ultimate premium for the calendar year. Such estimated calendar year amounts are recognized ratably during the year and are revised each period to reflect current experience, including changes in risk adjustment and reinsurance recoverables. We record receivables or payables and classify the amounts as current or long-term in the consolidated balance sheets based on the timing of expected settlement. For the three and six months ended June 30, 2014,we recorded $18.6 million and $27.3 million, respectively, of increases to risk corridor receivable as health plan services premium revenue, and the balance in other noncurrent assets as of June 30, 2014 was $27.3 million. | |||||||||||||||||
The final reconciliation and settlement with HHS of the premium and cost sharing subsidies and the amounts related to the 3Rs for the current year will be completed in the following year with HHS. | |||||||||||||||||
Section 1202 of ACA | |||||||||||||||||
Section 1202 of the ACA mandates increases in Medicaid payment rates for primary care in calendar years 2013 and 2014. The final rule had been in effect since January 1, 2013. The provisions of section 1202 impact our 1.4 million Medi-Cal members in California and 45,000 Medicaid members in Arizona. DHCS, the agency that regulates the Medi-Cal program, initially implemented a reimbursement methodology with no underwriting risk to the managed care plans ("MCPs") in 2013. Subsequently, DHCS changed the reimbursement methodology during the second quarter of 2014, and this change transferred full underwriting risk to the MCPs. | |||||||||||||||||
For the periods prior to this reimbursement methodology change, i.e., the year ended December 31, 2013 and the three months ended March 31, 2014, we accounted for the provisions of section 1202 on an administrative services only basis since it transferred no underwriting risk to the MCPs, and recorded the receipts and payments on a net basis. | |||||||||||||||||
Following the change in reimbursement methodology, we have full underwriting risk for 2013, including both utilization and unit cost risk. Accordingly, for the second quarter of 2014, with respect to our Medi-Cal business, we have: | |||||||||||||||||
• | Reversed $7.9 million previously recorded as administrative services fees and other income in 2013 and for the three months ended March 31, 2014. | ||||||||||||||||
• | Recorded payments on a grossed-up basis by recording Medi-Cal payments received as premium revenue and estimated Medi-Cal claim payments as health care costs (incurred claims), each via retroactive adjustments to premium revenues and health care costs. See the Three Months Ended June 30, 2014 - Full Risk column in the table below. | ||||||||||||||||
• | Recorded retrospective premium revenue adjustments based upon the state settlement agreement (see Note 2 - "Health Plan Services Revenue Recognition" above). | ||||||||||||||||
The financial statement impact of the section 1202 reimbursement methodology change is summarized in the table below. We have not recorded any premium revenue or health care costs for 2014 incurred services as we do not have sufficient information to make a reasonable estimate as of June 30, 2014. | |||||||||||||||||
Recorded In | |||||||||||||||||
Year Ended December 31, 2013 | Three Months Ended March 31, 2014 | Three Months Ended June 30, 2014 | |||||||||||||||
(Dollars in millions) | No Risk | No Risk | Full Risk | ||||||||||||||
Health plan services premiums | $ | 4.4 | $ | — | $ | 154.7 | |||||||||||
Health plan services expenses | — | — | 144 | ||||||||||||||
General and administrative expenses | 4.4 | — | — | ||||||||||||||
Administrative services fees and other income | 6.5 | 1.4 | (7.9 | ) | |||||||||||||
Pretax income | $ | 6.5 | $ | 1.4 | $ | 2.8 | |||||||||||
Recently Issued Accounting Pronouncement | ' | ||||||||||||||||
Recently Issued Accounting Pronouncement | |||||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. To meet the objectives of the new guidance, the FASB amended the Accounting Standards Codification and created a new Topic 606, Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance requires various qualitative and quantitative disclosures in order to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this ASU are effective retrospectively for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We will evaluate the impact of this ASU on our consolidated financial statements. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Accumulated Other Comprehensive (Loss) Income | ' | ||||||||||||||||
Our accumulated other comprehensive income (loss) for the three and six months ended June 30, 2014 and 2013 are as follows: | |||||||||||||||||
Unrealized Gains (Losses) on investments available-for-sale | Defined Benefit Pension Plans | Accumulated Other Comprehensive Income (loss) | |||||||||||||||
Three Months Ended June 30: | (Dollars in millions) | ||||||||||||||||
Balance as of April 1, 2013 | $ | 20.9 | $ | (10.6 | ) | $ | 10.3 | ||||||||||
Other comprehensive loss before reclassifications | (42.6 | ) | — | (42.6 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (3.7 | ) | 0.4 | (3.3 | ) | ||||||||||||
Other comprehensive (loss) income for the three months ended June 30, 2013 | (46.3 | ) | 0.4 | (45.9 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of April 1, 2014 | $ | (10.0 | ) | $ | (4.5 | ) | $ | (14.5 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 15.2 | — | 15.2 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (1.3 | ) | 0.1 | (1.2 | ) | ||||||||||||
Other comprehensive income for the three months ended June 30, 2014 | 13.9 | 0.1 | 14 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
Six Months Ended June 30: | |||||||||||||||||
Balance as of January 1, 2013 | $ | 38 | $ | (11.0 | ) | $ | 27 | ||||||||||
Other comprehensive (loss) income before reclassifications | (48.5 | ) | — | (48.5 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (14.9 | ) | 0.8 | (14.1 | ) | ||||||||||||
Other comprehensive (loss) income for the six months ended June 30, 2013 | (63.4 | ) | 0.8 | (62.6 | ) | ||||||||||||
Balance as of June 30, 2013 | $ | (25.4 | ) | $ | (10.2 | ) | $ | (35.6 | ) | ||||||||
Balance as of January 1, 2014 | $ | (28.3 | ) | $ | (4.6 | ) | $ | (32.9 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 33.7 | — | 33.7 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (1.5 | ) | 0.2 | (1.3 | ) | ||||||||||||
Other comprehensive income for the six months ended June 30, 2014 | 32.2 | 0.2 | 32.4 | ||||||||||||||
Balance as of June 30, 2014 | $ | 3.9 | $ | (4.4 | ) | $ | (0.5 | ) | |||||||||
Reclassifications Out of Accumulated Other Comprehensive Income | ' | ||||||||||||||||
The following table shows reclassifications out of accumulated other comprehensive income and the affected line items in the consolidated statements of operations for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
Three months ended June 30, | Six months ended | Affected line item in the Consolidated Statements of Operations | |||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Unrealized gains on investments available-for-sale | $ | 1.9 | $ | 5.7 | $ | 2.2 | $ | 23 | Net investment income | ||||||||
1.9 | 5.7 | 2.2 | 23 | Total before tax | |||||||||||||
0.6 | 2 | 0.7 | 8.1 | Tax expense | |||||||||||||
1.3 | 3.7 | 1.5 | 14.9 | Net of tax | |||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||
Prior-service cost | (0.1 | ) | — | (0.2 | ) | — | (a) | ||||||||||
Actuarial gains (losses) | — | (0.7 | ) | (0.1 | ) | (1.3 | ) | (a) | |||||||||
(0.1 | ) | (0.7 | ) | (0.3 | ) | (1.3 | ) | Total before tax | |||||||||
— | (0.3 | ) | (0.1 | ) | (0.5 | ) | Tax benefit | ||||||||||
(0.1 | ) | (0.4 | ) | (0.2 | ) | (0.8 | ) | Net of tax | |||||||||
Total reclassifications for the period | $ | 1.2 | $ | 3.3 | $ | 1.3 | $ | 14.1 | Net of tax | ||||||||
_________ | |||||||||||||||||
(a) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. | ||||||||||||||||
Carrying Amount of Goodwill | ' | ||||||||||||||||
The carrying amount of goodwill by reporting unit is as follows: | |||||||||||||||||
Western | Total | ||||||||||||||||
Region | |||||||||||||||||
Operations | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Balance as of December 31, 2013 | $ | 565.9 | $ | 565.9 | |||||||||||||
Balance as of June 30, 2014 | $ | 565.9 | $ | 565.9 | |||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||||
The intangible assets that continue to be subject to amortization using the straight-line method over their estimated lives are as follows: | |||||||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||||||
Carrying | Amortization | Balance | Average Life | ||||||||||||||
Amount | (in years) | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
As of June 30, 2014: | |||||||||||||||||
Provider networks | $ | 41.5 | $ | (36.3 | ) | $ | 5.2 | 18.9 | |||||||||
Customer relationships and other | 29.5 | (21.5 | ) | 8 | 11.1 | ||||||||||||
$ | 71 | $ | (57.8 | ) | $ | 13.2 | |||||||||||
As of December 31, 2013: | |||||||||||||||||
Provider networks | $ | 40.5 | $ | (35.7 | ) | $ | 4.8 | 19.4 | |||||||||
Customer relationships and other | 29.5 | (20.5 | ) | 9 | 11.1 | ||||||||||||
$ | 70 | $ | (56.2 | ) | $ | 13.8 | |||||||||||
Estimated Annual Pretax Amortization Expense For Other Intangible Assets | ' | ||||||||||||||||
Estimated annual pretax amortization expense for other intangible assets for each of the next five years ending December 31 is as follows (dollars in millions): | |||||||||||||||||
Year | Amount | ||||||||||||||||
2014 | $ | 3 | |||||||||||||||
2015 | 2.8 | ||||||||||||||||
2016 | 2.2 | ||||||||||||||||
2017 | 2.2 | ||||||||||||||||
2018 | 2.1 | ||||||||||||||||
Schedule of Financial Statement Impact of Section 1202 Model Change | ' | ||||||||||||||||
The financial statement impact of the section 1202 reimbursement methodology change is summarized in the table below. We have not recorded any premium revenue or health care costs for 2014 incurred services as we do not have sufficient information to make a reasonable estimate as of June 30, 2014. | |||||||||||||||||
Recorded In | |||||||||||||||||
Year Ended December 31, 2013 | Three Months Ended March 31, 2014 | Three Months Ended June 30, 2014 | |||||||||||||||
(Dollars in millions) | No Risk | No Risk | Full Risk | ||||||||||||||
Health plan services premiums | $ | 4.4 | $ | — | $ | 154.7 | |||||||||||
Health plan services expenses | — | — | 144 | ||||||||||||||
General and administrative expenses | 4.4 | — | — | ||||||||||||||
Administrative services fees and other income | 6.5 | 1.4 | (7.9 | ) | |||||||||||||
Pretax income | $ | 6.5 | $ | 1.4 | $ | 2.8 | |||||||||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting Information, Additional Information [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
Our segment information for the three and six months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Western Region | Government | Corporate/Other/ | Total | |||||||||||||
Operations | Contracts | Eliminations | ||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three months ended June 30, 2014 | ||||||||||||||||
Revenues from external sources | $ | 3,267.30 | $ | 154.1 | $ | — | $ | 3,421.40 | ||||||||
Intersegment revenues | 3.1 | — | (3.1 | ) | — | |||||||||||
Segment pretax income (loss) | 80.7 | 21.4 | (3.3 | ) | 98.8 | |||||||||||
Three months ended June 30, 2013 | ||||||||||||||||
Revenues from external sources | $ | 2,598.50 | $ | 139.9 | $ | — | $ | 2,738.40 | ||||||||
Intersegment revenues | 2.8 | — | (2.8 | ) | — | |||||||||||
Segment pretax income (loss) | 46.8 | 18.1 | (12.9 | ) | 52 | |||||||||||
Six months ended June 30, 2014 | ||||||||||||||||
Revenues from external sources | $ | 6,162.10 | $ | 298.2 | $ | — | $ | 6,460.30 | ||||||||
Intersegment revenues | 6.1 | — | (6.1 | ) | — | |||||||||||
Segment pretax income (loss) | 133.7 | 34.5 | (7.4 | ) | 160.8 | |||||||||||
Six months ended June 30, 2013 | ||||||||||||||||
Revenues from external sources | $ | 5,261.00 | $ | 274.5 | $ | — | $ | 5,535.50 | ||||||||
Intersegment revenues | 5.7 | — | (5.7 | ) | — | |||||||||||
Segment pretax income (loss) | 119.1 | 27.1 | (12.9 | ) | 133.3 | |||||||||||
Premium Revenue by Line of Business | ' | |||||||||||||||
Our health plan services premium revenue by line of business is as follows: | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Dollars in millions) | ||||||||||||||||
Commercial premium revenue | $ | 1,377.50 | $ | 1,298.60 | $ | 2,641.60 | $ | 2,624.00 | ||||||||
Medicare premium revenue | 757.2 | 688.6 | 1,512.40 | 1,395.00 | ||||||||||||
Medicaid premium revenue | 1,121.90 | 591.7 | 1,983.90 | 1,191.90 | ||||||||||||
Dual Eligibles premium revenue | 5.3 | — | 5.3 | — | ||||||||||||
Total health plan services premiums | $ | 3,261.90 | $ | 2,578.90 | $ | 6,143.20 | $ | 5,210.90 | ||||||||
Investments_Tables
Investments (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Investments [Abstract] | ' | ||||||||||||||||||||||||
Fair Value of Investments Available-for-Sale | ' | ||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, the amortized cost, gross unrealized holding gains and losses, and fair value of our current investments available-for-sale and our investments available-for-sale-noncurrent, after giving effect to other-than-temporary impairments, were as follows: | |||||||||||||||||||||||||
June 30, 2014 | |||||||||||||||||||||||||
Amortized | Gross | Gross | Carrying | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Holding | Holding | ||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Asset-backed securities | $ | 421.7 | $ | 4.1 | $ | (3.7 | ) | $ | 422.1 | ||||||||||||||||
U.S. government and agencies | 23.7 | — | — | 23.7 | |||||||||||||||||||||
Obligations of states and other political subdivisions | 728.1 | 10.1 | (7.1 | ) | 731.1 | ||||||||||||||||||||
Corporate debt securities | 489.2 | 4.7 | (1.9 | ) | 492 | ||||||||||||||||||||
$ | 1,662.70 | $ | 18.9 | $ | (12.7 | ) | $ | 1,668.90 | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Asset-backed securities | $ | 0.8 | $ | — | $ | (0.1 | ) | $ | 0.7 | ||||||||||||||||
$ | 0.8 | $ | — | $ | (0.1 | ) | $ | 0.7 | |||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Amortized | Gross | Gross | Carrying | ||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||
Holding | Holding | ||||||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Asset-backed securities | $ | 394.7 | $ | 3.4 | $ | (8.7 | ) | $ | 389.4 | ||||||||||||||||
U.S. government and agencies | 23.7 | — | — | 23.7 | |||||||||||||||||||||
Obligations of states and other political subdivisions | 734.3 | 5.9 | (30.3 | ) | 709.9 | ||||||||||||||||||||
Corporate debt securities | 449.8 | 3.6 | (9.4 | ) | 444 | ||||||||||||||||||||
$ | 1,602.50 | $ | 12.9 | $ | (48.4 | ) | $ | 1,567.00 | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Asset-backed securities | $ | 1.3 | $ | — | $ | (0.2 | ) | $ | 1.1 | ||||||||||||||||
Obligations of states and other political subdivisions | 53.4 | — | (6.3 | ) | 47.1 | ||||||||||||||||||||
Corporate debt securities | 13.2 | — | (1.6 | ) | 11.6 | ||||||||||||||||||||
$ | 67.9 | $ | — | $ | (8.1 | ) | $ | 59.8 | |||||||||||||||||
Available-for-Sale Current Investments Classified by Contractual Maturity Date | ' | ||||||||||||||||||||||||
As of June 30, 2014, the contractual maturities of our current investments available-for-sale and our investments available-for-sale-noncurrent were as follows: | |||||||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Current: | (Dollars in millions) | ||||||||||||||||||||||||
Due in one year or less | $ | 58 | $ | 58.2 | |||||||||||||||||||||
Due after one year through five years | 325.2 | 328.6 | |||||||||||||||||||||||
Due after five years through ten years | 417.3 | 422.3 | |||||||||||||||||||||||
Due after ten years | 440.5 | 437.7 | |||||||||||||||||||||||
Asset-backed securities | 421.7 | 422.1 | |||||||||||||||||||||||
Total current investments available-for-sale | $ | 1,662.70 | $ | 1,668.90 | |||||||||||||||||||||
Amortized | Estimated | ||||||||||||||||||||||||
Cost | Fair Value | ||||||||||||||||||||||||
Noncurrent: | (Dollars in millions) | ||||||||||||||||||||||||
Asset-backed securities | 0.8 | 0.7 | |||||||||||||||||||||||
Total noncurrent investments available-for-sale | $ | 0.8 | $ | 0.7 | |||||||||||||||||||||
Schedule of Unrealized Loss on Investments | ' | ||||||||||||||||||||||||
The following table shows our current investments’ fair values and gross unrealized losses for individual securities that have been in a continuous loss position through December 31, 2013: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 225.3 | $ | (7.9 | ) | $ | 22.5 | $ | (0.8 | ) | $ | 247.8 | $ | (8.7 | ) | ||||||||||
U.S. government and agencies | 4 | — | — | — | 4 | — | |||||||||||||||||||
Obligations of states and other political subdivisions | 453.5 | (23.5 | ) | 79.7 | (6.8 | ) | 533.2 | (30.3 | ) | ||||||||||||||||
Corporate debt securities | 242.8 | (9.0 | ) | 6.7 | (0.4 | ) | 249.5 | (9.4 | ) | ||||||||||||||||
$ | 925.6 | $ | (40.4 | ) | $ | 108.9 | $ | (8.0 | ) | $ | 1,034.50 | $ | (48.4 | ) | |||||||||||
The following table shows the fair values and gross unrealized losses for our individual securities-noncurrent that have been in a continuous loss position through December 31, 2013: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 0.5 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | $ | 1.2 | $ | (0.2 | ) | ||||||||||
Obligations of states and other political subdivisions | 17.4 | (2.2 | ) | 29.6 | (4.1 | ) | 47 | (6.3 | ) | ||||||||||||||||
Corporate debt securities | 7.5 | (0.9 | ) | 4.1 | (0.7 | ) | 11.6 | (1.6 | ) | ||||||||||||||||
$ | 25.4 | $ | (3.2 | ) | $ | 34.4 | $ | (4.9 | ) | $ | 59.8 | $ | (8.1 | ) | |||||||||||
The following table shows our current investments' fair values and gross unrealized losses for individual securities that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | 45.9 | $ | (0.1 | ) | $ | 151.7 | $ | (3.6 | ) | $ | 197.6 | $ | (3.7 | ) | ||||||||||
Obligations of states and other political subdivisions | 37.4 | (0.2 | ) | 301.9 | (6.9 | ) | 339.3 | (7.1 | ) | ||||||||||||||||
Corporate debt securities | 42.4 | (0.1 | ) | 96.1 | (1.8 | ) | 138.5 | (1.9 | ) | ||||||||||||||||
$ | 125.7 | $ | (0.4 | ) | $ | 549.7 | $ | (12.3 | ) | $ | 675.4 | $ | (12.7 | ) | |||||||||||
The following table shows our noncurrent investments' fair values and gross unrealized losses for individual securities that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||
Fair Value | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||||
Losses | Value | Losses | Value | Losses | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Asset-backed securities | $ | — | $ | — | $ | 0.7 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | |||||||||||
$ | — | $ | — | $ | 0.7 | $ | (0.1 | ) | $ | 0.7 | $ | (0.1 | ) | ||||||||||||
Number of Securities Included in Loss Position of Current Investments | ' | ||||||||||||||||||||||||
The following table shows the number of our individual securities-current that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than | 12 Months | Total | |||||||||||||||||||||||
12 Months | or More | ||||||||||||||||||||||||
Asset-backed securities | 19 | 58 | 77 | ||||||||||||||||||||||
Obligations of states and other political subdivisions | 26 | 129 | 155 | ||||||||||||||||||||||
Corporate debt securities | 41 | 91 | 132 | ||||||||||||||||||||||
86 | 278 | 364 | |||||||||||||||||||||||
The following table shows the number of our individual securities-noncurrent that have been in a continuous loss position through June 30, 2014: | |||||||||||||||||||||||||
Less than | 12 Months | Total | |||||||||||||||||||||||
12 Months | or More | ||||||||||||||||||||||||
Asset-backed securities | — | 1 | 1 | ||||||||||||||||||||||
— | 1 | 1 | |||||||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ' | |||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured on recurring basis | ' | |||||||||||||||||||||||||||||||
The following tables present information about our assets and liabilities measured at fair value on a recurring basis at June 30, 2014 and December 31, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (dollars in millions): | ||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 2- | Level 3 | Total | ||||||||||||||||||||||||||||
noncurrent | ||||||||||||||||||||||||||||||||
As of June 30, 2014: | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 603.1 | $ | — | $ | — | $ | — | $ | 603.1 | ||||||||||||||||||||||
Investments—available-for-sale | ||||||||||||||||||||||||||||||||
Asset-backed debt securities: | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | — | $ | 218.3 | $ | — | $ | — | $ | 218.3 | ||||||||||||||||||||||
Commercial mortgage-backed securities | — | 124.4 | 0.7 | — | 125.1 | |||||||||||||||||||||||||||
Other asset-backed securities | — | 79.4 | — | — | 79.4 | |||||||||||||||||||||||||||
U.S. government and agencies: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | 23.7 | — | — | — | 23.7 | |||||||||||||||||||||||||||
U.S. Agency securities | — | — | — | — | — | |||||||||||||||||||||||||||
Obligations of states and other political subdivisions | — | 731.1 | — | — | 731.1 | |||||||||||||||||||||||||||
Corporate debt securities | — | 492 | — | — | 492 | |||||||||||||||||||||||||||
Total investments at fair value | $ | 23.7 | $ | 1,645.20 | $ | 0.7 | $ | — | $ | 1,669.60 | ||||||||||||||||||||||
Embedded contractual derivative | — | — | — | 13.3 | 13.3 | |||||||||||||||||||||||||||
State-sponsored health plans settlement account deficit | — | — | — | 9.6 | 9.6 | |||||||||||||||||||||||||||
Total assets at fair value | $ | 626.8 | $ | 1,645.20 | $ | 0.7 | $ | 22.9 | $ | 2,295.60 | ||||||||||||||||||||||
Level 1 | Level 2 | Level 2- | Level 3 | Total | ||||||||||||||||||||||||||||
noncurrent | ||||||||||||||||||||||||||||||||
As of December 31, 2013: | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 433.2 | $ | — | $ | — | $ | — | $ | 433.2 | ||||||||||||||||||||||
Investments—available-for-sale | ||||||||||||||||||||||||||||||||
Asset-backed debt securities: | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | — | $ | 203.5 | $ | 0.4 | $ | — | $ | 203.9 | ||||||||||||||||||||||
Commercial mortgage-backed securities | — | 144.1 | 0.7 | — | 144.8 | |||||||||||||||||||||||||||
Other asset-backed securities | — | 41.8 | — | — | 41.8 | |||||||||||||||||||||||||||
U.S. government and agencies: | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | 23.7 | — | — | — | 23.7 | |||||||||||||||||||||||||||
U.S. Agency securities | — | — | — | — | — | |||||||||||||||||||||||||||
Obligations of states and other political subdivisions | — | 709.9 | 47.1 | — | 757 | |||||||||||||||||||||||||||
Corporate debt securities | — | 444 | 11.6 | — | 455.6 | |||||||||||||||||||||||||||
Total investments at fair value | $ | 23.7 | $ | 1,543.30 | $ | 59.8 | $ | — | $ | 1,626.80 | ||||||||||||||||||||||
Embedded contractual derivative | — | — | — | 7.2 | 7.2 | |||||||||||||||||||||||||||
State-sponsored health plans settlement account deficit | — | — | — | 62.9 | 62.9 | |||||||||||||||||||||||||||
Total assets at fair value | $ | 456.9 | $ | 1,543.30 | $ | 59.8 | $ | 70.1 | $ | 2,130.10 | ||||||||||||||||||||||
Changes in the Balances of Level 3 Financial Assets on Recurring Basis | ' | |||||||||||||||||||||||||||||||
The changes in the balances of Level 3 financial assets for the three months ended June 30, 2014 and 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | |||||||||||||||||||||||||
Opening balance | $ | — | $ | 11.4 | $ | 50 | $ | 61.4 | $ | — | $ | 10.9 | $ | 20.8 | $ | 31.7 | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | — | 1.9 | (40.4 | ) | (38.5 | ) | — | (0.1 | ) | 14.6 | 14.5 | |||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases/additions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issues | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Sales | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Closing balance | $ | — | $ | 13.3 | $ | 9.6 | $ | 22.9 | $ | — | $ | 10.8 | $ | 35.4 | $ | 46.2 | ||||||||||||||||
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
The changes in the balances of Level 3 financial assets for the six months ended June 30, 2014 and 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Six months ended June 30, | ||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | Available-For-Sale Investments | Embedded Contractual Derivative | State-Sponsored Health Plans Settlement Account Deficit | Total | |||||||||||||||||||||||||
Opening balance | $ | — | $ | 7.2 | $ | 62.9 | $ | 70.1 | $ | 0.2 | $ | 11.2 | $ | — | $ | 11.4 | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | — | 6.1 | (53.3 | ) | (47.2 | ) | — | (0.4 | ) | 35.4 | 35 | |||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases/additions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issues | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Sales | — | — | — | — | (0.2 | ) | — | — | (0.2 | ) | ||||||||||||||||||||||
Settlements | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Closing balance | $ | — | $ | 13.3 | $ | 9.6 | $ | 22.9 | $ | — | $ | 10.8 | $ | 35.4 | $ | 46.2 | ||||||||||||||||
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Changes in the Balances of Level 3 Financial Liabilities on Recurring Basis | ' | |||||||||||||||||||||||||||||||
The changes in the balances of Level 3 financial liability for the three and six months ended June 30, 2013 were as follows (dollars in millions): | ||||||||||||||||||||||||||||||||
Three months ended June 30, 2013 | Six months ended June 30, 2013 | |||||||||||||||||||||||||||||||
Embedded Contractual Derivative | ||||||||||||||||||||||||||||||||
Opening balance, April 1 and January 1 | $ | 4.2 | $ | 3.2 | ||||||||||||||||||||||||||||
Transfers into Level 3 | — | — | ||||||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | ||||||||||||||||||||||||||||||
Total gains or losses for the period: | ||||||||||||||||||||||||||||||||
Realized in net income | 0.6 | 1.6 | ||||||||||||||||||||||||||||||
Unrealized in accumulated other comprehensive income | — | — | ||||||||||||||||||||||||||||||
Purchases, issues, sales and settlements: | ||||||||||||||||||||||||||||||||
Purchases | — | — | ||||||||||||||||||||||||||||||
Issues | — | — | ||||||||||||||||||||||||||||||
Sales | — | — | ||||||||||||||||||||||||||||||
Settlements | — | — | ||||||||||||||||||||||||||||||
Closing balance | $ | 4.8 | $ | 4.8 | ||||||||||||||||||||||||||||
Quantitative information about level 3 assets fair value measurements | ' | |||||||||||||||||||||||||||||||
The following tables present quantitative information about Level 3 Fair Value Measurements as of June 30, 2014 and December 31, 2013 (dollars in millions): | ||||||||||||||||||||||||||||||||
Fair Value as of | Valuation Technique(s) | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||||||||
30-Jun-14 | ||||||||||||||||||||||||||||||||
Embedded contractual derivative asset | $ | 13.3 | Monte Carlo Simulation Approach | Health Net Health Care Expenditures | -5.58 | % | — | 8.13% | -1.64% | |||||||||||||||||||||||
National Health Care Expenditures | -1.13 | % | — | 10.95% | -2.52% | |||||||||||||||||||||||||||
Goodwill - Western Region reporting unit | $ | 565.9 | Income Approach | Discount Rate | 9 | % | — | 9.00% | -9.00% | |||||||||||||||||||||||
State-sponsored health plans settlement account deficit | $ | 9.6 | Income Approach | Discount Rate | 1.135 | % | — | 1.14% | -1.13% | |||||||||||||||||||||||
Fair Value as of | Valuation Technique(s) | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||||||
Embedded contractual derivative asset | $ | 7.2 | Monte Carlo Simulation Approach | Health Net Health Care Expenditures | -3.34 | % | — | 7.34% | -2.20% | |||||||||||||||||||||||
National Health Care Expenditures | -0.77 | % | — | 9.46% | -3.63% | |||||||||||||||||||||||||||
Goodwill - Western Region reporting unit | $ | 565.9 | Income Approach | Discount Rate | 10 | % | — | 10.00% | -10.00% | |||||||||||||||||||||||
State-sponsored health plans settlement account deficit | $ | 62.9 | Income Approach | Discount Rate | 1.135 | % | — | 1.14% | -1.13% | |||||||||||||||||||||||
Significant_Accounting_Policie3
Significant Accounting Policies (Cash and Cash Equivalents, Investments and Fair Value of Financial Instruments) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Accounting Policies [Abstract] | ' | ' | ' | ' | ' |
Checks outstanding | $0 | ' | $0 | ' | $0 |
Losses recognized from other-than-temporary impairments | 0 | 0 | 0 | 0 | ' |
Fair value of fixed rate borrowings | 440.5 | ' | 440.5 | ' | 434.5 |
Fair value of variable rate borrowings | $100 | ' | $100 | ' | $100 |
Significant_Accounting_Policie4
Significant Accounting Policies (Health Plan Services Revenue Recognition) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | $3,261,878,000 | $2,578,874,000 | $6,143,223,000 | $5,210,943,000 | ' | ' |
Medicare Premium Revenue [Member] | ' | ' | ' | ' | ' | ' |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | 757,200,000 | 688,600,000 | 1,512,400,000 | 1,395,000,000 | ' | ' |
Medicaid Premium Revenue [Member] | ' | ' | ' | ' | ' | ' |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | 1,121,900,000 | 591,700,000 | 1,983,900,000 | 1,191,900,000 | ' | ' |
Settlement account balance, beginning | ' | ' | ' | ' | ' | 0 |
Settlement account payment, maximum | ' | ' | 264,000,000 | ' | ' | ' |
Settlement account payment, current balance | 9,600,000 | ' | 9,600,000 | ' | 62,900,000 | ' |
Receivable with imputed interest, discount | 600,000 | ' | 600,000 | ' | 4,400,000 | ' |
Medicare Risk adjustment [Member] | Medicare Premium Revenue [Member] | ' | ' | ' | ' | ' | ' |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | 4,400,000 | ' | 20,000,000 | ' | ' | ' |
Medicaid Retro Rate Adjustment [Member] | Medicaid Premium Revenue [Member] | ' | ' | ' | ' | ' | ' |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | ' | 0 | ' | 42,200,000 | ' | ' |
State-sponsored health plans settlement account deficit [Member] | Medicaid Premium Revenue [Member] | ' | ' | ' | ' | ' | ' |
Health Care Organizations [Line Items] | ' | ' | ' | ' | ' | ' |
Health plans services premiums | ($40,400,000) | $14,600,000 | ($53,300,000) | $35,400,000 | ' | ' |
Significant_Accounting_Policie5
Significant Accounting Policies (Health Plan Services Health Care Cost) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Health Care Organization Revenue and Expense [Line Items] | ' | ' | ' | ' | ' |
Prior Years Favorable Reserve Development | $3,700,000 | ' | $26,600,000 | ' | ' |
Health plan services (excluding depreciation and amortization) | 2,763,179,000 | 2,191,918,000 | 5,165,521,000 | 4,460,654,000 | ' |
Provision For Adverse Deviation, Release | 4,800,000 | ' | 50,800,000 | ' | ' |
Provision For Adverse Deviation | 67,100,000 | ' | 67,100,000 | ' | 53,400,000 |
Unfavorable Development [Member] | ' | ' | ' | ' | ' |
Health Care Organization Revenue and Expense [Line Items] | ' | ' | ' | ' | ' |
Health plan services (excluding depreciation and amortization) | $1,100,000 | ' | $24,200,000 | ' | ' |
Significant_Accounting_Policie6
Significant Accounting Policies (Concentration of Credit Risk) (Details) (Government Contracts Concentration Risk [Member]) | 6 Months Ended |
Jun. 30, 2014 | |
Government Contracts Concentration Risk [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk, percentage | 97.00% |
Significant_Accounting_Policie7
Significant Accounting Policies (Accumulated Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Beginning balance | ($14,500,000) | $10,300,000 | ($32,867,000) | $27,000,000 |
Other comprehensive income (loss) before reclassifications | 15,200,000 | -42,600,000 | 33,700,000 | -48,500,000 |
Amounts reclassified from accumulated other comprehensive (loss) income | -1,200,000 | -3,300,000 | -1,300,000 | -14,100,000 |
Other comprehensive income (loss), net of tax | 14,059,000 | -45,885,000 | 32,416,000 | -62,593,000 |
Ending balance | -451,000 | -35,600,000 | -451,000 | -35,600,000 |
Unrealized Gains (Losses) on investments available-for-sale [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Beginning balance | -10,000,000 | 20,900,000 | -28,300,000 | 38,000,000 |
Other comprehensive income (loss) before reclassifications | 15,200,000 | -42,600,000 | 33,700,000 | -48,500,000 |
Amounts reclassified from accumulated other comprehensive (loss) income | -1,300,000 | -3,700,000 | -1,500,000 | -14,900,000 |
Other comprehensive income (loss), net of tax | 13,900,000 | -46,300,000 | 32,200,000 | -63,400,000 |
Ending balance | 3,900,000 | -25,400,000 | 3,900,000 | -25,400,000 |
Defined Benefit Pension Plans [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Beginning balance | -4,500,000 | -10,600,000 | -4,600,000 | -11,000,000 |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive (loss) income | 100,000 | 400,000 | 200,000 | 800,000 |
Other comprehensive income (loss), net of tax | 100,000 | 400,000 | 200,000 | 800,000 |
Ending balance | ($4,400,000) | ($10,200,000) | ($4,400,000) | ($10,200,000) |
Significant_Accounting_Policie8
Significant Accounting Policies (Reclassifications Out of Accumulated Other Comprehensive Income) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Income from operations before income taxes | $98,802,000 | $52,028,000 | $160,762,000 | $133,331,000 | ||||
Tax expense (benefit) | -22,065,000 | 18,545,000 | 11,108,000 | 49,798,000 | ||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Net of tax | 1,200,000 | 3,300,000 | 1,300,000 | 14,100,000 | ||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized gains (losses) on investments available-for-sale [Member] | ' | ' | ' | ' | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Unrealized gains (losses) on investments available-for-sale | 1,900,000 | 5,700,000 | 2,200,000 | 23,000,000 | ||||
Income from operations before income taxes | 1,900,000 | 5,700,000 | 2,200,000 | 23,000,000 | ||||
Tax expense (benefit) | 600,000 | 2,000,000 | 700,000 | 8,100,000 | ||||
Net of tax | 1,300,000 | 3,700,000 | 1,500,000 | 14,900,000 | ||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Amortization of defined benefit pension items [Member] | ' | ' | ' | ' | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Prior-service cost | -100,000 | [1] | 0 | [1] | -200,000 | [1] | 0 | [1] |
Actuarial gains (losses) | 0 | [1] | -700,000 | [1] | -100,000 | [1] | -1,300,000 | [1] |
Income from operations before income taxes | -100,000 | -700,000 | -300,000 | -1,300,000 | ||||
Tax expense (benefit) | 0 | -300,000 | -100,000 | -500,000 | ||||
Net of tax | ($100,000) | ($400,000) | ($200,000) | ($800,000) | ||||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. |
Significant_Accounting_Policie9
Significant Accounting Policies (Earnings Per Share) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 08, 2012 | 2-May-11 |
2011 Stock Repurchase Program [Member] | 2011 Stock Repurchase Program [Member] | 2011 Stock Repurchase Program [Member] | 2011 Stock Repurchase Program [Member] | |||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock equivalents (in shares) | 968,000 | 718,000 | 1,044,000 | 849,000 | ' | ' | ' | ' |
Anti-dilutive securities excluded from computation of diluted earnings per share (in shares) | 782,000 | 1,075,000 | 786,000 | 1,630,000 | ' | ' | ' | ' |
Stock repurchase program authorized amount | ' | ' | ' | ' | ' | ' | $323.70 | $300 |
Stock repurchase program remaining authorized repurchase amount | ' | ' | ' | ' | $280 | $280 | ' | ' |
Recovered_Sheet1
Significant Accounting Policies (Goodwill and Other Intangible Assets) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
Provider Networks [Member] | Provider Networks [Member] | Customer Relationships and Other [Member] | Customer Relationships and Other [Member] | Western Region Operations [Member] | Western Region Operations [Member] | Western Region Operations [Member] | |||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $565,886,000 | $565,886,000 | ' | ' | ' | ' | $565,900,000 | $565,900,000 | ' |
Ratio of fair value to carrying value | ' | ' | ' | ' | ' | ' | 190.00% | ' | 149.00% |
Finite-Lived Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Carrying Amount | 71,000,000 | 70,000,000 | 41,500,000 | 40,500,000 | 29,500,000 | 29,500,000 | ' | ' | ' |
Accumulated Amortization | -57,800,000 | -56,200,000 | -36,300,000 | -35,700,000 | -21,500,000 | -20,500,000 | ' | ' | ' |
Net Balance | 13,200,000 | 13,800,000 | 5,200,000 | 4,800,000 | 8,000,000 | 9,000,000 | ' | ' | ' |
Weighted Average Life (in years) | ' | ' | '18 years 10 months 24 days | '19 years 4 months 24 days | '11 years 1 month 6 days | '11 years 1 month 6 days | ' | ' | ' |
Future Amortization Expense, Current to Five Succeeding Fiscal Years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | $2,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Recovered_Sheet2
Significant Accounting Policies (Restricted Assets) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Summary of Significant Accounting Policies [Abstract] | ' | ' |
Restricted cash and cash equivalents | $1.80 | $5.30 |
Investment securities held by trustees or agencies | $23.80 | $23.80 |
Recovered_Sheet3
Significant Accounting Policies (Accounting for Certain Provisions of the ACA) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
ACA Health Insurer Fee [Member] | ACA Health Insurer Fee [Member] | ACA Reinsurance Recovery [Member] | ACA Reinsurance Recovery [Member] | ACA Risk Adjustment [Member] | ACA Risk Adjustment [Member] | ACA Risk Corridor [Member] | ACA Risk Corridor [Member] | ACA 1202, Model 1 [Member] | ACA 1202, Model 2 [Member] | ACA 1202, Model 2 [Member] | Medicaid Premium Revenue [Member] | Medicaid Premium Revenue [Member] | Medicaid Premium Revenue [Member] | Medicaid Premium Revenue [Member] | CALIFORNIA | ARIZONA | ||||||
Medicaid Premium Revenue [Member] | Medicaid Premium Revenue [Member] | |||||||||||||||||||||
Customers | Customers | |||||||||||||||||||||
Supplementary Insurance Information, by Segment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and other liabilities | $496,349,000 | ' | $496,349,000 | ' | $397,036,000 | $148,000,000 | $148,000,000 | ' | ' | $30,100,000 | $30,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred cost, amortization expense | ' | ' | ' | ' | ' | 37,800,000 | 74,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other assets | 259,878,000 | ' | 259,878,000 | ' | 132,683,000 | 74,100,000 | 74,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other noncurrent assets | 139,205,000 | ' | 139,205,000 | ' | 162,551,000 | ' | ' | ' | ' | ' | ' | 27,300,000 | 27,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Customers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | 45,000 |
Other receivables | 183,795,000 | ' | 183,795,000 | ' | 68,919,000 | ' | ' | 110,600,000 | 110,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Health plans services premiums | 3,261,878,000 | 2,578,874,000 | 6,143,223,000 | 5,210,943,000 | ' | ' | ' | ' | ' | -30,100,000 | -30,100,000 | 18,600,000 | 27,300,000 | 154,700,000 | 0 | 4,400,000 | 1,121,900,000 | 591,700,000 | 1,983,900,000 | 1,191,900,000 | ' | ' |
Health plan services expenses | 2,763,179,000 | 2,191,918,000 | 5,165,521,000 | 4,460,654,000 | ' | ' | ' | -77,500,000 | -110,600,000 | ' | ' | ' | ' | 144,000,000 | 0 | 0 | ' | ' | ' | ' | ' | ' |
General and administrative expenses | 344,734,000 | 291,437,000 | 705,757,000 | 536,672,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 4,400,000 | ' | ' | ' | ' | ' | ' |
Administrative services fees and other income | -6,612,000 | 2,472,000 | -4,214,000 | 3,377,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -7,900,000 | 1,400,000 | 6,500,000 | ' | ' | ' | ' | ' | ' |
Pretax income | $98,802,000 | $52,028,000 | $160,762,000 | $133,331,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,800,000 | $1,400,000 | $6,500,000 | ' | ' | ' | ' | ' | ' |
Segment_Information_Segment_In
Segment Information (Segment Information) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | $3,421,392 | $2,738,431 | $6,460,327 | $5,535,468 |
Pretax income | 98,802 | 52,028 | 160,762 | 133,331 |
Intersegment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Western Region Operations [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 3,267,300 | 2,598,500 | 6,162,100 | 5,261,000 |
Pretax income | 80,700 | 46,800 | 133,700 | 119,100 |
Western Region Operations [Member] | Intersegment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 3,100 | 2,800 | 6,100 | 5,700 |
Government Contracts [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 154,100 | 139,900 | 298,200 | 274,500 |
Pretax income | 21,400 | 18,100 | 34,500 | 27,100 |
Government Contracts [Member] | Intersegment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Corporate/Other/Eliminations [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Pretax income | -3,300 | -12,900 | -7,400 | -12,900 |
Corporate/Other/Eliminations [Member] | Intersegment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | ($3,100) | ($2,800) | ($6,100) | ($5,700) |
Segment_Information_Premium_Re
Segment Information (Premium Revenue By Line Of Business) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Health plans services premiums | $3,261,878 | $2,578,874 | $6,143,223 | $5,210,943 |
Commercial Premium Revenue [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Health plans services premiums | 1,377,500 | 1,298,600 | 2,641,600 | 2,624,000 |
Medicare Premium Revenue [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Health plans services premiums | 757,200 | 688,600 | 1,512,400 | 1,395,000 |
Medicaid Premium Revenue [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Health plans services premiums | 1,121,900 | 591,700 | 1,983,900 | 1,191,900 |
Dual eligibles premium revenue [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Health plans services premiums | $5,300 | $0 | $5,300 | $0 |
Investments_Fair_Value_of_Inve
Investments (Fair Value of Investments Available-for-Sale) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Carrying Value, Current | $1,668,943,000 | $1,567,020,000 |
Available-for-sale Securities, Noncurrent | 652,000 | 59,768,000 |
Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 1,662,725,000 | 1,602,456,000 |
Gross Unrealized Holding Gains | 18,900,000 | 12,900,000 |
Gross Unrealized Holding Losses | -12,700,000 | -48,400,000 |
Carrying Value, Current | 1,668,900,000 | 1,567,000,000 |
Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 808,000 | 67,943,000 |
Gross Unrealized Holding Gains | 0 | 0 |
Gross Unrealized Holding Losses | -100,000 | -8,100,000 |
Available-for-sale Securities, Noncurrent | 700,000 | 59,800,000 |
Asset-Backed Securities [Member] | Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 421,700,000 | 394,700,000 |
Gross Unrealized Holding Gains | 4,100,000 | 3,400,000 |
Gross Unrealized Holding Losses | -3,700,000 | -8,700,000 |
Carrying Value, Current | 422,100,000 | 389,400,000 |
Asset-Backed Securities [Member] | Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 800,000 | 1,300,000 |
Gross Unrealized Holding Gains | 0 | 0 |
Gross Unrealized Holding Losses | -100,000 | -200,000 |
Available-for-sale Securities, Noncurrent | 700,000 | 1,100,000 |
U.S. Government and Agencies [Member] | Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 23,700,000 | 23,700,000 |
Gross Unrealized Holding Gains | 0 | 0 |
Gross Unrealized Holding Losses | 0 | 0 |
Carrying Value, Current | 23,700,000 | 23,700,000 |
Obligations of States and Other Political Subdivisions [Member] | Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 728,100,000 | 734,300,000 |
Gross Unrealized Holding Gains | 10,100,000 | 5,900,000 |
Gross Unrealized Holding Losses | -7,100,000 | -30,300,000 |
Carrying Value, Current | 731,100,000 | 709,900,000 |
Obligations of States and Other Political Subdivisions [Member] | Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | ' | 53,400,000 |
Gross Unrealized Holding Gains | ' | 0 |
Gross Unrealized Holding Losses | ' | -6,300,000 |
Available-for-sale Securities, Noncurrent | ' | 47,100,000 |
Corporate Debt Securities [Member] | Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 489,200,000 | 449,800,000 |
Gross Unrealized Holding Gains | 4,700,000 | 3,600,000 |
Gross Unrealized Holding Losses | -1,900,000 | -9,400,000 |
Carrying Value, Current | 492,000,000 | 444,000,000 |
Corporate Debt Securities [Member] | Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | ' | 13,200,000 |
Gross Unrealized Holding Gains | ' | 0 |
Gross Unrealized Holding Losses | ' | -1,600,000 |
Available-for-sale Securities, Noncurrent | ' | $11,600,000 |
Investments_AvailableforSale_I
Investments (Available-for-Sale Investments Classified by Contractual Maturity Date) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available-for-sale Securities, Noncurrent | $652,000 | $59,768,000 |
Available for sale securities, Estimated Fair Value | 1,668,943,000 | 1,567,020,000 |
Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Due in one year or less, Amortized Cost | 58,000,000 | ' |
Due after one year through five years, Amortized Cost | 325,200,000 | ' |
Due after five years through ten years, Amortized Cost | 417,300,000 | ' |
Due after ten years, Amortized Cost | 440,500,000 | ' |
Available for sale securities, Amortized Cost | 1,662,725,000 | 1,602,456,000 |
Due in one year or less, Estimated Fair Value | 58,200,000 | ' |
Due after one year through five years, Estimated Fair Value | 328,600,000 | ' |
Due after five years through ten years, Estimated Fair Value | 422,300,000 | ' |
Due after ten years, Estimated Fair Value | 437,700,000 | ' |
Available for sale securities, Estimated Fair Value | 1,668,900,000 | 1,567,000,000 |
Current [Member] | Asset-backed Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available for sale securities, Amortized Cost | 421,700,000 | 394,700,000 |
Available for sale securities, Estimated Fair Value | 422,100,000 | 389,400,000 |
Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available for sale securities, Amortized Cost | 808,000 | 67,943,000 |
Available-for-sale Securities, Noncurrent | 700,000 | 59,800,000 |
Noncurrent [Member] | Asset-backed Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Available for sale securities, Amortized Cost | 800,000 | 1,300,000 |
Available-for-sale Securities, Noncurrent | $700,000 | $1,100,000 |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Investments [Abstract] | ' | ' | ' | ' | ' |
Losses from other-than-temporary impairments | $0 | $0 | $0 | $0 | ' |
Available-for-sale Securities, Noncurrent | 652,000 | ' | 652,000 | ' | 59,768,000 |
Proceeds from sales of investments available-for-sale | 125,800,000 | 218,600,000 | 192,250,000 | 573,406,000 | ' |
Gross realized gains | 2,200,000 | 7,000,000 | 3,400,000 | 24,500,000 | ' |
Gross realized losses | $300,000 | $1,400,000 | $1,200,000 | $1,600,000 | ' |
Investments_Unrealized_Loss_Po
Investments (Unrealized Loss Position for Investments) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | $125.70 | $925.60 |
Less than 12 Months, Unrealized Losses | -0.4 | -40.4 |
12 Months or More, Fair Value | 549.7 | 108.9 |
12 Months or More, Unrealized Losses | -12.3 | -8 |
Total, Fair Value | 675.4 | 1,034.50 |
Total, Unrealized Losses | -12.7 | -48.4 |
Current [Member] | Asset-Backed Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | 45.9 | 225.3 |
Less than 12 Months, Unrealized Losses | -0.1 | -7.9 |
12 Months or More, Fair Value | 151.7 | 22.5 |
12 Months or More, Unrealized Losses | -3.6 | -0.8 |
Total, Fair Value | 197.6 | 247.8 |
Total, Unrealized Losses | -3.7 | -8.7 |
Current [Member] | U.S. Government and Agencies [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | ' | 4 |
Less than 12 Months, Unrealized Losses | ' | 0 |
12 Months or More, Fair Value | ' | 0 |
12 Months or More, Unrealized Losses | ' | 0 |
Total, Fair Value | ' | 4 |
Total, Unrealized Losses | ' | 0 |
Current [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | 37.4 | 453.5 |
Less than 12 Months, Unrealized Losses | -0.2 | -23.5 |
12 Months or More, Fair Value | 301.9 | 79.7 |
12 Months or More, Unrealized Losses | -6.9 | -6.8 |
Total, Fair Value | 339.3 | 533.2 |
Total, Unrealized Losses | -7.1 | -30.3 |
Current [Member] | Corporate Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | 42.4 | 242.8 |
Less than 12 Months, Unrealized Losses | -0.1 | -9 |
12 Months or More, Fair Value | 96.1 | 6.7 |
12 Months or More, Unrealized Losses | -1.8 | -0.4 |
Total, Fair Value | 138.5 | 249.5 |
Total, Unrealized Losses | -1.9 | -9.4 |
Noncurrent [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | 0 | 25.4 |
Less than 12 Months, Unrealized Losses | 0 | -3.2 |
12 Months or More, Fair Value | 0.7 | 34.4 |
12 Months or More, Unrealized Losses | -0.1 | -4.9 |
Total, Fair Value | 0.7 | 59.8 |
Total, Unrealized Losses | -0.1 | -8.1 |
Noncurrent [Member] | Asset-Backed Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | 0 | 0.5 |
Less than 12 Months, Unrealized Losses | 0 | -0.1 |
12 Months or More, Fair Value | 0.7 | 0.7 |
12 Months or More, Unrealized Losses | -0.1 | -0.1 |
Total, Fair Value | 0.7 | 1.2 |
Total, Unrealized Losses | -0.1 | -0.2 |
Noncurrent [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | ' | 17.4 |
Less than 12 Months, Unrealized Losses | ' | -2.2 |
12 Months or More, Fair Value | ' | 29.6 |
12 Months or More, Unrealized Losses | ' | -4.1 |
Total, Fair Value | ' | 47 |
Total, Unrealized Losses | ' | -6.3 |
Noncurrent [Member] | Corporate Debt Securities [Member] | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Less than 12 Months, Fair Value | ' | 7.5 |
Less than 12 Months, Unrealized Losses | ' | -0.9 |
12 Months or More, Fair Value | ' | 4.1 |
12 Months or More, Unrealized Losses | ' | -0.7 |
Total, Fair Value | ' | 11.6 |
Total, Unrealized Losses | ' | ($1.60) |
Investments_Number_of_Securiti
Investments (Number of Securities Included in Loss Position of Current and Noncurrent Investments) (Details) | Jun. 30, 2014 |
Securities | |
Current [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 86 |
12 Months or More | 278 |
Total, number of securities | 364 |
Current [Member] | Asset-Backed Securities [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 19 |
12 Months or More | 58 |
Total, number of securities | 77 |
Current [Member] | Obligations of States and Other Political Subdivisions [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 26 |
12 Months or More | 129 |
Total, number of securities | 155 |
Current [Member] | Corporate Debt Securities [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 41 |
12 Months or More | 91 |
Total, number of securities | 132 |
Noncurrent [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 0 |
12 Months or More | 1 |
Total, number of securities | 1 |
Noncurrent [Member] | Asset-Backed Securities [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Less than 12 Months | 0 |
12 Months or More | 1 |
Total, number of securities | 1 |
Stock_Repurchase_Program_Detai
Stock Repurchase Program (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Mar. 08, 2012 | 2-May-11 | |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Treasury stock value acquired cost method | ' | ' | $18,146,000 | $85,496,000 | ' | ' | ' |
2011 Stock Repurchase Program [Member] | ' | ' | ' | ' | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Stock repurchase program authorized amount | ' | ' | ' | ' | ' | 323,700,000 | 300,000,000 |
Treasury stock shares acquired | 0 | 0 | 0 | 2,700,000 | ' | ' | ' |
Treasury stock value acquired cost method | 0 | 0 | 0 | 70,000,000 | ' | ' | ' |
Stock repurchase program remaining authorized repurchase amount | $280,000,000 | ' | $280,000,000 | ' | $280,000,000 | ' | ' |
Financing_Arrangements_Revolvi
Financing Arrangements (Revolving Credit Facility and Letters of Credit) (Details) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2011 | |
Debt Instrument [Line Items] | ' | ' | ' |
Maximum amount available for borrowing under the revolving credit facility | ' | ' | $600,000,000 |
Line of credit facility, maturity date | 24-Oct-16 | ' | ' |
Additional borrowing capacity | ' | ' | 200,000,000 |
Revolving credit facility outstanding balance | 100,000,000 | ' | ' |
Revolving credit facility, remaining capacity | 491,000,000 | 492,500,000 | ' |
Line of credit default limit | 50,000,000 | ' | ' |
Limit of uninsured judgment not stayed within 60 days | 50,000,000 | ' | ' |
Limit of uninsured judgment not stayed, period (in days) | '60 days | ' | ' |
Standby Letters of Credit [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Revolving credit facility, borrowing capacity | ' | ' | 400,000,000 |
Letter of Credit [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Maximum amount available for borrowing under the revolving credit facility | ' | ' | 400,000,000 |
Outstanding letters of credit | 9,000,000 | 7,500,000 | ' |
Amounts drawn on letters of credit | 0 | 0 | ' |
Bridge Loan [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Maximum amount available for borrowing under the revolving credit facility | ' | ' | $50,000,000 |
Line of Credit [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument basis description | 'a) the base rate (which is a rate per annum equal to the greatest of (i) the federal funds rate plus one-half of one percent, (ii) Bank of America, N.A.’s “prime rate†and (iii) the Eurodollar Rate (as such term is defined in the credit facility) for a one-month interest period plus one percent) plus an applicable margin ranging from 45 to 105 basis points or (b) the Eurodollar Rate plus an applicable margin ranging from 145 to 205 basis points | ' | ' |
Line of Credit [Member] | Federal Funds [Member] | Variable Base Rate A [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate (as a percentage) | 0.50% | ' | ' |
Line of Credit [Member] | Eurodollar Rate Plus 45 to 105 Basis Points [Member] | Variable Base Rate A [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread (as a percentage) | 1.00% | ' | ' |
Interest period on credit facility (in months) | '1 month | ' | ' |
Line of Credit [Member] | Eurodollar Rate Plus 45 to 105 Basis Points [Member] | Variable Base Rate A [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate (as a percentage) | 0.45% | ' | ' |
Line of Credit [Member] | Eurodollar Rate Plus 45 to 105 Basis Points [Member] | Variable Base Rate A [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate (as a percentage) | 1.05% | ' | ' |
Line of Credit [Member] | Eurodollar Rate Plus 145 to 205 Basis Points [Member] | Variable Base Rate B [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate (as a percentage) | 1.45% | ' | ' |
Line of Credit [Member] | Eurodollar Rate Plus 145 to 205 Basis Points [Member] | Variable Base Rate B [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt instrument, basis spread on variable rate (as a percentage) | 2.05% | ' | ' |
Financing_Arrangements_Senior_
Financing Arrangements (Senior Notes) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | 18-May-07 | Jun. 30, 2014 | Jun. 30, 2014 |
6.375% Senior Notes [Member] | 6.375% Senior Notes [Member] | Change in Control and Below Investment Grade Rating [Member] | |||
6.375% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Debt instrument, aggregate principal amount | ' | ' | $400,000,000 | ' | ' |
Debt instrument, stated interest rate (as a percentage) | ' | ' | 6.38% | ' | ' |
Debt instrument, maturity date | ' | ' | 1-Jun-17 | ' | ' |
Debt Instrument, Redemption Price (as a percentage) | ' | ' | ' | 100.00% | 101.00% |
Default on senior notes | ' | ' | ' | 0 | ' |
Number of days in year per debt terms | ' | ' | ' | '360 days | ' |
Number of months in year per debt terms | ' | ' | ' | '12 months | ' |
Number of days in month, per debt terms | ' | ' | ' | '30 days | ' |
Debt instrument, benchmark for variable rate basis | ' | ' | ' | 'Treasury rate | ' |
Treasury rate basis points (as a percentage) | ' | ' | ' | 0.30% | ' |
Senior note, failure to perform covenant | ' | ' | ' | '60 days | ' |
Senior note, grace period for defaulted payment | ' | ' | ' | '30 days | ' |
Threshold for noncompliance | ' | ' | ' | 50,000,000 | ' |
Accelerated principal amount threshold | ' | ' | ' | 50,000,000 | ' |
Senior notes amount | $399,402,000 | $399,300,000 | ' | ' | ' |
Fair_Value_Measurements_Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Transfers of Assets, Levels 1 to Level 2 | $0 | ' | $0 |
Transfer of Assets, Level 2 to Level 1 | 0 | ' | 0 |
Transfer of Liabilities, Level 1 to Level 2 | 0 | ' | 0 |
Transfers of Liabilities, Levels 2 to Level 1 | 0 | ' | 0 |
Assets measured on nonrecurring basis | 0 | 0 | ' |
Liabilities measured on nonrecurring basis | 0 | 0 | ' |
Recurring [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Cash and cash equivalents | 603,100,000 | 433,200,000 | ' |
Investments at fair value | 1,669,600,000 | 1,626,800,000 | ' |
Embedded contractual derivative asset | 13,300,000 | 7,200,000 | ' |
State-sponsored health plans settlement account deficit | 9,600,000 | 62,900,000 | ' |
Total assets at fair value | 2,295,600,000 | 2,130,100,000 | ' |
Liabilities, fair value | 0 | 0 | ' |
Recurring [Member] | Residential Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 218,300,000 | 203,900,000 | ' |
Recurring [Member] | Commercial Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 125,100,000 | 144,800,000 | ' |
Recurring [Member] | Other Asset-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 79,400,000 | 41,800,000 | ' |
Recurring [Member] | U.S. Treasury Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 23,700,000 | 23,700,000 | ' |
Recurring [Member] | U.S. Agency Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 731,100,000 | 757,000,000 | ' |
Recurring [Member] | Corporate Debt Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 492,000,000 | 455,600,000 | ' |
Recurring [Member] | Level 1 [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Cash and cash equivalents | 603,100,000 | 433,200,000 | ' |
Investments at fair value | 23,700,000 | 23,700,000 | ' |
Embedded contractual derivative asset | 0 | 0 | ' |
State-sponsored health plans settlement account deficit | 0 | 0 | ' |
Total assets at fair value | 626,800,000 | 456,900,000 | ' |
Recurring [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 1 [Member] | Commercial Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 1 [Member] | Other Asset-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 1 [Member] | U.S. Treasury Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 23,700,000 | 23,700,000 | ' |
Recurring [Member] | Level 1 [Member] | U.S. Agency Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 1 [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 1 [Member] | Corporate Debt Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' |
Investments at fair value | 1,645,200,000 | 1,543,300,000 | ' |
Embedded contractual derivative asset | 0 | 0 | ' |
State-sponsored health plans settlement account deficit | 0 | ' | ' |
Total assets at fair value | 1,645,200,000 | 1,543,300,000 | ' |
Recurring [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 218,300,000 | 203,500,000 | ' |
Recurring [Member] | Level 2 [Member] | Commercial Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 124,400,000 | 144,100,000 | ' |
Recurring [Member] | Level 2 [Member] | Other Asset-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 79,400,000 | 41,800,000 | ' |
Recurring [Member] | Level 2 [Member] | U.S. Treasury Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | U.S. Agency Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 731,100,000 | 709,900,000 | ' |
Recurring [Member] | Level 2 [Member] | Corporate Debt Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 492,000,000 | 444,000,000 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' |
Investments at fair value | 700,000 | 59,800,000 | ' |
Embedded contractual derivative asset | 0 | 0 | ' |
State-sponsored health plans settlement account deficit | 0 | 0 | ' |
Total assets at fair value | 700,000 | 59,800,000 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | Residential Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 400,000 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | Commercial Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 700,000 | 700,000 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | Other Asset-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | U.S. Treasury Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | U.S. Agency Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 47,100,000 | ' |
Recurring [Member] | Level 2 [Member] | Noncurrent Assets [Member] | Corporate Debt Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 11,600,000 | ' |
Recurring [Member] | Level 2 [Member] | Current Assets [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
State-sponsored health plans settlement account deficit | ' | 0 | ' |
Recurring [Member] | Level 3 [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' |
Investments at fair value | 0 | 0 | ' |
Embedded contractual derivative asset | 13,300,000 | 7,200,000 | ' |
State-sponsored health plans settlement account deficit | 9,600,000 | 62,900,000 | ' |
Total assets at fair value | 22,900,000 | 70,100,000 | ' |
Recurring [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | Commercial Mortgage-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | Other Asset-Backed Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | U.S. Treasury Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | U.S. Agency Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | Obligations of States and Other Political Subdivisions [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | 0 | 0 | ' |
Recurring [Member] | Level 3 [Member] | Corporate Debt Securities [Member] | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Investments at fair value | $0 | $0 | ' |
Fair_Value_Measurements_Change
Fair Value Measurements (Changes in the Balances of Level 3 Financial Assets) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Opening balance | $61.40 | $31.70 | $70.10 | $11.40 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses for the period | ' | ' | ' | ' |
Realized in net income | -38.5 | 14.5 | -47.2 | 35 |
Unrealized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Purchases, issues, sales and settlements | ' | ' | ' | ' |
Purchases/additions | 0 | 0 | 0 | 0 |
Issues | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | -0.2 |
Settlements | 0 | 0 | 0 | 0 |
Closing balance | 22.9 | 46.2 | 22.9 | 46.2 |
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss) | 0 | 0 | 0 | 0 |
Available-For-Sale Investments [Member] | ' | ' | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Opening balance | 0 | 0 | 0 | 0.2 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses for the period | ' | ' | ' | ' |
Realized in net income | 0 | 0 | 0 | 0 |
Unrealized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Purchases, issues, sales and settlements | ' | ' | ' | ' |
Purchases/additions | 0 | 0 | 0 | 0 |
Issues | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | -0.2 |
Settlements | 0 | 0 | 0 | 0 |
Closing balance | 0 | 0 | 0 | 0 |
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss) | 0 | 0 | 0 | 0 |
Embedded Contractual Derivative Asset [Member] | ' | ' | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Opening balance | 11.4 | 10.9 | 7.2 | 11.2 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses for the period | ' | ' | ' | ' |
Realized in net income | 1.9 | -0.1 | 6.1 | -0.4 |
Unrealized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Purchases, issues, sales and settlements | ' | ' | ' | ' |
Purchases/additions | 0 | 0 | 0 | 0 |
Issues | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Closing balance | 13.3 | 10.8 | 13.3 | 10.8 |
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss) | 0 | 0 | 0 | 0 |
Other Noncurrent Assets [Member] | ' | ' | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Opening balance | 50 | 20.8 | 62.9 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Total gains or losses for the period | ' | ' | ' | ' |
Realized in net income | -40.4 | 14.6 | -53.3 | 35.4 |
Unrealized in accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Purchases, issues, sales and settlements | ' | ' | ' | ' |
Purchases/additions | 0 | 0 | 0 | 0 |
Issues | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Closing balance | 9.6 | 35.4 | 9.6 | 35.4 |
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss) | $0 | $0 | $0 | ' |
Fair_Value_Measurements_Change1
Fair Value Measurements (Changes in the Balances of Level 3 Financial Liabilities) (Details) (Embedded contractual derivative liability [Member], USD $) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 |
Embedded contractual derivative liability [Member] | ' | ' |
Changes in Level 3 Financial Liabilities | ' | ' |
Opening balance | $4.20 | $3.20 |
Transfers Into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Realized in net income | 0.6 | 1.6 |
Unrealized in accumulated other comprehensive income | 0 | 0 |
Purchases, issues, sales and settlements: | ' | ' |
Purchases | 0 | 0 |
Issues | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Closing balance | $4.80 | $4.80 |
Fair_Value_Measurements_Quanti
Fair Value Measurements (Quantitative Information About Level 3 Fair Value Measurements) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Goodwill | 565,886,000 | 565,886,000 |
Western Region Operations [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Goodwill | 565,900,000 | 565,900,000 |
Level 3 [Member] | Monte Carlo Simulation Approach [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Embedded contractual derivative asset | 13,300,000 | 7,200,000 |
Level 3 [Member] | Income Approach [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
State-sponsored health plans settlement account deficit | 9,600,000 | 62,900,000 |
Level 3 [Member] | Western Region Operations [Member] | Income Approach [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Goodwill | 565,900,000 | 565,900,000 |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | Health Net Health Care Expenditures [Member] | Minimum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | -5.58% | -3.34% |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | Health Net Health Care Expenditures [Member] | Maximum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | 8.13% | 7.34% |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | Health Net Health Care Expenditures [Member] | Weighted Average [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | 1.64% | 2.20% |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | National Health Care Expenditures [Member] | Minimum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | -1.13% | -0.77% |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | National Health Care Expenditures [Member] | Maximum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | 10.95% | 9.46% |
Embedded Contractual Derivative Asset [Member] | Level 3 [Member] | Monte Carlo Simulation Approach [Member] | National Health Care Expenditures [Member] | Weighted Average [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Health Care Expenditures, range (as a percentage) | 2.52% | 3.63% |
State-sponsored health plans settlement account deficit [Member] | Level 3 [Member] | Income Approach [Member] | Minimum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 1.14% | 1.14% |
State-sponsored health plans settlement account deficit [Member] | Level 3 [Member] | Income Approach [Member] | Maximum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 1.14% | 1.14% |
State-sponsored health plans settlement account deficit [Member] | Level 3 [Member] | Income Approach [Member] | Weighted Average [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 1.14% | 1.14% |
Goodwill [Member] | Level 3 [Member] | Western Region Operations [Member] | Income Approach [Member] | Minimum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 9.00% | 10.00% |
Goodwill [Member] | Level 3 [Member] | Western Region Operations [Member] | Income Approach [Member] | Maximum [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 9.00% | 10.00% |
Goodwill [Member] | Level 3 [Member] | Western Region Operations [Member] | Income Approach [Member] | Weighted Average [Member] | ' | ' |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ' | ' |
Discount Rate, range (as a percentage) | 9.00% | 10.00% |
Legal_Proceedings_Details
Legal Proceedings (Details) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Mar. 28, 2011 | Mar. 18, 2011 | |
employees_members_providers | Plaintiff | Customers | |
actions | claims | ||
Litigation Related to Military Family Life Consultants [Member] | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Number of pending litigations | 3 | ' | ' |
Number of former MFLCs filing putative class action | 2 | ' | ' |
Number of other named plaintiffs | 12 | ' | ' |
Litigation Related to Information Security Issues [Member] | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Number of pending litigations | 3 | ' | ' |
Total number of people with information on drives | 2,000,000 | ' | ' |
Period of free credit monitoring services | '2 years | ' | ' |
Remaining actions currently pending, after consolidation | 2 | ' | ' |
Estimated putative class members | ' | ' | 800,000 |
Damages sought for each class member | ' | ' | $1,000 |
Number of named plaintiffs' claims on which arbitration was requested | ' | 2 | ' |
Number of motions for arbitration granted | ' | 1 | ' |
Settlement terms | 'Under the terms of the Settlement Agreement, which covers all individuals whose personal information was identified as being on the unaccounted-for server drives, class members who did not previously accept our offer of the credit monitoring and related services described above are eligible to receive such credit monitoring and related services for a period of two years at no cost to them. Class members who previously accepted our original offer are eligible to receive one additional year of such services. In addition, under the Settlement Agreement, class members are eligible to receive reimbursement for certain unreimbursed losses arising from identity theft during a specified time period, up to a cap of $50,000 per class member, and $2 million in the aggregate. The Settlement Agreement also provides that we will continue our ongoing activities to enhance our information security measures, including the encryption of data at rest on our servers and storage area networks. We are also responsible for the payment of the court's award of fees and expenses to plaintiffs' counsel in the amount of approximately $2.3 million. Finally, we will be responsible for the costs of administering the Settlement Agreement. | ' | ' |
Litigation settlement amount, per member, maximum | 50,000 | ' | ' |
Litigation settlement amount, maximum | 2,000,000 | ' | ' |
Award for Plaintiffs' counsel fees and expenses | $2,300,000 | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Effective tax rate | -22.30% | 35.60% | 6.90% | 37.30% |
Impact to Effective Income Tax Rate, Nondeductible Health Insurer Fee, Percent | 13.70% | ' | 14.00% | ' |
Tax Benefit Due to Worthless Stock loss | $72.60 | ' | ' | ' |
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | $11 | ' | ' | ' |