Revenue:

The revenues are generated mostly from premiums on risk-based products, fees from management, administrative, technology and consulting services, sales of wide variety of products and services related to the broad health and well-being industry, and investment and other income. Another major source of income is derived from health care insurance premiums. The other various sources of revenues are identified as service revenues, enters for Medicare and Medicaid Services and Company’s Prescription Solutions pharmacy benefits management.

The management offers the Medicare Advantage and Medicare Part D premium revenues are subject to periodic adjustment under CMS risk adjustment payment methodology. This risk adjustment model provides higher facilities to those members who has a higher possibility of medical conditions. The model also helps identifying the apportion premiums paid to all health plans according to health severity and certain demographic factors.

Management also recognizes premium revenues in the period eligible individuals are entitled to receive health care services. Premium revenues are recognized based on the estimated premiums earned net of projected rebates. The company also earns service revenues which consists of primarily of fees derived from services performed for customers that self-insure the health care costs of their employees and employee’s dependents.

Cash, Cash Equivalents and Investments:

Cash and cash equivalents, because of their high liquid and short term nature are valued at their carrying value. But investments are classified into several categories based on the nature on the instrument. They can either be classified based on their held to maturity or available or sale. Investments with maturities less than one year are classified as short-term. The investments more than one year would be recognized as long