10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______________

FORM 10-Q

_______________

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 000-51954

_______________

DCP Holding Company

(Exact name of Registrant as specified in its Charter)

Ohio	20-1291244
(State or Other Jurisdiction of	(IRS Employer Identification No.)
Incorporation or Organization)

100 Crowne Point Place	45241
Sharonville, Ohio	(Zip Code)
(Address of Principal Executive Office)

Registrant’s telephone number, including area code: (513) 554-1100

_______________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes ☒     No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes ☒     No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting Company ☐
Emerging growth company ☐
	(Do not check if smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of September 30, 2017, there were 500, 8,473 and 3,771 of the Registrant’s Class A, Class B and Class C Redeemable Common Shares outstanding, respectively.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION
		PAGE
Item 1.	Financial Statements (unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
	Signatures	23

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		December 31,
	2017		2016
ASSETS
INVESTMENTS:
Fixed maturities, available for sale at fair value, amortized cost of $8,921,000 and $8,825,000 at September 30, 2017 and December 31, 2016, respectively	$	8,997,871	$	8,824,420
Short-term investments, available for sale at fair value, cost of $577,000 and $513,000 at September 30, 2017 and December 31, 2016, respectively		577,597		512,989
Total investments		9,575,468		9,337,409
CASH AND CASH EQUIVALENTS		11,686,233		11,221,951
ACCRUED INVESTMENT INCOME		77,602		78,662
ACCOUNTS RECEIVABLE, including billed premiums of $853,965 and $1,018,391, net of allowance of $33,344 and $41,092 at September 30, 2017 and December 31, 2016, respectively		46,203,150		46,705,170
DEFERRED ACQUISITION COSTS		3,098,689		3,109,117
PROPERTY AND EQUIPMENT, net of depreciation and amortization of $3,668,553 and $3,531,436 at September 30, 2017 and December 31, 2016, respectively		3,513,997		2,756,999
OTHER ASSETS		5,190,947		4,872,499
TOTAL ASSETS	$	79,346,086	$	78,081,807
LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY
CLAIMS PAYABLE	$	3,417,785	$	3,743,551
UNEARNED PREMIUM REVENUE		46,846,670		46,954,609
OTHER PAYABLES AND ACCRUALS		6,736,757		7,334,165
MORTGAGE LOAN PAYABLE		1,108,400		1,148,000
CAPITAL LEASE OBLIGATIONS		1,308,783		558,114
DEFERRED COMPENSATION		4,452,667		4,051,078
TOTAL LIABILITIES		63,871,062		63,789,517
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED AND COMMON SHARES:
Class A, Redeemable Common Shares, no par value—authorized, 7,500 shares; issued and outstanding, 500 and 506 shares at September 30, 2017 and December 31, 2016, respectively		607,149		561,439
Class B Redeemable Common Shares, no par value—authorized, 120,000 shares; issued and outstanding, 8,473 and 8,604 shares at September 30, 2017 and December 31, 2016, respectively		10,288,754		9,546,686
Class C Redeemable Common Shares, no par value—authorized, 80,000 shares; issued and outstanding, 3,771 shares at September 30, 2017 and December 31, 2016		4,579,121		4,184,165
Total redeemable preferred and common shares		15,475,024		14,292,290
SHAREHOLDERS’ EQUITY—Preferred Shares; no par value—authorized, 92,700 shares; issued, none outstanding
TOTAL LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY	$	79,346,086	$	78,081,807

See notes to unaudited condensed consolidated financial statements.

1

DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
REVENUES
Premium revenue	$	27,339,477		$	26,734,505		$	81,226,549		$	79,409,241
Investment income		70,162			68,498			193,776			206,966
Realized gains on investments, net		54,755			99,558			187,177			48,233
Other income					10,384						46,728
Total revenues		27,464,394			26,912,945			81,607,502			79,711,168
EXPENSES
Healthcare services expense		20,402,073			20,311,592			62,209,264			61,154,178
Insurance expense:
Salaries and benefits expense		2,142,120			2,150,771			6,730,439			6,605,983
Commission expenses and other acquisition costs		1,385,740			1,435,961			4,086,964			4,033,805
Other insurance expense		1,951,554			1,858,026			5,972,507			5,567,876
Total insurance expense		5,479,414			5,444,758			16,789,910			16,207,664
Total expenses		25,881,487			25,756,350			78,999,174			77,361,842
INCOME BEFORE INCOME TAX		1,582,907			1,156,595			2,608,328			2,349,326
INCOME TAX EXPENSE		563,657			501,616			929,005			1,018,419
NET INCOME		1,019,250			654,979			1,679,323			1,330,907
OTHER COMPREHENSIVE INCOME (LOSS)
Change in the fair value of interest rate swap, net of income tax (benefit) of $449, $3,176, $914 and ($12,638), respectively		871			6,163			1,773			(24,532	)
Change in the fair value of investments, net of income tax (benefit) $7,890, ($2,939), $43,017 and $96,324, respectively		15,318			(5,705	)		83,503			186,982
Reclassification adjustment for realized gains included in net income, net of income benefit of ($4,254), ($20,842), ($16,740) and ($3,392), respectively		(8,258	)		(40,459	)		(32,494	)		(6,584	)
Total other comprehensive income		7,931			(40,001	)		52,782			155,866
TOTAL COMPREHENSIVE INCOME	$	1,027,181		$	614,978		$	1,732,105		$	1,486,773

See notes to unaudited condensed consolidated financial statements.

2

DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Nine Months Ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,679,323		$	1,330,907
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		350,196			368,113
Realized gain on investments, net		(187,177	)		(48,233	)
Deferred compensation		569,133			434,409
Effects of changes in operating assets and liabilities:
Accrued investment income		1,060			2,482
Accounts receivable		502,020			(19,453,894	)
Deferred acquisition costs		10,428			(1,289,545	)
Other assets		(217,008	)		(208,730	)
Claims payable		(325,766	)		41,810
Unearned premium revenue		(107,939	)		19,319,645
Other payables and accruals		(581,149	)		1,284,815
Net cash provided by operating activities		1,693,121			1,781,779
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		(3,585,005	)		(4,419,358	)
Sales of investments		2,968,344			2,712,964
Maturities of investments		490,000			200,000
Proceeds from the sale of property and equipment		920,752
Acquisition of property and equipment		(1,083,697	)		(224,556	)
Net cash used in investing activities		(289,606	)		(1,730,950	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Mortgage loan repayments		(39,600	)		(37,800	)
Payments on capital lease		(170,083	)		(231,553	)
Repurchase of redeemable common shares		(182,107	)		(184,461	)
Repurchase of redeemable preferred shares					(2,805,064	)
Extinguishment cost of redeemable preferred shares					(118,812	)
Redeemable shares issued					2,280,066
Issuance cost of redeemable shares					(116,833	)
Dividends paid		(547,443	)		(510,413	)
Net cash used in financing activities		(939,233	)		(1,724,870	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		464,282			(1,674,041	)
CASH AND CASH EQUIVALENTS—Beginning of period		11,221,951			11,657,287
CASH AND CASH EQUIVALENTS—End of period	$	11,686,233		$	9,983,246
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	46,900		$	53,500
Cash paid for income taxes		863,000			855,000
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Redeemed common shares (in other payables and accruals)	$	10,882		$	49,560
Capital lease obligation		920,752

See notes to unaudited condensed consolidated financial statements.

3

DCp HOLDING COMPANY And subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION

DCP Holding Company (the “Company”) is the parent holding company of three wholly-owned operating subsidiaries which include Dental Care Plus, Inc., an Ohio corporation; Insurance Associates Plus, Inc., an Ohio corporation; and Adenta, Inc., a Kentucky corporation. Providers who participate in one or more of the Dental Care Plus networks own a majority of the Company’s Redeemable Common Shares. The Company’s Redeemable Common Shares are also owned by retired providers, Company board members, non-provider individuals and employees. The Company primarily offers to employer groups of all sizes health maintenance organization (“HMO”), participating provider organization (“PPO”) and indemnity plans for dental care services and vision benefit plans. The condensed consolidated interim financial statements included in this report have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation are reflected in the interim financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited 2016 financial statements and notes thereto as included in the DCP Holding Company annual report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 24, 2017. These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. Certain financial information that is required in the annual financial statements may not be required for interim financial reporting purposes and has been condensed or omitted. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

The accounting policies of the Company conform to GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accompanying consolidated financial statements include estimates. Actual results could differ from those estimates.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim condensed consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Company’s consolidated financial statements for the year ended December 31, 2016. While management believes that the procedures followed in preparation of interim financial information are reasonable, the accompanying condensed consolidated financial statements include estimates for items such as changes in claims payable, income tax accounts, deferred acquisition costs, deferred share-based compensation and accrued expenses and various other liability accounts. Any adjustments related to such estimates during the reporting period were of a normal recurring nature.

Premium Revenue—

Fully-Insured—Membership contracts are written on an annual or multi-year basis and are subject to cancellation by the employer group upon thirty days written notice. The Company’s unearned premium revenue was approximately $46,847,000 and $46,955,000 at September 30, 2017 and December 31, 2016, respectively, and primarily relates to the estimated premium revenue associated with the remaining contract periods. Related unbilled amounts recorded in accounts receivable were approximately $45,349,000 and $45,687,000 at September 30, 2017 and December 31, 2016, respectively. Premiums are due monthly in advance and are recognized evenly as revenue during the period in which the Company is obligated to provide services to members. Any amounts not received by the end of a reporting period are recorded as accounts receivable by the Company. Any premiums received prior to the beginning of a reporting period are recognized as premiums received in advance and are included in unearned premium revenue in the accompanying condensed consolidated balance sheets. Premiums received in advance were approximately $1,497,000 and $1,268,000 at September 30, 2017 and December 31, 2016, respectively. Management has determined that as of September 30, 2017 and December 31, 2016, respectively, no premium deficiency reserve is required. The Company’s premium deficiency reserve analysis includes an allocation of investment income.

4

Self-Insured—The Company provides administrative and claims processing services, benefit plan design, and access to its provider networks for an administrative fee to self-insured groups. The Company has no underwriting risk arising from the provision or cost of any services provided to the self-insured groups. The Company recognizes and records self-insured premiums on a gross basis because: (i) the Company is the primary obligor in its contractual relationships with self-insured employers and dental service providers, (ii) the Company establishes the pricing for the services provided, (iii) the Company controls the selection of and the relationships with the dental service providers, and (iv) the Company is involved in the determination of dental service specifications. Self-insured premium revenue is recognized upon the payment of claims for self-insured members in accordance with agreements with self-insured employers and is included in premium revenue in the accompanying condensed consolidated statements of comprehensive income.

Third-party administration fee revenue (“ASO fees”) is recognized monthly when earned and is normally based on annual contracts with the self-insured groups. ASO fees are charged to self-insured employer groups monthly on a per subscriber per month basis and included in premium revenue in the accompanying condensed consolidated statements of comprehensive income. ASO fees also include the administrative fees the Company earns relative to the dental indemnity and vision products that are underwritten by third-party insurance carriers.

Healthcare Services Expense—Healthcare services expense is recognized on a monthly basis. In the case of the fully-insured dental HMO and indemnity and dental PPO segments, healthcare services expense is calculated by taking the paid claims associated with the fully-insured membership and adjusting this amount for the change in the claims payable liability determined using actuarial estimates. For the self-insured dental segment, the healthcare services expense is based solely on the paid claims for the self-insured membership.

Investments—The Company invests in certificates of deposit, corporate bonds and money market funds. The Company classifies all investments as available-for-sale. The Company engages a fixed income portfolio manager to manage the Company’s investment grade and non-investment grade corporate bonds, under the Company’s direction, in order to maximize investment returns. Such investments are recorded at fair value, with unrealized gains and losses recorded as a component of other comprehensive income. The Company recognizes gains and losses when these securities have other than temporary impairment, mature or are sold using the specific identification method.

Deferred Acquisition Costs—Deferred acquisition costs are those incremental direct costs related to the successful acquisition of new and renewal business. These incremental direct costs are those that are essential to the contract transaction and would not have been incurred had the contract transaction not occurred. Such incremental direct costs include commissions, costs of contract issuance and underwriting, state premium taxes and other costs the Company incurs to successfully acquire new business or renew existing business. The Company defers policy acquisition costs and amortizes them over the estimated life of the contracts, which are short-duration in nature, in proportion to premiums earned. The Company capitalized deferred acquisition costs of approximately $724,000 and $753,000 and amortized approximately $1,243,000 and $1,196,000 of these capitalized costs for the three months ended September 30, 2017 and 2016, respectively. The Company capitalized deferred acquisition costs of approximately $3,700,000 and $4,847,000 and amortized approximately $3,710,000 and $3,557,000 of these capitalized costs for the nine months ended September 30, 2017 and 2016, respectively. The amortization of these costs is recorded in commission expense and other acquisition costs included in the condensed consolidated statements of comprehensive income.     

Claims Payable—The Company estimates liabilities for both incurred but not reported (“IBNR”) and reported claims in process by employing actuarial methods that are commonly used by health insurance actuaries.  These estimates meet actuarial standards of practice and are also recorded in accordance with generally accepted accounting principles.  Management’s estimates of dental services provided are based on the Company’s historical experience and current trends, with assistance from the Company’s consulting actuary. Estimated dental claims payable are reviewed monthly by management and are adjusted based on current information, actual paid claims data, dental utilization statistics and other pertinent information. However, final claim payments may differ from the established reserves. Any resulting adjustments are reflected in current operations in the condensed consolidated statements of comprehensive income.     

New Accounting Guidance—In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers. The new guidance requires that an entity recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. Insurance contracts are not included in the scope of this new guidance. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017. We have determined that any impact will only relate to contracts with our self-insured dental business. The Company does not anticipate any material changes in the timing of our recognition of revenue or net income.

5

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU 2016-01 is for interim and annual reporting periods beginning after December 15, 2017. The ASU has not yet been adopted by the Company; however, it will not have a material impact on our Company’s consolidated financial position, cash flows and results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 introduces new guidance that requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Leases would be classified as finance or operating leases and both types of leases will be recognized on the balance sheet. The new guidance will also require new qualitative and quantitative disclosures. The effective date of ASU 2016-02 is for interim and annual reporting periods beginning after December 15, 2018. The ASU has not yet been adopted by the Company. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts as well as identification of other contracts that may fall under the scope of the new guidance. We do not expect the adoption to have a material impact on the Company’s consolidated financial position, cash flows and results of operations.     

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The effective date of ASU 2016-13 is for interim and annual reporting periods beginning after December 15, 2019. The ASU has not yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is not expected to have a significant impact.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The effective date of ASU 2017-08 is for interim and annual reporting periods beginning after December 15, 2018. The ASU has not yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is not expected to have a significant impact.

3. INVESTMENTS

The Company owned certificates of deposit insured by the Federal Deposit Insurance Corporation (“FDIC”) with an amortized cost of $1,150,000 and $1,090,000 as of September 30, 2017 and December 31, 2016, respectively. The certificates of deposit included in short term and fixed maturities investments are classified as available-for-sale and are carried at fair value. The Company also invests in money market funds included in short term investments that are classified as available-for-sale, with a cost of approximately $177,000 and $223,000 as of September 30, 2017 and December 31, 2016, respectively. The Company invested in corporate bonds with an amortized cost of approximately $8,171,000 and $8,025,000 as of September 30, 2017 and December 31, 2016, respectively. These corporate bonds included in fixed maturity investments are classified as available-for-sale and are carried at fair value.

The Company owned corporate bonds at September 30, 2017, which consisted primarily of investment grade securities. At September 30, 2017, total bond fair value was approximately $8,246,000, which consisted of approximately $7,576,000 with a credit rating of BBB- or better. The remaining securities, totaling approximately $670,000 had a credit rating of BB+ or lower. The weighted average yield-to-cost of the Company’s corporate bonds was approximately 3.20% at September 30, 2017. The weighted average maturity of the Company’s corporate bonds was 5.21 years at September 30, 2017.

6

At September 30, 2017 and December 31, 2016, maturity dates for fixed maturities and short term investments (excluding the money market funds) were:

	Available-for-Sale
	Amortized		Fair		% of Total
September 30, 2017	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	400,000	$	400,217		4.3	%
Years 1-5		5,347,561		5,384,875		57.3	%
Years 5-10		3,523,638		3,563,607		37.9	%
Due after ten years		50,000		49,390		0.5	%
Total	$	9,321,199	$	9,398,089		100.0	%

	Available-for-Sale
	Amortized		Fair		% of Total
December 31, 2016	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	290,000	$	290,412		3.2	%
Years 1-5		5,722,990		5,741,735		63.0	%
Years 5-10		3,052,388		3,035,185		33.3	%
Due after ten years		50,000		47,500		0.5	%
Total	$	9,115,378	$	9,114,832		100.0	%

Investments classified at September 30, 2017 and December 31, 2016 as fixed maturities and short term investments were as follows:

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2017	Cost		Gain		Loss			Value
Money market fund	$	177,379						$	177,379
Certificates of deposit, short term		400,000	$	246	$	(28	)		400,218
Certificates of deposit, fixed maturities		750,000		2,012					752,012
Corporate bonds, fixed maturities		8,171,199		111,115		(36,455	)		8,245,859
Total investments	$	9,498,578	$	113,373	$	(36,483	)	$	9,575,468

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2016	Cost		Gain		Loss			Value
Money market fund	$	222,577						$	222,577
Certificates of deposit, short term		290,000	$	412					290,412
Certificates of deposit, fixed maturities		800,000		4,728	$	(66	)		804,662
Corporate bonds, fixed maturities		8,025,378		76,323		(81,943	)		8,019,758
Total investments	$	9,337,955	$	81,463	$	(82,009	)	$	9,337,409

Unrealized losses on investments at September 30, 2017 and December 31, 2016 were generally due to higher current market yields relative to the yields of the investments at their amortized cost. Unrealized losses due to credit risk associated with the underlying collateral of the investments, if any, are not material. All investments with unrealized losses are reviewed quarterly to determine if any impairment is other than temporary, requiring a charge to earnings. The Company considers the severity of the loss on a security, duration of loss, duration of the investment, credit rating of the security, as well as payment performance and the Company’s intent or requirement to sell the investment before recovery when determining whether any impairment is other than temporary. The Company had no investments in a material unrealized loss position for greater than one year at September 30, 2017 or December 31, 2016.

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4. DEFERRED COMPENSATION PLAN

In accordance with the 2006 Dental Care Plus Management Equity Incentive Plan and the Dental Care Plus, Inc. and DCP Holding Company Deferred Compensation Plan (the “Plans”), Company directors and certain key employees elected to defer portions of their director fees and employee compensation, as applicable. In 2017, the non-employee members of the Board were granted a total of 216 share based awards and key employees were granted 99 share based awards. Share-based awards may be subject to deferral elections upon vesting, in which case these accounts in the Deferred Compensation Plan will increase or decrease in value based upon the value of the Company’s Redeemable Common Shares. The Company recorded deferred compensation expense of approximately $127,000 and $125,000 related to share-based awards that were deferred at vesting and the change in the value of deferred employee compensation for the three months ended September 30, 2017 and 2016, respectively. The Company recorded deferred compensation expense of approximately $13,000 and $15,000 related to deferred director fees and deferred employee compensation for the three months ended September 30, 2017 and 2016, respectively. The Company recorded deferred compensation expense of approximately $550,000 and $399,000 related to deferred share awards and the change in the value of deferred employee compensation for the nine months ended September 30, 2017 and 2016, respectively. The Company recorded deferred compensation expense of approximately $45,000 and $40,000 related to deferred director fees and deferred employee compensation for the nine months ended September 30, 2017 and 2016, respectively.

In February 2017 and 2016, the Board declared a per share cash dividend for all Redeemable Common Shares in the amounts of $42.50 and $40.47 per share, respectively. With the dividend, the holders of restricted share units and phantom shares received an equivalent share based dividend that resulted in an increase in the deferred compensation liability of approximately $115,000 and $102,000 in February 2017 and February 2016, respectively.

At September 30, 2017 and December 31, 2016, the deferred compensation liability was approximately $4,453,000 and $4,051,000, respectively.

5. LIABILITY FOR CLAIMS PAYABLE

Activity in the liability for claims payable for members is summarized as follows:

	Nine months ended		Nine months ended
	September 30, 2017		September 30, 2016
Balance—January 1	$	3,743,551	$	3,253,346
Net incurred claims related to:
Current year		42,789,639		41,999,068
Prior years		80,300		(45,147	)
Net incurred claims		42,869,939		41,953,921
Net paid claims related to:
Current year		39,583,233		38,760,333
Prior years		3,612,472		3,151,778
Net paid claims		43,195,705		41,912,111
Balance—September 30	$	3,417,785	$	3,295,156

6. FEDERAL INCOME TAXES

The Company calculates its year to date income tax provision by applying the estimated annual effective tax rate for the year to pretax income. The effective tax rate for the three and nine months ended September 30, 2017 was 35.6% with tax expense of approximately $564,000 and $929,000, respectively. The effective tax rate for the three and nine months ended September 30, 2016 was 43.3% with tax expense of approximately $502,000 and $1,018,000, respectively. The decrease in federal income tax is primarily the result of a 2017 moratorium on the non-deductible federal premium tax. Tax years subsequent to 2013 remain open to examination by the Internal Revenue Service (“IRS”), and 2012 remains open to state and local tax authorities.  The Company has recorded no uncertain tax positions in the tax years that are subject to examination.

8

7. ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income includes changes in unrealized gains and losses on available for sale and other invested assets as follows:

	Three months ended									Three months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized gains, net, on investments available for sale, beginning of period	$	53,214		$	18,097		$	35,117		$	308,777		$	104,988		$	203,789
Other comprehensive income (loss) before reclassification		23,208			7,890			15,318			(8,644	)		(2,939	)		(5,705	)
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(12,512	)		(4,254	)		(8,258	)		(61,301	)		(20,842	)		(40,459	)
Effect on other comprehensive income		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Accumulated unrealized income, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(5,330	)	$	(1,812	)	$	(3,518	)	$	(64,525	)	$	(21,940	)	$	(42,585	)
Other comprehensive income before reclassification		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive losses		1,320			449			871			9,339			3,176			6,163
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive gain, beginning of period	$	47,884		$	16,285		$	31,599		$	244,252		$	83,048		$	161,204
Change in unrealized gains (losses), net, on investments available for sale		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Change in unrealized gains, net, on interest rate swap		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive income (loss)		12,016			4,085			7,931			(60,606	)		(20,605	)		(40,001	)
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

9

	Nine months ended									Nine months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized loss, net, on investments available for sale, beginning of period	$	(13,376	)	$	(4,544	)	$	(8,832	)	$	(34,498	)	$	(11,725	)	$	(22,773	)
Other comprehensive income before reclassification		126,520			43,017			83,503			283,306			96,324			186,982
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(49,234	)		(16,740	)		(32,494	)		(9,976	)		(3,392	)		(6,584	)
Effect on other comprehensive income		77,286			26,277			51,009			273,330			92,932			180,398
Accumulated unrealized gains, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(6,697	)	$	(2,277	)	$	(4,420	)	$	(18,016	)	$	(6,126	)	$	(11,890	)
Other comprehensive income (loss) before reclassification		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income (loss)		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive loss, beginning of period	$	(20,073	)	$	(6,821	)	$	(13,252	)	$	(52,514	)	$	(17,851	)	$	(34,663	)
Change in unrealized gains, net, on investments available for sale		77,286			26,277			51,009			273,330			92,932			180,398
Change in unrealized gains (losses), net, on interest rate swap		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income		79,973			27,191			52,782			236,160			80,294			155,866
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

8. SEGMENT INFORMATION

The Company manages its business with four segments: fully-insured dental HMO and indemnity, fully-insured dental PPO, self-insured dental and corporate, all other. Self-insured dental consists of the self-insured dental HMO, self-insured dental PPO and self-insured dental indemnity products. Corporate, all other consists of revenue associated with the Company’s dental indemnity and vision products underwritten by third-party insurance carriers and certain other corporate activities. These segments are consistent with information used by the Chief Executive Officer (the chief operating decision maker) in managing the business.

The results of the fully-insured dental HMO and indemnity, fully-insured dental PPO and self-insured dental segments are measured by gross profit. The Company does not allocate insurance expense, investment and other income, assets or liabilities to these segments because the Company does not use these measures to analyze the segments. These items are assigned to the remainder of the Company’s business, which it identifies as corporate, all other. The Company’s gross profit was approximately $6,937,000 and $6,422,000 for the three months ended September 30, 2017 and 2016, respectively. The Company’s gross profit was approximately $19,017,000 and $18,255,000 for the nine months ended September 30, 2017 and 2016, respectively.

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Listed below is financial information required for each reportable segment for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	12,922	$	9,352	$	3,570	$	13,373	$	9,859	$	3,514
Fully-insured dental PPO		6,483		4,372		2,111		5,582		3,878		1,704
Self-insured dental		7,733		6,678		1,055		7,584		6,575		1,009
Corporate, all other		201				201		195				195
Total	$	27,339	$	20,402		6,937	$	26,734	$	20,312		6,422
Investment income						70						69
Realized gains on investments, net						55						100
Other income												10
Insurance expense						5,479						5,444
Income before income tax					$	1,583					$	1,157
Total assets-corporate					$	79,346

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	38,700	$	29,375	$	9,325	$	39,915	$	30,351	$	9,564
Fully-insured dental PPO		19,513		13,495		6,018		16,727		11,603		5,124
Self-insured dental		22,414		19,339		3,075		22,200		19,200		3,000
Corporate, all other		599				599		567				567
Total	$	81,226	$	62,209		19,017	$	79,409	$	61,154		18,255
Investment income						194						207
Realized gains on investments, net						187						48
Other income												47
Insurance expense						16,790						16,208
Income before income tax					$	2,608					$	2,349
Total assets-corporate					$	79,346

Inter-segment revenues were not significant for the three and nine months ended September 30, 2017 and 2016.

9. FAIR VALUE MEASUREMENTS

The Company classifies the assets and liabilities that require measurement of fair value based on the priority of the observable and market-based sources of data into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows:

● Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

● Level 2 – Valuations based on significant other observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

● Level 3 – Valuations based on unobservable inputs such as when observable inputs are not available or inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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The following table presents each of the fair value levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (amounts in thousands):

	September 30, 2017						December 31, 2016
	Level 1		Level 2		Total Balance		Level 1		Level 2		Total Balance
Assets
Fixed maturities
Federally-Insured certificates of deposit			$	752	$	752			$	805	$	805
Investment grade corporate bonds				7,576		7,576				7,363		7,363
Non-investment grade corporate bonds				670		670				657		657
Short-term investments
Money market funds	$	177				177	$	223				223
Federally-Insured certificates of deposit				400		400				290		290
Deferred compensation investments (a)
Equity mutual fund investments		1,118				1,118		729				729
State guarantee fund deposits (b)
Government securities		1,771				1,771		1,775				1,775
Federally-Insured certificates of deposit				75		75				75		75
Total	$	3,066	$	9,473	$	12,539	$	2,727	$	9,190	$	11,917
Liabilities
Interest rate swap (c)			$	4	$	4			$	7	$	7
Total	$		$	4	$	4	$		$	7	$	7

(a) Included as a trading security in other assets

(b) Included in other assets

(c) Included in other payables and accruals

The Company measures fair value using the following valuation methodologies. The Company uses quoted market prices to determine the fair value of the deferred compensation investments and certain state fund guarantee deposits; such items are classified as Level 1 of the fair value hierarchy. Examples include government securities and mutual fund equity securities. The Company primarily bases fair value for investments in fixed-maturity securities on quoted market prices or on prices from a pricing vendor, an outside resource that supplies independent securities pricing, dividend, corporate action and descriptive information to support fund pricing, securities operations, research and portfolio management. The Company obtains and reviews the pricing service’s valuation methodologies and validates these prices using various inputs including quotes from other independent regulatory sources. When deemed necessary, the Company validates prices by replicating a sample using a discounted cash flow model. Such items are classified as Level 2 of the fair value hierarchy. The Company obtains a price from an independent vendor to determine the fair value of the interest rate swap. The independent vendor uses a discounted cash flow method whereby the significant observable inputs include the replacement interest rates of similar swap instruments in the market and swap curves; such items are classified as Level 2 of the fair value hierarchy.

As of September 30, 2017 and December 31, 2016, there were no assets or liabilities that were required to be measured at fair value on a non-recurring basis. The Company did not have any transfers between fair value hierarchy levels during the three and nine months ended September 30, 2017 or 2016. As of September 30, 2017 and December 31, 2016, the Company did not have any assets or liabilities classified as Level 3 of the fair value hierarchy.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking statements

Portions of this report, including this discussion and the information contained in the notes to the condensed consolidated financial statements, contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “intend,” “potential,” “likely will result,” or the negative of such terms or similar expressions. These forward-looking statements reflect our current expectations and views about future events and speak only as of the date of this report. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements, include, among others: claims costs exceeding our estimates, a downgrade in our financial strength rating, competitive pressures, changes in demand for dental benefits and other economic conditions, the loss of a significant customer or broker, the occurrence or non-occurrence of circumstances beyond our control and those items described in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date this report is filed.

Overview

Headquartered in Cincinnati, Ohio, the Dental Care Plus Group offers to Ohio, Kentucky and Indiana employer groups of all sizes dental HMO, dental PPO, dental indemnity and vision PPO benefit plans and related services. The Company also offers dental PPO plans to individuals and small groups on the Ohio, Kentucky, Indiana, Pennsylvania, Georgia, Tennessee, Illinois and Virginia Federally Facilitated Marketplace exchanges (the “FFM exchanges”) and individual dental HMO and PPO plans in Ohio, Kentucky and Indiana. As of September 30, 2017, we had approximately 389,100 members in our dental and vision benefit programs with approximately 3,000 providers participating in our dental HMO network, approximately 3,200 providers participating in our DentaSelect dental PPO network and approximately 2,300 providers in our Balanced Value dental PPO network. The Company has a network access agreement with a national dental network management company that has one of the largest PPO networks of providers under contract in the United States. With this network access agreement, our dental PPO members have access to approximately 2,800 additional providers in Ohio and Indiana and approximately 45,000 additional providers throughout the United States. The Company also has other network access arrangements for the dental PPO plans that it offers on the FFM exchanges. With these network access arrangements, our exchange members have access to approximately 6,000 providers across the FFM exchange states.

We manage our business with four reportable segments: fully-insured dental HMO and indemnity (“dental HMO/IND”), fully-insured dental PPO, self-insured dental, and corporate, all other. Self-insured dental consists of the self-insured dental HMO, self-insured dental PPO and self-insured dental indemnity products. Corporate, all other primarily consists of revenue associated with our dental and vision products underwritten by third-party insurance carriers and certain other corporate activities.

The results of our fully-insured dental HMO/IND, fully-insured dental PPO and self-insured dental segments are measured by gross profit. We do not measure the gross profit of our corporate, all other segment. We do not allocate investment and other income, insurance expenses, assets or liabilities to our segments because these measures are not used to analyze the segments. Our segments do not share overhead costs or assets. We do, however, measure the contributions of each of our fully-insured and self-insured segments to costs retained in our corporate, all other segment.

Company Strategy

Our strategy focuses on providing solutions to employers and individuals to manage the rising cost of dental care by leveraging our products that give employer groups and members options that meet their needs. We strive to provide excellent customer service to our employer groups, members, brokers and providers. Additionally, we have increased the diversification of our membership base, not only through our newer products, but also by entering new geographic territories.

Highlights

– We had net income of approximately $1,019,000 for the three months ended September 30, 2017 (the “2017 quarter”) compared to net income of approximately $655,000 for the three months ended September 30, 2016 (the “2016 quarter”).

– We had net income of approximately $1,679,000 for the nine months ended September 30, 2017 (the “2017 period”) compared to net income of approximately $1,331,000 for the nine months ended September 30, 2016 (the “2016 period”). This increase in net income was primarily the result of an increase in gross profit (total premium revenue less healthcare services expense) of approximately $762,000, a reduction of tax expense of approximately $89,000 and an increase in investment income, realized gains and other income of approximately $79,000 in the 2017 period as compared to the 2016 period. These increases in net income were offset by higher insurance expense of approximately $582,000.

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– Our dental and vision product membership increased by approximately 8,900 members to approximately 389,100 members at September 30, 2017. This membership increase from September 30, 2016 is predominantly due to an increase in fully-insured dental PPO membership of approximately 12,300 members, offset by a decrease in fully-insured HMO/IND dental membership of approximately 4,900 members.

– Our ratio of healthcare services expense to premium revenue (“loss ratio”) decreased from 77.0% in the 2016 period to 76.6% in the 2017 period. The decrease in the loss ratio is primarily the result of a decrease of incurred claims for our fully insured dental HMO and dental PPO group business.

– In March 2017, we paid a dividend of $42.50 per share to shareholders of record for all Redeemable Common Shares. We paid a dividend in March 2016 of $40.47 per share to shareholders of record for all Redeemable Common Shares.

Comparison of Results of Operations

The following is a discussion of our results of operations for the 2017 quarter and the 2016 quarter, the 2017 period and the 2016 period.

The table below presents membership and financial data for our four reportable segments (dollar amounts in thousands):

	As of		As of
	September 30, 2017		September 30, 2016		Change
Membership:
Fully-insured dental HMO/IND		161,800		166,700		(2.9%	)
Fully-insured dental PPO		91,300		79,000		15.6	%
Self-insured dental		96,800		96,200		0.6	%
Corporate, all other		39,200		38,300		2.3	%
Total membership		389,100		380,200		2.3	%

	Three months ended		Three months ended
	September 30, 2017		September 30, 2016		Change
Premium revenue:
Fully-insured dental HMO/IND	$	12,922	$	13,373		(3.4	%)
Fully-insured dental PPO		6,483		5,582		16.1	%
Self-insured dental		7,733		7,584		2.0	%
Corporate, all other		201		195		3.1	%
Total premium revenue		27,339		26,734		2.3	%
Investment income		70		69		1.4	%
Realized gains on investments, net		55		100		(45.0	%)
Other income		-		10		(100.0	%)
Total revenue		27,464		26,913		2.0	%
Healthcare services expense:
Fully-insured dental HMO/IND		9,352		9,859		(5.1	%)
Fully-insured dental PPO		4,372		3,878		12.7	%
Self-insured dental		6,678		6,575		1.6	%
Total healthcare service expense		20,402		20,312		0.4	%
Insurance expense		5,479		5,444		0.6	%
Income tax expense		564		502		12.4	%
Net income	$	1,019	$	655		55.6	%

14

	Nine months ended		Nine months ended
	September 30, 2017		September 30, 2016		Change
Premium revenue:
Fully-insured dental HMO/IND	$	38,700	$	39,915		(3.0%	)
Fully-insured dental PPO		19,513		16,727		16.7	%
Self-insured dental		22,414		22,200		1.0	%
Corporate, all other		599		567		5.6	%
Total premium revenue		81,226		79,409		2.3	%
Investment income		194		207		(6.3%	)
Realized gains on investments, net		187		48		289.6	%
Other income		-		47		(100.0%	)
Total revenue		81,607		79,711		2.4	%
Healthcare services expense:
Fully-insured dental HMO/IND		29,375		30,351		(3.2%	)
Fully-insured dental PPO		13,495		11,603		16.3	%
Self-insured dental		19,339		19,200		0.7	%
Total healthcare service expense		62,209		61,154		1.7	%
Insurance expense		16,790		16,208		3.6	%
Income tax expense		929		1,018		(8.7%	)
Net income	$	1,679	$	1,331		26.1	%

Membership

Our fully-insured dental HMO/IND membership decreased approximately 4,900 members as of September 30, 2017 from September 30, 2016. This membership decrease is attributable to the reduction of approximately 10,000 fully-insured dental HMO members due to the conversion of one employer group from our fully-insured dental HMO/IND product to our self-insured dental product effective January 1, 2017. In addition, a decrease of approximately 7,500 members is the result of employer groups that did not renew with the Company or reduced employee counts of retained employer groups, which was offset with an increase of 12,600 members from new sales. Some of our fully-insured dental HMO/IND membership losses were the result of corporate consolidations and employer groups moving to medical carriers to take advantage of medical/dental packaged savings.

Our fully insured dental PPO membership increased by approximately 12,300 members as of September 30, 2017 from September 30, 2016. The increase in fully-insured dental PPO membership is primarily the result of new sales of approximately 18,700 members, offset by the loss of approximately 6,400 members due to employer groups that did not renew with the Company or reduced employee counts of retained employer groups.

Our self-insured dental membership increased as of September 30, 2017 compared to September 30, 2016. During the period of comparison, approximately 10,000 members of an employer group converted from our fully-insured dental HMO product to our self-insured dental product effective January 1, 2017, which was offset by a decrease of 9,400 members as a result of employer groups that did not renew with the Company. Some of our fully-insured dental HMO/IND membership losses were the result of corporate consolidation and employer groups moving to medical carriers to take advantage of medical/dental packaged savings.

Our corporate, all other membership increased slightly as of September 30, 2017 compared to September 30, 2016, as a result of an increase in vision membership.

Revenue

Fully-insured dental HMO/IND premium revenue for the 2017 quarter decreased by approximately $451,000 compared to the 2016 quarter. New fully-insured dental HMO/IND sales volume resulted in an increase in fully-insured dental HMO/IND premium revenue of approximately $437,000 that was offset by a decrease in fully-insured dental HMO/IND revenue of approximately $810,000 due to the conversion of an employer group to the self-insured product line in 2017. Fully-insured dental HMO/IND premium decreased by $78,000 due to lower overall premium rates on a PMPM basis. The conversion of an employer group from fully-insured to the self-insured product line resulted in $54,000 of this decrease.

15

Fully-insured dental HMO/IND premium revenue for the 2017 period decreased by approximately $1,215,000 compared to the 2016 period. New fully-insured dental HMO/IND sales volume resulted in an increase in fully-insured dental HMO/IND premium revenue of approximately $1,519,000 that was offset by a decrease in fully-insured dental HMO/IND revenue of approximately $2,432,000 due to the conversion of an employer group to the self-insured product line in 2017. Fully-insured dental HMO/IND premium decreased by $302,000 due to lower overall premium rates on a PMPM basis. The conversion of an employer group from fully-insured to the self-insured product line resulted in $162,000 of this decrease.

Fully-insured dental PPO premium revenue for the 2017 quarter increased by approximately $901,000 compared to the 2016 quarter. Fully-insured dental PPO revenue increased by approximately $896,000 due to an increase in fully-insured PPO group and individual membership in the 2017 quarter and the remaining increase was due to premium rate increases.

Fully-insured dental PPO premium revenue for the 2017 period increased by approximately $2,786,000 compared to the 2016 period. Fully-insured dental PPO revenue increased by approximately $3,072,000 due to an increase in fully-insured PPO group and individual membership in the 2017 period, offset by a decrease of approximately $286,000 due to a decrease in premium rates for the period.

Total self-insured dental revenue for the 2017 quarter increased approximately $149,000 compared to the 2016 quarter. Total self-insured dental revenue for the 2017 period increased approximately $214,000 compared to the 2016 period.

The self-insured segment revenue has two components:

Self-Insured Claim Revenue – Self-insured claim revenue increased approximately $141,000 to approximately $7,382,000 in the 2017 quarter from approximately $7,241,000 in the 2016 quarter. The self-insured claim revenue increased by approximately $1,127,000 due to the conversion of fully-insured HMO/IND revenue to the self-insured product. This increase was offset by a decrease of approximately $899,000, as a result of the loss of employer groups in 2017. In addition, there was a decrease in self-insured claim revenue of approximately $87,000 as a result of a decrease in self-insured claim revenue on a PMPM basis in the 2017 quarter.

Self-Insured Claim Revenue – Self-insured claim revenue increased approximately $198,000 to approximately $21,350,000 in the 2017 period from approximately $21,152,000 in the 2016 period. The self-insured claim revenue increased by approximately $2,889,000 due to the conversion of fully-insured HMO/IND revenue to the self-insured product. This increase was offset by a decrease of approximately $2,520,000, as a result of the loss of employer groups in 2017. In addition, there was a decrease in self-insured claim revenue of approximately $171,000 as a result of a decrease in self-insured claim revenue on a PMPM basis in the 2017 period.

Self-Insured ASO Fees - Self-insured ASO fees increased approximately $8,000 to approximately $351,000 in the 2017 quarter from approximately $343,000 in the 2016 quarter due to an increase in the average self-insured ASO fee rates on a PMPM basis for the 2017 quarter compared to the 2016 quarter.

Self-Insured ASO Fees - Self-insured ASO fees increased approximately $16,000 to approximately $1,064,000 in the 2017 period from approximately $1,048,000 in the 2016 period. Self-insured ASO fees increased by approximately $14,000 due to an increase in the average self-insured ASO fee rates on a PMPM basis for the 2017 period compared to the 2016 period. In addition, there was an increase of approximately $2,000 due to a net membership increase with existing employer groups.

Corporate, all other premium revenue is primarily derived from the dental indemnity product and the vision product that are underwritten by third-party insurance carriers. In aggregate, corporate, all other premium revenue increased by approximately $32,000 in the 2017 period compared to the 2016 period.

Healthcare Services Expense

Fully-insured dental HMO/IND healthcare services expense decreased $507,000 in the 2017 quarter compared to the 2016 quarter. Fully-insured dental HMO/IND healthcare services expense on a PMPM basis decreased by 2.4% from $19.79 PMPM in the 2016 quarter to $19.31 PMPM in the 2017 quarter. A decrease in fully-insured dental HMO/IND membership due to the conversion of an employer group to our self-insured product resulted in a claim decrease of approximately $597,000. This decrease was offset by an increase of approximately $322,000 in healthcare services expense due to an increase in new membership. In addition, lower healthcare services utilization resulted in a decrease in fully-insured dental HMO/IND healthcare services expense of approximately $338,000 in the 2017 quarter compared to the 2016 quarter. An increase of $106,000 is also attributable to fee schedule increases effective January 1, 2017.

16

Fully-insured dental HMO/IND healthcare services expense decreased $976,000 in the 2017 period compared to the 2016 period. Fully-insured dental HMO/IND healthcare services expense on a PMPM basis decreased by 1.0% from, $20.42 PMPM in the 2016 period to $20.23 PMPM in the 2017 period. A decrease in fully-insured dental HMO/IND membership due to the conversion of an employer group to our self-insured product resulted in a claim decrease of approximately $1,849,000. Lower healthcare services utilization resulted in a decrease in fully-insured dental HMO/IND healthcare services expense of approximately $608,000 in the 2017 period compared to the 2016 period. These decreases were offset by an increase of approximately $1,155,000 due to an increase in new membership. In addition, an increase of $326,000 is attributable to fee schedule increases effective January 1, 2017.

Fully-insured dental PPO healthcare services expense increased by $494,000 in the 2017 quarter compared to the 2016 quarter. Fully-insured dental PPO healthcare services expense on a PMPM basis decreased by 2.8% from $16.22 PMPM in the 2016 quarter to $15.76 PMPM in the 2017 quarter. An increase in fully-insured dental PPO membership resulted in an increase in fully-insured dental PPO healthcare services expense of $623,000. In addition, an increase of $49,000 is attributable to fee schedule increases effective January 1, 2017. These increases were offset by lower healthcare services utilization that resulted in a decrease of approximately $178,000 in the 2017 quarter compared to the 2016 quarter.

Fully-insured dental PPO healthcare services expense increased by $1,892,000 in the 2017 period compared to the 2016 period. Fully-insured dental PPO healthcare services expense on a PMPM basis decreased 1.4%, from $16.23 PMPM in the 2016 period to $16.00 PMPM in the 2017 period. An increase in fully-insured dental PPO membership resulted in an increase in fully-insured dental PPO healthcare services expense of $2,131,000. In addition, an increase of $69,000 is attributable to fee schedule increases effective January 1, 2017. These increases were offset by lower healthcare services utilization that resulted in a decrease of approximately $308,000 in the 2017 period compared to the 2016 period.

Self-insured healthcare services expense increased by $103,000 in the 2017 quarter compared to the 2016 quarter. Self-insured healthcare services expense on a PMPM basis increased by 1.2% from $22.73 PMPM in the 2016 quarter to $23.01 PMPM in the 2017 quarter. An increase in self-insured dental membership due to the conversion of employer groups to our self-insured product resulted in an increase of approximately $1,014,000. In addition, self-insured healthcare services expense increased approximately $73,000 attributable to fee schedule increases effective January 1, 2017. These increases were offset by a decrease of $817,000 due to the loss of self-insured groups in 2017. Also, lower healthcare services utilization resulted in a decrease in self-insured healthcare services expense of approximately $167,000 in the 2017 quarter compared to the 2016 quarter.

Self-insured healthcare services expense increased by $139,000 in the 2017 period compared to the 2016 period. Self-insured healthcare services expense on a PMPM basis increased 0.5% from $22.02 PMPM in the 2016 period to $22.12 PMPM in the 2017 period. An increase in self-insured dental membership due to the conversion of employer groups to our self-insured product resulted in an increase of approximately $2,600,000. In addition, self-insured healthcare services expense increased approximately $192,000 attributable to fee schedule increases effective January 1, 2017. These increases were offset by a decrease of $2,287,000 due to the loss of self-insured groups in 2017. Also, lower healthcare services utilization resulted in a decrease in self-insured healthcare services expense of approximately $366,000 in the 2017 period compared to the 2016 period.

Corporate, all other healthcare services expense is not recognized by the Company due to the fact that our other dental indemnity and vision PPO products are underwritten by third-party insurance carriers.

Insurance Expense

Consolidated insurance expense for the 2017 quarter increased approximately $35,000 compared to the 2016 quarter. Consolidated insurance expense for the 2017 period increased approximately $582,000 compared to the 2016 period. The higher consolidated insurance expense for the 2017 quarter and period was primarily due to increases in salaries and wages and a reduction in the capitalization of deferred acquisition costs in 2017. Insurance expense as a percentage of total premium revenue, or the insurance expense ratio, was approximately 20.7% and 20.4% for the 2017 period and the 2016 period, respectively.

Income Taxes

The Company calculates its year to date income tax provision by applying the estimated annual effective tax rate for the year to pretax income. The effective tax rate for the three and nine months ended September 30, 2017 was 35.6% with tax expense of approximately $564,000 and $929,000, respectively. The effective tax rate for the three and nine months ended September 30, 2016 was 43.3% with tax expense of approximately $502,000 and $1,018,000, respectively. The decrease in federal income tax is primarily the result of a 2017 moratorium on the non-deductible federal premium tax. Tax years subsequent to 2013 remain open to examination by the Internal Revenue Service (“IRS”), and 2012 remains open to state and local tax authorities.  The Company has recorded no uncertain tax positions in the tax years that are subject to examination.

17

Liquidity and Capital Resources and Changes in Financial Condition

Our primary sources of cash include receipts of premiums, ASO fees, investment and other income, proceeds from the sale or maturity of our investment securities, as well as from the sale of redeemable common and preferred shares and from borrowings. Our primary uses of cash include disbursements for claims payments, insurance expense, interest expense, taxes, purchases of investment securities, capital expenditures, dividends, redeemable common share redemptions and payments on borrowings. Cash increased approximately $464,000, or 4.1% during the 2017 period to approximately $11,686,000 at September 30, 2017 from approximately $11,222,000 at December 31, 2016. The change in cash for the 2017 and 2016 period is summarized as follows (in thousands):

	Nine months ended			Nine months ended
	September 30, 2017			September 30, 2016
Net cash provided by operating activities	$	1,693		$	1,782
Net cash used in investing activities		(290	)		(1,731	)
Net cash used in financing activities		(939	)		(1,725	)
Increase (decrease) in cash and cash equivalents	$	464		$	(1,674	)

Cash Flows from Operating Activities

In the 2017 period, we had net income of approximately $1,679,000. Our non-cash deferred compensation activity was approximately $569,000 primarily due to current year vesting of share-based awards subject to deferral elections and an increase in current book value of our common shares, which increase the value of accounts that track our common shares in the 2017 period. Other assets increased by approximately $217,000 primarily due to the increase in the deferred compensation asset. Other payables and accrued expenses decreased and resulted in a net decrease in cash flow from operating activities of approximately $581,000 primarily due to the federal tax payment made during the 2017 period. An increase in accounts receivable offset by an increase in unearned premium revenue resulted in an increase of cash of approximately $394,000 in the 2017 period. The remaining effects of changes in operating assets and liabilities that represent fluctuations are not significant and are consistent with the 2016 period.

Cash Flows from Investing Activities

During the 2017 period, we made purchases totaling approximately $3,585,000 of investment grade and non-investment grade corporate bonds and certificates of deposit in order to improve investment income. Also during the 2017 period, we had investment grade and non-investment grade corporate bond sales and certificate of deposit sales and maturities that aggregated approximately $3,458,000. In addition, in September 2017 we sold certain office and computer equipment with a value of approximately $921,000 to a leasing company and entered into a capital lease to lease back these same assets for a four year period. The remaining net cash of approximately $1,084,000 used in investing activities during the 2017 period was for purchases of computer software, furniture and fixtures.

Cash Flows from Financing Activities

In the 2017 period, we made scheduled principal payments of approximately $40,000 related to our office building mortgage and scheduled payments of approximately $170,000 related to our capital leases. In addition, we paid approximately $182,000 related to the repurchase of Redeemable Common Shares. During the 2017 period, we paid dividends of approximately $547,000 to holders of our Redeemable Common Shares.

Contractual Obligations, Other Commitments and Off-balance Sheet Arrangements

Refer to the Company’s 2016 Annual Report on Form 10-K filed with the SEC for a description of contractual obligations, other commitments and off-balance sheet arrangements. We have had no significant changes in these items in 2017.

Financial Condition

Our consolidated cash and short term investments were approximately $12.3 million and $11.7 million as of September 30, 2017 and December 31, 2016, respectively. We expect to generate positive cash flow from operations during the balance of 2017. Based on total expenses for the nine months ended September 30, 2017, we estimate that we had approximately 42 days of cash and short term investments on hand at September 30, 2017. In addition, the Company has access to approximately $9.0 million of fixed maturity investments that are classified as available-for-sale and two working capital lines of credit discussed below.

In December 2012, the Company refinanced the mortgage of its office building and in connection therewith, the Company executed a mortgage note with a bank, secured by the land and the office building, in the amount of $1,340,000. Interest is payable based on the 30-day LIBOR rate plus 1.95%. The Company also entered into an interest rate swap agreement that effectively changed the interest rate related to the mortgage note with a commercial bank from a variable rate based on the 30-day LIBOR rate plus 1.95% to a fixed rate of 3.90% for the 10-year period through December 22, 2022.      

18

We have an annually renewable agreement with a commercial bank for a $500,000 working capital line of credit. Interest is payable at a variable rate of LIBOR plus 2.50%. We did not have any interest expense for the line of credit in the 2017 period or the 2016 period. As of September 30, 2017 and December 31, 2016, there was no amount outstanding on this line of credit. The $500,000 working capital line of credit expires in July 2018. We expect to renew this line of credit at its maturity.

We have an additional annually renewable working capital line of credit for $1,000,000. Interest is payable at a variable rate of LIBOR plus 2.50%. We did not have any interest expense for the line of credit in the 2017 period or the 2016 period. At September 30, 2017 and December 31, 2016, there was no amount outstanding on this line of credit. The $1,000,000 working capital line of credit expires in July 2018. We expect to renew this line of credit at its maturity.

Under the mortgage note and each of the renewable lines of credit, the Company is required to have a debt service ratio of at least 1:1 at the end of each quarter and a minimum tangible net worth equal to or greater than $3,500,000 at the end of each fiscal year. The Company was in compliance with these covenants at September 30, 2017 and December 31, 2016.

We believe our premium revenues, cash, investments and working capital lines of credit are sufficient to meet our short term and long term liquidity needs. In the short term, we are obligated to make payments related to our contractual obligations such as our healthcare services expense, building mortgage, and our capital and operating leases and other commitments, including payment of certain deferred compensation obligations. In the long term, we will continue to be obligated to make payments related to our other contractual obligations. We will also be obligated in certain circumstances to repurchase the Redeemable Common Shares and make future payments to employees and directors related to the Company’s deferred compensation obligations. Our Board of Directors establishes limitations on the amount of share redemptions each year. While we are not able to estimate future redemptions of our Redeemable Common Shares, we believe our cash balances, investment securities, operating cash flows, and borrowing capacity, taken together, provide adequate resources to fund ongoing operating and regulatory requirements and capital expenditures in the next twelve months.

Our largest subsidiary, Dental Care Plus Inc., (“DCP”), operates in states that regulate its payment of dividends and debt service on inter-company loans, as well as other inter-company cash transfers and require minimum levels of equity as well as limit investments to approved securities. The amount of dividends that may be paid by DCP, without prior approval by state regulatory authorities, is limited based on statutory income and statutory capital and surplus. Even if prior approval is not required, prior notification must be provided to state insurance departments before paying a dividend. During 2017, the total dividend that the DCP subsidiary may declare without prior regulatory approval is approximately $1,227,000. There were no dividends declared or paid by DCP in 2017 or 2016.

A.M. Best Company assigns a rating to companies based on their ability to meet their ongoing obligations to policyholders, but are financially vulnerable to adverse changes in underwriting and economic conditions. In August 2017, A.M. Best Company affirmed our financial strength rating at B+ (Good) with a positive outlook based on DCP’s operating performance and capitalization. Our A.M. Best rating is a measure of our financial strength relative to other insurance companies and is not a recommendation to buy, sell or hold securities. The rating assigned by A.M. Best Company is based, in part, on the ratio of our fully-insured premium revenue to our statutory capital and surplus.

We attempt to reduce overall risk by maintaining a well-diversified fixed-maturity portfolio of investments. We invest in certificates of deposits, investment grade corporate bonds, non-investment grade corporate bonds, and money market funds, targeting what we believe to be optimal risk-adjusted after-tax yields. Risk, in this context, includes interest rate, call, reinvestment rate, credit and liquidity risk. We typically do not make a concerted effort to alter duration on a portfolio basis in response to anticipated movements in interest rates. By continually investing in certificates of deposits, money market funds and investment and non-investment grade corporate bonds, we believe the portfolio mitigates the impact of adverse economic factors.

Our regulated subsidiary’s state of domicile has statutory risk-based capital, or RBC, requirements for health and other insurance companies largely based on the NAIC’s RBC Model Act. These RBC requirements are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products. The NAIC sets forth the formula for calculating the RBC requirements, which are designed to take into account asset risks, insurance risks, interest rate risks and other relevant risks with respect to an individual insurance company’s business. In general, an insurance company must submit a report of its RBC level to the state insurance department or insurance commissioner, as appropriate, at the end of each calendar year. Our subsidiary’s risk-based capital as of December 31, 2016, which was the most recent date for which reporting was required, was in excess of all mandatory RBC thresholds.

19

Critical Accounting Policies

Liability for Claims Payable

We estimate liabilities for both incurred but not reported (“IBNR”) and reported claims in process by employing actuarial methods that are commonly used by health insurance actuaries and meet actuarial standards of practice. These actuarial standards of practice require that claim liability estimates be adequate under moderately adverse circumstances. The Company’s consulting actuary assists us in making these estimates. Since our liability for claims payable is based on actuarial estimates, the amount of claims eventually paid for services provided prior to the balance sheet date could differ from the estimated liability. Any such differences are recognized in the condensed consolidated statements of comprehensive income for the period in which the differences are identified. Historically, such differences have not been material.

We develop our estimate for the claims payable liability using actuarial methodologies and assumptions, primarily based on historical claim payments and claim receipt patterns, as well as historical dental cost trends. Depending on the period for which incurred claims are estimated, we apply a different method in determining our estimate. For periods prior to the most recent month, we calculate a “completion factor” which indicates the percentage of claims payable estimated for a prior period that have been paid as of the end of the current reporting period. We use the completion factor to determine historical patterns over a rolling 12-month period, made consistent by making adjustments for known changes in claims in process levels and known changes in claim payment processes. For the most recent month, we calculate a “claims trend factor” that estimates incurred claims primarily from a trend analysis based upon PMPM claims trends developed from our historical experience in the preceding months, adjusted for known provider contracting changes, changes in benefit levels, seasonality and consideration of any subsequent actual claims data available. When developing our estimate for claims payable liability as of September 30, 2017 and December 31, 2016, we considered actual paid claim data from October 2017 and January 2017. As a result, we were able to use the completion factors approach for all historical months at September 30, 2017 and December 31, 2016.

We have not changed the key actuarial methodologies used by management to estimate the IBNR and reported claims in process components of our claims payable liability during the periods presented, and management has not adjusted any of the key methodologies used in calculating the most recent estimate of the IBNR and reported claims in process components of our claims payable liability.

The table below illustrates how our operating results are affected when there is a variance between estimated claims expense and actual claims expense. The table shows the sensitivity of the estimated fully-insured incurred claims payable liability to fluctuations in the expected completion factors that were used to estimate the claims payable liability as of September 30, 2017 within variance ranges historically experienced.

Completion Factor (a)
		Estimated claims
(Decrease)		payable liability
Increase		as of
In Factor		9/30/2017
(0.5)%		$	3,679,246
0%	(estimate used)		3,417,785
0.5%			3,220,237

(a)     Reflects estimated potential changes in incurred claims payable liability caused by changes in completion factors for months prior to the most recent month.

Based on historical experience, we believe the completion factors we use to estimate outstanding IBNR and reported claims in process are reliable for predicting actual claims paid at future times, with a variance range of approximately one-half of one percent, plus or minus.

20

Based on our healthcare services expense on a PMPM basis that adjusts the quarterly healthcare services expense for membership volume changes, we have observed that the utilization of our dental plan members is somewhat variable. In general, claims on a PMPM basis are lower in the second and fourth quarter than in the first quarter and the third quarter. The higher third quarter claim level on a PMPM basis is primarily due to the high level of dental services used in July and August by student members prior to returning to school. Use of dental services is lowest in the fourth quarter due to the holiday season and the fact that a portion of our members have already reached their maximum annual benefit level for the year. The following shows these trends in tabular form:

	Healthcare Service Expense
	2017				2016
	$000’s		$PMPM		$000’s		$PMPM
First Quarter	$	21,425	$	20.23	$	21,047	$	20.66
Second Quarter		20,383		19.24		19,795		19.26
Third Quarter		20,402		19.39		20,312		19.79
Fourth Quarter						19,346		18.88

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk that we will incur investment losses or increased interest expense due to adverse changes in market rates and prices. Our market risk exposures are substantially related to our investment portfolio and the impact of interest rate changes on these securities. In addition, interest rate changes can affect future interest expense for debt obligations that have a variable rate of interest associated with them.

Our portfolio includes approximately $8,246,000 and $8,020,000 of corporate bonds, approximately $177,000 and $223,000 of money market funds and approximately $1,152,000 and $1,095,000 of investments in FDIC-insured bank certificates of deposits at September 30, 2017 and December 31, 2016, respectively. We have instructed our investment manager to invest additional funds in shorter duration investment grade corporate bonds with maturities up to five years.

There is increased interest rate risk associated with our investment in longer duration investment grade and non-investment grade corporate bonds. We have evaluated the impact on the invested portfolio’s fair value considering an immediate 100 basis point change in interest rates. A 100 basis point increase in interest rates would result in an approximate $295,000 decrease in fair value, whereas a 100 basis point decrease in interest rates would result in an approximate $303,000 increase in fair value. The investment and non-investment grade corporate bonds as well as the certificates of deposits are all classified as available-for-sale.

At September 30, 2017 and December 31, 2016, we had a mortgage note with a bank with an outstanding principal balance of $1,108,000 and $1,148,000, respectively, with a variable rate based on LIBOR plus 1.95%. In December 2012, we entered into a variable to fixed interest rate swap contract that effectively eliminated the interest rate risk exposure on the entire outstanding loan principal. Management estimates that a 100 basis point increase in interest rates would not materially impact our annual pre-tax earnings.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the design and effectiveness of the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2017. Based on the evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15(d)-15(f)) during the three and nine months ended September 30, 2017 that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

21

PART II. OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings that we believe would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.

ITEM 1A.   RISK FACTORS

Certain factors may have a material adverse effect on our business, financial condition and results of operations and you should carefully consider them. It is not possible to predict or identify all such factors. For discussion of our potential risks or uncertainties, refer to Part I, Item 1A, Risk Factors, included in our 2016 Annual Report on Form 10-K. There have been no material changes to the risk factors disclosed in our 2016 Annual Report on Form 10-K.

ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We repurchased and retired 28 Class B Redeemable Common Shares during the three months ended September 30, 2017 as follows:

Period			Total Class A shares purchased (a)		Total Class B shares purchased (a)		Total Class C shares purchased (a)		Average price paid per share		Total Number of Shares Purchased as Part of a Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1	-	July 31, 2017		0		0		0		N/A		0		N/A
August 1	-	August 31, 2017		0		28		0	$	1,129.85		0		N/A
September 1	-	September 30, 2017		0		0		0		N/A		0		N/A

(a) Repurchased from shareholder in accordance with the Company’s obligations under its Amended and Restated Code of Regulations.

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.      MINE SAFETY DISCLOSURES

None.

ITEM 5.      OTHER INFORMATION

None.

22

ITEM 6. EXHIBITS

Exhibits

31.1 CEO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2 CFO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32 CEO and CFO certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 Financial information and Notes to Financial Statements for the three and nine months ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language).
______________

SIGNATURES

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

	DCP HOLDING COMPANY
November 13, 2017	By: /s/ Anthony A. Cook
	Anthony A. Cook
	President, Chief Executive Officer and Director
	Principal Executive Officer

November 13, 2017	By: /s/ Robert C. Hodgkins, Jr.
	Robert C. Hodgkins, Jr.
	Vice President and Chief Financial Officer
	Principal Financial Officer

23

INDEX TO EXHIBITS

Exhibit No. Item

31.1 Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2 Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 Financial information and Notes to Financial Statements for the three and nine months ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language).

______________

EX-31.1

Exhibit 31.1

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Anthony A. Cook, certify that:

1. I have reviewed this Quarterly Report of DCP Holding Company (the “Company’) on Form 10-Q for the period ended September 30, 2017;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     November 13, 2017

Signature:	/s/ Anthony A. Cook
	Anthony A. Cook
	President, Chief Executive Officer and Director
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Robert C. Hodgkins, Jr., certify that:

1. I have reviewed this Quarterly Report of DCP Holding Company (the “Company’) on Form 10-Q for the period ended September 30, 2017;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     November 13, 2017

Signature:	/s/ Robert C. Hodgkins, Jr.
	Robert C. Hodgkins, Jr.
	Vice President and Chief Financial Officer
	Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of DCP Holding Company (the “Company’) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report’), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of the Company, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Anthony A. Cook

President, Chief Executive Officer and Director

Principal Executive Officer

November 13, 2017

/s/ Robert C. Hodgkins, Jr.

Vice President and Chief Financial Officer

Principal Financial Officer

November 13, 2017

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2017 shares
Document Information [Line Items]
Entity Registrant Name	DCP Holding CO
Entity Central Index Key	0001361025
Trading Symbol	dcph
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Class C [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)	3,771
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)	8,473
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)	500

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Fixed maturities, available for sale at fair value, amortized cost of $8,921,000 and $8,825,000 at September 30, 2017 and December 31, 2016, respectively	$ 8,997,871	$ 8,824,420
Short-term investments, available for sale at fair value, cost of $577,000 and $513,000 at September 30, 2017 and December 31, 2016, respectively	577,597	512,989
Total investments	9,575,468	9,337,409
CASH AND CASH EQUIVALENTS	11,686,233	11,221,951
ACCRUED INVESTMENT INCOME	77,602	78,662
ACCOUNTS RECEIVABLE, including billed premiums of $853,965 and $1,018,391, net of allowance of $33,344 and $41,092 at September 30, 2017 and December 31, 2016, respectively	46,203,150	46,705,170
DEFERRED ACQUISITION COSTS	3,098,689	3,109,117
PROPERTY AND EQUIPMENT, net of depreciation and amortization of $3,668,553 and $3,531,436 at September 30, 2017 and December 31, 2016, respectively	3,513,997	2,756,999
OTHER ASSETS	5,190,947	4,872,499
TOTAL ASSETS	79,346,086	78,081,807
LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY
CLAIMS PAYABLE	3,417,785	3,743,551
UNEARNED PREMIUM REVENUE	46,846,670	46,954,609
OTHER PAYABLES AND ACCRUALS	6,736,757	7,334,165
MORTGAGE LOAN PAYABLE	1,108,400	1,148,000
CAPITAL LEASE OBLIGATIONS	1,308,783	558,114
DEFERRED COMPENSATION	4,452,667	4,051,078
TOTAL LIABILITIES	63,871,062	63,789,517
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED AND COMMON SHARES:
Redeemable shares	15,475,024	14,292,290
SHAREHOLDERS’ EQUITY—Preferred Shares; no par value—authorized, 92,700 shares; issued, none outstanding
TOTAL LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS’ EQUITY	79,346,086	78,081,807
Common Class A [Member]
REDEEMABLE PREFERRED AND COMMON SHARES:
Redeemable shares	607,149	561,439
Common Class B [Member]
REDEEMABLE PREFERRED AND COMMON SHARES:
Redeemable shares	10,288,754	9,546,686
Common Class C [Member]
REDEEMABLE PREFERRED AND COMMON SHARES:
Redeemable shares	$ 4,579,121	$ 4,184,165

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fixed maturities, available for sale at fair value, amortized cost	$ 8,921,000	$ 8,825,000
Short-term investments, available for sale at fair value, amortized cost	577,000	513,000
Accounts receivable, uncollected premiums	853,965	1,018,391
Accounts receivable, allowance	33,344	41,092
Depreciation and amortization, property and equipment	$ 3,668,553	$ 3,531,436
Preferred shares, no par value (in dollars per share)	$ 0	$ 0
Preferred shares, authorized (in shares)	92,700	92,700
Preferred shares, issued (in shares)	0	0
Preferred shares, outstanding (in shares)	0	0
Common Class A [Member]
Redeemable shares, authorized (in shares)	7,500	7,500
Redeemable shares, issued (in shares)	500	506
Redeemable shares, outstanding (in shares)	500	506
Redeemable shares, par value (in dollars per share)	$ 0	$ 0
Common Class B [Member]
Redeemable shares, authorized (in shares)	120,000	120,000
Redeemable shares, issued (in shares)	8,473	8,604
Redeemable shares, outstanding (in shares)	8,473	8,604
Redeemable shares, par value (in dollars per share)	$ 0	$ 0
Common Class C [Member]
Redeemable shares, authorized (in shares)	80,000	80,000
Redeemable shares, issued (in shares)	3,771	3,771
Redeemable shares, outstanding (in shares)	3,771	3,771
Redeemable shares, par value (in dollars per share)	$ 0	$ 0

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
REVENUES
Premium revenue	$ 27,339,477	$ 26,734,505	$ 81,226,549	$ 79,409,241
Investment income	70,162	68,498	193,776	206,966
Realized gains on investments, net	54,755	99,558	187,177	48,233
Other income		10,384		46,728
Total revenues	27,464,394	26,912,945	81,607,502	79,711,168
EXPENSES
Healthcare services expense	20,402,073	20,311,592	62,209,264	61,154,178
Insurance expense:
Salaries and benefits expense	2,142,120	2,150,771	6,730,439	6,605,983
Commission expenses and other acquisition costs	1,385,740	1,435,961	4,086,964	4,033,805
Other insurance expense	1,951,554	1,858,026	5,972,507	5,567,876
Total insurance expense	5,479,414	5,444,758	16,789,910	16,207,664
Total expenses	25,881,487	25,756,350	78,999,174	77,361,842
INCOME BEFORE INCOME TAX	1,582,907	1,156,595	2,608,328	2,349,326
INCOME TAX EXPENSE	563,657	501,616	929,005	1,018,419
NET INCOME	1,019,250	654,979	1,679,323	1,330,907
OTHER COMPREHENSIVE INCOME (LOSS)
Change in the fair value of interest rate swap, net of income tax (benefit) of $449, $3,176, $914 and ($12,638), respectively	871	6,163	1,773	(24,532)
Change in the fair value of investments, net of income tax (benefit) $7,890, ($2,939), $43,017 and $96,324, respectively	15,318	(5,705)	83,503	186,982
Reclassification adjustment for realized gains included in net income, net of income benefit of ($4,254), ($20,842), ($16,740) and ($3,392), respectively	(8,258)	(40,459)	(32,494)	(6,584)
Effect on other comprehensive income (loss), net	7,931	(40,001)	52,782	155,866
TOTAL COMPREHENSIVE INCOME	$ 1,027,181	$ 614,978	$ 1,732,105	$ 1,486,773

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest rate swap, tax expense (benefit)	$ 449	$ 3,176	$ 914	$ (12,638)
Investments, tax expense (benefit)	7,890	(2,939)	43,017	96,324
Reclassification adjustment for gains included in net income, expense (benefit)	$ (4,254)	$ (20,842)	$ (16,740)	$ (3,392)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,679,323	$ 1,330,907
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	350,196	368,113
Realized gain on investments, net	(187,177)	(48,233)
Deferred compensation	569,133	434,409
Effects of changes in operating assets and liabilities:
Accrued investment income	1,060	2,482
Accounts receivable	502,020	(19,453,894)
Deferred acquisition costs	10,428	(1,289,545)
Other assets	(217,008)	(208,730)
Claims payable	(325,766)	41,810
Unearned premium revenue	(107,939)	19,319,645
Other payables and accruals	(581,149)	1,284,815
Net cash provided by operating activities	1,693,121	1,781,779
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments	(3,585,005)	(4,419,358)
Sales of investments	2,968,344	2,712,964
Maturities of investments	490,000	200,000
Proceeds from the sale of property and equipment	920,752
Acquisition of property and equipment	(1,083,697)	(224,556)
Net cash used in investing activities	(289,606)	(1,730,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Mortgage loan repayments	(39,600)	(37,800)
Payments on capital lease	(170,083)	(231,553)
Repurchase of redeemable common shares	(182,107)	(184,461)
Repurchase of redeemable preferred shares		(2,805,064)
Extinguishment cost of redeemable preferred shares		(118,812)
Redeemable shares issued		2,280,066
Issuance cost of redeemable shares		(116,833)
Dividends paid	(547,443)	(510,413)
Net cash used in financing activities	(939,233)	(1,724,870)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	464,282	(1,674,041)
CASH AND CASH EQUIVALENTS—Beginning of period	11,221,951	11,657,287
CASH AND CASH EQUIVALENTS—End of period	11,686,233	9,983,246
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	46,900	53,500
Cash paid for income taxes	863,000	855,000
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Redeemed common shares (in other payables and accruals)	10,882	49,560
Capital lease obligation	$ 920,752

XML

Note 1 - Basis of Presentation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1 . BASIS OF PRESENTATION

DCP Holding Company (the “Company”) is the parent holding company of

three

wholly-owned operating subsidiaries which include Dental Care Plus, Inc., an Ohio corporation; Insurance Associates Plus, Inc., an Ohio corporation; and Adenta, Inc., a Kentucky corporation. Providers who participate in

one

or more of the Dental Care Plus networks own a majority of the Company’s Redeemable Common Shares. The Company’s Redeemable Common Shares are also owned by retired providers, Company board members, non-provider individuals and employees. The Company primarily offers to employer groups of all sizes health maintenance organization (“HMO”), participating provider organization (“PPO”) and indemnity plans for dental care services and vision benefit plans. The condensed consolidated interim financial statements included in this report have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation are reflected in the interim financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited

2016

financial statements and notes thereto as included in the DCP Holding Company annual report on Form

10

-K for the year ended

December 31, 2016

filed with the Commission on

March 24, 2017.

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. Certain financial information that is required in the annual financial statements

may

not

be required for interim financial reporting purposes and has been condensed or omitted. Operating results for the

three

and

nine

months ended

September 30, 2017

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2017.

The accounting policies of the Company conform to GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accompanying consolidated financial statements include estimates. Actual results could differ from those estimates.

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Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim condensed consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Company’s consolidated financial statements for the year ended

December 31, 2016.

While management believes that the procedures followed in preparation of interim financial information are reasonable, the accompanying condensed consolidated financial statements include estimates for items such as changes in claims payable, income tax accounts, deferred acquisition costs, deferred share-based compensation and accrued expenses and various other liability accounts. Any adjustments related to such estimates during the reporting period were of a normal recurring nature.

Premium Revenue

—

Fully-Insured

—Membership contracts are written on an annual or multi-year basis and are subject to cancellation by the employer group upon

thirty

days written notice. The Company’s unearned premium revenue was approximately

$46,847,000

and

$46,955,000

at

September 30, 2017

and

December 31, 2016,

respectively, and primarily relates to the estimated premium revenue associated with the remaining contract periods. Related unbilled amounts recorded in accounts receivable were approximately

$45,349,000

and

$45,687,000

at

September 30, 2017

and

December 31, 2016,

respectively. Premiums are due monthly in advance and are recognized evenly as revenue during the period in which the Company is obligated to provide services to members. Any amounts

not

received by the end of a reporting period are recorded as accounts receivable by the Company. Any premiums received prior to the beginning of a reporting period are recognized as premiums received in advance and are included in unearned premium revenue in the accompanying condensed consolidated balance sheets. Premiums received in advance were approximately

$1,497,000

and

$1,268,000

at

September 30, 2017

and

December 31, 2016,

respectively. Management has determined that as of

September 30, 2017

and

December 31, 2016,

respectively,

no

premium deficiency reserve is required. The Company’s premium deficiency reserve analysis includes an allocation of investment income.

Self-Insured

—The Company provides administrative and claims processing services, benefit plan design, and access to its provider networks for an administrative fee to self-insured groups. The Company has

no

underwriting risk arising from the provision or cost of any services provided to the self-insured groups. The Company recognizes and records self-insured premiums on a gross basis because: (i) the Company is the primary obligor in its contractual relationships with self-insured employers and dental service providers, (ii) the Company establishes the pricing for the services provided, (iii) the Company controls the selection of and the relationships with the dental service providers, and (iv) the Company is involved in the determination of dental service specifications. Self-insured premium revenue is recognized upon the payment of claims for self-insured members in accordance with agreements with self-insured employers and is included in premium revenue in the accompanying condensed consolidated statements of comprehensive income.

Third-party administration fee revenue (“ASO fees”) is recognized monthly when earned and is normally based on annual contracts with the self-insured groups. ASO fees are charged to self-insured employer groups monthly on a per subscriber per month basis and included in premium revenue in the accompanying condensed consolidated statements of comprehensive income. ASO fees also include the administrative fees the Company earns relative to the dental indemnity and vision products that are underwritten by

third

-party insurance carriers.

Healthcare Services Expense

—Healthcare services expense is recognized on a monthly basis. In the case of the fully-insured dental HMO and indemnity and dental PPO segments, healthcare services expense is calculated by taking the paid claims associated with the fully-insured membership and adjusting this amount for the change in the claims payable liability determined using actuarial estimates. For the self-insured dental segment, the healthcare services expense is based solely on the paid claims for the self-insured membership.

Investments

—The Company invests in certificates of deposit, corporate bonds and money market funds. The Company classifies all investments as available-for-sale. The Company engages a fixed income portfolio manager to manage the Company’s investment grade and non-investment grade corporate bonds, under the Company’s direction, in order to maximize investment returns. Such investments are recorded at fair value, with unrealized gains and losses recorded as a component of other comprehensive income. The Company recognizes gains and losses when these securities have other than temporary impairment, mature or are sold using the specific identification method.

Deferred Acquisition Costs—

Deferred acquisition costs are those incremental direct costs related to the successful acquisition of new and renewal business. These incremental direct costs are those that are essential to the contract transaction and would

not

have been incurred had the contract transaction

not

occurred. Such incremental direct costs include commissions, costs of contract issuance and underwriting, state premium taxes and other costs the Company incurs to successfully acquire new business or renew existing business. The Company defers policy acquisition costs and amortizes them over the estimated life of the contracts, which are short-duration in nature, in proportion to premiums earned. The Company capitalized deferred acquisition costs of approximately

$724,000

and

$753,000

and amortized approximately

$1,243,000

and

$1,196,000

of these capitalized costs for the

three

months ended

September 30, 2017

and

2016,

respectively. The Company capitalized deferred acquisition costs of approximately

$3,700,000

and

$4,847,000

and amortized approximately

$3,710,000

and

$3,557,000

of these capitalized costs for the

nine

months ended

September 30, 2017

and

2016,

respectively. The amortization of these costs is recorded in commission expense and other acquisition costs included in the condensed consolidated statements of comprehensive income.     

Claims Payable—

The Company estimates liabilities for both incurred but

not

reported (“IBNR”) and reported claims in process by employing actuarial methods that are commonly used by health insurance actuaries.  These estimates meet actuarial standards of practice and are also recorded in accordance with generally accepted accounting principles.  Management’s estimates of dental services provided are based on the Company’s historical experience and current trends, with assistance from the Company’s consulting actuary. Estimated dental claims payable are reviewed monthly by management and are adjusted based on current information, actual paid claims data, dental utilization statistics and other pertinent information. However, final claim payments

may

differ from the established reserves. Any resulting adjustments are reflected in current operations in the condensed consolidated statements of comprehensive income.     

New Accounting Guidance

—In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued ASU

2014

-

09,

Revenue from Contracts with Customers

. The new guidance requires that an entity recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts.

Insurance contracts are

not

included in the scope of this new guidance. The effective date of ASU

2014

-

09

is for annual reporting periods beginning after

December 15, 2017.

We have determined that any impact will only relate to contracts with our self-insured dental business. The Company does

not

anticipate any material changes in the timing of our recognition of revenue or net income.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments – Overall (Subtopic

825

-

10

) – Recognition and Measurement of Financial Assets and Financial Liabilities

. ASU

2016

-

01

revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU

2016

-

01

is for interim and annual reporting periods beginning after

December 15, 2017.

The ASU has

not

yet been adopted by the Company; however, it will

not

have a material impact on our Company’s consolidated financial position, cash flows and results of operations.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases (Topic

842

).

ASU

2016

-

02

introduces new guidance that requires a lessee to recognize assets and liabilities for leases with lease terms of more than

12

months. Leases would be classified as finance or operating leases and both types of leases will be recognized on the balance sheet. The new guidance will also require new qualitative and quantitative disclosures. The effective date of ASU

2016

-

02

is for interim and annual reporting periods beginning after

December 15, 2018.

The ASU has

not

yet been adopted by the Company. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts as well as identification of other contracts that

may

fall under the scope of the new guidance. We do

not

expect the adoption to have a material impact on the Company’s consolidated financial position, cash flows and results of operations.     

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments. ASU

2016

-

13

amends previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The effective date of ASU

2016

-

13

is for interim and annual reporting periods beginning after

December 15, 2019.

The ASU has

not

yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is

not

expected to have a significant impact.

In

March 2017,

the FASB issued ASU

2017

-

08,

Receivables – Nonrefundable Fees and Other Costs (Subtopic

310

-

20

)

:Premium Amortization on Purchased Callable Debt Securities. ASU

2017

-

08

amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The effective date of ASU

2017

-

08

is for interim and annual reporting periods beginning after

December 15, 2018.

The ASU has

not

yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is

not

expected to have a significant impact.

XML

Note 3 - Investments

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3. INVESTMENTS

The Company owned certificates of deposit insured by the Federal Deposit Insurance Corporation (“FDIC”) with an amortized cost of

$1,150,000

and

$1,090,000

as of

September 30, 2017

and

December 31, 2016,

respectively. The certificates of deposit included in short term and fixed maturities investments are classified as available-for-sale and are carried at fair value. The Company also invests in money market funds included in short term investments that are classified as available-for-sale, with a cost of approximately

$177,000

and

$223,000

as of

September 30, 2017

and

December 31, 2016,

respectively. The Company invested in corporate bonds with an amortized cost of approximately

$8,171,000

and

$8,025,000

as of

September 30, 2017

and

December 31, 2016,

respectively. These corporate bonds included in fixed maturity investments are classified as available-for-sale and are carried at fair value.

The Company owned corporate bonds at

September 30, 2017,

which consisted primarily of investment grade securities. At

September 30, 2017,

total bond fair value was approximately

$8,246,000,

which consisted of approximately

$7,576,000

with a credit rating of BBB- or better. The remaining securities, totaling approximately

$670,000

had a credit rating of BB+ or lower. The weighted average yield-to-cost of the Company’s corporate bonds was approximately

3.20%

at

September 30, 2017.

The weighted average maturity of the Company’s corporate bonds was

5.21

years at

September 30, 2017.

At

September 30, 2017

and

December 31, 2016,

maturity dates for fixed maturities and short term investments (excluding the money market funds) were:

	Available-for-Sale
	Amortized		Fair		% of Total
September 30, 2017	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	400,000	$	400,217		4.3	%
Years 1-5		5,347,561		5,384,875		57.3	%
Years 5-10		3,523,638		3,563,607		37.9	%
Due after ten years		50,000		49,390		0.5	%
Total	$	9,321,199	$	9,398,089		100.0	%

	Available-for-Sale
	Amortized		Fair		% of Total
December 31, 2016	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	290,000	$	290,412		3.2	%
Years 1-5		5,722,990		5,741,735		63.0	%
Years 5-10		3,052,388		3,035,185		33.3	%
Due after ten years		50,000		47,500		0.5	%
Total	$	9,115,378	$	9,114,832		100.0	%

Investments classified at

September 30, 2017

and

December 31, 2016

as fixed maturities and short term investments were as follows:

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2017	Cost		Gain		Loss			Value
Money market fund	$	177,379						$	177,379
Certificates of deposit, short term		400,000	$	246	$	(28	)		400,218
Certificates of deposit, fixed maturities		750,000		2,012					752,012
Corporate bonds, fixed maturities		8,171,199		111,115		(36,455	)		8,245,859
Total investments	$	9,498,578	$	113,373	$	(36,483	)	$	9,575,468

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2016	Cost		Gain		Loss			Value
Money market fund	$	222,577						$	222,577
Certificates of deposit, short term		290,000	$	412					290,412
Certificates of deposit, fixed maturities		800,000		4,728	$	(66	)		804,662
Corporate bonds, fixed maturities		8,025,378		76,323		(81,943	)		8,019,758
Total investments	$	9,337,955	$	81,463	$	(82,009	)	$	9,337,409

Unrealized losses on investments at

September 30, 2017

and

December 31, 2016

were generally due to higher current market yields relative to the yields of the investments at their amortized cost. Unrealized losses due to credit risk associated with the underlying collateral of the investments, if any, are

not

material. All investments with unrealized losses are reviewed quarterly to determine if any impairment is other than temporary, requiring a charge to earnings. The Company considers the severity of the loss on a security, duration of loss, duration of the investment, credit rating of the security, as well as payment performance and the Company’s intent or requirement to sell the investment before recovery when determining whether any impairment is other than temporary. The Company had

no

investments in a material unrealized loss position for greater than

one

year at

September 30, 2017

or

December 31, 2016.

XML

Note 4 - Deferred Compensation Plan

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Compensation Related Costs, General [Text Block]

4. DEFERRED COMPENSATION PLAN

In accordance with the

2006

Dental Care Plus Management Equity Incentive Plan and the Dental Care Plus, Inc. and DCP Holding Company Deferred Compensation Plan (the “Plans”), Company directors and certain key employees elected to defer portions of their director fees and employee compensation, as applicable. In

2017,

the non-employee members of the Board were granted a total of

216

share based awards and key employees were granted

99

share based awards. Share-based awards

may

be subject to deferral elections upon vesting, in which case these accounts in the Deferred Compensation Plan will increase or decrease in value based upon the value of the Company’s Redeemable Common Shares. The Company recorded deferred compensation expense of approximately

$127,000

and

$125,000

related to share-based awards that were deferred at vesting and the change in the value of deferred employee compensation for the

three

months ended

September 30, 2017

and

2016,

respectively. The Company recorded deferred compensation expense of approximately

$13,000

and

$15,000

related to deferred director fees and deferred employee compensation for the

three

months ended

September 30, 2017

and

2016,

respectively. The Company recorded deferred compensation expense of approximately

$550,000

and

$399,000

related to deferred share awards and the change in the value of deferred employee compensation for the

nine

months ended

September 30, 2017

and

2016,

respectively. The Company recorded deferred compensation expense of approximately

$45,000

and

$40,000

related to deferred director fees and deferred employee compensation for the

nine

months ended

September 30, 2017

and

2016,

respectively.

In

February 2017

and

2016,

the Board declared a per share cash dividend for all Redeemable Common Shares in the amounts of

$42.50

and

$40.47

per share, respectively. With the dividend, the holders of restricted share units and phantom shares received an equivalent share based dividend that resulted in an increase in the deferred compensation liability of approximately

$115,000

and

$102,000

in

February 2017

and

February 2016,

respectively.

At

September 30, 2017

and

December 31, 2016,

the deferred compensation liability was approximately

$4,453,000

and

$4,051,000,

respectively.

XML

Note 5 - Liability for Claims Payable

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Insurance Disclosure [Text Block]

5. LIABILITY FOR CLAIMS PAYABLE

Activity

in the liability for claims payable for members is summarized as follows:

	Nine months ended		Nine months ended
	September 30, 2017		September 30, 2016
Balance —January 1	$	3,743,551	$	3,253,346
Net incurred claims related to:
Current year		42,789,639		41,999,068
Prior years		80,300		(45,147	)
Net incurred claims		42,869,939		41,953,921
Net paid claims related to:
Current year		39,583,233		38,760,333
Prior years		3,612,472		3,151,778
Net paid claims		43,195,705		41,912,111
Balance —September 30	$	3,417,785	$	3,295,156

XML

Note 6 - Federal Income Taxes

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

6. FEDERAL INCOME TAXES

The Company calculates its year to date income tax provision by applying the estimated

annual effective tax rate for the year to pretax income. The effective tax rate for the

three

and

nine

months ended

September 30, 2017

was

35.6%

with tax expense of approximately

$564,000

and

$929,000,

respectively. The effective tax rate for the

three

and

nine

months ended

September 30, 2016

was

43.3%

with tax expense of approximately

$502,000

and

$1,018,000,

respectively. The decrease in federal income tax is primarily the result of a

2017

moratorium on the non-deductible federal premium tax. T

ax years subsequent to

2013

remain open to examination by the Internal Revenue Service (“IRS”), and

2012

remains open to state and local tax authorities.  The Company has recorded

no

uncertain tax positions in the tax years that are subject to examination.

XML

Note 7 - Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

7. ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income includes changes in unrealized gains and losses on available for sale and other invested assets as follows:

	Three months ended									Three months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized gains, net, on investments available for sale, beginning of period	$	53,214		$	18,097		$	35,117		$	308,777		$	104,988		$	203,789
Other comprehensive income (loss) before reclassification		23,208			7,890			15,318			(8,644	)		(2,939	)		(5,705	)
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(12,512	)		(4,254	)		(8,258	)		(61,301	)		(20,842	)		(40,459	)
Effect on other comprehensive income		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Accumulated unrealized income, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(5,330	)	$	(1,812	)	$	(3,518	)	$	(64,525	)	$	(21,940	)	$	(42,585	)
Other comprehensive income before reclassification		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive losses		1,320			449			871			9,339			3,176			6,163
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive gain, beginning of period	$	47,884		$	16,285		$	31,599		$	244,252		$	83,048		$	161,204
Change in unrealized gains (losses), net, on investments available for sale		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Change in unrealized gains, net, on interest rate swap		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive income (loss)		12,016			4,085			7,931			(60,606	)		(20,605	)		(40,001	)
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

	Nine months ended									Nine months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized loss, net, on investments available for sale, beginning of period	$	(13,376	)	$	(4,544	)	$	(8,832	)	$	(34,498	)	$	(11,725	)	$	(22,773	)
Other comprehensive income before reclassification		126,520			43,017			83,503			283,306			96,324			186,982
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(49,234	)		(16,740	)		(32,494	)		(9,976	)		(3,392	)		(6,584	)
Effect on other comprehensive income		77,286			26,277			51,009			273,330			92,932			180,398
Accumulated unrealized gains, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(6,697	)	$	(2,277	)	$	(4,420	)	$	(18,016	)	$	(6,126	)	$	(11,890	)
Other comprehensive income (loss) before reclassification		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income (loss)		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive loss, beginning of period	$	(20,073	)	$	(6,821	)	$	(13,252	)	$	(52,514	)	$	(17,851	)	$	(34,663	)
Change in unrealized gains, net, on investments available for sale		77,286			26,277			51,009			273,330			92,932			180,398
Change in unrealized gains (losses), net, on interest rate swap		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income		79,973			27,191			52,782			236,160			80,294			155,866
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

XML

Note 8 - Segment Information

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

8. SEGMENT INFORMATION

The Company manages its business with

four

segments: fully-insured dental

HMO and indemnity, fully-insured dental PPO, self-insured dental and corporate, all other. Self-insured dental consists of the self-insured dental HMO, self-insured dental PPO and self-insured dental indemnity products. Corporate, all other consists of revenue associated with the Company’s dental indemnity and vision products underwritten by

third

-party insurance carriers and certain other corporate activities. These segments are consistent with information used by the Chief Executive Officer (the chief operating decision maker) in managing the business.

The results of the fully-insured

dental HMO and indemnity, fully-insured dental PPO and self-insured dental segments are measured by gross profit. The Company does

not

allocate insurance expense, investment and other income, assets or liabilities to these segments because the Company does

not

use these measures to analyze the segments. These items are assigned to the remainder of the Company’s business, which it identifies as corporate, all other. The Company’s gross profit was approximately

$6,937,000

and

$6,422,000

for the

three

months ended

September 30, 2017

and

2016,

respectively. The Company’s gross profit was approximately

$19,017,000

and

$18,255,000

for the

nine

months ended

September 30, 2017

and

2016,

respectively.

Listed below is financial information required for each reportable

segment for the

three

and

nine

months ended

September 30, 2017

and

2016

(amounts in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	12,922	$	9,352	$	3,570	$	13,373	$	9,859	$	3,514
Fully-insured dental PPO		6,483		4,372		2,111		5,582		3,878		1,704
Self-insured dental		7,733		6,678		1,055		7,584		6,575		1,009
Corporate, all other		201				201		195				195
Total	$	27,339	$	20,402		6,937	$	26,734	$	20,312		6,422
Investment income						70						69
Realized gains on investments, net						55						100
Other income												10
Insurance expense						5,479						5,444
Income before income tax					$	1,583					$	1,157
Total assets-corporate					$	79,346

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	38,700	$	29,375	$	9,325	$	39,915	$	30,351	$	9,564
Fully-insured dental PPO		19,513		13,495		6,018		16,727		11,603		5,124
Self-insured dental		22,414		19,339		3,075		22,200		19,200		3,000
Corporate, all other		599				599		567				567
Total	$	81,226	$	62,209		19,017	$	79,409	$	61,154		18,255
Investment income						194						207
Realized gains on investments, net						187						48
Other income												47
Insurance expense						16,790						16,208
Income before income tax					$	2,608					$	2,349
Total assets-corporate					$	79,346

Inter-segment revenues were

not

significant for the

three

and

nine

months ended

September 30, 2017

and

2016.

XML

Note 9 - Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

9. FAIR VALUE MEASUREMENTS

The Company classifies the assets and liabilities that require measurement of fair value

based on the priority of the observable and market-based sources of data into a

three

-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level

1

) and the lowest priority to unobservable inputs (Level

3

). The

three

levels of the fair value hierarchy are as follows:

● Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

● Level 2 – Valuations based on significant other observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

● Level 3 – Valuations based on unobservable inputs such as when observable inputs are not available or inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents each of the fair value levels, the Company

’s assets and liabilities that are measured at fair value on a recurring basis as of

September 30, 2017

and

December 31, 2016 (

amounts in thousands):

	September 30, 2017						December 31, 2016
	Level 1		Level 2		Total Balance		Level 1		Level 2		Total Balance
Assets
Fixed maturities
Federally-Insured certificates of deposit			$	752	$	752			$	805	$	805
Investment grade corporate bonds				7,576		7,576				7,363		7,363
Non-investment grade corporate bonds				670		670				657		657
Short-term investments
Money market funds	$	177				177	$	223				223
Federally-Insured certificates of deposit				400		400				290		290
Deferred compensation investments (a)
Equity mutual fund investments		1,118				1,118		729				729
State guarantee fund deposits (b)
Government securities		1,771				1,771		1,775				1,775
Federally-Insured certificates of deposit				75		75				75		75
Total	$	3,066	$	9,473	$	12,539	$	2,727	$	9,190	$	11,917
Liabilities
Interest rate swap (c)			$	4	$	4			$	7	$	7
Total	$		$	4	$	4	$		$	7	$	7

(a) Included as a trading security in other assets

(b) Included in other assets

(c) Included in other payables and accruals

The Company measures fair value using the following valuation methodologies. The Company uses quoted market prices to determine the fair value of the deferred compensation investments and certain state fund guarantee deposits; such items are classified as Level

1

of the fair

value hierarchy. Examples include government securities and mutual fund equity securities. The Company primarily bases fair value for investments in fixed-maturity securities on quoted market prices or on prices from a pricing vendor, an outside resource that supplies independent securities pricing, dividend, corporate action and descriptive information to support fund pricing, securities operations, research and portfolio management. The Company obtains and reviews the pricing service’s valuation methodologies and validates these prices using various inputs including quotes from other independent regulatory sources. When deemed necessary, the Company validates prices by replicating a sample using a discounted cash flow model. Such items are classified as Level

2

of the fair value hierarchy. The Company obtains a price from an independent vendor to determine the fair value of the interest rate swap. The independent vendor uses a discounted cash flow method whereby the significant observable inputs include the replacement interest rates of similar swap instruments in the market and swap curves; such items are classified as Level

2

of the fair value hierarchy.

As

of

September 30, 2017

and

December 31, 2016,

there were

no

assets or liabilities that were required to be measured at fair value on a non-recurring basis. The Company did

not

have any transfers between fair value hierarchy levels during the

three

and

nine

months ended

September 30, 2017

or

2016.

As of

September 30, 2017

and

December 31, 2016,

the Company did

not

have any assets or liabilities classified as Level

3

of the fair value hierarchy.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Insurance Premiums Revenue Recognition, Policy [Policy Text Block]

Premium Revenue

—

Fully-Insured

—Membership contracts are written on an annual or multi-year basis and are subject to cancellation by the employer group upon

thirty

days written notice. The Company’s unearned premium revenue was approximately

$46,847,000

and

$46,955,000

at

September 30, 2017

and

December 31, 2016,

respectively, and primarily relates to the estimated premium revenue associated with the remaining contract periods. Related unbilled amounts recorded in accounts receivable were approximately

$45,349,000

and

$45,687,000

at

September 30, 2017

and

December 31, 2016,

respectively. Premiums are due monthly in advance and are recognized evenly as revenue during the period in which the Company is obligated to provide services to members. Any amounts

not

received by the end of a reporting period are recorded as accounts receivable by the Company. Any premiums received prior to the beginning of a reporting period are recognized as premiums received in advance and are included in unearned premium revenue in the accompanying condensed consolidated balance sheets. Premiums received in advance were approximately

$1,497,000

and

$1,268,000

at

September 30, 2017

and

December 31, 2016,

respectively. Management has determined that as of

September 30, 2017

and

December 31, 2016,

respectively,

no

premium deficiency reserve is required. The Company’s premium deficiency reserve analysis includes an allocation of investment income.

Self-Insured

—The Company provides administrative and claims processing services, benefit plan design, and access to its provider networks for an administrative fee to self-insured groups. The Company has

no

underwriting risk arising from the provision or cost of any services provided to the self-insured groups. The Company recognizes and records self-insured premiums on a gross basis because: (i) the Company is the primary obligor in its contractual relationships with self-insured employers and dental service providers, (ii) the Company establishes the pricing for the services provided, (iii) the Company controls the selection of and the relationships with the dental service providers, and (iv) the Company is involved in the determination of dental service specifications. Self-insured premium revenue is recognized upon the payment of claims for self-insured members in accordance with agreements with self-insured employers and is included in premium revenue in the accompanying condensed consolidated statements of comprehensive income.

Third-party administration fee revenue (“ASO fees”) is recognized monthly when earned and is normally based on annual contracts with the self-insured groups. ASO fees are charged to self-insured employer groups monthly on a per subscriber per month basis and included in premium revenue in the accompanying condensed consolidated statements of comprehensive income. ASO fees also include the administrative fees the Company earns relative to the dental indemnity and vision products that are underwritten by

third

-party insurance carriers.

Healthcare Services Expense [Policy Text Block]

Healthcare Services Expense

—Healthcare services expense is recognized on a monthly basis. In the case of the fully-insured dental HMO and indemnity and dental PPO segments, healthcare services expense is calculated by taking the paid claims associated with the fully-insured membership and adjusting this amount for the change in the claims payable liability determined using actuarial estimates. For the self-insured dental segment, the healthcare services expense is based solely on the paid claims for the self-insured membership.

Investment, Policy [Policy Text Block]

Investments

—The Company invests in certificates of deposit, corporate bonds and money market funds. The Company classifies all investments as available-for-sale. The Company engages a fixed income portfolio manager to manage the Company’s investment grade and non-investment grade corporate bonds, under the Company’s direction, in order to maximize investment returns. Such investments are recorded at fair value, with unrealized gains and losses recorded as a component of other comprehensive income. The Company recognizes gains and losses when these securities have other than temporary impairment, mature or are sold using the specific identification method.

Deferred Policy Acquisition Costs, Policy [Policy Text Block]

Deferred Acquisition Costs—

Deferred acquisition costs are those incremental direct costs related to the successful acquisition of new and renewal business. These incremental direct costs are those that are essential to the contract transaction and would

not

have been incurred had the contract transaction

not

occurred. Such incremental direct costs include commissions, costs of contract issuance and underwriting, state premium taxes and other costs the Company incurs to successfully acquire new business or renew existing business. The Company defers policy acquisition costs and amortizes them over the estimated life of the contracts, which are short-duration in nature, in proportion to premiums earned. The Company capitalized deferred acquisition costs of approximately

$724,000

and

$753,000

and amortized approximately

$1,243,000

and

$1,196,000

of these capitalized costs for the

three

months ended

September 30, 2017

and

2016,

respectively. The Company capitalized deferred acquisition costs of approximately

$3,700,000

and

$4,847,000

and amortized approximately

$3,710,000

and

$3,557,000

of these capitalized costs for the

nine

months ended

September 30, 2017

and

2016,

respectively. The amortization of these costs is recorded in commission expense and other acquisition costs included in the condensed consolidated statements of comprehensive income. 

Unpaid Policy Claims and Claims Adjustment Expense, Policy [Policy Text Block]

Claims Payable—

The Company estimates liabilities for both incurred but

not

reported (“IBNR”) and reported claims in process by employing actuarial methods that are commonly used by health insurance actuaries.  These estimates meet actuarial standards of practice and are also recorded in accordance with generally accepted accounting principles.  Management’s estimates of dental services provided are based on the Company’s historical experience and current trends, with assistance from the Company’s consulting actuary. Estimated dental claims payable are reviewed monthly by management and are adjusted based on current information, actual paid claims data, dental utilization statistics and other pertinent information. However, final claim payments

may

differ from the established reserves. Any resulting adjustments are reflected in current operations in the condensed consolidated statements of comprehensive income.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Guidance

—In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued ASU

2014

-

09,

Revenue from Contracts with Customers

. The new guidance requires that an entity recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts.

Insurance contracts are

not

included in the scope of this new guidance. The effective date of ASU

2014

-

09

is for annual reporting periods beginning after

December 15, 2017.

We have determined that any impact will only relate to contracts with our self-insured dental business. The Company does

not

anticipate any material changes in the timing of our recognition of revenue or net income.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments – Overall (Subtopic

825

-

10

) – Recognition and Measurement of Financial Assets and Financial Liabilities

. ASU

2016

-

01

revises the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The effective date of ASU

2016

-

01

is for interim and annual reporting periods beginning after

December 15, 2017.

The ASU has

not

yet been adopted by the Company; however, it will

not

have a material impact on our Company’s consolidated financial position, cash flows and results of operations.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases (Topic

842

).

ASU

2016

-

02

introduces new guidance that requires a lessee to recognize assets and liabilities for leases with lease terms of more than

12

months. Leases would be classified as finance or operating leases and both types of leases will be recognized on the balance sheet. The new guidance will also require new qualitative and quantitative disclosures. The effective date of ASU

2016

-

02

is for interim and annual reporting periods beginning after

December 15, 2018.

The ASU has

not

yet been adopted by the Company. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts as well as identification of other contracts that

may

fall under the scope of the new guidance. We do

not

expect the adoption to have a material impact on the Company’s consolidated financial position, cash flows and results of operations.     

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments. ASU

2016

-

13

amends previous guidance on the impairment of financial instruments by adding an impairment model that allows an entity to recognize expected credit losses as an allowance rather than impairing as they are incurred. The new guidance is intended to reduce complexity of credit impairment models and result in a more timely recognition of expected credit losses. The effective date of ASU

2016

-

13

is for interim and annual reporting periods beginning after

December 15, 2019.

The ASU has

not

yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is

not

expected to have a significant impact.

In

March 2017,

the FASB issued ASU

2017

-

08,

Receivables – Nonrefundable Fees and Other Costs (Subtopic

310

-

20

)

:Premium Amortization on Purchased Callable Debt Securities. ASU

2017

-

08

amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The effective date of ASU

2017

-

08

is for interim and annual reporting periods beginning after

December 15, 2018.

The ASU has

not

yet been adopted by the Company. Management is currently evaluating the impact on our Company’s consolidated financial position, cash flows and results of operations, but it is

not

expected to have a significant impact.

XML

Note 3 - Investments (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Investments Classified by Contractual Maturity Date [Table Text Block]

	Available-for-Sale
	Amortized		Fair		% of Total
September 30, 2017	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	400,000	$	400,217		4.3	%
Years 1-5		5,347,561		5,384,875		57.3	%
Years 5-10		3,523,638		3,563,607		37.9	%
Due after ten years		50,000		49,390		0.5	%
Total	$	9,321,199	$	9,398,089		100.0	%

	Available-for-Sale
	Amortized		Fair		% of Total
December 31, 2016	Cost		Value		Fair Value
Maturity dates occurring:
Less than 1 year	$	290,000	$	290,412		3.2	%
Years 1-5		5,722,990		5,741,735		63.0	%
Years 5-10		3,052,388		3,035,185		33.3	%
Due after ten years		50,000		47,500		0.5	%
Total	$	9,115,378	$	9,114,832		100.0	%

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2017	Cost		Gain		Loss			Value
Money market fund	$	177,379						$	177,379
Certificates of deposit, short term		400,000	$	246	$	(28	)		400,218
Certificates of deposit, fixed maturities		750,000		2,012					752,012
Corporate bonds, fixed maturities		8,171,199		111,115		(36,455	)		8,245,859
Total investments	$	9,498,578	$	113,373	$	(36,483	)	$	9,575,468

	Available-for-Sale
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2016	Cost		Gain		Loss			Value
Money market fund	$	222,577						$	222,577
Certificates of deposit, short term		290,000	$	412					290,412
Certificates of deposit, fixed maturities		800,000		4,728	$	(66	)		804,662
Corporate bonds, fixed maturities		8,025,378		76,323		(81,943	)		8,019,758
Total investments	$	9,337,955	$	81,463	$	(82,009	)	$	9,337,409

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Note 5 - Liability for Claims Payable (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block]

	Nine months ended		Nine months ended
	September 30, 2017		September 30, 2016
Balance —January 1	$	3,743,551	$	3,253,346
Net incurred claims related to:
Current year		42,789,639		41,999,068
Prior years		80,300		(45,147	)
Net incurred claims		42,869,939		41,953,921
Net paid claims related to:
Current year		39,583,233		38,760,333
Prior years		3,612,472		3,151,778
Net paid claims		43,195,705		41,912,111
Balance —September 30	$	3,417,785	$	3,295,156

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Note 7 - Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Three months ended									Three months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized gains, net, on investments available for sale, beginning of period	$	53,214		$	18,097		$	35,117		$	308,777		$	104,988		$	203,789
Other comprehensive income (loss) before reclassification		23,208			7,890			15,318			(8,644	)		(2,939	)		(5,705	)
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(12,512	)		(4,254	)		(8,258	)		(61,301	)		(20,842	)		(40,459	)
Effect on other comprehensive income		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Accumulated unrealized income, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(5,330	)	$	(1,812	)	$	(3,518	)	$	(64,525	)	$	(21,940	)	$	(42,585	)
Other comprehensive income before reclassification		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive losses		1,320			449			871			9,339			3,176			6,163
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive gain, beginning of period	$	47,884		$	16,285		$	31,599		$	244,252		$	83,048		$	161,204
Change in unrealized gains (losses), net, on investments available for sale		10,696			3,636			7,060			(69,945	)		(23,781	)		(46,164	)
Change in unrealized gains, net, on interest rate swap		1,320			449			871			9,339			3,176			6,163
Effect on other comprehensive income (loss)		12,016			4,085			7,931			(60,606	)		(20,605	)		(40,001	)
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

	Nine months ended									Nine months ended
	September 30, 2017									September 30, 2016
	Before Tax			Income Tax			Net			Before Tax			Income Tax			Net
Accumulated unrealized loss, net, on investments available for sale, beginning of period	$	(13,376	)	$	(4,544	)	$	(8,832	)	$	(34,498	)	$	(11,725	)	$	(22,773	)
Other comprehensive income before reclassification		126,520			43,017			83,503			283,306			96,324			186,982
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net		(49,234	)		(16,740	)		(32,494	)		(9,976	)		(3,392	)		(6,584	)
Effect on other comprehensive income		77,286			26,277			51,009			273,330			92,932			180,398
Accumulated unrealized gains, net, on investments available for sale, end of period	$	63,910		$	21,733		$	42,177		$	238,832		$	81,207		$	157,625
Accumulated unrealized losses, net, on interest rate swap, beginning of period	$	(6,697	)	$	(2,277	)	$	(4,420	)	$	(18,016	)	$	(6,126	)	$	(11,890	)
Other comprehensive income (loss) before reclassification		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income (loss)		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Accumulated unrealized losses, net, on interest rate swap, end of period	$	(4,010	)	$	(1,363	)	$	(2,647	)	$	(55,186	)	$	(18,764	)	$	(36,422	)
Accumulated other comprehensive loss, beginning of period	$	(20,073	)	$	(6,821	)	$	(13,252	)	$	(52,514	)	$	(17,851	)	$	(34,663	)
Change in unrealized gains, net, on investments available for sale		77,286			26,277			51,009			273,330			92,932			180,398
Change in unrealized gains (losses), net, on interest rate swap		2,687			914			1,773			(37,170	)		(12,638	)		(24,532	)
Effect on other comprehensive income		79,973			27,191			52,782			236,160			80,294			155,866
Accumulated other comprehensive income, end of period	$	59,900		$	20,370		$	39,530		$	183,646		$	62,443		$	121,203

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Note 8 - Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended						Three Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	12,922	$	9,352	$	3,570	$	13,373	$	9,859	$	3,514
Fully-insured dental PPO		6,483		4,372		2,111		5,582		3,878		1,704
Self-insured dental		7,733		6,678		1,055		7,584		6,575		1,009
Corporate, all other		201				201		195				195
Total	$	27,339	$	20,402		6,937	$	26,734	$	20,312		6,422
Investment income						70						69
Realized gains on investments, net						55						100
Other income												10
Insurance expense						5,479						5,444
Income before income tax					$	1,583					$	1,157
Total assets-corporate					$	79,346

	Nine Months Ended						Nine Months Ended
	September 30, 2017						September 30, 2016
	Revenues-		Healthcare				Revenues-		Healthcare
	External		Services				External		Services
	Customers		Expense		Total		Customers		Expense		Total
Reportable segments:
Fully-insured dental HMO/Indemnity	$	38,700	$	29,375	$	9,325	$	39,915	$	30,351	$	9,564
Fully-insured dental PPO		19,513		13,495		6,018		16,727		11,603		5,124
Self-insured dental		22,414		19,339		3,075		22,200		19,200		3,000
Corporate, all other		599				599		567				567
Total	$	81,226	$	62,209		19,017	$	79,409	$	61,154		18,255
Investment income						194						207
Realized gains on investments, net						187						48
Other income												47
Insurance expense						16,790						16,208
Income before income tax					$	2,608					$	2,349
Total assets-corporate					$	79,346

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Note 9 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	September 30, 2017						December 31, 2016
	Level 1		Level 2		Total Balance		Level 1		Level 2		Total Balance
Assets
Fixed maturities
Federally-Insured certificates of deposit			$	752	$	752			$	805	$	805
Investment grade corporate bonds				7,576		7,576				7,363		7,363
Non-investment grade corporate bonds				670		670				657		657
Short-term investments
Money market funds	$	177				177	$	223				223
Federally-Insured certificates of deposit				400		400				290		290
Deferred compensation investments (a)
Equity mutual fund investments		1,118				1,118		729				729
State guarantee fund deposits (b)
Government securities		1,771				1,771		1,775				1,775
Federally-Insured certificates of deposit				75		75				75		75
Total	$	3,066	$	9,473	$	12,539	$	2,727	$	9,190	$	11,917
Liabilities
Interest rate swap (c)			$	4	$	4			$	7	$	7
Total	$		$	4	$	4	$		$	7	$	7

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Note 1 - Basis of Presentation (Details Textual)	9 Months Ended
	Sep. 30, 2017
Number of Wholly Owned Subsidiaries	3

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Financial Guarantee Insurance Contracts, Unearned Premium Revenue	$ 46,847,000		$ 46,847,000		$ 46,955,000
Unbilled Contracts Receivable	45,349,000		45,349,000		45,687,000
Advance Premium Received	1,497,000		1,497,000		1,268,000
Premium Deficiency Reserve	0		0		$ 0
Deferred Policy Acquisition Costs, Additions	724,000	$ 753,000	3,700,000	$ 4,847,000
Deferred Policy Acquisition Costs, Amortization Expense	$ 1,243,000	$ 1,196,000	$ 3,710,000	$ 3,557,000

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Note 3 - Investments (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Available-for-sale Securities, Amortized Cost Basis	$ 9,498,578	$ 9,337,955
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	0
Certificates of Deposit [Member]
Available-for-sale Securities, Amortized Cost Basis	1,150,000	1,090,000
Money Market Funds [Member]
Available-for-sale Securities, Amortized Cost Basis	177,379	222,577
Available-for-sale Securities	177,000	223,000
Corporate Bond Securities [Member]
Available-for-sale Securities, Amortized Cost Basis	8,171,199	$ 8,025,378
Investment Owned, at Fair Value	$ 8,246,000
Weighted Average Yield to Book Value of Investment Grade Corporate Bonds	3.20%
Weighted Average Maturity of Investment	5 years 76 days
Corporate Bond Securities [Member] | BBB- or Better [Member]
Investment Owned, at Fair Value	$ 7,576,000
Corporate Bond Securities [Member] | BB + or Lower [Member]
Investment Owned, at Fair Value	$ 670,000

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Note 3 - Investments - Maturity Dates for Fixed Maturities and Short-term Investments (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Maturity dates occurring:
Total, amortized cost	$ 8,921,000	$ 8,825,000
Fixed Maturities and Short Term Investments Excluding the Money Market Funds [Member]
Maturity dates occurring:
Less than 1 year, amortized cost	400,000	290,000
Less than 1 year, fair value	$ 400,217	$ 290,412
Less than 1 year, percentage of total fair value	4.30%	3.20%
Years 1-5, amortized cost	$ 5,347,561	$ 5,722,990
Years 1-5, fair value	$ 5,384,875	$ 5,741,735
Years 1-5, percentage of total fair value	57.30%	63.00%
Years 5-10, amortized cost	$ 3,523,638	$ 3,052,388
Years 5-10, fair value	$ 3,563,607	$ 3,035,185
Years 5-10, percentage of total fair value	37.90%	33.30%
Due after ten years, amortized cost	$ 50,000	$ 50,000
Due after ten years, fair value	$ 49,390	$ 47,500
Due after ten years, percentage of total fair value	0.50%	0.50%
Total, amortized cost	$ 9,321,199	$ 9,115,378
Total, fair value	$ 9,398,089	$ 9,114,832
Total, percentage of total fair value	100.00%	100.00%

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Note 3 - Investments - Fixed Maturities and Short-term Investments (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Available-for-sale Securities, Amortized Cost Basis	$ 9,498,578	$ 9,337,955
Available-for-sale securities, gross unrealized gain	113,373	81,463
Available-for-sale securities, gross unrealized loss	(36,483)	(82,009)
Available-for-sale securities, fair value	9,575,468	9,337,409
Money Market Funds [Member]
Available-for-sale Securities, Amortized Cost Basis	177,379	222,577
Available-for-sale securities, gross unrealized gain	0	0
Available-for-sale securities, gross unrealized loss	0	0
Available-for-sale securities, fair value	177,379	222,577
Certificates of Deposit Short Term [Member]
Available-for-sale Securities, Amortized Cost Basis	400,000	290,000
Available-for-sale securities, gross unrealized gain	246	412
Available-for-sale securities, gross unrealized loss	(28)	0
Available-for-sale securities, fair value	400,218	290,412
Certificates of Deposit, Fixed Maturities [Member]
Available-for-sale Securities, Amortized Cost Basis	750,000	800,000
Available-for-sale securities, gross unrealized gain	2,012	4,728
Available-for-sale securities, gross unrealized loss		(66)
Available-for-sale securities, fair value	752,012	804,662
Corporate Bond Securities [Member]
Available-for-sale Securities, Amortized Cost Basis	8,171,199	8,025,378
Available-for-sale securities, gross unrealized gain	111,115	76,323
Available-for-sale securities, gross unrealized loss	(36,455)	(81,943)
Available-for-sale securities, fair value	$ 8,245,859	$ 8,019,758

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Note 4 - Deferred Compensation Plan (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Dividends Payable, Amount Per Share	$ 42.50	$ 40.47
Increase (Decrease) in Deferred Compensation					$ 569,133	$ 434,409
Deferred Compensation Liability, Current and Noncurrent			$ 4,452,667		4,452,667		$ 4,051,078
Dividend Declared [Member]
Increase (Decrease) in Deferred Compensation	$ 115,000	$ 102,000
Deferred Share and Phantom Shares [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense			127,000	$ 125,000	550,000	399,000
Directors and Employees [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense			$ 13,000	$ 15,000	$ 45,000	$ 40,000
Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					216
Key Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					99

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Note 5 - Liability for Claims Payable - Activity in Liability for Claims Payable for Members (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Balance - January 1	$ 3,743,551	$ 3,253,346
Net incurred claims related to:
Current year	42,789,639	41,999,068
Prior years	80,300	(45,147)
Net incurred claims	42,869,939	41,953,921
Net paid claims related to:
Current year	39,583,233	38,760,333
Prior years	3,612,472	3,151,778
Net paid claims	43,195,705	41,912,111
Balance - December 31	$ 3,417,785	$ 3,295,156

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Note 6 - Federal Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Effective Income Tax Rate Reconciliation, Percent	35.60%	43.30%	35.60%	43.30%
Income Tax Expense (Benefit)	$ 563,657	$ 501,616	$ 929,005	$ 1,018,419
Unrecognized Tax Benefits	$ 0		$ 0
Domestic Tax Authority [Member] | Earliest Tax Year [Member]
Open Tax Year			2013
State and Local Jurisdiction [Member]
Open Tax Year			2012

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Note 7 - Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Effect on other comprehensive income (loss), net	$ 7,931	$ (40,001)	$ 52,782	$ 155,866
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Accumulated other comprehensive income (loss), before tax	53,214	308,777	(13,376)	(34,498)
Other comprehensive income (loss) before reclassification, before tax	23,208	(8,644)	126,520	283,306
Reclassification adjustment for realized investment (gains) losses, net, included in realized gains on investments, before tax	(12,512)	(61,301)	(49,234)	(9,976)
Effect on other comprehensive income (loss), before tax	10,696	(69,945)	77,286	273,330
Accumulated other comprehensive income (loss), before tax	63,910	238,832	63,910	238,832
Accumulated other comprehensive income (loss), tax	18,097	104,988	(4,544)	(11,725)
Other comprehensive income (loss) before reclassification, tax	7,890	(2,939)	43,017	96,324
Reclassification adjustment for realized investment (gains) losses, net, included in realized gains on investments, tax	(4,254)	(20,842)	(16,740)	(3,392)
Effect on other comprehensive income (loss), tax	3,636	(23,781)	26,277	92,932
Accumulated other comprehensive income (loss), tax	21,733	81,207	21,733	81,207
Accumulated other comprehensive income (loss), net	35,117	203,789	(8,832)	(22,773)
Other comprehensive income (loss) before reclassification, net	15,318	(5,705)	83,503	186,982
Reclassification adjustment for realized investment gains, net, included in realized gains on investments, net	(8,258)	(40,459)	(32,494)	(6,584)
Effect on other comprehensive income (loss), net	7,060	(46,164)	51,009	180,398
Accumulated other comprehensive income (loss), net	42,177	157,625	42,177	157,625
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Accumulated other comprehensive income (loss), before tax	(5,330)	(64,525)	(6,697)	(18,016)
Other comprehensive income (loss) before reclassification, before tax	1,320	9,339	2,687	(37,170)
Effect on other comprehensive income (loss), before tax	1,320	9,339	2,687	(37,170)
Accumulated other comprehensive income (loss), before tax	(4,010)	(55,186)	(4,010)	(55,186)
Accumulated other comprehensive income (loss), tax	(1,812)	(21,940)	(2,277)	(6,126)
Other comprehensive income (loss) before reclassification, tax	449	3,176	914	(12,638)
Effect on other comprehensive income (loss), tax	449	3,176	914	(12,638)
Accumulated other comprehensive income (loss), tax	(1,363)	(18,764)	(1,363)	(18,764)
Accumulated other comprehensive income (loss), net	(3,518)	(42,585)	(4,420)	(11,890)
Other comprehensive income (loss) before reclassification, net	871	6,163	1,773	(24,532)
Effect on other comprehensive income (loss), net	871	6,163	1,773	(24,532)
Accumulated other comprehensive income (loss), net	(2,647)	(36,422)	(2,647)	(36,422)
AOCI Attributable to Parent [Member]
Accumulated other comprehensive income (loss), before tax	47,884	244,252	(20,073)	(52,514)
Change in unrealized gains, net, on investments available for sale, before tax	10,696	(69,945)	77,286	273,330
Change in unrealized gains (losses), net, on interest rate swap, before tax	1,320	9,339	2,687	(37,170)
Effect on other comprehensive income (loss), before tax	12,016	(60,606)	79,973	236,160
Accumulated other comprehensive income (loss), before tax	59,900	183,646	59,900	183,646
Accumulated other comprehensive income (loss), tax	16,285	83,048	(6,821)	(17,851)
Change in unrealized gains, net, on investments available for sale, tax	3,636	(23,781)	26,277	92,932
Change in unrealized gains (losses), net, on interest rate swap, tax	449	3,176	914	(12,638)
Effect on other comprehensive income (loss), tax	4,085	(20,605)	27,191	80,294
Accumulated other comprehensive income (loss), tax	20,370	62,443	20,370	62,443
Accumulated other comprehensive income (loss), net	31,599	161,204	(13,252)	(34,663)
Change in unrealized gains, net, on investments available for sale, net	7,060	(46,164)	51,009	180,398
Change in unrealized gains (losses), net, on interest rate swap, net	871	6,163	1,773	(24,532)
Effect on other comprehensive income (loss), net	7,931	(40,001)	52,782	155,866
Accumulated other comprehensive income (loss), net	$ 39,530	$ 121,203	$ 39,530	$ 121,203

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Note 8 - Segment Information (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Number of Reportable Segments			4
Gross Profit	$ 6,937,000	$ 6,422,000	$ 19,017,000	$ 18,255,000

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Note 8 - Segment Information - Reportable Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Revenues - External Customers	$ 27,339,477	$ 26,734,505	$ 81,226,549	$ 79,409,241
Healthcare Services Expense	20,402,073	20,311,592	62,209,264	61,154,178
Total	6,937,000	6,422,000	19,017,000	18,255,000
Investment income	70,162	68,498	193,776	206,966
Realized gains on investments, net	54,755	99,558	187,177	48,233
Other income		10,384		46,728
Insurance expense	5,479,414	5,444,758	16,789,910	16,207,664
Income before income tax	1,582,907	1,156,595	2,608,328	2,349,326
Total assets-corporate	79,346,086		79,346,086		$ 78,081,807
Fully Insured Dental HMO [Member]
Revenues - External Customers	12,922,000	13,373,000	38,700,000	39,915,000
Healthcare Services Expense	9,352,000	9,859,000	29,375,000	30,351,000
Total	3,570,000	3,514,000	9,325,000	9,564,000
Fully Insured Dental PPO [Member]
Revenues - External Customers	6,483,000	5,582,000	19,513,000	16,727,000
Healthcare Services Expense	4,372,000	3,878,000	13,495,000	11,603,000
Total	2,111,000	1,704,000	6,018,000	5,124,000
Self-insured Dental [Member]
Revenues - External Customers	7,733,000	7,584,000	22,414,000	22,200,000
Healthcare Services Expense	6,678,000	6,575,000	19,339,000	19,200,000
Total	1,055,000	1,009,000	3,075,000	3,000,000
Corporate and Other [Member]
Revenues - External Customers	201,000	195,000	599,000	567,000
Healthcare Services Expense
Total	$ 201,000	$ 195,000	$ 599,000	$ 567,000

XML

Note 9 - Fair Value Measurements (Details Textual) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Assets, Fair Value Disclosure, Nonrecurring		$ 0	$ 0
Assets, Fair Value Disclosure	[1]	12,539,000	11,917,000
Liabilities, Fair Value Disclosure, Nonrecurring		0	0
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure		0	0
Financial Liabilities Fair Value Disclosure		$ 0	$ 0

[1] Included in other assets

XML

Note 9 - Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Assets
Assets	[1]	$ 12,539	$ 11,917
Liabilities
Liabilities		4	7
Interest Rate Swap [Member]
Liabilities
Liabilities	[2]	4	7
Fair Value, Inputs, Level 1 [Member]
Assets
Assets	[1]	3,066	2,727
Liabilities
Liabilities
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Liabilities
Liabilities
Fair Value, Inputs, Level 2 [Member]
Assets
Assets	[1]	9,473	9,190
Liabilities
Liabilities		4	7
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Liabilities
Liabilities	[2]	4	7
Fixed Maturities [Member] | Federally Insured Certificates of Deposit [Member]
Assets
Assets		752	805
Fixed Maturities [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets
Fixed Maturities [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets		752	805
Fixed Maturities [Member] | Investment Grade Corporate Bonds [Member]
Assets
Assets		7,576	7,363
Fixed Maturities [Member] | Investment Grade Corporate Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets
Fixed Maturities [Member] | Investment Grade Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets		7,576	7,363
Fixed Maturities [Member] | Non-investment Grade Corporate Bonds [Member]
Assets
Assets		670	657
Fixed Maturities [Member] | Non-investment Grade Corporate Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets
Fixed Maturities [Member] | Non-investment Grade Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets		670	657
Short-term Investments [Member] | Money Market Funds [Member]
Assets
Assets		177	223
Short-term Investments [Member] | Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Assets
Assets		177	223
Short-term Investments [Member] | Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]
Assets
Assets
Short-term Investments [Member] | Federally Insured Certificates of Deposit [Member]
Assets
Assets		400	290
Short-term Investments [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets
Short-term Investments [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets		400	290
Deferred Compensation Investment [Member] | Equity Mutual Fund Investments [Member]
Assets
Assets	[3]	1,118	729
Deferred Compensation Investment [Member] | Equity Mutual Fund Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets	[3]	1,118	729
Deferred Compensation Investment [Member] | Equity Mutual Fund Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets
State Guarantee Fund Deposits [Member] | US Government Agencies Debt Securities [Member]
Assets
Assets	[1]	1,771	1,775
State Guarantee Fund Deposits [Member] | Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member]
Assets
Assets	[1]	1,771	1,775
State Guarantee Fund Deposits [Member] | Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member]
Assets
Assets
State Guarantee Fund Deposits [Member] | Federally Insured Certificates of Deposit [Member]
Assets
Assets	[1]	75	75
State Guarantee Fund Deposits [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Assets
State Guarantee Fund Deposits [Member] | Federally Insured Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets	[1]	$ 75	$ 75

[1] Included in other assets

[2] Included in other payables and accruals

[3] Included as a trading security in other assets