On November 29, 2023, BHIC-Texas (the “Deconsolidated Entity”) was placed into liquidation and the Texas Department of Insurance was appointed as receiver. The Deconsolidated Entity’s financial results are included in the Company’s consolidated results through November 28, 2023, the day prior to the date of the receivership. However, under ASC 810, consolidation of a majority-owned subsidiary is precluded where control of the subsidiary does not rest with the majority owners. Once the Texas Department of Insurance was appointed as receiver of BHIC-Texas we concluded the Company no longer controlled the subsidiary, and we deconsolidated BHIC-Texas as of that date.

The deconsolidation of BHIC-Texas resulted in certain related party balances that had previously been eliminated upon consolidation to become liabilities of the Company. In 2022, BHIC-Texas entered into a risk share contract with a different NeueHealth affiliate, whereby losses incurred at BHIC-Texas over a specified medical loss ratio target were transferred from BHIC-Texas to the affiliated entity. On November 29, 2023 the accrued loss of BHIC-Texas related to the risk share contract was $124.0 million. Upon deconsolidation of BHIC-Texas, this liability is required to be recorded as risk share payable to deconsolidated entity on the Consolidated Balance Sheet. The corresponding receivable on BHIC-Texas was included in our carrying value evaluation described below.


Cash and cash equivalents	$	60,560
Prepaids and other current assets	1,522
Risk share receivable	123,981
Total Assets	$	186,063
Accounts payable	$	135
Medical costs payable	3,283
Other current liabilities	1,523
Risk adjustment payable	89,638
Total Liabilities	94,579
APIC	204,753
Accumulated Deficit	(113,269)
Total Equity	91,484
Total Liabilities and Equity	$	186,063

Under ASC 810, Consolidation, this loss of control would likely trigger a gain or loss for the parent as the parent would remeasure its retained noncontrolling investment at fair value. Upon deconsolidation, the Company valued its investment in BHIC-Texas to be $91.5 million, which is equivalent to the Deconsolidated Entity's carrying value. Upon valuing the investment in BHIC-Texas we assessed the current expected credit loss associated with the underlying receivables; as a result of our analysis we recorded a full valuation allowance on the investment due to uncertainties related to the collection of the risk share receivable.

In April 2023, we announced that we were exploring strategic alternatives for our California Medicare Advantage business, the Bright HealthCare reporting segment, with the focus on a potential sale. At that time, we met the criteria for “held for sale,” in accordance with ASC 205-20. This represents a strategic shift that will have a material impact on our business and financial results. As such, we have reflected amounts relating to Bright HealthCare as a disposal group as part of discontinued operations. On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business to Molina, which consisted of BND and CHP (the “Molina Purchase Agreement”). Effective as of January 1, 2024, this transaction was consummated for an aggregate purchase price of $500.0 million subject to certain contingencies adjustments relating to Tangible Net Equity (“TNE”). Upon completion of the sale, the Bright HealthCare reporting unit of our discontinued operations was no longer included in our operations. The Consolidation and Adjustment Escrow review has been completed and $61.1 million was released from escrow to the Company on March 17, 2025.

In October 2022, we announced that we will no longer offer commercial plans through our Bright HealthCare - Commercial segment in 2023. As a result, we exited the Commercial marketplace effective December 31, 2022. We determined this exit represented a strategic shift that will have a material impact on our business and financial results that requires presentation as discontinued operations.

While we are no longer offering plans in the Commercial marketplace as of December 31, 2022, we will continue to be involved in the states where we formerly operated in, as we support run out activities of medical claims incurred in the 2022 plan year and perform other activities necessary to wind down our operations in each state. We were substantially complete with medical claim payments as of the end of 2023, and we will continue to make remaining medical claim payments and payments towards the remaining risk adjustment obligations through 2025 and into 2026.


	Three Months Ended March 31,
	2025		2024
Revenue:
Premium revenue	$	(322)	$	(215)
Investment income	942		1,568
Total revenue from discontinued operations	620		1,353
Operating expenses:
Medical costs	(1,203)		(3,759)
Operating costs	2,004		6,206

Total operating expenses from discontinued operations	801		2,447
Operating loss from discontinued operations	(181)		(1,094)
Interest expense	9,251		8,765
Loss from discontinued operations before income taxes	(9,432)		(9,859)
Income tax (benefit) expense	(22)		6
Net loss from discontinued operations	$	(9,410)	$	(9,865)


	Three Months Ended March 31,
	2025		2024
Cash used in operating activities - discontinued operations	$	(16,868)	$	(37,958)
Cash provided by investing activities - discontinued operations	61,130		198,451
Supplemental disclosure of cash flow information:
Cash paid for interest	$	33	$	2,628


	March 31, 2025		December 31, 2024
	Total		Total
Assets
Current assets:
Cash and cash equivalents	$	86,729	$	102,110
Short-term investments	7,526		7,533
Consideration due from Molina	—		61,139
Prepaids and other current assets	212		2,224
Current assets of discontinued operations	94,467		173,006
Total assets of discontinued operations	$	94,467	$	173,006
Liabilities
Current liabilities:
Medical costs payable	$	2,046	$	7,031
Accounts payable	5,232		9,052
Risk adjustment payable	271,839		276,835
Other current liabilities	56,064		51,733
Current liabilities of discontinued operations	335,181		344,651
Total liabilities of discontinued operations	$	335,181	$	344,651

California Medicare Advantage Sale: On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business, which consisted of BND and CHP, for total purchase consideration of $600.0 million, subject to regulatory approval and other closing conditions. Subsequently, on December 13, 2023 we announced that we entered an amendment (the “Amendment”) with Molina which reduced the purchase price of our California Medicare Advantage business from $600.0 million to $500.0 million. Upon closing on the sale, effective January 1, 2024, the $500.0 million purchase price included $167.3 million of purchase price adjustments subject to contingencies and adjustments relating to TNE.

The Consolidation and Adjustment Escrow review has been completed and $61.1 million was released from escrow to the Company on March 17, 2025. The remaining purchase price consideration subject to contingencies and adjustments as of March 31, 2025 is as follows (in thousands):

(1) For 18 months post-closing date, the Company will indemnify Molina against and are liable to Molina for any and all losses incurred by Molina resulting from breach or inaccuracy of warranties and representations made, breach or failure to perform any covenant of the Molina Purchase Agreement, among others. As the Indemnity Escrow Amount is subject to these conditions for 18 months post close, the Company will only recognize this amount in the fair value of consideration

As the conditions surrounding collection of the Indemnity Escrow Amount remain subject to contingencies that are largely outside of the Company’s control, we have not recorded any contingent consideration receivable related to the amount as of March 31, 2025.

Refer to Note 19 of the 2024 Form 10-K for discussion of the gain on sale recorded in the fourth quarter of 2024. As of March 31, 2024, the company recorded no gain or loss associated with the sale of the California Medicare Advantage business (in thousands):


Sale price of California MA Business	$	500,000
Less: Portion of sale price subject to contingencies	(167,326)
Less: Investment in California MA Business	(324,216)
Less: Transactions costs contingent on closing of sale	(8,458)
Gain or loss on sale of California MA Business	$	—

Upon the close of the sale, we ceased having a controlling financial interest over BND and CHP and have not retained any investments in the former subsidiaries. Molina is not a related party and subsequent to the close of the sale BND and CHP are no longer considered related parties to the Company.

Revenue Recognition: We record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by the U.S. Department of Health and Human Services (“HHS”), which could result in future payments applicable to benefit years.


	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Carrying Value
Cash equivalents	$	70,207	$	—	$	—	$	70,207






Held to maturity:
U.S. government and agency obligations	7,426		—		—		7,426

Corporate obligations	100		—		—		100
Total held-to-maturity securities	7,526		—		—		7,526
Total investments	$	77,733	$	—	$	—	$	77,733


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Carrying Value
Cash equivalents	$	82,043	$	6	$	—	$	82,049






Held to maturity:
U.S. government and agency obligations	7,430		—		—		7,430

Corporate obligations	103		—		—		103
Total held-to-maturity securities	7,533		—		—		7,533
Total investments	$	89,576	$	6	$	—	$	89,582

We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases. At each reporting period, we evaluate securities for impairment when the fair value of the investment is less than its amortized cost. We evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase.

Fair Value Measurements: Certain assets and liabilities are measured at fair value in the condensed consolidated financial statements or have fair values disclosed in the notes to the condensed consolidated financial statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP.

Level 2: Quoted prices for similar assets or liabilities in active markets or quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument see Note 19 to the audited consolidated financial statements included in our 2024 Form 10-K.

As of March 31, 2025, investments and cash equivalents within our discontinued operations were comprised of $76.0 million and $1.7 million with fair value measurements of Level 1 and Level 2, respectively. As of December 31, 2024, the investments

and cash equivalents within our discontinued operations were comprised of $87.8 million and $1.8 million with fair value measurements of Level 1 and Level 2, respectively. All investments and cash equivalents within our discontinued operations is classified as restricted.

Risk Adjustment: On March 13, 2025, our insurance subsidiaries in Colorado and Florida entered into modified repayment agreements with respect to the remaining unpaid amount of their risk adjustment obligations for an aggregate amount of $271.8 million. The remaining amount owed under the Modified Repayment Agreements is due September 15, 2026 and bears interest at a rate of 11.5% per annum. The remaining amount due relating to the risk adjustment repayment agreements, our risk adjustment payable liability, was $271.8 million and $276.8 million as of March 31, 2025 and December 31, 2024, respectively. During the first quarter of 2025, our insurance subsidiary in Illinois repaid the entirety of its outstanding risk adjustment obligation.

Restricted Capital and Surplus: Our regulated insurance legal entities are required by statute to meet and maintain a minimum level of capital as stated in applicable state regulations, such as risk-based capital requirements. These balances are monitored regularly to ensure compliance with these regulations. For the period ended March 31, 2025, we are out of compliance with the minimum levels for certain of our regulated insurance legal entities.