Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company leases its corporate headquarters in Olathe, Kansas, which includes the health and wellness operations center, under an operating lease which expires in 2018. The Company leases its AHS operations centers in Des Moines, Iowa and Indianapolis, IN, under operating leases which expire in 2018. The Company also leases copiers and other miscellaneous equipment. These leases expire at various times through 2017.

The Company is obligated under a lease related to the discontinued Hooper Holmes Services operations center through 2018 and has ceased use of this facility. The Company has recorded a facility closure obligation of $0.5 million as of September 30, 2016, related to this lease, which is recorded in other current and long-term liabilities in the accompanying condensed consolidated balance sheet.

The Company has employment agreements with certain employees that provide for payment of base salary for up to a one year period in the event their employment with the Company is terminated in certain circumstances, including following a change in control, as further defined in the agreements.

The Company incurred certain severance and other costs related to its ongoing initiatives to increase the flexibility of its cost structure that were recorded in selling, general, and administrative expenses, and at September 30, 2016, the Company recorded a $0.2 million liability related to these initiatives in other current liabilities in the accompanying condensed consolidated balance sheet.

From time to time, the Company is subject to federal and state tax audits and related governmental inquiries into matters such as income tax returns, sales and use tax returns, employment classification of its workers, and wage and hour law compliance. The Company is currently under examination by the Internal Revenue Service (the “IRS”) for the calendar years 2013, 2014, and 2015 with respect to its classification of certain of its health professionals as independent contractors rather than employees. This examination could lead to proposed adjustments to its federal employment taxes for the periods in question, but the IRS has not yet issued an assessment. The Company believes that it has properly classified these workers as independent contractors, but there can be no assurances of a favorable outcome for the Company and given the ongoing status of the examination, we are unable at this time to provide an estimate of the range of loss, if any.