Oscar Health, Inc 10-Q for FY2025 Q1
Oscar Health, Inc. (OSCR)
10-Q
2025-05-08
For: 2025-03-31
View Original
Added on
April 07, 2026
About this 10-Q
Oscar Health, Inc filed this 10-Q on May 8, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.05B
- up 42.2% from $2.14B a year earlier
- Net income
- $275.27M
- up 55.2% from net income of $177.37M a year earlier
- Diluted EPS
- $0.92
- up 48.4% from $0.62 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended March 31, 2025
or
For the transition period from __________to__________
Commission File Number: 001-40154
____________________________________________________________
(Exact name of registrant as specified in its charter)
____________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (646) 403-3677
Former name, former address and former fiscal year, if changed since last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth 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 ☒
| Class of Stock | Shares Outstanding as of April 30, 2025 (in thousands) | |||||||
| Class A Common Stock, par value $0.00001 per share | ||||||||
| Class B Common Stock, par value $0.00001 per share | ||||||||
Oscar Health, Inc.
TABLE OF CONTENTS
| Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
| Item 1. | Financial Statements (unaudited) | |||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
This Quarterly Report on Form 10-Q for the period ended March 31, 2025 (“Quarterly Report on Form 10-Q”) contains the following defined terms, unless context otherwise requires: (i) “Oscar,” “the Company,” “we,” “our,” “us” or like terms refer to Oscar Health, Inc. and its subsidiaries, (ii) “Thrive Capital” refers to Thrive Capital Management, LLC, a Delaware limited liability company, and the investment funds affiliated with or advised by Thrive Capital Management, LLC and (iii) “Thrive General Partners” refers to Thrive Partners II GP, LLC, Thrive Partners III GP, LLC, Thrive Partners V GP, LLC, Thrive Partners VI GP, LLC, Thrive Partners VII GP, LLC, and Thrive Partners VII Growth GP, LLC, each of which is a general partner of a Thrive Capital-affiliated fund.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continues” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, risk adjustment transfer payments, industry, regulatory and business trends, our commercial arrangements, business strategy, plans and plan mix, membership and market growth, and our objectives for future operations.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following:
•Our ability to execute our strategy and manage our growth effectively (including our ability to successfully integrate strategic acquisitions);
•Our ability to retain and expand our member base;
•Our ability to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs;
•Our ability to maintain profitability in the future;
•Unanticipated results of or changes to risk adjustment programs;
•Our ability to arrange for the delivery of quality care and maintain good relations with brokers and the physicians, hospitals, and other providers within and outside our provider networks;
•Changes in federal or state laws or regulations (including any changes in the interpretation or enforcement thereof), including changes with respect to the Patient Protection and Affordable Care Act (“ACA”) and any regulations enacted thereunder, non-renewal of the enhanced Advanced Premium Tax Credits (“APTCs”), the implementation of new program integrity rules or other government actions, such as the imposition of tariffs;
•Our ability to comply with ongoing regulatory requirements, including capital reserve and surplus requirements and applicable performance standards;
•Changes or developments in the health insurance markets in the United States;
•Our, or any of our vendors’, ability to comply with laws, regulations, and standards related to the handling of information about individuals or applicable consumer protection laws, including as a result of our participation in government-sponsored programs;
•Heightened competition in the markets in which we participate;
•Our ability to utilize quota share reinsurance to meet our capital and surplus requirements and protect against downside risk on medical claims;
•Unfavorable or otherwise costly outcomes of lawsuits, audits, investigations, and other third party claims;
•Incurrence of data security breaches of our and our partners’ information and technology systems;
3
•Our ability to attract and retain qualified personnel;
•Our ability to detect and prevent material weaknesses or significant control deficiencies in our internal controls over financial reporting or other failure to maintain an effective system of internal controls; Adverse publicity or other adverse consequences related to our dual class structure or “controlled company” status; and
•The other risks and uncertainties described under the caption “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I Item A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 20, 2025.
The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
This Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q should be read with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Oscar Health, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except per share amounts) | 2025 | 2024 | |||||||||||||||||||||
Revenue | |||||||||||||||||||||||
| Premium | $ | $ | |||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Services and other | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Medical | |||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Earnings from operations | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
Earnings before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Net income attributable to Oscar Health, Inc. | $ | $ | |||||||||||||||||||||
| Earnings per Share | |||||||||||||||||||||||
Basic | $ | $ | |||||||||||||||||||||
Diluted | $ | $ | |||||||||||||||||||||
| Weighted Average Common Shares Outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
5
Oscar Health, Inc.
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive income, net of tax: | |||||||||||||||||||||||
| Net unrealized gains (loss) on securities available for sale | ( | ||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||
| Comprehensive income attributable to Oscar Health, Inc. | $ | $ | |||||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
6
Oscar Health, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
| (in thousands, except per share amounts) | March 31, 2025 | December 31, 2024 | |||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Premiums and accounts receivable (net of allowance for credit losses of $ | |||||||||||
Risk adjustment transfer receivable | |||||||||||
Reinsurance recoverable | |||||||||||
| Other current assets | |||||||||||
Total current assets | |||||||||||
Property, equipment, and capitalized software, net | |||||||||||
Long-term investments | |||||||||||
Restricted deposits | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current Liabilities: | |||||||||||
Benefits payable | $ | $ | |||||||||
Risk adjustment transfer payable | |||||||||||
Unearned premiums | |||||||||||
Accounts payable and other liabilities | |||||||||||
Reinsurance payable | |||||||||||
Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 12) | |||||||||||
Stockholders' Equity | |||||||||||
Class A common stock ($ | |||||||||||
Class B common stock ($ | |||||||||||
Treasury stock ( | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
| Total Oscar Health, Inc. stockholders' equity | |||||||||||
| Noncontrolling interests | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ | |||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
7
Oscar Health, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Common stock, Class A shares | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | |||||||||||||||||||||||
| Shares withheld for net settlement of share-based awards | ( | — | |||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common stock, Class B shares | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | — | — | |||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common stock, Class A | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | |||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Common Stock, Class B | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Treasury stock | |||||||||||||||||||||||
| Balance, beginning of period | ( | ( | |||||||||||||||||||||
| Balance, end of period | ( | ( | |||||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||
| Issuance of common stock from equity incentive plans | |||||||||||||||||||||||
| Net settlement for taxes related to share-based awards | ( | — | |||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Accumulated Deficit | |||||||||||||||||||||||
| Balance, beginning of period | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Balance, end of period | ( | ( | |||||||||||||||||||||
| Accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Balance, beginning of period | ( | ||||||||||||||||||||||
| Unrealized gains (loss) on investments, net | ( | ||||||||||||||||||||||
| Balance, end of period | ( | ||||||||||||||||||||||
| Noncontrolling interests | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Total stockholders' equity | $ | $ | |||||||||||||||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
8
Oscar Health, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Three Months Ended March 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Deferred taxes | ( | ||||||||||
Net realized gain on sale of financial instruments | ( | ||||||||||
Depreciation and amortization expense | |||||||||||
| Amortization of debt issuance costs | |||||||||||
Stock-based compensation expense | |||||||||||
| Net accretion of investments | ( | ( | |||||||||
| Change in provision for credit losses | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
(Increase) / decrease in: | |||||||||||
| Premium and other receivables | ( | ( | |||||||||
Risk adjustment transfer receivable | ( | ( | |||||||||
Reinsurance recoverable | ( | ||||||||||
Other assets | ( | ( | |||||||||
Increase / (decrease) in: | |||||||||||
Benefits payable | |||||||||||
Unearned premiums | ( | ( | |||||||||
Premium deficiency reserve | ( | ||||||||||
Accounts payable and other liabilities | |||||||||||
Reinsurance payable | ( | ||||||||||
Risk adjustment transfer payable | |||||||||||
| Net cash provided by operating activities | |||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchase of investments | ( | ( | |||||||||
Sale of investments | |||||||||||
Maturity and paydowns of investments | |||||||||||
Purchase of property, equipment and capitalized software | ( | ( | |||||||||
Change in restricted deposits | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities: | |||||||||||
| Tax payments related to net settlement of share-based awards | ( | ||||||||||
Proceeds from exercise of stock options | |||||||||||
Net cash provided by financing activities | |||||||||||
Increase in cash, cash equivalents and restricted cash equivalents | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period | |||||||||||
Cash, cash equivalents, restricted cash and cash equivalents—end of period | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash and cash equivalents included in restricted deposits | |||||||||||
Total cash, cash equivalents and restricted cash and cash equivalents | $ | $ | |||||||||
| Supplemental Disclosures: | |||||||||||
| Interest payments | $ | $ | |||||||||
See the accompanying Notes to Condensed Consolidated Financial Statements
9
Oscar Health, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
(in thousands, except per share amounts, or as otherwise stated herein)
1. ORGANIZATION
Oscar Health, Inc., together with its subsidiaries (either individually or collectively referred to as “Oscar” or the “Company”), is a leading healthcare technology company, whose mission is to make a healthier life accessible and affordable for all. The Company’s Class A common stock is traded on the New York Stock Exchange under the symbol “OSCR”.
Oscar operates as one reportable segment to sell insurance to individuals, families and employees through the federal and state-run healthcare exchanges formed in conjunction with the ACA and leverages its technology platform to provide services via its +Oscar offering. The Company determined that the Chief Executive Officer is the chief operating decision maker (“CODM”) who regularly reviews financial information and other key performance indicators on a consolidated basis, for the purposes of allocating resources and evaluating financial performance. Factors used in determining the reportable segment include the nature of operating activities, the Company’s organizational and reporting structure, and the type of information presented to the Company’s CODM to allocate resources and evaluate financial performance.
The Company’s member-first philosophy and innovative approach to care has earned the trust of approximately 2.0 million effectuated members (“members”), as of March 31, 2025. Effectuated members are those who are actively enrolled in one of the Company’s plans and whose required premium payments have either been made or are within the payment grace period.
Basis of Presentation
The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and the applicable rules and regulations of the Securities and Exchange Commission for interim financial information. As such, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements.
These Condensed Consolidated Financial Statements are unaudited; however, in the opinion of management, they reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the information presented in conformity with U.S. GAAP applicable for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2024.
Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates inherent in the preparation of the accompanying interim Condensed Consolidated Financial Statements include healthcare costs incurred but not yet reported (“IBNR”) and risk adjustment transfers. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ materially from these estimates.
10
Accounting Pronouncements - Not Yet Adopted
In December 2023, the FASB issued Accounting Standards Update No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and other amendments to improve the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 applies on a prospective basis; however, retrospective application in all prior periods presented is permitted. While the standard will require additional disclosures related to the Company’s income taxes, the standard is not expected to have any material impact on the Company’s consolidated operating results, financial condition, or cash flows. The Company is currently evaluating the impact of the adoption of this guidance on the related disclosures before it becomes effective for the Company’s 2025 annual financial statements.
2. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing Net income attributable to Oscar Health, Inc. for the period by the weighted-average shares of common stock outstanding during the period. In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted EPS because their inclusion would have an anti-dilutive effect. Thus, basic EPS is the same as diluted EPS.
During periods of net income, diluted EPS is computed by adjusting Net income attributable to Oscar Health, Inc. for any interest charges and changes in the fair value of the bifurcated conversion option applicable to the convertible senior notes. This adjusted net income is then divided by the sum of the basic weighted-average shares of common stock outstanding and any dilutive potential common stock outstanding during the period, using the treasury stock method and the if-converted method for convertible senior notes, as described in “Note 8 - Debt.” Potential common stock includes the effect of outstanding dilutive stock options, restricted stock units and, performance-based restricted stock units. The computation for basic and diluted EPS is as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except per share data) | 2025 | 2024 | |||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
| Net income attributable to Oscar Health, Inc. | $ | $ | |||||||||||||||||||||
| Effect of convertible senior notes | |||||||||||||||||||||||
| Net income available to Oscar Health, Inc. common shareholders | $ | $ | |||||||||||||||||||||
Denominator: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding, basic and diluted | |||||||||||||||||||||||
| Common stock equivalents | |||||||||||||||||||||||
| Effect of convertible senior notes | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding and potential dilutive common shares outstanding | |||||||||||||||||||||||
| Earnings per Share | |||||||||||||||||||||||
Basic | $ | $ | |||||||||||||||||||||
Diluted | $ | $ | |||||||||||||||||||||
11
The following potential common shares were excluded from the computation of diluted EPS because including them would have had an anti-dilutive effect:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
Stock options to purchase common stock | |||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
| Performance-based restricted stock units | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
3. REVENUE RECOGNITION
Premium
Premium revenue includes direct policy premiums collected from members and the federal government, assumed policy premiums received as part of the reinsurance arrangement under the Cigna+Oscar Small Group plan offering, and risk adjustment transfers. Premium revenue is net of ceded premium from excess of loss (“XOL”) and run-off quota share reinsurance contracts accounted for under reinsurance accounting (See “Note 9 - Reinsurance” for additional information on the Company’s reinsurance contracts).
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Direct policy premiums | $ | $ | |||||||||||||||||||||||||||||||||
| Assumed premiums | |||||||||||||||||||||||||||||||||||
| Risk adjustment transfers | ( | ( | |||||||||||||||||||||||||||||||||
| Reinsurance premiums ceded | ( | ( | |||||||||||||||||||||||||||||||||
| Premium | $ | $ | |||||||||||||||||||||||||||||||||
The direct policy premiums received from Centers for Medicare & Medicaid Services (“CMS”) for the three months ended March 31, 2025, and 2024 were $3,142.5 million and $2,113.8 million, respectively.
Services and Other
The Company earns revenue as part of services performed via the +Oscar platform. Services revenue is recognized in the period the contractual performance obligations are satisfied and measured in an amount that reflects the consideration the Company expects to be entitled to in exchange for performing the services. The timing of the Company's revenue recognition may differ from the timing of payment by customers. A receivable is recorded to Premiums and accounts receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, deferred revenue is recorded to Accounts payable and other liabilities when payment is received before the performance obligations are satisfied. Other revenue includes primarily sublease income.
4. INVESTMENTS
Net investment income was attributable to the following:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Fixed maturity securities | $ | $ | |||||||||||||||||||||
| Cash equivalents | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
Investment expense | ( | ( | |||||||||||||||||||||
Net investment income | $ | $ | |||||||||||||||||||||
12
As of March 31, 2025 and December 31, 2024, the Company recorded accrued investment income of $23.0 million and $19.8 million, respectively.
The following tables provide summaries of the Company's carrying amounts and fair values of available-for-sale securities by major security type as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | |||||||||||||||||||||||
| (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Corporate notes | ( | ||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||
Other (1) | — | — | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
(1) Includes equity securities without a readily determinable market value.
| December 31, 2024 | |||||||||||||||||||||||||||||
| (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Corporate notes | ( | ||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
Other (1) | — | — | |||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
(1) Includes equity securities without a readily determinable market value.
The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position, by the length of time in which the securities have continuously been in that position, as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | ||||||||||||||||||||||||||||||||||
| (in thousands, except no. of securities) | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. treasury and agency securities | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| Corporate notes | ( | ||||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | ||||||||||||||||||||||||||||||||||
| (in thousands, except no. of securities) | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. treasury and agency securities | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
| Corporate notes | ( | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
The Company monitors available-for-sale debt securities for credit losses and recognizes an allowance for credit losses when factors indicate a decline in the fair value of a security is credit-related. Certain investments may experience a decline in fair value due to changes in market interest rates, changes in general economic conditions, or a deterioration in the credit worthiness of a security's issuer. For securities in an unrealized loss position that the Company does not intend to sell, the Company has assessed the gross unrealized losses during the period and determined an allowance for credit losses is not necessary because the declines in fair value are believed to be due to market fluctuations and not due to credit-related events.
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The amortized cost and fair value of the Company's fixed maturity securities as of March 31, 2025 and December 31, 2024 by contractual maturity are shown below. Actual maturities of these securities could differ from their contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties.
| March 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after one year through five years | |||||||||||||||||||||||
| Due after five years through ten years | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
5. FAIR VALUE MEASUREMENTS
Fair value represents the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The Company's financial assets and liabilities measured at fair value on a recurring basis are categorized into a three-level fair value hierarchy based on the priority of the inputs used in the fair value valuation technique.
The levels of the fair value hierarchy are as follows:
•Level 1: Inputs utilize quoted (unadjusted) prices in active markets for identical assets or liabilities.
•Level 2: Inputs utilize quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations in which all significant inputs are observable in active markets.
•Level 3: Inputs utilized are unobservable but significant to the fair value measurement for the asset or liability. The unobservable inputs are used to measure fair value to the extent relevant observable inputs are not available. The unobservable inputs typically reflect management’s own estimates about the assumptions a market participant would use in pricing the asset or liability.
The following tables summarize fair value measurements by level for assets and liabilities measured at fair value on a recurring basis:
| March 31, 2025 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Investments | |||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Corporate notes | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| Restricted investments | |||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
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| December 31, 2024 | |||||||||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||
U.S. treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||||||||
Corporate notes | |||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
| Restricted investments | |||||||||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||||||||
6. RESTRICTED CASH AND RESTRICTED DEPOSITS
The Company maintains cash, cash equivalents and investments on deposit for its property leases or pledged to various state agencies in connection with its insurance licensure. The restricted cash and cash equivalents and restricted investments presented below are included in Restricted deposits in the accompanying Condensed Consolidated Balance Sheets.
| (in thousands) | March 31, 2025 | December 31, 2024 | |||||||||
| Restricted cash and cash equivalents | $ | $ | |||||||||
| Restricted investments | |||||||||||
| Restricted deposits | $ | $ | |||||||||
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7. BENEFITS PAYABLE
Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities on the Condensed Consolidated Balance Sheets. The assumptions for the estimates and for establishing the resulting liability are reviewed and any adjustments to reserves are reflected in the Condensed Consolidated Statements of Operations in the period in which the estimates are updated.
The following table provides a rollforward of the Company’s beginning and ending benefits payable and claims adjustment expenses (“CAE”) payable balances for the three months ended March 31, 2025 and 2024:
As of March 31, 2025 | As of March 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Benefits Payable | Unallocated Claims Adjustment Expense | Total | Benefits Payable | Unallocated Claims Adjustment Expense | Total | |||||||||||||||||||||||||||||
| Benefits payable, beginning of the period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: Reinsurance recoverable | — | — | |||||||||||||||||||||||||||||||||
| Benefits payable, beginning of the period, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Claims incurred and CAE | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Prior years | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total claims incurred and CAE, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Claims paid and CAE | |||||||||||||||||||||||||||||||||||
| Current year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Prior years | |||||||||||||||||||||||||||||||||||
| Total claims and CAE paid, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Benefits and CAE payable, end of period, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Add: Reinsurance recoverable | — | — | |||||||||||||||||||||||||||||||||
| Benefits and CAE payable, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amounts incurred related to prior periods vary from previously estimated liabilities as more claim information becomes available and claims are ultimately settled. The favorable development recognized in the three months ended March 31, 2025 resulted primarily from lower than expected paid claims.
8. DEBT
Convertible Senior Notes
As previously disclosed in “Note 9 - Debt,” in our Annual Report on Form 10-K for the year ended December 31, 2024, in February 2022, the Company issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC (the “Initial Purchasers”). In connection with the issuance of the 2031 Notes, on January 27, 2022, the Company entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, the Company entered into an indenture with U.S. Bank, as Trustee (the “Indenture”). The 2031 Notes are the Company's senior, unsecured obligations which bear interest at a rate of 7.25 % per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.
Upon the occurrence of a fundamental change (as defined in the Indenture), holders of the 2031 Notes have the right to require the Company to repurchase all or some of their 2031 Notes for cash, subject to certain conditions. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. Additionally, the initial purchasers of the 2031 Notes have the right to require the
16
Company to repurchase all of their Notes for cash, on each of June 30, 2027, June 30, 2028, June 30, 2029 and June 30, 2030, subject to certain notice requirements.
The Company may not redeem the 2031 Notes prior to December 31, 2026. The Company may redeem all, but not less than all, of the 2031 Notes, at the Company's option, on or after December 31, 2026 and on or before the 35th scheduled trading day immediately preceding the maturity date, for a cash purchase price equal to the redemption price, but only if the last reported sale price per share of Class A common stock exceeds 200 % of the conversion price on each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the date on which the Company sends the redemption notice for such redemption. The redemption price will be a cash amount equal to the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, if the Company calls any of the 2031 Notes for redemption the Initial Purchasers have the right to convert the 2031 Notes and to elect to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement.
The 2031 Notes are convertible into the Company's Class A common stock at an initial conversion rate of 120.1721 per $1,000 principal amount (equivalent to an initial conversion price of approximately $8.32 per share of Class A common stock), subject to customary adjustments upon the occurrence of certain events. The 2031 Notes may be converted at the option of the holders: (i) on or after August 31, 2031, (ii) if the Company calls the 2031 Notes for redemption, (iii) upon satisfaction of a Class A common stock sale price condition, (iv) upon satisfaction of a 2031 Note trading price condition, or (v) upon certain corporate events. Upon conversion, the 2031 Notes will be settled, at the Company's election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, unless an Initial Purchaser of the 2031 Notes elects to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement. During the quarterly period ended March 31, 2025, the Class A common stock sales price condition was satisfied when the last reported sales price per share of the Company’s common stock was greater than 130 % of the conversion price of $8.32 per share for each of at least twenty (20 ) trading days during the period of thirty (30 ) consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 2031 Notes are convertible during the second quarter of 2025 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted.
As of March 31, 2025, the net carrying amount of the 2031 Notes was $299.7 million, with unamortized debt discount and issuance costs of $5.3 million. The estimated fair value of the 2031 Notes as of March 31, 2025 was $527.7 million. The Company classified the fair value of the 2031 Notes as a level 3 measurement due to the lack of observable market data over fair value inputs such as stock price volatility over the term of the 2031 Notes and the Company's cost of debt.
The following table presents the interest expense indicating an effective interest rate of 7.61 % over the term of the 2031 Notes:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Coupon interest expense | $ | $ | |||||||||||||||||||||||||||||||||
| Amortization of debt discount and issuance costs | |||||||||||||||||||||||||||||||||||
| Total interest expense | $ | $ | |||||||||||||||||||||||||||||||||
Revolving Credit Facility
As previously disclosed in “Note 9 - Debt,” in our Annual Report on Form 10-K for the year ended December 31, 2024, on December 28, 2023, the Company entered into a third amendment to its senior secured credit agreement with Wells Fargo Bank, National Association, as lender and administrative agent, and certain other lenders party thereto from time to time (collectively, the “Lenders”), and Oscar Management Corporation, as a subsidiary guarantor, which amended the senior secured credit agreement, dated as of February 21, 2021 (as previously amended by the First Amendment to Credit Agreement, dated as of January 27, 2022 and the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million, with proceeds to be used for general corporate purposes of the Company.
17
The Revolving Credit Facility contemplates guarantees by Oscar Management Corporation, each wholly owned subsidiary of the Company, and all of the Company's future direct and indirect subsidiaries (subject to certain permitted exceptions, including exceptions for certain guarantees (i) that would require material governmental consents or (ii) in respect of joint ventures). Oscar Management Corporation is currently the only guarantor. The Revolving Credit Facility is secured by substantially all of the Company’s and the guarantors’ assets (subject to certain exceptions). The Revolving Credit Facility is available for the Company to borrow under until December 28, 2025, provided the Company is in compliance with the restrictive and financial covenants contained therein, including financial covenants to maintain minimum thresholds related to direct policy premiums, Consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility), and liquidity, as well as a maximum medical loss ratio. The Company is permitted to increase commitments under the Revolving Credit Facility by an aggregate amount not to exceed $50.0 million, subject to certain conditions.
As of March 31, 2025, there were no outstanding borrowings under the Revolving Credit Facility.
9. REINSURANCE
The Company participates in quota share reinsurance to limit risk and capital requirements and XOL reinsurance to mitigate the exposure of high cost or catastrophic member risk. The quota share reinsurance arrangements are with more than one counterparty with multiple state-level treaties. The XOL reinsurance arrangements are with a private counterparty and federal and state-run programs. A summary of the Company's reinsurance agreements and related accounting treatment is included in “Note 11 - Reinsurance,” in our Annual Report on Form 10-K for the year ended December 31, 2024.
As previously disclosed in “Note 1 - Organization,” in our Annual Report on Form 10-K for the year ended December 31, 2024, the Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024, and will continue to provide transition and run-off services through December 31, 2026, and share proportionally in all premiums and claims for any Cigna+Oscar Small Group plan sold or issued on or before December 15, 2024, in accordance with the terms of the arrangement.
Reinsurance Contracts Accounted for under Deposit Accounting
As of March 31, 2025 and December 31, 2024, a deposit liability balance of $51.1 million and $13.6 million, respectively, was recorded for the Company's quota share arrangements accounted for under deposit accounting and represented fees due to the reinsurer, which are recognized within Selling, general, and administrative expenses on the Consolidated Statements of Operations.
For the three months ended March 31, 2025, and 2024, the Company ceded 50 % and 54 %, respectively, of its premium under reinsurance contracts accounted for under deposit accounting.
Reinsurance Contracts Accounted for under Reinsurance Accounting
Reinsurance accounting applies to quota share reinsurance contracts that are in runoff as well as the XOL treaties. The tables below present information for the Company's reinsurance arrangements accounted for under reinsurance accounting. Please see “Note 3 - Revenue Recognition” for total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the Condensed Consolidated Statements of Operations.
The following table reconciles total Medical expenses to the amount presented in the Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
Direct claims incurred | $ | $ | |||||||||||||||||||||
Ceded reinsurance claims | ( | ( | |||||||||||||||||||||
Assumed reinsurance claims | |||||||||||||||||||||||
Medical expenses | $ | $ | |||||||||||||||||||||
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The Company records Selling, general and administrative (“SG&A”) expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the Condensed Consolidated Statements of Operations:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
Selling, general and administrative expenses, gross | $ | $ | |||||||||||||||||||||
Reinsurance ceding commissions | ( | ||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | |||||||||||||||||||||
The composition of the Reinsurance recoverable balance on the Condensed Consolidated Balance Sheets is as follows:
| (in thousands) | March 31, 2025 | December 31, 2024 | |||||||||
| Reinsurance premium and claim recoverables | $ | $ | |||||||||
| Reinsurance ceding commissions | |||||||||||
| Experience refunds on reinsurance agreements | ( | ( | |||||||||
| Reinsurance recoverable | $ | $ | |||||||||
Credit Ratings
The financial condition of the Company's reinsurers is regularly evaluated to minimize exposure to significant losses. A key credit quality indicator for reinsurance is the financial strength ratings issued by the credit rating agencies, which provide an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The Company’s reinsurers have most recently been issued financial strength ratings of A+.
The creditworthiness of each reinsurer is evaluated in order to assess counterparty credit risk and estimate an allowance for expected credit losses on the Company's reinsurance recoverable balances.
10. BUSINESS ARRANGEMENTS
Variable Interest Entities
In the normal course of business, the Company entered into business arrangements with integrated health systems, as well as medical professional corporations that employ health care providers to deliver telemedical healthcare services to its covered member population in various states. The financial results of these entities are consolidated into the Company's financial statements.
The following table presents the collective assets and liabilities of the Company's variable interest entities:
| (in thousands) | March 31, 2025 | December 31, 2024 | |||||||||
| Assets | $ | $ | |||||||||
| Liabilities | $ | $ | |||||||||
11. RELATED PARTY TRANSACTIONS
In February 2022, the Company issued the 2031 Notes to funds affiliated with, among others, Thrive Capital (collectively, the “Initial Purchasers”). See “Note 8 - Debt” for additional information. In addition, pursuant to the Investment Agreement entered into with the Initial Purchasers, the Company agreed to amend the Twelfth Amended and Restated Investors' Rights Agreement dated as of March 5, 2021 (the “Investors’ Rights Agreement”), by and among the Company and the investors party thereto, to provide that the Notes and shares of Class A common stock issued or issuable upon conversion of any 2031 Notes held by entities affiliated with Thrive Capital will be subject to the registration rights contained in the Investors' Rights Agreement.
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12. COMMITMENTS AND CONTINGENCIES
The Company’s current and past business practices are subject to review or other investigations by various state insurance and healthcare regulatory authorities and other state and federal regulatory authorities. These reviews focus on numerous facets of the Company’s business, including claims payment practices, statutory capital requirements, provider contracting, risk adjustment, competitive practices, commission payments, privacy issues, network adequacy, utilization management practices, pharmacy benefits, access to care, and sales practices, among others. Some of these reviews have historically resulted in fines imposed on the Company and some have required changes to certain of the Company’s practices. The Company continues to be subject to these reviews, which could result in additional fines or other sanctions being imposed on the Company or additional changes to certain of its practices.
The Company is also currently involved in, and may in the future from time to time become involved in, legal proceedings and other claims in the ordinary course of its business, including class actions and suits brought by the Company’s members, providers, commercial counterparties, employees, and other parties relating to the Company’s business, including management and administration of health benefit plans and other services. Such matters can include claims relating to the performance of contractual and non-contractual obligations to providers, vendors, members, employer groups, and others, including, but not limited to, the alleged failure to properly pay in-network and out-of-network claims and challenges to the manner in which the Company processes claims, disputes regarding the amounts owed under vendor contracts, various employment claims, disputes regarding reinsurance arrangements, disputes relating to intellectual property privacy, the Telephone Consumer Protection Act and class action lawsuits, or other and claims alleging that the Company has engaged in unfair business practices.
In addition, on May 12, 2022, a securities class action lawsuit against the Company, certain of its directors and officers, and the underwriters that participated in the Company’s initial public offering (“IPO”) was commenced in the United States District Court for the Southern District of New York (the “Court”), captioned Carpenter v. Oscar Health, Inc., et al., Case No. 1:22-CV-03885 (S.D.N.Y.) (the “Securities Action”). The initial complaint in the Securities Action asserted violations of Sections 11 and 15 of the Securities Act based on the Company’s purported failure to disclose in its IPO registration statement growing COVID-19 testing and treatment costs, the impact of significant Special Enrollment Period membership, and risk adjustment data validation results for 2019 and 2020. By Court orders dated September 27, 2022 and December 13, 2022, the Court appointed a lead plaintiff and lead counsel on behalf of the putative class. An amended complaint filed on December 6, 2022 asserted the same violations of Sections 11 and 15 of the Securities Act, but this time based on the Company’s alleged failure to disclose in its IPO registration statement purportedly inadequate controls and systems in connection with the risk adjustment data validation audit for 2019, alleging that this purported omission caused losses and damages for members of the putative class. The amended complaint sought unspecified compensatory damages as well as interest, fees, and costs. On April 4, 2023, the Company moved to dismiss the amended complaint. On March 6, 2025, the Court granted the motion to dismiss without prejudice and granted leave to file a second amended complaint. A second amended complaint was not timely filed and on April 22, 2025 the Court dismissed the case with prejudice.
The Company records liabilities for its reasonable estimates of probable losses resulting from these matters where appropriate. Estimates of losses resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred, the ultimate settlement of which could be material.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on Oscar's business, results of operations, financial condition or cash flows.
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13. SEGMENT INFORMATION
The Company operates in and reports as a single reportable segment as the CODM does not evaluate profitability nor evaluate performance or allocate resources below the level of the consolidated Company. The accounting policies of the segment are the same as those described in “Note 2 - Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 2024. The CODM reviews Net income attributable to Oscar Health, Inc. and Earnings from operations presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. These metrics serve as benchmarks to evaluate the business, measure performance, identify trends, prepare financial projections, and make strategic decisions. The CODM does not evaluate performance or allocate resources based on segment assets data; therefore, total segment assets are not presented.
The following table presents the revenue, significant expenses, and net income for the Company’s segment. As the Company operates and reports as a single segment, its measure of segment net income is the same as Net income attributable to Oscar Health, Inc. on the Condensed Consolidated Statements of Operations.
| Three Months Ended March 31, | |||||||||||
(in thousands) | 2025 | 2024 | |||||||||
| Total revenue | $ | $ | |||||||||
| Less: | |||||||||||
Medical expenses | |||||||||||
Selling, general, and administrative expenses: | |||||||||||
Member acquisition and servicing costs (1) | |||||||||||
Premium taxes, exchange fees, and other taxes and fees (2) | |||||||||||
All other SG&A (3) | |||||||||||
| Total Selling, general, and administrative expenses | |||||||||||
| Depreciation and amortization | |||||||||||
| Earnings from operations | |||||||||||
| Interest expense | |||||||||||
| Other expenses | |||||||||||
| Earnings before income taxes | |||||||||||
| Income tax expense | |||||||||||
| Net income attributable to noncontrolling interests | |||||||||||
| Net income attributable to Oscar Health, Inc. | $ | $ | |||||||||
(1)Member acquisition and servicing costs include the Company’s expenses incurred to acquire, service, and fulfill obligations to members.
(2)Premium taxes, exchange fees, and other taxes and fees represent non-income tax charges from federal and state governments, including but not limited to healthcare exchange user fees and premium taxes.
(3)All other SG&A includes employee-related and administrative costs that are not member-based. Additionally, all other SG&A includes the net impact of quota share reinsurance accounted for under deposit accounting.
Significant Customers
The Company generates the majority of its total revenue from health insurance policy premiums, which primarily comes from subsidies received from CMS as part of the Advanced Premium Tax Credit program.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the SEC on February 20, 2025. Unless the context otherwise requires, references in this MD&A to “we,” “us,” “our,” “Oscar,” “Oscar Health, Inc,” and the “Company” mean the business and operations of Oscar Health, Inc. and its consolidated subsidiaries.
Index to this MD&A
Management's discussion and analysis of financial condition and results of operations is comprised of the following sections:
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Overview
Oscar is a leading healthcare technology company built around a full stack technology platform and a relentless focus on member experience. We have been challenging the status quo in the healthcare system since our founding in 2012, and are dedicated to making a healthier life accessible and affordable for all. Oscar serves individuals, families, and employees through the Patient Protection and Affordable Care Act (“ACA”) and offers health technology solutions that power the healthcare industry through +Oscar. Our technology drives superior experiences, deep engagement, and high-value clinical care, earning us the trust of approximately 2.0 million effectuated members (“members”) as of March 31, 2025. Effectuated members are those who are actively enrolled in one of the Company’s plans and whose required premium payments have either been made or are within the payment grace period.
We regularly review our Total Revenue, Medical Loss Ratio (“MLR”), Selling, General and Administrative Expense Ratio (“SG&A Expense Ratio”), Earnings from Operations, and Net Income attributable to Oscar Health Inc. to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.
Total Revenue
Total revenue includes Premium revenue, Investment income, and Services and other revenue. We believe Total revenue is an important metric to assess the growth of our business, as well as the earnings potential of our investment portfolio.
MLR
MLR is a metric used to calculate medical expenses as a percentage of net premiums before ceded quota share reinsurance. The impact of the federal risk adjustment program is included in the denominator of our MLR. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for the healthcare of our members to the net premium before ceded quota share reinsurance. MLRs in our products are subject to various federal and state minimum requirements.
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SG&A Expense Ratio
The SG&A Expense Ratio reflects the Company’s Selling, general and administrative expenses, as a percentage of Total revenue. We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.
Earnings (loss) from Operations
Earnings (loss) from Operations is a primary metric for assessing operating performance. Earnings from Operations is the Company's Total revenue less Total operating expenses.
Net Income (loss) attributable to Oscar Health, Inc.
Net earnings (loss) allocated to the Company after income (loss) attributable to noncontrolling interests. It is a key indicator of the Company’s profitability and operational efficiency, allowing management to evaluate performance and make informed decisions on strategic planning, cost management, and resource allocation.
Recent Developments, Trends and Other Key Factors Impacting Performance
Regulatory Developments and Trends
Our operations are subject to comprehensive and detailed federal, state, and local laws and regulations, which continue to rapidly evolve and change. Developments related to the regulatory regimes under which we operate have in the past impacted, and are expected to continue to impact, our results of operations. The following regulatory developments have impacted our operations during the periods presented in the financial statements contained elsewhere in this Quarterly Report on Form 10-Q, or are expected to impact our results of operations in future periods.
The ACA
The ACA established significant subsidies to support the purchase of health insurance by individuals, in the form of advanced premium tax credits (“APTCs”), available through Health Insurance Marketplaces. The American Rescue Plan Act (“ARPA”) increased the size of APTCs for 2021 and 2022, and the Inflation Reduction Act of 2022 renewed the enhanced APTCs for three years through the end of 2025. If Congress does not take action, the enhanced APTCs will expire at the end of 2025. If the enhanced APTCs are not renewed, insurance coverage could become unaffordable for certain individuals.
The Centers for Medicare & Medicaid Services (“CMS”) is increasingly focused on improving integrity in the Health Insurance Marketplace eligibility and enrollment process, and we expect this focus to continue. During the second half of 2024 CMS enacted new measures to respond to increases in unauthorized changes in consumer enrollments by agents and brokers and to reduce consumer burdens related to unauthorized enrollments. These measures may make it more difficult for members to enroll in new plans or switch from one plan to another. In addition, CMS issued proposed rules on March 10, 2025 that would create more stringent procedures to confirm member eligibility for APTCs, as well as other requirements related to ACA plan enrollment, including shorter enrollment periods (the “Program Integrity Rules”). Certain of these proposed rules would begin to apply once the rule is adopted, while others will begin to apply to the annual open enrollment process for plan year 2026.
The implementation of the Program Integrity Rules (if adopted) and the discontinuation of the enhanced APTCs (if not renewed at the end of 2025) may reduce overall participation in the Health Insurance Marketplaces, and any resulting market contraction could negatively impact market morbidity. For additional details on how these factors may impact Oscar, see “Risk Factors-Most Material Risks to Us-Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed” and “Risk Factors–Most Material Risks to Us–Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q and “Risk Factors–Most Material Risks to Us–Any changes to the ACA and its regulations could materially and adversely affect our business, results of operations, and financial condition” and “Business–Government Regulation–Ongoing Requirements and Changes to the ACA” in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Medicaid redeterminations began on April 1, 2023 and CMS announced a Special Enrollment Period (“SEP”) that began March 31, 2023 and ended November 30, 2024 to facilitate enrollment in the ACA by individuals who lost Medicaid coverage under the redetermination process. While CMS announced in 2024 that all unwinding-related renewals for beneficiaries enrolled in Medicaid or the Children's Health Insurance Program (“CHIP”) must be completed no later than December 31, 2025, our understanding is that the majority of states substantially completed their unwinding processes in 2024. We believe these Medicaid redeterminations have previously contributed to increases in our membership, however, we anticipate that any future impact on our membership will not be as significant as the membership growth we previously experienced. For additional details, see “Risk Factors–Most Material Risks to Us–Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q and “Business–Government Regulation–Ongoing Requirements and Changes to the ACA” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Proposed Tariffs
The Trump administration has indicated that new tariffs may be imposed on a variety of products relevant to our business, including certain pharmaceutical products and ingredients and medical devices and supplies imported into the United States. If such tariffs are imposed, the potential impact could include, among other things, higher costs for medical providers and facilities, higher pharmaceutical prices, higher costs of medical devices and supplies and shortages of certain medicines and medical supplies. Shortages in medicines and supplies may also impact the health of our members, which in turn may result in higher medical costs. The unprecedented nature of these types of tariffs, as well as uncertainty around their implementation, could impact our ability to accurately estimate and effectively manage the impact on our medical expenses, which in turn could adversely affect our results of operations and financial position. For additional details, see “Risk Factors-Most Material Risks to Us-Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows” in this Quarterly Report on Form 10-Q.
SEP Market Dynamics Developments and Trends
SEP or other market dynamics that drive enrollment and/or mix changes throughout the year may impact the per member levels of premiums, claims, and/or risk adjustment transfers. During the year ended December 31, 2024, the increase in our membership was due in part to an increase in member enrollments through SEP which impacted our MLR. Higher SEP growth in certain markets throughout 2024 may have contributed to the increase in our risk transfer payable for the year ended December 31, 2024 and the three months ended March 31, 2025. We anticipate lower SEP membership growth throughout 2025.
Members
Our membership is measured as of a particular point in time. Membership may change due to our expansion into or exiting of certain markets, and further vary throughout the year due to disenrollments, any SEP, and other market dynamics that are in effect such as Medicaid redeterminations, enhancements, reductions or eliminations of APTCs, other legislative or regulatory actions, such as recent CMS initiatives to improve the integrity in the ACA eligibility and enrollment process, or other factors that enable the overall market to grow or decline throughout the year.
Risk Adjustment
The risk adjustment programs in the markets we serve are administered federally by CMS and are designed to mitigate the potential impact of adverse selection and provide stability for health insurers. Under this program, each plan is assigned a risk score based upon demographic information and current year claims information related to its members. The risk score is used to adjust plan revenue to reflect the relative risk of the plan's enrolled population. We reevaluate our risk adjustment transfer estimates as new information and market data becomes available, until we receive the final reporting from CMS in later periods, up to twelve months in arrears.
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Our risk transfer estimates are subject to a high degree of estimation and variability, and are affected by the relative risk of our members, and in the case of ACA, relative to that of other insurers. There is a higher degree of uncertainty associated with estimates of risk adjustment transfers at the beginning of the policy year resulting from the fact that the risk score is based on concurrent claim data. There is additional uncertainty for both markets and blocks of business that experience outsized growth, compounded by the lack of credible experience data on the newly enrolling population. Furthermore, there is also uncertainty associated with changes in other carriers operations, which may impact the ultimate degree of market-level risk. Actual risk adjustment calculations and transfers could materially differ from our assumptions.
Claims Incurred
Our medical expenses are impacted by seasonal effects on medical costs, such as the utilization of deductibles and out-of-pocket maximums over the course of the policy year, which shift more costs to us in the second half of the year as we pay a higher proportion of covered claims costs, and the number of days and holidays in a given period. Our medical and pharmacy costs can also exhibit seasonality depending on selection effects or changes in the risk profile of our membership and the proportion of our membership that is new in the calendar year. The emergence of medical and pharmacy claims is influenced by the aforementioned drivers, and further mix shifts may continue to alter claims incurred patterns in future periods.
Seasonality
Our business is generally affected by the seasonal patterns of our member enrollment, medical expenses, and health plan mix shift and product design. SEP or other market dynamics that drive enrollment and/or mix changes throughout the year may impact the per member levels of premiums, claims, and/or risk adjustment transfers. Additionally, medical expenses have historically been highest towards the second half of the year due to a number of factors discussed above.
Reinsurance
We believe our reinsurance agreements help us achieve important goals for our business, including risk management and capital efficiency. Our reinsurance agreements are contracted under two different types of arrangements: quota share reinsurance contracts and excess of loss (“XOL”) reinsurance contracts. In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company’s losses in exchange for a corresponding percentage of premiums. In XOL reinsurance, the reinsurer agrees to assume all or a portion of the ceding company’s losses in excess of a specified amount. Under XOL reinsurance, the premium payable to the reinsurer is negotiated by the parties based on losses on an individual member in a given calendar year and their assessment of the amount of risk being ceded to the reinsurer. In the case of federal and state-run reinsurance programs, no reinsurance premiums are paid. The reinsurance agreements do not relieve us of our primary medical claims incurred obligations. Refer to “Note 9 - Reinsurance” included elsewhere in this Quarterly Report on Form 10-Q for a description of the accounting methods used to record our quota share reinsurance arrangements.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of the Company's significant accounting policies is included in “Note 2 - Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended December 31, 2024. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. As of March 31, 2025, there were no significant changes to our critical accounting estimates from what was reported in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Components of our Results of Operations
Premium
Premium revenue includes direct policy premiums collected from our members and subsidies received from the federal government, risk adjustment transfers, and assumed policy premiums we earned as part of our reinsurance arrangement under our former Cigna+Oscar Small Group plan offering, and is net of ceded premium from XOL and run-off quota share reinsurance contracts accounted for under reinsurance accounting. The Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024.
Investment Income
Investment income primarily includes investment income, interest earned, and gains (losses) on our investment portfolio.
Services and Other
Services and other revenue includes primarily revenue earned from administrative services performed as part of the +Oscar platform, as well as sublease income.
Medical
Medical expense primarily consists of both paid and unpaid medical expenses incurred to provide medical services and products to our members. Medical claims include fee-for-service claims, pharmacy benefits, capitation payments to providers, disputed provider claims and various other medical-related costs. Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Medical claims are recognized in the period healthcare services are provided. Unpaid medical expenses include claims reported and in the process of being settled, but that have not yet been paid, as well as healthcare costs incurred but not yet reported to us, which are collectively referred to as benefits payable or claim reserves. The development of the claim reserve estimate is based on actuarial methodologies that consider underlying claim payment patterns, medical cost inflation, historical developments, such as claim inventory levels and claim receipt patterns, and other relevant factors. The methods for making such estimates and for establishing the resulting liability are continuously reviewed and any adjustments are reflected in the period determined. Medical expense also reflects the net impact of our ceded reinsurance claims from XOL and run-off quota share reinsurance contracts accounted for under reinsurance accounting.
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily include distribution and servicing costs, premium taxes, exchange fees, and other taxes and fees, employee-related expenses, costs of software and hardware, stock-based compensation, the impact of quota share reinsurance, and other administrative costs.
Other Expenses (Income)
Other expenses (income) consists primarily of miscellaneous expenses or income that are not core to our operations, including profit sharing arrangements with our co-branded health plans and changes in the fair value of financial instruments.
Income Tax Expense (Benefit)
Income tax expense (benefit) consists primarily of changes to our current and deferred federal and state tax assets and liabilities. Income taxes are recorded as deferred tax assets and deferred tax liabilities based on differences between the book and tax bases of assets and liabilities. Our deferred tax assets and liabilities are calculated by applying the current tax rates and laws to taxable years in which such differences are expected to reverse.
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to noncontrolling interests represents the share of the Company’s earnings allocated to the Company’s joint venture partner.
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Results of Operations
The following table sets forth our results of operations for the periods indicated:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | |||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Premium | $ | 2,995,821 | $ | 2,093,682 | |||||||||||||||||||
| Investment income | 46,112 | 42,989 | |||||||||||||||||||||
| Services and other | 4,330 | 5,634 | |||||||||||||||||||||
| Total revenue | 3,046,263 | 2,142,305 | |||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Medical | 2,259,651 | 1,554,774 | |||||||||||||||||||||
| Selling, general, and administrative | 482,759 | 394,162 | |||||||||||||||||||||
| Depreciation and amortization | 6,730 | 7,811 | |||||||||||||||||||||
| Total operating expenses | 2,749,140 | 1,956,747 | |||||||||||||||||||||
| Earnings from operations | 297,123 | 185,558 | |||||||||||||||||||||
| Interest expense | 5,994 | 5,902 | |||||||||||||||||||||
| Other expenses | 2,918 | 1,178 | |||||||||||||||||||||
| Earnings before income taxes | 288,211 | 178,478 | |||||||||||||||||||||
| Income tax expense | 12,705 | 996 | |||||||||||||||||||||
| Net income | 275,506 | 177,482 | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 235 | 114 | |||||||||||||||||||||
| Net income attributable to Oscar Health, Inc. | $ | 275,271 | $ | 177,368 | |||||||||||||||||||
| Medical Loss Ratio (MLR) | 75.4 | % | 74.2 | % | |||||||||||||||||||
| SG&A Expense Ratio | 15.8 | % | 18.4 | % | |||||||||||||||||||
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Premium
Premium revenue increased by $902.1 million, or 43%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was driven by higher membership.
The following table summarizes the Company’s membership by offering:
| As of March 31, | |||||||||||
| Membership by Offering | 2025 | 2024 | |||||||||
| Individual and Small Group | 2,021,484 | 1,386,980 | |||||||||
Cigna+Oscar (1) | 17,983 | 61,428 | |||||||||
Total Members (2) | 2,039,467 | 1,448,408 | |||||||||
(2) Represents effectuated members. Effectuated members are those who are actively enrolled in one of our plans and whose required premium payments have either been made or are within the payment grace period. A member covered under more than one of our health plans counts as a single member for the purposes of this metric.
Investment Income
Investment income increased by $3.1 million, or 7%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a larger asset base.
Medical Expenses and MLR
Medical expenses increased by $704.9 million, or 45%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was primarily due to increased membership. MLR increased by 120 basis points for the three months ended March 31, 2025, compared to the same period in 2024, driven by unfavorable prior period development primarily due to our 2024 Risk Adjustment payable, partially offset by favorable claims runout and a cost sharing reduction (“CSR”) recovery accrual.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages) | 2025 | 2024 | |||||||||||||||||||||
| Medical | $ | 2,259,651 | $ | 1,554,774 | |||||||||||||||||||
Less: Ceded quota share reinsurance claims(1) | — | (1,055) | |||||||||||||||||||||
Net claims before ceded quota share reinsurance (A) | $ | 2,259,651 | $ | 1,555,829 | |||||||||||||||||||
| Premium | $ | 2,995,821 | $ | 2,093,682 | |||||||||||||||||||
Less: Ceded quota share reinsurance premiums (1) | — | (2,016) | |||||||||||||||||||||
Net premiums before ceded quota share reinsurance (B) | $ | 2,995,821 | $ | 2,095,698 | |||||||||||||||||||
Medical Loss Ratio (A divided by B) | 75.4 | % | 74.2 | % | |||||||||||||||||||
(1)Represents prior period development for claims and premiums, respectively, ceded to reinsurers pursuant to quota share treaties accounted for under reinsurance accounting, which are in runoff. | |||||||||||||||||||||||
Selling, General and Administrative Expenses and SG&A Expense Ratio
Selling, general and administrative expenses increased by $88.6 million, or 22%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was driven by higher distribution and selling expenses associated with higher membership year over year. The SG&A Expense Ratio improved 260 basis points for the three months ended March 31, 2025, compared to the same period in 2024, due to fixed cost leverage, lower exchange fee rates, and variable cost efficiencies.
Income Tax Expense (Benefit)
Our effective tax rate was approximately 4.41% and 0.56% for the three months ended March 31, 2025 and 2024, respectively.
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Liquidity and Capital Resources
Overview
We maintain liquidity at two levels of our corporate structure, through our health insurance subsidiaries (any subsidiary of Oscar Health, Inc. that has applied for or received a license, certification or authorization to sell health plans by any state Department of Insurance, Department of Financial Services, Department of Health, or comparable regulatory authority) and through our holding company (our parent company, Oscar Health, Inc., on a standalone basis (“Parent”) and subsidiaries excluding our health insurance subsidiaries).
The majority of the assets held by the holding company are in the form of cash and cash equivalents and investments. As of March 31, 2025 and December 31, 2024, total cash and cash equivalents and investments held by the holding company were $149.6 million and $189.8 million, respectively, of which $12.9 million and $12.8 million was restricted as of March 31, 2025 and December 31, 2024, respectively.
The majority of the assets held by our health insurance subsidiaries are in the form of cash and cash equivalents and investments. As of March 31, 2025 and December 31, 2024, total cash and cash equivalents and investments held by our health insurance subsidiaries were $4,742.1 million and $3,808.0 million, respectively, of which $18.1 million and $18.0 million, respectively, was on deposit with regulators as required for statutory licensing purposes. These amounts are classified as restricted deposits on the balance sheet.
Our health insurance subsidiaries’ states of domicile have statutory minimum capital requirements that are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products. The combined statutory capital and surplus of our health insurance subsidiaries was estimated to be approximately $1,520.3 million and $1,242.7 million as of March 31, 2025 and December 31, 2024, respectively, which was in compliance with and in excess of the minimum capital requirements for each period. The health insurance subsidiaries historically have required capital contributions from Parent to maintain minimum levels. The health insurance subsidiaries may be subject to additional capital and surplus requirements in the future, as a result of factors such as increasing membership and medical costs, which may require us to incur additional indebtedness, sell capital stock, or access other sources of funding in order to fund such requirements. During periods of increased volatility, adverse securities and credit markets, including those due to rising interest rates, may exert downward pressure on the availability of liquidity and credit capacity for certain issuers, and any such funding may not be available on favorable terms, or at all.
As our health insurance subsidiaries have collectively become profitable and to the extent their levels of statutory capital and surplus continue to exceed minimum regulatory requirements, we may make periodic requests for dividends and distributions from our subsidiaries to fund our operations or seek to enter into transactions or structures that enable us to efficiently deploy this excess capital, which may or may not require approval by our regulators. During the three months ended March 31, 2024, our health insurance subsidiaries made loan repayments of $13.0 million to Parent. During the three months ended March 31, 2025, the insurance subsidiaries did not make loan repayments or capital distributions to the Parent.
During the three months ended March 31, 2025, Parent made no capital contributions to the health insurance subsidiaries. During the three months ended March 31, 2024, Parent made $8.0 million of capital contributions to the health insurance subsidiaries. Our health insurance subsidiaries also utilize quota share reinsurance arrangements to reduce our minimum capital and surplus requirements, which are designed to enable us to efficiently deploy capital to fund our growth. We estimate that had we not had any quota share reinsurance arrangements in place, the health insurance subsidiaries would have been required to hold approximately $631.5 million and $553.8 million of additional capital as of March 31, 2025 and December 31, 2024, respectively, which the Parent would have been required to fund to the extent the applicable insurance subsidiary did not have excess capital to cover the requirement.
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Short-Term Cash Requirements
The Company’s cash requirements within the next twelve months include benefits payable, risk adjustment transfer payables, current lease liabilities, interest payable on debt, other current liabilities and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily funded by cash available for general corporate use, cash flows from current operations, and/or the realization of current assets, such as accounts receivable. Based on our current forecast, we believe the Company's cash, and cash equivalents and investments, not including restricted cash, will be sufficient to fund our operating requirements for at least the next twelve months.
Some of our payments and receipts, including risk adjustment transfers, rebates from our pharmacy benefit manager, and reinsurance receipts, can be significant. As such, timing of payments and receipts can influence cash flows from operating activities in any given period which would have a negative impact on our operating cash flows.
Long-Term Cash Requirements
Our long-term cash requirements under our various contractual obligations and commitments include operating leases. We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations. See “Note 13 - Leases” in our Annual Report on Form 10-K for the year ended December 31, 2024 for
further detail of our obligations and the timing of expected future payments.
Convertible Senior Notes
On February 3, 2022, we issued $305.0 million in aggregate principal amount of convertible senior notes due 2031 (the “2031 Notes”) in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC and Tenere Capital LLC (the “Initial Purchasers”). In connection with the sale and issuance of the 2031 Notes, on January 27, 2022, we entered into an investment agreement with the Initial Purchasers (the “Investment Agreement”) and on February 3, 2022, we entered into an indenture with U.S. Bank, as Trustee (the “Indenture”). The 2031 Notes bear interest at a rate of 7.25% per annum, payable in cash, semi-annually in arrears on June 30 and December 31 of each year, commencing on June 30, 2022. The 2031 Notes will mature on December 31, 2031, subject to earlier repurchase, redemption, or conversion.
The holders of the 2031 Notes may require us to repurchase the 2031 Notes for cash, upon a fundamental change (as defined in the Indenture) or on June 30, 2027 and each anniversary thereof until June 30, 2030. In addition, we may redeem the 2031 Notes on or after December 31, 2026 if certain Class A common stock sales price and other conditions are satisfied.
The 2031 Notes may be converted at the election of the holders under certain circumstances, including if we call the 2031 Notes for redemption or upon satisfaction of a Class A common stock sale price condition. During the quarterly period ended March 31, 2025, the Class A common stock sale price condition was satisfied. As a result, the 2031 Notes are convertible during the second quarter of 2025 at the option of the holder. As of the date of this Quarterly Report on Form 10-Q, the 2031 Notes have not been converted. Upon conversion, the 2031 Notes will be settled, at the Company’s election, in shares of Class A common stock, cash, or a combination of cash and shares of Class A common stock, unless an Initial Purchaser of the 2031 Notes elects to receive the consideration due upon conversion solely in shares of Class A common stock pursuant to the terms of the Investment Agreement.
For more information on our 2031 Notes, including details relating to repurchase, redemption and conversions of the 2031 Notes, see “Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Convertible Senior Notes” and “Note 9 - Debt” to our Consolidated Financial Statements, each in our Annual Report on Form 10-K for the year ended December 31, 2024, and, “Note 8 – Debt” to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
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Revolving Credit Facility
On December 28, 2023, we entered into a third amendment to our senior secured credit agreement with Wells Fargo Bank, National Association, as lender and administrative agent, and certain other lenders party thereto from time to time (collectively, the “Lenders”), and Oscar Management Corporation, as a subsidiary guarantor, which amended the senior secured credit agreement, dated as of February 21, 2021 (as previously amended by the First Amendment to Credit Agreement, dated as of January 27, 2022 and the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a revolving loan credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of $115.0 million, with proceeds to be used for general corporate purposes of the Company.
The Revolving Credit Facility is available for the Company to borrow under until December 28, 2025, provided the Company is in compliance with the restrictive and financial covenants contained therein, including financial covenants to maintain minimum thresholds related to direct policy premiums, Consolidated Adjusted EBITDA (as defined in the Revolving Credit Facility), and liquidity, as well as a maximum medical loss ratio. As of March 31, 2025, there were no outstanding borrowings under the Revolving Credit Facility.
For more information on our Revolving Credit Facility, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility in our Annual Report on Form 10-K for the year ended December 31, 2024, and “Note 8 – Debt” to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Investments
We generally invest our cash in U.S. Treasury instruments, federal and state agency securities, investment grade corporate bonds and asset backed securities to improve our overall investment return. These investments are purchased pursuant to board-approved investment policies that reflect our obligations under our credit agreement and conform to applicable state laws and regulations.
Our investment policies are designed to provide liquidity, preserve capital, and optimize the total return on invested assets. These policies also align with the constraints of our credit agreement and state regulations governing the types of investments our health insurance subsidiaries can hold. These investment policies require that our investments in U.S. corporate bonds and asset backed securities have final maturities of no more than five years from the date of issuance and U.S. federal and state government obligations have final maturities of no more than seven years from the settlement date. Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents. Our portfolio managers are directed to obtain our prior approval before selling investments in a loss position.
Net investment income on a consolidated basis was $46.1 million and $43.0 million for the three months ended March 31, 2025, and 2024, respectively. Net investment income for our health insurance subsidiaries was $44.4 million and $40.3 million for the three months ended March 31, 2025, and March 31, 2024, respectively.
Our restricted investments consist primarily of cash and cash equivalents and U.S. Treasury securities; we have the ability to hold such restricted investments until maturity. The Company maintains cash and cash equivalents and investments on deposit or pledged to various state agencies as a condition for licensure. We classify our restricted deposits as long-term given the requirement to maintain such assets on deposit with regulators.
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Summary of Cash Flows
Our cash flows used in operations may differ substantially from our net income due to non-cash charges or due to changes in balance sheet accounts.
The timing of our cash flows from operating activities can also vary among periods due to the timing of payments made or received. Some of our payments and receipts, including loss settlements, rebates from our pharmacy benefit manager, and subsequent reinsurance receipts, can be significant. Therefore, their timing can influence cash flows from operating activities in any given period. The potential for a large claim under an insurance or reinsurance contract means that our health insurance subsidiaries may need to make substantial payments within relatively short periods of time, which would have a negative impact on our operating cash flows.
Our primary operating cash flow sources are premiums and investment income. Our primary operating cash flow uses are payments for claims, risk adjustment transfers, and operating expenses, including interest expense. For the three months ended March 31, 2025, net cash provided by operating activities was $878.5 million as compared with $634.4 million provided by operating activities for the same period in 2024. The increase was primarily due to higher premium received and reinsurance recoverables, which were partially offset by higher claim disbursements.
Cash flows from investing activities primarily include the purchase and disposition of financial instruments. For the three months ended March 31, 2025, net cash used in investing activities was $174.2 million as compared to net cash used in investing activities of $300.6 million for the same period in 2024. The change was primarily due to a reduction in the purchases of securities, which was offset by a lower level of maturing investment.
Cash flows from financing activities may include proceeds from the issuance of debt securities and proceeds from stock option exercises. For the three months ended March 31, 2025, net cash provided by financing activities was $4.9 million as compared to $27.3 million for the same period in 2024. The decrease was primarily due to a reduction in proceeds from stock option exercises.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily attributable to potential changes in interest rates and/or inflation and the resulting impact on investment income and interest expense. We do not hold financial instruments for trading purposes.
Interest Rate Risk
We are subject to interest rate risk in connection with the fair value of our investment portfolio, which consists of U.S. Treasury and agency securities, corporate notes, and certificates of deposit. Our primary market risk exposure is driven by changes to prime rate-based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Assuming a hypothetical and immediate 1% increase in interest rates at March 31, 2025, the fair value of our investments would decrease by approximately $43.9 million. Any declines in interest rates over time would reduce our investment income.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
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Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The information required under this Part II, Item 1 is set forth in “Note 12 - Commitments and Contingencies” to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Item 1A. Risk Factors
Except as set forth in the amended and restated risk factors below, there have been no material changes to the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024.
Our success and ability to grow our business depend in part on retaining and expanding our member base. If we fail to add new members or retain current members, or manage our membership growth appropriately to meet our business objectives, our business, revenue, operating results, and financial condition could be harmed.
We currently derive substantially all of our revenue from direct policy premiums, which are primarily driven by the number of members covered by our health plans. As a result, the size of our member base is critical to our success. We have experienced significant member growth since we commenced operations; however, we may not be able to maintain this growth or manage our membership growth appropriately to meet our business objectives, and our member base could decrease rapidly or shrink over time.
There are many factors that could negatively affect our ability to retain existing members and expand our member base, many of which are beyond our direct control, including if:
•we are unable to remain competitive on member experience, pricing, and insurance coverage options;
•we are unable to gain access to quality providers;
•we are unable to develop or maintain competitive provider networks, or maintain adequate networks that comply with regulatory requirements and standards;
•insurance brokers that we rely on to build our member base are unable to market our insurance products effectively;
•we fail to attract brokers to sell our insurance products or lose important broker relationships to our competitors or otherwise, including in circumstances where we require brokers to use different enrollment services vendors;
•the enhanced APTCs under the ARPA are eliminated or reduced, or other APTCs or subsidies under the ACA are eliminated or reduced;
•our competitors or new market entrants successfully mimic our innovative product offerings or our full stack technology platform;
•we are unable to maintain licenses and approvals, or there are material modifications or restrictions on our ability to offer insurance in our current markets or to participate on Health Insurance Marketplaces, obtain licenses and approvals to offer insurance in new markets, or to otherwise expand our plan offerings in an economically sustainable manner;
•we fail to continue to offer differentiated and competitive products, or there are regulatory actions that limit the types of plans that can be offered, such as the Notice of Benefit and Payment Parameters;
•initiatives designed to improve member and provider experience, including the use of AI technologies or other new technologies, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, regulators, or other third parties;
•as a result of changes in law or otherwise, our competitors participate in the individual market to a greater extent than they have previously;
•there is an initiation of new Special Enrollment Period (“SEPs”) or other unexpected healthcare market developments, including in response to legislative, regulatory or political developments and executive orders;
•our digital platform experiences technical or other problems or disruptions that frustrate the experience of members or providers or other third party partners;
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•we or our partners or other third parties with whom we collaborate sustain a cyber-attack or suffer privacy or data security breaches;
•regulatory actions to improve the integrity in the ACA eligibility and enrollment process, including rules that make it more difficult for members to enroll in new plans or switch from one plan to another;
•we experience unfavorable shifts in perception of our digital platform or other member service channels;
•we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate;
•our strategic partners terminate or fail to renew our current contracts or we fail to enter into contracts with new strategic partners; or
•our efforts to partner with ICHRA platforms to transition small, mid-sized and large employers to the individual market where their employees can choose an Oscar product are not successful, or take significantly more time than expected to be successful.
For example, CMS is increasingly focused on improving integrity in the Health Insurance Marketplace eligibility and enrollment process, and we expect this focus to continue. During the second half of 2024, CMS enacted new measures to respond to increases in unauthorized changes in consumer enrollments by agents and brokers and to reduce consumer burdens related to unauthorized enrollments, and these measures may make it more difficult for members to enroll in new plans or switch from one plan to another. In addition, on March 10, 2025 CMS issued a proposed Program Integrity Rule that, among other initiatives, would change the annual open enrollment period (“OEP”) for all individual market coverage to run from November 1 through December 15 preceding the coverage year, instead of through January 15 of the coverage year. Historically a material number of members enroll in the final month of the OEP, and furthermore, if the enhanced APTCs are not renewed at the end of 2025, a shortened OEP could make it more difficult for individuals to determine what plan they can afford in the time period allowed. Although we expect a shortened OEP to result in a reduction in the number of enrolled individuals in the Health Insurance Marketplace, we are unable to predict with certainty the magnitude of the impact to the overall Health Insurance Marketplace or to our future membership. In addition, this proposed rule creates stricter income eligibility verification processes, including annual income data matching issues (“DMIs”) when applicants attest to income above 100 percent of the Federal Poverty Level (“FPL”), but trusted data sources show income below 100 percent of the FPL, and remove an automatic 60-day extension for applicants to provide documentation to verify household income when there is an income inconsistency. While we expect these stricter income eligibility verification processes to result in a number of individuals in states where we operate to no longer qualify for APTCs and therefore reduce the number of enrolled individuals in the Health Insurance Marketplace, we are unable to predict with certainty the magnitude of the impact to the overall Health Insurance Marketplace or to our future membership. The proposed Program Integrity Rule, if enacted, could have a material impact on the Health Insurance Marketplace and could also have a material impact on our business, revenue, operating results, and financial condition.
We operate in a highly competitive environment and some of the health insurers with which we compete have greater financial and other resources, offer a broader scope of products, and may be able to price their products more competitively than ours. Many of our competitors also have relationships with more providers and provider groups than we do, and can offer a larger network or obtain better unit cost economics. Our inability to overcome these challenges could impair our ability to attract new members and retain existing members, and could have a material adverse effect on our business, revenue, operating results, and financial condition. Additionally, if we are not able to grow our membership, we may be unable to attract additional partners to our +Oscar platform or maintain existing +Oscar partnerships, which could impact our ability to execute our growth strategy.
Failure to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our financial position, results of operations, and cash flows.
We set our premiums in advance of each policy year based on competitive factors in each market in which we participate as well as a projection of future expenses. As a result, the profitability of our insurance business depends, to a significant degree, on our ability to accurately estimate and effectively manage our medical expenses and administrative costs.
Numerous factors impact our ability to accurately estimate and control our medical expenses, many of which are not within our control, including, but not limited to:
•changes in healthcare regulations and practices, including subregulatory guidance, regulations, or statutes that govern individual plans, or the Health Insurance Marketplaces;
•the impact on the morbidity of our members or the broader market member population from ongoing regulatory actions to improve the integrity in the ACA eligibility and enrollment process, the potential elimination of enhanced APTCs, Medicaid redeterminations and tariffs and related medical cost increases;
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•increases in the costs of healthcare facilities and services, medical devices and supplies, pharmaceutical products and ingredients, including due to the introduction and adoption of new or costly medical technologies and pharmaceuticals, the impact of legislative or regulatory actions, including the imposition of tariffs on certain pharmaceuticals or other foreign imports, or macroeconomic inflationary effects;
•changes in purchase discounts or pharmacy volume rebates received from drug manufacturers and wholesalers, or the guaranteed minimum discounts or rebates we agree to with the pharmacy benefit manager that negotiates and collects such discounts and rebates on our behalf;
•continued increases in broker fees due to the proportion of broker-acquired business continuing to increase in line with the macro trend in the Health Insurance Marketplace of fewer members signing up directly on exchanges;
•the broader competitive landscape, including new membership resulting from other health insurers exiting our markets or changing their pricing strategies, initiation of new SEPs and general expansion of the individual health insurance market;
•lack of credible data in new regions or with respect to new plan offerings;
•changes in the utilization of prescription drugs, medical services or other covered items or services;
•changes in our member demographic mix, the geographic concentration of our members, and the distribution of members among our plans;
•increased incidences or acuity of high dollar claims related to catastrophic illnesses or medical conditions, including claims for which we may not have adequate reinsurance coverage;
•changes to, or reductions of, our utilization management functions, such as preauthorization of services, concurrent review or requirements for physician referrals;
•the occurrence of natural disasters, terrorism, public health emergencies, major epidemics and pandemics; and
•provider or broker fraud.
The Consolidated Appropriations Act of 2023 delinked Medicaid redeterminations from the end of the PHE for COVID-19, and Medicaid redeterminations were required to begin by April 1, 2023. Although redeterminations were expected to conclude by June 2024, CMS directed certain states to temporarily pause procedural terminations while they addressed issues in the renewal process that led to increased procedural disenrollments. CMS also announced an SEP that began March 31, 2023 and ended November 30, 2024 to facilitate enrollment in the ACA by individuals who lost Medicaid coverage under the redetermination process. Data from CMS on Medicaid redeterminations showed significant increases in ACA plan enrollments among consumers in 2023 and 2024 who lost Medicaid or CHIP coverage. While CMS announced in 2024 that all unwinding-related renewals for beneficiaries enrolled in Medicaid or CHIP must be completed no later than December 31, 2025, our understanding is that the majority of states had substantially completed their unwinding processes in 2024. We anticipate that any future impact on our membership in connection with ACA enrollments due to the unwinding of the Medicaid continuous enrollment condition will not be as significant as the membership growth we experienced in plan year 2024. However, we cannot predict ACA plan enrollment patterns and the potential impact of recent and future enrollments on market morbidity, and the related impact on our underwriting margin, risk adjustment payables and MLR is therefore uncertain.
Due to the time lag between when services are actually rendered by providers and when we receive, process, and pay a claim for those services, our medical expenses include a provision for claims incurred but not paid. Given the uncertainties inherent in making estimates for such provisions, there can be no assurance that our claims liability estimates will be adequate, and any adjustments to these estimates may unfavorably impact, potentially in a material way, our reported results of operations and financial condition. Further, our inability to estimate our claims liability may also affect our ability to take timely corrective actions, further exacerbating the extent of any adverse effect on our results.
We also incur substantial administrative costs, particularly distribution costs, the costs of scaling and improving our operations, and the costs of hiring and retaining personnel. External factors, including general economic conditions such as inflation and unemployment levels and federal and state legislative and regulatory actions, are generally beyond our control and could further reduce our ability to accurately estimate and effectively control our administrative expenses, including the cost of our third party vendors. Furthermore, regulatory changes or developments may require us to change our existing practices with respect to broker commissions and could potentially result in a substantial increase in related costs or limit our ability to manage those costs in the future. Any such increase in costs could cause our actual results to differ, potentially materially, from our prior expectations. As a result of our market expansion, expansion of our plan offerings and growth of our membership, our anticipated medical expenses and administrative costs are subject to additional uncertainty.
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From time to time in the past, our actual results have varied from those expected, particularly in times of significant changes in the number of our members or when we commence or exit operations in a new state or region. If it is determined that our estimates are significantly different from actual results, our results of operations and financial position could be adversely affected.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) None.
(b) None.
(c) On February 7, 2025 , Alessandrea Quane , the Company’s former Chief Insurance Officer , terminated trading arrangement 211,774 shares of the Company’s Class A common stock by August 29, 2025. The arrangement was originally adopted on September 27, 2024 and was intended to satisfy the affirmative defense of Rule 10b5-1(c).
Effective March 1, 2025, the Company adopted the net settlement method to satisfy applicable tax withholding obligations in connection with restricted stock unit awards for senior leadership. In connection with adopting the net settlement method, the following officers of the Company terminated sell-to-cover instructions intended to satisfy the affirmative defense of Rule 10b5-1(c) and that provided for sales of Class A common stock as necessary to cover tax withholding obligations incurred in connection with the vesting or settlement of restricted stock units:
•On February 25, 2025, Scott Blackley, the Company’s Chief Financial Officer, terminated his sell-to-cover instruction that was originally adopted on September 7, 2021.
•On February 25, 2025, Victoria Baltrus, the Company’s Chief Accounting Officer, terminated her sell-to-cover instruction that was originally adopted on September 1, 2022.
•On February 26, 2025, Mark Bertolini, the Company’s Chief Executive Officer, terminated his sell-to-cover instruction that was originally adopted on November 11, 2024.
•On February 27, 2025, Mario Schlosser, the Company’s Chief Technology Officer, terminated his sell-to-cover instruction that was originally adopted on May 21, 2021.
•On March 14, 2025, Adam McAnaney, the Company’s Chief Legal Officer, terminated his sell-to-cover instruction that was originally adopted on February 15, 2025.
•On March 17, 2025, Janet Liang, the Company’s President, terminated her sell-to-cover instruction that was originally adopted on February 15, 2025.
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Item 6. Exhibits
| Incorporated by Reference | Filed/ Furnished Herewith | ||||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | ||||||||||||||||||||||||||||||
| 3.1 | 8-K | 001-40154 | 3.1 | 3/8/2021 | |||||||||||||||||||||||||||||||
| 3.2 | 8-K | 001-40154 | 3.2 | 3/8/2021 | |||||||||||||||||||||||||||||||
| 4.1 | S-1/A | 333-252809 | 4.1 | 2/22/2021 | |||||||||||||||||||||||||||||||
| 10.1 | * | ||||||||||||||||||||||||||||||||||
| 10.2 | * | ||||||||||||||||||||||||||||||||||
| 31.1 | * | ||||||||||||||||||||||||||||||||||
| 31.2 | * | ||||||||||||||||||||||||||||||||||
| 32.1 | ** | ||||||||||||||||||||||||||||||||||
| 32.2 | ** | ||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document | * | |||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | |||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101) | * | |||||||||||||||||||||||||||||||||
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OSCAR HEALTH, INC. | ||||||||
Date: May 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Date: May 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Date: May 7, 2025 | By: | /s/ Victoria Baltrus | ||||||
| Victoria Baltrus | ||||||||
| Chief Accounting Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 30, 2025, is entered into by and between Oscar Health, Inc., a Delaware corporation (“Holdings”) and Oscar Management Corporation (“OpCo” and, together with Holdings, the “Company”) and Janet Liang (the “Executive”).
WHEREAS, the Company desires to employ the Executive and the Executive desires to be employed by the Company; and
WHEREAS, the Parties wish for this Agreement to set forth the terms and conditions of such employment.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.Employment Period. The Executive’s employment hereunder shall be for a period (the “Employment Period”) commencing on February 24, 2025 (the “Effective Date”) and continuing until terminated in accordance with the terms of this Agreement. Notwithstanding anything to the contrary in the foregoing, the Executive’s employment hereunder is terminable at-will by the Company or by the Executive at any time (for any reason or for no reason), subject to the provisions of Section 4 hereof. For the avoidance of doubt, this Agreement will not be effective, and Executive will not be entitled to any of the compensation and benefits set forth herein, unless and until the Executive commences employment with the Company on the Effective Date.
2.Terms of Employment.
(a)Position and Duties.
(i) Role and Responsibilities. During the Employment Period, the Executive shall serve as the Company’s EVP and President of Oscar Insurance and shall perform such employment duties as are usual and customary for such position. The Executive shall report directly to the Company’s Chief Executive Officer (the “CEO”). At the Company’s request, the Executive shall serve the Company and/or its subsidiaries and affiliates in other capacities in addition to the foregoing, consistent with the Executive’s position hereunder, for no additional compensation.
(ii) Exclusivity. During the Employment Period and excluding any periods of leave to which the Executive may be entitled, the Executive agrees to devote the Executive’s full business time and attention to the business and affairs of the Company. Notwithstanding the foregoing, during the Employment Period, it shall not be a violation of this Agreement for the Executive to: (A) serve on boards, committees or similar bodies of charitable or nonprofit organizations, (B) fulfill limited teaching, speaking and writing engagements, and (C) manage the Executive’s personal investments, in each case, so long as such activities do not individually or in the aggregate materially interfere or conflict with the performance of the Executive’s duties and responsibilities under this Agreement; provided, that with respect to the activities in subclauses (A) and/or (B), the Executive receives prior written approval from the Board.
(iii) Principal Location. During the Employment Period, the Executive shall perform the services required by this Agreement at her home office in California (the “Principal Location”); provided, however, the parties acknowledge and agree that (i) the Executive is
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expected to travel to the Company’s offices in New York, NY on a consistent basis as requested by the Company and/or to the extent necessary to perform the Executive’s duties and responsibilities hereunder and (ii) the Executive may be required to travel to other locations as may be necessary to fulfill the Executive’s duties and responsibilities hereunder.
(b)Compensation, Benefits, Etc.
(i)Base Salary. During the Employment Period, the Executive shall receive a base salary (the “Base Salary”) at the rate of $600,000 per annum. The Base Salary shall be paid in accordance with the Company’s normal payroll practices for executive salaries generally, but no less often than monthly, and shall be pro-rated for partial years of employment. The Base Salary may be increased in the discretion of the Board or a subcommittee thereof, but not reduced, and the term “Base Salary” as utilized in this Agreement shall refer to the Base Salary as so increased.
(ii)Annual Cash Bonus. For each calendar year ending during the Employment Period, the Executive shall be eligible to earn a cash performance bonus (an “Annual Bonus”) under the Company’s bonus plan or program applicable to senior executives, targeted at 100% of the Executive’s Base Salary paid with respect to such year (the “Target Bonus”). The actual amount of any Annual Bonus shall be determined by the Board (or a subcommittee thereof) in its discretion, based on the achievement of individual and/or Company performance goals as determined by the Board (or a subcommittee thereof), and shall be pro-rated for a partial initial year of employment. The payment of any Annual Bonus, to the extent any Annual Bonus becomes payable, will be made on the date on which annual bonuses are paid generally to the Company’s senior executives, but in no event later than March 15th of the calendar year following the calendar year in which such Annual Bonus was earned. Except as provided in Section 4, payment of the Annual Bonus shall be subject to the Executive’s continued employment through the payment date.
(iii)Annual Equity Award(s). For each calendar year during the Employment Period beginning with calendar year 2025, the Executive shall be eligible to receive an equity-based compensation award(s), as determined by the Board (or a subcommittee thereof) from time to time, with a target value of $3,000,000. The Board or such subcommittee shall determine in its sole discretion the grant timing, amount, form(s) and mix, and such other terms and conditions (including vesting, exercise and settlement) applicable to any such annual equity-based compensation award, taking into account the Executive’s and the Company’s performance. Any such award shall be evidenced by a separate award agreement in a form prescribed by the Company, to be entered into by Holdings and the Executive.
(iv)New Hire Equity Awards. Holdings shall recommend the grant to the Executive of a restricted stock unit award covering shares of Holdings’ Class A common stock with a value of $1,500,000, and a stock option, with a Black-Scholes valuation as of the date of grant of $1,500,000, to purchase shares of Holdings’ Class A common stock (together, the “New Hire Awards”). Subject to the Executive’s continued service with the Company through the applicable vesting date, the New Hire Awards shall vest (and become exercisable, as applicable) with respect to 1/16th of the shares subject to the award on each quarterly anniversary of March 1, 2025. The terms and conditions of the New Hire Awards will be set forth in separate award agreements in a form prescribed by the Company, to be entered into by Holdings and the Executive. Except as otherwise provided in this Agreement, the New Hire Awards shall be
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governed in all respects by the terms and conditions of the applicable award agreements and equity incentive plans.
(v)Benefits. During the Employment Period, the Executive (and the Executive’s spouse and/or eligible dependents to the extent provided in the applicable plans and programs) shall be eligible to participate in the health and welfare benefit plans and programs maintained by the Company for the benefit of its employees from time to time, pursuant to the terms of such plans and programs, on the same terms and conditions as those applicable to similarly situated senior executives. In addition, during the Employment Period, the Executive shall be eligible to participate in any retirement, savings and other employee benefit plans and programs maintained from time to time by the Company for the benefit of its senior executive officers. Nothing contained in this Section 2(b)(v) shall create or be deemed to create any obligation on the part of the Company to adopt or maintain any health, welfare, retirement or other benefit plan or program at any time or to create any limitation on the Company’s ability to modify or terminate any such plan or program.
(vi)Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Executive in connection with the performance of the Executive’s duties under this Agreement in accordance with the policies, practices and procedures of the Company provided to employees of the Company. For the avoidance of doubt, unless otherwise determined by the Board or a subcommittee thereof, the Executive shall not be eligible for reimbursement for any expenses incurred in connection with her travel between her California residence and New York.
(vii)Fringe Benefits. During the Employment Period, the Executive shall be eligible to receive such fringe benefits and perquisites as are provided by the Company to its employees from time to time, in accordance with the policies, practices and procedures of the Company, and shall receive such additional fringe benefits and perquisites as the Company may, in its discretion, from time-to-time provide to its senior executive officers.
(viii)Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices of the Company applicable to its employees, as in effect from time to time.
(ix)Sign-On Bonus. The Executive shall be eligible to receive a cash signing bonus in an aggregate amount equal to $2,000,000 (the “Sign-On Bonus”). The payment of the Sign-On Bonus shall be made in two installments of $1,000,000 (each, an “Installment”), with the first Installment to be paid within 30 days following the Effective Date and the second Installment to be paid within 30 days following the six-month anniversary of the Effective Date, in each case, subject to and conditioned upon the Executive’s continued employment with the Company through the applicable payment date (with respect to the first Installment) or the six-month anniversary of the Effective Date (with respect to the second Installment), except as otherwise set forth in Section 4 below. In the event that the Executive’s employment with the Company is terminated by the Company for Cause or by the Executive without Good Reason (each, as defined below), in either case, (x) with respect to the first Installment, within 12 months following the Effective Date and/or (y) with respect to the second Installment, within 12 months following the six-month anniversary of the Effective Date, in either case, the Executive shall repay the Unearned Portion (as defined below) of the applicable Installment (net receipt after tax withholding) to the Company in full within 30 days following the date of the Executive’s
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termination of employment. For purposes of this Agreement, the “Unearned Portion” means (I) with respect to the first Installment, an amount equal to $1,000,000 multiplied by a fraction, the numerator of which is the number of days during the period commencing on (but excluding) the date of such termination of employment and ending on (and including) the first anniversary of the Effective Date, and the denominator of which is 365 and (II) with respect to the second Installment (to the extent the date of such termination of employment occurs following the six-month anniversary of the Effective Date), an amount equal to $1,000,000 multiplied by a fraction, the numerator of which is the number of days during the period commencing on (but excluding) the date of such termination of employment and ending on (and including) the 18-month anniversary of the Effective Date, and the denominator of which is 365.
(x)Deferred Cash Award. The Executive shall be eligible to receive a cash award in an amount equal to $800,000 (each, a “Deferred Cash Award”) for each of calendar years 2025, 2026, 2027 and 2028. A Deferred Cash Award shall be paid to the Executive on or within 30 days following each of December 31, 2025, December 31, 2026, December 31, 2027 and December 31, 2028, in each case, subject to and conditioned upon the Executive’s continued employment with the Company through the applicable December 31 date.
(xi)Transition Benefits. In connection with the Executive obtaining temporary lodging in New York, New York, the Company shall pay to the Executive $150,000 in a lump-sum cash payment on or as soon as reasonably practicable following the Effective Date for reasonable and necessary travel and expenses (the “Transition Payment”).
3.Termination of Employment.
(a)Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. Either the Company or the Executive may terminate the Executive’s employment in the event of the Executive’s Disability during the Employment Period.
(b)Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period for Cause or without Cause.
(c)Termination by the Executive. The Executive may terminate the Executive’s employment during the Employment Period for any or no reason, including with Good Reason or without Good Reason.
(d)Notice of Termination. Any termination of employment (other than due to the Executive’s death), shall be communicated by a Notice of Termination to the other parties hereto given in accordance with Section 12(b) hereof. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
(e)Termination of Offices and Directorships; Return of Property. Upon termination of the Executive’s employment for any reason, unless otherwise specified in a written agreement between the Executive and the Company, the Executive shall be deemed to have resigned from all offices, directorships, and other employment positions if any, then held with the Company, and shall take all
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actions reasonably requested by the Company to effectuate the foregoing. In addition, upon the termination of the Executive’s employment for any reason, the Executive agrees to return to the Company all documents of the Company and its affiliates (and all copies thereof) and all other Company or Company affiliate property that the Executive has in the Executive’s possession, custody or control. Such property includes, without limitation: (i) any materials of any kind that the Executive knows contain or embody any proprietary or confidential information of the Company or an affiliate of the Company (and all reproductions thereof), (ii) computers (including, but not limited to, laptop computers, desktop computers and similar devices) and other portable electronic devices (including, but not limited to, tablet computers), cellular phones/smartphones, credit cards, phone cards, entry cards, identification badges and keys, and (iii) any correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the customers, business plans, marketing strategies, products and/or processes of the Company or any of its affiliates and any information received from the Company or any of its affiliates regarding third parties.
4.Obligations of the Company upon Termination.
(a)Accrued Obligations. In the event that the Executive’s employment under this Agreement terminates during the Employment Period for any reason, the Company will pay or provide to the Executive: (i) any earned but unpaid Base Salary and accrued vacation time, (ii) reimbursement of any business expenses incurred by the Executive prior to the Date of Termination that are reimbursable in accordance with Section 2(b)(vi) hereof, (iii) payment of any earned but unpaid Annual Bonus for any calendar year completed prior to the Date of Termination and (iv) any vested amounts due to the Executive under any plan, program or policy of the Company (together, the “Accrued Obligations”); provided, however, that if the Executive’s employment hereunder is terminated (X) by the Company for Cause or (Y) by the Executive without Good Reason and not for death or Disability, then Executive shall not be eligible to receive payment of any earned but unpaid Annual Bonus for any calendar year completed prior to the Date of Termination. The Accrued Obligations described in clauses (i) – (ii) of the preceding sentence shall be paid within 30 days after the Date of Termination (or such earlier date as may be required by applicable law), the Accrued Obligations described in clause (iii) of the preceding sentence shall be paid in the ordinary course pursuant to Section 2(b)(ii) (i.e., on the date on which annual bonuses are paid to the Company’s senior executives generally for such calendar year) and the Accrued Obligations described in clause (iv) of the preceding sentence shall be paid in accordance with the terms of the governing plan or program.
(b)Qualifying Termination. Subject to Sections 4(c), 4(e) and 12(d), and the Executive’s continued compliance with the provisions of Section 7 hereof, if the Executive’s employment with the Company is terminated during the Employment Period due to a Qualifying Termination, then in addition to the Accrued Obligations:
(i)Cash Severance. The Company shall pay the Executive an amount equal to 1.0 times the sum of the Executive’s Base Salary (at the highest rate in effect at any time in the six months prior to the Date of Termination) and the Target Bonus for the calendar year in which the Date of Termination occurs (the “Severance”). The Severance shall be paid in substantially equal installments in accordance with the Company’s normal payroll practices over the twelve-month period following the Date of Termination, but shall commence on the first normal payroll date following the effective date of the Release (as defined below), and amounts otherwise payable prior to such first payroll date shall be paid on such date without interest thereon.
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(ii)COBRA. Subject to the Executive’s valid election to continue healthcare coverage under Section 4980B of the Code, the Company shall continue to provide, during the COBRA Period, the Executive and the Executive’s eligible dependents with coverage under its group health plans at the same levels and the same cost to the Executive as would have applied if the Executive’s employment had not been terminated based on the Executive’s elections in effect on the Date of Termination, provided, however, that (A) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), or (B) the Company is otherwise unable to continue to cover the Executive under its group health plans without incurring penalties (including without limitation, pursuant to Section 2716 of the Public Health Service Act or the Patient Protection and Affordable Care Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to the Executive in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof). For purposes of this Agreement, “COBRA Period” shall mean the period beginning on the Date of Termination and ending on the first year anniversary thereof.
(iii)Equity Award Treatment. All outstanding Holdings equity awards that vest solely on the passage of time that are held by the Executive on the Date of Termination (the “Time-Vesting Awards”) shall vest and, to the extent applicable, become exercisable, on an accelerated basis as of the Date of Termination with respect to the number of shares underlying such award that would have vested (and become exercisable, if applicable) had the Executive remained in continuous service beyond the Date of Termination for 12 additional months (and assuming any such award vests in equal monthly installments rather than quarterly installments (as applicable), over the vesting period). Notwithstanding the foregoing, in the event that the Qualifying Termination occurs on or within 12 months following a Change in Control, then all Time-Vesting Awards shall become fully vested and, to the extent applicable, exercisable.
(iv)Sign-On Bonus. In the event that such Qualifying Termination occurs prior to the six-month anniversary of the Effective Date, the Company shall pay the Executive the second Installment of the Sign-On Bonus in a lump-sum cash payment within 30 days following the date of such Qualifying Termination.
(c)Release. Notwithstanding the foregoing, it shall be a condition to the Executive’s right to receive the amounts provided for in Section 4(b) hereof that the Executive execute and deliver to the Company (and, as applicable, not revoke) an effective release of claims in substantially the form attached hereto as Exhibit A (the “Release”) within 30 days (or, to the extent required by law, 52 days) following the Date of Termination (the date such Release becomes effective and irrevocable herein referred to as the “Release Effective Date”). For the avoidance of doubt, all equity awards eligible for accelerated vesting pursuant to Section 4(b) hereof shall remain outstanding and eligible to vest following the Date of Termination and shall actually vest and become exercisable (if applicable) and non-forfeitable upon the Release Effective Date.
(d)Other Terminations. Except as otherwise set forth in a written agreement between the Executive and the Company, if the Executive’s employment is terminated for any reason not described in Section 4(b) hereof, the Company will pay the Executive only the Accrued Obligations.
(e)Six-Month Delay. Notwithstanding anything to the contrary in this Agreement, no compensation or benefits, including without limitation any severance payments or benefits payable
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under this Section 4, shall be paid to the Executive during the six-month period following the Executive’s Separation from Service if the Company determines that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a result of the previous sentence, then on the first day of the seventh month following the date of Separation from Service (or such earlier date upon which such amount can be paid under Section 409A without resulting in a prohibited distribution, including as a result of the Executive’s death), the Company shall pay the Executive a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Executive during such period.
(f)Exclusive Benefits. Except as expressly provided in this Section 4 and subject to Section 5 hereof, the Executive shall not be entitled to any additional payments or benefits upon or in connection with the Executive’s termination of employment.
5.Non-Exclusivity of Rights. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.
6.Excess Parachute Payments; Limitation on Payments.
(a)Best Pay Cap. Notwithstanding any other provision of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a termination of the Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the payments and benefits under Section 4 hereof, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then, the Total Payments shall be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). If the Total Payments are so reduced, the Company shall reduce or eliminate the Total Payments (A) by first reducing or eliminating the portion of the Total Payments which are not payable in cash (other than that portion of the Total Payments subject to clause (C) hereof), (B) then by reducing or eliminating cash payments (other than that portion of the Total Payments subject to clause (C) hereof) and (C) then by reducing or eliminating the portion of the Total Payments (whether payable in cash or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time.
(b)Certain Exclusions. For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no portion of the Total Payments shall be taken into account which, in the written opinion of an independent, nationally recognized accounting firm (the “Independent Advisors”) selected by the
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Company, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
7.Restrictive Covenants.
(a)The Executive hereby acknowledges that the Executive shall enter into an agreement with the Company, substantially in the form attached hereto as Exhibit B, containing confidentiality, intellectual property assignment, non-competition, non-solicitation and other protective covenants (the “PIIA”), that the Executive shall be bound by the terms and conditions of the PIIA, and that such agreement shall be additional to, and not in limitation of, the covenants contained in any other written agreement between the Company and the Executive.
(b)Notwithstanding anything in this Agreement or the PIIA to the contrary, nothing contained in this Agreement shall prohibit either party (or either party’s attorney(s)) from (i) filing a charge or complaint with the Equal Employment Opportunity Commission (the “EEOC”) or any similar state or local government agency or commission; (ii) reporting to, communicating with, cooperating with, or providing information to, or receiving any monetary reward or bounty from, any federal, state or local government agency, including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the U.S. National Labor Relations Board, or the U.S. Department of Justice, without notice to the Company; (iii) testifying pursuant to a court order, subpoena, or written request from an administrative agency or the legislature, or making any truthful statements or disclosures required by law, regulation or legal process; (iv) exercising any rights the Executive may have under Section 7 of the U.S. National Labor Relations Act; or (v) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination based on a protected characteristic or any other conduct that the Executive has reason to believe is unlawful. Further, the Executive acknowledges that the Company has provided the Executive notice of the immunity provisions of the U.S. Defend Trade Secrets Act of 2016, which state as follows: “(1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (2) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.”
8.Representations. The Executive hereby represents and warrants to the Company that (a) the Executive is entering into this Agreement voluntarily and that the performance of the Executive’s obligations hereunder will not violate any agreement between the Executive and any other person, firm, organization or other entity, or any policy, program or code of such other person, firm, organization or other entity person, and (b) the Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by the Executive’s entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement.
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9.Successors.
(a)This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.
(b)This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns.
10.Certain Definitions.
(a)“Board” means the Board of Directors of Holdings.
(b)“Cause” means the occurrence of any one or more of the following events:
(i)the Executive’s willful failure to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the Executive’s issuance of a Notice of Termination for Good Reason), including the Executive’s failure to follow any lawful directive from the Company within the reasonable scope of the Executive’s duties and the Executive’s failure to correct the same (if capable of correction, as determined by the Company), within 30 days after a written notice is delivered to the Executive, which demand specifically identifies the manner in which the Company believes that the Executive has not performed the Executive’s duties. For the avoidance of doubt, the Executive’s failure to satisfy any specific performance goal or metric or the Company’s failure to attain any specific level of financial performance shall not constitute a failure to perform for purposes of this clause (i);
(ii)the Executive’s commission of, indictment for or entry of a plea of guilty or nolo contendere to a felony crime (excluding vehicular crimes) or a crime of moral turpitude;
(iii)the Executive’s material breach of any material obligation under any written agreement with the Company or its affiliates or under any applicable policy of the Company or its affiliates that have been provided to or made available to the Executive (including any code of conduct or harassment policies), and the Executive’s failure to correct the same (if capable of correction, as determined by the Company), within 30 days after a written notice is delivered to the Executive, which demand specifically identifies the manner in which the Company believes that the Executive has materially breached such agreement;
(iv)any act of fraud, embezzlement, theft or misappropriation from the Company or its affiliates by the Executive; or
(v)the Executive’s willful misconduct or gross negligence with respect to any material aspect of the Company’s business or a material breach by the Executive of the Executive’s fiduciary duty to the Company or its affiliates, which willful misconduct, gross negligence or material breach has a material and demonstrable adverse effect on the Company or its subsidiaries.
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(c)“Change in Control” has the meaning set forth in the Company’s 2021 Incentive Award Plan, as may be amended from time to time.
(d)“Code” means the Internal Revenue Code of 1986, as amended and the regulations thereunder.
(e)“Date of Termination” means the date on which the Executive’s employment with the Company terminates.
(f)“Disability” means that the Executive has become entitled to receive benefits under an applicable Company long-term disability plan or, if no such plan covers the Executive, the Executive’s inability, due to physical or mental illness, to perform the essential functions of the Executive’s job, with or without a reasonable accommodation for 180 consecutive days.
(g)“Good Reason” means the occurrence of any one or more of the following events without the Executive’s prior written consent, unless the Company fully corrects the circumstances constituting Good Reason (provided such circumstances are capable of correction) as provided below:
(i)a material diminution in the Executive’s Base Salary or Target Bonus, other than as part of an across-the-board reduction applicable to the Company’s senior executives, and further excluding any voluntary reductions in Base Salary and/or Target Bonus;
(ii)a change in the geographic location of the Principal Location by more than 35 miles from its existing location by action of the Company (including a change such that the Principal Location is no longer the Executive’s home office in California, but excluding (for clarity) any work-related travel to the Company’s offices in New York, New York (which work-related travel may include the Company needing the Executive to be in the New York office on a regular or even weekly basis));
(iii)a material diminution in the Executive’s title, authority or duties, as contemplated by this Agreement, or the Executive no longer reporting directly to the CEO (or the Chief Executive Officer of the Company’s successor) but excluding Executive reporting directly to the Board, excluding for any such purpose any isolated, insubstantial or inadvertent actions not taken in bad faith and which are remedied by the Company promptly after receipt of notice thereof given by the Executive;
(iv)the Company’s material breach of this Agreement.
Notwithstanding the foregoing, the Executive will not be deemed to have resigned for Good Reason unless (1) the Executive provides the Company with written notice setting forth in reasonable detail the facts and circumstances claimed by the Executive to constitute Good Reason within 45 days after the date of the occurrence of any event that the Executive knows or should reasonably have known to constitute Good Reason, (2) the Company fails to cure such acts or omissions within 30 days following its receipt of such notice, and (3) the effective date of the Executive’s termination for Good Reason occurs no later than 60 days after the expiration of the Company’s cure period.
(h)“Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the
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provision so indicated and (iii) if the Date of Termination is other than the date of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of such notice unless as otherwise provided upon a termination for Good Reason).
(i) “Qualifying Termination” means a termination of the Executive’s employment (i) by the Company without Cause (other than by reason of the Executive’s death or Disability) or (ii) by the Executive for Good Reason.
(j) “Section 409A” means Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.
(k)“Separation from Service” means a “separation from service” (within the meaning of Section 409A).
11.Indemnification. The Company shall indemnify the Executive to the fullest extent permitted by applicable law in the event that the Executive was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, by reason of the fact that the Executive is or was a director, officer, employee or agent of the Company or any of its affiliates, whether or not the claim is asserted during the Employment Period. The Executive shall be covered under any directors’ and officers’ insurance that the Company maintains for its directors and other officers in the same manner and on the same basis as the Company’s directors and other officers.
12.Miscellaneous.
(a)Governing Law; Captions. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. The Executive acknowledges that the Executive has been advised by the Company to consult with, and seek the advice of, a personal attorney of the Executive’s choice prior to executing this Agreement in connection with the negotiation, drafting and execution of this Agreement and the PIIA, including, without limitation, the choice of law provision contained in this Section 12(a) and the arbitration provisions contained in Section 12(i). The Executive represents and warrants that the Executive has, in fact, retained a personal attorney for such purpose and has received the advice of such attorney with respect to the terms of this Agreement and the PIIA, and the negotiation of this Agreement and PIIA, prior to entering into either and including, without limitation, with respect to the provisions noted in the preceding sentence. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(b)Notices. All notices and other communications hereunder shall be in writing and shall be effective (i) when delivered in person or (ii) two business days after sent via email or United States mail, postage prepaid, addressed as follows:
If to the Executive: at the Executive’s most recent physical address or personal email address on the records of the Company.
If to the Company:
Oscar Health, Inc.
75 Varick Street, 5th Floor
New York, NY 10013
Attention: General Counsel
Email: corporate@hioscar.com
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or to such other address as either party shall have furnished to the other in writing in accordance herewith.
(c)Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the contrary, if the Company determines, in its good faith judgment, that any transfer or deemed transfer of funds hereunder is likely to be construed as a personal loan prohibited by Section 13(k) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), then such transfer or deemed transfer shall not be made to the extent necessary or appropriate so as not to violate the Exchange Act and the rules and regulations promulgated thereunder.
(d)Section 409A of the Code.
(i)To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A. Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall work in good faith with the Executive to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including without limitation, actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; provided, however, that this Section 12(d) shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so.
(ii)Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments. To the extent permitted under Section 409A, any separate payment or benefit under this Agreement or otherwise shall not be deemed “nonqualified deferred compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception or provision of Section 409A. Any payments subject to Section 409A that are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as termination of employment) occurs shall commence payment only in the calendar year in which the consideration period or, if applicable, release revocation period ends, as necessary to comply with Section 409A. All payments of nonqualified deferred compensation subject to Section 409A to be made upon a termination of employment under this Agreement may only be made upon the Executive’s Separation from Service.
(iii)To the extent that any payments or reimbursements provided to the Executive under this Agreement are deemed to constitute compensation to the Executive to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred. The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and the Executive’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.
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(e)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(f)Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(g)No Waiver. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 3(c) hereof, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(h)Entire Agreement. As of the Effective Date, this Agreement (including the PIIA), constitutes the final, complete and exclusive agreement between the Executive and the Company with respect to the subject matter hereof and replaces and supersedes any and all other agreements, offers or promises, whether oral or written, by any member of the Company and its subsidiaries or affiliates, or representative thereof. Notwithstanding anything herein to the contrary, this Agreement and the obligations and commitments hereunder shall neither commence nor be of any force or effect prior to the Effective Date.
(i)Arbitration.
(i)Any controversy or dispute that establishes a legal or equitable cause of action (“Arbitration Claim”) between any two or more Persons Subject to Arbitration (as defined below), including any controversy or dispute, whether based on contract, common law, or federal, state or local statute or regulation, arising out of, or relating to the Executive’s service or the termination thereof, shall be submitted to final and binding arbitration as the sole and exclusive remedy for such controversy or dispute in accordance with the rules of JAMS pursuant to its Employment Arbitration Rules and Procedures, which are available at http://www.jamsadr.com/rules-employment-arbitration/, and the Company will provide a copy upon the Executive’s request. Notwithstanding the foregoing, this Agreement shall not require any Person Subject to Arbitration to arbitrate pursuant to this Agreement any claims: (A) under a Company benefit plan subject to the Employee Retirement Income Security Act, as amended; or (B) as to which applicable law not preempted by the Federal Arbitration Act prohibits resolution by binding arbitration. Either party may seek provisional non-monetary remedies in a court of competent jurisdiction to the extent that such remedies are not available or not available in a timely fashion through arbitration. It is the parties’ intent that issues of arbitrability of any dispute shall be decided by the arbitrator.
(ii)“Persons Subject to Arbitration” means, individually and collectively, (A) the Executive, (B) any person in privity with or claiming through, on behalf of or in the right of the Executive, (C) the Company, (D) any past, present or future affiliate, employee, officer, director or agent of the Company, and/or (E) any person or entity alleged to be acting in concert with or to be jointly liable with any of the foregoing.
(iii)The arbitration shall take place before a single neutral arbitrator at the JAMS office in New York, New York. Such arbitrator shall be provided through JAMS by mutual agreement of the parties to the arbitration; provided that, absent such agreement, the
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arbitrator shall be selected in accordance with the rules of JAMS then in effect. The arbitrator shall permit reasonable discovery. The award or decision of the arbitrator shall be rendered in writing; shall be final and binding on the parties; and may be enforced by judgment or order of a court of competent jurisdiction. The parties hereto agree to each cover their own legal expenses, regardless of fee shifting provisions or laws, or which party prevails.
(iv) THE EXECUTIVE AND THE COMPANY UNDERSTAND THAT BY AGREEING TO ARBITRATE ANY ARBITRATION CLAIM, THEY WILL NOT HAVE THE RIGHT TO HAVE ANY ARBITRATION CLAIM DECIDED BY A JURY OR A COURT, BUT SHALL INSTEAD HAVE ANY ARBITRATION CLAIM DECIDED THROUGH ARBITRATION.
(v) THE EXECUTIVE AND THE COMPANY WAIVE ANY CONSTITUTIONAL OR OTHER RIGHT TO BRING CLAIMS COVERED BY THIS AGREEMENT OTHER THAN IN THEIR INDIVIDUAL CAPACITIES. EXCEPT AS MAY BE PROHIBITED BY LAW, THIS WAIVER INCLUDES THE ABILITY TO ASSERT CLAIMS AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.
(vi) This Section 12(i) shall be interpreted to conform to any applicable law concerning the terms and enforcement of agreements to arbitrate service disputes. To the extent any terms or conditions of this Section 12(i) would preclude its enforcement, such terms shall be severed or interpreted in a manner to allow for the enforcement of this Section 12(i). To the extent applicable law imposes additional requirements to allow enforcement of this Section 12(i), this Agreement shall be interpreted to include such terms or conditions.
(j)Amendment; Survival. No amendment or other modification of this Agreement shall be effective unless made in writing and signed by the parties hereto. The respective rights and obligations of the parties under this Agreement shall survive the Executive’s termination of employment and the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations.
(k)Counterparts. This Agreement and any agreement referenced herein may be executed in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
(l)Clawback. The compensation payable hereunder shall be subject to (i) any Company clawback or recoupment policy required in order to comply with applicable law, including the Company’s Policy for Recovery of Erroneously Awarded Compensation and (ii) any Company clawback or recoupment policy adopted by the Company.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, each of Holdings and OpCo has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
OSCAR HEALTH, INC.
By: /s/ Mark T. Bertolini
Name: Mark Bertolini
Title: Chief Executive Officer
Name: Mark Bertolini
Title: Chief Executive Officer
OSCAR MANAGEMENT CORPORATION
By: /s/ Mark T. Bertolini
Name: Mark Bertolini
Title: Chief Executive Officer
Name: Mark Bertolini
Title: Chief Executive Officer
EXECUTIVE
/s/ Janet Liang
Janet Liang
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Attachments:
Exhibit A: General Release
Exhibit B: PIIA
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EXHIBIT A
GENERAL RELEASE
1.Release For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned, on the undersigned’s own behalf and on behalf of the undersigned’s spouse, domestic partner, children, agents, heirs, executors, administrators, beneficiaries, trustees, legal representatives, and assigns, does hereby release and forever discharge the “Releasees” hereunder, consisting of Oscar Health, Inc., a Delaware corporation (“Holdings”) and Oscar Management Corporation (together with Holdings, the “Company”), and the Company’s partners, subsidiaries, associates, affiliates, predecessors, successors, heirs, assigns, agents, directors, officers, employees, representatives, lawyers, insurers, shareholders, employee benefit plans, administrators, fiduciaries, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting the generality of the foregoing, any Claims in any way arising out of, based upon, or related to the employment or termination of employment of the undersigned by the Releasees, or any of them; any alleged breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasees’ right to terminate the employment of the undersigned; and any alleged violation of any federal, state or local laws or regulations including, without limitation, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act (as amended by the Older Workers Benefit Protection Act) (the “ADEA”), the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act, the National Labor Relations Act, the Occupational Health and Safety Act, [the New York State Human Rights Law, the New York City Human Rights Law, the New York State Whistleblower Statute, and/or the New York Labor Law],1 and any and all laws or regulations prohibiting employment discrimination, harassment, or retaliation.
2.Claims Not Released. Notwithstanding the foregoing, this general release (the “Release”) shall not operate to release any rights or claims of the undersigned (i) to payments or benefits under Section 4(b) of that certain Employment Agreement, dated as of [__], 2025, between the Company and the undersigned (the “Employment Agreement”), with respect to the payments and benefits provided in exchange for this Release, (ii) to payments or benefits under any equity award agreement between the undersigned and Holdings or as a holder of any securities of Holdings, (iii) with respect to Section 4(a) of the Employment Agreement, (iv) to accrued or vested benefits the undersigned may have, if any, as of the date hereof under any applicable plan, policy, practice, program, contract or agreement with the Company, (v) to any Claims, including claims for indemnification and/or advancement of expenses arising under any indemnification agreement between the undersigned and the Company or under the bylaws, certificate of incorporation or other similar governing document of the Company, (vi) to any Claims which cannot be waived by an employee under applicable law or (vii) to engage in any Protected Activities (as defined below) and any right to report allegations of unlawful conduct, including criminal conduct and unlawful employment practices, to federal, state or local authorities.
3.[Unknown Claims.]
1 NTD: To be updated to reflect applicable state law references if the Executive does not live in New York at the time the release is executed.
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THE UNDERSIGNED ACKNOWLEDGES THAT THE UNDERSIGNED HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN THE EXECUTIVE’S FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED THE EXECUTIVE’S SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS THE UNDERSIGNED MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
4.Exceptions. Notwithstanding anything in this Release to the contrary, nothing contained in this Release shall prohibit the undersigned (or the undersigned’s attorney(s)) from (i) filing a charge or complaint with the Equal Employment Opportunity Commission (the “EEOC”) or any similar state or local government agency or commission; (ii) reporting to, communicating with, cooperating with, or providing information to, or receiving any monetary reward or bounty from, any federal, state or local government agency, including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the U.S. National Labor Relations Board, or the U.S. Department of Justice, without notice to the Company; (iii) testifying pursuant to a court order, subpoena, or written request from an administrative agency or the legislature, or making any truthful statements or disclosures required by law, regulation or legal process; (iv) exercising any rights the undersigned may have under Section 7 of the U.S. National Labor Relations Act; or (v) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination based on a protected characteristic or any other conduct that the Executive has reason to believe is unlawful. Further, the undersigned acknowledges that the Company has provided the Executive notice of the immunity provisions of the U.S. Defend Trade Secrets Act of 2016, which state as follows: “(1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (2) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.” The activities or rights described in this Section 4 shall be referred to as “Protected Activities”.
5.Representations. The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which the undersigned may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.
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6.No Action. The undersigned agrees that if the undersigned hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim. Notwithstanding the foregoing, this provision shall not apply to any suit or Claim to the extent is challenges the effectiveness of this release with respect to a claim under the ADEA.
7.No Admission. The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.
8.OWBPA. The undersigned agrees and acknowledges that this Release constitutes a knowing and voluntary waiver and release of all Claims the undersigned has or may have against the Company and/or any of the Releasees as set forth herein, including, but not limited to, all Claims arising under the Older Workers Benefit Protection Act and the ADEA. In accordance with the Older Workers Benefit Protection Act, the undersigned is hereby advised as follows:
(i)the undersigned has read the terms of this Release, and understands its terms and effects, including the fact that the undersigned agreed to release and forever discharge the Company and each of the Releasees, from any Claims released in this Release;
(ii)the undersigned understands that, by entering into this Release, the undersigned does not waive any Claims that may arise after the date of the undersigned’s execution of this Release, including without limitation any rights or claims that the undersigned may have to secure enforcement of the terms and conditions of this Release, nor does the Release prevent the undersigned from challenging the knowing and voluntary waiver of the Release under the Older Workers Benefit Protection Act;
(iii)the undersigned has signed this Release voluntarily and knowingly in exchange for the consideration described in this Release, which the undersigned acknowledges is adequate and satisfactory to the undersigned and which the undersigned acknowledges is in addition to any other benefits to which the undersigned is otherwise entitled;
(iv)the Company hereby advises the undersigned to consult with an attorney prior to executing this Release;
(v)the undersigned has been given at least [21]2 days in which to review and consider this Release. To the extent that the undersigned chooses to sign this Release prior to the expiration of such period, the undersigned acknowledges that the undersigned has done so voluntarily, had sufficient time to consider the Release, to consult with counsel and that the undersigned does not desire additional time and hereby waives the remainder of the [21]-day period; and
(vi)the undersigned may revoke this Release within seven days from the date the undersigned signs this Release and this Release will become effective upon the expiration of such
2 NTD: Use 45 days in a group termination, and include information regarding terminated positions.
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seven-day period if the undersigned has not revoked this Release during such seven-day period. If the undersigned revokes this Release during such seven-day period, this Release will be null and void and of no force or effect on either the Company or the undersigned and the undersigned will not be entitled to any of the payments or benefits which are expressly conditioned upon the execution and non-revocation of this Release. Any revocation must be in writing and sent to [name], via electronic mail at [email address], on or before [5:00 p.m. Eastern time] on the seventh day after this Release is executed by the undersigned.
9.Acknowledgement. The undersigned acknowledges that different or additional facts may be discovered in addition to what is now known or believed to be true by the undersigned with respect to the matters released in this Release, and the undersigned agrees that this Release shall be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any different or additional facts
10.Governing Law. This Release is deemed made and entered into in the State of [New York],3 and in all respects shall be interpreted, enforced and governed under the internal laws of the State of [New York], to the extent not preempted by federal law.
IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of ___________, ____.
Janet Liang
3 NTD: To be updated to reflect applicable state if the Executive does not live in New York at the time the release is executed.
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EXHIBIT B
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
[Attached]
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OSCAR HEALTH, INC. 2021 INCENTIVE AWARD PLAN | ||
STOCK OPTION GRANT NOTICE – FORM FOR NON- RETIREMENT ELIGIBLE
Oscar Health, Inc., a Delaware corporation (the “Company”) has granted to the participant listed below (“Participant”) the stock option (the “Option”) described in this Stock Option Grant Notice (the “Grant Notice”), subject to the terms and conditions of the Oscar Health, Inc. 2021 Incentive Award Plan (as amended from time to time, the “Plan”) and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
| Participant: | [_______] | ||||
| Grant Date: | [_______] | ||||
| Exercise Price per Share: | [_________] | ||||
| Shares Subject to the Option: | [_________] | ||||
| Final Expiration Date: | [To be specified as the 10th anniversary of the Grant Date] | ||||
| Vesting Commencement Date: | [_________] | ||||
| Vesting Schedule: | [_________] | ||||
| Type of Option | [Incentive Stock Option]/[Non-Qualified Stock Option] | ||||
By accepting (whether in writing, electronically or otherwise) the Option, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
| OSCAR HEALTH, INC. | PARTICIPANT | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
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Exhibit A
STOCK OPTION AGREEMENT
Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.GENERAL
1.1Grant of Option. The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”).
1.2Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
1.3Defined Terms. Capitalized terms not specifically defined in this Agreement shall have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan. In addition, the following defined terms shall apply:
(a)“Assumed” shall mean that an Assumption occurs with respect to the Option in connection with a Change in Control.
(b)“Cause” shall have such meaning as is contained in Participant’s Employment Agreement or, if not defined therein, shall mean a determination by the Company of (i) Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; (ii) Participant’s breach of any agreement between Participant and the Company; (iii) Participant’s failure to comply with the Company’s written policies or rules; (iv) Participant’s conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State thereof; (v) Participant’s gross negligence or willful misconduct; (vi) Participant’s continuing failure to perform assigned duties after receiving notification of such failure from the Company; or (vii) Participant’s failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers, or employees.
(c)“Change in Control Period” shall mean the twelve (12) month period beginning on the date on which a Change in Control occurs.
(d)“Employment Agreement” shall mean any employment agreement, offer letter or similar written agreement between Participant and the Company or any of its affiliates.
(e)“Good Reason” shall have the meaning ascribed to such term (or similar term) in Participant’s Employment Agreement, if applicable.
(f)“Qualifying Termination” shall mean Participant’s Termination of Service (i) by the Company without Cause or (ii) if Participant’s Employment Agreement contains a definition of “Good Reason” (or similar term), by Participant for Good Reason.
(g)“Restrictive Covenants” shall mean any confidentiality, intellectual property assignment, non-competition, non-solicitation, non-disparagement and other protective covenants contained in any written agreement between the Company (or an affiliate) and Participant.
ARTICLE II.PERIOD OF EXERCISABILITY
2.1Commencement of Exercisability. The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the “Vesting Schedule”) except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated. Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of
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Participant’s Termination of Service for any reason (after taking into consideration any accelerated vesting and exercisability which may occur in connection with such Termination of Service).
2.2Change in Control; Termination of Service.
(a)Change in Control. If a Change in Control occurs and Participant remains in continued service until at least immediately prior to such Change in Control, then, effective as of the date of such Change in Control: (i) to the extent the Option is Assumed in connection with such Change in Control, the Option will remain outstanding and eligible to vest and become exercisable following such Change in Control, subject to Participant’s continued service through the applicable vesting date; or (ii) to the extent the Option is not Assumed in connection with such Change in Control, 100% of the Option will vest and become exercisable as of immediately prior to such Change in Control.
(b)Qualifying Termination not within the Change in Control Period. Upon Participant’s Qualifying Termination that does not occur during the Change in Control Period, and except to the extent set forth in Participant’s Employment Agreement, in which case any accelerated vesting terms in such Employment Agreement shall control (and assuming that the Option vests and becomes exercisable in equal monthly installments, rather than quarterly installments, over the vesting period), a number of Shares subject to the Option shall vest and become exercisable equal to (i) the number of Shares subject to the Option that would have vested on the next Vesting Date (had Participant remained in service through such Vesting Date), multiplied by (ii) a fraction, (x) the numerator of which is the number of days Participant was in service from the prior Vesting Date (or, if there is no such date, the Vesting Commencement Date) through the termination date and the (y) denominator of which is the number of days from the prior Vesting Date (or, if there is no such date, the Vesting Commencement Date) through the next scheduled Vesting Date. If Participant experiences a termination of employment or service that is a Termination of Service (rather than a termination of employment or service where Participant remains in continuous service with the Company), then any portion of the Option that remains unvested following the application of the foregoing automatically will be forfeited and terminated as of the termination date without consideration therefor.
(c)Qualifying Termination within the Change in Control Period. To the extent the Option is Assumed in connection with a Change in Control, upon Participant’s Qualifying Termination that occurs during the Change in Control Period, 100% of the then-unvested portion of the Option shall vest and become exercisable.
(d)Termination due to Death or Disability. Upon Participant’s Termination of Service due to death or Disability, 100% of the then-unvested portion of the Option shall vest and become exercisable.
(e)Other Terminations. If Participant experiences a Termination of Service for any reason other those set forth in Sections 2.2(b)-(d), the portion of the Option that has not become vested on or prior to the date of such Termination of Service automatically will be forfeited and terminated as of the termination date without consideration therefor.
(f)Release; Restrictive Covenants. The accelerated vesting and exercisability set forth in Sections 2.2(a)-(d) is subject to and conditioned upon (i) Participant’s (or Participant’s estate’s) execution, delivery and non-revocation of a general release of claims in a form prescribed by the Company within 30 days (or, to the extent required by law, 52 days) following the date of Participant’s Termination of Service and (ii) Participant’s continued compliance with the Restrictive Covenants.
2.3Duration of Exercisability. The Vesting Schedule is cumulative. Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires. The Option will be forfeited immediately upon its expiration.
2.4Expiration of Option. The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:
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(a)The final expiration date in the Grant Notice; provided, however, such final expiration date may be extended pursuant to Section 5.3 of the Plan;
(b)Except as the Administrator may otherwise approve, the expiration of three months from the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause or by reason of Participant’s death or Disability;
(c)Except as the Administrator may otherwise approve, the expiration of one year from the date of Participant’s Termination of Service by reason of Participant’s death or Disability; and
(d)Except as the Administrator may otherwise approve, Participant’s Termination of Service for Cause.
ARTICLE III. EXERCISE OF OPTION
3.1Person Eligible to Exercise. During Participant’s lifetime, only Participant may exercise the Option. After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary as provided in the Plan.
3.2Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.
3.3Tax Withholding; Exercise Price.
(a)Subject to Section 3.3(b) and 3.3(c), payment of the exercise price and withholding tax obligations with respect to the Option may be by any of the following, or a combination thereof, as determined by Participant or the Administrator:
(i)Cash or check;
(ii)In whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Option creating the tax obligation, valued at their Fair Market Value on the date of delivery; or
(iii)In whole or in part by the Company withholding of Shares otherwise issuable upon exercise of this Option.
(b)Unless Participant or the Administrator otherwise determines, and subject to Section 10.17 of the Plan, payment of the exercise price and withholding tax obligations with respect to the Option shall be by delivery (including electronically or telephonically to the extent permitted by the Company) by Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company that Participant has placed a market sell order with such broker with respect to Shares then-issuable upon exercise of the Option, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the applicable exercise price and tax withholding obligations; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator.
(c)Subject to Section 9.5 of the Plan, the applicable tax withholding obligation will be determined based on Participant’s Applicable Withholding Rate. Participant’s “Applicable Withholding Rate” shall mean (i) if Participant is subject to Section 16 of the Exchange Act, the greater of (A) the minimum applicable statutory tax withholding rate or (B) with Participant’s consent, the maximum individual tax withholding rate permitted under the rules of the applicable taxing authority for tax withholding attributable to the underlying transaction, or (ii) if Participant is not subject to Section 16 of the Exchange Act, the minimum applicable statutory tax withholding rate or such other higher rate approved by the Company; provided, however, that (i) in no event shall Participant’s Applicable
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Withholding Rate exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America); and (ii) the number of Shares tendered or withheld, if applicable, shall be rounded up to the nearest whole Share sufficient to cover the applicable tax withholding obligation, to the extent rounding up to the nearest whole Share does not result in the liability classification of the Option under generally accepted accounting principles.
(d)Participant acknowledges that Participant is ultimately liable and responsible for the exercise price and all taxes owed in connection with the Option (and, with respect to taxes, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option). Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares. The Company and its Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.
ARTICLE IV. OTHER PROVISIONS
4.1Adjustments. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
4.2Clawback. The Option and the Shares issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Company’s Policy for Recovery of Erroneously Awarded Compensation.
4.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s General Counsel at the Company’s principal office or the General Counsel’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
4.4Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
4.5Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
4.6Successors and Assigns. The Company may assign any of its rights under this Agreement to a single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
4.7Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
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4.8Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the Option without the prior written consent of Participant.
4.9Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
4.10Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms of this Agreement.
4.11Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
4.12Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
4.13Incentive Stock Options. If the Option is designated as an Incentive Stock Option:
(a)Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which stock options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such stock options (including the Option) will be treated as non-qualified stock options. Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code. Participant also acknowledges that if the Option is exercised more than three months after Participant’s Termination of Service, other than by reason of death or Disability, the Option will be taxed as a Non-Qualified Stock Option.
(b)Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (i) within two years from the Grant Date or (ii) within one year after the transfer of such Shares to Participant. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.
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Exhibit 31.1
CERTIFICATION
I, Mark T. Bertolini, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this 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 report;
3.Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4.The registrant’s other certifying officer(s) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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 weaknesses 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: May 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION
I, R. Scott Blackley, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Oscar Health, Inc.;
2.Based on my knowledge, this 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 report;
3.Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4.The registrant’s other certifying officer(s) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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 weaknesses 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: May 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATION 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 on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) 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 results of operations of the Company.
Date: May 7, 2025 | By: | /s/ Mark T. Bertolini | ||||||
| Mark T. Bertolini | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 32.2
CERTIFICATION 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 on Form 10-Q of Oscar Health, Inc. (the “Company”) for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) 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 results of operations of the Company.
Date: May 7, 2025 | By: | /s/ R. Scott Blackley | ||||||
| R. Scott Blackley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||