8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 23, 2016 (March 22, 2016)

CENTENE CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	001-31826	42-1406317
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

7700 Forsyth Blvd., St. Louis, Missouri	63105
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (314) 725-4477

(Former Name or Former Address, if Changed Since Last Report): N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events

As previously disclosed, Centene Corporation (“Centene”) entered into an Agreement and Plan of Merger, dated as of July 2, 2015 (the “Merger Agreement”), by and among Centene, Health Net, Inc., a Delaware corporation (“Health Net”), Chopin Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Centene (“Merger Sub I”), and Chopin Merger Sub II, Inc., a Delaware corporation and a direct wholly owned subsidiary of Centene (“Merger Sub II” and, together with Centene and Merger Sub I, the “Applicant”), pursuant to which Merger Sub I will merge with and into Health Net (the “Merger”), with Health Net surviving the Merger as the surviving corporation (the “Surviving Corporation”) and, immediately following the Merger, the Surviving Corporation will merge with and into Merger Sub II (the “Second Merger” and, together with the Merger, the “Mergers”), with Merger Sub II surviving the Second Merger as the final surviving corporation, subject to the terms and conditions set forth in the Merger Agreement.

CDI Approval

On March 22, 2016, the California Department of Insurance (“CDI”) announced that it had issued an order approving the change in control of Health Net Life Insurance Company (“HNLIC”), a wholly owned subsidiary of Health Net (the “CDI Approval Order”). This change of control will occur upon the completion of the Mergers. The CDI Approval Order was issued in connection with the Applicant’s application (known as a “Form A”) that the Applicant previously filed with CDI in connection with the Mergers.

In connection with the Form A, Centene, Health Net, HNLIC and, with respect to select provisions, Health Net of California, Inc. (collectively, the “Companies”) executed a “Stipulation and Undertakings” with CDI (the “CDI Undertakings”). A copy of the CDI Undertakings, excluding the Confidential Appendix thereto which modifies and supplements certain of the undertakings, is attached hereto as Exhibit 99.1 and is incorporated by reference herein. The CDI Undertakings contain various commitments by the Companies that will be effective upon completion of the Mergers, including, but not limited to, the following:

• Merger Costs (as defined in the CDI Undertakings) and Director and Executive Officer Compensation (as defined in the CDI Undertakings) will not be factored into premiums, co-payments, deductible amounts and other similar types of costs charged to policyholders of HNLIC;

• HNLIC will not pay any dividends or other similar distributions if such actions would cause HNLIC’s Total Adjusted Capital (as defined in the CDI Undertakings) to be less than the Agreed Minimum RBC Level;

• Centene will provide capital support to HNLIC as necessary for HNLIC to maintain the Agreed Minimum RBC Level;

• The Companies will increase the number of covered lives in HNLIC’s California health insurance products;

• Subject to certain limited exceptions, the Companies will not apply to transfer the state of domicile of HNLIC outside of California;

• The Chief Executive Officer/President of HNLIC and the senior executives of HNLIC who have primary day-to-day responsibility for Local Functions (as defined in the CDI Undertakings) will maintain their primary offices in California;

• HNLIC will maintain the National Committee for Quality Assurance (“NCQA”) accreditation for all of its health insurance products currently subject to such accreditation and will submit to the accreditation process with NCQA for its off-exchange EPO and PPO health insurance products;

• For each plan type and accredited product offered in California, HNLIC will improve, year over year, the applicable Total HEDIS Score (as defined in the CDI Undertakings) by at least 0.8 per year on an annual rolling average basis, and will improve the applicable Total HEDIS Score to at least 26.7 as of the Score issued in 2020. Failure of HNLIC to improve its quality scores for a particular reporting year will result in it being required to reinvest in its business operations (with the objective of improving or, if applicable, maintaining its Total HEDIS Score) an amount not exceeding $2 million in the immediately following calendar year based on a calculation specified in the CDI Undertakings;

• HNLIC will maintain compliance with the requirements for provider network adequacy under California’s insurance laws and will comply with certain other provider network related undertakings;

• HNLIC will use reasonable best efforts to keep premium rate increases to a minimum. For any HNLIC premium rate increase deemed unreasonable or unjustified by CDI, HNLIC agrees to meet and confer with CDI and make a good faith attempt to resolve any differences regarding the premium rate increase;

• HNLIC’s practices and methodologies for determining premium rates for its health insurance products after the Merger will not materially vary from HNLIC’s pre-Merger practices and methodologies;

• HNLIC’s practices and methodologies for determining its health insurance product portfolio and health insurance plan designs in California and premium rates after the Merger will not materially vary from HNLIC’s pre-Merger practices and methodologies;

• The Companies will comply with the reporting obligations set forth in the CDI Undertakings, including annual certifications to CDI attesting that since the closing of the Mergers or, if a certification was previously filed with CDI, since the last certification, the Companies have complied with each undertaking;

• In addition to the $10 million HNLIC has invested through the California Organized Investment Network (COIN) as of December 31, 2015, the Companies will invest an additional $30 million, for a total of $40 million, through COIN over the next five (5) year period commencing on the close of the Mergers; and

• Centene will build a service center in an economically distressed community in California employing at least 300 people. Centene will invest $200 million over ten (10) years in support of building the service center and creating new jobs.

The commitments set forth in the CDI Undertakings are subject to the enforcement mechanisms established in Undertaking 21 of the CDI Undertakings.

The CDI Undertakings will become effective on the closing date of the Merger and, except as expressly set forth otherwise with respect to one or more particular undertakings or provisions, will remain in full force and effect until the earlier of (i) five (5) years ending on the fifth anniversary of the closing date of the Merger, (ii) the date on which Centene ceases to maintain a majority of voting power, direct or indirect, over HNLIC, as established by CDI approving a Form A authorizing a change of control or a divestiture or (iii) the date terminated with the written consent of the California Insurance Commissioner.

DMHC Approval

On March 22, 2016, the California Department of Managed Health Care (“DMHC”) announced that it had issued orders approving the change of control of Health Net of California, Inc. (“HNCA”), Health Net Community Solutions, Inc. (“HNCS”) and Managed Health Network (“MHN” and, together with HNCA and HNCS, the “Knox-Keene Entities”), each a wholly owned subsidiary of Health Net (the “DMHC Approval Orders”). This change of control will occur upon the completion of the Merger. The DMHC Approval Orders were issued in connection with applications (known as “Notices of Material Modification”) that the Knox-Keene Entities previously filed with DMHC in connection with the Mergers.

In connection with the Notices of Material Modification, Centene, Health Net, the Knox-Keene Entities and California Health & Wellness Plan, a wholly owned subsidiary of Centene and Knox-Keene licensed entity (“CHWP” and, together with Centene, Health Net and the Knox-Keene Entities, the “Companies”), executed “Undertakings” with DMHC (the “DMHC Undertakings” and together with the CDI Undertakings, the “Undertakings”). A copy of the DMHC Undertakings is attached hereto as Exhibit 99.2 and is incorporated by reference herein. The DMHC Undertakings contain various commitments by the Companies that will be effective upon completion of the Mergers, including but not limited to, the following:

• All of the executive compensation by reason of the Merger will be the responsibility of Centene, except for severance payments required to be made in connection with the Merger, which will be the responsibility of Health Net, and no such amounts, directly or indirectly, will be the obligation of the Knox-Keene Entities;

• The Knox-Keene Entities will not declare or pay dividends or make similar type distributions if such actions would result in any of the Knox-Keene Entities falling below certain financial reserve thresholds;

• The premiums payable by HNCA and MHN enrollees (including copayments and deductibles) will not increase as a result of costs incurred in financing, analyzing and/or consummating the Merger;

• HNCA and MHN practices and methodologies for determining premium rates in the California market after the Mergers will not materially vary from HNCA and MHN pre-Merger practices and methodologies;

• HNCA and MHN practices and methodologies for determining products and benefit designs in the California health plan market after the Mergers will not materially vary from HNCA and MHN pre-Merger practices and methodologies;

• No debt ratings factor relating to the indebtedness that Centene has incurred to finance the Merger will be included in HNCA and MHN’s premium practices and methodologies post-Merger;

• HNCA will make every effort to keep premium rate increases to a minimum. For any HNCA premium rate increase deemed unreasonable or unjustified by DMHC, HNCA will meet and confer with DMHC and make a good faith attempt to resolve any differences regarding the premium rate increase;

• Key functions and operations performed by Health Net in California pre-Merger, including maintaining Health Net’s headquarters, will remain in California;

• HNCA and MHN will continue to make all commercially reasonable efforts in good faith to operate as an ongoing, economically viable and active competitor in the individual, small and large group commercial markets in California;

• The Knox-Keene Entities will take all reasonable steps in good faith to preserve and maintain the value and goodwill of the Knox-Keene Entities and their products in California.

• The Companies will work to improve enrollee quality of care measures through rating and oversight programs under DMHC, Department of Health Care Services and Office of the Patient Advocate.

• The Companies will provide reports to the DMHC to demonstrate compliance with the Undertakings;

• Centene will contribute $65 million to improve enrollee health outcomes, support locally-based consumer assistance programs and strengthen the health care delivery system. In addition to the $65 million, Centene will invest $75 million in California’s health care infrastructure for underserved communities or populations throughout California in need of such capital;

• Same as the commitment made under the CDI Undertakings, Centene will build a service center in an economically distressed community in California employing at least 300 people. Centene will invest $200 million over ten (10) years in construction costs of building the service center and creating new jobs;

• The Companies will comply with a variety of additional undertakings designed to ensure continued compliance with the Knox-Keene Health Care Service Plan Act of 1975 (the “Act”) and the Act’s corresponding regulations.

The DMHC Undertakings will become effective on the closing date of the Merger and, except as to those provisions of the DMHC Undertakings that contain separate termination provisions, will remain in full force and effect for five years, ending on the fifth anniversary of the closing date of the Merger, unless terminated sooner by the Companies with the written consent of DMHC.

Press Release

On March 22, 2016, Centene and Health Net issued a joint press release announcing that DMHC had approved the Mergers. On March 23, 2016, Centene and Health Net issued a joint press release announcing that CDI had approved the Mergers. Copies of those press releases are attached hereto as Exhibit 99.3 and Exhibit 99.4, respectively, and are incorporated herein by reference.

Forward-Looking Statements

This Form 8-K may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Centene, Health Net and the combined businesses of Centene and Health Net and certain plans and objectives of Centene and Health Net with respect thereto, including the expected benefits of the proposed merger. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aim”, “continue”, “will”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the expected closing date of the transaction; the possibility that the expected synergies and value creation from the proposed merger will not be realized, or will not be realized within the expected time period, including, but not limited to, as a result of conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to, the merger; the exertion of management’s time and Centene’s resources, and other out-of-pocket expenses incurred in connection with complying with the Undertakings; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; changes in economic conditions or political conditions; changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder; provider and state contract changes; the outcome of pending legal or regulatory proceedings; reduction in provider payments by governmental payors; the expiration or termination of Centene’s or Health Net’s Medicare or Medicaid managed care contracts with federal or state governments; tax matters; increased health care costs; the possibility that the merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions; and risks and uncertainties discussed in the reports that Centene and Health Net have filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements reflect Centene’s and Health Net’s current views with respect to future events and are based on numerous assumptions and assessments made by Centene and Health Net in light of their experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause Centene’s and Health Net’s plans with respect to the proposed merger, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such

forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this announcement. Neither Centene nor Health Net assumes any obligation to update the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 that has been filed with the SEC on September 21, 2015, in connection with the merger. A further list and description of risks and uncertainties can be found in Centene’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in its reports on Form 10-Q and Form 8-K as well as in Health Net’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in its subsequent Form 8-K reports.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Description
99.1	Stipulation and Undertakings with the California Department of Insurance
99.2	Undertakings with the California Department of Managed Health Care
99.3	Press Release issued by Centene Corporation and Health Net, Inc. on March 22, 2016
99.4	Press Release issued by Centene Corporation and Health Net, Inc. on March 23, 2016

SIGNATURE

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 hereunto duly authorized.

	CENTENE CORPORATION
Dated: March 23, 2016	By:	/s/ Keith H. Williamson
		Name:	Keith H. Williamson
		Title:	Executive Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Stipulation and Undertakings with the California Department of Insurance
99.2	Undertakings with the California Department of Managed Health Care
99.3	Press Release issued by Centene Corporation and Health Net, Inc. on March 22, 2016
99.4	Press Release issued by Centene Corporation and Health Net, Inc. on March 23, 2016

EX-99.1

Exhibit 99.1

BEFORE THE INSURANCE COMMISSIONER

OF THE STATE OF CALIFORNIA

SAN FRANCISCO

In the Matter of the Change of Control of	STIPULATION AND UNDERTAKINGS
HEALTH NET LIFE INSURANCE COMPANY	File No. APP-2015-00889
Due to the Indirect Acquisition by
CENTENE CORPORATION.

Centene Corporation (“Centene”), a Delaware corporation, has filed a Statement Regarding the Acquisition of Control of a Domestic Insurer (“Form A”) with respect to Health Net Life Insurance Company (“HNLIC”). The Form A seeks the approval of the California Department of Insurance (“CDI”) for the change of control of HNLIC that would occur upon the proposed merger (“Merger”) of Chopin Merger Sub I, Inc., a wholly owned subsidiary of Centene, with and into Health Net, Inc. (“Health Net”), the current ultimate parent of HNLIC, with Health Net the survivor. Depending on the determination of tax issues, immediately following this merger, Health Net may merge into Chopin Merger Sub II, Inc., another wholly owned subsidiary of Centene, with Chopin Merger Sub II, Inc. as survivor, named as Health Net, Inc. Upon the closing of the Merger, Centene will directly or indirectly own all of the outstanding voting securities of HNLIC, which will become an indirect, wholly owned subsidiary of Centene. Currently HNLIC is, and would remain immediately after the Merger, an immediate subsidiary of Health Net of California, Inc. (“HNCA”), which is licensed as a health care service plan by the California Department of Managed Health Care.

In consideration of the California Insurance Commissioner (the “Commissioner”) approving the Form A, Health Net, HNCA (with respect to Undertakings 2, 8, 11, and as to those, 21 and 22), HNLIC and Centene (collectively “Companies”) stipulate to the following undertakings.

Undertaking 1

Definitions

The Parties agree that the following terms in this Stipulation and Undertakings shall have the following meanings:

“Agreed Minimum RBC Level” is defined in the Confidential Appendix.

“CAHPS” means Consumer Assessment of Healthcare Providers and Systems.

“Certification” means an annual submission to CDI, as described further below.

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“Confidential Appendix” means the addendum to this Stipulation and Undertakings that refers to proprietary or otherwise confidential information under the law, including Undertakings that implicate confidential information.

“Enforcement Action” means any action initiated by CDI by issuance of a Notice of Noncompliance, Order to Show Cause, Accusation, or other formal pleading which alleges a violation to which any penalty recited in the California Insurance Code or California Code of Regulations may apply.

“EPO” means Exclusive Provider Organization.

“Director and Executive Officer Compensation” means Health Net stock options, restricted stock units, and performance share awards held by Health Net’s non-executive directors and executive officers that are outstanding immediately prior to the effective time of the Merger and which, pursuant to the terms of the Merger as described in the SEC Form S-4, are converted into the right to receive Health Net stock option consideration; are subject to accelerated vesting, canceled, and converted into the right to receive Merger consideration; or are converted to rollover awards as of the effective time of the Merger. This term also includes severance payments and benefits to which an executive officer of Health Net is entitled under his or her employment agreement due to a change in control if he or she experiences a “qualifying termination,” as that term is defined in the Form S-4, within two years after the closing of the Merger. This term also includes compensation paid to any director or executive of Centene in connection with the Merger.

“Health Insurance Plan” means the pairing of health insurance coverage benefits offered by HNLIC under a Health Insurance Product with a particular cost-sharing structure, provider network, and Service Area.

“Health Insurance Product” means a discrete package of health insurance coverage benefits offered by HNLIC in California using a particular product network type within a Service Area. It encompasses HNLIC indemnity, EPO and PPO products offered to the California individual, small and large group markets. Health Insurance Products are health insurance policies offered in California as defined in Section 106(b), specialized health insurance (dental, vision, behavioral health, etc.) as defined in Section 106(c), and student blanket insurance.

“HEDIS” means Healthcare Effectiveness Data and Information Set.

“Local Functions” means the following functions:

Operations. This function is composed primarily of operations that require direct contact with California insureds and/or providers, including customer contact, provider services, membership accounting, and membership appeals and grievances.

Finance. This function is composed primarily of financial planning and analysis for California lines of business, including a dedicated local senior financial officer responsible for California business.

Clinical Affairs. This function is composed of a Chief Medical Officer who is responsible for clinical policies and the oversight of quality for California insureds.

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Network Management. This function is composed of responsibility for provider network development, contracting and management and provider relations for California.

Commercial Product Leadership. This function is composed of leadership dedicated to California commercial products and local teams to provide sales, broker management and account services.

California Compliance. This function is composed of a Chief Compliance Officer responsible for HNLIC’s adherence to applicable health and insurance statutes and regulations of California.

“Medical Loss Ratio” or “MLR” has the same meaning as defined in Section 10112.25.

“Merger Costs” means costs incurred to finance, analyze and consummate the Merger, including but not limited to debt service, attorneys’ fees, investment bankers’ fees, travel expenses and due diligence expenses.

“NAIC” means the National Association of Insurance Commissioners.

“Parent Company” means Centene, Health Net, HNCA, and any subsidiary, affiliate or successor, other than HNLIC, of one of those companies that is or becomes a parent company of HNLIC.

“Parent Company Distribution” means the declaration or payment of a dividend, the distribution of cash or property, or any other upstream of funds or property by HNLIC to a Parent Company without an equal amount of valuable consideration. The term Parent Company Distribution excludes payments made by HNLIC under the terms of an administrative services agreement, tax sharing agreement or any other agreement that has been filed with and approved or non-disapproved by CDI.

“Parties” means Centene, Health Net, HNLIC, and CDI. CDI includes references to the Commissioner.

“Policyholder Costs” means premiums, co-payments, deductible amounts or other similar types of costs charged to policyholders for any HNLIC product offered in California.

“PPO” means Preferred Provider Organization.

“RBC Instructions” means the RBC Report, including risk-based capital instructions adopted by the NAIC, and as the RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

“RBC Report” means the report required in Section 739.2.

“Region” means, in the individual and small group markets, the rating regions established by Sections 10965.9 and 10753.14, respectively.

“Section” means a section of the California Insurance Code, unless another code is cited.

“Service Area” means the geographic area in which coverage will be provided under a Health Insurance Product issued by HNLIC to persons residing in that geographic area.

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“Total Adjusted Capital” means the sum of: (1) an insurer’s statutory capital and surplus and (2) other items, if any, that the RBC Instructions may provide.

“Undertake(s)” means to promise (verb) and “Undertaking” means a promise (noun). Each Undertaking recited in this document constitutes a contractual obligation to perform the provisions of that Undertaking. Each Undertaking is a separate material inducement to and consideration for the Commissioner’s approval of the Form A,

“Undertaking,” singular, refers to the specific, numbered undertaking (including any undertaking in the Confidential Appendix) in which that term is used, and not the entire set of undertakings.

“Undertakings,” plural, refers to all of the undertakings (including those in the Confidential Appendix), collectively, recited in this Stipulation and Undertakings.

Undertaking 2

Parental Control

Centene, Health Net, and HNCA undertake to use the full extent of their corporate power and influence over HNLIC to ensure that HNLIC complies fully with all Undertakings to which HNLIC is committed by this Stipulation and Undertakings.

Undertaking 3

Redomestication

Companies undertake not to apply to transfer the state of domicile of HNLIC outside of California if, immediately following the redomestication:

i. HNLIC would be commercially domiciled in California pursuant to Section 1215.14(a) as codified on January 1, 2016; or

ii. A plurality of covered lives of all types of coverage in all jurisdictions from all regulated entities that are subsidiaries of Health Net (or any successor) reside in California.

Notwithstanding the duration set forth in paragraph (d) of Undertaking 22, this Undertaking will remain in full force and effect until the earlier of:

(a) the date on which Centene ceases to maintain a majority of voting power, direct or indirect, over HNLIC, as established by CDI’s approving a Form A authorizing a change of control pursuant to Section 1215.2(d) or a divestiture in compliance with Section 1215.2(h); or

(b) the date this Undertaking is terminated with the written consent of the Commissioner.

Companies agree that an application to CDI to transfer the state of domicile in contravention of this Undertaking 3 may be deemed not to be in the interests of policyholders of California, may be disapproved by CDI on that basis, and if disapproved will not be challenged by Companies in any manner, notwithstanding any other provision of these Undertakings to the contrary.

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Undertaking 4

Ongoing Commitment to California Commercial Market

Companies undertake to increase the number of covered lives in HNLIC’s California Health Insurance Products as provided in the Confidential Appendix.

Undertaking 5

Local Management

(a) Companies undertake that the Chief Executive Officer/President of HNLIC and the senior executives of HNLIC who have primary day-to-day responsibility for Local Functions will maintain their primary offices in California.

(b) Companies undertake that they will maintain sufficient staff located in California to ensure HNLIC’s adherence to California’s health and insurance statutes and regulations.

Undertaking 6

Merger Costs

Companies undertake that HNLIC will not factor any Merger Costs into Policyholder Costs.

Undertaking 7

Director and Executive Officer Compensation

Companies undertake that HNLIC will not factor Director and Executive Officer Compensation into Policyholder Costs.

Undertaking 8

Parent Company Distributions

Centene, Health Net, and HNCA undertake that HNLIC will not make any Parent Company Distribution if the Parent Company Distribution would cause HNLIC’s Total Adjusted Capital to be less than the Agreed Minimum RBC Level, as defined in the Confidential Appendix.

Undertaking 9

Maintenance of RBC

Centene undertakes to provide capita! support to HNLIC as necessary for HNLIC to maintain the Agreed Minimum RBC Level.

Undertaking 10

Affiliated Agreements

(a) HNLIC undertakes that it will not do any of the following without the prior written approval of the Commissioner:

i. Co-sign or guarantee any part of any current or future loan and/or credit facility entered into by any Parent Company;

ii. Assume any part of a loan from any Parent Company; or

iii. Pledge or hypothecate any HNLIC asset in connection with any current or future loan in which any Parent Company is a borrower or guarantor.

(b) If CDI denies consent pursuant to this Undertaking, HNLIC shall be entitled to a hearing on whether the proposed transaction satisfies the requirements of Section 1215.5.

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Undertaking 11

Capital Stock of HNLIC

Centene, Health Net, and HNCA undertake that they will not pledge or hypothecate any HNLIC capital stock in connection with any current or future loan in which any Parent Company is a borrower or guarantor without the prior written approval of the Commissioner. If CDI denies consent pursuant to this Undertaking, HNLIC shall be entitled to a hearing on whether the proposed transaction satisfies the requirements of Section 1215.5.

Undertaking 12

NCQA Accreditation

(a) HNLIC undertakes to maintain the National Committee for Quality Assurance (“NCQA”) accreditation for all Health Insurance Products currently subject to such accreditation and to submit to the accreditation process with NCQA for off-exchange EPO and PPO Health Insurance Products. The submission process will be initiated within 60 days after the closing of the Merger for the next NCQA accreditation cycle scheduled for February 2019.

(b) Prior to re-accreditation in 2019 of off-exchange EPO and PPO Health Insurance Products, HNLIC undertakes to maintain the quality reporting metrics under HEDIS and CAHPS associated with the NCQA accreditation and shall include in its annual Certifications the reporting metrics for each of the calendar years 2016, 2017 and 2018. In 2016, on a confidential basis, HNLIC will provide CDI with the reporting metrics reviewing 2015 experience.

(c) If HNLIC determines that obtaining NCQA accreditation has become impractical, HNLIC agrees to use reasonable best efforts to obtain an alternative accreditation, if any, agreed upon by the Parties after good faith discussions. If the Parties cannot agree on an alternative accreditation after good faith discussions, the NCQA accreditation requirements contained in this Undertaking 12 shall continue to apply.

Undertaking 13

Quality Assurance

(a) Within fourteen (14) days following the closing of the Merger, HNLIC will provide CDI with a confidential copy of HNLIC’s Accreditation Summary Report from HEDIS® 2015, the scores of which will be used as the baseline for the purpose of this Undertaking (“Baseline”), including, specifically, the 28 Effectiveness of care measures and the 9 CAHPS Measures used in calculating the Total HEDIS Score used by NCQA to determine accreditation status (“Total HEDIS Score”).

(b) For each plan type and accredited product offered in California, starting with 2016 experience (applicable to 2017 reporting) HNLIC undertakes to improve, year over year, the applicable Total HEDIS Score by at least 0.8 per year on an annual rolling average basis, and to improve the applicable Total HEDIS Score to at least

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26.7 as of the Score issued in 2020. If during the duration of this Undertaking 13, HNLIC achieves a Total HEDIS Score of 26.7 or higher, HNLIC would be required only to maintain, rather than improve, its Total HEDIS Score going forward year over year.

(c) If NCQA, CAHPS or HEDIS create new measures or criteria that are not included in the Baseline (“New Measures”), such measures will not be included in determining whether HNLIC has met the requirement in paragraph (b), above, until HNLIC has at least two years of experience applying the New Measures.

(d) If HNLIC fails to improve its quality scores as specified in paragraph (b) of this Undertaking 13 for a particular reporting year, it shall reinvest an amount not exceeding $2 million (each a “Reinvestment Amount”) in the immediately following calendar year calculated as follows:

Yearly amount = $5.00 per insured covered by the applicable plan type or accredited product offered in California.

(e) Each Reinvestment Amount shall be invested by HNLIC in one or more of the following areas of its business operations, with the objective of improving or, if applicable, maintaining, its Total HEDIS Score: (1) technology; (2) personnel; and (3) provider and member outreach (collectively “Quality Improvement Measures”). HNLIC shall provide as part of the Certification a detailed explanation of its application of such Reinvestment Amount that will include (i) a comparison of investment made in prior year; (ii) an explanation of the resources to which the investment is being applied; and (iii) an explanation of how the investment is expected to address the quality metrics. The provisions of paragraphs 13(d) and (e) are intended for HNLIC to be obligated to spend up to but not exceeding $2 million in any calendar year on Quality Improvement Measures above what it spent on such measures in 2016.

(f) Companies agree that, if HNLIC fails to reinvest the Reinvestment Amount described in paragraphs (d) and (e) of this Undertaking, each five thousand dollars ($5,000) of the Reinvestment Amount not reinvested in HNLIC operations as described in this Undertaking 13 constitutes a single act enforceable pursuant to Undertaking 21.

(g) HNLIC may assert as a defense in any Enforcement Action CDI brings involving paragraph (b), (d), (e) or (f) of this Undertaking 13 the claim that NCQA materially changed its scoring methodology. The Parties agree that any such Reinvestment Amount resulting from the assertion of such a defense shall reflect any changes in methodology the NCQA adopts after the Merger and the intent and design of the goal recited in paragraph (b).

(h) If in any calendar year HNLIC exceeds the growth projections for California set forth in the business plan dated December 16, 2015, submitted as a confidential supplement to the Form A and in such year fails to improve its Total HEDIS Score by the annual rolling average target score in paragraph (b) above, the Parties agree to engage in good faith discussions with respect to waiving any penalty under paragraph (f) above and modifying the target Total HEDIS Score for the following year(s). If the Parties cannot agree on such waiver or revised Total HEDIS Score, the Total HEDIS Score and/or penalty provisions, respectively, set forth above shall remain in place.

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(i) Companies will use reasonable best efforts to improve HNLIC’s star rating for each topic and measure on the PPO report card published by the California Office of the Patient Advocate and HNLIC’s quality rating in the Covered California Quality Rating System.

(j) Companies undertake to collect and report quality data for HNLIC’s Health Insurance Products in California separate from Centene’s national and other affiliate data. Such data, however, may be collected and reported in the aggregate with data for other Health Net health care service plan products. The data will conform to accepted industry and California standards. Companies may include data from HNLIC in Centene’s national data, as long as HNLIC’s data can also be reported separately for California. Nothing in this paragraph (i) shall be deemed to supersede any statute, regulation, or pending or subsequent specific data call to the contrary.

(k) Companies undertake to maintain an advisory committee, accountable to Centene’s management, to direct oversight and improvement of quality of care in California specifically, including reduction of statewide documented variance in clinical practice unexplained by patient conditions. CDI may review and comment on the committee’s membership. Companies undertake to describe the membership and activity of this committee in the Certifications for the duration of this Stipulation and Undertakings.

Undertaking 14

Provider Directory Accuracy

Companies undertake that HNLIC will maintain compliance with the applicable laws and requirements pertaining to provider directories in California, including those set forth in Section 10133.15. Companies undertake to use a combination of technology resources and communications with HNLIC’s providers to keep directories current. HNLIC undertakes to comply with the provider directory requirements of Section 10133.15, which take effect on July 1, 2016.

Undertaking 15

Provider Network Adequacy

Companies undertake that HNLIC will maintain compliance with the requirements for provider network adequacy under California’s insurance laws. Companies further undertake to comply with the provider network related Undertakings contained in the Confidential Appendix.

Undertaking 16

Annual Certifications

(a) Companies undertake to provide Certifications to CDI attesting that since the closing of the Merger or, if a Certification was previously filed with CDI, since the last Certification, Companies have complied with each Undertaking. Upon CDI request, Companies will promptly provide all supporting documentation reasonably necessary to support a Certification or attestation.

(b) Companies undertake that the Certifications will be executed under penalty of perjury under the laws of the State of California by the President or CEO of HNLIC, and will attest that the information contained therein, and any supporting documents, are true and complete to the best of his or her knowledge, based on duly diligent compliance audits with regard to each Undertaking.

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(c) Companies undertake promptly to provide full and complete supplemental Certifications upon CDI’s reasonable request to elaborate on the manner in which Companies have complied with one or more of the Undertakings.

(d) Companies undertake to submit the Certifications required by these Undertakings by March 15th of each calendar year, with the first Certification due in 2017, based upon the 2016 calendar year.

(e) Companies may request confidential treatment with regard to any Certifications and any other accompanying documentation or information provided to CDI, unless previously public. CDI shall determine whether any such Certifications and accompanying documentation or information are confidential consistent with state law (“Confidential Information”). Confidential Information shall be given confidential treatment by CDI to the fullest extent permitted by California law, including but not limited to the California Public Records Act and Sections 735.5 and 12919. CDI agrees to provide HNLIC with appropriate prior notice of any judicial or other effort to compel CDI to disclose Confidential Information. However, CDI may use Confidential Information in an Enforcement Action in which one of the Companies or one of their affiliates, subsidiaries or a direct or indirect parent is a respondent, subject to a protective order or stipulation ensuring that the confidential information is disclosed only to the party or parties to the Enforcement Action.

(f) The Certifications notwithstanding, Companies agree to:

1. Conduct self-audits of their compliance with each of the Undertakings at intervals that Companies deem to be reasonable for each Undertaking, with such intervals in no event being less than once per calendar year;

2. Develop and implement a reasonable remediation plan to promptly and completely address non-compliance with any Undertaking;

3. Report non-compliance to CDI within five (5) business days of the earlier of (i) discovery during the self-audit process, or (ii) discovery by senior management outside the self-audit process; and

4. Provide CDI with the remediation plan and a date by which any ongoing instances of non-compliance will cease.

(g) With respect to any Undertakings, including Confidential Undertakings, that require evaluating activities or metrics in relation to a historic level or metric, Companies shall, on an ongoing basis as applicable, provide all documentation and information necessary to determine any relevant baselines required to evaluate Companies’ compliance with the Undertakings.

Undertaking 17

Product Reporting

(a) Separate and apart from the Annual Certifications required in Undertaking 16, HNLIC undertakes to provide the following statistics as of the end of each calendar quarter for each of the HNLIC Health Insurance Products listed in paragraph (b) of this Undertaking 17:

i. Covered lives statewide, per Region, and per county;

ii. Member months;

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iii. A medical loss ratio based on incurred claims and premiums;

iv. Net premiums earned;

v. Per member per month statistics for premium, health care claims costs; and

vi. Commissions, premium taxes and other general and administrative expenses on an aggregate level for HNLIC.

(b) The Health Insurance Products for which HNLIC will provide the statistics recited in paragraph (a) i. through v. of this Undertaking 17 are:

i. Indemnity health insurance by market segment (large group, small group and individual);

ii. PPO health insurance by market segment (large group, small group and individual);

iii. EPO health insurance by market segment (large group, small group and individual);

iv. Student blanket (Section 10270.2(a)(2));

v. Medicare Supplement by market segment (individual and group);

vi. Specialized health insurance by product type and market segment (individual and group dental, vision, behavioral health, etc.);

vii. Each product not listed above that exceeds 10% of total written premium;

viii. Subtotal of all of the Health Insurance Products; and

ix. All other HNLIC products combined.

(c) In complying with paragraphs (a) and (b) of this Undertaking 17, HNLIC undertakes to provide the statistics for each Health Insurance Product separately.

(d) HNLIC will provide a list of each Health Insurance Product offered, including each plan offered under the Health Insurance Product, and the state tracking numbers for the form, rate, and network filings for each Health Insurance Product.

(e) HNLIC will provide an Actuarial Memorandum describing in detail the rate development for each Health Insurance Product.

(f) Separate and apart from the Annual Certifications required in Undertaking 16, HNLIC undertakes to submit to CDI on an annual basis a copy of the Medical Loss Ratio Annual Reporting Form submitted to the Centers for Medicare & Medicaid Services (“CMS”) promptly after filing such report with CMS.

(g) The Product Reporting obligation of this Undertaking 17 shall be due on a quarterly basis, and shall follow the same reporting cycle used by HNLIC in filing its quarterly financial statements with CDI, with the exception of the Actuarial Memorandum and the Medical Loss Ratio Annual Reporting Form, which shall be provided on an annual basis.

(h) If the number of HNLIC’s covered lives in all Health Insurance Products in a market segment decreases in any quarter five percent (5%) or more from the prior quarter, HNLIC will provide to CDI a detailed explanation for the decrease, as well as provide to CDI and implement a comprehensive remedial plan to reverse such decrease.

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Undertaking 18

Commitment To California Infrastructure

(a) COIN: In addition to the $10 million HNLIC has invested through the California Organized Investment Network (COIN) as of December 31, 2015, Companies undertake to invest an additional $30 million, for a total of $40 million, through COIN over the five (5) year period commencing on the close of the Merger. To the extent possible, the investment required under this Undertaking 18 shall be used for health care facilities or services for low-to-moderate income persons, or that will use more of the investment for those purposes than other investments available through COIN.

(b) Service Center: Centene commits to making investments of $200 million for providing new jobs supporting the California health care industry in an economically distressed community in California. To satisfy this commitment, within twelve (12) months following the closing date of the Merger, Centene shall submit to CDI a detailed and comprehensive plan (the “Plan”) for the employment of at least 300 individuals and construction of a new multi-building facility (the “Service Center”). Centene commits to use best efforts to begin construction of the Service Center within nine (9) months following submission of the Plan. The investments made under this section shall include investments in construction costs, costs of wages and benefits, and operating costs over the first ten (10) years of the Service Center’s operations.

Undertaking 19

Cybersecurity

(a) Companies undertake that they will, no later than January 1, 2017, fully implement a plan to manage HNLIC’s cybersecurity risk that is consistent with a nationally recognized effort, such as the National Institute of Standards and Technology (NIST) framework or ISO/IEC 27001 – Information Security Management.

(b) Companies undertake that they will, no later than June 1, 2016, ensure that HNLIC affords all current and former California insureds of HNLIC all rights recited in the “NAIC Roadmap for Cybersecurity Consumer Protections.”

Undertaking 20

Product and Premium Methodologies

(a) Without CDI’s prior written consent, Companies’ practices and methodologies as described below for HNLIC’s Health Insurance Products following the Merger will not materially vary from HNLIC’s practices and methodologies before the Merger. HNLIC will provide Certifications attesting that:

1. HNLIC’s practices and methodologies for determining premium rates for Health Insurance Products after the Merger have not materially varied from HNLIC’s pre-Merger practices and methodologies; and

2. HNLIC’s practices and methodologies for determining its Health Insurance Product portfolio and Health Insurance Plan designs in California after the Merger have not materially varied from HNLIC’s pre-Merger practices and methodologies.

(b) The Companies agree that controlling health care costs is of the utmost importance. Accordingly, HNLIC will make reasonable best efforts to keep premium rate increases to a minimum. For any HNLIC premium rate increase deemed unreasonable or unjustified by CDI, HNLIC agrees to meet and confer with CDI and make a good faith attempt to resolve any differences regarding the premium rate increase. This applies to all commercial lines of business subject to rate review by CDI at the time the rate is filed.

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Undertaking 21

Enforcement

These Undertakings shall be subject to the following terms and conditions:

(a) The Commissioner may enforce this Stipulation and Undertakings by any means available under law or equity, including but not limited to administrative enforcement proceedings, and/or proceedings to obtain an order by a court of competent jurisdiction, including but not limited to an action pursuant to Section 12928.6.

(b) Companies expressly acknowledge that the alleged commission of an “act” or “acts” in violation of one or more of these Undertakings may be enforced pursuant to the California Unfair Insurance Practices Act (the “UIPA”). (California Insurance Code Section 790 et seq.) In any Enforcement Action brought by CDI pursuant to the UIPA:

1. The definitions in title 10, Chapter 5, subchapter 7.5, California Code of Regulations, Section 2695.2 apply.

2. Knowing or willful acts of an employee or agent on behalf of any of the Companies will be deemed knowing or willful acts of the Companies unless the employee or agent acted outside the scope of employment or agency. If an alleged violation of any of the Undertakings would constitute an unfair method of competition or an unfair or deceptive act or practice that is defined in Section 790.03, the provisions of Section 790.05 shall apply.

3. Companies agree that every other alleged violation of these Undertakings shall each be deemed an unfair method of competition or an act or practice that is unfair or deceptive, as those terms are used in Section 790.06, subdivision (a), that no order to show cause or proceedings, administrative or judicial, shall be required to deem them unfair or deceptive, and that they shall be subject to enforcement pursuant to Section 790.05 as if they had been declared unfair or deceptive as set forth in Section 790.07. Companies agree that the Commissioner may order Companies to correct, eliminate, or remedy the conduct, conditions, or grounds resulting in a violation. Companies shall be liable pursuant to Section 790.035 for each act in violation of the Undertakings and the Commissioner shall have the discretion to establish what constitutes an act, unless an Undertaking expressly defines what constitutes an act. However, when acts or omissions with respect to an Undertaking are inadvertent, such acts or omissions shall be deemed a single act or omission for purposes of enforcing these Undertakings.

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(c) This Stipulation and Undertakings and its validity, enforcement and interpretation, will for all purposes be governed by and construed in accordance with the laws of the State of California.

(d) Any legal proceeding arising from an alleged violation of this Stipulation and Undertakings may be brought by CDI in an administrative proceeding pursuant to California Government Code Section 11400 et seq. or in the Superior Court for the State of California. Companies consent to personal jurisdiction in connection with any court proceeding or judicial review of any administrative proceeding in the Superior Court for the limited purposes of enforcing this Stipulation and Undertakings, and waive all defenses that could be brought in any action based on lack of personal jurisdiction and inconvenient or improper forum of such court to adjudicate an action against Companies.

(e) If Companies, or any of them individually, violates this Stipulation and Undertakings, CDI would be irreparably harmed and could not be made whole by monetary damages. Companies, and each of them individually, waive the defense, in any action for specific performance, that a remedy at law would be adequate.

(f) Notwithstanding any other paragraph in this Undertaking 21, an Enforcement Action or legal proceeding arising from this Stipulation and Undertakings must be brought by CDI no later than two (2) years after the expiration or termination of the applicable Undertaking.

(g) Notwithstanding any other paragraph in this Undertaking 21, CDI will refrain from bringing an Enforcement Action for not more than two non-willful violations of any separate Undertakings per calendar year, unless CDI demonstrates that such violation caused damages to another person or entity. In each instance, Companies must establish they complied with the self-audit, self-remediation, and self-reporting provisions of Undertaking 16(f), with the self-reporting occurring before CDI independently learned of the violation.

Undertaking 22

Miscellaneous

(a) Review for Compliance. All reviews CDI conducts to confirm compliance with this Stipulation and Undertakings, including the cost of consultants or other personnel CDI retains to conduct or assist with the reviews, shall be deemed an examination of HNLIC and subject to reimbursement by HNLIC pursuant to Section 729 et seq.

(b) Binding Effect. This Stipulation and Undertakings is unconditionally valid and binding on each of the Companies with respect to the matters set forth herein, and on HNCA with respect to Undertakings 2, 8, and 11, and as to those, 21 and 22. Companies and HNCA hereby waive all claims, causes of action, defenses, and counterclaims that the Undertakings are invalid for lack of consideration. Subject to the foregoing sentence, Companies and HNCA hereby reserve the right and are entitled to contest any interpretation of the meaning and scope of any of the Undertakings, as well as any allegation that the Companies or HNCA violated, or failed to comply with, any of the Undertakings.

(c) Entire Agreement, This Stipulation and Undertakings, including the Confidential Appendix, constitute all the agreements among the Parties with respect to their subject matter. The recited Undertakings supersede any alleged or actual prior agreements, whether written and oral.

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(d) Duration. This Stipulation and Undertakings, including the Confidential Appendix, will become effective on the closing date of the Merger and, except as expressly set forth otherwise with respect to one or more particular Undertakings or provisions, will remain in full force and effect until the earlier of (i) five (5) years, ending on the fifth anniversary of the closing date of the Merger, (ii) the date on which Centene ceases to maintain a majority of voting power, direct or indirect, over HNLIC, as established by CDI approving a Form A authorizing a change of control pursuant to Section 1215.2(d) or a divestiture in compliance with Section 1215.2(h), or (iii) the date terminated with the written consent of the Commissioner.

(e) Invalidity. Except as otherwise provided herein, if a court of competent jurisdiction declares any part of this Stipulation and Undertakings invalid or unenforceable, the remainder of this Stipulation and Undertakings will remain in full force and effect.

(f) Third Party Rights. Nothing in this Stipulation and Undertakings provides any person (including any policyholder) other than the Parties, and their respective successors and permitted assigns, with any legal or equitable right or remedy. For example, but not by way of limitation, no private parties, individuals, or entities are entitled to enforce this Stipulation and Undertakings.

(g) Amendment. This Stipulation and Undertakings may be amended only by written agreement signed by the Parties.

(h) Assignment. No Party to this Stipulation and Undertakings may assign any part of this Stipulation and Undertakings without the prior written consent of the other Parties.

(i) The requirements of these Undertakings shall not replace, and shall be in addition to, any other applicable legal requirements under state or federal law. Nothing in these Undertakings authorizes HNLIC to act in a manner inconsistent with any applicable state or federal law.

CENTENE CORPORATION
By:
	SIGNATURE:	/s/ Michael F. Neidorff
	NAME/TITLE:	Michael F. Neidorff Chairman and Chief Executive Officer
	Dated:	March 22, 2016

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HEALTH NET, INC.
By:
	SIGNATURE:	/s/ Jay Gellert
	NAME/TITLE:	Jay Gellert/CEO
	Dated:	3.22.16
HEALTH NET LIFE INSURANCE COMPANY
By:
	SIGNATURE:
	NAME/TITLE:
	Dated:

HEALTH NET OF CALIFORNIA, Inc. (only for purposes of Undertakings 2, 8, 11, and as to those, 21 and 22)

By:
	SIGNATURE:	/s/ Jay Gellert
	NAME/TITLE:	Jay Gellert/CEO
	Dated:	3.22.16
Accepted by:
	SIGNATURE:
	John F. Finston General Counsel and Deputy Commissioner
	Dated:

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HEALTH NET, INC.
By:
	SIGNATURE:
	NAME/TITLE:
	Dated:
HEALTH NET LIFE INSURANCE COMPANY
By:
	SIGNATURE:	/s/ Steven J. Sell
	NAME/TITLE:	Steven J. Sell/President
	Dated:	3-22-16

HEALTH NET OF CALIFORNIA, Inc. (only for purposes of Undertakings 2, 8, 11, and as to those, 21 and 22)

By:
	SIGNATURE:
	NAME/TITLE:
	Dated:
Accepted by:
	SIGNATURE:	/s/ John F. Finston
	John F. Finston General Counsel and Deputy Commissioner
	Dated:	3/22/16

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EX-99.2

Exhibit 99.2

UNDERTAKINGS

Centene Corporation (“Centene”), Chopin Merger Sub I, Inc. (“Chopin I”), Chopin Merger Sub II, Inc. (“Chopin II”), and Health Net, Inc. have entered into an Agreement and Plan of Merger, pursuant to which Health Net, Inc. will become a direct subsidiary of Centene, and Health Net, Inc.’s subsidiaries, including Health Net of California, Inc. (“HNCA”), Health Net Community Solutions, Inc. (“HNCS”) and Managed Health Network (“MHN”), will become indirect subsidiaries of Centene.

The change of control will occur as a consequence of the proposed merger of a wholly owned subsidiary of Centene with and into Health Net, Inc. pursuant to which Centene will become the ultimate controlling person of Health Net, Inc. and, indirectly, HNCA, HNCS and MHN (the “Merger”). Chopin I and Chopin II are acquisition subsidiaries formed by Centene for the purpose of implementing the Merger. Upon the closing of the Merger, Chopin I will be merged out of existence when it merges with and into Health Net, Inc. so that Health Net, Inc. is the surviving entity and a direct wholly owned subsidiary of Centene. If certain criteria are met, a second merger will be effected pursuant to which Health Net, Inc. will be merged with and into Chopin II, so that Chopin II will be the surviving entity and a direct wholly owned subsidiary of Centene (the “Second Merger”). If the Second Merger is effected, immediately following its consummation, Chopin will be renamed Health Net, Inc.

HNCA, HNCS and MHN have filed documents related to the Merger in Notices of Material Modification Nos. 20151955, 20151958, and 20151959. In addition, Centene’s subsidiary, California Health & Wellness Plan (“CHWP”), has filed documents related to this transaction in Amendment No. 20151945.

To demonstrate continued compliance with the Knox-Keene Health Care Service Plan Act of 1975, California Health and Safety Code section 1340 et seq. (the “Act”) and the Act’s corresponding regulations at Title 28, California Code of Regulations (the “Rules”), Centene, Health Net, Inc., HNCA, HNCS, MHN and CHWP agree to the following Undertakings and acknowledge that any Orders issued by the Department of Managed Health Care (“Department”) approving Material Modification Nos. 20151955, 20151958, and 20151959 and Transmittal approving Amendment No. 20151945 incorporate and are conditioned upon the Undertakings set forth below, and that the Undertakings are enforceable as Orders of the Department. By so doing, Centene, Health Net, Inc., HNCA, HNCS, MHN and CHWP agree to fully and completely comply with these Undertakings and agree that they will not violate these Undertakings.

References to “Undertakings Tracking” in these Undertakings means a submission through the Undertakings Tracking section of the Department’s e-filing portal.

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March 18, 2016

Filing Requirements

Undertaking 1

Within 35 days after the closing of the Merger, HNCA, HNCS, and MHN shall submit the following as an Amendment filing in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4:

(a) Copies of all required notices and consents for the contracts identified in HNCA, HNCS, and MHN’s September 28, 2015 response to Comment No. 6,

(b) An update of the conditions referenced in HNCA, HNCS, and MHN’s September 28, 2015 response to Comment No. 10 not previously provided to the Department,

(c) An update regarding the status of the Second Merger,

(d) An update to Exhibit D-2 regarding the status of the filings with governmental authorities not previously provided to the Department, and

(e) Any press releases or public announcements related to the Merger not previously provided to the Department.

Undertaking 2

HNCA, HNCS, MHN and CHWP shall submit an Amendment or Notice of Material Modification filing in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 if any of the following are proposed:

(a) Changes to HNCA, HNCS, MHN, or CHWP’s provider contracts;

(b) Changes to HNCA, HNCS, MHN, or CHWP’s operations; or

(c) Changes to HNCA, HNCS, MHN, or CHWP’s marketing and solicitation arrangements.

Undertaking 3

HNCA, HNCS, and MHN shall file as an Amendment filing in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 an executed copy of the following documents within five calendar days of the document being executed:

(a) The Second Merger Agreement, and

(b) The amended contract for the Medicare Advantage Special Needs Plan.

Financial Requirements

Undertaking 4

Centene and Health Net, Inc. promise the following:

(a) All of the executive compensation by reason of the Merger, including change in control payments, acceleration of outstanding equity incentives, and signing/retention bonuses (together “CIC Benefit”) shall be the responsibility of Centene, except for severance payments required to be made in connection with the Merger, which shall be the responsibility of Health Net, Inc.;

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March 18, 2016

(b) Centene shall have on hand cash and committed borrowing facilities at the time of the closing of the Merger that are adequate to timely discharge all obligations relating to the CIC Benefit;

(c) Centene shall have on hand cash and committed borrowing facilities at the time of the closing of the Merger that are adequate to timely discharge the long-term indebtedness for borrowed money of Health Net, Inc. Such long-term indebtedness for Health Net, Inc. was $610 million as of September 30, 2015;

(d) No amounts relating, directly or indirectly, to the CIC Benefit shall be the obligation of HNCA, HNCS, or MHN;

(e) No amounts relating, directly or indirectly, to the CIC Benefit shall be charged to or made the responsibility of HNCA, HNCS, or MHN, directly or indirectly, under any reimbursement or cost allocation arrangement; and,

(f) Centene further represents and warrants that there are no CIC Benefit payments owed by Centene by reason of the Merger to any of Centene’s officers, directors, or key management.

Centene and Health Net, Inc. shall confirm the above via Undertaking Tracking within 30 days after the closing of the Merger.

Undertaking 5

HNCA, HNCS or MHN shall not declare or pay dividends, make other distributions of cash or property or in any other way upstream any funds or property to its shareholders or any of HNCA, HNCS, or MHN affiliates (“Affiliate Company Distributions”) without adequate consideration if such actions would cause any of the following:

(a) Cause HNCA, HNCS, and MHN to fail to maintain at all times the greater of the following:

i. For HNCA, 250% of the minimum tangible net equity (which annualized amount shall be calculated by multiplying the applicable current quarter revenues and expenditures by four) currently required by Section 1374.64(b)(1) of the Act;

ii. For HNCS, 250% of the minimum tangible net equity (which annualized amount shall be calculated by multiplying the applicable current quarter revenues and expenditures by four) currently required by Section 1374.64(b)(1) of the Act;

iii. For MHN, 250% of the minimum tangible net equity (which annualized amount shall be calculated by multiplying the applicable current quarter revenues and expenditures by four) currently required by Section 1374.64(b)(1) of the Act; or

iv. 100% of minimum tangible net equity as may be required following any future amendment to Section 1374.64 of the Act or Rule 1300.76, or any successor statute or regulation; or

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March 18, 2016

(b) Result in insufficient working capital or insufficient cash flows necessary to provide for the retirement of existing or proposed indebtedness of HNCA, HNCS or MHN, as required by Rule 1300.75.1(a); or

(c) Adversely affect the ability of HNCA, HNCS or MHN to provide health care services.

For purposes of these Undertakings, “Affiliate Company Distributions” shall not be deemed to refer to payments made under the terms of any administrative service agreement or tax sharing agreement, which has been filed with and received prior approval from the Department.

Undertaking 6

HNCA, HNCS, and MHN shall not take any of the following actions prior to the submission of a Notice of Material Modification in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 and the receipt of the Department’s Order of Approval:

(a) Cosign or guarantee any portion of any current or future loans and/or credit facilities entered into by HNCA, HNCS or MHN shareholders, the HNCA, HNCS or MHN affiliates, or any other affiliated shareholders; or

(b) Permit any portion of loans obtained by HNCA, HNCS or MHN shareholders, HNCA, HNCS, or MHN affiliates, or any other affiliate shareholders to be assumed by HNCA, HNCS or MHN unless HNCA, HNCS or MHN are currently a party to a loan; or

(c) Allow a pledge or hypothecation of HNCA, HNCS, or MHN assets in any way connected with any current or future loans of HNCA, HNCS, or MHN shareholders, HNCA, HNCS, or MHN affiliates or any other affiliated shareholders; or

(d) Borrow any funds or otherwise incur any indebtedness for the purpose of making any Affiliate Company Distribution, except any Affiliate Company Distribution that is made in compliance with this Undertaking, or a payment made pursuant to any written administrative services agreement or tax sharing agreement between or among HNCA, HNCS, or MHN on the one hand, and HNCA, HNCS, or MHN affiliates or shareholders or any other affiliate shareholders, on the other hand.

Undertaking 7

HNCA, HNCS and MHN shall ensure that written disclosure, by commercially reasonable means, of Undertakings 5 and 6 is provided to any and all future holders of any loans and/or credit facilities of HNCA, HNCS, or MHN affiliates, to the extent that HNCA, HNCS, or MHN assets are involved in such loans and/or credit facilities, to ensure that the holder of such instrument(s) has written notice that the satisfaction of any obligations under such instrument(s) is subordinated to obligations of HNCA, HNCS, or MHN under the Act and Rules thereunder.

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March 18, 2016

Undertaking 8

For three years following the closing date of the Merger, HNCA, HNCS, and MHN shall file with the Department, a Schedule that reports the estimated claims payable; reported or unreported medical liability at the end of each such quarter; and the amount of the claims payable reported on lines 3 through 6 of Report #1 – Part B: Liabilities and Net Worth. This Schedule shall be filed with the HNCA, HNCS, and MHN Quarterly Financial Reports filed with the Department each calendar quarter. If filed through eFiling, the Schedule must be filed as an Exhibit HH-32 and must be accompanied by a Request for Confidentiality as described below.

The estimated unreported medical liability (incurred-but-not-reported claim liability) at the end of each such quarter shall be prepared by HNCA, HNCS, and MHN and by the HNCA, HNCS, and MHN or Centene chief actuary, chief financial officer, or other appropriate financial officer, ensuring the unreported medical liability is in accordance with actuarial standards of practice which generally require that the unreported medical liability estimates be adequate to cover obligations under moderately adverse conditions.

Annually, HNCA, HNCS, and MHN shall obtain, provide, and include as part of its required financial filings, an actuarial opinion by an independent actuarial or accounting firm reasonably acceptable to the Department.

Upon Request for Confidentiality, the Department shall grant confidential treatment to the Schedule filed pursuant to this Undertaking for indefinite period of time. In each Request for Confidentiality, HNCA, HNCS, and MHN shall reference the File Number of this Undertaking and Order, and describe the confidential and proprietary nature of the information provided in the Schedule. The Department shall provide HNCA, HNCS, and MHN with appropriate notice of any judicial or other effort to compel the Department to disclose this information in accordance with Rule 1007.

Undertaking 9

After the closing date of the Merger, if HNCA, HNCS, and MHN desire to amend, change, terminate or replace their tax sharing agreements, as previously filed with and approved by the Department, HNCA, HNCS, and MHN shall file any changes to those tax sharing agreements as a Notice of Material Modification in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4.

Undertaking 10

HNCA, HNCS, MHN, and CHWP shall promptly pay for the reasonable costs arising from activities of the Department with respect to each such plan, including any necessary out-of-state travel, incurred in the course of verifying and auditing compliance by HNCA, HNCS, MHN, and CHWP with each of the Undertakings set forth herein. Such activity shall be conducted, at the Department’s discretion, in addition to any of the surveys, audits, examinations, or inquiries required or permissible under the Act.

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Undertaking 11

Health Net, Inc. and Centene shall not use any form of push-down accounting methods that result in the transfer or allocation of any of Heath Net Inc., or Centene’s goodwill, including goodwill related to this Merger, to HNCA, HNCS, and MHN.

Premium Rates

Undertaking 12

HNCA, MHN and Centene represent and warrant that premiums payable by HNCA and MHN enrollees (including copayments and deductibles) will not increase as a result of costs incurred in financing, analyzing and/or consummating the Merger (Merger Costs). Such costs include but are not limited to, attorneys’ and investment bankers’ fees, travel expenses, the CIC Benefit, due diligence expenses, and expenses related to concurrent or future mergers or acquisitions by Centene affiliates, other than HNCA.

HNCA and Centene further represent and warrant that, subject to any exceptions filed with and approved by the Department:

(a) HNCA and MHN practices and methodologies for determining premium rates in the California market after the Merger shall not materially vary from HNCA and MHN pre-Merger practices and methodologies;

(b) HNCA and MHN practices and methodologies for determining products and benefit designs in the California health plan market after the Merger shall not materially vary from HNCA and MHN pre-Merger practices and methodologies;

(c) No debt rating factor relating to the indebtedness that Centene has incurred to finance the Merger shall be included in HNCA and MHN’s premium practices and methodologies post-Merger;

(d) In the event that there are reductions in the level of reimbursement of HNCA and MHN health care providers, as defined in Section 1345(i) of the Act, such reductions shall not be attributable to the Merger Costs; and

(e) In the event that there are reductions in the benefits in HNCA and MHN products sold in California markets, such reductions shall not be attributable to the Merger Costs.

To appropriately measure the Merger’s effect on premium rates and product offerings, the Department must evaluate certain confidential and proprietary business information, including pre- and post-merger target profit levels, and lists of retention items with respect to commercial product offerings by HNCA and/or MHN.

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HNCA shall provide the following information to the Department for the purposes of determining compliance with this Undertaking:

(f) Through eFiling, as an Exhibit HH-32, filed within sixty (60) days of the close of the Merger:

i. A list of the target profit levels for each commercial product (consisting of individual, small group and large group products) at the time of the closing of the Merger;

ii. A list of all retention items for each commercial line of business at the time of the closing of the Merger; and

iii. A Request for Confidentiality referencing this Undertaking and its related Filing Number, and describing the proprietary and confidential nature of the information filed.

(g) Through eFiling, as an Exhibit HH-32, filed annually, for the duration of these Undertakings, as an attachment to HNCA Actuarial Memorandum (see (c) below):

i. An annual update of the list of the target profit levels for each commercial product (consisting of individual, small group and large group) at the time of the closing of the Merger;

ii. An annual update of the retention items for each commercial product at the time of the closing of the Merger; and

iii. A Request for Confidentiality referencing this Undertaking and its related Filing Number, and describing the proprietary and confidential nature of the information filed.

(h) Annually, through eFiling, as an Exhibit HH-32, within 60 days following the end of the calendar year, an Actuarial Memorandum, signed by the HNCA or Centene chief actuary, CFO or similar officer, that certifies that no portion of the cost components of any premium rate charged for any commercial product offered in California by HNCA or MHN includes a charge related to the Merger Costs or to the community investments in Undertaking 27.

(i) HNCA and MHN shall provide the Department with at least 60 days’ prior written notice of any premium adjustments for its small group and individual commercial products.

Upon Request for Confidentiality, the Department shall grant confidential treatment, to the extent permitted by law, to confidential and proprietary information submitted pursuant to this Undertaking and shall provide HNCA and MHN with appropriate notice of any judicial or other effort to compel the Department to disclose confidential information, in accordance with Rule 1007.

The Department may, in addition to the activities described in Undertaking 10 below, audit or examine HNCA and/or MHN and its books and records with respect to the foregoing certifications, to the extent deemed necessary or desirable at the discretion of the Director. In the

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event that the Department uses a third party auditor(s), the Department’s auditor(s) shall sign confidentiality agreements to ensure the confidential treatment of confidential and proprietary information reviewed as part of any audit, consistent with the confidentiality protections provided for in these Undertakings and in Rule 1007.

Undertaking 13

Centene and HNCA agree that controlling health care costs is of the utmost importance. This means that HNCA will make every effort to keep premium rate increases to a minimum. For any HNCA premium rate increase deemed unreasonable or unjustified by the Department, HNCA agrees to meet and confer with the Department and make a good faith attempt to resolve any differences regarding the premium rate increase. This applies to all commercial lines of business subject to rate review by the Department at the time the rate is filed.

Key Functions, Management and Books/Records Based in California

Undertaking 14

Centene and Health Net, Inc. commit that, consistent with Centene’s “local approach” business model, the Chief Executive Officer / President (s) overseeing the California operations of HNCA, HNCS and MHN shall be based in California as well as the leaders responsible for local functions described below. Centene and Health Net, Inc. further commit that job functions currently performed at the time of the filing by employees in California who directly interact with members and providers in California for HNCA, HNCS, and MHN will continue to be performed in California after the Merger. After the Merger is completed, HNCA, HNCS, and MHN shall maintain leaders overseeing, as well as personnel to maintain adequate organizational and administrative capacity, at a minimum for the following functions and positions in California consistent with their practices in effect prior to the Merger:

(a) Clinical decision-making and California medical policy development by any clinical personnel responsible for California medical decision-making and California medical policy, including determination of HNCA, HNCS, and MHN prescription drug formularies, including a Chief Medical Officer(s), medical directors and other clinicians;

(b) Prior authorization and referral functions;

(c) Enrollee grievance and appeal functions;

(d) Network Management;

(e) Provider servicers, including membership accounting and provider directories;

(f) Independent Medical Review process;

(g) Underwriting functions;

(h) Provider Dispute Resolution Mechanism process;

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(i) Key management personnel, including senior financial staff; and

(j) Key regulatory, legal, financial and compliance officers and other personnel performing state and federal compliance functions, including personnel knowledgeable with the Act and Rules as well as the laws governing Medi-Cal and any other applicable law.

These aforementioned functions shall be conducted in conformity with California standards, and timeframes, as required by the Act. HNCA, HNCS, and MHN confirm to the Department that they intend to maintain offices in California, which shall continue to serve as headquarters for HNCA, HNCS, and MHN health plan operations.

Undertaking 15

HNCA, HNCS, and MHN agree that they shall not remove, or require, permit, or cause the removal of any HNCA, HNCS, and MHN books and records, as defined in the Act, from California prior to the submission of a Notice of Material Modification in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 and the receipt of the Department’s Order of Approval. Further, notwithstanding any failure or omission on the part of HNCA, HNCS, and MHN, or that of an affiliate, to maintain the records of HNCA, HNCS, and MHN in California, HNCA, HNCS, and MHN agree that they shall return to California, as may be required by the Department, within the timeframe specified by the Department, any such HNCA, HNCS, and MHN books and records that have been removed from California without the Department s express, written permission. This Undertaking shall not restrict HNCA, HNCS, and MHN from maintaining books and records in an electronic format, as long as electronic books and records are contemporaneously available in California.

Undertaking 16

In the event of any Change(s), as defined below, to an administrative services agreement (“ASA”) to which HNCA, HNCS, and MHN are a party with any HNCA, HNCS, and MHN affiliate, or through which HNCA, HNCS, and MHN receive services, HNCA, HNCS, and MHN shall file a Notice of Material Modification in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 and shall not implement prior to the receipt of the Department’s Order of Approval.

“Change” is defined for purposes of this Undertaking to be an amendment, modification, termination, or replacement of an ASA, which involves any of the following:

(a) The addition of a new service or a change in the scope of services;

(b) Change to reimbursement terms or method of reimbursement for services performed on behalf of HNCA, HNCS, and MHN;

(c) Change to the location of books and records documenting performance of the services performed on behalf of HNCA, HNCS, or MHN pursuant to an ASA, resulting in removal of the ASA provider’s books and records outside of California;

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(d) Change to the location of performance of any of the functions from California to another state or country, or from a state other than California to another state or country; or

(e) Change to the legal identity of the entity performing HNCA, HNCS, and MHN functions on behalf of HNCA, HNCS, and MHN pursuant to an ASA, unless the entity is a HNCA, HNCS, and MHN affiliate.

Undertaking 17

Centene has acknowledged an understanding of the important and vigorous role HNCA, HNCS, MHN, and CHWP play in the California market. Centene has further acknowledged that HNCA and MHN plan to maintain and expand product offerings in the individual, small and large group commercial markets, including Covered California and CalPERS, with HNCS and CWHP collectively maintaining participation in the Medi-Cal market. Accordingly:

(a) HNCA and MHN-shall continue to make all commercially reasonable efforts in good faith to operate as an ongoing, economically viable and active competitor in the commercial market in California, including but not limited to the individual, small and large group markets, such as Covered California and CalPERS.

(b) HNCA, HNCS, and MHN shall take all reasonable steps in good faith to preserve and maintain the value and goodwill of HNCA, HNCS and MHN and their products in California, including continuing to strive to grow in the California health care market. As part of this commitment, HNCA, HNCS, and MHN shall use commercially reasonable efforts to develop and offer product offerings that support the California growth strategy. HNCA, HNCS, and MHN shall refrain from disparaging any product offering in the marketing or sales of that product. This Undertaking 17 does not preclude HNCA,HNCS, and MHN from employing growth strategies that emphasize certain geographic regions over others.

(c) HNCA, HNCS, MHN, and CHWP shall annually file a report to the Director via Undertaking Tracking as to their plans for expansion or exit from any market segment or geographic area, including any action that is likely to result in a 50% or more decrease in covered lives in a market segment. HNCA, HNCS, MHN, and CHWP shall provide reasonable detail as to the nature and scope of any planned product offerings and a summary of actions they took in the previous year to expand in any market segment and the outcomes of such actions. Upon Request for Confidentiality, the Department shall grant confidential treatment, to the extent permitted by law, to confidential and proprietary information submitted pursuant to this Undertaking and shall provide HNCA, HNCS, MHN, and CHWP with appropriate notice of any judicial or other effort to compel the Department to disclose confidential information, in accordance with Rule 1007.

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Plan Performance

Undertaking 18

Within 90 days of issuance of the final reports identified in this Undertaking, and quarterly thereafter, until the Department has verified the deficiencies are corrected or has issued a Follow-Up Survey Report confirming that the deficiencies are corrected, or in the case of a financial examination, a finding by the Department that the deficiencies have been corrected, CHWP shall submit status reports on the implementation of any corrective actions plans and file them via Undertakings Tracking to address the following:

(a) All uncorrected deficiencies identified by the Department in the Final Report resulting from the survey conducted by Department for the review period of June 1, 2014 through May 31, 2015 (“CHWP Survey Final Report”), and

(b) All uncorrected deficiencies identified by the Department in the CHWP Examination Final Report resulting from the routine financial examination conducted by the Department for the review of quarter-ending September 30, 2015.

(c) All uncorrected deficiencies identified by the Department of Health Care Services (“DHCS”) in its 1115 Waiver Seniors and Persons with Disabilities and Rural Expansion surveys conducted in May 2015. In addition, CHWP agrees to address the preliminary Quality Management findings from the DHCS survey report, which require the following actions:

i. Ensure that grievances related to medical quality of care issues are referred to the Medical Director.

ii. Ensure that potential quality issues identified are appropriately assigned based on the nature of the issue.

In order to discharge section (c) of this Undertaking, CHWP shall request documentation from DHCS annually, beginning with 2017, confirming its progress on or satisfaction of the requirements of the Undertaking, which it shall file via Undertaking Tracking.

Undertaking 19

Within 90 days of issuance of the final report, and quarterly thereafter, until the Department has verified that the deficiencies are corrected or has issued a Follow-Up Survey Report confirming that the deficiencies are corrected, MHN shall submit status reports on the implementation of any corrective action plans and file them via a submission through the Undertakings Tracking section of the Department’s e-filing portal. The status reports shall address all uncorrected deficiencies identified by the Department in the Final Report resulting from the survey conducted by Department for the review period of February 2013 through February 2015.

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Undertaking 20

HNCS shall timely correct any and all deficiencies identified by DHCS in its annual and Coordinated Care Initiative audits conducted in May 2015 or by DHCS related to technical assistance and corrective action plans. HNCS will report to DHCS in accordance with timelines already established by DHCS. In addition, HNCS agrees to the following in the areas of Quality and the DHCS Medical Audit:

Quality

HNCS shall meet all of the Quality Corrective Action Plan (“CAP”) goals and milestones, as agreed upon by both DHCS and HNCS, and memorialized in the CAP Framework document issued on or after December 9, 2015 or any future iterations of this document as it may be updated due to performance in this or in future years, which covers a total of ten indicators over three reporting units. The CAP requires quality performance improvements on Annual Monitoring for Patients on Persistent Medications ACE inhibitors and Diuretics, Prenatal & Postpartum Care-Timeliness of Prenatal Care and Postpartum Care, and Comprehensive Diabetes Care Bundle -Eye Exam (Retinal) Performed and HbAlc Testing Improvement Projects or Performance Improvement Projects and that improvement would continue for a minimum of four years or until:

(a) HNCS achieves statistically significant improvement over baseline, sustained for at least one re-measurement year, and exceeds the Minimum Performance Level (“MPL”) for each CAP indicator in each reporting unit impacted by the CAP; and

(b) Inclusive of the CAP indicators subject to the MPL, HNCS can meet or exceed the MPL for 85% of all indicators at the plan level, excluding new reporting units in their first year of operation, no later than Measurement Year 2018/Reporting Year 2019 and maintain for one re-measurement year.

In relation to quality improvement efforts, HNCS shall participate in the DHCS Quality Collaboratives and other State led quality improvement efforts, Plan-Do-Study-Act, Improvement Projects and Performance Improvement Projects. In addition to addressing new areas of improvement as those arise, HNCS shall continue efforts around achieving improvement in all of the Improvement Projects and Performance Improvement Projects bundles as described below:

(a) CAP bundles: (may have some non-CAP counties participating in the CAP measure bundle):

i. Patients on Persistent Medications ACE inhibitors and Diuretics: Los Angeles, Sacramento, San Diego, San Joaquin, Stanislaus and Tulare

ii. Comprehensive Diabetes Care Bundle: Sacramento, San Diego and Stanislaus

iii. Prenatal & Postpartum Care-Timeliness of Prenatal Care: Los Angeles, San Diego and Kern

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(b) Non-CAP bundles:

i. Medication Management for Asthma – Medications Compliance 50% and Medication Compliance 75%: Tulare and Kern

ii. Prenatal & Postpartum Care-Timeliness of Postpartum Care: San Joaquin, Los Angeles and San Diego

iii. Cervical Cancer Screening: Los Angeles, Sacramento, San Joaquin, Stanislaus, Kern and San Diego

iv. Childhood Immunization Status – Combo 3 and Immunizations for Adolescents: Sacramento, San Joaquin and Stanislaus

DHCS’ Medical Audit

DHCS has imposed a Corrective Action Plan on HNCS in relation to the 2015 HNCS annual medical audit. HNCS has a number of audit findings in the Member’s Rights category. These findings were related to informing members of their rights in a timely manner, lack of clarity in stated reasons for decisions, and the lack of ability to track and respond to certain aspects of member grievances. Additionally, HNCS has a number of audit findings in the Case Management and Care Coordination category. These findings were related to the lack of documentation of the coordination of care for carved out services, and inadequate subcontractor monitoring and untimely prior authorization. HNCS agrees to address all audit findings within the timeframes established by DHCS which shall require the following actions:

(a) Member Rights

i. When issuing a denial Notice of Action, include understandable and specific reasons for decisions pursuant to the DHCS contract and Section 1368 of the Act and Rule 1300.68.

ii. Ensure that contractual and regulatory timeframes are met when responding to member grievances.

iii. Consistently monitor and track the member grievance system for utilization (over and under) and possible systemic or trending concerns arising from appeal reviews.

(b) Case Management & Coordination of Care

i. Monitor and educate providers more consistently on the following topics:

1. California Children’s Services (CCS) services to members;

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2. Early Intervention/Developmental Disabilities services to eligible members; and

3. Basic & Complex Case Management Services.

ii. Ensure effective communication between the plan and provider for more efficient coordination of care.

In order to discharge this Undertaking, HNCS shall request documentation from DHCS annually confirming its progress on or satisfaction of the requirements of the Undertaking, which it shall file via Undertaking Tracking.

Undertaking 21

HNCS and CHWP agree to meet all Medi-Cal managed care health plan requirements for encounter data submission. This includes the correction of encounter records submitted since November, 2014 with invalid paid amounts. When the contracted payment type for a health care service is non-capitated, paid amounts shall be correctly populated in the 837 Institutional and Professional encounter data transactions. HNCS and CHWP shall evaluate their reporting process to determine if paid amounts are populated in the appropriate fields for DHCS submission. If deficiencies are found, HNCS and CHWP shall correct the deficient encounters via replacements even if the encounter was previously accepted. This applies to all encounters submitted to the Post-Adjudicated Claims and Encounters System (“PACES”) retrospectively and moving forward.

In addition, HNCS and CHWP agree to collaborate with contracted providers regarding how to report appropriately utilizing standardized codes, including but not limited to, meeting thresholds for completeness, accuracy, reasonability and timeliness. HNCS and CHWP further agree the data from delegated entities that has been submitted to DHCS is complete.

HNCS and CHWP agree to meet all Medi-Cal managed care health plan requirements for the transition to monthly provider data submission via the X12 274 Transaction through the PACES system. HNCS and CHWP shall initiate system testing in the first quarter of 2016 and production readiness by the end of the second quarter of 2016.

In order to discharge this Undertaking, HNCS shall request documentation from DHCS annually confirming its progress on or satisfaction of the requirements of the Undertaking, which it shall file via Undertaking Tracking.

Undertaking 22

HNCA agrees to improve its performance on Right Care Initiative indicators for cardiovascular disease, hypertension and diabetes, with a goal of reaching, at a minimum, the national 90th percentile performance rate for all health plans participating in the Right Care Initiative, by no later than the performance measurement period ending December 31, 2019.

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HNCA shall report to the Department its action plans and progress on this Undertaking every six months beginning six months after the closing date of the Merger. Within 60 days following the availability of indicators for the 2019 performance measurement period, HNCA shall file a final report with the Department which includes a summary of the actions taken and outcomes. In the event that HNCA fails to reach the national 90th percentile performance rate for all health plans participating in the Right Care Initiative, within 60 days following the availability of indicators for the 2019 performance measurement period, HNCA shall submit a written corrective action plan acceptable to the Department for improving outcomes for these patients.

Undertaking 23

HNCA agrees to improve any star rating on the 2015-16 Office of the Patient Advocate Quality Report Card for HNCA that is two stars or below with a goal to reach a minimum of three stars (on a four star scale) or four stars (on a five star scale), including, but not limited to, Behavioral and Mental Health care, Asthma and Lung Disease care and Patient Experience scores, by no later than the performance measurement period ending December 31, 2019.

HNCA shall report to the Department its action plans and progress on this Undertaking every six months beginning six months after the closing date of the Merger. Within 60 days following the availability of indicators for the 2019 performance measurement period, HNCA shall file a final report with the Department which includes a summary of the actions taken and outcomes.

Undertaking 24

For a period of three years following the closing of the Merger, HNCA, HNCS and CHWP agree to participate in programs designed to educate high risk patients and their support teams regarding prevention of heart attacks, strokes and diabetes. HNCA, HNCS, CHWP and MHN also agree to participate in programs designed to promote health literacy education.

No later than 90 days following the date of the closing of the Merger, HNCA, HNCS, MHN, and CHWP shall file a plan with the Department via Undertakings Tracking specifying the programs in sufficient detail, including a description of the program and its methods and goals, for the Department to evaluate and approve prior to the plans initiating their participation. HNCA, HNCS, CHWP and MHN shall file via Undertakings Tracking an annual report describing the progress of these programs with the last report due following the 2018 calendar year.

Undertaking 25

For a period of three years following the closing date of the Merger, HNCA, HNCS, and CHWP agree to assign a medical director to attend and actively and constructively participate in the University of Best Practices learning collaborative in Sacramento, Los Angeles, and San Diego, and to deliver an annual presentation and written report to representatives of the Department, the University of Best Practices learning collaborative, and HNCA, HNCS, and CHWP’s contracted medical groups and IPAs regarding improvements made in HNCA, HNCS, and CHWP and its affiliates’ quality measures during the past year, as well as targets for improvements during the upcoming year.

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For a period of three years following the closing date of the Merger, HNCS agrees to actively and constructively participate in the Healthy San Diego Collaborative sponsored by the County of San Diego Health and Human Services Agency.

HNCA, HNCS, MHN, and CHWP shall file via Undertakings Tracking annual reports describing the progress of these programs with the last report due following the 2020 calendar year.

Undertaking 26

Centene does not currently participate in the California commercial health plan market. Within three months after the date of the issuance of the Order of Approval, Centene will file a report to the Department describing its plan to increase its proficiency in the California commercial health plan market. Centene will file a final report with the Department one year from the date of the three-month report filing, which will include a summary of the actions it took and the outcomes.

Undertaking 27

HNCA, HNCS, MHN, and CHWP agree that accurate, complete, and accessible provider directories reflecting adequate networks of contracted providers are essential to enrollees. HNCA, HNCS, MHN, and CHWP will publish and maintain printed and online provider directories in compliance with section 1367.27 by July 1, 2016, and will correct any deficiencies in provider network adequacy identified by the Department within applicable regulatory timelines.

Undertaking 28

HNCA, HNCS, MHN, and CHWP agree to cooperate fully, in compliance with the Act and Rules to the reasonable satisfaction of the Department, with any and all requests for information from the Department and its contractors, including but not limited to requests for information generated by the Department’s Help Center, Office of Plan Licensing, Office of Financial Review and Office of Enforcement. This includes, but is not limited to, compliance with requests for health plan information and financial information.

Community Investments

Undertaking 29

Following the date of the issuance of the Order of Approval, and subject to preapproval by the Director, HNCA, HNCS, MHN, and CHWP, agree to make community investments as follows:

(a) Create a grant program to support locally-based consumer assistance programs. The program shall provide a minimum of $5 million over five years.

(b) Contributions of $10 million over 5 years to support programs designed to improve enrollee health outcomes in rural and/or underserved areas of California. At least one program shall be located in the Central Valley, defined as the counties of Kern, Tulare, Kings, Fresno, Madera, Merced, Stanislaus, and San Joaquin.

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(c) Contributions of $50 million over 5 years to strengthen the infrastructure of the Medi-Cal health care delivery system, particularly for Medi-Cal providers contracted with managed care plans, that will improve the completeness and accuracy of encounter data and provider directories.

(d) In making a commitment to these programs, HNCA, HNCS, MHN, and CHWP recognize that expertise will be necessary to achieve the goals of the identified programs. HNCA, HNCS, MHN, and CHWP agree to establish and participate on an Advisory Committee approved by the Department and California Health and Human Services Agency that will make recommendations and provide expertise and guidance for project development and implementation. Funding for the programs listed in categories (a), (b), and (c) shall be based upon a demonstration of need to the reasonable satisfaction of Centene, based upon recommendations from the Advisory Committee and subject to the Director’s preapproval. In the event an amount under category (a), (b), or (c) above is reduced, the funds saved as a result of the reduction shall be contributed to one of the other of these categories, subject to approval from the Department. Contributions for compliance with subparagraphs (a), (b), and (c) may be disbursed through a grant application process to be developed by Centene in consultation with the Advisory Committee. Within 6 months after the closing of the transaction, Centene shall begin formulating a plan for carrying out the Advisory Committee’s responsibilities and developing appropriate guidelines, policies and procedures, subject to approval by the Department. Centene shall begin implementing this plan within twelve (12) months following the closing date of the Merger.

(e) HNCA, HNCS, MHN, and CHWP agree to participate significantly in both the program to standardize encounter data submissions across all lines of business and the Provider Directory Project.

(f) Investments of $200 million for providing new jobs supporting the California health care industry in an economically distressed community in California. To satisfy this commitment, within twelve (12) months following the closing date of the Merger, Centene shall submit to the Department a detailed and comprehensive plan (the “Plan”) for the employment of at least 300 individuals and construction of a new multi-building facility (the “Service Center”). Prior to the submission of the Plan, Centene will consult with the Department, the California Health and Human Services Agency and the California Governor’s Office of Business and Economic Development regarding the selection of a location for the Service Center within California that will benefit from revitalization. Centene commits to use best efforts to begin construction of the Service Center within nine (9) months following submission of the Plan. The investments made under this section shall include investments in construction costs, costs of wages and benefits, and operating costs over the first ten (10) years of the Service Center’s operations. Centene shall report annually to the DMHC beginning with the 2020 calendar year showing invested amounts that are directly related to the Service Center.

(g) Investments of $75 million in California’s health care infrastructure (the “Infrastructure Investment”). The purpose of the Infrastructure Investment is to provide capital to

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entities that provide health services to currently underserved communities or populations throughout California in need of such capital, and find access to such capital challenging for various reasons. Such investments could include investments that (i) expand and upgrade physical and technological infrastructure, including, but not limited to, telehealth capabilities for safety net and low income providers through the State of California; (ii) strengthen access to health care resources for, and improve the health status of, low-income urban and rural underserved Californians; (iii) improve electronic health care technology; (iv) support the coordinated care model; (v) implement value-based payment programs; (vi) promote systems changes for quality improvement activities that result in improved health outcomes; or (vii) leverage other investment opportunities.

1. Investments made pursuant to this Undertaking 29(g) will be consistent with financial standards required by the Department and subject to the sound and prudent investment management policies of Centene. The determinations with respect to each investment will be made considering the risk profile and rate of return of such investment, and the overall strength and investment quality of the entire investment portfolio, and will not be unduly restrictive with regard to each individual investment commitment. In addition, the collective impact of the investments made pursuant to this Undertakings 29(g) must be of sufficient creditworthiness and quality so as not to result in the placing of additional capital requirements on Centene by various credit rating agencies (such as Moody’s and Standard & Poor’s).

2. In making the Infrastructure Commitment, Centene recognizes that flexibility and creativity will be necessary to achieve the dual goals of prudent investment and increasing access to underserved communities, and they undertake closely to work with an advisory committee (the “Investment Advisory Committee”) consisting of individuals with experience in community reinvestment and health care delivery for underserved communities, which committee may include representatives or designees of: (i) clinics and other health care providers that serve low income or uninsured rural or urban Californians; (ii) charitable entities that support such clinics and other providers; and (iii) health information technology experts, including persons with expertise in the collection and reporting of quality and performance data. In addition, representatives of the Department, the California Health and Human Services Agency, and Centene will participate in Investment Advisory Committee meetings and activities. The members of the Investment Advisory Committee shall be designated from time to time by Centene in consultation with the Department.

3. Within ninety (90) days following the closing of the Merger, Centene will meet and consult with the California Health and Human Services Agency and the Department to (i) discuss the appropriate type, scope, and range of investments to be made in accordance with this Undertaking 29(g), including community health care services, health care infrastructure, and health information technology investments; (ii) secure advice and feedback regarding the selection of independent investment advisors to the Investment Advisory Committee that are acceptable to the Department; (iii) discuss the composition of the Investment

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Advisory Committee; (iv) discuss the development of an exemption process, if sufficient qualifying assets cannot be identified by the end of the 2020 calendar year; and (v) otherwise take actions and adopt policies, procedures, and guidelines to implement the Investment Commitment.

4. Within six months after the closing of the Merger, the Investment Advisory Committee will be established and, promptly thereafter, the Investment Advisory Committee and Centene shall, in consultation with the investment advisors, begin formulating a plan for carrying out the Investment Advisory Committee’s responsibilities and developing appropriate guidelines, policies, and procedures, subject to approval by the Department. The plan will include the steps Centene will take to publicize the availability of investment capital to the targeted groups.

5. Expenses incurred in administering the Infrastructure Investment, including expenses of outside investment advisors, will be separate from the aggregate Infrastructure Investment amount.

6. Centene anticipates considering specific investments beginning by the second quarter of 2017, with the goal of having the Infrastructure Investment fully funded by the seventh (7^th) anniversary of the closing of the merger. The goal of the Investment Advisory Committee shall be to have at the end of the seventh anniversary of the closing of the merger an investment portfolio with a weighted average maturity of ten (10) years.

7. Centene will provide regular reports to the Investment Advisory Committee and, in connection with each annual statement filed to the Department, will provide the Department with reports on progress made toward the Infrastructure Investment.

Within ninety (90) days following the Closing of the Merger, HNCA, HNCS, MHN, and CHWP shall submit a filing via Undertakings Tracking identifying the plan representatives who shall participate in and have decision making authority for the community investments described above. In addition, HNCA, HNCS, MHN, and CHWP shall submit a filing via Undertakings Tracking identifying its proposals for community investments as identified in subsections (a)-(c), (f), and (g) to this Undertaking 29.

Miscellaneous

Undertaking 30

Notwithstanding the above, these Undertakings do not supersede a requirement for HNCA, HNCS, or MHN requirement to file a Notice of Material Modification when such a filing is required in accordance with the standards set forth in Section 1352 of the Act and Rule 1300.52.4 and the receipt of the Department’s Order of Approval.

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March 18, 2016

Undertaking 31

In addition to the Undertakings executed above, HNCA, HNCS, MHN, and CHWP reassert and reaffirm each and every Undertaking in existence prior to execution of this document, and agree to abide by and confirm to each and every prohibition and condition.

Undertaking 32

For a period of five years, HNCA, HNCS, MHN, and CHWP shall annually file, via Undertakings Tracking, a report outlining the status of each Undertaking. This report will be prepared in a format deemed acceptable by the Department and shall be submitted within sixty (60) days following the end of each calendar year beginning with the 2016 calendar year and ending with the 2020 calendar year.

Undertaking 33

The Undertakings set forth herein shall be enforceable to the fullest extent of the authority and power of the Director of the Department under the provisions of the Act, including all civil, criminal, and administrative remedies (such as Cease and Desist Orders, freezing enrollment, and assessment of fines and penalties). The Undertakings shall act as an Order of the Director. Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP acknowledge that the Act’s enforcement remedies are not exclusive, and may be sought and employed in any combination deemed advisable by the Department to enforce these Undertakings.

Undertaking 34

The Undertakings set forth herein shall be subject to the following terms and conditions:

(a) Binding Effect. The Undertakings set forth herein shall be binding on the Plan and its respective successors and permitted assigns. If Centene, Health Net, Inc, HNCA, HNCS, MHN, and CHWP fail to fulfill its obligations to the Department as provided under the Undertakings set forth herein, Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP stipulate and agree that the Department shall have the authority to enforce the provisions of these Undertakings in a California court of competent jurisdiction or an Office of Administrative Hearing.

(b) Governing Law. The Undertakings set forth herein and their validity, enforcement, and interpretation, shall for all purposes be governed by and construed in accordance with the laws of the State of California.

(c) Venue. The proper venue of any dispute arising from the Undertakings set forth herein shall be Sacramento, California.

(d) Invalidity. In the event that any Undertakings or any portion of any Undertaking set forth herein shall be declared invalid or unenforceable for any reason by a court of competent jurisdiction, the validity or enforceability of any other Undertakings or any portion of any Undertaking shall not affect the validity or enforceability of any other Undertakings, and such other Undertakings shall remain in full force and effect and shall be enforceable to the maximum extent permitted by applicable law.

Page 21 of 23

March 18, 2016

(e) Duration. The Undertakings set forth herein shall become effective upon the closing date of the Merger and except as to those provisions of the Undertakings that contain separate termination provisions, shall remain in full force and effect for five years, ending on the anniversary of the closing date of the Merger, unless terminated sooner by Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP with the written consent of the Department.

(f) Third Party Rights. Nothing in the Undertakings set forth herein is intended to provide any person other than Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP and the Department, and their respective successors and permitted assigns, with any legal or equitable right or remedy with respect to any provision of any Undertaking set forth herein.

(g) Amendment. The Undertakings set forth herein may be amended only by written agreement executed by both Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP and the Department.

(h) Assignment. No Undertaking set forth herein may be assigned by Centene, Health Net, Inc., HNCA, HNCS, MHN, or CHWP, in whole or in part, without the prior written consent of the Department.

(i) Specific Performance. In the event of any breach of these Undertakings, Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP acknowledge that the State of California would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that Centene, Health Net, Inc., HNCA, HNCS, MHN, and CHWP shall waive the defense in any action brought by the Department for specific performance that a remedy at law would be adequate, and the Department should be entitled to seek an injunction or injunctions to prevent breaches of the provisions of these Undertakings and to seek to specifically enforce the terms and provisions stated herein. The Department’s right to seek an injunction does not supersede the remedies available to the Director described in subsection (a) of this Undertaking.

Page 22 of 23

March 18, 2016

Health Net of California, Inc.
Signature:	/s/ Jay Gellert
Date:	3.21.16
Print Name:	Jay Gellert
Print Title:	CEO
Health Net Community Solutions, Inc.
Signature:	/s/ Marie Montgomery
Date:	3.21.16
Print Name:	Marie Montgomery
Print Title:	CFO
Managed Health Network
Signature:	/s/ Jay Gellert
Date:	3.21.16
Print Name:	Jay Gellert
Print Title:	CEO
Health Net, Inc.
Signature:	/s/ Jay Gellert
Date:	3.21.16
Print Name:	Jay Gellert
Print Title:	CEO

Page 23 of 23

March 18, 2016

Centene Corporation
Signature:	/s/ Michael F. Neidorff
Date:	March 21, 2016
Print Name:	Michael F. Neidorff
Print Title:	Chairman & CEO
California Health & Wellness Plan
Signature:	/s/ Keith H. Williamson
Date:	March 21, 2016
Print Name:	Keith H. Williamson
Print Title:	Secretary

EX-99.3

Exhibit 99.3

N E W S  R E L E A S E

Centene:
Media	Investors
Marcela Manjarrez-Hawn	Edmund E. Kroll, Jr.
(314) 445-0790	(212) 759-0382
mediainquiries@centene.com	investors@centene.com
Health Net:
Media	Investors
Brad Kieffer	Peter O’Neill
(818) 676-6833	(818) 676-8692
brad.kieffer@healthnet.com	peter.oneill@healthnet.com

FOR IMMEDIATE RELEASE

CENTENE AND HEALTH NET RECEIVE DMHC REGULATORY APPROVAL

St. Louis, MO and Los Angeles, CA (March 22, 2016) – Centene Corporation (NYSE: CNC) and Health Net, Inc. (NYSE: HNT) today announced the receipt of approval of Centene’s planned merger with Health Net from the California Department of Managed Health Care (DMHC).

Centene and Health Net expect to close the transaction shortly after receipt of approval from the California Department of Insurance, subject to satisfaction or waiver of the closing conditions.

Centene and Health Net announced a merger agreement in July 2015 that would create a leading diversified multi-national healthcare enterprise, extending Centene’s offerings in government programs, including Medicare Advantage and programs offered through contracts with the U.S. Department of Defense and U.S. Department of Veterans Affairs, as well as the commercial exchanges.

###

About Centene

Centene Corporation, a Fortune 500 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. Many receive benefits provided under Medicaid, including the State Children’s Health Insurance Program

(CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care (LTC), in addition to other state-sponsored/hybrid programs, and Medicare. Centene operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Centene uses its investor relations website to publish important information about Centene, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene’s investor relations website, http://www.centene.com/investors.

About Health Net

Health Net, Inc. is a publicly traded managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. Its mission is to help people be healthy, secure and comfortable. Health Net provides and administers health benefits to approximately 6.1 million individuals across the country through group, individual, Medicare (including the Medicare prescription drug benefit commonly referred to as “Part D”), Medicaid and dual eligible programs, as well as programs with the U.S. Department of Defense and U.S. Department of Veterans Affairs. Health Net also offers behavioral health, substance abuse and employee assistance programs, and managed health care products related to prescription drugs.

For more information on Health Net, Inc., please visit Health Net’s website at www.healthnet.com.

Forward-Looking Statements

This material may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Centene, Health Net and the combined businesses of Centene and Health Net and certain plans and objectives of Centene and Health Net with respect thereto, including the expected benefits of the proposed merger. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aim”, “continue”, “will”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the expected closing date of the transaction; the possibility that the expected synergies and value creation from the proposed merger will not be realized, or will not be realized within the expected time period, including, but not limited to, as a result of conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to, the merger; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational

relationships; the risk that unexpected costs will be incurred; changes in economic conditions or political conditions; changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder; provider and state contract changes; the outcome of pending legal or regulatory proceedings; reduction in provider payments by governmental payors; the expiration or termination of Centene’s or Health Net’s Medicare or Medicaid managed care contracts with federal or state governments; tax matters; increased health care costs; the possibility that the merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions; and risks and uncertainties discussed in the reports that Centene and Health Net have filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements reflect Centene’s and Health Net’s current views with respect to future events and are based on numerous assumptions and assessments made by Centene and Health Net in light of their experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause Centene’s and Health Net’s plans with respect to the proposed merger, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this announcement. Neither Centene nor Health Net assumes any obligation to update the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 that has been filed with the SEC on September 21, 2015, in connection with the merger. A further list and description of risks and uncertainties can be found in Centene’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in its reports on Form 10-Q and Form 8-K as well as in Health Net’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

EX-99.4

Exhibit 99.4

N E W S  R E L E A S E

Centene:
Media	Investors
Marcela Manjarrez-Hawn	Edmund E. Kroll, Jr.
(314) 445-0790	(212) 759-0382
mediainquiries@centene.com	investors@centene.com
Health Net:
Media	Investors
Brad Kieffer	Peter O’Neill
(818) 676-6833	(818) 676-8692
brad.kieffer@healthnet.com	peter.oneill@healthnet.com

FOR IMMEDIATE RELEASE

CENTENE AND HEALTH NET RECEIVE CDI REGULATORY APPROVAL

St. Louis, MO and Los Angeles, CA (March 23, 2016) – Centene Corporation (NYSE: CNC) and Health Net, Inc. (NYSE: HNT) today announced the receipt of approval of Centene’s planned merger with Health Net from the California Department of Insurance (CDI).

Centene and Health Net expect to close the transaction in the coming days, subject to satisfaction or waiver of the closing conditions.

Centene and Health Net announced a merger agreement in July 2015 that would create a leading diversified multi-national healthcare enterprise, extending Centene’s offerings in government programs, including Medicare Advantage and programs offered through contracts with the U.S. Department of Defense and U.S. Department of Veterans Affairs, as well as the commercial exchanges.

###

About Centene

Centene Corporation, a Fortune 500 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. Many receive benefits provided under Medicaid, including the State Children’s Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care

(LTC), in addition to other state-sponsored/hybrid programs, and Medicare. Centene operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Centene uses its investor relations website to publish important information about Centene, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene’s investor relations website, http://www.centene.com/investors.

About Health Net

Health Net, Inc. is a publicly traded managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. Its mission is to help people be healthy, secure and comfortable. Health Net provides and administers health benefits to approximately 6.1 million individuals across the country through group, individual, Medicare (including the Medicare prescription drug benefit commonly referred to as “Part D”), Medicaid and dual eligible programs, as well as programs with the U.S. Department of Defense and U.S. Department of Veterans Affairs. Health Net also offers behavioral health, substance abuse and employee assistance programs, and managed health care products related to prescription drugs.

For more information on Health Net, Inc., please visit Health Net’s website at www.healthnet.com.

Forward-Looking Statements

This material may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Centene, Health Net and the combined businesses of Centene and Health Net and certain plans and objectives of Centene and Health Net with respect thereto, including the expected benefits of the proposed merger. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aim”, “continue”, “will”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the expected closing date of the transaction; the possibility that the expected synergies and value creation from the proposed merger will not be realized, or will not be realized within the expected time period, including, but not limited to, as a result of conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to, the merger; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; changes in economic

conditions or political conditions; changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder; provider and state contract changes; the outcome of pending legal or regulatory proceedings; reduction in provider payments by governmental payors; the expiration or termination of Centene’s or Health Net’s Medicare or Medicaid managed care contracts with federal or state governments; tax matters; increased health care costs; the possibility that the merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions; and risks and uncertainties discussed in the reports that Centene and Health Net have filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements reflect Centene’s and Health Net’s current views with respect to future events and are based on numerous assumptions and assessments made by Centene and Health Net in light of their experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause Centene’s and Health Net’s plans with respect to the proposed merger, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this announcement. Neither Centene nor Health Net assumes any obligation to update the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 that has been filed with the SEC on September 21, 2015, in connection with the merger. A further list and description of risks and uncertainties can be found in Centene’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in its reports on Form 10-Q and Form 8-K as well as in Health Net’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.