Balance Sheet Accounts

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Accounts

BALANCE SHEET ACCOUNTS

Commissions Receivable

Commissions receivable activity is summarized as follows:

	Dec. 31,
(in thousands)	2023		2022
Beginning balance	$	1,031,433	$	1,262,507
Commission revenue(1)	360,233		341,467
Cash receipts	(479,999)		(572,741)
Allowance for credit losses	30		200
Ending balance	911,697		1,031,433
Less: Commissions receivable - current	336,215		335,796
Commissions receivable - non-current	$	575,482	$	695,637

(1)Commission revenue includes commissions generated through the Company’s Non-Encompass BPO Services as well as from the sale of individual and family plan insurance products.

The Company’s contracts with health plan partners expose it to credit risk because a financial loss could be incurred if the counterparty does not fulfill its financial obligation. While the Company is exposed to credit losses due to the potential non-performance of its counterparties, the Company considers this risk to be remote. The Company estimates the allowance for credit losses using available information from internal and external sources related to historical experiences, current conditions and forecasts. Estimates of loss are determined by using historical collections data as well as historical information obtained through research and review of other peer companies. The estimated exposure of default is determined by applying these internal and external factors to the commission receivable balances. The Company estimates the maximum credit risk in determining the commissions receivable amount recorded on the Consolidated Balance Sheets.

The commissions receivable balances as of December 31, 2023 and 2022 primarily relate to Medicare Advantage Plans sold during the fourth quarters of 2023 and 2022 with effective dates in 2024 and 2023, respectively.

Property, Equipment and Capitalized Software, Net

Property, equipment, and capitalized software, net, consist of the following:

	Dec. 31,
(in thousands)	2023		2022
Computer equipment	$	9,416	$	7,872
Leasehold improvements	11,811		9,339
Office equipment and furniture	1,628		1,356
Property and equipment	22,855		18,567
Capitalized software	33,101		24,976
Less: Accumulated depreciation and amortization	(29,113)		(18,261)
Property, equipment and capitalized software, net	$	26,843	$	25,282

Depreciation expense related to property and equipment for the twelve months ended December 31, 2023, 2022 and 2021 was $3.9 million, $6.4 million and $9.3 million, respectively.

Amortization expense related to capitalized software was $7.8 million, $6.5 million and $4.2 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

Accrued Liabilities

Accrued liabilities consist of the following:

	Dec. 31,
(in thousands)	2023		2022
Bonuses and commissions	$	11,794	$	23,752
Payroll	11,305		10,865
Marketing costs	18,404		6,949
Interest expense	11,109		179
Other accrued expenses	33,642		11,589
Accrued liabilities	$	86,254	$	53,334