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): September 15, 2008

Health Net, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-12718	95-4288333
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

21650 Oxnard Street, Woodland Hills, California	91367
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (818) 676-6000

Not Applicable

Former name or former address, if changed since last report

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:

¨ 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 7.01.   Regulation FD Disclosure.

On September 16, 2008, members of the management team of Health Net, Inc. (the “Company”) will be presenting at the Bank of America 38th Annual Investment Conference. The Company will have a live audio webcast of its discussion at 12:30 p.m. (Eastern Time) on September 16, 2008 from the “Investor Relations—Presentations and Webcasts” section of its website at www.healthnet.com. A replay of the webcast will be available on the Company’s website, and the Company’s slides for the presentation are attached to this Current Report on Form 8-K as Exhibit 99.1.

The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

CAUTIONARY STATEMENT: Certain statements made in this report contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve a number of risks and uncertainties. All statements, other than statements of historical information provided herein, may be deemed to be forward-looking statements. These statements are based on management’s analysis, judgment, belief and expectation only as of the date hereof, and are subject to uncertainty and changes in circumstances. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate,” “intend” and other similar expressions are intended to identify forward-looking statements. Actual results could differ materially due to, among other things, rising health care costs, negative prior period claims reserve developments, trends in medical care ratios, unexpected utilization patterns or unexpectedly severe or widespread illnesses, membership declines, rate cuts affecting our Medicare or Medicaid business, issues relating to provider contracts, litigation costs, regulatory issues, operational issues, health care reform and general business conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included within the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q filed with the SEC and the risks discussed in the Company’s other periodic filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this report.

Item 8.01 Other Events.

On September 12, 2008, the Company entered into an agreement with the California Department of Insurance (“CDI”) to resolve all matters with the CDI regarding the Company’s rescission of Individual and Family Plan PPO policies from January 1, 2004 to August 15, 2008. The Company believes that the litigation-related charge it took in the first quarter of 2008 is sufficient to cover its potential liability under this settlement.

Item 9.01   Financial Statements and Exhibits.

(d) Exhibits

99.1 Health Net, Inc. Presentation Slides for Bank of America 38^th Annual Investment Conference, dated September 16, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Health Net, Inc.
September 15, 2008	By:	/s/ Linda V. Tiano
		Name: Linda V. Tiano
		Title: Senior Vice President, General Counsel and Secretary

EX-99.1

EXHIBIT 99.1

Bank of America

Bank of America

38

38

th

th

Annual

Annual

Investment Conference

Investment Conference

Jay Gellert

Chief Executive Officer

Health Net, Inc.

September 16, 2008

2

Cautionary Statement

Cautionary Statement

All statements in this presentation, other than statements of historical information, may

be deemed to be forward-looking statements and as such are subject to a number of risks

and uncertainties. These statements are based on management’s analysis, judgment,

belief and expectation only as of the date of this presentation, and are subject to

uncertainty and changes in circumstances. Without limiting the foregoing, statements

including the words “believes,” “anticipates,” “plans,” “expects,” “may,”  “should,”

“could,” “estimate,” “intend” and other similar expressions are intended to identify

forward-looking statements. Actual results could differ materially due to, among other

things, rising health care costs, negative prior period claims reserve developments, trends

in medical care ratios, unexpected utilization patterns or unexpectedly severe or

widespread illnesses, membership declines, rate cuts affecting our Medicare or Medicaid

business, issues relating to provider contracts, litigation costs, regulatory issues,

operational issues, health care reform and general business conditions. Additional factors

that could cause actual results to differ materially from those reflected in the forward-

looking statements include, but are not limited to, the risks discussed in the “Risk

Factors” section included within the company's most recent Annual Report on Form 

10-K and Quarterly Reports on Form 10-Q for the first and second quarters of 2008 filed

with the SEC. Audience participants are cautioned not to place undue reliance on these

forward-looking statements. The company undertakes no obligation to publicly revise

any of its forward-looking statements to reflect events or circumstances that arise after

the date of this presentation.

3

Non-GAAP Measures

Non-GAAP Measures

•

This presentation includes quarterly and full year income

statement measurements that are not calculated and presented

in accordance with Generally Accepted Accounting Principles.

Audience participants should refer to the reconciliation table

available in the company’s second quarter 2008 earnings press

release, available on the company’s Web site at

www.healthnet.com

which

reconciles

certain

non-GAAP

financial information to GAAP financial information.

•

Management believes that the non-GAAP financial information

discussed in this presentation is useful as it provides the

audience a basis to better understand the company’s results by

excluding items that are not indicative of our core operating

results for the periods presented.

,

4

Company Profile

Company Profile

•

National health benefits company serving commercial and

government (Medicare, Medicaid and TRICARE) customers

•

Provide health care benefits to approximately 6.7 million

individuals across the country

•

Offer mental health and pharmacy benefit management

services to approximately 10.3 million individuals

Northeast

region:

CT, NJ, NY

Western

region:

AZ, CA,

OR, WA

5

Diverse Medical Membership Base

Diverse Medical Membership Base

2Q08 Premium Revenue Contribution

Commercial

51%

Medicare

24%

TRICARE

18%

Medicaid

7%

6

2008 Issues

2008 Issues

•

Higher flu costs

•

Prior period development from 2007

•

Higher than expected Medicare costs in 2008

•

Higher than expected commercial costs in 2008

•

Lower than planned commercial enrollment

•

California Medicaid rate reduction

7

Key Responses

Key Responses

•

More conservative cost assumptions

•

2H08 commercial pricing

•

2009 Medicare bid

•

Continued solid performance in Medi-Cal

•

Ongoing G&A improvement

8

Commercial Business

Commercial Business

•

Solid commercial franchises

•

Stable provider networks in all regions

•

Continued pricing discipline

•

Gross margin improvement in 2H08 and 2009

•

Continue to diversify and refresh product portfolio

•

Leverage all distribution channels

9

Medicare

Medicare

•

Submitted 2009 bid focused on margin

improvement in both PDP and MA

•

Grow network-model MA plans/products

–

Reduced focus on PFFS

•

Continue to build on PDP experience

and strengths

•

Opportunities for growth through other

lines of business

10

Medicaid

Medicaid

•

Opportunities for growth through

geographic expansion and reform

•

781,000 members

•

New Jersey:

–

44,000 members in 13 counties

•

California:

–

737,000 members

–

Medicaid in 10 counties

–

Healthy Families Program in

44 counties

–

State may expand Medicaid

managed care program to

11 more counties

11

Federal Services

Federal Services

•

TRICARE North Managed Care Contract

•

Department of Veterans Affairs

–

Claims

repricing

–

Community-based Outpatient

Clinic Program

–

DRG Recovery Audit Contract

•

Partnering with MHN to provide behavioral

health services to military beneficiaries

•

Opportunities

–

Dubai Health Authority support

–

Expand existing capabilities to

new markets and programs

•

TRICARE Reprocurement

12

Margin Improvement Opportunities

Margin Improvement Opportunities

•

Multiple systems

•

Inefficient ancillary systems

–

Enrollment and billing

–

Call centers

•

Aging technology

•

Reliant on manual processes

and workarounds

•

Multiple data warehouses

–

Inconsistent operational metrics

–

Redundant analytical functions

•

High cost locations

Result is higher G&A PMPM than

Result is higher G&A PMPM than

other key competitors

other key competitors

2006 Membership

Adjusted G&A PMPM*

*HNT Strategy Group Analysis

$20

$22

$25

$27

$15

$18

$21

$24

$27

$30

Low

Median

High

HNT

National and Regional Players

13

Investment for the Future

Investment for the Future

Additional labor

Consultants

Accelerated depreciation

Employee termination costs

Contract termination costs

Technology write-downs

IT systems migration

Outsourcing

IT systems migration

Outsourcing

Performance improvements and efficiencies

Year of Investment

2008

2008

$50 M in savings

2009

2009

$100 M in savings

2010

2010

14

•

Annual goal: repurchase 3 to 5 percent of

shares outstanding

•

Approximately $203 million in remaining authority

•

Repurchased approximately 33 million shares at

an average price of $35.18 since the inception of

the share repurchase program in May 2002

14

As of 6/30/2008

Share Repurchase

Share Repurchase

15

Well-Positioned for Potential Change

Well-Positioned for Potential Change

Stable networks

Solid commercial

franchises with

expanding margins

Growing and

diversified government

business

Positioned to restore

earnings momentum

Medicare

TRICARE

Medicaid and the

uninsured

Low-cost products

Behavioral health

opportunities

Positioned to Respond to

Environmental Changes

Positioned to Respond to

Environmental Changes

Positioned for Growth

Positioned for Growth