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): January 8, 2010

Health Net, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-12718	95-4288333
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS 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 January 11, 2010, members of the management team of Health Net, Inc. (the “Company”) will be giving a presentation and meeting with investors and analysts at the 28^th Annual J.P. Morgan Health Care Conference. During this meeting, the Company intends to address its prospects and historical performance, and will reaffirm its earnings guidance for the full year 2010, as previously announced in a press release issued on December 10, 2009. The Company will have an audio webcast of its presentation at the meeting at 8:00 a.m. (Pacific Time) on January 11, 2010 from the “Investor Relations – Presentations and Webcasts” section of its website at www.healthnet.com. A replay of the Company’s presentation 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, 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, costs, fees and expenses related to the post-closing administrative services to be provided under the administrative services agreements entered into in connection with the sale of our Northeast business; potential termination of the administrative services agreements by the service recipients should we breach such agreements or fail to perform all or a material part of the services required thereunder; any liabilities of the Northeast business that were incurred prior to the closing of its sale as well as those liabilities incurred through the winding-up and running-out period of the Northeast business; potential termination of our TRICARE North operations; rising health care costs; a continued decline in the economy; negative prior period claims reserve developments; investment portfolio impairment charges; volatility in the financial markets; trends in medical care ratios; unexpected utilization patterns or unexpectedly severe or widespread illnesses; membership declines; rate cuts affecting our Medicare or Medicaid businesses; litigation costs; regulatory issues; operational issues; health care reform and general business and market 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 filed with the Securities and Exchange Commission (“SEC”), subsequent quarterly reports on Form 10-Q filed with the SEC, and the risks discussed in the Company’s other 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 any of its forward-looking statements to reflect events or circumstances that arise after the date of this report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Health Net, Inc. Presentation Slides for the 28^th Annual J.P. Morgan Health Care Conference, dated January 11, 2010.

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.
January 8, 2010	By:	/s/    ANGELEE F. BOUCHARD
	Name:	Angelee F. Bouchard
	Title:	Senior Vice President, General Counsel and Secretary

EX-99.1

Jay Gellert

President & Chief Executive Officer

Health Net, Inc.

January 11, 2010

28

th

Annual J.P. Morgan

Health Care Conference

Exhibit 99.1

2

Cautionary Statement

Cautionary Statement

All statements in this presentation, other than statements of historical information provided herein, 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

hereof,

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, costs, fees and expenses related to the post-closing

administrative services to be provided under the administrative services agreements entered into in connection with the sale of

our Northeast business; potential termination of the administrative services agreements by the service recipients should we

breach

such

agreements

or

fail

to

perform

all

or

a

material

part

of

the

services

required

thereunder;

any

liabilities of the

Northeast business that were incurred prior to the closing of its sale as well as those liabilities incurred through the winding-up

and running-out period of the Northeast business; potential termination of our TRICARE North operations; rising health care

costs;

a

continued

decline

in

the

economy;

negative

prior

period

claims

reserve

developments;

investment

portfolio

impairment

charges; volatility in the financial markets; trends in medical care ratios; unexpected utilization patterns or unexpectedly severe or

widespread illnesses; membership declines; rate cuts affecting our Medicare or Medicaid businesses; litigation costs; regulatory

issues; operational issues; health care reform; and general business and market 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, and the risks discussed in the company’s other filings with the Securities and Exchange

Commission.

Readers

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 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 third quarter 2009 earnings press

release, available on the company’s Web site at

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.

www.healthnet.com,

4

2009 Summary

2009 Summary

•

Improve Medicare performance

•

Solidify commercial

base

•

Close Northeast transaction

•

Strengthen balance sheet

•

Strong TRICARE performance

•

Position for the future

5

Preliminary 2010 Expectations

Preliminary 2010 Expectations

As of Dec. 10, 2009

Metric

2010 Guidance

Year-end Membership

Health Plan enrollment vs. 2009:  flat

Consolidated Revenues

$13.0 billion to $13.5 billion

Investment Income

~ $62 million -

$68 million

Tax

Rate

(a)

~ 39%

Weighted-average Fully

Diluted Shares Outstanding

104 million to 105 million

GAAP EPS

Non-GAAP

EPS

(a)

$1.90 to $2.00

$2.30 to $2.40

(a)

Excludes approximately $69 million in pretax charges. These charges include approximately $53 million related to the wind-down of the company’s

Northeast businesses and approximately $16 million related to the company’s operations strategy. The company currently expects these charges to

impact general and administrative expenses.

6

Commercial Opportunities

Commercial Opportunities

•

Product mix aligned with market changes

•

Lower-cost, narrow network products gaining traction

–

Interest in narrow networks resulting from economy

–

Key to small group and mid-market growth

•

Further margin expansion

–

Disciplined pricing and stable health care costs

–

Beneficial product and geographic mix changes

•

Positioned for growth resulting from ongoing

environmental changes

7

Medicare Strategy

Medicare Strategy

•

Built on network-model MA plans

•

Exiting Private Fee-for-Service in 2010

•

“Staying the course”

in Part D

•

Positioned for margin stability in the future

8

Government & Specialty Services

Government & Specialty Services

•

Stable financial performance

•

TRICARE update

–

DoD

to

follow

GAO

recommendations

–

will

review unfair

competitive advantage issue first; if necessary, will

evaluate other flaws identified in GAO decision

–

No timeline for concluding review given

–

DoD

has given formal intent to exercise Option Periods

under current contract through March 31, 2011

•

Growth opportunities

–

MHN (behavioral health subsidiary)

–

Veterans Affairs

9

Repositioning G&A

Repositioning G&A

•

G&A reductions an integral part of margin expansion

•

Made necessary investments over the past few years

•

Operations strategy nearly complete --

$100 million+

in run-rate savings achieved since 2007

•

Eliminate $80 million to $100 million in run-rate G&A

expenses in 2011

•

Create leaner, more focused organization

10

Strong Balance Sheet

Strong Balance Sheet

•

As of September 30, 2009:

–

Total cash and investments of $1.8 billion with an

average credit quality of AA+

–

Investment portfolio with market value of $1.3 billion

–

Total debt of $618.3 million and debt-to-total capital

ratio of 25.8%

•

Ended 2009 with approximately $450 million of cash at

parent after increasing subsidiary capital by $100 million

•

Expect

approximately

$140

million

to

$260

million

in

additional

net

proceeds

from

the

Northeast

transaction

during

an

estimated

two-year

transition

period*

*See Appendix for details

11

Health Net: The Future

Health Net: The Future

•

Opportunities to expand margins

•

Positioned for value-driven demand in marketplace

•

Medicare

strategy

focused

on

margin

stability

and

strong

markets

•

G&A reductions aligned with repositioned business

•

Building strong cash position

•

Positioned

for

industry

changes

12

Appendix

Appendix

•

Northeast transaction currently valued at approximately $490 million

to $610 million

–

Received $350 million in proceeds at closing ($290 million in

tangible net equity and $60 million membership-related

payments)

–

Expect $160 million to $280 million in additional proceeds during

the transition period

Remaining tangible net equity payments of approximately

$160 million

Additional membership payments of up to $120 million

(this amount is dependent on a number of factors, including the number of commercial members

that transition from Health Net of the Northeast to UnitedHealthcare

products)

–

Net expense of $20 million from run-out, tax benefits, freed

capital and other costs

Note: Additional information regarding the terms of the Northeast transactions is available in Health Net’s Form 8-K on 

file with the SEC