Good day, ladies and gentlemen, and welcome to the Third Quarter 2014 eHealth Inc. Earnings Conference Call. My name is Philip, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today. Ms. Kate Sidorovich, company's Vice President of Investor Relations. Please proceed, ma'am.

Good afternoon, and thank you all for joining us today, either by phone or by webcast, for a discussion about eHealth Inc.'s third quarter 2014 financial results. On the call this afternoon, we'll have Gary Lauer, eHealth's Chief Executive Officer; and Stuart Huizinga, eHealth's Chief Financial Officer. After management completes its remarks, we will open the lines for questions. As a reminder, today's conference call is being recorded and webcast from the IR section of our website. A replay of the call will be available on our website following the call. We will be making forward-looking statements on this call, that includes statements regarding future events, beliefs and expectations, including our expectations regarding the timing of the open enrollment period and the Medicare Annual Enrollment Period; our projections for timing and volume of increased Individual & Family Plan applications; our beliefs regarding health insurance customers' future purchasing decisions; estimates of health insurance exchange enrollees in 2015; our marketing plans; our expectations with regards to applications from subsidy eligible consumers and our ability to enroll such consumers; our beliefs regarding demand and the determinants of expected demand during the open enrollment period; our expectations regarding carrier's future commission rates; our ability to interact through government exchanges; our expectations regarding team and rates on members who apply through our platform and get approved this upcoming open enrollment period; the expected benefit of the extension of organic search and partner channels; expected conversion rates from some Medicare-approved members; the impact over the timing of submitted applications in our revenue, EBITDA, stock-based comp and earnings per share guidance for 2014. Forward-looking statements on this call represent eHealth's views as of today. You should not rely on these statements as representing our views in the future. We undertake no obligation nor duty to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in our forward-looking statements. We describe these and other risks and uncertainties in our annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission, which you may access through the SEC website or from the Investor Relations section of our website. We will be presenting certain financial measures on this call that will be considered non-GAAP under SEC Regulation G. For a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to the information included in our press release and in our SEC filings, which can be found in the About Us section of our corporate website, under the heading, Investor Relations. And at this point, I will turn the call over to Gary Lauer.

Thank you all for joining us today as we report our third quarter 2014 results. Third quarter revenues were $41.2 million, GAAP earnings per share were $0.08, EBITDA was $7.5 million and cash flow from operations was $11 million. We ended the quarter with no debt and $58 million in cash reflecting share repurchases under a $50 million share buyback program, which was authorized by our Board of Directors in March and completed in July of this year during this third quarter. Third quarter submitted applications for individual and family plans were roughly in line with the second quarter of 2014 and down 81% year-over-year. We expected this application volume pattern, which reflects the new seasonality inherent in the individual health insurance business. As a reminder, following the completion of the open enrollment period on March 31, only a small subset of consumers with qualifying life events could purchase major medical plans until the upcoming open enrollment period starts again on this November 15. The upcoming open enrollment period will span 2 quarters and is currently expected to end on February 15 of 2015. Accordingly, we project a strong sequential increase in Individual & Family Plan submitted applications in the fourth quarter compared to the third quarter. The Congressional Budget Office has estimated that approximately $7 million more enrollees will purchase insurance through health insurance exchanges in 2015. In addition, we believe that many consumers who bought health insurance during the last open enrollment period will return to the market to switch plans. Subsidy eligible consumers in particular may benefit from revisiting their health plan selection to ensure they are getting the optimal subsidy amounts given that household incomes and plan premiums tend to change each year. We believe that a combination of new market entrants and reshoppers will generate…

Thanks, Gary, and good afternoon, everyone. Our third quarter 2014 revenue was $41.2 million, a 2% decline compared to the third quarter of 2013. During the quarter, we generated operating cash flows of $11 million and strong annual growth in net income, reflecting careful expense management and reduced marketing costs in our Individual & Family Plan business. Medicare revenues were up 33% year-over-year reflecting 52% growth in Medicare commissions and single-digit growth in Medicare advertising revenues. At the end of the third quarter, we had approximately 121,000 estimated Medicare members, up from 85,000 at the end of the third quarter of 2013 or an increase of 42%. Third quarter Individual & Family Plan commission revenues were down 14% compared to the third quarter of 2013 due primarily to a decline in the estimated number of revenue-generating Individual & Family Plan members over the same time period. Noncommissioned Individual & Family Plan revenue, which is linked directly to the application volumes for insurance products offered by carriers participating in our sponsorship and licensing programs, also declined year-over-year, driven by softness in Individual & Family Plan application volumes outside of the open enrollment period. Our ancillary products continued to perform strongly during the quarter, with total commission revenues growing in excess of 50% compared to Q3 of last year. The estimated number of members on ancillary and small business products was over 380,000 at the end of Q3 2014, reflecting 29% annual growth. One of the big drivers in this area is the continued strong demand for our short-term products. The estimated number of members on short-term policies grew close to 85% in the third quarter compared to Q3 of last year. As we shared with you on our last earnings call, we believe that much of this demand is driven by…

[Operator Instructions] And our first question comes from the line of Dave Francis from RBC Capital Markets.

Could you guys comment a little bit on what your experience has been so far in working with the test environment that the government's made available to yourselves and other electronic brokers relative to seeing how your technology pressure sets up against what the government is working to date anyway? And any issues, positive or negative, that you've seen so far?

Sure. We plan to take advantage of this with healthcare.gov and some of the states through 2 things: in healthcare.gov, it's something called the double redirect; and also the broker portal we have been testing. We feel optimistic about the use of our technology and in combination with our call center. We believe that assuming that healthcare.gov, for the 38th state they'll be operating in, if it's stable, more stable than it was a year ago, and we're expecting that it will be, then we're going to have some good pathways then. That should allow us to, we think, generate some, hopefully, some significant scale in terms of applications from the subsidized consumers. And we've been working closely in and through the different kinds of testing environments that have been provided to us. And all I can report to you right now is so far so good. We're 2 weeks away and we've got our fingers crossed that there's nothing unexpected that happens with healthcare.gov. With the states, which many of them will be working through their broker portal, we did some of that work last year. We feel good about that. That's going to be a bit more call center-centric. But again, that looks to us like, hopefully, it will be reliable and somewhat predictable.

Well, Gary, if I could push a little harder because this is obviously a big deal relative to how you guys perform this year versus last year. What -- can you talk a little bit more specifically about what's different right now relative to what you guys experienced last year and gives you a better sense of confidence that your work around for the double redirect or the portal is going to have a different result this time?

Well, yes, absolutely. First of all, at this time last year, what we really had was a kind of a pseudo or a quasi double redirect. And as you know, healthcare.gov didn't work at all for the first several months, actually. I mean, I'm generalizing, but that's essentially what occurred. And we had, because of that instability, we had no pathway in. Some of the -- in fact, a lot of what we did with the double redirect simply didn't work, and the broker portal was pretty much nonexistent at that point. As you got further into the open enrollment period last year -- last open enrollment period and into this year, into the first quarter timeframe, that stuff worked a little bit better for us. We -- near the end of the open enrollment period, we were able to get some of our subsidy eligible consumers through that process. It's much different now. We think it's more stable. We know much more about it. More importantly, we know what we have to deal with. We had gotten commitments a year ago about technology, solutions and help from the government that just never came to pass. We're not looking for any of that right now. What we've decided to do is take what's there and do everything we can to optimize that. And I would say the same thing goes for several of the states as well. So we have a much different view. We've got a lot more knowledge of what government has here, especially healthcare.gov, and we've got some experience with it as well.

Okay. A quick housekeeping question, and I'll jump back in the queue. Stuart, there was a tick-up in the sponsorship revenue line this quarter relative to where you guys have been in the last couple of quarters. Is it something there that is new, that is durable in the business or was that a one-time event? How should we be looking at that as we look going forward?

That line's generally kind of lumpy. That increase that you're seeing there is from the Medicare business, a little bit of a tick-up in the Medicare advertising.

So is that it this quarter and we shouldn't see it again going forward or is that going to be durable for the next few quarters?

I'd probably just kind of -- it's going to be kind of lumpy up and down. I'd say it's probably a special tick-up here in this quarter.

And our next question comes from the line of Dave Styblo from Jefferies.

I wanted to stay on Dave's prior question, just with the connectivity to enroll subsidized lives. It sounds like with the past quarter, you guys are feeling more comfortable and confident about being able to enroll the subsidized members. I'm just wondering if something has changed with the testing that you've done or if there is something in the technology that gives you higher confidence that you're going to be able to enroll folks at a higher scale? And is there any capacity constraint that you'd feel is there on the system, especially since it's a shorter OEP this time?

Yes. Well, those are all good questions. Yes, we're certainly more optimistic, much more optimistic for a number of reasons. We've have had 9 months now to work on our technology side of this knowing what we'd be dealing with. We've had 9 months to work on our call center capabilities through all of this. We've had the last 9 months to really think through the double redirect as well as the broker portal, which are the -- really the entry points for subsidized individuals. We've been able to do some good testing and so on. So that, yes, we do have more confidence and a lot more optimism about this. But I just want to reiterate this again, that we're largely dependent on the stability of healthcare.gov and some of the state exchanges. If they are working reliably and up and running for most hours of the day, if not all hours of the day, we think that -- we really do believe that we can achieve some very good scale here, which we weren't able to do a year ago.

And when you say that, of healthcare.gov, there's obviously a lot of different systems within there. Is there certain elements that need to work? What assets specifically are you needing to be stable, because...

Well, we need the site -- first of all, the site's got to be up and running because that's the entry point. I mean, everybody needs to understand that for anyone who's subsidy eligible, that subsidy is confirmed essentially through the Treasury Department. And to get there, you've got to go through something called a Federal data hub. Even the state exchanges do this. For us, for carriers, for other brokers and so on, who are not healthcare.gov, we have to pass through healthcare.gov to get into this confirmation area for subsidy eligible individuals and work with healthcare.gov to do that. If the site's not operating, we can't do it. If the site's operating and stable, we can do it. That's really what it comes down to. I'm simplifying it, but that's really what it's about. If it's operating reliably, we, again, believe that we can generate some really interesting volume here with subsidized consumers. And on constraints, our biggest constraint, and I know I just keep repeating myself, but once again, is the constraint that we have and the risk factor that we have in this, and everyone has as well, is healthcare.gov and our ability to get in and through that efficiently and with a fair amount of scale because we believe we're going to see a lot of demand. We saw a lot of demand last year for subsidy eligible consumers. In fact, we've made the comment several times that had we had the capability last year, we had demand sufficient last year, last open enrollment period, to have at least as many subsidy eligible applications as we had non-subsidy eligible applications. We would expect to see a similar trend in this open enrollment period.

Okay. And then just moving over to a different side, the Medicare, it's nice to see a little bit more growth this quarter. Anything to attribute that to? And then as we -- your comments about the beginning of OEP for Medicare. Obviously, we're only 2 weeks in, but you sound pretty encouraged by that. Do you already have some stats about the first 2 weeks versus last year's first couple of weeks? What gives you so much confidence and encouragement about that?

Well, several things on Medicare. I'd personally point out that not only do we see application growth and so on in this past quarter outside of the Annual Enrollment Period, and I think this starts to speak to the Age-ins, these people turning 65 years of age that we've talked about for some time. But, you also see some good growth in revenue and a significant growth in membership, and we're really, really pleased about that. That's been the strategy and really the objective since we started this business. And again, I just want to emphasize how important that member growth is, that we're seeing there right now. We came into this Annual Enrollment Period with a large inventory of products, with, again, more capability, more knowledge, more experience, more partners contributing, more technology, medicare.com for example, the URL that we're operating now. And we're only 2 weeks into this. And let me also point out that the Medicare business is a very interesting business. Like most consumer businesses and consumer buying patterns, it's got a hockey stick. And a vast majority of this business transacts in the very last several days of the Annual Enrollment Period. So what we look at is we track all this, and we track it carefully, is where are we now compared to where we were at this time last year, where we were at this time 2 years ago and where we think we need to be on that continuum of the hockey stick. And I would say that, today, we like what we see. And we also like what we know is going to be happening in terms of demand generation through our partners as well as our own activities over the next several weeks.

Our next question comes from the line of George Sutton from Craig-Hallum.

Gary, you mentioned that relative to the carrier payments, there were certain carriers that you had identified with issues. And I wondered if you could just go into a little bit more detail, not name names, but giving a sense of the significance of those carriers? And do you feel like you've identified the issues down to a specific point?

Yes, George, this is Stuart. I'd say there is quite a discrepancy, as we mentioned last quarter, among the carriers. And I'd say the group of carriers that we're working actively with is probably roughly a dozen or so on -- working on the issues that we saw last OEP to improve them for the upcoming OEP. And in some cases, it was broker attribution issues, and we've cleaned up a good chunk of that and believe their systems have been updated to identify if it's a broker. We also have worked with those carriers on another issue that we saw, which was that with those particular carriers, they had a difficult time dealing with increased absolute volumes of nonelectronic processes. And that would include customers that opted out of paying electronically and decided to pay by check. It also includes customers that opted out of sending in their application electronically and printed it out and mailed it in. And so large volumes of paper applications or paper payments and certain carriers were not able to effectively deal with that. So with those carriers, we've either had them commit to improving systems that broke down last OEP, moving into the next OEP with better -- more robust systems. In other cases, we've worked with carriers to reduce the amount of options, to reduce the nonelectronic options for consumers going through those carriers. So make it either -- or eliminate the ability for a consumer with that carrier to submit a paper application, let's say, or minimize the flow of people that would go into a paper payment process. So we've been working on those specific processes with a subset of our carriers that we saw as an issue last time around.

You suggested that you're going to be in better shape this year, but the payments could still be slower. Are you able to give us a sense of what slower means, relative to normal not relative to last year?

I think it's hard to say on this alone [ph]. I mean, we're really trying to eliminate the non-payers. It's not so much the speed. We're really trying to work on how many of these approved members can we close on and have them make -- become paying members at all. That's our main focus.

Got you, okay. Relative to Medicare, I am curious, the medicare.com URL, how significant has that been for you thus far?

George, it's Gary. It's been a contributor in the past. Before we owned it, the owner -- we were -- was funneling leads and demand to us. We've done a number of things with this URL to improve the experience, to make it more of a destination for seniors. In fact, I'd suggest that you all go to medicare.com and take a look, you'll see some of the work that we've been doing there. It's much more than just a lead generation site. And so far so good. We're certainly seeing more demand for it than we saw before we owned it. And we're just in the beginning of really expanding this. And we're hopefully making a really, really good online destination for seniors.

Okay. And then lastly, relative to Medicare inventory, I'm curious, are you happy with the inventory you have this year relative to last year?

Absolutely. We've got United plans in full force now. We've got AARP going. We've got several other regional plans. Yes, it's -- last year, we had more inventory than the year before. And this year, we've got more inventory than we had last year. I think most importantly, we've got the major brand names, and there's a real brand name recognition in this marketplace we've found. We have Aetna, we've got WellPoint, we've got United, we've got Humana. These are just really important brand names. They spend a tremendous amount of money advertising. So the brand name recognition and association we find just works really well. Yes, we're very pleased with what we've got now from a product standpoint.

Our next question comes from the line of Adam Klauber from William Blair. Adam Klauber - William Blair & Company L.L.C., Research Division: A couple of different areas. Could you talk about partnerships on the Individual, particularly with EON? Have they rolled it out to -- have they rolled out the Individual capability to more corporations than just Walgreens?

Well, with EON, the partnership that we have, it's really a quasi private exchange partnership, is for contractors, part-time employees and so on and their mid-and-large size employer base. They have been rolling that out. It's been good. It continues to expand. We're looking at other opportunities like that as well with them with the related products. We're very interested in doing more and more in the senior market, for example, with our Medicare products. But yes, EON, it's coming along nicely for us, a very, very good partner. We work well together, and we think there's significant opportunities for both of us. Adam Klauber - William Blair & Company L.L.C., Research Division: Without giving the exact number, can you give us an idea of the larger companies they've rolled it out to? Is it just 2, 3 or is it more like a dozen, just some idea? How many companies has that been rollout to?

Well, this may surprise you, but it's in the process of being rolled out or rolled out to close to 50 different enterprises or companies, many of which are very recognizable names. You can put a big box retailer in there, for example, some others as well. Yes, this could be significant. Adam Klauber - William Blair & Company L.L.C., Research Division: That's helpful. And then as far as TurboTax, obviously, there was a lot of limitations last year, but I guess, why should that partnership work better this year compared to last year?

Well, I think the most important reason is that we're going to have a subsidy eligible capability this year, we believe. And a lot of these TurboTax users are subsidy eligible consumers, and they're online. Intuit's got a very strong relationship with them, and they'll introduce us and take us in that way. And we think the subsidy eligible capability here with Intuit and TurboTax, frankly, much like with EON as well, is extremely important because it's -- this is a very large segment of certainly the EON opportunity, but a lot of these TurboTax users as well. Adam Klauber - William Blair & Company L.L.C., Research Division: Can you give us a rough idea of how big of a component of TurboTax's base was eligible for subsidies?

I don't know the answer to that, and I'm not so sure that Intuit discloses that anyway. I'd be surprised if they do. But if it's just like the general population, it's -- you've got 40% to 50% of those, both at EON and Intuit and other places as well maybe subsidy eligible.

Our next question comes from the line of Steve Rubis with Stifel. Steve Rubis - Stifel, Nicolaus & Company, Incorporated, Research Division: Can you talk about what sort of mix you need to see between, say, subsidy eligible and non-subsidy eligible in order to hit the full year guidance in the fourth quarter in terms of submitted applications?

I don't know that it really comes down to the mix so much as to the overall expectation. And really, as we said in our prepared comments, really looking at the full OEP period, it's a little hard to pin down exactly how much is going to be Q4 versus Q1 at this point. We're looking for, obviously, growth year-over-year in Q4 in our guidance, but it really doesn't impact -- from a guidance standpoint, it doesn't have any impact on revenue. Most -- the vast majority of the Q4 applicants are going to start contributing in 2015. They will be applying for 2015 coverage. The revenue won't start flowing, so it really doesn’t impact this year's guidance. It's really more the marketing expense related to the application volumes, which impacts the bottom line this year.

Remember, we don't give guidance on applications, we do on revenue. And so a revenue contributor for us in the fourth quarter is Medicare. And so really what's more important to achieving that, our full year guidance in the fourth quarter, is our Medicare results and applications more so than the Individual & Family Plan business because as Stuart pointed out, the vast majority of those Individual & Family Plan applications in the fourth quarter won't generate -- we won't see revenue on those until the first quarter. Steve Rubis - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, very good. Can you talk about your value proposition or the feedback you're getting from health plans and the value of what you do versus, say, simple lead gen advertising on other sort of health and wellness type of websites. Has that had any impact on your business?

No. We've seen -- the lead gen models have been in place for years, many of them provide us leads. But they may be important to the carriers, but then the carriers have got to go and directly fulfill them. That's not an inexpensive thing for them to do. That's why we have the kinds of commission rates that we have. Their own direct efforts, and I can't speak for any of them individually, but we know it's expensive. People just don’t buy these products, they have to be marketed and explained and on and on. So we don’t -- we really don't think too much about that part of the market except that it's part of one of our -- it's an important part of one of our channels through -- and that's the partner channel, through which we do generate demand. And certainly, we compete with some of these demand generators, especially in the area of search and paid search.

Our next question comes from the line of Steve Halper from FBR. Steven P. Halper - FBR Capital Markets & Co., Research Division: So given your plan to drive marketing expense, and assuming that you can submit subsidized eligible folks, is it possible to get 5% of the 7 million CBO estimate between Q4 and Q1? I mean, just trying to size what the expectation should be around that?

Steve, it's a great question. I think I touched on that in my comments that of the -- we had 480,000 subsidized individuals last year, the 1.2 million that went through government exchanges. So approximately 1/3, a little bit more than 1/3 actually. I don't expect that we're going to get 1/3 of the subsidized population, but if we just get a small fraction of what we're able to do with the non-subsidized, you're talking about what could be some significant volume here. 5% of that 7 million would be nothing short of fantastic with that 350,000. I'm just doing this off the top of my head. Don't know, could happen, we'll see. We're certainly -- we're loaded up. And once we get into this, we'll see how this scales and how it goes. It's -- I'm not predicting that, but I would say that it's possible. Steven P. Halper - FBR Capital Markets & Co., Research Division: So just to follow up, if on November 15, if things seem to be working, would you consider driving your spend, your marketing expense even higher to -- above what your existing guidance assumes for Q4 in order to capitalize on that opportunity?

I really hope that's a decision point we get to early in the open enrollment period because that will indicate we've got a lot of volume coming. We'll certainly look at that, think about the quality of it. Just -- I think then it just becomes an ROI question. It's pretty easy. We look at what we're spending, we look at what the revenue is going to be generated, the lifetime revenue of these things and we'll make some decisions. And yes, it's possible that we could overspend, which is going to have an adverse impact on earnings in the fourth quarter and a very positive impact on revenue and earnings in subsequent quarters.

Our next question comes from the line of Scott Fidel from Deutsche Bank.

This is Shawn Bevec on for Scott. Just going back to the workaround for the subsidy eligibles, can you remind us how many subsidy eligibles you signed up last year? And given the, I guess -- if we assume that healthcare.gov does work efficiently, could it be 2x, 5x that number or can you frame it any more than that?

Well, I wish we could. We spend a lot of time trying to model this and predict it obviously. Last year, during the open enrollment period, we enrolled about 480,000 individuals. Approximately 10,000 of those were subsidy eligible, and we did it really in the last few days of the open enrollment period. That's when we had some -- a little bit of capability and stability to be able to do that. As I pointed out earlier, last year, 1.2 million non-subsidy eligibles were enrolled through government exchanges. We did 470,000-some-odd subsidy eligibles. That's over 1/3. If you look at the 7 million that are -- at least the CBO, the Congressional Budget Office says will be enrolling this year, a large percentage of those will be subsidy eligible. If everything works perfectly, and things don't work perfectly, but if it did, we think that these could be some very, very interesting numbers and volumes for us. But I'm just -- I'm reluctant to predict this because of the experience we had last year working with these, through government and so on. And although we've been testing, this is still untried, and we've got to make all -- this has got to work for us in the marketplace.

Okay. And then on the short-term medical policies. How many short-term medical members do you have today? What's the mix of these in terms of subsidy eligibles? And then what kind of conversion do you expect for these members to go over to a major medical policy?

Well, I'll say we have tens of thousands of short-term members. Our applications for short term were in excess of our Individual & Family applications during this quarter, just as an example of the demand for short term in the off-season. We don't get the incomes of those applicants, so I can't tell you the subsidy eligibility of those right off. I also don't know what the conversion rates are going to be, but I can tell you that we are highly focused on easing that as a contact base to convert during the open enrollment periods when we get there.

Our next question comes from the line of Tobey Sommer from SunTrust.

This is Frank in for Tobey. Wanted to ask about the channel's direct marketing partners and online advertising, a nice tick-up in direct there. What are your expectations going into the enrollment season? And do you see that trend continuing? And what impact does that have on margin?

Well, I think, that direct is high here in the off season, largely -- well, part of it is due to pulling back our horns in paid search. The conversions are not as good in the off season for the traffic that is coming in and looking, but may not be able to transact. And so we've had to pull back somewhat in paid search in the off season. So I would expect the mix to shift somewhat during the open enrollment period. We'll have more partners sending more traffic during the open enrollment period than we've had in the off season. We'll be dialing back up our paid search because the conversions will be there. And so I would expect the mix will probably be, for lack of a better guide, probably more similar to what we saw a year ago in the open enrollment period.

Okay, great. And you mentioned churn being at similar levels as the prior quarter. Where do you see that going and what can you do to kind of manage that or influence that going forward?

This is the off-season churn and there's not a lot we can do here outside of the open enrollment period regarding that. It's really related to people that are getting employer-based coverage or aging into Medicare, as an example, or other special events, life events, moving around. And so it is a little bit elevated relative to what we were expecting in the off season. But really, just focused on the open enrollment period where we can really recapture people and go after those people.

Okay. And finally, can you remind us the seasonality of the customer care and enrollment expense as you look at 4Q and 1Q and what we should expect there?

Yes, they typically start ramping up in the third quarter as we start hiring up into mainly the Annual Enrollment Period for Medicare. We will have a little bit more of an uptick in Q4 over and above Q3 as we get a full quarter of those people on board. So the largest expense is in the fourth quarter, and we'll add some Individual & Family Plan agents as well to handle the volumes for open enrollment period. And then that should come down a little bit probably starting at tail end of the first quarter into second quarter. So it kind of comes down in the second quarter and then starts ramping back up again third quarter into fourth.

Our next question comes from the line of Nat Schindler from Bank of America Merrill Lynch.

Yes, a couple of different ones. One, you mentioned -- I want to follow a little bit up on the EON question you had a little bit earlier. If I look at your 650,000 members right now in the IFP membership, how significant is -- so far has EON been to that number, and given that you're already inside 50 different operation businesses for them?

Nat, it's Gary. It's not a significant contributor yet. We see very little in there. It's not material. I think the bigger question is what's it going to look like during this open enrollment period, assuming that so many of these are subsidy eligible, their part-timers, contractors and so on, and how many of those can we transact and enroll.

Okay. Gary, but you signed that deal a while back. When did you turn this on?

We've been turning it on this year. We've been rolling out platforms and so on with them, and we're still in the process of doing that. I would say this is obviously the first open enrollment period where we've actually got some, we think, some good online presence and platforms with them in a number of these enterprises.

Okay. And then can you comment at all about the Walmart private exchange that recently got announced? Were you bidding for that?

We've been working with them and we're looking at it. They -- the issue for us was a pretty simple one, that they want a fair amount of in-person presence, both in stores and on the phone. That just doesn’t work well with our model. We're pretty much online.

I understand. Now going over to what's going on in the IP market right now, I understand -- do you have a sense of your share and how it's trending in -- I mean, you only really have 2 quarters of this to know, but of the life event changes. Are you getting -- with those 28,000 applications, are you getting a significant share of that, of the life event changes? Or has that number been going up as you move, as you get better understanding of this post-ACA world?

It's a question I don’t think we've got a lot of data on right now. It's been fairly stable for us. I mean, we'd need to know what it looks like in every other part of the market. At least sitting here, I don't know that right now, Nat. That's an interesting question. Don't know.

Okay. And then finally, well, I mean, I think it's related to that question is that the improvements to healthcare.gov and the state exchanges, obviously, should have an effect on the business. I mean, we're assuming they're better than they were last year when they started open enrollment. Did you -- you saw an impact as you went through open enrollment last year from improvements in the exchanges. Do you think that, that -- what kind of confidence do you have in your guidance at this point given that open enrollment hasn't started and we haven't really seen healthcare.gov for 9 months, and how it's working well for the -- for -- how it's working now for new applicants?

Well, there's a number of test environments that have been up and running, healthcare.gov has been doing some work as well. We talked to people in CMS. So we've got a lot of different data points. In fact, you'll hear public comments from government officials that it's going to be better, but it's not going to be great. All we want is for it to be stable because we've got a really good experience on our end. We just need it to be stable to facilitate everything that we need and want to do. And I'll say what I said several times already this afternoon that we're optimistic and we're hopeful that it is, but it is our risk factor.

And Nat, again, what would process during the open enrollment period does not impact our guidance for this year on the revenue side. In fact, the more we do, the more we spend and the lower earnings could potentially be.

Okay. So next year up is the wildcard?

Next year. It's more of a next year membership and revenue impact, for sure.

Ladies and gentlemen, this concludes the question and answer portion of today's conference. I would now like to turn the call back over to Gary Lauer for closing remarks.

Well, thanks, everyone, for taking the time with us this afternoon, and we'll look forward to speaking with many of you as well.

Ladies and gentlemen, that concludes today's conference. Thank you all for your participation, and you may all now disconnect. Have a wonderful day.