Health Net internal print magazine created by writer, editor, art director Linda Hubbard Lalande as part of an internal brand campaign that integrated print, intranet, email and HR materials. Feature writing, profiles, strategies and goals, accomplishments, editorial perspectives guided employees and gave context to company news. Design: Moller Creative

1. Quarterly Magazine for Health Net Associates • Summer 2006
Introducing
the premiere issue
of Health Net’s new quarterly
associate magazine
Inside:
MHN Brings Cover Story:
Comfort
to Military Families Navigating
We Live Medicare
Here, Too
Health Net in
the Community
Growing
Commercial
Business
The Advertising
Blitz is On

2. Inside this issue:
Published by: Health Net, Inc.
STORIES FROM THE TRENCHES Corporate Communications
MHN behavioral health unit supports members 21650 Oxnard Street
of the military, giving them a soft place to land. Mail Code CA-102-22-07
page 2 Woodland Hills, CA 91367
We welcome your ideas and
We Live Here,Too feedback. Contact Linda Lalande
Making a name in the neighborhood through local or Margaret Longo at:
sponsorships – first up: HNCA’s Kick It With Health Net. Connections@healthnet.com.
page 5 For internal distribution only
Health Net, Inc. is among the
Cover Story: Navigating Medicare nation’s largest publicly traded
Guiding consumers through the changing tides managed health care companies.
with simplicity. Its mission is to help people be
page 6 healthy, secure and comfortable.
For more information, go to
www.healthnet.com.
The Blitz Is On! Certain matters discussed in this publication contain
forward-looking statements within the meaning
HNNE and HNCA are on the advertising circuit of Section 21E of the Securities Exchange Act of 1934,
to drive commercial growth. as amended, and Section 27A of the Securities Act of
1933, as amended, that involve a number of risks and
page 10 uncertainties. All statements, other than statements of
historical information provided herein, may be deemed
to be forward-looking statements. Readers are cautioned
What’s the Magic to Saving? not to place undue reliance on these forward-looking
statements. The company undertakes no obligation to
401(k) Savings Plan does the trick. publicly revise these forward-looking statements to
reflect events or circumstances that arise after
page 13 the date of this publication.
Images of the Themes that Unite Us
Look for these newly created icons to identify Health Net’s three important themes. The icons
will be used in communications about what is going on in the company and how we are succeeding.
PERFORMANCE GROWTH GREAT PLACE TO WORK
Progress and achievements that Efforts to expand and increase Examples of a high-performance
support Health Net’s business the quality of Health Net’s environment that supports
strategy and financial goals. business. associates and serves
customers well.

3. GREAT PLACE TO WORK
We Invite You to Be Part
Making of CONNECTIONS
CONNECTIONS
for You
by David Olson,
SVP, Corporate A message from the
Communications Executive Operating Team:
(L to R) Steve Nelson, president,
HNNE; Jim Woys, president,
Government & Specialty
elcome to the premiere issue of
W Connections – Health Net’s new all-
associate news magazine. Designed for you,
Services (EOT chairman);
Buddy Piszel, CFO, Health
Net, Inc. and Stephen Lynch,
it will provide analysis and perspective on president, Western Regional
the many aspects of Health Net’s businesses– Health Plans.
and the important roles you play. Each
quarter, Connections will feature a variety
of Health Net stories from across the country–
stories to broaden your understanding of
H ealth Net’s business is helping people with one of the
most important aspects of their lives – their health. Our
customers look to us to help them navigate the best, most
what we do, how we do it and who is
appropriate paths to get the health care they need. It’s not
making it happen.
an easy task, but it needs to be a purposeful one. And we
Connections will supplement our Intranet, believe that by sharing our experiences, our insights and
HN Connect, by providing an additional our accomplishments, we all can do better.
forum for the exciting things we’re doing Therefore, we are pleased to see the launch of Connections
at both the local and national level. HN and the broad communications venue it provides. For just as
Connect will continue to be the place to we on the Executive Operating Team (EOT) are charged with
catch current news and updates to ongoing providing review and oversight for Health Net’s “greater good,”
developments. Together, these communications we see Connections extending that effort by increasing our
will provide a more complete picture of the collective understanding to support growth and enhance
entire enterprise. We especially want to performance across the enterprise.
showcase how you are making our businesses From immunizations to intensive care, from HMOs to PPOs,
successful – by increasing our capabilities, from newborns to Medicare-eligibles, from phone calls to claims
establishing best practices and building processing, from complex contracts to federal, state and local
a culture of performance. compliance standards – helping people to be healthy, secure
As with HN Connect, we intend this and comfortable requires knowledge and know-how.
publication to be a partnership: we’ll be That’s why understanding and appreciating the many
asking you what you’ve learned from it jobs we all do – and how we do them – is vital. Building that
and what you’d like to see in future issues. understanding is what Connections is all about.
With your participation, we look forward to Thanks in advance for your readership and your willingness
making the connections you need to create to forge a more complete and informed connection with Health
the kind of place – a great place – for us to Net’s businesses. We believe that your increased understanding
work and serve our customers. will benefit our customers and make us a better company.
summer 2006 connections 1

4. PERFORMANCE
STORIES
FROM
THe TRENCHES
Health Net’s behavioral health unit, MHN (Managed Health Network), supports members of the
Army, Marines, Navy and Air Force, as well as Guard and Reserve personnel and their families.
MHN’s Military Support Programs
Address Unique Stressors
or some military personnel and their families, City, who also spends time
“F emotional wounds can be as harmful as physical
ones,” says Stu Murphy, VP, Account Management &
as a counselor on the military
bases. “We help service people
Sales, for Health Net’s Managed Health Network to unburden, to share their combat
Government Services (MHNGS), New York City, N.Y. experiences in a way that helps them
To address the emotional needs of people in the military, get to a more positive place about
MHN launched an intervention initiative in May 2004. these events, realizing they’re not alone
“As we’ve proven our effectiveness, the demand for our with their experience. We give them tools
services is increasing rapidly. We’ve touched over 100,000 and resources to help them manage the
lives of service personnel and their families, in the U.S. impact on their lives and the lives of their families.
and abroad, since we began,” he notes. “Because it now Parenting skills become vital, as children begin to
touches service personnel and their families across the act out, don’t relate to returning parents and add
four service branches, we refer to the initiative as tremendous strain to an already isolated spouse.”
Military and Family Life Consulting (MFLC), the same According to Jerry Coil, president, MHN, Point
acronym we use for the consultants themselves.” Richmond, “We send out consultants on a rotational
MFLC assists in the military’s readiness efforts to help basis, from one to three months. So at any given
the families and the war fighters be ready to do their time we have about 100 consultants in the field.
jobs. The consultants provide counseling and support to We have over 50 in Europe right now.” Jerry
augment the many programs and services the military and Ian travel to the bases across Europe and
already has in place. “It’s not about therapy – it’s about the U.S. periodically to oversee the programs.
skills,” explains Dr. Ian Shaffer, chief medical officer, “We are in many European countries and
MHN, Pt. Richmond, Calif. “Through MFLC, we provide the Pacific Rim,” Jerry notes. Consultants
a wealth of communication skill-building to help create also visit small units of NATO personnel
realistic expectations and give military and family scattered all over Europe including Norway,
members the tools to help reestablish their relationships,” Great Britain, the Netherlands, Belgium,
he explains. Luxembourg, Germany, Portugal, Spain and
“Isolation is common for both those left behind and Italy. “It’s a very meaningful effort that we
those coming and going from active duty,” says Ronnie are proud to be a part of.”
Weiner, director, Clinical Programs, MHNGS, New York
2 connections summer 2006

5. MHN brings comfort to service families
“When things get hard, we’re a soft spot to land on.” – MHN Military and Family Life Consultant
IN an elementary school classroom in Western
Europe, several children ask an MHN Military and
Family Life Consultant (MFLC) if they can talk about “Mike”
military personnel and their families on and around the
bases in locations like libraries, bowling alleys or even
long lines. Local restaurants are a favorite spot.”
whose father was killed “down range” in active combat. “It can happen anytime, anywhere,” explains a consultant.
After the MFLC asks who wants to start the discussion, “There are countless opportunities to be of service.”
one child blurts out, “I don’t want to talk about this After introducing the program, consultants may informally
because...” A torrent of words pours forth, and suddenly chat with someone, schedule a follow-up consultation,
the other children join in, expressing fear, worry and or refer someone to a range of resources.
loss of control. Some begin to cry. As the class draws
to an end, the MFLC says, “You may notice that I
Someone to talk to
As they listen to stories that pour in from
haven’t said very much. What you say as a kid can
the “trenches,” MFLCs often become the
be much more important than what I as an adult
starting point for subtle and not so
may have to say.” The kids sit silently, but now they
subtle transformations. One consultant
are smiling and rubbing their tear-streaked faces.
remembers meeting a young soldier
Being of service two months into a new
This MFLC is part of a team of more than 100 assignment. The soldier
temporarily assigned to military installations stateside had recently returned
and overseas by Health Net’s behavioral health unit, from a dangerous, year-
MHN. MHN supports members of the Army, Marines, long deployment. As
Navy and Air Force as well as Guard and Reserve his eyes welled up
Did you
personnel and their families.
Consultants make contact during pre- and post-
with tears, he told
the consultant how
know?
• 1.4 milli
deployment training. They sometimes “shadow” units he had “seen some on U.S. military
personne
during reintegration to assure continuity of support over stuff over there.” l are on active
time. “For example, there is typically a need to check in (Continued on next page.)
duty.
at the six-month mark to determine if returning military
• Just ove
are adjusting,” says Terry Fullerton, director, Clinical r half of
Services, MHNGS, Arlington, Va. “MFLCs also approach duty pers active
onnel are
married.
• Approxim
ately 73%
married se of
rvice mem
have chil bers
dren.
• Both sp
ouses are
members service
in about 1
military m 2% of
arriages (7
7,000).
Photo Credit: Master Sgt. Rob Trubia,
U.S. Air Force.
summer 2006 connections 3

6. up close and
personal:
How MHN M ilitary and family
life consultants help
rviceman
in Germany, a se
While stationed oman. When
a local young w
falls in love with isolated and
q, she becomes
he leaves for Ira e base for a Photo Credit: Joe Kane, Chief Journalist, U.S. Navy
g a visit to th
depressed. Durin ary and Family
hamburger, she meets a Milit
d to and readily
and is introduce He also remembered being back from duty and
Life Consultant ort group
earts Apart” supp
embraced by a “H lace.
spotting a woman in a bar wearing a belt that resembled
welcome so
where she finds ammunition. “It wasn’t real, but I couldn’t stop looking
at it,” the soldier confided. “All of a sudden, I felt like I
was back there. I had to leave the place.” Then he asked
The wife the consultant sheepishly, “Is that crazy?” They talked
of a soldie
deployme r who is fa about the reintegration process and prolonged stress
nts is hav cing mult
to her hu ing a hard iple
sband. “I’m time rela
ting response. At the end of their meeting, the soldier said,
connecte not ever
d to him going to g “You have no idea how good it feels to have someone
“It was so again,” sh et
painful th e admits to talk to.”
e first tim tearfully.
Through e he left.”
talking ab
and Famil out this w Offering comfort and healing
y Life Con ith a Milit
accept th sultant, sh ary
e love AN e finds w From helping children process their feelings to reassuring
D the pain ays to
of separa a troubled soldier, MFLCs are indeed creating a soft spot
tion.
for many to fall on – and making a remarkable difference
doing so.
ds another Article courtesy of MHN’s HN Connect site, May 22, 2006,
ing from Iraq fin
A soldier return r boyfriend. MHN Marketing & Communications; Pt. Richmond, Calif.
ed in with he
soldier has mov
e has served with
Complica ting matters, sh
r. Realizing
ith the interlope
and is friends w career over
nt to ruin her
she does not wa litary and
this, she sit s down with a Mi
ultant and comes up
Family Life Cons
d move on.
with a plan to cope an
In a f
amily
share left b
their ehind
home mom’s , the
from bed. W young chil
as hen d dr
felt o
n all s signment, ad com en
Consu ides. A the d es
Milita isp
lta
help b nt works w ry and lacement is
rid ith th Famil
makin ge the ten e y Life
g room sion a family on s
for ev nd pa kills t
ve th
eryon
e’s ne e way o
eds. to
Photo Credit: Senior Master Sgt. David H. Lipp,
U.S. Air Force.
4 connections summer 2006

7. GREAT PLACE TO WORK
We Live Here,Too
Improving Health Isn’t Just
About Selling Insurance
Sponsorships with a wellness purpose
ot just another corporate sponsorship. Not your Kick It
N ordinary arms-length big check. Health Net wants
to make an important difference for society – starting
With Health
Net fosters
with children, the most vulnerable, and those most ready activities and
to embrace life and new ideas. programs to help youth
“We don’t want to be one of a crowd of companies – stay fit. Last year, Kick It provided
we want our contribution to be distinct and significant athletic scholarships and soccer equipment to more
while still supporting Health Net’s business,” says than 15,000 school-age athletes and volunteers in five
Jay Gellert, Health Net, Inc. president and CEO. “We Southern California community soccer leagues. “Aided by
also want our image to reflect our ongoing ‘go local’ associate volunteers, HNCA also sponsored customized
strategies for meeting customer needs in the skills and drills clinics for the more than 17,000 children,”
communities where we work.” says Tiffany. “Participants have a strong, favorable and
lasting impression of Health Net.”
Our intention is to:
• Establish goodwill and demonstrate that we are Kick It With Health Net expanded in 2006 to include 12
part of the communities we serve. leagues, with five in Northern California and seven that
span the Los Angeles, San Diego and San Francisco metro
• Spread the good word about Health Net and build brand areas. “These locations have a combined population of
awareness by putting a human face on the company. more than 12 million and provide access to very culturally
• Energize Health Net associates to get involved. diverse markets where we want people to recognize our
Health Net, Inc. and its regional plans consistently brand and are likely to see us as a choice when selecting
contribute to national and local charitable organizations health coverage,” says Mark Morgan, chief commercial
and activities, encouraging and supporting associates’ officer, HNCA.
involvement. Here’s just one example from our California “I’m there to help fight obesity by getting kids active,”
team. says Tim Louie, manager, HNCA Marketing, who was one
In the Neighborhood: of several volunteers at a skills clinic. Another volunteer,
Delcia Witty, HNCA wellness coordinator, attended
HNCA’s Kick It With Health Net
several events to hand out wellness information and
Encouraging people to make better health choices
got involved helping the kids with their drills. “Because
requires many different approaches. Recognizing this,
the kids were so excited, I joined in the fun and created
Health Net of California (HNCA) began a grassroots
a contest to see who could win the most Health Net
sponsorship program in mid-2005 to help parents and
stickers.”
children further their own goals for healthy living.
“The sponsorship program is about building health
awareness in our communities while strengthening To find out more, go to www.kickitwithhealthnet.com
Health Net’s brand and involving associates,” explains
Tiffany Kobashigawa, manager, HNCA Marketing.
summer 2006 connections 5

8. GROWTH
Health Net simplifies
the way for consumers
84, Health Net member Yolanda
At Brach of Queens, N.Y., says, “I
don’t take any prescription medicine so I wasn’t
overly concerned about choosing a Medicare
Part D plan. After talking with family and friends,
I realized that whether I needed it or not, choosing
a plan was important.”
Brach says that, “As a Health Net member, I
trusted the company to enroll me in a plan that
works for me.” She may not need a prescription
drug plan right now – but she feels comfortable
that she has the right coverage at the right
price if and when she does.
Her positive experience as a Health Net
member prompted her to recommend
Health Net to her friends.
Showing customers like Brach why her
Medicare decision DOES matter is
the way Health Net is carving a niche
for itself in the complex and often
confusing world of Medicare. This
world was altered dramatically
when changes authorized by
the Medicare Prescription Drug
6 connections summer 2006

9. Total Medicare Total Medicare Geographic Growth
Enrollment Growth Revenue Growth • We currently sell Medicare Advantage (MA)
in five states: Arizona, California, Connecticut,
Oregon and New York. Health Net sells
the stand-alone PDP in 10 states, the five
states where we currently sell MA (listed
above), plus: Massachusetts, New Jersey,
Rhode Island, Vermont and Washington.
• Effective in 2007, Health Net is approved
to sell the PDP in all 50 states.
Q4 2005 to Q1 2006: Q4 2005 to Q1 2006:
Enrollment increased Revenue increased
156% – from 174,000 47% – from $391 million
to 445,000 in Medicare to $576 million.
Advantage and PDP.
“I’ve had my share of medical problems and I am legally
blind. I was concerned about the changes in Medicare. I
Improvement and Modernization Act of 2003 (MMA) didn’t really understand how it worked. Thankfully, Health
went into full effect on January 1, 2006, and seniors Net helped me enroll in the Part D for my area. Because of
felt the direct impact. my medical issues I have a personal relationship with my
pharmacist – he is happy with the plan selected for me,
These changes, the most sweeping since the Medicare
too – my medications are all covered and that means I
program began in 1965, allow private health plans to offer
don’t have think about it.”
prescription drug coverage (Medicare Part D) directly
Theresa Napolitano, Queens, N.Y.
to Medicare-eligible beneficiaries–more than 43 million
Health Net member for five years
individuals.
However, unlike Medicare Parts A and B which are Standing on firm ground
automatically provided to eligible seniors by the federal Health Net banked on its long-standing tradition
government, seniors can only access government- and deep-seated experience serving seniors to take
sponsored Part D benefits by signing up through a aim at the new Part D market. Even before the Part D
qualified plan sponsor like Health Net. enrollment season opened last fall, Health Net was
Largest product launch in company’s history already the nation’s fourth-largest Medicare Advantage
Undaunted by the complexity of the MMA legislation contractor with a 6 percent market share based on
and spurred by the opportunity to address the needs of approximately 171,000 members in five states.
the senior population, Health Net seized the Medicare Health Net’s core markets represent one-third of the
Part D opportunity. total Part D opportunity, which is 43 million eligibles.
Embracing the double-digit revenue and enrollment Carpe Diem! New markets, new products,
growth potential it represented for the company, with new members
record speed Health Net hit the market with 98 new With the first open enrollment season behind us,
plans during the first open enrollment season. This made Health Net’s Medicare growth is encouraging. Medicare
it the single largest product launch in Health Net’s history. Part D membership at the end of the first quarter of
The company’s course was clear and direct. “It was 2006 was 255,000. Medicare Advantage membership
paramount for us to distinguish ourselves at the outset, rose by 9 percent, or approximately 16,000 members,
so we built Health Net’s Medicare Part D strategy on the to 190,000 at the end of the first quarter of 2006. The
belief that we could make Medicare simple, and in so largest Medicare Advantage gains occurred in California
doing, engender trust,” Sam Srivastava, chief senior and the Northeast.
products officer, Medicare, tells us. “Simplicity is the (Continued on next page.)
pathway to trust” became our guiding principle.
summer 2006 connections 7

10. Across the nation, the Part D program is doing quite “HNPS’s bench strength gave us the leadership we
well, despite some initial bumps in the road. Enrollment needed for the heavy lifting,” notes Linda Brisbane, VP,
among all U.S. beneficiaries reached 90 percent as of the Senior Products Division Operations. “This allowed us
May 15 deadline – and enrollees are now saving an average to focus on the design and pricing of our new MA and
of $1,500 annually on their prescription medications. MAPD products to keep them relevant and affordable
“While positioning ourselves was vital to launch our for the older American audience.”
Part D effort, delivering was what we had to do,” continues Doing our part: associates bring the message home
Sam. “We had to be prepared to support sales in current “Health Net associates are our most important brand
markets, stage to enter new markets, design new product ambassadors,” says Gail Watts, VP, Organization
offerings, negotiate with providers and rapidly expand Effectiveness. “Medicare Part D offered an unprecedented
our infrastructure. These were the logistical ‘Everests’ opportunity to demonstrate that belief.”
we had to surmount – and did.” That’s why, as Part D enrollment approached, Health
Health Net showcased its abilities with an advance on Net associates were tapped as Medicare navigators not
the market that included a “call to action” advertising only at work, but at home too. According to John Sivori,
blitz with well-known actor and retired Tennessee president, HNPS, “As sons and daughters, nieces,
Senator Fred Thompson, who gave voice to the solutions nephews and grandchildren of members and potential
Health Net offered. Creative events proliferated – such as members, associates could take a very personal role in
“senior proms” to entertain and educate Medicare-eligibles, communicating the importance of signing up for a
as well as a storefront in a popular mall in Tempe, Ariz., Medicare Part D plan.”
where seniors could walk in and sign up. To arm them with what they needed to reach out to
As the second enrollment season in November gets loved ones, Medicare Marketing prepared training and
closer, hopes are high that we will continue to grow communications. “This included a dedicated phone number
steadily as we perfect our strategies. We also will be family and friends could call for preferred handling,” says John.
expanding to additional geographic markets. “So far, we’ve received more than 350 associate referrals.”
Taking expansion in stride “Never before has Health Net launched a product
So how did Health Net move so quickly to pull off offering where associates played such a strategic role,”
our single largest product launch in company history? Gail explains. “We encourage associates to stay engaged
It required drawing on the established expertise in
several areas – and the dedicated teamwork of these
associates – to make things happen.
Notably, to expand so rapidly and keep
administrative costs low, Health Net’s
Senior Products Division (SPD)
built upon the existing Health
Net Pharmaceutical Services
(HNPS) infrastructure and
benefit management
capability to launch
and support the during this fall’s open enrollment season, and to
Medicare Part D continue communicating our message of ‘simplicity’
drug benefit. to family members and friends who are newly eligible.”
Where are we now?
“Medicare Part D is a great success story,” says Sam.
“It didn’t go off without a hitch, but we’ve proven how
very good we are at troubleshooting and making things
right for the customer. And we’ve kept our promise to
keep things simple.”
8 connections summer 2006

11. A look ahead – What’s next for Health Net
and Medicare Part D
“Our Medicare strategy for 2007 and beyond includes
product enhancements and geographic expansion of our
markets. We’ll also build on our best practices, including
our Medicare retail store piloted in Arizona. A resounding
success, the storefront demonstrates our understanding
of the customer and a respect for diverse needs,” explains Simplicity Health Net offers consumers the
Mike Clark, VP, National Medicare Sales. “Health Net’s right coverage through easy-to-understand and
Medicare officers are developing outlets in California, easy-to-use plans in two basic categories: Medicare
Oregon, New York and Connecticut.” Advantage with prescription drug coverage and a
stand-alone prescription drug plan.
A new Fall advertising campaign is in the creative stages,
as are new online distribution tools for members and brokers, Broad networks Our vast networks of contracted
provider kits, and additional color-coded product collateral. physicians, hospitals, pharmacies and medical
professionals provide care that is comprehensive
Reality check and accessible.
Individuals who enrolled in the sign-up-now-or-pay-more-
later rush to beat the first May 15 deadline took advantage of Access to a wide range of commonly
the grace period allowed to scrutinize their choices. They prescribed generic and brand-name drugs.
had until June 30, 2006, to make a switch. Health Net Plans with no deductibles and coinsurance
focused on assisting enrollees during this last-chance phase. For many common services, we have a feature that
“We’ve learned important lessons from our first Part D eliminates deductible and coinsurance requirements,
experience, all of which will contribute to improvements and Heath Net covers members from their very
first claim.
that will directly benefit our customers and our business,”
Sam concludes. “It’s a very exciting time for us. Our
strategy for success going forward is to diversify our
Senior Products portfolio and expand geographically to
fulfill the needs of all seniors. That’s our next wave.” The look and feel of our 2006 Medicare campaign.
“By putting our customers’ needs and expectations
first, we will be able to constantly improve products and
services in a way that matters – and that is what we
plan to do,” says Jim Woys, president, Government and
Specialty Services (including Medicare). “Senior Products is a
key growth engine of Health Net. The Part D opportunity
allows us to fulfill our long-term commitment to offer
solutions to seniors that will improve their health and
well-being.”
Look for past coverage and ongoing communications
about Medicare.
• On HN Connect: Medicare ad roundup on
Jay’s Corner… 5/1/06.
• HNAZ’s Medicare storefront on Latest News…
3/17/06
• On www.healthnet.com > Medicare
enrollment information for family and friends.
summer 2006 connections 9

12. GROWTH
Our Commercial Business:
The Ad
Blitz Is On!
Product innovation and
advertising aim to spur Health
Net’s commercial growth
Sample of HNCA's “Health
Nut” billboard campaign.
B
Focus on California and the network in select counties in
Northeast Southern California. XtraValue and
etter relationships with
Silver Network also are available
doctors, pricing that First, “What’s New?” to Mid-Market employers and are
fits consumer demand Building on existing product lines, attracting keen attention.
and getting a handle on cost California has revamped and expanded
Finally, California is doing the
trends add up to a healthier bottom many of its products and introduced
network expansion, contracting
groundbreaking additions to its Salud
line for Health Net. Add to the and operations work necessary to
con Health Net product aimed at
mix improved products and new enhance its PPO offering. By offering
the state’s rapidly expanding Latino
offerings to enrich our growth a stronger PPO option, we can better
population.
and we have a winning formula serve our California customers.
For example, the Individual &
for Health Net’s product, sales The Northeast made waves with
Family Plans (IFP) group launched
and marketing teams. the launch of an integrated health
three new “Simple Value” zero-
savings account (HSA) product on
Capture the public eye with deductible plans with flexible pharmacy
January 1, 2006, with Wells Fargo
creative advertising in strategic options that have quickly become
serving as its financial partner.
best sellers. Small Business Group
locations and voila! Our reputation (California also will be bringing Wells
(SBG) added four new plans in May
grows and our commercial Fargo to its HSA offering in the third
to fill gaps in an already robust port-
enrollment begins to increase. quarter of 2006.) In New York and
folio that includes the XtraValue and
This strategy’s proving true this New Jersey, a new suite of more
Silver Network options. XtraValue
affordable plans for our OutlookSM
year for commercial business plans are SBG’s lowest cost, full-
product portfolio inspired significant
and bodes well for the future. network option, while Silver Network
growth in the self-insured market.
offers affordability with a smaller
10 connections summer 2006

13. Getting the word out: to make an informed decision about It’s about the customer
Advertising takes off treatment.” Decision PowerSM is one of
The following illustrates how Health the tools we offer to assist them with “With Health Net’s new company-
Net’s advertising and outreach are advice and the best course of treatment. wide focus on ‘customer intimacy’
developing as we continue defining According to Mark, “Small businesses as its value proposition, we’re
what it means to be a “customer are the backbone of California’s econo- looking to develop and present our
intimate” company. (See side bar.) my. Our 2006 blitz lets people know products – nationally and locally –
about our Enhanced Choice for small to better meet our customers’
California breaks out of
businesses – which includes more needs,” says Kathleen Richard,
the quiet mode
affordable plans for this market than
A common question among California Health Net’s Enterprise officer.
any other carrier in California. We are
associates used to be, “Why don’t we Kathleen leads our value proposition
seeing encouraging signs that HNCA
advertise?” Now, you’d be hard pressed development to help drive sales
Commercial is back on a growth trajectory.”
to find many Californians who haven’t and support growth within and
heard or seen some type of ad for California advertising includes TV
spots, billboards and prints ads in local
across our markets.
Health Net of California (HNCA).
and national publications. See samples “That means building on our
The first campaign began last fall and
in this story and on HN Connect. ‘go local’ business strategies to
answered the question, “Why is Health
Investing in the Latino market systematically get even closer to
Net a better decision?”
Great fanfare accompanied the our customers,” she explains, “to
“One of the key messages emphasized
announcement of enhancements to understand what our members
Health Net’s stability – 25 years of
experience, 6 million members and the HNCA’s Salud con Health Net product need and how best to deliver it to
staying power of a $12 billion company,” suite at an event at the Mexican them. As we move along this path,
states Mark Morgan, HNCA chief Consulate in Los Angeles. Salud our products, marketing and
commercial officer. “Another message enhancements include two new products– advertising will play a critical role–
reassured members that they can Mexi-Plan and Health Net Cross-Border reflecting how we are becoming
count on us to be available when they Individual and Family Plan – the first the health care company that
need us – whether they’re ready to ever cross-border health care plans
uniquely understands and serves
begin a fitness program, or they have available to individual consumers who
its customers with the solutions
a serious health condition and need purchase benefits directly from insurers.
they need.”
(Continued on next page.)
So How Big Is Health Net’s
Commercial Business?
Our commercial franchises – HNCA,
HNOR, HNAZ, HNNE-NY, NJ, CT – are the
largest segment of our company with:
• More than 2 million members.
• Boasting about 53 percent
of total Health Net revenues.
Sample of HNCA’s East Los Angeles and
State Health Programs ad campaign.
summer 2006 connections 11

14. HNNE New Jersey direct mail campaign sample.
products opened in East Los Angeles “We’ve run at least four distinctive
in June. ads for each town,” says Jennifer
HNAZ has its own storefront in Ravalli, regional marketing
a mall in Mesa, Ariz., launched to coordinator, Shelton, Conn. (See
Fifteen media outlets were encourage Medicare Part D enroll- samples, next page.) “Health Net
attracted to the festivities – print, ment. (See mention in story on associates living in these communities
radio and television–resulting in Medicare, page 8). The storefront help us choose which events
extensive coverage and giving concept is an example of a “customer to feature in the ads. In some
enrollment a major boost – with intimate” approach to recognizing instances, we cleverly include a
nearly 1,000 calls coming in on the unique and diverse needs. reference to a Health Net associate
first day of offering Mexi-Plan. who lives in the community.”
The Northeast goes grassroots
California associates cultivate Northeast Marketing will expand
with MyTown
Salud enrollment MyTown to other parts of HNNE.
In response to feedback from
Keeping the momentum going, “So associates should keep that local
HNNE associates, Northeast
20 associates manned the phone information coming,” Jennifer adds.
Marketing is playing up the unique-
banks and answered consumer ness of the small town flavor of the New Jersey: Health Net’s back!
calls on health insurance during an region with MyTown, an extremely With the launch of the new
information special on the popular local marketing campaign based OutlookSM suite of products in New
Latino-focused Los Angeles-based around selected Connecticut Jersey, the Marketing team took an
Univision television station. communities. integrated approach to get the word
Throughout the program, Health “MyTown positions Health Net out and help reinvigorate the Health
Net’s Ana Andrade, VP, Latino as a local plan of choice, uniquely Net brand. The June kick-off features
Programs, discussed HNCA’s role connected to what makes each collateral, targeted direct mail to
in creating more affordable access community a one-of-a-kind place,” company decision-makers, e-mail
to care for Latinos. For customer says Paul Lambdin, HNNE chief blasts to brokers, and a New Jersey
service representative Isela Torres, commercial officer. “The MyTown print media plan including all the
the experience was very rewarding. campaign targets decision makers, major newspapers in Northern
“Participating in this event gave us brokers, CEOs and others where New Jersey.
all a great opportunity to provide they live.” There’s no doubt about it:
the community with important Besides its myriad programs, Health Net Commercial is on
information,” says Isela. social events and sporting event the move – and advertising and
Another brainchild of associate sponsorships, MyTown includes a Health Net associates are organic
origin is the storefront concept. newspaper advertising campaign to the effort.
Maria Lugo, director of Sales, came for each community. The ads are
up with the idea to bring information as local as local gets – in many cases,
and enrollment opportunities to only those from within the
Latinos in the way they are most neighborhood targeted actually
comfortable: face-to-face. To that “get it.”
end, a sales storefront for all HNCA
12 connections summer 2006

15. GREAT PLACE TO WORK
What’s the
Magic to Saving?
For associates,
it’s Health Net’s
401(k) Savings Plan
“There’s no
doubt about it: Y ou’ve probably
heard the saying
Health Net Commercial “a penny saved is a penny
is on the move – and earned” – and putting away
a little money on a regular
advertising and Health basis is certainly the first step
Net associates are toward saving. But Health Net’s
organic to the effort.” 401(k) Savings Plan can transform
your pennies saved into much more – and it’s
no hocus-pocus. Here’s how.
Health Net contributes, too
For every dollar you save in the 401(k) Savings Plan, Health Net puts
in a dollar, too, up to 3 percent of your eligible compensation. If you
save even more, Health Net will match 50 percent of the next 2 percent
you contribute. It’s an amazing return on your money and makes
your savings grow quickly. You’ll want to contribute enough to get
the free match money, but you also can save and invest even more.
Pretax saving = $$$
401(k) contributions are not taxed until you withdraw them later.
The money you would pay in taxes is instead available to help your
savings grow through potential investment earnings.
Beginning to see how 401(k) savings benefits are no illusion?
To learn more, go to HN Connect > HR Link > My Knowledge Link >
401(k). Or, contact the Associate Service Center (ASC) at
1-877-HR-HELPS (1-877-474-3577).
Samples from HNNE MyTown ad campaign in
Connecticut. Top: Refers to Kendle Klein, Manager,
Sales Administration, Shelton, involved in local
theater. Bottom: Refers to the Garden Club of
Woodbridge’s Notable Tree Project. summer 2006 connections 13

16. So What Do YOU Think?
Fifty bucks says “we really want to hear from you.”
To be entered in a random drawing to win one of five $50 SuperCertificates®
to shop at GiftCertificates.com, send us your feedback to help make
Connections a magazine that gives you a better understanding of Health Net.
Simply e-mail answers to the following How to Reply and Enter:
three questions by August 15, 2006: • Put your answers to the three questions
1. Did you enjoy reading Connections? in an e-mail.
Why or why not? • Type Connections Feedback in the
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Why or why not? the “To” box of your e-mail and send it
3. What stories or types of stories would by August 15, 2006.
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of Connections? e-mail. Winners names will appear on HN Connect.
Thank you in advance for your comments.
HN Connect
Your Online Resource for Breaking
Did you know
Health Net at a glance …
?
• Provides health benefits to approximately
News and Updates
6.6 million individuals.
HN Connect is your resource for the latest
• Employs approximately 9,800 associates.
Health Net news and information. Check out the
home page and your business unit or department • Reported revenues of $11.9 billion for 2005.
page for the most up-to-date information on
what's happening in our company. • Among Fortune 200 companies, is ranked
• For an online version of this magazine with live links
seventh in profit improvement and 15th
to related stories, go to HN Connect > Find It Fast > in total shareholder return for 2005.
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• Find It Fast: a collection of customizable links for one-click
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14 connections summer 2006