##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 000-51954
 
 DCP Holding Company
  Ohio
    
    20-1291244(State or Other Jurisdiction of
    
    (IRS Employer Identification No.)Incorporation or Organization)
 100 Crowne Point Place
    
    45241Sharonville, Ohio
    
    (Zip Code)(Address of Principal Executive Office)
  
 þ o
  Large accelerated filer o   
    Accelerated filer o
    Non-accelerated filer þ
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



PART I  FINANCIAL INFORMATION
 PAGEItem 1. Condensed Consolidated Financial Statements (Unaudited)
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity and Use of Proceeds
    
    
    20Item 3. Defaults Upon Senior Securities
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Signatures
    
    
    22EX-31.1EX-31.2EX-32
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Item 1. Financial Statements.  DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 June 30,
    
    
    December 31,2008
    
    
    2007ASSETSINVESTMENTS:Fixed maturities at fair value, cost of $700,000 and $1,109,000
at June 30, 2008 and December 31, 2007, respectively
    
    $
    699,013
    
    
    $
    1,109,683Short-term investments at fair value, cost of $4,411,692 and $4,113,020
at June 30, 2008 and December 31, 2007, respectively
    
    
    4,419,682
    
    
    
    4,112,868Total investments
    
    
    5,118,695
    
    
    
    5,222,551CASH
    
    
    1,971,102
    
    
    
    2,262,888ACCRUED INVESTMENT INCOME
    
    
    20,536
    
    
    
    34,592ACCOUNTS RECEIVABLE, net of allowance of $11,941 and $3,499
at June 30, 2008 and December 31, 2007, respectively
    
    
    451,147
    
    
    
    560,880UNBILLED ACCOUNTS RECEIVABLE (Note 2)
    
    
    26,737,274REINSURANCE RECOVERABLE ON PAID LOSSES
    
    
    35,980
    
    
    
    26,500DEFERRED ACQUISITION COSTS (Note 2)
    
    
    1,340,562PROPERTY AND EQUIPMENT
    
    
    4,773,113
    
    
    
    4,526,347Less accumulated depreciation and amortization
    
    
    (1,785,894
    )
    
    
    (1,583,009
    )Total property, plant, and equipmentnet
    
    
    2,987,219
    
    
    
    2,943,338INTANGIBLE ASSETS, net of accumulated amortization of $59,143 and $51,486
at June 30, 2008 and December 31, 2007, respectively
    
    
    180,857
    
    
    
    188,532GOODWILL
    
    
    136,355
    
    
    
    136,355DEFERRED INCOME TAX
    
    
    240,448
    
    
    
    243,804OTHER ASSETS
    
    
    668,329
    
    
    
    665,791TOTAL ASSETS
    
    $
    39,888,504
    
    
    $
    12,285,231LIABILITIES AND SHAREHOLDERS EQUITYCLAIMS PAYABLE
    
    $
    2,240,356
    
    
    $
    2,490,251UNEARNED PREMIUM REVENUE (Note 2)
    
    
    27,621,693
    
    
    
    666,411OTHER PAYABLES AND ACCRUALS
    
    
    3,099,931
    
    
    
    2,118,107MORTGAGE LOAN PAYABLE
    
    
    1,200,000
    
    
    
    1,260,000CAPITAL LEASE OBLIGATION
    
    
    132,758
    
    
    
    242,877DEFERRED COMPENSATION
    
    
    517,049
    
    
    
    416,374TOTAL LIABILITIES
    
    
    34,811,787
    
    
    
    7,194,020REDEEMABLE COMMON SHARES:Class A, Redeemable Common Shares, no par valueauthorized, 7,500 shares;
issued and outstanding, 646 and 653 at June 30, 2008 and December 31, 2007, respectively
    
    
    385,241
    
    
    
    392,603Class B Redeemable Common Shares, no par valueauthorized, 100,000 shares;
issued and outstanding, 7,867 and 7,815 at June 30, 2008 and December 31, 2007, respectively
    
    
    4,691,476
    
    
    
    4,698,608Total redeemable common shares
    
    
    5,076,717
    
    
    
    5,091,211SHAREHOLDERS EQUITYPreferred Shares; no par valueauthorized, 100,000 shares; issued, noneTOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    39,888,504
    
    
    $
    12,285,231
  1




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DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007REVENUESPremium revenue
    
    $
    16,126,075
    
    
    $
    14,553,860
    
    
    $
    31,660,271
    
    
    $
    29,412,927Investment income
    
    
    52,083
    
    
    
    58,152
    
    
    
    117,873
    
    
    
    108,781Other income
    
    
    12,196
    
    
    
    17,086
    
    
    
    25,935
    
    
    
    50,817Total revenues
    
    
    16,190,354
    
    
    
    14,629,098
    
    
    
    31,804,079
    
    
    
    29,572,525EXPENSESHealthcare services expense
    
    
    13,016,785
    
    
    
    11,355,944
    
    
    
    25,938,783
    
    
    
    23,500,357Insurance expense:Salaries and benefit expense
    
    
    1,076,868
    
    
    
    983,489
    
    
    
    2,189,317
    
    
    
    1,302,928Commission expense
    
    
    606,041
    
    
    
    536,480
    
    
    
    1,267,278
    
    
    
    2,058,710Other insurance expense
    
    
    1,104,699
    
    
    
    1,194,804
    
    
    
    2,479,236
    
    
    
    2,409,809Total insurance expense
    
    
    2,787,608
    
    
    
    2,714,773
    
    
    
    5,935,831
    
    
    
    5,771,447Total expenses
    
    
    15,804,393
    
    
    
    14,070,717
    
    
    
    31,874,614
    
    
    
    29,271,804INCOME (LOSS) BEFORE INCOME TAX
    
    
    385,961
    
    
    
    558,381
    
    
    
    (70,535
    )
    
    
    300,721INCOME TAX EXPENSE (BENEFIT)
    
    
    135,626
    
    
    
    187,676
    
    
    
    (24,786
    )
    
    
    105,710EARNINGS (LOSS) ON REDEEMABLE COMMON SHARES
    
    $
    250,335
    
    
    $
    370,705
    
    
    $
    (45,749
    )
    
    $
    195,011BASIC EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE
    
    $
    29.60
    
    
    $
    45.45
    
    
    $
    (5.41
    )
    
    $
    23.92DILUTED EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE
    
    $
    29.60
    
    
    $
    45.22
    
    
    $
    (5.41
    )
    
    $
    23.79
  2




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DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON SHARES AND SHAREHOLDERS EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND 2007 (Unaudited)
 Redeemable Common Shares
    
    
    Shareholders EquityClass A
    
    
    Class B
    
    
    
    
    
    
    Other AccumulatedNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings (Deficit)
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCEDECEMBER
31, 2007
    
    
    653
    
    
    $
    392,603
    
    
    
    7,815
    
    
    $
    4,698,608Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (45,749
    )
    
    
    
    
    
    $
    (45,749
    )
    
    $
    (45,749
    )Change in fair
value of interest
rate swap (net of
income tax
benefit of
$2,428)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (4,714
    )
    
    
    (4,714
    )
    
    
    (4,714
    )Unrealized gain
on investments
(net of income
tax of $5,785)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,228
    
    
    
    11,228
    
    
    
    11,228Total
comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (39,235
    )Class B Common
Shares issued
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    53,145Class A Common
Shares exchanged
for Class B
Common Shares
    
    
    (3
    )
    
    
    (1,698
    )
    
    
    3
    
    
    
    1,698Common shares
redemptions
    
    
    (4
    )
    
    
    (2,367
    )
    
    
    (44
    )
    
    
    (26,037
    )Accretion
(dilution) of
common shares to
redemption value
    
    
    
    
    
    
    (3,297
    )
    
    
    
    
    
    
    (35,938
    )
    
    
    45,749
    
    
    
    (6,514
    )
    
    
    39,235BALANCEJUNE 30,
2008
    
    
    646
    
    
    $
    385,241
    
    
    
    7,867
    
    
    $
    4,691,476
    
    
    $
    
    
    
    $
    
    
    
    $
 Redeemable Common Shares
    
    
    Shareholders EquityClass A
    
    
    Class B
    
    
    
    
    
    
    Other AccumulatedNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings (Deficit)
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCEDECEMBER
31, 2006
    
    
    681
    
    
    $
    362,853
    
    
    
    7,438
    
    
    $
    3,963,138Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    195,011
    
    
    
    
    
    
    $
    195,011
    
    
    $
    195,011Change in fair
value of interest
rate swap (net of
income tax of
$1,190)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,311
    
    
    
    2,311
    
    
    
    2,311Unrealized gain
on investments
(net of income
tax benefit of
$1,135)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,202
    )
    
    
    (2,202
    )
    
    
    (2,202
    )Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    195,120Cumulative effect
of change in
accounting
principle (FIN
48)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,997
    )
    
    
    
    
    
    
    (5,997
    )Class B Common
Shares issued
    
    
    
    
    
    
    
    
    
    
    292
    
    
    
    153,492Class A Common
Shares exchanged
for Class B
Common Shares
    
    
    (18
    )
    
    
    (9,473
    )
    
    
    18
    
    
    
    9,473Common shares
redemptions
    
    
    (4
    )
    
    
    (1,724
    )
    
    
    (54
    )
    
    
    (24,157
    )Accretion of
common shares to
redemption value
    
    
    
    
    
    
    14,626
    
    
    
    
    
    
    
    174,497
    
    
    
    (189,014
    )
    
    
    (109
    )
    
    
    (189,123
    )BALANCEJUNE 30,
2007
    
    
    659
    
    
    $
    366,282
    
    
    
    7,694
    
    
    $
    4,276,443
    
    
    $
    
    
    
    $
    
    
    
    $
  3




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DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 For the Six Months EndedJune 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss) on redeemable common shares
    
    $
    (45,749
    )
    
    $
    195,011Adjustments to reconcile net income (loss)
to net cash provided by operating activities:Depreciation and amortization
    
    
    210,559
    
    
    
    203,594Effects of changes in operating assets and liabilities:Accrued investment income
    
    
    14,056
    
    
    
    3,163Accounts receivable
    
    
    109,733
    
    
    
    117,643Unbilled accounts receivable
    
    
    (26,737,274
    )Reinsurance recoverable on paid losses
    
    
    (9,480
    )
    
    
    (12,872
    )Deferred acquisition costs
    
    
    (1,340,562
    )Other assets
    
    
    861
    
    
    
    (39,778
    )Claims payable
    
    
    (249,895
    )
    
    
    (737,099
    )Unearned premium revenue
    
    
    26,955,282
    
    
    
    382,110Other payables and accruals
    
    
    972,786
    
    
    
    (158,241
    )Deferred compensation
    
    
    125,642
    
    
    
    122,536Net cash provided by operating activities
    
    
    5,959
    
    
    
    76,067CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of property, plant and equipment
    
    
    (246,767
    )
    
    
    (91,286
    )Purchases of investments
    
    
    (8,914,803
    )
    
    
    (3,624,489
    )Sales and maturities of investments
    
    
    9,025,132
    
    
    
    2,399,569Net cash used in investing activities
    
    
    (136,438
    )
    
    
    (1,316,206
    )CASH FLOWS FROM FINANCING ACTIVITIES:Mortgage loan repayments
    
    
    (60,000
    )
    
    
    (60,000
    )Repayment of capital lease
    
    
    (110,119
    )
    
    
    (103,650
    )Repayments of note
    
    
    
    
    
    
    (55,417
    )Repurchase of redeemable common shares
    
    
    (19,366
    )
    
    
    (44,389
    )Redeemable common shares issued
    
    
    28,178
    
    
    
    153,492Net cash used in financing activities
    
    
    (161,307
    )
    
    
    (109,964
    )DECREASE IN CASH
    
    
    (291,786
    )
    
    
    (1,350,103
    )CASHBeginning of period
    
    
    2,262,888
    
    
    
    5,208,153CASHEnd of period
    
    $
    1,971,102
    
    
    $
    3,858,050SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
    
    $
    37,544
    
    
    $
    50,289Cash paid for income taxes
    
    
    65,000
    
    
    
    75,000NON-CASH INVESTING AND FINANCING ACTIVITIES:Redeemed common shares in other current liabilities
    
    $
    9,038
    
    
    $
    32,244Redeemable common shares issued in lieu of cash payment of deferred compensation
    
    
    24,967
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DCP HOLDING COMPANY AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2008 (UNAUDITED)
 1.
    
    BASIS OF PRESENTATION
   2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Premium Revenue 
 Fully-Insured
 Self-Insured
 5




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Healthcare Service Expense
    Reinsurance 
 Deferred Acquisition Costs
 Use of Estimates
 6




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3.
    
    NEW ACCOUNTING PRONOUNCEMENTS
 
     
  4.
    
    DEFERRED COMPENSATION PLAN
  7




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5.
    
    EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss) accretive (dilutive) to redeemable common shareholders
    
    $
    250,335
    
    
    $
    370,705
    
    
    $
    (45,749
    )
    
    $
    195,011Weighted average outstanding redeemable common shares used to compute
basic earnings (loss) per redeemable common share
    
    
    8,457
    
    
    
    8,156
    
    
    
    8,452
    
    
    
    8,154Weighted average outstanding redeemable common shares used to compute
diluted earnings (loss) per redeemable common share
    
    
    8,457
    
    
    
    8,198
    
    
    
    8,452
    
    
    
    8,196Basic earnings (loss) per redeemable common share
    
    $
    29.60
    
    
    $
    45.45
    
    
    $
    (5.41
    )
    
    $
    23.92Diluted earnings (loss) per redeemable common share
    
    $
    29.60
    
    
    $
    45.22
    
    
    $
    (5.41
    )
    
    $
    23.79
  6.
    
    SEGMENT INFORMATION
  8




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Three Months Ended
    
    
    Three Months EndedJune 30, 2008
    
    
    June 30, 2007Revenues-
    
    
    Healthcare
    
    
    
    
    
    
    Revenues-
    
    
    HealthcareExternal
    
    
    Services
    
    
    
    
    
    
    External
    
    
    ServicesCustomers
    
    
    Expense
    
    
    Total
    
    
    Customers
    
    
    Expense
    
    
    TotalReportable segments:Fully-insured dental
    
    $
    9,796
    
    
    $
    7,695
    
    
    $
    2,101
    
    
    $
    10,241
    
    
    $
    7,769
    
    
    $
    2,472Self-insured dental
    
    
    6,215
    
    
    
    5,322
    
    
    
    893
    
    
    
    4,217
    
    
    
    3,587
    
    
    
    630Corporate, All Other
    
    
    115
    
    
    
    
    
    
    
    115
    
    
    
    96
    
    
    
    
    
    
    
    96Total
    
    $
    16,126
    
    
    $
    13,017
    
    
    
    3,109
    
    
    $
    14,554
    
    
    $
    11,356
    
    
    
    3,198Investment income
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    58Other income
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    17Insurance expense
    
    
    
    
    
    
    
    
    
    
    2,787
    
    
    
    
    
    
    
    
    
    
    
    2,715Income before income tax
    
    
    
    
    
    
    
    
    
    $
    386
    
    
    
    
    
    
    
    
    
    
    $
    558Total assets-corporate
    
    
    
    
    
    
    
    
    
    $
    39,889
    
    
    
    
    
    
    
    
    
    
    $
    12,559
 Six Months Ended
    
    
    Six Months EndedJune 30, 2008
    
    
    June 30, 2007Revenues-
    
    
    Healthcare
    
    
    
    
    
    
    Revenues-
    
    
    HealthcareExternal
    
    
    Services
    
    
    
    
    
    
    External
    
    
    ServicesCustomers
    
    
    Expense
    
    
    Total
    
    
    Customers
    
    
    Expense
    
    
    TotalReportable segments:Fully-insured dental
    
    $
    19,183
    
    
    $
    15,476
    
    
    $
    3,707
    
    
    $
    20,424
    
    
    $
    16,011
    
    
    $
    4,413Self-insured dental
    
    
    12,225
    
    
    
    10,463
    
    
    
    1,762
    
    
    
    8,757
    
    
    
    7,489
    
    
    
    1,268Corporate, All Other
    
    
    252
    
    
    
    
    
    
    
    252
    
    
    
    232
    
    
    
    
    
    
    
    232Total
    
    $
    31,660
    
    
    $
    25,939
    
    
    
    5,721
    
    
    $
    29,413
    
    
    $
    23,500
    
    
    
    5,913Investment income
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    
    
    
    
    
    
    
    
    109Other income
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    51Insurance expense
    
    
    
    
    
    
    
    
    
    
    5,936
    
    
    
    
    
    
    
    
    
    
    
    5,772Income (Loss) before income tax
    
    
    
    
    
    
    
    
    
    $
    (71
    )
    
    
    
    
    
    
    
    
    
    $
    301Total assets-corporate
    
    
    
    
    
    
    
    
    
    $
    39,889
    
    
    
    
    
    
    
    
    
    
    $
    12,559
  9




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##### Table of Contents



7.
    
    FAIR VALUE MEASUREMENTS
  
    
    Level 1  Valuations based on quoted prices in active markets for identical
assets or liabilities that the entity has the ability to access.
    
    Level 2  Valuations based on significant other observable inputs other than
those included in Level 1 such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, or other inputs that are observable
or can be corroborated by observable data for substantially the full term of the
assets or liabilities.
    
    Level 3  Valuations based on unobservable inputs such as when observable inputs
are not available or inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  Level 1
    
    
    Level 2
    
    
    Total BalanceAssetsFixed maturities
    
    
    
    
    
    $
    699
    
    
    $
    699Short-term
investments (a)
    
    
    
    
    
    
    1,267
    
    
    
    1,267Deferred
compensation investments (b)
    
    $
    152
    
    
    
    
    
    
    
    152Interest rate swap (b)
    
    
    
    
    
    
    20
    
    
    
    20State guarantee fund deposits (b)
    
    
    238
    
    
    
    50
    
    
    
    288Total
    
    $
    390
    
    
    $
    2,036
    
    
    $
    2,426
 
 
    
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking statements
  10




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Overview
    Profitability Strategy
      11




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##### Table of Contents



Highlights
 
    
    We generated net income of approximately $250,000 in the three months ended June 30, 2008
compared to net income of approximately $371,000 for the three months ended June 30, 2007.
    
    We had a net loss of approximately $(46,000) for the six months ended June 30, 2008
compared to net income of approximately $195,000 for the six months ended June 30, 2007.
    
    Our dental and vision products grew by 16,200 members, or 6.6%, from approximately
245,000 members at December 31, 2007 to approximately 261,200 members at June 30, 2008. Our
membership at June 30, 2008 includes approximately 19,500 members from sales related to our
DentaSelect dental PPO offering.
    
    We amended all of our fully-insured dental HMO and dental indemnity employer group
contracts effective May 1, 2008 and all of our fully-insured dental PPO employer group
contracts effective June 1, 2008 to be non-cancelable by DCP. This change to our
fully-insured contracts has been well received by our customers.
    
    As of June 1, 2008, nearly all of the fully-insured dental PPO employer group contracts
in Ohio are now underwritten by DCP.
 Comparison of Results of Operations
   12




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##### Table of Contents



As of
    
    As ofJune 30, 2008
    
    June 30, 2007
    
    ChangeMembership:Fully-insured dental
    
    
    151,400
    
    
    
    150,500
    
    
    
    0.6
    %Self-insured dental
    
    
    95,500
    
    
    
    69,800
    
    
    
    36.8
    %Corporate, all other
    
    
    14,300
    
    
    
    16,400
    
    
    
    -12.8
    %Total membership
    
    
    261,200
    
    
    
    236,700
    
    
    
    10.4
    %Three months ended
    
    
    Three months endedJune 30, 2008
    
    
    June 30, 2007
    
    
    ChangePremium revenue:Fully-insured dental
    
    $
    9,796
    
    
    $
    10,241
    
    
    
    -4.3
    %Self-insured dental
    
    
    6,215
    
    
    
    4,217
    
    
    
    47.4
    %Corporate, All Other
    
    
    115
    
    
    
    96
    
    
    
    19.8
    %Total premium revenue
    
    
    16,126
    
    
    
    14,554
    
    
    
    10.8
    %Investment income:Corporate, All Other
    
    
    52
    
    
    
    58
    
    
    
    -10.3
    %Other income:Corporate, All Other
    
    
    12
    
    
    
    17
    
    
    
    -29.4
    %Total revenue
    
    
    16,190
    
    
    
    14,629
    
    
    
    10.7
    %Healthcare service expense:Fully-insured dental
    
    
    7,695
    
    
    
    7,769
    
    
    
    -1.0
    %Self-insured dental
    
    
    5,322
    
    
    
    3,587
    
    
    
    48.4
    %Corporate, All Other
    
    
    
    
    
    
    
    
    
    
    0.0
    %Total healthcare service expense
    
    
    13,017
    
    
    
    11,356
    
    
    
    14.6
    %Insurance expense:Corporate, All Other
    
    
    2,787
    
    
    
    2,715
    
    
    
    2.7
    %Income tax provisionCorporate, All Other
    
    
    136
    
    
    
    187
    
    
    
    -27.3
    %Net Income
    
    $
    250
    
    
    $
    371
    
    
    
    -32.6
    %
 13




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##### Table of Contents



Six months ended
    
    
    Six months endedJune 30, 2008
    
    
    June 30, 2007
    
    
    ChangePremium revenue:Fully-insured dental
    
    $
    19,183
    
    
    $
    20,424
    
    
    
    -6.1
    %Self-insured dental
    
    
    12,225
    
    
    
    8,757
    
    
    
    39.6
    %Corporate, All Other
    
    
    252
    
    
    
    232
    
    
    
    8.6
    %Total premium revenue
    
    
    31,660
    
    
    
    29,413
    
    
    
    7.6
    %Investment income:Corporate, All Other
    
    
    118
    
    
    
    109
    
    
    
    8.3
    %Other income:Corporate, All Other
    
    
    26
    
    
    
    51
    
    
    
    -49.0
    %Total revenue
    
    
    31,804
    
    
    
    29,573
    
    
    
    7.5
    %Healthcare service expense:Fully-insured dental
    
    
    15,476
    
    
    
    16,011
    
    
    
    -3.3
    %Self-insured dental
    
    
    10,463
    
    
    
    7,489
    
    
    
    39.7
    %Corporate, All Other
    
    
    
    
    
    
    
    
    
    
    0.0
    %Total healthcare service expense
    
    
    25,939
    
    
    
    23,500
    
    
    
    10.4
    %Insurance expense:Corporate, All Other
    
    
    5,936
    
    
    
    5,772
    
    
    
    2.8
    %Income tax provisionCorporate, All Other
    
    
    (25
    )
    
    
    106
    
    
    
    -123.6
    %Net Income (Loss)
    
    $
    (46
    )
    
    $
    195
    
    
    
    -123.6
    %
 Summary
   Membership
   14




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Revenue
    Self-Insured Claim Revenue
 Self-Insured ASO Fees
 15




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##### Table of Contents



Investment Income
  Healthcare Service Expense
     Reinsurance
  16




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Deferred Acquisition Costs
  Insurance Expense
   Other Income
  Income Taxes
  Liquidity and Capital Resources and Changes in Financial Condition
  17




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Six months ended June
    
    
    Six months ended June30, 2008
    
    
    30, 2007Net cash provided by in operating activities
    
    $
    6
    
    
    $
    76Net cash used in investing activities
    
    
    (136
    )
    
    
    (1,316
    )Net cash used in financing activities
    
    
    (161
    )
    
    
    (110
    )Decrease in cash
    
    $
    (291
    )
    
    $
    (1,350
    )
 Cash Flow from Operating Activities
   Cash Flow from Investing Activities
  Cash Flow from Financing Activities
  Provider Withhold Funds
   18




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Financial Condition
      
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
     
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  19




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Changes in Internal Control over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  20




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Total Numberof SharesPurchased as
    
    MaximumPart of a
    
    Number of SharesPublicly
    
    that May Yet BeTotal Class A
    
    Total Class B
    
    Average price
    
    Announced
    
    Purchased Undershares
    
    shares
    
    paid
    
    Plans or
    
    the Plans orPeriod
    
    purchased
    
    purchased
    
    per share
    
    Programs
    
    ProgramsApril 1  April 30, 2008
    
    
    0
    
    
    
    0
    
    
    
    N/A
    
    
    
    0
    
    
    N/AMay 1  May 31, 2008
    
    
    0
    
    
    
    0
    
    
    
    N/A
    
    
    
    0
    
    
    N/AJune 1  June 30, 2008
    
    1(a)
    
    11(a)
    
    
    $575.55
    
    
    
    0
    
    
    N/A
 
 (a)
    
    Repurchased from provider shareholder in accordance with the Companys
obligations under its Amended and Restated Code of Regulations. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Names
    
    For
    
    Withheld
    
    Not VotedRoss A. Geiger
    
    
    339
    
    
    
    27
    
    
    
    284Roger M. Higley, DDS
    
    
    341
    
    
    
    25
    
    
    
    284David A. Kreyling, DMD
    
    
    339
    
    
    
    27
    
    
    
    284Donald J. Peak, CPA
    
    
    339
    
    
    
    27
    
    
    
    284Michael Carl, DDS
    
    
    340
    
    
    
    26
    
    
    
    284James E. Kroeger, MBA, CPA
    
    
    339
    
    
    
    27
    
    
    
    284
  NamesFred J. Bronson, DDSJack M. Cook, MHAFred H. Peck, DDSMolly Meakin-Rogers, MBA, CPAStephen T. Schuler, DMDMark Zigoris, DDS
  For
    
    Withheld
    
    Abstained
    
    Not Voted305
    
    
    26
    
    
    
    35
    
    
    
    284
 
 ITEM 5. OTHER INFORMATION
  21




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ITEM 6. EXHIBITS
 Exhibits31.1
    
    CEO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    CFO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.32
    
    CEO and CFO certifications pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
  DCP HOLDING COMPANYAugust 13, 2008
    By:
    /s/ Robert C. Hodgkins, Jr.Robert C. Hodgkins, Jr.Vice President and Chief Financial Officer 22




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Exhibit No.
    
    Item31.1
    
    Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 200231.2
    
    Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 200232
    
    Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002