After many arguements with JANE, I've concluded that it flashes randomly.
Ok, this is all I know. The bit above the cross is a shield, and it is related to your shields. When you have no shields, it will be transparant. It will flash when your shields are recharging. When you have overshield, it will flash yellow and later red when the overshield isn't yellow anymore, when it becomes red.
When on blue health, the cross is blue. When on yellow, it's yellow. When on 2 bars (red), it's red. When on one bar, it becomes transparant, just like the shields do when you have no shields. When you're dead... you're dead.
That explains everything, except why it flashes. I did alot of testing, but I don't think it flashes 100% of the time in a single circumstance. Example: Let's say it starts to flash when I get hurt by an explosion. The next time, it doesn't flash.
Also, once it flashed when I wasn't under fire and no enemies around me and my health and shields was 100%. Sounds random to me.
RANDOM!
JANE disagrees, but oh well. She didn't have a top science monkey to do the testing, did she?