Your alien's health is judged by how much Life Force it has. If your Life bar is completely green then your alien is healthy. However, if you have been hurt in battle, you will see some red in the bar. If the bar is completely red, that means you're dead. What is this dependent on? Your alien's life force. When you first start playing A3, your alien is given 15 Life Force.
Life Force can be restored by using herbs. All herbs (except the blue) heal your alien a certain amount of life. The blue herb brings your alien back to life (revive).
Obviously, in order to do better in battle, you would like to increase your Life Force. You can increase your Life Force by leveling up, using LF Pluses, or by paying a visit to Than'dor in the Housing Complex.