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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | 16. INCOME TAXES Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform”). Tax Reform establishes new tax laws effective January 1, 2018, including, but not limited to, (1) reduction of the U.S. federal corporate income tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized, (3) limitations on the deductibility of certain executive compensation, (4) changes to the discounting of statutory reserves for tax purposes, and (5) limitations on net operating losses (NOLs) generated after December 31, 2017 though there is no impact to the Company’s current NOL carryforwards. Related to Tax Reform, the Company recorded a provisional net income tax expense of $877 in the period ending December 31, 2017. This net expense consisted of an $821 reduction of the Company’s deferred tax assets primarily due to the reduction in the U.S. federal corporate income tax rate and a $56 sequestration fee payable associated with refundable AMT credits. During 2018, the Company recorded income tax expense of $17 as measurement period adjustments related to Tax Reform due to the filing of the Company's 2017 federal income tax return and completion of the Aetna Group Benefits acquisition. In addition, the Company recorded an income tax benefit of $56, reflecting the elimination of the sequestration fee payable. In total, the Company recorded a net income tax benefit from Tax Reform of $39 in 2018. As of December 31, 2018, the Company had AMT carryovers of $841 which are reflected as a current income tax receivable within Other Assets in the accompanying consolidated balance sheet. AMT credits may be used to offset a regular tax liability for any taxable year beginning after December 31, 2017, and are refundable at an amount equal to 50 percent of the excess of the minimum tax credit for the taxable year over the amount of the credit allowable for the year against regular tax liability. Any remaining credits not used against regular tax liability are refundable in the 2021 tax year to be realized in 2022. Income Tax Expense The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions, as applicable. Income (loss) from continuing operations before income taxes included income from domestic operations of $1,753, $704 and $521 for the years ended December 31, 2018, 2017 and 2016, and income (losses) from foreign operations of $0, $19 and $(74) for the years ended December 31, 2018, 2017 and 2016. Income Tax Expense (Benefit)
| For the years ended December 31,
| 2018 | 2017 | 2016
Income Tax Expense (Benefit) |  |  |
Current - U.S. Federal | $ | (18 | ) | $ | 116 |  | $ | 10 |
International | — |  | 1 |  | — |
Total current | (18 | ) | 117 |  | 10 |
Deferred - U.S. Federal | 286 |  | 866 |  | (173 | )
International | — |  | 2 |  | (3 | )
Total deferred | 286 |  | 868 |  | (176 | )
Total income tax expense (benefit) | $ | 268 |  | $ | 985 |  | $ | (166 | )
Income Tax Rate Reconciliation
| For the years ended December 31,
| 2018 | 2017 | 2016
Tax provision at U.S. federal statutory rate [1] | $ | 368 |  | $ | 253 |  | $ | 157 |
Tax-exempt interest | (66 | ) | (123 | ) | (124 | )
Decrease in deferred tax valuation allowance | — |  | — |  | (79 | )
Executive Compensation | 11 |  | — |  | — |
Stock-based compensation | (5 | ) | (15 | ) | — |
Solar credits | — |  | — |  | (79 | )
Sale of the U.K. property & casualty run-off subsidiaries and foreign rate differential | — |  | 5 |  | (37 | )
Tax Reform | (39 | ) | 877 |  | — |
Other | (1 | ) | (12 | ) | (4 | )
Provision (benefit) for income taxes | $ | 268 |  | $ | 985 |  | $ | (166 | )
[1] Due to the passage of Tax Reform on December 22, 2017, current and prior period federal statutory rates are reflected at 21% and 35% respectively. In addition to the effect of tax-exempt interest, the Company's effective tax rate for the year ended December 31, 2018 reflects a federal income tax expense of $11 related to non-deductible executive compensation and a benefit of $5 related to a deduction for stock-based compensation that vested at a fair value per share greater than the fair value on the date of grant. Included in 2018 is a benefit of $39 related to Tax Reform, primarily due to the elimination of the sequestration fee on AMT credits. Included in 2017 is an expense of $877 due to the effects of Tax Reform, primarily due to the reduction in net deferred tax assets as a result of the reduction in the federal corporate income tax rate from 35% to 21%. Included in 2016 is a benefit of $79 due to the investment in solar energy partnerships. The total tax benefit from the transaction was $113, which included the tax effects of the related financial statement realized loss from writing down the investment in partnerships. Also included in 2016 is a tax benefit primarily due to the sale of the Company's U.K. property and casualty run-off subsidiaries. The tax benefit of $37 relates to the difference between the tax basis and book basis of the Company's investment in the subsidiaries net of additional foreign tax rate differentials. The total estimated tax benefit recognized in 2016 related to the sale of the U.K. property and casualty run-off subsidiaries was $76. For discussion of this transaction, see Note 20 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements. Deferred Taxes Deferred tax assets and liabilities on the consolidated balance sheets represent the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. The deferred tax assets and liabilities as of December 31, 2018 and 2017 shown in the table below reflect the lower corporate Federal income tax rate as a result of Tax Reform. Deferred tax balances for the year ended December 31, 2017 related to the life and annuity business sold in May 2018 are not included in the table below as they were included in assets held for sale as of December 31, 2017. In lieu of recording a benefit of the tax capital loss on the sale of the life and annuity business, the Company elected to retain tax net operating loss carryovers with an estimated benefit of $477 as of December 31, 2018. Deferred Tax Assets (Liabilities)
| As of December 31,
| 2018 | 2017
Deferred Tax Assets |  |  |  |
Loss reserves and tax discount | $ | 150 |  | $ | 104 |
Unearned premium reserve and other underwriting related reserves | 355 |  | 352 |
Investment-related items | 183 |  | 194 |
Employee benefits | 287 |  | 313 |
General business credit carryover | 1 |  | 3 |
Net operating loss carryover | 521 |  | 710 |
Foreign tax credit carryover | — |  | 26 |
Other | — |  | 1 |
Total Deferred Tax Assets | 1,497 |  | 1,703 |
Deferred Tax Liabilities |  |
Deferred acquisition costs | (104 | ) | (103 | )
Net unrealized gains on investments | (7 | ) | (306 | )
Other depreciable and amortizable assets | (135 | ) | (130 | )
Other | (3 | ) | — |
Total Deferred Tax Liabilities | (249 | ) | (539 | )
Net Deferred Tax Asset | $ | 1,248 |  | $ | 1,164 |
A deferred tax valuation allowance has not been recorded because the Company believes the deferred tax assets will more likely than not be realized. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies. From time to time, tax planning strategies could include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities held, making investments which have specific tax characteristics, and business considerations such as asset-liability matching. Management views such tax planning strategies as prudent and feasible and would implement them, if necessary, to realize the deferred tax assets. As shown in the deferred tax assets (liabilities) table above, included in net deferred income taxes are the future tax benefits associated with U.S. net operating loss carryover and general business credit carryovers. Net operating loss carryovers, if unused, would expire between 2026 and 2036. General business credits would expire between 2026 and 2027. U.S. NOLs reflected above arose in taxable years prior to 2017 and are still subject to prior tax law which allows for carryback and limits the period over which carryforwards may be used to offset taxable income. Utilization of the Company's loss carryovers is dependent upon the generation of sufficient future taxable income. Although the Company projects there will be sufficient future taxable income to fully recover the remainder of the loss carryover, the Company's estimate of the likely realization may change over time. Uncertain Tax Positions Rollforward of Unrecognized Tax Benefits
| For the years ended December 31,
| 2018 | 2017 | 2016
Balance, beginning of period | $ | 9 |  | $ | 12 |  | $ | 12 |
Gross increases - tax positions in prior period | 5 |  | 3 |  | — |
Gross decreases - tax positions in prior period | — |  | — |  | — |
Gross decreases - tax reform | — |  | (6 | ) | — |
Balance, end of period | $ | 14 |  | $ | 9 |  | $ | 12 |
The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release. In addition, for the year ended December 31, 2018 the Company recorded a receivable of $5 related to a tax indemnification agreement associated with the life and annuity business sold in May 2018. The receivable is separate from the tax liability and is classified as an other asset on the balance sheet. Other Tax Matters The federal audits have been completed through 2013, and the Company is not currently under examination for any open years. Management believes that adequate provision has been made in the consolidated financial statements for any potential adjustments that may result from tax examinations and other tax related matters for all open tax years. The Company classifies interest and penalties (if applicable) as income tax expense in the consolidated financial statements. The Company recognized no interest expense for the years ended December 31, 2018, 2017 and 2016. The Company had no interest payable as of December 31, 2018 and 2017. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not recorded any accrual for penalties.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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