Income Taxes

The consolidated income tax expense consists of the following for the years ended December 31:



	2013			2012			2011
Current provision:
Federal	$	120,858		$	47,528		$	63,388
State and local	5,857			(4,368		)	5,157
Total current provision	126,715			43,160			68,545
Deferred provision	(19,635		)	4,252			2,142
Total provision for income taxes	$	107,080		$	47,412		$	70,687

The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes is as follows:



	2013			2012			2011
Earnings from continuing operations, before income tax expense	$	268,917		$	122,791		$	188,350
Less flow through noncontrolling interest	960			(2,539		)	(2,855		)
Earnings from continuing operations, less noncontrolling interest, before income tax expense	267,957			125,330			191,205

Tax provision at the U.S. federal statutory rate	93,785			43,866			66,922
State income taxes, net of federal income tax benefit	2,871			(2,288		)	3,381
Nondeductible goodwill impairment	—			8,487			—
Nondeductible compensation	12,519			1,108			2,705
Other, net	(2,095		)	(3,761		)	(2,321		)
Income tax expense	$	107,080		$	47,412		$	70,687

The tax effects of temporary differences which give rise to deferred tax assets and liabilities are presented below for the years ended December 31:



	2013			2012
Deferred tax assets:
Medical claims liability and other accruals	$	53,943		$	37,413
State net operating loss carry forward	9,530			9,055
Stock compensation	14,223			12,615
Other	30,199			20,573
Deferred tax assets	107,895			79,656
Valuation allowance	(8,119		)	(8,180		)
Net deferred tax assets	$	99,776		$	71,476

Deferred tax liabilities:
Intangible assets	$	18,278		$	12,441
Prepaid assets	5,621			4,767
Depreciation and amortization	30,411			31,741
Other	1,615			5,624
Deferred tax liabilities	$	55,925		$	54,573

Net deferred tax assets	$	43,851		$	16,903

The Company's deferred tax assets include federal and state net operating losses, or NOLs, of which $6,547 were acquired in business combinations. Accordingly, the total and annual deduction for those NOLs is limited by tax law. The Company's federal NOLs expire between the years 2020 and 2032 and the state NOLs expire between the years 2014 and 2034. Valuation allowances are recorded for those NOLs the Company believes are more likely than not to expire unused. During 2013 and 2012, the Company recorded valuation allowance additions in the tax provision of $1,301 and $2,093, respectively. In 2013 and 2012, the Company recorded valuation allowance reductions of $1,362 and $2,289, respectively.

The Company maintains a reserve for uncertain tax positions that may be challenged by a tax authority. A roll-forward of the reserve is as follows:



	2013			2012
Gross unrecognized tax benefits, beginning of period	$	7,870		$	13,552
Gross increases:
Current year tax positions	338			4,107
Prior year tax positions	164			451
Gross decreases:
Prior year tax positions	—			(9,925		)
Settlements	(4,390		)	(53		)
Statute of limitation lapses	(708		)	(262		)
Gross unrecognized tax benefits, end of period	$	3,274		$	7,870

Included in the balance of unrecognized tax benefits at December 31, 2013 and 2012 were reserve balances of $3,274 and $4,095, respectively, that, if recognized, would decrease the effective tax rate on income from continuing operations. Also included in the December 31, 2012 reserve balance were liabilities of $3,775 that, if recognized, would have been recorded as an adjustment to deferred taxes.

The Company recognizes interest accrued related to unrecognized tax benefits in the provision for income taxes. During the year ended December 31, 2013 and 2012, the Company recognized tax benefits generated from the net reduction in interest accrued of $310 and $170, respectively. Interest accrued, net of federal benefit, was $623, $933 and $1,157 as of December 31, 2013, 2012 and 2011, respectively. No penalties have been accrued.

During 2013, the IRS concluded its examination of the Company's 2010 and 2011 federal tax returns. The Company files in numerous state jurisdictions with varying statutes of limitation. The unrecognized state tax benefits are related to returns open from 2009 to 2013.