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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The consolidated income tax expense consists of the following ($ in millions):
Year Ended December 31,
 202420232022
Income (loss) from continuing operations before income tax expense (benefit)
U.S. Federal$3,529 $3,686 $1,938 
Foreign (1)
728 (88)24 
Total$4,257 $3,598 $1,962 
Income tax expense (benefit) from continuing operations
Current tax expense
Federal$798 $833 $1,144 
State and local142 132 261 
Foreign— 1 4 
Total current tax expense$940 $966 $1,409 
Deferred tax expense (benefit)
Federal$8 $(71)$(514)
State and local7 33 (126)
Foreign8 (29)(9)
Total deferred tax expense (benefit)$23 $(67)$(649)
Total income tax expense (benefit)
Federal$806 $762 $630 
State and local149 165 135 
Foreign8 (28)(5)
Total income tax expense (benefit)$963 $899 $760 
(1)
Foreign income from continuing operations includes the Company's Cayman Islands reinsurance entity. The Company has elected for its Cayman Islands entity to be taxed as a U.S. corporation and pays U.S. tax at the 21% tax rate. The U.S. tax resulting from this entity is included in Federal income tax expense. This entity is expected to cease operating in 2025.
The reconciliation of the tax provision at the U.S. federal statutory rate to income tax expense is as follows ($ in millions):
Year Ended December 31,
 202420232022
Total%Total%Total%
Earnings from continuing operations, before income tax expense$4,257 $3,598 $1,962 
Tax provision at the U.S. federal statutory rate894 21.0 %756 21.0 %412 21.0 %
Federal
Effect of cross-border tax laws
Global Intangible Low-Taxed Income (GILTI)44 1.0 %4 0.1 %— — %
Cayman Islands
Statutory income tax rate differential (1)
142 3.3 %62 1.7 %6 0.3 %
Other2 — %(21)(0.6)%(1)(0.1)%
Tax credits(14)(0.3)%(5)(0.1)%(8)(0.4)%
Changes in valuation allowances(12)(0.3)%(2)(0.1)%(11)(0.6)%
Nontaxable or nondeductible items
Nondeductible compensation37 0.9 %29 0.8 %51 2.6 %
Nondeductible goodwill— — %— — %56 2.9 %
Nontaxable or nondeductible divestiture (gains) losses(97)(2.3)%(9)(0.3)%79 4.0 %
Other nontaxable or nondeductible items(1)— %(6)(0.2)%13 0.7 %
Other
Deferred taxes for investments in subsidiaries— — %— — %70 3.6 %
Excess tax benefit on stock awards(3)(0.1)%(59)(1.6)%(13)(0.7)%
Other9 0.2 %26 0.7 %29 1.5 %
Foreign tax effects
United Kingdom
Nondeductible goodwill(34)(0.8)%83 2.3 %— — %
Other12 0.3 %(26)(0.7)%(2)(0.1)%
Cayman Islands
Statutory income tax rate differential (1)
(142)(3.3)%(62)(1.7)%(6)(0.3)%
Other jurisdictions7 0.2 %(16)(0.4)%— — %
Changes in unrecognized tax benefits24 0.6 %27 0.8 %13 0.7 %
State income taxes, net of federal income tax benefit (2)
95 2.2 %118 3.3 %72 3.7 %
Income tax expense$963 22.6 %$899 25.0 %$760 38.7 %
(1)
The Company has elected for its Cayman Islands reinsurance entity to be taxed as a U.S. corporation and pays U.S. tax at the 21% tax rate. The taxability of this entity does not represent a reconciling item between the U.S. federal rate and the Company's effective tax rate. This entity ceased to operate in 2025.
(2)
During the year ended December 31, 2024, state taxes in California, Florida and Illinois comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2023, state taxes in California and Florida comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2022, state taxes in California and Pennsylvania comprised greater than 50% of the tax effect in this category.
Income taxes paid are as follows ($ in millions):
Year Ended December 31,
202420232022
U.S. Federal (1)
$930 $698 $1,009 
Pennsylvania*53 *
Other (2)
71 138 175 
Total U.S. State and Local 71 191 175 
Foreign 1(2)14
Total income taxes paid, net$1,002 $887 $1,198 
(1)
Includes amounts paid to purchase transferable tax credits of $100 million and $49 million during the years ended December 31, 2024 and 2023, respectively.
(2)
Includes amounts paid to purchase transferable tax credits of $15 million, $10 million and $19 million during the years ended December 31, 2024, 2023 and 2022, respectively.
*
The amount of income taxes paid during the years ended December 31, 2024 and 2022 does not meet the 5% disaggregation threshold.

The tax effects of temporary differences which give rise to deferred tax assets and liabilities are presented below ($ in millions):
 December 31, 2024December 31, 2023
Deferred tax assets:
Medical claims liability$178 $217 
Nondeductible liabilities81 111 
Net operating loss and tax credit carryforwards70 71 
Compensation accruals93 113 
Premium and trade receivables72 94 
Operating lease liability231 269 
Unrealized gain/loss153 179 
Software development costs246 193 
Other92 92 
Deferred tax assets1,216 1,339 
Valuation allowance(77)(82)
Net deferred tax assets$1,139 $1,257 
Deferred tax liabilities:
Goodwill and intangible assets$1,518 $1,603 
Fixed assets135 127 
Right-of-use asset88 98 
Other82 70 
Deferred tax liabilities1,823 1,898 
Net deferred tax liabilities$(684)$(641)

Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal and state net operating loss, federal and state capital loss and tax credit carryforwards.

Federal net operating loss and credit carryforwards of $11 million expire beginning in 2025 through 2042. State net operating loss and tax credit carryforwards of $42 million expire beginning in 2025 through 2043, while the remaining $16 million have indefinite carryforward periods.
The Company maintains a reserve for uncertain tax positions that may be challenged by a tax authority. A rollforward of the beginning and ending amount of uncertain tax positions, exclusive of related interest and penalties, is as follows ($ in millions):
Year Ended December 31,
 20242023
Gross unrecognized tax benefits, January 1$439 $410 
Gross increases:
Current year tax positions16 19 
Prior year tax positions31 29 
Gross decreases:
Settlements (1)
(133)(2)
Prior year tax positions(6)(10)
Statute of limitation lapses(7)(7)
Gross unrecognized tax benefits, December 31$340 $439 
(1)
Primarily reflects the resolution of an item that had no net impact on the Consolidated Statement of Operations.

As of December 31, 2024, $213 million of unrecognized tax benefits would impact the Company's effective tax rate in future periods, if recognized.

The table above excludes interest and penalties, net of related tax benefits, which are treated as income tax expense (benefit) under the Company's accounting policy. The Company recognized net interest expense and penalties related to uncertain positions of $13 million and $18 million for the years ended December 31, 2024 and 2023, respectively. The Company had $98 million and $84 million of accrued interest and penalties for uncertain tax positions as of December 31, 2024 and 2023, respectively.

The Company files federal tax returns as well as returns for numerous state tax jurisdictions and is engaged in multiple audit proceedings for its state filings. Generally, no further state audit activity is expected for years prior to 2015. As of December 31, 2024, the Company is not under federal examination.