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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Provision for income taxes

ncome tax expense (benefit) consisted of the following:

	Year Ended December 31,
	2018				2017				2016
	(In millions)
Current:
Federal	$	272			$	(9	)		$	134
State	18				3				3
Foreign	8				—				(6		)
Total current	298				(6		)		131
Deferred:
Federal	(3		)		(85		)		19
State	(3		)		(9		)		2
Foreign	—				—				1
Total deferred	(6		)		(94		)		22
Income tax expense (benefit)	$	292			$	(100	)		$	153

Effective income tax rate reconciliation to the statutory federal income tax rate

A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate is as follows:

	Year Ended December 31,
	2018			2017			2016
Statutory federal tax (benefit) rate	21.0	%		(35.0	)%		35.0	%
State income provision (benefit), net of federal	1.2			(0.7	)		1.6
Nondeductible health insurer fee (“HIF”)	7.3			—			37.0
Nondeductible compensation	0.7			2.8			3.1
Nondeductible goodwill impairment	—			6.6			—
Worthless stock deduction	(1.0	)		—			—
Revaluation of net deferred tax assets	(0.4	)		8.8			—
Change in purchase agreement that increased tax basis in assets	—			—			(2.2	)
Other	0.4			1.1			0.3
Effective tax (benefit) rate	29.2	%		(16.4	)%		74.8	%

Significant components of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 were as follows:

	December 31,
	2018				2017
	(In millions)
Accrued expenses	$	32			$	15
Reserve liabilities	7				11
Other accrued medical costs	12				16
Net operating losses	16				27
Fixed assets and intangibles	30				23
Unearned premiums	9				19
Lease financing obligation	30				30
Tax credit carryover	12				15
Other	3				3
Valuation allowance	(28		)		(41		)
Total deferred income tax assets, net of valuation allowance	123				118
Prepaid expenses	(6		)		(6		)
Basis in debt	—				(9		)
Total deferred income tax liabilities	(6		)		(15		)
Net deferred income tax asset	$	117			$	103

Unrecognized tax benefits roll forward

The roll forward of our unrecognized tax benefits is as follows:

	Year Ended December 31,
	2018				2017				2016
	(In millions)
Gross unrecognized tax benefits at beginning of period	$	(13	)		$	(11	)		$	(9	)
Increases in tax positions for current year	(9		)		(1		)		(1		)
Increases in tax positions for prior years	—				(4		)		(1		)
Decreases in tax positions for prior years	—				3				—
Lapse in statute of limitations	2				—				—
Gross unrecognized tax benefits at end of period	$	(20	)		$	(13	)		$	(11	)

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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