XML 36 R19.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense for continuing operations consisted of the following:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (In millions)
Current: |  |  |  |  |
Federal | $ | 209 |  |  | $ | 281 |  |  | $ | 204 |
State | 31 |  |  | 26 |  |  | 12 |
Foreign | — |  |  | — |  |  | 9 |
Total current | 240 |  |  | 307 |  |  | 225 |
Deferred: |  |  |  |  |
Federal | (17) |  |  | (13) |  |  | 5 |
State | (7) |  |  | (7) |  |  | 6 |
Foreign | — |  |  | 1 |  |  | (1) |
Total deferred | (24) |  |  | (19) |  |  | 10 |
Income tax expense | $ | 216 |  |  | $ | 288 |  |  | $ | 235 |
A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate for continuing operations is as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Statutory federal tax (benefit) rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income provision (benefit), net of federal benefit | 2.2 |  |  | 1.6 |  |  | 1.4 |
Nondeductible health insurer fee (“HIF”) | — |  |  | 6.1 |  |  | — |
Nondeductible compensation | 1.5 |  |  | 1.1 |  |  | 1.2 |
Other | — |  |  | 0.2 |  |  | 0.6 |
Effective tax expense rate | 24.7 | % |  | 30.0 | % |  | 24.2 | %
The effective tax rate was not impacted by the HIF in 2019 given the HIF moratorium. HIF was repealed for years after 2020. Our effective tax rate is based on expected income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Management estimates and judgments are required in determining our effective tax rate. We are routinely under audit by federal, state, or local authorities regarding the timing and amount of deductions, nexus of income among various tax jurisdictions, and compliance with federal, state, foreign, and local tax laws. Deferred tax assets and liabilities are classified as non-current. Significant components of our deferred tax assets and liabilities as of December 31, 2021 and 2020 were as follows:
| December 31,
| 2021 |  | 2020
| (In millions)
Accrued expenses and reserve liabilities | $ | 57 |  |  | $ | 52 |
Other accrued medical costs | 23 |  |  | 15 |
Net operating losses | 13 |  |  | 11 |
Unearned premiums | 17 |  |  | 18 |
Lease financing obligation | 9 |  |  | 8 |
Tax credit carryover | 5 |  |  | 7 |
Other | 6 |  |  | 4 |
Valuation allowance | (10) |  |  | (17) |
Total deferred income tax assets, net of valuation allowance | 120 |  |  | 98 |
Fixed assets and intangibles | (1) |  |  | (7) |
Prepaid expenses | (13) |  |  | (10) |
Unrealized gains and losses | — |  |  | (12) |
Total deferred income tax liabilities | (14) |  |  | (29) |
Net deferred income tax asset | $ | 106 |  |  | $ | 69 |
At December 31, 2021, we had state net operating loss carryforwards of $177 million, which begin expiring in 2036. At December 31, 2021, we had foreign net operating loss carryforwards of $9 million, which expire in 2032. At December 31, 2021, we had foreign tax credit carryovers of $5 million, which expire in 2030. We evaluate the need for a valuation allowance taking into consideration the ability to carry back and carry forward tax credits and losses, available tax planning strategies and future income, including reversal of temporary differences. We have determined that as of December 31, 2021, $10 million of deferred tax assets did not satisfy the recognition criteria. Therefore, we decreased our valuation allowance by $7 million, from $17 million at December 31, 2020, to $10 million as of December 31, 2021. We recognize tax benefits only if the tax position is more likely than not to be sustained. We are subject to income taxes in the United States, Puerto Rico, and numerous state jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The roll forward of our unrecognized tax benefits is as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (In millions)
Gross unrecognized tax benefits at beginning of period | $ | (20) |  |  | $ | (20) |  |  | $ | (20) |
Settlements | 5 |  |  | — |  |  | — |
Gross unrecognized tax benefits at end of period | $ | (15) |  |  | $ | (20) |  |  | $ | (20) |
The total amount of unrecognized tax benefits at December 31, 2021, 2020 and 2019 that, if recognized, would affect the effective tax rates is $15 million, $20 million, and $20 million, respectively. We expect that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities may decrease by as much as $10 million as a result of the expiration of statutes of limitations. Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. Amounts accrued for the payment of interest and penalties as of December 31, 2021, 2020 and 2019 were insignificant. The U.S. Internal Revenue Service (IRS) completed exams for years 2017 and prior. We may be subject to examination by the IRS for calendar years after 2017. With a few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local, and Puerto Rico tax examinations for years before 2017.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration