Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

On May 20, 2013, we announced certain organizational and executive leadership changes to align with how our Chief Executive Officer is managing our operations. Beginning with the three months ended June 30, 2013, our organizational structure is comprised of three reportable segments: Commercial and Specialty Business; Government Business; and Other.

Our Commercial and Specialty Business segment includes our Local Group, National Accounts, Individual and Specialty businesses. Business units in the Commercial and Specialty Business segment offer fully-insured health products; provide a broad array of managed care services to self-funded customers including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services; and provide an array of specialty and other insurance products and services such as dental, vision, life and disability insurance benefits, radiology benefit management and analytics-driven personal health care guidance.

Our Government Business segment includes Medicare and Medicaid businesses, National Government Services, or NGS, and services provided to the federal government in connection with FEP. Medicare business includes services such as Medicare Advantage, Medicare Part D, and Medicare Supplement. Medicaid business includes our managed care alternatives through publicly funded health care programs, including Medicaid, Temporary Assistance for Needy Family programs, programs for seniors and people with disabilities, programs for long-term services and support, Children’s Health Insurance Programs and ACA-related Medicaid expansion programs. NGS acts as a Medicare contractor in several regions across the nation.

Our Other segment includes other businesses that do not meet the quantitative thresholds for an operating segment as defined by FASB guidance, as well as corporate expenses not allocated to the other reportable segments.

We define operating revenues, a non-GAAP measure, to include premium income, administrative fees and other revenues. Operating revenues are derived from premiums and fees received primarily from the sale and administration of health benefit products. Operating gain, a non-GAAP measure, is calculated as total operating revenue less benefit expense and selling, general and administrative expense.

Through our participation in various federal government programs, we generated approximately 21.0%, 20.3% and 23.7% of our total consolidated revenues from agencies of the U.S. government for the years ended December 31, 2014, 2013, and 2012, respectively. These revenues are contained in the Government Business segment.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies in Note 2, “Basis of Presentation and Significant Accounting Policies,” except that certain shared administrative expenses for each segment are recognized on a pro rata allocated basis, which in aggregate approximates the consolidated expense. Any difference between the allocated expenses and actual consolidated expense is included in other expenses not allocated to reportable segments. Intersegment sales and expenses are recorded at cost and eliminated in the consolidated financial statements. We evaluate performance of the reportable segments based on operating gain or loss as defined above. We evaluate investment income, net realized gains on investments, OTTI losses recognized in income, interest expense, amortization expense, loss on extinguishment of debt and income taxes, and asset and liability details on a consolidated basis as these items are managed in a corporate shared service environment and are not the responsibility of segment operating management.

Financial data by reportable segment for the years ended December 31 is as follows:

	Commercial and Specialty Business		Government Business		Other			Total
Year ended December 31, 2014
Operating revenue	$	39,199.6	$	33,796.4	$	25.7		$	73,021.7
Operating gain (loss)	3,260.9		1,191.9		(34.4		)	4,418.4
Depreciation and amortization of property and equipment	—		—		474.3			474.3
Year ended December 31, 2013
Operating revenue	$	39,404.2	$	30,752.6	$	34.6		$	70,191.4
Operating gain (loss)	3,176.4		844.0		(19.0		)	4,001.4
Depreciation and amortization of property and equipment	—		—		457.1			457.1
Year ended December 31, 2012
Operating revenue	$	39,639.9	$	20,838.9	$	35.2		$	60,514.0
Operating gain (loss)	3,396.3		285.4		(61.8		)	3,619.9
Depreciation and amortization of property and equipment	—		—		363.5			363.5

The major product revenues for each of the reportable segments for the years ended December 31 are as follows:

	2014		2013		2012
Commercial and Specialty Business
Managed care products	$	33,755.6	$	34,516.9	$	34,875.4
Managed care services	3,997.8		3,474.0		3,446.9
Dental/Vision products and services	1,037.3		952.5		903.9
Other	408.9		460.8		413.7
Total Commercial and Specialty Business	39,199.6		39,404.2		39,639.9
Government Business
Managed care products	33,344.6		30,347.1		20,460.0
Managed care services	451.8		405.5		378.9
Total Government Business	33,796.4		30,752.6		20,838.9
Other
Other	25.7		34.6		35.2
Total product revenues	$	73,021.7	$	70,191.4	$	60,514.0

The classification between managed care products and managed care services in the above table primarily distinguishes between the level of risk assumed. Managed care products represent insurance products where we bear the insurance risk, whereas managed care services represent product offerings where we provide claims adjudication and other administrative services to the customer, but the customer principally bears the insurance risk. 

Asset and equity details by reportable segment have not been disclosed, as we do not internally report such information. 

A reconciliation of reportable segment operating revenues to the amounts of total revenues included in the consolidated statements of income for the years ended December 31 is as follows:

	2014			2013			2012
Reportable segments operating revenues	$	73,021.7		$	70,191.4		$	60,514.0
Net investment income	724.4			659.1			686.1
Net realized gains on investments	177.0			271.9			334.9
Other-than-temporary impairment losses recognized in income	(49.0		)	(98.9		)	(37.8		)
Total revenues	$	73,874.1		$	71,023.5		$	61,497.2

A reconciliation of reportable segment operating gain to income from continuing operations before income taxes included in the consolidated statements of income for the years ended December 31 is as follows:

	2014			2013			2012
Reportable segments operating gain	$	4,418.4		$	4,001.4		$	3,619.9
Net investment income	724.4			659.1			686.1
Net realized gains on investments	177.0			271.9			334.9
Other-than-temporary impairment losses recognized in income	(49.0		)	(98.9		)	(37.8		)
Interest expense	(600.7		)	(602.7		)	(511.8		)
Amortization of other intangible assets	(220.9		)	(245.3		)	(233.0		)
Loss on extinguishment of debt	(81.1		)	(145.3		)	—
Income from continuing operations before income tax expense	$	4,368.1		$	3,840.2		$	3,858.3